EXHIBIT 10.16
AFFILIATION, INC.
SERIES A PREFERRED STOCK AND
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES A PREFERRED STOCK AND SERIES B PREFERRED STOCK PURCHASE
AGREEMENT (the "Agreement") is entered into as of January 7th, 1999, by and
among AFFILIATION, INC., a Delaware corporation (the "Company") and each of
those persons and entities, severally and not jointly, whose names are set forth
on the Schedule of Purchasers attached hereto as Exhibit A (which persons and
entities are hereinafter collectively referred to as "Purchasers" and each
individually as a "Purchaser").
RECITALS
WHEREAS, the Company has authorized the sale and issuance of an aggregate
of nine million eight hundred ninety thousand one hundred eleven (9,890,111)
shares of its Series A Preferred Stock (the "Series A Shares");
WHEREAS, the Company has authorized the sale and issuance of an aggregate
of five million (5,000,000) shares of its Series B Preferred Stock (the "Series
B Shares") (the Series A Shares and the Series B Shares are referred to herein
collectively as the "Shares");
WHEREAS, Purchasers desire to purchase the Shares on the terms and
conditions set forth herein; and
WHEREAS, the Company desires to issue and sell the Shares to Purchasers on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree as follows:
1. AGREEMENT TO SELL AND PURCHASE.
1.1 Authorization of Shares. On or prior to the Closing (as defined
in Section 2 below), the Company shall have authorized (a) the transfer, sale
and issuance to Purchasers of the Shares and (b) the issuance of such shares of
Preferred Stock or Common Stock to be issued upon conversion of the Shares (the
"Conversion Shares"). The Shares and the Conversion Shares shall have the
rights, preferences, privileges and restrictions set forth in the Amended and
Restated Certificate of Incorporation of the Company, in the form attached
hereto as Exhibit B (the "Restated Charter").
1.2 Sale and Purchase. Subject to the terms and conditions hereof,
at the Closing (as hereinafter defined) the Company hereby agrees to issue and
sell to each Purchaser, severally and not jointly, and each Purchaser agrees to
purchase from the Company, severally and not jointly, the number of Series A
Shares and the number of Series B Shares set forth opposite such Purchaser's
name on Exhibit A, at a purchase price of thirty-five cents ($0.35) per Series A
Share and thirty-five cents ($0.35) per Series B Share.
2. CLOSING, DELIVERY AND PAYMENT.
2.1 Closing. The closing of the sale and purchase of the Shares
under this Agreement (the "Closing") shall take place at 2:00 p.m. on the date
hereof at the offices of Xxxxxx Godward LLP, 0000 Xxxx Xxxx Xxxx, Xxxxxxxx 0,
Xxxxx 000, Xxxxx Xxxx, Xxxxxxxxxx 00000 or at such other time or place as the
Company and Purchasers may mutually agree (such date is hereinafter referred to
as the "Closing Date").
2.2 Delivery. At the Closing, subject to the terms and conditions
hereof, the Company will deliver to each Purchaser a certificate representing
the number of Series A Shares and the number of Series B Shares to be purchased
at the Closing by such Purchaser, against payment of the consideration listed on
Exhibit A attached hereto by wire transfer, check made payable to the order of
the Company, cancellation of indebtedness or any combination of the foregoing or
the assignment of assets, as applicable.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as set forth on a Schedule of Exceptions delivered by the
Company to the Purchasers at the Closing the Company hereby represents and
warrants to each Purchaser as of the date of this Agreement as follows:
3.1 Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement and the Investor Rights Agreement in the form attached hereto as
Exhibit C (the "Investor Rights Agreement"), to issue and sell the Shares and
the Conversion Shares, and to carry out the provisions of this Agreement, the
Investor Rights Agreement and the Restated Charter and to carry on its business
as presently conducted and as presently proposed to be conducted.
3.2 Subsidiaries. The Company does not own or control any equity
security or other interest of any other corporation, limited partnership or
other business entity. The Company is not a participant in any joint venture,
partnership or similar arrangement.
