Exhibit 10.1
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
SERIES E PREFERRED STOCK
PURCHASE AGREEMENT
TABLE OF CONTENTS
PAGE
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1. AGREEMENT TO SELL AND PURCHASE.................................................1
1.1 Authorization of Shares...............................................1
1.2 Sale and Purchase.....................................................1
2. CLOSING, DELIVERY AND PAYMENT..................................................1
2.1 Closing...............................................................1
2.2 Delivery..............................................................2
2.3 Subsequent Sales of Series E Preferred Stock..........................2
3. REPRESENTATIONS AND WARRANTIES OF THE CORPORATION..............................2
3.1 Organization Good Standing and Qualification..........................2
3.2 Capitalization; Voting Rights.........................................2
3.3 Authorization; Binding Obligations....................................3
3.4 Agreements; Action....................................................3
3.5 Obligations to Related Parties........................................5
3.6 Title to Properties and Assets; Liens, etc............................5
3.7 Patents and Trademarks................................................5
3.8 Compliance with Other Instruments.....................................6
3.9 Litigation............................................................6
3.10 Employees.............................................................6
3.11 Proprietary Information and Inventions Agreements.....................7
3.12 Obligations of Management; Employee Search............................7
3.13 Registration Rights...................................................7
3.14 Compliance with Laws; Permits.........................................7
3.15 Environmental and Safety Laws.........................................8
3.16 Offering Valid........................................................8
3.17 Minute Books..........................................................8
3.18 Section 83(b) Elections...............................................8
3.19 Real Property Holding Corporation.....................................8
3.20 Disclosure............................................................8
3.21 Financial Statements..................................................8
3.22 Changes...............................................................9
3.23 Compliance with Other Instruments....................................10
3.24 Insurance............................................................11
3.25 Tax Returns, Payments and Elections..................................11
4. REPRESENTATIONS AND WARRANTS OF THE PURCHASERS................................11
4.1 Requisite Power and Authority........................................11
4.2 Consents.............................................................12
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TABLE OF CONTENTS
(CONTINUED)
4.3 Investment Representations...........................................12
4.4 Transfer Restrictions................................................13
5. CONDITIONS TO CLOSING.........................................................13
5.1 Conditions to Purchasers' Obligations at the Closing.................13
5.2 Conditions to Obligations of the Corporation.........................15
6. MISCELLANEOUS.................................................................15
6.1 Governing Law........................................................15
6.2 Survival.............................................................15
6.3 Successors and Assigns...............................................16
6.4 Entire Agreement.....................................................16
6.5 Severability.........................................................16
6.6 Amendment and Waiver.................................................16
6.7 Delays or Omissions..................................................16
6.8 Notices..............................................................16
6.9 Expenses.............................................................17
6.10 Attorneys' Fees......................................................17
6.11 Titles and Subtitles.................................................17
6.12 Counterparts.........................................................17
6.13 Pronouns.............................................................17
6.14 Broker's Fees........................................................17
6.15 Exculpation Among Purchasers.........................................17
6.16 Waiver of conflicts..................................................17
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ADESSO SPECIALTY SERVICES ORGANIZATION INC.
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES E PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is
entered into by and among ADESSO SPECIALTY SERVICES ORGANIZATION INC., a
California corporation (the "Corporation") 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
"Purchaser").
RECITALS
WHEREAS, the Corporation has authorized the sale and issuance of an
aggregate of up to one million two hundred thousand (1,200,000) shares of its
Series E Preferred Stock (the "Shares");
WHEREAS, Purchasers desire to purchase the Shares on the terms
and conditions set forth herein; and
WHEREAS, the Corporation 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 Corporation shall have authorized (i) the sale and
issuance to Purchasers of the Shares and (ii) the issuance of such shares of
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
Articles of Incorporation of the Corporation, as amended, in the form attached
hereto as Exhibit B (the "Restated Articles").
1.2 SALE AND PURCHASE. Subject to the terms and conditions hereof, at
the Closing (as hereinafter defined) the Corporation hereby agrees to issue and
sell to each Purchaser, severally and not jointly, and each Purchaser agrees to
purchase from the Corporation, severally and not jointly, the number of Shares
set forth opposite such Purchaser's name on Exhibit A, at a purchase price of
$16.80 per 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 on the date hereof, at the
offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, XX
00000-0000 or at such other time or place as the
Corporation 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 Corporation will deliver to the Purchasers certificates representing
the number of Shares to be purchased at the Closing by each Purchaser, against
payment of the purchase price therefor by cancellation of indebtedness of the
Corporation to such Purchaser or by check or wire transfer made payable to the
order of the Corporation.
2.3 SUBSEQUENT SALES OF SERIES E PREFERRED STOCK. At any time on or
before the 30th day following the Closing, the Corporation may sell up to the
balance of Series E Preferred Stock authorized but not sold at the Closing to
such persons as may be approved by the Chief Executive Officer of the
Corporation. All such sales shall be made on the terms and conditions set forth
in this Agreement. Any shares of Series E Preferred Stock sold pursuant to this
Section 2.3 shall be deemed to be "Series E Preferred Stock" for all purposes
under this agreement and shall be deemed "Shares" sold pursuant to this
Agreement, and any purchasers therefore shall be deemed to be "Purchasers" for
all purposes under this agreement. Should any such sales be made, the
Corporation shall prepare and distribute to the Purchasers a revised Exhibit A
to this Agreement reflecting such sales.
3. REPRESENTATIONS AND WARRANTIES OF THE CORPORATION.
Except as set forth on the Schedule of Exceptions attached hereto as
Exhibit C, the Corporation hereby represents and warrants to each Purchaser as
follows:
3.1 ORGANIZATION GOOD STANDING AND QUALIFICATION. The Corporation is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California. The Corporation has all requisite corporate power
and authority to own and operate its properties and assets, to execute and
deliver this Agreement, the Amended and Restated Investors' Rights Agreement in
the form attached hereto as Exhibit D (the "Investors' Rights Agreement"), the
Amended and Restated Co-Sale Agreement attached hereto as Exhibit E (the
"Co-Sale Agreement") and the Amended and Restated Voting Agreement attached
hereto as Exhibit F (the "Voting Agreement") (collectively, the "Related
Agreements"), to issue and sell the Shares hereunder, to issue the Conversion
Shares, and to carry out the provisions of this Agreement, the Related
Agreements and the Restated Articles and to carry on its business as currently
conducted and as currently proposed to be conducted. The Corporation is duly
qualified and is authorized to do business and is in good standing as a foreign
corporation in all jurisdictions in which the nature of its activities and of
its properties (both owned and leased) makes such qualification necessary,
except for those jurisdictions in which failure to do so would not have a
material adverse effect on the Corporation or its business. The Corporation owns
no equity securities of any other corporation, limited partnership or similar
entity. The Corporation is not a participant in any joint venture, partnership
or similar arrangement.
3.2 CAPITALIZATION; VOTING RIGHTS. The authorized capital stock of the
Corporation, immediately prior to the Closing, will consist of 7,000,000 shares
of Common Stock, 277,082 shares
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of which are issued and outstanding and 1,091,525 shares of which are reserved
for future issuance to employees and directors of and consultants to the
Corporation pursuant to the Corporation's 1995 Stock Option Plan and 1997 Stock
Option Plan and 5,535,000 shares of Preferred Stock, 1,000,000 shares of which
are designated Series A Preferred Stock, 790,000 shares of which are issued and
outstanding and 135,615 shares of which are reserved for future issuance upon
exercise of warrants, 1,185,000 shares of which are designated Series B
Preferred Stock, 1,021,356 shares of which are issued and outstanding, 900,000
shares of which have been designated Series C Preferred Stock, 853,631 shares of
which are issued and outstanding, 1,250,000 shares of which have been designated
as Series D Preferred Stock, 1,196,570 shares of which are issued and
outstanding, and 1,200,000 shares of which are designated Series E Preferred
Stock, none of which are issued and outstanding. All issued and outstanding
shares of the Corporation's Common and Preferred Stock (i) have been duly
authorized and validly issued, (ii) are fully paid and nonassessable, and (iii)
were issued in compliance with all applicable state and federal laws concerning
the issuance of securities. The rights, preferences, privileges and restrictions
of the Shares are as stated in the Restated Articles. The Conversion Shares have
been duly and validly reserved for issuance. Other than as set forth in this
Section 3.2 and except for the conversion privileges of the Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, Series D, and Series
E Preferred Stock and the rights set forth in the Related Agreements, 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 Corporation of
any of its securities. When issued in compliance with the provisions of this
Agreement and the Restated Articles, 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 in the related agreements, or as otherwise required
by such laws at the time a transfer is proposed.
3.3 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on the
part of the Corporation, its officers, directors and shareholders necessary for
the authorization of this Agreement and the Related Agreements, the performance
of all obligations of the Corporation 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 Articles has been taken or
will be taken prior to the Closing. The Agreement and the Related Agreements,
when executed and delivered, will be valid and binding obligations of the
Corporation enforceable in accordance with their terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization moratorium or other laws of
general application affecting enforcement of creditors' rights; (ii) general
principles of equity that restrict the availability of equitable remedies; and
(iii) to the extent that the enforceability of the indemnification provisions in
Section 2.9 of the Investors' Rights Agreement may be limited by applicable
laws. The sale of the Shares and the subsequent conversion of the Shares into
Conversion Shares and 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.
3.4 AGREEMENTS; ACTION.
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(a) Except for agreements explicitly contemplated hereby and
in the related agreements and agreements between the Corporation and its
employees with respect to the sale of the Corporation's Common Stock, there are
no agreements, understandings or proposed transactions between the Corporation
and any of its officers or directors or any affiliate thereof.