3.3 Capitalization; Voting Rights. The authorized capital stock of
the Company, immediately prior to the Closing, will consist of 20,000,000 shares
of Common Stock, (par value $0.001) per share, none of which are issued and
outstanding and 1,978,022 shares of which are reserved for future issuance to
employees pursuant to the Company's 1999 Stock Option Plan and 15,000,000 shares
of Preferred Stock, (par value $0.001) per share, 10,000,000 of which are
designated Series A Preferred Stock, none of which are issued and outstanding
and 5,000,000 of which are designated Series B Preferred Stock, none of which
are issued and outstanding. All issued and outstanding shares of the Company's
Common Stock and Preferred Stock (a) have been duly authorized and validly
issued. The rights, preferences, privileges and restrictions of the Shares are
as stated in the Restated Charter. Each Series of Series A Preferred Stock is
convertible into Common Stock on a one-for-one basis. The Conversion Shares
have been duly and validly reserved for issuance. Other than the 1,978,022
shares reserved for issuance under the Company's 1999 Stock Option Plan, and
except as may be granted pursuant to
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the Investor Rights Agreement, there are no outstanding options, warrants,
rights (including conversion or preemptive rights and rights of first refusal),
proxy or shareholder agreements, or agreements of any kind for the purchase or
acquisition from the Company of any of its securities. When issued in compliance
with the provisions of this Agreement and the Restated Charter, the Shares and
the Conversion Shares will be validly issued, fully paid and nonassessable, and
will be free of any liens or encumbrances, provided, however, that the Shares
and the Conversion Shares may be subject to restrictions on transfer under state
and/or federal securities laws as set forth herein or as otherwise required by
such laws at the time a transfer is proposed. No stock plan, stock purchase,
stock option or other agreement or understanding between the Company and any
holder of any equity securities or rights to purchase equity securities provides
for acceleration or other changes in the vesting provisions or other terms of
such agreement or understanding as the result of any merger, consolidated sale
of stock or assets, change in control or any other transaction(s) by the
Company.
3.4 Authorization; Binding Obligations. All corporate action on the
part of the Company, its officers, directors and shareholders necessary for the
authorization of this Agreement and the Investor Rights Agreement, the
performance of all obligations of the Company hereunder and thereunder at the
Closing and the authorization, sale, issuance and delivery of the Shares
pursuant hereto and the Conversion Shares pursuant to the Restated Charter has
been taken or will be taken prior to the Closing. The Agreement and the
Investor Rights Agreement, when executed and delivered, will be valid and
binding obligations of the Company enforceable in accordance with their terms,
except (a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of
creditors' rights, (b) general principles of equity that restrict the
availability of equitable remedies, and (c) to the extent that the
enforceability of the indemnification provisions in Section 2.9 of the Investor
Rights Agreement may be limited by applicable laws. The sale of the Shares and
the subsequent conversion of the Shares into Conversion Shares are not and will
not be subject to any preemptive rights or rights of first refusal that have not
been properly waived or complied with.
3.5 Agreements; Action.
(a) There are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs or decrees to which
the Company is a party or to its knowledge by which it is bound which may
involve (i) obligations (contingent or otherwise) of, or payments to, the
Company in excess of $20,000 (other than obligations of, or payments to, the
Company arising from purchase or sale agreements entered into in the ordinary
course of business or arising from this Agreement or the Investor Rights
Agreement), or (ii) the transfer or license of any parent, copyright, trade
secret or other proprietary right to or from the Company (other than licenses
arising from the purchase of "off the shelf" or other standard products), or
(iii) provisions restricting the development, manufacture or distribution of the
Company's products or services, or (iv) indemnification by the Company with
respect to infringements of proprietary rights (other than indemnification
obligations arising from purchase or sale or license agreements entered into in
the ordinary course of business).