(b) There are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs or decrees to which
the Corporation is a party or to its knowledge by which it is bound that may
involve (i) obligations (contingent or otherwise) of, or payments to, the
Corporation in excess of $50,000, or (ii) the license of any patent, copyright,
trade secret or other proprietary right to or from the Corporation (other than
licenses arising from the purchase of "off the shelf" or other standard
products), or (iii) provisions restricting or affecting the development,
manufacture or distribution of the Corporation's products or services, or (iv)
indemnification by the Corporation with respect to infringements of proprietary
rights (other than indemnification obligations arising from purchase or sale
agreements entered into in the ordinary course of business).
(c) The Corporation 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 stock, (ii) incurred any indebtedness for money
borrowed or any other liabilities (other than with respect to indebtedness and
other obligations incurred in the ordinary course of business) individually in
excess of $50,000 or, in the case of indebtedness and/or liabilities
individually less than $50,000, in excess of $100,000 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.
(d) 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 Corporation has reason to believe are affiliated therewith)
shall be aggregated for the purpose of meeting the individual minimum dollar
amounts of such subsections.
(e) The Corporation is not a party to and is not bound by any
contract, agreement or instrument, or subject to any restriction under its
Restated Articles or Bylaws that adversely affects its business as now conducted
or as proposed to be conducted its properties or its financial condition.
(f) The Corporation has not engaged in the past three months
in any discussion (i) with any representative of any corporation or corporations
regarding the consolidation or merger of the Corporation with or into any such
corporation or corporations, (ii) with any corporation, partnership, association
or other business entity or any individual regarding the sale, conveyance or
disposition of all or substantially all of the assets of the Corporation, or a
transaction or series of related transactions in which more than 50% of the
voting power of the Corporation is disposed of, or (iii) regarding any other
form of acquisition, liquidation, dissolution or winding up of the Corporation.
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3.5 OBLIGATIONS TO RELATED PARTIES. There are no obligations of the
Corporation to officers, directors, shareholders, or employees of the
Corporation other than (a) for payment of salary for services rendered, (b)
reimbursement for reasonable expenses incurred on behalf of the Corporation and
(c) for other standard employee benefits made generally available to all
employees (including stock option agreements outstanding under any stock option
plan or agreements approved by the Board of Directors of the Corporation). The
Corporation is not a guarantor or indemnitor of any indebtedness of any other
person, firm or corporation. To the best of the Corporation's knowledge, none of
the officers, directors or shareholders of the Corporation, or any members of
their immediate families, have any direct or indirect ownership interest in any
firm or corporation with which the Corporation is affiliated or with which the
Corporation has a business relationship, or any firm or corporation that
competes with the Corporation, except that officers, directors and/or
shareholders of the Corporation may own stock in publicly traded companies which
may compete with the Corporation. No officer or director of the Corporation is a
member of the immediate family of any other officer or director of the
Corporation, and no officer, director or shareholder, or any member of their
immediate families, is, directly or indirectly, interested in any material
contract with the Corporation (other than such contracts as relate to any such
person's ownership of capital stock or other securities of the Corporation).
There are no agreements, understandings or arrangements, either oral or written,
between the Corporation and any of its shareholders except for this Agreement
and the Related Agreements and, to the Corporation's knowledge, between any of
its shareholders except for this Agreement and the Related Agreements.
3.6 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC. The Corporation has
good and marketable title to its properties and assets, and good title to its
leasehold estates, in each case subject to no mortgage, pledge, lien, lease,
encumbrance or charge, other than (i) those resulting from taxes which have not
yet become delinquent, (ii) minor liens and encumbrances that do not materially
detract from the value of the property subject thereto or materially impair the
operations of the Corporation, and (iii) those that have otherwise arisen in the
ordinary course of business that do not materially impair the operations of the
Corporation. All facilities, machinery, equipment, fixtures, vehicles and other
properties owned, leased or used by the Corporation are in good operating
condition and repair and are reasonably fit and usable for the purposes for
which they are being used.
3.7 PATENTS AND TRADEMARKS. To the best of its knowledge, the
Corporation owns or possesses sufficient legal rights to all patents,
trademarks, service marks, trade names, copyrights, trade secrets, information
and other proprietary rights and processes necessary for its business as now
conducted and as 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 Corporation 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 Corporation has not received any
communications alleging that the Corporation has violated or, by conducting its
business as 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
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Corporation is not aware that any of its employees is obligated under any
contract (including 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
Corporation or that would conflict with the Corporation's business as
proposed to be conducted. Neither the execution nor delivery of this
Agreement, nor the carrying on of the Corporation's business by the employees
of the Corporation, nor the conduct of the Corporation's business as
proposed, will, to the Corporation'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 Corporation does not believe it is or will be necessary to
utilize any inventions, trade secrets or proprietary information of any of
its employees made prior to their employment by the Corporation, except for
inventions, trade secrets or proprietary information that have been assigned
to the Corporation.
3.8 COMPLIANCE WITH OTHER INSTRUMENTS. The Corporation is not in
violation or default of any term of its Restated Articles 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 or, to its knowledge, any statute, rule or regulation
applicable to the Corporation that would materially and adversely affect the
business, assets, liabilities, financial condition, operations or prospects of
the Corporation. The execution, delivery, and performance of and compliance with
this Agreement, and the Related Agreements, and the issuance and sale of the
Shares pursuant hereto and of the Conversion Shares pursuant to the Restated
Articles, 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
Corporation or the suspension, revocation, impairment, forfeiture or nonrenewal
of any permit license, authorization or approval applicable to the Corporation,
its business or operations or any of its assets or properties.
3.9 LITIGATION. There is no action, suit, proceeding or investigation
pending or to the Corporation's knowledge currently threatened against the
Corporation that questions the validity of this Agreement, or the Related
Agreements or the right of the Corporation to enter into any of such agreements,
or to consummate the transactions contemplated hereby or thereby, or that might
result, either individually or in the aggregate, in any material change in the
assets, condition, affairs or prospects of the Corporation, financially or
otherwise, or any change in the current equity ownership of the Corporation, nor
is the Corporation aware that there is any basis for the foregoing. The
foregoing includes, without limitation, actions pending or threatened (or any
basis therefor known to the Corporation) involving the prior employment of any
of the Corporation's employees, their use in connection with the Corporation'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 Corporation 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
Corporation currently pending or which the Corporation intends to initiate.
3.10 EMPLOYEES. The Corporation has no collective bargaining
agreements with any of its employees. There is no labor union organizing
activity pending or, to the Corporation's knowledge,
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threatened with respect to the Corporation. No employee has any agreement or
contract, written or verbal, regarding the employment. The Corporation is not a
party to or bound by any currently effective employment contract, deferred
compensation arrangement, bonus plan, incentive plan, profit sharing plan,
retirement agreement or other employee compensation plan or agreement. To the
Corporation's knowledge, no employee of the Corporation, nor any consultant with
whom the Corporation has contracted, is in 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 Corporation because of the nature of the business to be conducted by
the Corporation; and to the Corporation's knowledge the continued employment by
the Corporation of its present employees, and the performance of the
Corporation's contracts with its independent contractors, will not result in any
such violation. The Corporation has not received any notice alleging that any
such violation has occurred. No employee of the Corporation has been granted the
right to continued employment by the Corporation or to any material compensation
following termination of employment with the Corporation. The Corporation is not
aware that any officer or key employee, or that any group of key employees,
intends to terminate their employment with the Corporation, nor does the
Corporation have a present intention to terminate the employment of any officer,
key employee or group of key employees.
3.11 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTS. Each employee,
officer and consultant of the Corporation who has access to confidential
information has executed a Proprietary Information and Inventions Agreement
substantially in the form of Exhibit H attached hereto. To the best of the
Corporation's knowledge, none of its employees, officers or consultants is in
violation of such agreement.
3.12 OBLIGATIONS OF MANAGEMENT; EMPLOYEE SEARCH. Each officer of the
Corporation is currently devoting 100% of his or her business time to the
conduct of the business of the Corporation. The Corporation is not aware of any
officer or key employee of the Corporation planning to work less than full time
at the Corporation in the future.
3.13 REGISTRATION RIGHTS. Except as required pursuant to the
Investors' Rights Agreement, the Corporation is presently not under any
obligation, and has not granted any rights, to register (as defined in Section 1
of the Investors' Rights Agreement) any of the Corporation's presently
outstanding securities or any of its securities that may hereafter be issued.
3.14 COMPLIANCE WITH LAWS; PERMITS. To its knowledge, the Corporation
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
Corporation. 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
Corporation has all franchises, permits, licenses and any
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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 Corporation and
believes it can obtain, without undue burden or expense, any similar authority
for the conduct of its business as planned to be conducted.
3.15 ENVIRONMENTAL AND SAFETY LAWS. To its knowledge, the Corporation
is not in violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and to its knowledge, no material
expenditures are or will be required in order to comply with any such existing
statute, law or regulation.
3.16 OFFERING VALID. Assuming the accuracy of the representations and
warranties of the Purchasers contained in Section 4.3 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
Corporation 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 by the
Corporation within the registration provisions of the Securities Act.
3.17 MINUTE BOOKS. The minute books of the Corporation made available
to special counsel to the Purchasers contain a complete summary of all meetings
of directors and shareholders since the time of incorporation and reflect all
transactions referenced in such minutes accurately in all material respects.
3.18 SECTION 83(b) ELECTIONS. To the Corporation's knowledge, all
elections and notices permitted by Section 83(b) of the Internal Revenue Code
and any analogous provisions of applicable state tax laws have been timely filed
by all employees who have purchased shares of the Corporation's common stock
under agreements that provide for the vesting of such shares.
3.19 REAL PROPERTY HOLDING CORPORATION. The Corporation is not a real
property holding corporation within the meaning of Internal Revenue Code Section
897(c)(2) and any regulations promulgated thereunder.
3.20 DISCLOSURE. Neither this Agreement nor any information in the
Exhibits hereto or otherwise furnished to the Purchasers taken as a whole
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein and therein not
misleading.
3.21 FINANCIAL STATEMENTS. The Corporation has made available to each
Purchaser its audited financial statements (including balance sheet, income
statement and statement of cash flows) as of December 31, 1998 and for the
fiscal year ended December 31, 1998 and its unaudited financial statements
(including balance sheet, income statement and statement of cash flows) as of
December 31, 1999 ("the "Statement Date") and for the one-month period ended
January 31, 2000 (collectively, the "Financial Statements"). The Financial
Statements have been prepared in
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accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods indicated, except that the unaudited Financial
Statements may not contain all footnotes required by generally accepted
accounting principles. The Financial Statements fairly present the financial
condition and operating results of the Corporation as of the dates, and for the
periods, indicated therein, subject to normal year-end audit adjustments. Except
as set forth in the Financial Statements, the Corporation has no material
liabilities, contingent or otherwise, other than (i) liabilities incurred in the
ordinary course of business subsequent to the Statement Date and (ii)
obligations under contracts and commitments incurred in the ordinary course of
business and not required under generally accepted accounting principles to be
reflected in the Financial Statements, which, in both cases, individually or in
the aggregate are not material to the financial condition or operating results
of the Corporation. Except as disclosed in the Financial Statements, the
Corporation is not a guarantor or indemnity of any indebtedness of any other
person, firm or corporation. The Corporation maintains a standard system of
accounting established and administered in accordance with generally accepted
accounting principles.
3.22 CHANGES. Since the Statement Date, there has not been, to the
Corporation's knowledge:
(a) Any change in the assets, liabilities, financial condition
or operations of the Corporation from that reflected in the Financial
Statements, other than changes in the ordinary course of business, none of which
individually or in the aggregate has had or is expected to have a material
adverse effect on such assets, liabilities, financial condition or operations of
the Corporation;
(b) Any resignation or termination of any officers of the
Corporation; and the Corporation, to the best of its knowledge, does not know of
the impending resignation or termination of employment of any such officer;
(c) Any material change, in the contingent obligations of the
Corporation by way of guaranty, endorsement, indemnity, warranty, satisfaction,
discharge or otherwise;
(d) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, business or
prospects or financial condition of the Corporation;
(e) Any waiver by the Corporation of a valuable right or of a
material debt owed to it;
(f) Any direct or indirect loans made by the Corporation to
any shareholder, employee, officer or director of the Corporation, other than
immaterial advances made in the ordinary course of business;
(g) Any material change in any compensation arrangement or
agreement with any employee, officer, director or shareholder;
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(h) Any declaration, setting aside or payment of any dividend
or other distribution of the assets of the Corporation, or any direct or
indirect redemption, purchase or other acquisition of any of the Corporation's
capital stock by the Corporation;
(i) Any mortgage, pledge, transfer of a security interest in,
or lien, created by the Corporation with respect to any of its material
properties or assets, except for liens for taxes not yet due or payable;
(j) Any debt, obligation or liability incurred, assumed or
guaranteed by the Corporation, except those for immaterial amounts and for
current liabilities incurred in the ordinary course of business;
(k) Any sale, assignment or transfer of any patents,
trademarks, copyrights, trade secrets or other intangible assets;
(l) Any change in any material agreement to which the
Corporation is a party or by which it is bound which materially and adversely
affects the business, assets, liabilities, financial condition, operations or
prospects of the Corporation, including compensation agreements with the
Corporation's employees;
(m) receipt of notice that there has been a loss of, or
material order cancellation by, any major customer of the Corporation;
(n) Any other event or condition of any character that, either
individually or cumulatively, has materially and adversely affected the
business, assets, liabilities, financial condition, operations or prospects of
the Corporation; or
(o) any arrangement or commitment by the Corporation to do any
of the items described in this section 3.22.
3.23 COMPLIANCE WITH OTHER INSTRUMENTS. The Corporation is not in
violation or default of any term of its Restated Articles 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 or, to its knowledge, any statute, rule or regulation
applicable to the Corporation which would materially and adversely affect the
business, assets, liabilities, financial condition, operations or prospects of
the Corporation. The execution, delivery, and performance of and compliance with
this Agreement, and the Related Agreements, and the issuance and sale of the
Shares pursuant hereto and of the Conversion Shares pursuant to the Restated
Articles, 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
Corporation or the suspension, revocation, impairment, forfeiture or nonrenewal
of any permit license, authorization or approval applicable to the Corporation,
its business or operations or any of its assets or properties.
-10-
3.24 INSURANCE. The Corporation has in full force and effect fire and
casualty insurance policies, with extended coverage, sufficient in amount
(subject to reasonable deductibles) to allow it to replace any of its properties
that might be damaged or destroyed.
3.25 TAX RETURNS, PAYMENTS AND ELECTIONS. The Corporation has filed
all tax returns and reports as required by law. These returns and reports are
true and correct in all material respects. The Corporation has paid all taxes
and other assessments due, except those contested by it in good faith that are
listed in the Schedule of Exceptions. The provision for taxes of the Corporation
as shown in the Financial Statements is adequate for taxes due or accrued as of
the date thereof. The Corporation has not elected pursuant to the Internal
Revenue Code of 1986, as amended (the "Code"), to be treated as a Subchapter S
corporation or a collapsible corporation pursuant to Section 1362(a) or Section
341(f) of the Code, nor has it made any other elections pursuant to the Code
(other than elections that relate solely to methods of accounting, depreciation
or amortization) that would have a material effect on the Corporation, its
financial condition, its business as presently conducted or proposed to be
conducted or any of its properties or material assets. The Corporation has never
had any tax deficiency proposed or assessed against it and has not executed any
waiver of any statute of limitations on the assessment or collection of any tax
or governmental charge. None of the Corporation's federal income tax returns and
none of its state income or franchise tax or sales or use tax returns has ever
been audited by governmental authorities. Since the Statement Date, the
Corporation has made adequate provisions on its books of account for all taxes,
assessments and governmental charges with respect to its business, properties
and operations for such period. The Corporation has withheld or collected from
each payment made to each of its employees, the amount of all taxes (including,
but not limited to, federal income taxes, Federal Insurance Contribution Act
taxes and Federal Unemployment Tax Act taxes) required to be withheld or
collected therefrom, and has paid the same to the proper tax receiving officers
or authorized depositories.
4. REPRESENTATIONS AND WARRANTS OF THE PURCHASERS.
Each Purchaser hereby represents and warrants to the Corporation as
follows (such representations and warranties do not lessen or obviate the
representations and warranties of the Corporation 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 Related Agreements and to carry out their provisions. All
action on Purchaser's part required for the lawful execution and delivery of
this Agreement and the Related Agreements have been or will be effectively taken
prior to the Closing. Upon their execution and delivery, this Agreement and the
Related Agreements will be valid and binding obligations of Purchaser,
enforceable in accordance with their terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratoritun or other laws of general
application affecting enforcement of creditors' rights, (ii) general principles
of equity that restrict the availability of equitable remedies, and (iii) to the
extent that the enforceability of the indemnification provisions of Section 2.9
of the Investors' Rights Agreement may be limited by applicable laws.
-11-
4.2 CONSENTS. All consents, approvals, orders, authorizations,
registrations, qualifications, designations, declarations or filings with any
governmental or banking authority on the part of Purchaser required in
connection with the consummation of the transactions contemplated in the
Agreement, or the Related Agreements have been or shall have been obtained prior
to and be effective as of the Closing.
4.3 INVESTMENT REPRESENTATIONS. Purchaser understands that neither the
Shares nor the Conversion Shares have been registered under the Securities Act.
Purchaser also understands that the Shares are being offered and sold pursuant
to an exemption from registration contained in the Securities Act based in part
upon Purchaser's representations contained in the Agreement. Purchaser hereby
represents and warrants as follows:
(a) PURCHASER BEARS ECONOMIC RISK. Purchaser has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Corporation so that it is capable of
evaluating the merits and risks of its investment in the Corporation 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 Act, or an exemption from registration is
available. Purchaser understands that the Corporation 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 to protect its own interests in connection with the
transactions contemplated in this Agreement, and the Related Agreements.
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) CORPORATION INFORMATION. Purchaser has had an
opportunity to discuss the Corporation's business, management and financial
affairs with directors, officers and management of the Corporation and has had
the opportunity to review the Corporation's operations and facilities. Purchaser
has also had the opportunity to ask questions of and receive answers from, the
Corporation 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
-12-
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, 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
Corporation, the resale occurring not less than the required holding period
after a party has purchased and paid for the security to be sold, the sale being
through an unsolicited "broker's transaction" or in transactions directly with a
market maker (as said term is defined under the Securities Exchange Act of 1934,
as amended) 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 Corporation or other entity, then the office or
offices of the Purchaser in which its investment decision was made is located at
the address or addresses of the Purchaser set forth on Exhibit A.
4.4 TRANSFER RESTRICTIONS. Each Purchaser acknowledges and agrees that
the Shares, and if issued, the Conversion Shares are subject to restrictions on
transfer as set forth in the Investors' Rights Agreement.
5. CONDITIONS TO CLOSING.
5.1 CONDITIONS TO PURCHASERS' OBLIGATIONS AT THE CLOSING. Purchasers'
obligations to purchase the Shares at the Closing are subject to the
satisfaction, at or prior to the Closing, of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF
OBLIGATIONS. The representations and warranties made by the Corporation 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 Corporation shall have performed all obligations and
conditions herein required to be performed or observed by it on or prior to the
Closing.
(b) LEGAL INVESTMENT. On the Closing Date, the sale and
issuance of the Shares and the proposed issuance of the Conversion Shares shall
be legally permitted by all laws and regulations to which Purchasers and the
Corporation are subject.
(c) CONSENTS, PERMITS, AND WAIVERS. The Corporation shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the Related
Agreements (except for such as may be properly obtained subsequent to the
Closing).
(d) FILING OF RESTATED ARTICLES. The Restated Articles shall
have been filed with the Secretary of State of the State of California.
-13-
(e) CORPORATE DOCUMENTS. The Corporation shall have delivered
to Purchasers or their counsel, copies of all corporate documents of the
Corporation as Purchasers shall reasonably request.