(b) The Company has not (i) declared or paid any dividends, or
authorized or made any distribution upon or with respect to any class or Series
of its capital
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stock, (ii) incurred any indebtedness for money borrowed or any other
liabilities (other than with respect to dividend obligations, distributions,
indebtedness and other obligations incurred in the ordinary course of business
or as disclosed in the financial statements) individually in excess of $10,000
or, in the case of indebtedness and/or liabilities individually less than
$10,000, in excess of $25,000 in the aggregate, (iii) made any loans or advances
to any person, other than ordinary advances for travel expenses, or (iv) sold,
exchanged or otherwise disposed of any of its assets or rights, other than the
sale of its inventory in the ordinary course of business.
(c) For the purposes of subsections (b) and (c) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.
3.6 Obligations to Related Parties. There are no obligations of the
Company to officers, directors, shareholders, or employees of the Company other
than (a) for payment of salary for services rendered, (b) reimbursement for
reasonable expenses incurred on behalf of the Company and (c) for other standard
employee benefits made generally available to all employees (including stock
option agreements outstanding under any stock option plan approved by the Board
of Directors of the Company). The Company is not a guarantor or indemnitor of
any indebtedness of any other person, firm or corporation.
3.7 Title to Properties and Assets; Liens, Etc. The Company has
good and marketable title to its properties and assets, including the properties
and assets reflected in the most recent balance sheet included in the Financial
Statements, and good title to its leasehold estates, in each case subject to no
mortgage, pledge, lien, lease, encumbrance or charge, other than (a) those
resulting from taxes which have not yet become delinquent, (b) minor liens and
encumbrances which do not materially detract from the value of the property
subject thereto or materially impair the operations of the Company, and (c)
those that have otherwise arisen in the ordinary course of business. The
Company is in compliance with all material terms of each lease to which it is a
parry or is otherwise bound.
3.8 Patents and Trademarks. To the best of its knowledge, after
taking into account the purchase by the Company of certain assets under this
Agreement, the Company owns or possesses sufficient legal rights to all patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information and other proprietary rights and processes necessary for its
business as now conducted and as presently proposed to be conducted, without any
known infringement of the rights of others. There are no outstanding options,
licenses or agreements of any kind relating to the foregoing, nor is the Company
bound by or a party to any options, licenses or agreements of any kind with
respect to the patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information and other proprietary rights and processes
of any other person or entity other than such licenses or agreements arising
from the purchase of "off the shelf" or standard products. The Company has not
received any communications alleging that the Company has violated or, by
conducting its business as presently proposed would violate any of the patents,
trademarks, service marks, trade names, copyrights or trade secrets or other
proprietary rights of, any other person or entity. The Company is not aware
that any of its employees is obligated under any contract (including
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licenses, covenants or commitments of any nature) or other agreement, or subject
to any judgment, decree or order of any court or administrative agency, that
would interfere with their duties to the Company or that would conflict with the
Company's business as presently proposed to be conducted. Neither the execution
nor delivery of this Agreement or the Investor Rights Agreement, nor the
carrying on of the Company's business by the employees of the Company, nor the
conduct of the Company's business as presently proposed, will, to the Company's
knowledge, conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract covenant or
instrument under which any employee is now obligated. The Company does not
believe it is or will be necessary to utilize any inventions, made secrets or
proprietary information of any of its employees made prior to their employment
by the Company, except for inventions, trade secrets or proprietary information
that have been assigned to the Company.
3.9 Compliance with other Instruments. The Company is not in
violation or default of any term of its Restated Charter or Bylaws, or of any
provision of any mortgage, indenture, contract, agreement, instrument or
contract to which it is party or by which it is bound or of any judgment,
decree, order, writ. The execution, delivery, and performance of and compliance
with this Agreement, and the Investor Rights Agreement, and the issuance and
sale of the Shares pursuant hereto and of the Conversion Shares pursuant to the
Restated Charter, will not, with or without the passage of time or giving of
notice, result in any such material violation, or be in conflict with or
constitute a default under any such term, or result in the creation of any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Company or the suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, authorization or approval applicable to the
Company, its business or operations or any of its assets or properties.