(f) RESERVATION OF CONVERSION SHARES. The Conversion Shares
issuable upon conversion of the Shares shall have been duly authorized and
reserved for issuance upon such conversion.
(g) COMPLIANCE CERTIFICATE. The Corporation shall have
delivered to Purchasers a Compliance Certificate, executed by the President of
the Corporation, dated the date of the Closing, to the effect that the
conditions specified in subsections (a), (c), (d) and (f) of this Section 5.1
have been satisfied.
(h) INVESTORS' RIGHTS AGREEMENT. An Amended and Restated
Investors' Rights Agreement substantially in the form attached hereto as Exhibit
D shall have been executed and delivered by the parties thereto.
(i) CO-SALE AGREEMENT. The Amended and Restated Co-Sale
Agreement substantially in the form attached hereto as Exhibit E shall have been
executed and delivered by the parties thereto. The stock certificates
representing the shares subject to the Amended and Restated Co-Sale Agreement
shall have been delivered to the Secretary of the Corporation and shall have had
appropriate legends placed upon them to reflect the restrictions on transfer set
forth on the Amended and Restated Co-Sale Agreement.
(j) VOTING AGREEMENT. An Amended and Restated Voting
Agreement substantially in the form attached hereto as Exhibit F shall have been
executed and delivered by the parties thereto.
(k) BOARD OF DIRECTORS. Upon the Closing, the authorized size
of the Board of Directors of the Corporation shall be eight members and the
Board shall consist of Xx. Xxxxxxx Lamnan, Xxxxxxx Xxxxxx, Xxxxxx Xxxxxxxxxx,
Xxxxxx Xxxx, Xx. Xxxxxxx Xxxxxx, Xxxxxxxx Xxxxx, Xxxx Xxxxxx, and Xxxxx Xxxxxxx.
(l) LEGAL OPINION. The Purchasers shall have received from
legal counsel to the Corporation an opinion addressed to them, dated as of the
Closing Date, in substantially the form attached hereto as Exhibit I.
(m) 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.
-14-
5.2 CONDITIONS TO OBLIGATIONS OF THE CORPORATION. The Corporation's
obligation to issue and sell the Shares are subject to the satisfaction, on or
prior to the Closing, of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties made by Purchasers in Section 4 hereof shall be true and correct
in all material respects at the date of the Closing, with the same force and
effect as if they had been made on and as of said date.
(b) PERFORMANCE OF OBLIGATIONS. Purchasers shall have
performed and complied with all agreements and conditions herein required to be
performed or complied with by Purchasers on or before the Closing.
(c) FILING OF RESTATED ARTICLES. The Restated Articles shall
have been filed with the Secretary of State of the State of California.
(d) INVESTORS' RIGHTS AGREEMENT. An Amended and Restated
Investors' Rights Agreement substantially in the form attached hereto as Exhibit
D shall have been executed and delivered by the Purchasers.
(e) CO-SALE AGREEMENT. The Amended and Restated Co-Sale
Agreement substantially in the form attached hereto as Exhibit E shall have been
executed and delivered by the parties thereto. The stock certificates
representing the shares subject to the Amended and Restated Co-Sale Agreement
shall have been delivered to the Secretary of the Corporation and shall have had
appropriate legends placed upon them to reflect the restrictions on transfer set
forth on the Amended and Restated Co-Sale Agreement.
(f) VOTING AGREEMENT. An Amended and Restated Voting Agreement
substantially in the form attached hereto as Exhibit F shall have been executed
and delivered by the parties thereto.
(g) CONSENTS, PERMITS, AND WAIVERS. The Corporation shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the Related
Agreements (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.
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 Corporation pursuant hereto in connection with the
-15-
transactions contemplated hereby shall be deemed to be representations and
warranties by the Corporation 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 Related Agreements and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
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.
6.6 AMENDMENT AND WAIVER.
(a) This Agreement may be amended or modified only upon the
written consent of the Corporation and holders of at least a majority 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 Corporation 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 a majority 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 Related
Agreements or the Restated Articles, shall impair any such right, power or
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 any Purchaser's
part of any breach, default or noncompliance under this Agreement, the Related
Agreements or under the Restated Articles or any waiver on such party's part of
any provisions or conditions of the Agreement, the Related Agreements, or the
Restated Articles 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 Related Agreements, the Restated Articles, Bylaws, 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: (i) upon personal delivery to the
party to be notified; (ii) when sent by
-16-
confirmed telex or facsimile if sent during normal business hours of the
recipient, if not, then on the next business day; (iii) five days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid; or (iv) one 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 Corporation 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 Corporation or Purchaser may
designate by ten days' advance written notice to the other parties hereto.
6.9 EXPENSES. The Corporation 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 dispute among the parties
to this Agreement should result in litigation, 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.
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 construing 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 instrument.
6.13 PRONOUNS. All pronouns contained herein and any variations
thereof shall be deemed to refer to the masculine, feminine or neuter, singular
or plural, as the identity of the parties hereto may require.
6.14 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 party for any claims, losses or expenses incurred by such
other party as a result of the representation in this Section 6.14 being untrue.
6.15 EXCULPATION AMONG PURCHASERS. Each Purchaser acknowledges that it
is not relying upon any person, firm, or corporation, other then the Corporation
and its officers and directors, in making its investment or decision to invest
in the Corporation. Each Purchaser agrees that no Purchaser nor the respective
controlling persons, officers, directors, partners, agents, or employees of any
Purchaser shall be liable for any action heretofore or hereafter taken or
omitted to be taken by any of them in connection with the Shares and Conversion
Shares.
6.16 WAIVER OF CONFLICTS. Each party to this Agreement acknowledges
that legal counsel for the Corporation, Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
("WSGR") has in the past and may continue in the future to perform legal
services for one or more of the Purchasers or their affiliates in matters
-17-
unrelated to the transactions contemplated by this Agreement, including, but not
limited to, the representation of the Purchasers in matters of a similar nature
to the transactions contemplated herein. Each party to this Agreement hereby (a)
acknowledges that they have had an opportunity to ask for and have obtained
information relevant to such representation, including disclosure of the
reasonably foreseeable adverse consequences of such representation; (b)
acknowledges that with respect to the transactions contemplated herein, WSGR has
represented the Corporation and not any individual Purchaser or any individual
shareholder, director or employee of the Corporation; and (c) gives its informed
consent to WSGR's representation of the Corporation in the transactions
contemplated by this Agreement and WSGR's representation of fone or more of the
Purchasers or their affiliates in matters unrelated to such transactions. The
Corporation hereby confirms that WSGR may act as the Corporation's counsel in
connection with the transactions contemplated herein and WSGR may continue to
act as general counsel for the Corporation.
[THIS SPACE INTENTIALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed the Series E
Preferred Stock Purchase Agreement as of the date set forth in the first
paragraph hereof.
CORPORATION: PURCHASER:
ADESSO SPECIALTY SERVICES -----------------------------------
ORGANIZATION INC. (Print Name of Purchaser)
By: /s/ Xxxxx X. Xxxxxxx By:
-------------------------------- --------------------------------
Xxxxx X. Xxxxxxx (Signature)
Chief Executive Officer
Title:
-----------------------------
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed the Series E
Preferred Stock Purchase Agreement as of the date set forth in the first
paragraph hereof.
CORPORATION: PURCHASER:
SEQUOIA CAPITAL VI
SEQUOIA TECHNOLOGY PARTNERS VI
ADESSO SPECIALTY SERVICES -----------------------------------
ORGANIZATION INC. (Print Name of Purchaser)
By: By: /s/ XXXXXX XXXXXXXXXX
-------------------------------- --------------------------------
Xxxxx X. Xxxxxxx (Signature)
Chief Executive Officer
Title: General Partner
-----------------------------
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed the Series E
Preferred Stock Purchase Agreement as of the date set forth in the first
paragraph hereof.
CORPORATION: PURCHASER:
ADESSO SPECIALTY SERVICES -----------------------------------
ORGANIZATION INC. (Print Name of Purchaser)
By: By:
-------------------------------- --------------------------------
Xxxxx X. Xxxxxxx (Signature)
Chief Executive Officer
Title:
-----------------------------
PURCHASER:
TECHNOLOGY FUNDING PARTNERS III, L.P.,
A Delaware Limited Partnership
TECHNOLOGY FUNDING VENTURE
By: Technology Funding Inc., PARTNERS V, AN AGGRESSIVE GROWTH
Managing General Partner FUND, L.P.,
A Delaware Limited Partnership
By: /s/ XXXXXXX X. XXXXXX By: Technology Funding Inc.,
------------------------------- Managing General Partner
Title: Vice President By: /s/ XXXXXXX X. XXXXXX
---------------------------- --------------------------------
Title: Vice President
-----------------------------
TECHNOLOGY FUNDING VENTURE
PARTNERS IV, AN AGGRESSIVE GROWTH
FUND, L.P.,
A Delaware Limited Partnership TECHNOLOGY FUNDING MEDICAL
PARTNERS I, L.P.,
A Delaware Limited Partnership
By: Technology Funding Inc.,
Managing General Partner By: Technology Funding Inc.,
Managing General Partner
By: /s/ XXXXXXX X. XXXXXX By: /s/ XXXXXXX X. XXXXXX
------------------------------- --------------------------------
Title: Vice President Title: Vice President
---------------------------- -----------------------------
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed the Series E
Preferred Stock Purchase Agreement as of the date set forth in the first
paragraph hereof.
CORPORATION: PURCHASER:
ADESSO SPECIALTY SERVICES HYBRID VENTURE PARTNERS, L.P., a
ORGANIZATION INC. Delaware limited partnership
By: BY: Rosemont Venture Management I,
------------------------------- L.L.C.
Xxxxx X. Xxxxxxx Its General Partner
Chief Executive Officer
By: /s/ XXXXXX X. XXXXXXXX
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
------------------------------
Title: Managing Member
-----------------------------
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed the Series E
Preferred Stock Purchase Agreement as of the date set forth in the first
paragraph hereof.