3.10 Litigation. There is no action, suit, proceeding or
investigation pending or to the Company's knowledge currently threatened in
writing against the Company that questions the validity of this Agreement, or
the Investor Rights Agreement or the right of the Company to enter into any of
such agreements, or to consummate the transactions contemplated hereby or
thereby, or which might result, either individually or in the aggregate, in any
material adverse change in the assets, condition, affairs or prospects of the
Company, financially or otherwise, or any change in the current equity ownership
of the Company, nor is the Company aware that there is any basis for any of the
foregoing. The foregoing includes, without limitation, actions pending or
threatened in writing (or any basis therefor known to the Company) involving the
prior employment of any of the Company's employees, their use in connection with
the Company's business of any information or techniques allegedly proprietary to
any of their former employers, or their obligations under any agreements with
prior employers. The Company is not a party or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company currently pending or which the Company intends to initiate.
3.11 Employees. The Company has no collective bargaining agreements
with any of its employees. There is no labor union organizing activity pending
or, to the Company's knowledge, threatened with respect to the Company. To the
Company's knowledge, no employee of the Company, nor any consultant with whom
the Company has controlled, is in
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violation of any term of any employment contract, proprietary information
agreement or any other agreement relating to the right of any such individual to
be employed by, or to contract with, the Company because of the nature of the
business to be conducted by the Company; and to the Company's knowledge the
continued employment by the Company of its present employees, and the
performance of the Company's contracts with its independent contractors, will
not result in any such violation. The Company has not received any notice
alleging that any such violation has occurred. No employee of the Company has
been granted the right to continued employment by the Company or to any material
compensation following termination of employment with the Company. The Company
is not aware that any officer or key employee, or that any group of key
employees, intends to terminate his, her or their employment with the Company,
nor does the Company have a present intention to terminate the employment of any
officer, key employee or group of key employees.
3.12 Registration Rights and Voting Rights.
(a) Except as required pursuant to the Investor Rights
Agreement, the Company is presently not under any obligation, and has not
granted any rights, to register (as defined in Section 1.1 of the Investor
Rights Agreement) any of The Company's presently outstanding securities or any
of its securities that may hereafter be issued.
(b) To the Company's knowledge, no shareholder of the Company
has entered into any agreement with respect to the voting of equity securities
of the Company.
3.13 Compliance with Laws; Permits. To its knowledge, the Company is
not in violation of any applicable statute, rule, regulation, order or
restriction of any domestic or foreign -government or any instrumentality or
agency thereof in respect of the conduct of its business or the ownership of its
properties which violation would materially and adversely affect The business,
assets, liabilities, financial condition, operations or prospects of the
Company. No governmental orders, permissions, consents. approvals or
authorizations are required to be obtained and no registrations or declarations
are required to be filed in connection with the execution and delivery of this
Agreement and the issuance of the Shares or the Conversion Shares. except such
as has been duly and validly obtained or filed, or with respect to any filings
that must be made after the Closing, as will be filed in a timely manner. The
Company has all franchises, permits licenses and any similar authority necessary
for the conduct of its business as now being conducted by it, the lack of which
could materially and adversely affect the business, properties, prospects or
financial condition of the Company and believes it can obtain, without undue-
burden or expense, any similar authority for the conduct of its business as
planned to be conducted.
3.14 Offering Valid. Assuming the accuracy of the representations
and warranties of the Purchasers contained in Section 4.2 hereof, the offer,
sale and issuance of the Shares and the Conversion Shares will be exempt from
the registration requirements of the Securities Act of 1933, as amended the
"Securities Act"), and will have been registered or qualified (or are exempt
from registration and qualification) under the registration, permit or
qualification requirements of all applicable state securities laws. Neither the
Company nor any agent on its behalf has solicited or will solicit any offers to
sell or has offered to sell or will offer to sell all or any part of the Shares
to any person or persons so as to bring the sale of such Shares
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by the Company within the registration provisions of the Securities Act or any
state securities laws.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
Each Purchaser hereby represents and warrants to the Company as
follows (such representations and warranties do not lessen or obviate the
representations and warranties of the Company set forth in this Agreement):
4.1 Requisite Power and Authority. Purchaser has all necessary
power and authority under all applicable provisions of law to execute and
deliver this Agreement and the Investor Rights Agreement and to carry out their
provisions. All action on Purchaser's part required for the lawful execution and
delivery of this Agreement and the Investor Rights Agreement have been or will
be effectively taken prior to the Closing. Upon their execution and delivery,
this Agreement and the Investor Rights Agreement will be valid and binding
obligations of Purchaser, enforceable in accordance with their terms, except (a)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors' sights,
(b) general principles of equity That restrict The availability of equitable
remedies, and (c) to the extent that the enforceability of the indemnification
provisions of Section 2.9 of The Investor Rights Agreement may be limited by
applicable laws,
4.2 Investment Representations. Purchaser understands that neither
the Shares nor the Conversion Shares have been registered under the Securities
Act. Purchaser also understands that the Shams are being offered and sold
pursuant to an exemption from registration contained in the Securities Act based
in pan upon Purchaser's representations contained in the Agreement. Purchaser
hereby represents and, warrants as following:
(a) Purchaser Bears Economic Risk. Purchaser has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests- Purchaser must bear the economic risk of
this investment indefinitely unless the Shares (or the Conversion Shares) are
registered pursuant to The Securities Am or an exemption from registration is
available Purchaser understands that the Company has no present intention of
registering the Shares, the Conversion Shares or any shares of its Common Stock.
Purchaser also understands that there is no assurance that any exemption from
registration under the Securities Act will be available and that, even if
available, such exemption may not allow Purchaser to transfer all or any portion
of the Shares or The Conversion Shares; under the circumstances, in the amounts
or at the times Purchaser might propose.
(b) Acquisition for Own Account. Purchaser is acquiring The
Shares and the Conversion Shares for Purchaser's own account for investment
only, and not with a view towards Their distribution.
(c) Purchaser Can Protect Its Interest. Purchaser represents
that by reason of its, or of its management's, business or financial experience,
Purchaser has the capacity
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to protect its own interests in connection with the Transactions contemplated in
this Agreement. and the Investor Rights Agreement. Further, Purchaser is aware
of no publication of any advertisement in connection with the transactions
contemplated in the Agreement.
(d) Accredited Investor. Purchaser represents that it is an
accredited investor within the meaning of Regulation D under the Securities Act.
(e) Company Information. Purchaser has received and read the
financial statements and Business Plan and has had an opportunity to discuss the
Company's business, management and financial affairs with directors, officers
and management of the Company and has had the opportunity to review the
Company's operations and facilities. Purchaser has also had the opportunity to
ask questions of and receive answers from, the Company and its management
regarding the terms and conditions of this investment
(f) Rule 144. Purchaser acknowledges and agrees that the
Shares and, if issued, the Conversion Shares must be held indefinitely unless
they are subsequently registered under the Securities Act or an exemption from
such registration is available Purchaser has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act as in effect from
time to time, which permits limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions. including, among
other things: the availability of certain current public information about the
Company, the resale occurring following the required holding period under Rule
144 and the number of shares being sold during any three-month period not
exceeding specified limitations.
(g) Residence. If the Purchaser is an individual, then the
Purchaser resides in the state or province identified in the address of the
Purchaser set forth on EXHIBIT A; if the Purchaser is a partnership,
corporation, limited liability company or other entity, Then the office or
offices of the Purchaser in which its investment decision was mad is located at
the address or addresses of The Purchaser set forth on Exhibit A.
4.3 Transfer Restrictions. Each Purchaser acknowledges and agrees
that the Shams and, if issued, the Conversion Shares are subject to restrictions
on transfer as set forth in the Investor Rights Agreement.
5. CONDITIONS TO CLOSING.
5.1 Conditions to Purchasers' Obligations at the Closing.
Purchasers' obligations-to purchase the Shares at the Closing am subject to The
satisfaction, at or prior to the Closing Date, of the following conditions:
(a) Representations And Warranties True; Performance of
Obligations. The representations and warranties made by the Company in Section 3
hereof shall be true and correct in all material respects as of the Closing Date
with the same force and effect as if they had been made as of the Closing Date,
and the Company shall have performed all obligations and conditions herein
required to be performed or observed by it on or prior to the Closing.