CORPORATION: PURCHASER:
NEW ENTERPRISE ASSOCIATES VII,
LIMITED PARTNERSHIP
By: NEA Partners VII, Limited
Partnership
Its General Partner
ADESSO SPECIALTY SERVICES -----------------------------------
ORGANIZATION INC. (Print Name of Purchaser)
By: By: /s/ XXXXXX XXXX
-------------------------------- --------------------------------
Xxxxx X. Xxxxxxx (Signature)
Chief Executive Officer
Title: GENERAL PARTNER
-----------------------------
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed the Series E
Preferred Stock Purchase Agreement as of the date set forth in the first
paragraph hereof.
CORPORATION: PURCHASER:
InterWest Partners VI, L.P.
InterWest Investors VI, L.P.
ADESSO SPECIALTY SERVICES -----------------------------------
ORGANIZATION INC. (Print Name of Purchaser)
By: By: /s/ XXXXXXX X. XXXXXX
-------------------------------- --------------------------------
Xxxxx X. Xxxxxxx (Signature)
Chief Executive Officer
Title: VENTURE MEMBER
-----------------------------
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed the Series E
Preferred Stock Purchase Agreement as of the date set forth in the first
paragraph hereof.
CORPORATION: PURCHASER:
ADESSO SPECIALTY SERVICES HYBRID VENTURE PARTNERS, L.P., a
ORGANIZATION INC. Delaware limited partnership
By: By: Rosemont Venture Management I,
-------------------------------- L.L.C.
Xxxxx X. Xxxxxxx Its General Partner
Chief Executive Officer
By: /s/ XXXXXX X. XXXXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxxxx
-----------------------------
Title: Managing Member
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed the Series E
Preferred Stock Purchase Agreement as of the date set forth in the first
paragraph hereof.
CORPORATION: PURCHASER:
ADESSO SPECIALTY SERVICES COMDISCO, INC.
ORGANIZATION INC. -----------------------------------
(Print Name of Purchaser)
By: By: /s/ Xxxx X. Xxxxxx
-------------------------------- --------------------------------
Xxxxx X. Xxxxxxx (Signature)
Chief Executive Officer
XXXX X. XXXXXX
Title: SENIOR VICE PRESIDENT
-----------------------------
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
EXHIBIT A
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
SCHEDULE OF PURCHASERS
AGGREGATE
NAME AND ADDRESS SHARES PURCHASE PRICE
---------------- ------ --------------
TECHNOLOGY FUNDING PARTNERS III, L.P. 7,726 $129,796.80
0000 Xxxxxxx xx xxx Xxxxxx
Xxx Xxxxx, XX 00000
TECHNOLOGY FUNDING VENTURE PARTNERS IV,
AN AGGRESSIVE GROWTH FUND L.P. 12,218 $205,262.40
0000 Xxxxxxx xx xxx Xxxxxx
Xxx Xxxxx, XX 00000
TECHNOLOGY FUNDING VENTURE PARTNERS V,
AN AGGRESSIVE GROWTH FUND L.P. 11,217 $188,445.60
0000 Xxxxxxx xx xxx Xxxxxx
Xxx Xxxxx, XX 00000
TECHNOLOGY FUNDING MEDICAL PARTNERS I, L.P. 1,848 $31,046.40
0000 Xxxxxxx xx xxx Xxxxxx
Xxx Xxxxx, XX 00000
SEQUOIA CAPITAL VI 20,516 $344,668.40
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxxx
SEQUOIA TECHNOLOGY PARTNERS VI 1,080 $18,144.40
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxxx
INTERWEST PARTNERS VI, L.P. 15,765 $264,852.00
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, M.D.
INTERWEST INVESTORS VI, L.P. 494 $8,299.20
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, M.D.
NEW ENTERPRISE ASSOCIATES VII, L.P. 18,422 $309,489.60
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxx Xxxx
COMDISCO VENTURES 14,881 $250,000.80
0000 Xxxx Xxxx Xxxx, Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
HYBRID VENTURE PARTNERS, L.P. 14,881 $250,000.80
c/o Rosemont Venture Management I L.L.C.
0000 Xxxx Xxxx Xxxx, Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
TOTAL 119,048 $2,000,006.40
-2-
EXHIBIT B
AMENDED AND RESTATED ARTICLES OF INCORPORATION
[SEAL]
SECRETARY OF STATE
I, XXXX XXXXX, Secretary of State of the State of California, hereby
certify:
That the attached transcript of 13 page(s) has been compared with the
record on file in this office, of which it purports to be a copy, and that it is
full, true and correct.
IN WITNESS WHEREOF, I execute this
certificate and affix the Great Seal
of the State of California this day of
[SEAL]
MAR 20 2000
--------------------------------------
/s/ Xxxx Xxxxx
Secretary of State
AMENDED AND RESTATED ARTICLES OF INCORPORATION OF
ADESSO SPECIALTY SERVICES ORGANIZATION INC. [STAMP]
Xxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxx hereby certify that:
ONE: They are the duly elected and acting Chief Executive Officer and
Secretary, respectively, of Adesso Specialty Services Organization Inc., a
California corporation (the "Corporation" or the "Company").
TWO: The Articles of Incorporation of this corporation are hereby
amended and restated to read as follows:
I
The name of the Corporation is Adesso Specialty Services
Organization Inc.
II
The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.
III
A. This Corporation is authorized to issue two classes of
stock to be designated, respectively, "Common Stock" and "Preferred Stock." The
total number of shares the Corporation shall have authority to issue is
12,535,000 shares, 7,000,000 shares of which shall be Common Stock (the "Common
Stock") and 5,535,000 shares of which shall be Preferred Stock (the "Preferred
Stock").
B. The Preferred Stock may be issued from time to time in one
or more series. The Board of Directors is hereby authorized, within the
limitations and restrictions stated in these Restated Articles, to fix or alter
the dividend rights, dividend rate, conversion rights, voting rights, rights and
terms of redemption (including sinking fund provisions), the redemption price or
prices, the liquidation preferences of any wholly unissued series of Preferred
Stock, and the number of shares constituting any such series and the designation
thereof, or any of them; and to increase or decrease the number of shares of any
series subsequent to the issue of shares of that series, but not below the
number of shares of such series then outstanding. In case the number of shares
of any series shall be so decreased, the shares constituting such decrease shall
resume the status that they had prior to the adoption of the resolution
originally fixing the number of shares of such series.
C. 1,000,000 of the authorized shares of Preferred Stock are
hereby designated "Series A Preferred Stock" (the "Series A Preferred"),
1,185,000 of the authorized shares of Preferred Stock are hereby designated
"Series B Preferred Stock" (the "Series B Preferred"),
900,000 of the authorized shares of Preferred Stock are hereby designated
"Series C Preferred Stock" (the "Series C Preferred"), 1,250,000 of the
authorized shares of Preferred Stock are hereby designated "Series D Preferred
Stock" (the "Series D Preferred"), and 1,200,000 shares of the authorized shares
of Preferred Stock are hereby designated "Series E Preferred Stock" (the "Series
E Preferred"). The Series A Preferred, the Series B Preferred, the Series C
Preferred, the Series D Preferred, and the Series E Preferred are hereinafter
collectively referred to as the "Series Preferred."
D. The rights, preferences, privileges, restrictions and other
matters relating to the Series Preferred are as follows:
1. DIVIDEND RIGHTS.
(a) Holders of Series A Preferred, Series B Preferred, Series
C Preferred, and Series D Preferred (but not Series E Preferred), in preference
to the holders of any other stock of the Company ("Junior Stock"), shall be
entitled to receive, when and as declared by the Board of Directors, but only
out of funds that are legally available therefor, cash dividends at the rate of
eight percent (8%) of the "Original Issue Price" per annum on each outstanding
share of Series Preferred (as adjusted for any stock dividends, combinations,
splits, recapitalizations and the like with respect to such shares). The
Original Issue Price of the Series A Preferred shall be $1.00, the Original
Issue Price of the Series B Preferred shall be $3.25, the Original Issue Price
of the Series C Preferred shall be $6.20, the Original Issue Price of the Series
D Preferred shall be $8.40, and the Original Issue Price of the Series E
Preferred shall be $16.80. Such dividends shall be payable only when, as and if
declared by the Board of Directors and shall be non-cumulative.
(b) So long as any shares of Series Preferred shall be
outstanding, no dividend, whether in cash or property, shall be paid or
declared, nor shall any other distribution be made, on any Junior Stock, nor
shall any shares of any Junior Stock of the Company be purchased, redeemed, or
otherwise acquired for value by the Company (except for acquisitions of Common
Stock by the Company pursuant to agreements that permit the Company to
repurchase such shares upon termination of services to the Company or in
exercise of the Company's right of first refusal upon a proposed transfer) until
all dividends on the Series Preferred (set forth in Section 1(a) above) shall
have been paid or declared and set apart. In the event dividends are paid on any
share of Common Stock, an additional dividend shall be paid with respect to all
outstanding shares of Series Preferred (including Series E Preferred) in an
amount equal per share (on an as-if-converted to Common Stock basis) to the
amount paid or set aside for each share of Common Stock. Subject to the rights
of the holders of Series Preferred as set forth in Section 2(b) below, the
provisions of this Section 1(b) shall not, however, apply to (i) a dividend
payable in Common Stock, (ii) the acquisition of shares of any Junior Stock in
exchange for shares of any other Junior Stock, or (iii) any repurchase of any
outstanding securities of the Company that is approved by the Company's Board of
Directors. In connection with repurchases by the Company of its Common Stock
upon the termination of employment pursuant to its agreements with certain of
the holders thereof, Sections 502, 503 and 506 shall not apply in whole or in
part with respect to such repurchases.