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(b) Legal Investment. On the Closing Date, the sale and
issuance of the Share and the proposed issuance of the Conversion Shares shall
be legally permitted by all laws and regulations to which Purchasers and the
Company are subject.
(c) Consents, Permits, and Waivers. The Company shall have
obtained any and all consents permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the Investor
Rights Agreement (except for such as may be properly obtained subsequent to the
Closing).
(d) Filing of Restated Charter. The Restated Charter shall have
been filed with the Secretary of State of the State of Delaware and shall
continue to be in fall force and effect as of the Closing Date.
(e) Corporate Documents. The Company shall have delivered to
Purchasers or Their counsel, copies of all corporate documents of the Company as
Purchasers shall reasonably request.
(f) Reservation of Conversion Shares. The Conversion Shams
issuable upon conversion of the Shams shall have; been duly authorized and
reserved for issuance upon such conversion.
(g) Compliance Certificate. The Company shall have delivered to
Purchasers a Compliance Certificate, executed by the President of the Company,
dated the Closing Date, to the effect that the conditions specified in
subsections (a), (c), (d) and (f) of this Section 5.1 have been satisfied.
(h) Investor Rights Agreement. An Investor Rights Agreement
substantially in the form attached hereto as Exhibit C shall have been executed
and delivered by the parties thereto.
(i) Board of Directors. Upon the Closing, the authorized. size
of the Board of Directors of the Company shall be two (2) members and the Board
shall consist of Xxxxx Xxxxxxxx and Xxxx Xxxx.
(j) Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing
hereby and all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to the Purchasers and their
special counsel, and the Purchasers and their special counsel shall have
received all such counterpart originals or certified or other copies of such
documents as they may reasonably request.
5.2 Conditions to Obligations of the Company. The Company's
obligation to issue and sell the Shares at each Closing is subject to the
satisfaction, an or prior to such Closing, of the following conditions:
(a) Representations and Warranties True. The representations
and warranties in Section 4 made by those Purchasers acquiring Shares hereof
shall be true and
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correct in all material respects at the date of Me Closing, with the same force
and effect as if they had been made on and as of said date.
(b) Performance Of Obligations. Such Purchasers shall have
performed and complied with all agreements and conditions herein required to be
performed or complied with by such Purchasers on or before the Closing.
(c) Filing of Restated Charter. The Restated Charter shall
have been filed with the Secretary of State of the State of Delaware.
(d) Investor Rights Agreement. An Investor Rights Agreement
substantially in the form attached hereto as Exhibit C shall have been executed
and delivered by the Purchasers.
(e) Consents, Permits and Waivers. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the Investor
Rights Agreement (except for such as may be properly obtained subsequent to the
Closing).
6. Miscellaneous.
6.1 Governing Law. This Agreement shall be governed in all respects
by the laws of the State of California as such laws are applied to agreements
between California residents entered into and performed entirely in California.
6.2 Survival. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by any Purchaser and
the closing of the transactions contemplated hereby. All statements as to
factual matters contained in any certificate or other instrument delivered by or
on behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.
6.3 Successors and Assigns. Except as otherwise expressly provided
herein, The provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Shares from time to time.
6.4 Entire Agreement. This Agreement, the Exhibits and Schedules
hereto, the Investor Rights Agreement and the other documents delivered pursuant
hereto constitute the full and entire understanding and agreement between the
values with regard to the subjects hereof and no party shall be liable or bound
to any other in any manner by any representations, warranties, covenants and
agreements except as specifically set forth herein and therein.
6.5 Severability. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, The validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
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6.6 Amendment And Waiver.
(a) This Agreement may be amended or modified only upon the
written. consent of the Company and holders of at least sixty-six and two-thirds
percent (66 2/3%) of the Shares (treated as if converted and including any
Conversion Shares into which the Shares have been converted that have not been
sold to the public).