-2-
2. VOTING RIGHTS.
(a) GENERAL RIGHTS. Except as otherwise provided herein or as
required by law, the Series Preferred shall be voted equally with the shares of
the Common Stock of the Company and not as a separate class, at any annual or
special meeting of shareholders of the Company, and may act by written consent
in the same manner as the Common Stock, in either case upon the following basis:
each holder of shares of Series Preferred shall be entitled to such number of
votes as shall be equal to the whole number of shares of Common Stock into which
such holder's aggregate number of shares of Series Preferred are convertible
(pursuant to Section 4 hereof) immediately after the close of business on the
record date fixed for such meeting or the effective date of such written
consent.
(b) SEPARATE VOTE OF SERIES PREFERRED. For so long as any
shares of Series Preferred remain outstanding, in addition to any other vote or
consent required herein or by law, the vote or written consent of the holders of
at least a majority of the outstanding Series Preferred, voting on an
as-if-converted to Common Stock basis, shall be necessary for effecting or
validating the following actions:
(i) Any amendment, alteration, or repeal of any
provision of the Amended and Restated Articles or the Bylaws of the Company that
affects adversely the voting powers, preferences, or other special rights or
privileges, qualifications, limitations, or restrictions of the Series
Preferred;
(ii) Any increase or decrease (other than by
redemption or conversion) in the authorized number of shares of Common Stock or
Preferred Stock;
(iii) Any authorization or designation, whether by
reclassification or otherwise, of any new class of shares or series of stock or
any other securities convertible into equity securities of the Company ranking
on a parity with or senior to the rights, preferences or privileges of the
Series Preferred in rights of redemption, conversion, antidilution provisions,
liquidation preference, voting or dividends;
(iv) Any redemption, repurchase, payment of dividends
or other distributions with respect to Junior Stock (except for acquisitions of
Common Stock by the Company pursuant to agreements that permit the Company to
repurchase such shares upon termination of services to the Company or in
exercise of the Company's right of first refusal upon a proposed transfer);
(v) Any agreement by the Company or its shareholders
regarding an Asset Transfer or Acquisition (each as defined in Section 3(c));
(vi) Any action that results in the payment or
declaration of a dividend on any shares of Common Stock or Preferred Stock; or
(vii) Any increase or decrease in the authorized
number of members of the Company's Board of Directors.
-3-
(c) ELECTION OF BOARD OF DIRECTORS. The members of the
Company's Board of Directors shall be elected as follows: (i) holders of the
Series A Preferred, voting as a separate class, shall be entitled to elect one
member of the Board of Directors at or pursuant to each meeting or consent of
the Company's shareholders for the election of directors, and to remove from
office such director and to fill any vacancies caused by the resignation, death
or removal of such director; (ii) holder of the Series B Preferred, voting as a
separate class, shall be entitled to elect one member of the Board of Directors
at or pursuant to each meeting or consent of the Company's shareholders for the
election of directors, and to remove from office such director and to fill any
vacancy caused by the resignation, death or removal of such director; (iii)
holders of the Series C Preferred, voting as a separate class, shall be entitled
to elect one member of the Board of Directors at or pursuant to each meeting or
consent of the Company's shareholders for the election of directors, and to
remove from office such director and to fill any vacancy caused by the
resignation, death or removal of such director; (iv) holders of the Series D
Preferred, voting as a separate class, shall be entitled to elect one member of
the Board of Directors at or pursuant to each meeting or consent of the
Company's shareholders for the election of directors, and to remove from office
such director and to fill any vacancy caused by the resignation, death or
removal of such director; and (v) all remaining directors authorized for
election at such election of directors shall be elected by the holders of
outstanding shares of Common Stock and Series Preferred in accordance with
Section 2(a) above.
3. LIQUIDATION RIGHTS.
(a) Upon any liquidation, dissolution, or winding up of the
Company, whether voluntary or involuntary, before any distribution or payment
shall be made to the holders of any Junior Stock, the holders of Series
Preferred, other than the holders of Series E Preferred, shall be entitled to be
paid out of the assets of the Company an amount per share of Series Preferred
equal to the applicable Original Issue Price plus all declared and unpaid
dividends on such shares of Series Preferred (as adjusted for any stock
dividends, combinations, splits, recapitalizations and the like with respect to
such shares) for each share of Series Preferred held by them.
(b) After the payment of the full liquidation preference of
the Series Preferred, other than the Series E Preferred, as set forth in Section
3(a) above, the assets of the Company legally available for distribution, if
any, shall be distributed ratably to the holders of the Common Stock and Series
Preferred on an as-if-converted to Common Stock basis.
(c) The following events shall be considered a liquidation
under this Section 3:
(i) any consolidation or merger of the Company with
or into any other corporation or other entity or person, or any other corporate
reorganization, in which the shareholders of the Company immediately prior to
such consolidation, merger or reorganization, own less than 50% of the Company's
voting power immediately after such consolidation, merger or reorganization, or
any transaction or series of related transactions in which in excess of fifty
percent (50%) of the Company's voting power is transferred (an "Acquisition");
or
(ii) a sale, lease or other disposition of all or
substantially all of the assets of the Company (an "Asset Transfer").
-4-
(d) Whenever the distribution provided for in this Section 3
shall be payable in property other than cash, the value of such distribution
shall be the fair market value of such property as determined in good faith by
the Board of Directors of the Company, PROVIDED, HOWEVER, that any securities to
be delivered to the holders of the Series Preferred and/or Common Stock pursuant
to this Section 3 shall be valued as follows:
(i) Securities not subject to investment letter or
other similar restrictions on free marketability:
(1) If traded on a securities exchange or
the Nasdaq National Market, the value shall be deemed to be the average of the
closing prices of the securities on such exchange over the 30-day period ending
three (3) days prior to the date of distribution;
(2) If actively traded over-the-counter, the
value shall be deemed to be the average of the closing bid prices over the
30-day period ending three (3) days prior to the date of distribution; and
(3) If there is no active public market, the
value shall be the fair market value thereof, as determined in good faith by the
Board of Directors of the Company.
(ii) The method of valuation of securities subject to
investment letter or other restrictions on free marketability shall include an
appropriate discount from the market value determined as above in (i)(A), (B) or
(C) to reflect the approximate fair market value thereof, as determined in good
faith by the Board of Directors of the Company.
(e) If, upon any liquidation, distribution, or winding up, the
assets of the Company shall be insufficient to make payment in full to all
holders of Series Preferred, other than the holders of Series E Preferred, of
the liquidation preferences set forth in Section 3(a) above, then such assets
shall be distributed among the holders of Series Preferred, other than the
holders of Series E Preferred, at the time outstanding, ratably in proportion to
the full amounts to which they would otherwise be respectively entitled.
4. CONVERSION RIGHTS. The holders of the Series Preferred shall
have the following rights with respect to the conversion of the Series Preferred
into shares of Common Stock (the "Conversion Rights"):
(a) OPTIONAL CONVERSION. Subject to and in compliance with the
provisions of this Section 4, any shares of Series Preferred may, at the option
of the holder, be converted at any time into fully-paid and nonassessable shares
of Common Stock. The number of shares of Common Stock to which a holder of
Series Preferred shall be entitled upon conversion shall be the product obtained
by multiplying the applicable Conversion Rate then in effect (determined as
provided in Section 4(b)) by the number of shares of Series Preferred being
converted.
(b) CONVERSION RATE. The conversion rate in effect at any time
for conversion of each Series Preferred (the "Series Preferred Conversion Rate")
shall be the quotient obtained by dividing the Original Issue Price of such
series by the "Series Preferred Conversion Price" for such series calculated as
provided in Section 4(c).
-5-
(c) CONVERSION PRICE. The conversion price for each series of
the Series Preferred shall initially be the Original Issue Price of such series
(the "Series Preferred Conversion Price"). Each such initial Series Conversion
Price shall be adjusted from time to time in accordance with this Section 4. All
references to the Series Preferred Conversion Price shall mean the Series
Preferred Conversion Price as so adjusted.
(d) MECHANICS OF CONVERSION. Each holder of Series Preferred
who desires to convert the same into shares of Common Stock pursuant to this
Section 4 shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Company or any transfer agent for the Series
Preferred, and shall give written notice to the Company at such office that such
holder elects to convert the same. Such notice shall state the number of shares
of Series Preferred being converted. Thereupon, the Company shall promptly issue
and deliver at such office to such holder a certificate or certificates for the
number of shares of Common Stock to which such holder is entitled and shall
promptly pay in cash or, to the extent sufficient funds are not then legally
available therefor, in Common Stock (at the Common Stock's fair market value
determined by the Board of Directors as of the date of such conversion), any
declared and unpaid dividends on the shares of Series Preferred being converted.
Such conversion shall be deemed to have been made at the close of business on
the date of such surrender of the certificates representing the shares of Series
Preferred to be converted, and the person entitled to receive the shares of
Common Stock issuable upon such conversion shall be treated for all purposes as
the record holder of such shares of Common Stock on such date.
(e) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the
Company shall at any time or from time to time after the date that the first
share of Series E Preferred is issued (the "Original Issue Date") effect a
subdivision of the outstanding Common Stock without a corresponding subdivision
of the Series Preferred, each Series Preferred Conversion Price in effect
immediately before that subdivision shall be proportionately decreased.
Conversely, if the Company shall at any time or from time to time after the
Original Issue Date combine the outstanding shares of Common Stock into a
smaller number of shares without a corresponding combination of the Series
Preferred, each Series Preferred Conversion Price in effect immediately before
the combination shall be proportionately increased. Any adjustment under this
Section 4(e) shall become effective at the close of business on the date the
subdivision or combination becomes effective.
(f) ADJUSTMENT FOR COMMON STOCK DIVIDENDS AND DISTRIBUTIONS.
If the Company at any time or from time to time after the Original Issue Date
makes, or fixes a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in additional
shares of Common Stock, in each such event each Series Preferred Conversion
Price that is then in effect shall be decreased as of the time of such issuance
or, in the event such record date is fixed, as of the close of business on such
record date, by multiplying each Series Preferred Conversion Price then in
effect by a fraction (1) the numerator of which is the total number of shares of
Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date, and (2) the denominator
of which is the total number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the close of business on such
record date plus the number of shares of Common Stock issuable in payment of
such dividend or distribution; provided, however, that if such record date is
fixed and such dividend is not fully paid or if such distribution is not fully
made on the date fixed
-6-
therefor, each Series Preferred Conversion Price shall be recomputed accordingly
as of the close of business on such record date and thereafter each Series
Preferred Conversion Price shall be adjusted pursuant to this Section 4(f) to
reflect the actual payment of such dividend or distribution.
(g) ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. If the
Company at any time or from time to time after the Original Issue Date makes, or
fixes a record date for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in securities of the Company
other than shares of Common Stock, in each such event provision shall be made so
that the holders of the Series Preferred shall receive upon conversion thereof,
in addition to the number of shares of Common Stock receivable thereupon, the
amount of other securities of the Company that they would have received had
their Series Preferred been converted into Common Stock on the date of such
event and had they thereafter, during the period from the date of such event to
and including the conversion date, retained such securities receivable by them
as aforesaid during such period, subject to all other adjustments called for
during such period under this Section 4 with respect to the rights of the
holders of the Series Preferred or with respect to such other securities by
their terms.
(h) ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE AND
SUBSTITUTION. If at any time or from time to time after the Original Issue Date,
the Common Stock issuable upon the conversion of the Series Preferred is changed
into the same or a different number of shares of any class or classes of stock,
whether by recapitalization, reclassification or otherwise (other than an
Acquisition or Asset Transfer as defined in Section 3(c) or a subdivision or
combination of shares or stock dividend or a reorganization, merger,
consolidation or sale of assets provided for elsewhere in this Section 4), in
any such event each holder of Series Preferred shall have the right thereafter
to convert such stock into the kind and amount of stock and other securities and
property receivable upon such recapitalization, reclassification or other change
by holders of the maximum number of shares of Common Stock into which such
shares of Series Preferred could have been converted immediately prior to such
recapitalization, reclassification or change, all subject to further adjustment
as provided herein or with respect to such other securities or property by the
terms thereof.
(i) REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR SALES OF
ASSETS. If at any time or from time to time after the Original Issue Date, there
is a capital reorganization of the Common Stock (other than an Acquisition or
Asset Transfer as defined in Section 3(c) or a recapitalization, subdivision,
combination, reclassification, exchange or substitution of shares provided for
elsewhere in this Section 4), as a part of such capital reorganization,
provision shall be made so that the holders of the Series Preferred shall
thereafter be entitled to receive upon conversion of the shares of the Series
Preferred the number of shares of stock or other securities or property of the
Company to which a holder of the number of shares of Common Stock deliverable
upon conversion would have been entitled on such capital reorganization, subject
to adjustment in respect of such stock or securities by the terms thereof. In
any such case, appropriate adjustment shall be made in the application of the
provisions of this Section 4 with respect to the rights of the holders of Series
Preferred after the capital reorganization to the end that the provisions of
this Section 4 (including adjustment of each Conversion Price then in effect and
the number of shares issuable upon conversion of the Series Preferred) shall be
applicable after that event and be as nearly equivalent as practicable.
-7-
(j) SALE OF SHARES BELOW SERIES PREFERRED CONVERSION PRICE.
(i) If at any time or from time to time after the
Original Issue Date, the Company issues or sells, or is deemed by the express
provisions of this subsection (j) to have issued or sold, Additional Shares of
Common Stock (as defined in subsection (iv) below), other than as a dividend or
other distribution on any class of stock as provided in Section 4(f) above, and
other than a subdivision or combination of shares of Common Stock as provided in
Section 4(e) above, for an Effective Price (as defined in subsection (iv) below)
less than the then effective Series Preferred Conversion Price for such series,
then and in each such case the then existing applicable Series Preferred
Conversion Price shall be reduced, as of the opening of business on the date of
such issue or sale, to a price determined by multiplying the applicable Series
Preferred Conversion Price by a fraction (i) the numerator of which shall be (A)
the number of shares of Common Stock deemed outstanding (as defined below)
immediately prior to such issue or sale, plus (B) the number of shares of Common
Stock that the aggregate consideration received (as defined in subsection
(j)(ii)) by the Company for the total number of Additional Shares of Common
Stock so issued would purchase at such Series Preferred Conversion Price, and
(ii) the denominator of which shall be the number of shares of Common Stock
deemed outstanding (as defined below) immediately prior to such issue or sale
plus the total number of Additional Shares of Common Stock so issued. For the
purposes of the preceding sentence, the number of shares of Common Stock deemed
outstanding as of the given date shall be the sum of (A) the number of shares of
Common Stock actually outstanding as of the given date, (B) the number of shares
of Common Stock into which the then outstanding shares of Series Preferred could
be converted if fully converted on the day immediately preceding the given date,
and (C) the number of shares of Common Stock which could be obtained through the
exercise or conversion of all other rights, options and convertible securities
on the day immediately preceding the given date.
(ii) For the purpose of making any adjustment
required under this Section 4(j), the consideration received by the Company for
any issue or sale of securities shall (A) to the extent it consists of cash, be
computed at the net amount of cash received by the Company after deduction of
any underwriting or similar commissions, compensation or concessions paid or
allowed by the Company in connection with such issue or sale but without
deduction of any expenses payable by the Company, (B) to the extent it consists
of property other than cash, be computed at the fair value of that property as
determined in good faith by the Board of Directors, and (C) if Additional Shares
of Common Stock, Convertible Securities (as defined in subsection (iii) below)
or rights or options to purchase either Additional Shares of Common Stock or
Convertible Securities are issued or sold together with other stock or
securities or other assets of the Company for a consideration that covers both,
be computed as the portion of the consideration so received that may be
reasonably determined in good faith by the Board of Directors to be allocable to
such Additional Shares of Common Stock, Convertible Securities or rights or
options.
(iii) For the purpose of the adjustment required
under this Section 4(j), if the Company issues or sells any rights or options
for the purchase of, or stock or other securities convertible into, Additional
Shares of Common Stock (such convertible stock or securities being herein
referred to as "Convertible Securities") and if the Effective Price of such
Additional Shares of Common Stock is less than the Series A Conversion Price,
Series B Conversion Price, Series C Conversion Price, Series D Conversion Price,
or Series E Conversion Price, as applicable, in each
-8-
case the Company shall be deemed to have issued at the time of the issuance of
such rights or options or Convertible Securities the maximum number of
Additional Shares of Common Stock issuable upon exercise or conversion thereof
and to have received as consideration for the issuance of such shares an amount
equal to the total amount of the consideration, if any, received by the Company
for the issuance of such rights or options or Convertible Securities, plus, in
the case of such rights or options, the minimum amounts of consideration, if
any, payable to the Company upon the exercise of such rights or options, plus,
in the case of Convertible Securities, the minimum amounts of consideration, if
any, payable to the Company (other than by cancellation of liabilities or
obligations evidenced by such Convertible Securities) upon the conversion
thereof; provided that if in the case of Convertible Securities the minimum
amounts of such consideration cannot be ascertained, but are a function of
antidilution or similar protective clauses, the Company shall be deemed to have
received the minimum amounts of consideration without reference to such clauses;
provided further that if the minimum amount of consideration payable to the
Company upon the exercise or conversion of rights, options or Convertible
Securities is reduced over time or on the occurrence or non-occurrence of
specified events other than by reason of antidilution adjustments, the Effective
Price shall be recalculated using the figure to which such minimum amount of
consideration is reduced; provided further that if the minimum amount of
consideration payable to the Company upon the exercise or conversion of such
rights, options or Convertible Securities is subsequently increased, the
Effective Price shall be again recalculated using the increased minimum amount
of consideration payable to the Company upon the exercise or conversion of such
rights, options or Convertible Securities. No further adjustment of the Series A
Conversion Price, Series B Conversion Price, Series C Conversion Price, Series D
Conversion Price, or Series E Conversion Price, as applicable, as adjusted upon
the issuance of such rights, options or Convertible Securities, shall be made as
a result of the actual issuance of Additional Shares of Common Stock on the
exercise of any such rights or options or the conversion of any such Convertible
Securities. If any such rights or options or the conversion privilege
represented by any such Convertible Securities shall expire without having been
exercised, the Series A Conversion Price, Series B Conversion Price, Series C
Conversion Price, Series D Conversion Price, or Series E Conversion Price, as
applicable, as adjusted upon the issuance of such rights, options or Convertible
Securities shall be readjusted to the Series A Conversion Price, Series B
Conversion Price, Series C Conversion Price, Series D Conversion Price, or
Series E Conversion Price, as applicable, which would have been in effect had an
adjustment been made on the basis that the only Additional Shares of Common
Stock so issued were the Additional Shares of Common Stock, if any, actually
issued or sold on the exercise of such rights or options or rights of conversion
of such Convertible Securities, and such Additional Shares of Common Stock, if
any, were issued or sold for the consideration actually received by the Company
upon such exercise, plus the consideration, if any, actually received by the
Company for the granting of all such rights or options, whether or not
exercised, plus the consideration received for issuing or selling the
Convertible Securities actually converted, plus the consideration, if any,
actually received by the Company (other than by cancellation of liabilities or
obligations evidenced by such Convertible Securities) on the conversion of such
Convertible Securities, provided that such readjustment shall not apply to prior
conversions of Series Preferred.
(iv) "Additional Shares of Common Stock" shall mean
all shares of Common Stock issued by the Company or deemed to be issued pursuant
to this Section 4(j), whether or not subsequently reacquired or retired by the
Company other than (1) shares of Common Stock issued upon conversion of the
Series Preferred; (2) up to 1,108,226 shares of Common Stock and/or
-9-
options, warrants or other Common Stock purchase rights, and the Common Stock
issued pursuant to such options, warrants or other rights (as adjusted for any
stock dividends, combinations, splits, recapitalizations and the like) after the
Original Issue Date to employees, officers or directors of, or consultants or
advisors to the Company or any subsidiary pursuant to stock purchase or stock
option plans or other arrangements that are approved by the Board; and (3)
shares of Common Stock issued pursuant to the exercise of options, warrants or
convertible securities outstanding as of the Original Issue Date. The
"Effective Price" of Additional Shares of Common Stock shall mean the quotient
determined by dividing the total number of Additional Shares of Common Stock
issued or sold, or deemed to have been issued or sold by the Company under this
Section 4(j), into the aggregate consideration received, or deemed to have been
received by the Company for such issue under this Section 4(j), for such
Additional Shares of Common Stock.