(b) The obligations of the Company and the rights of the
holders of the Shares and the Conversion Shares under the Agreement may be
waived only with the written consent of the holders of at least sixty-six and
two-thirds percent (66 2/3%) of the Shares (treated as if converted and
including any Conversion Shares into which the Shares have been converted that
have not been sold to the public).
6.7 Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, the Investor
Rights Agreement or the Restated Charter, shall impair any such right, power at
remedy, nor shall it be construed to be a waiver of any such breach, default or
noncompliance, or any acquiescence therein, or of or in any similar breach,
default or noncompliance thereafter occurring. It is further agreed that any
waiver, permit, consent or approval of any kind or character on my Purchaser's
part of any breach, default or noncompliance under This Agreement, the Investor
Rights Agreement or under the Restated Charter or any waiver on such party's
part of any provisions or conditions of the Agreement, the Investor Rights
Agreement, or the Restated Charter must be in writing and shall be effective
only to the extent specifically set forth in such writing. All remedies, either
under this Agreement the Investor Right Agreement, The Restated Charter, by law,
or otherwise afforded to any party, shall be cumulative and not alternative.
6.8 Notices. All notices required or permitted hereunder shall be
in writing and shall be deemed effectively given: (a) upon personal delivery to
the party to be notified, (b) when seat by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, 'then on the next
business day, (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall be
sent to the Company at the address as set forth on the signature page hereof and
to Purchaser at the address set forth on Exhibit A attached hereto or at such
other address as the Company or Purchaser may designate by ten (10) days advance
written notice to the other parties hereto.
6.9 Expenses. Each party shall pay all costs and expenses that it
incurs with respect to the negotiation, execution, delivery and performance of
the Agreement.
6.10 Attorneys' Fees. In the event that any suitor action is
instituted to enforce any provision in this Agreement, the prevailing party in
such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation, such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.
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6.11 Titles and Subtitles. The titles of the sections and
subsections of the Agreement are for convenience of reference only and are not
to be considered in consuming this Agreement.
6.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one
6.13 Broker's Fees. Each party hereto represents and warrants That
no agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party hereto is or will be entitled to any broker's or
finder's fee or any other commission directly or indirectly in connection with
the transactions contemplated herein. Each party hereto further agrees to
indemnify each other parry for any claims, losses or expenses incurred by such
other party as a result of the representation in this Section 6.14 being untrue.
6.14 Exculpation Among Purchasers. Each Purchaser acknowledges that
it is not relying upon any person, firm, or corporation, other than the Company
and its officers and directors, in making its investments or decisions to invest
in the Company-Each Purchaser agrees that no Purchaser nor the respective
controlling persons, officers, directors, partners, agents or employees of any
Purchaser shall be liable to any other Purchaser for any action heretofore or
hereafter taken or omitted To be taken by any of them in connection with the
Shares and Conversion Shares.
6.15 Confidentiality. Each party hereto agrees to except with the
prior written consent of the other party, it shall at all times keep
confidential and not divulge, furnish or make accessible to anyone any
confidential information, knowledge or data concerning or relating to the
business or financial affairs of the other parties to which such parry has been
or shall become privy by reason of this Agreement or the Investor Rights
Agreement, discussions or negotiations relating to this Agreement or the
Investor Rights Agreement, the performance of it obligations hereunder or the
ownership of the Shares purchased hereunder. The provisions of this Section
6.16 shall be in addition to, and not in substitution for, the provisions of any
separate nondisclosure agreement executed by the parties hereto.
6.16 Pronouns. All pronouns contained herein, and any variations
thereof, shall be deemed to refer to the masculine, feminine or neutral,
singular or plural, as to the identity of the parties hereto may require.
6.17 California Corporate Securities Law. THE SALE OF THE
SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF
SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE OF AN EXEMPTION FROM SUCH
QUALIFICATION IS UNLAWFUL. PRIOR TO ACCEPTANCE OF SUCH CONSIDERATION By THE
COMPANY, THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT A" EXPRESSLY CONDITIONED
UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION FROM SUCH QUALIFICATION
BEING AVAILABLE.
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