(k) ACCOUNTANTS' CERTIFICATE OF ADJUSTMENT. In each case of an
adjustment or readjustment of any Conversion Price for the number of shares of
Common Stock or other securities issuable upon conversion of the Series
Preferred, if the Series Preferred is then convertible pursuant to this Section
4, the Company, at its expense, shall compute such adjustment or readjustment in
accordance with the provisions hereof and prepare a certificate showing such
adjustment or readjustment, and shall mail such certificate, by first class
mail, postage prepaid, to each registered holder of Series Preferred at the
holder's address as shown in the Company's books. The certificate shall set
forth such adjustment or readjustment, showing in detail the facts upon which
such adjustment or readjustment is based, including a statement of (1) the
consideration received or deemed to be received by the Company for any
Additional Shares of Common Stock issued or sold or deemed to have been issued
or sold, (2) the applicable Conversion Price at the time in effect, (3) the
number of Additional Shares of Common Stock and (4) the type and amount, if any,
of other property which at the time would be received upon conversion of the
Series Preferred.
(l) NOTICES OF RECORD DATE. Upon (i) any taking by the Company
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend or
other distribution, or (ii) any Acquisition (as defined in Section 3(c)) or
other capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company, any merger or
consolidation of the Company with or into any other corporation, or any Asset
Transfer (as defined in Section 3(c)), or any voluntary or involuntary
dissolution, liquidation or winding up of the Company, the Company shall mail to
each holder of Series Preferred at least 20 days prior to the record date
specified therein a notice specifying (1) the date on which any such record is
to be taken for the purpose of such dividend or distribution and a description
of such dividend or distribution, (2) the date on which any such Acquisition,
reorganization, reclassification, transfer, consolidation, merger, Asset
Transfer, dissolution, liquidation or winding up is expected to become
effective, and (3) the date, if any, that is to be fixed as to when the holders
of record of Common Stock (or other securities) shall be entitled to exchange
their shares of Common Stock (or other securities) for securities or other
property deliverable upon such Acquisition, reorganization, reclassification,
transfer, consolidation, merger, Asset Transfer, dissolution, liquidation or
winding up.
-10-
(m) AUTOMATIC CONVERSION.
(i) Each share of Series Preferred shall
automatically be converted into shares of Common Stock, based on the
then-effective applicable Series Preferred Conversion Price, (A) at any time
upon the affirmative election of the holders of at least two-thirds of the
outstanding shares of the Series Preferred, voting on an as-if-converted to
Common Stock basis, or (B) immediately upon the closing of a firmly underwritten
public offering pursuant to an effective registration statement under the
Securities Act of 1933, as amended, covering the offer and sale of Common Stock
for the account of the Company in which (i) the per share price is at least
$16.80 (as adjusted for any stock dividends, combinations, splits,
recapitalizations and the like), and (ii) the gross cash proceeds to the Company
(before underwriting discounts, commissions and fees) are at least $20,000,000.
Upon such automatic conversion, any declared and unpaid dividends shall be paid
in accordance with the provisions of Section 4(d).
(ii) Upon the occurrence of the event specified in
paragraph (i) above, the outstanding shares of Series Preferred shall be
converted automatically without any further action by the holders of such shares
and whether or not the certificates representing such shares are surrendered to
the Company or its transfer agent; provided, however, that the Company shall not
be obligated to issue certificates evidencing the shares of Common Stock
issuable upon such conversion unless the certificates evidencing such shares of
Series Preferred are either delivered to the Company or its transfer agent as
provided below, or the holder notifies the Company or its transfer agent that
such certificates have been lost, stolen or destroyed and executes an agreement
satisfactory to the Company to indemnify the Company from any loss incurred by
it in connection with such certificates. Upon the occurrence of such automatic
conversion of the Series Preferred, the holders of Series Preferred shall
surrender the certificates representing such shares at the office of the Company
or any transfer agent for the Series Preferred. Thereupon, there shall be issued
and delivered to such holder promptly at such office and in its name as shown on
such surrendered certificate or certificates, a certificate or certificates for
the number of shares of Common Stock into which the shares of Series Preferred
surrendered were convertible on the date on which such automatic conversion
occurred, and any declared and unpaid dividends shall be paid in accordance with
the provisions of Section 4(d).
(n) FRACTIONAL SHARES. No fractional shares of Common Stock
shall be issued upon conversion of Series Preferred. All shares of Common Stock
(including fractions thereof) issuable upon conversion of more than one share of
Series Preferred by a holder thereof shall be aggregated for purposes of
determining whether the conversion would result in the issuance of any
fractional share. If, after the aforementioned aggregation, the conversion would
result in the issuance of any fractional share, the Corporation shall, in lieu
of issuing any fractional share, pay cash equal to the product of such fraction
multiplied by the Common Stock's fair market value (as determined by the Board)
on the date of conversion.
(o) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Company
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of the Series Preferred, such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series Preferred. If at any time the number of
authorized but unissued
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shares of Common Stock shall not be sufficient to effect the conversion of all
then outstanding shares of the Series Preferred, the Company will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purpose.
(p) NOTICES. Any notice required by the provisions of this
Section 4 shall be in writing and shall be deemed effectively given: (i) upon
personal delivery to the party to be notified, (ii) when sent by confirmed telex
or facsimile if sent during normal business hours of the recipient; if not, then
on the next business day, (iii) five days after having been sent by registered
or certified mail, return receipt requested, postage prepaid, or (iv) one (1)
day after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt. All notices shall be
addressed to each holder of record at the address of such holder appearing on
the books of the Company.
(q) PAYMENT OF TAXES. The Company will pay all taxes (other
than taxes based upon income) and other governmental charges that may be imposed
with respect to the issue or delivery of shares of Common Stock upon conversion
of shares of Series Preferred, excluding any tax or other charge imposed in
connection with any transfer involved in the issue and delivery of shares of
Common Stock in a name other than that in which the shares of Series Preferred
so converted were registered.
(r) NO DILUTION OR IMPAIRMENT. Without the consent of the
holders of at least a majority of the then outstanding Series Preferred, the
Company shall not amend its Amended and Restated Articles of Incorporation or
participate in any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, for the
purpose of avoiding or seeking to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company, but shall at all
times in good faith assist in carrying out all such action as may be reasonably
necessary or appropriate in order to protect the conversion rights of the
holders of the Series Preferred against dilution or other impairment.
5. NO REISSUANCE OF SERIES PREFERRED. No share or shares of
Series Preferred acquired by the Corporation by reason of redemption, purchase,
conversion or otherwise shall be reissued.
IV
A. The liability of the directors of the Corporation for
monetary damages shall be eliminated to the fullest extent permissible under
California law.
B. The Corporation is authorized to indemnify the directors
and officers of the Corporation to the fullest extent permissible under
California law.
C. Any repeal or modification of this Article shall only be
prospective and shall not effect the rights under this Article in effect at the
time of the alleged occurrence of any action or omission to act giving rise to
liability."
THREE: The foregoing amendment and restatement of the Articles of
Incorporation has been duly approved by the Board of Directors of this
Corporation.
-12-
FOUR: The foregoing amendment and restatement of the Articles of
Incorporation has been duly approved by the required vote of shareholders in
accordance with Section 902 of the California Corporations Code. The total
number of outstanding shares of Common Stock of the Corporation is 290,217,
total number of outstanding shares of Series A Preferred Stock is 790,000, the
total number of outstanding shares of Series B Preferred Stock is 1,021,356, the
total number of outstanding shares of Series C Preferred Stock is 853,631, and
the total number of outstanding shares of Series D Preferred Stock is 1,196,570.
The number of shares voting in favor of the amendment equaled or exceeded the
vote required. The percentage vote required was more than 50% of the outstanding
shares of Common Stock and more than 50% of the outstanding shares of Series
Preferred.
We further declare under penalty of perjury that the matters set forth
in the foregoing certificate are true and correct of our own knowledge.
Executed at San Jose, California, on March 17, 2000.
/s/ Xxxxx X. Xxxxxxx
-------------------------------------------
Xxxxx X. Xxxxxxx, Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxx
-------------------------------------------
Xxxxxxx X. Xxxxxx, Secretary
[SEAL]
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EXHIBIT C
SCHEDULE OF EXCEPTIONS
EXHIBIT C
SCHEDULE OF EXCEPTIONS
The section numbers in this Schedule of Exceptions correspond to the sections of
the Agreement; provided, however, that any information disclosed herein under
any section number shall be deemed to be disclosed and incorporated into any
other section of the Agreement where such disclosure would be appropriate.
3.2 CAPITALIZATION.
1. There are warrants outstanding to purchase 135,615 shares of
the Corporation's Series A Preferred Stock.
2. The Corporation has reserved a total of 1,091,525 shares for
issuance pursuant to its 1995 Stock Option Plan and its 1997
Stock Option Plan (the "Plans"). Options covering a total of
820,246 shares have been granted under the Plans.
3. The Corporation has executed subordinated promissory notes
payable to Comdisco, Inc., for a total of $3,500,000. Under
the conversion agreement associated with this debt, the Lender
has the option to convert $1,750,000 of the debt at the
conversion strike price of $10.50 to 166,667 shares of Series
D Preferred Stock.
3.3 AUTHORIZATION; BINDING OBLIGATIONS.
1. Under its current Amended and Restated Investors' Rights
Agreement, the Corporation has granted a right of first
refusal to its Series A, Series B, Series C and Series D
Preferred Stock investors with respect to new issuances of
securities. These investors have either exercised or waived
their rights with respect to the issuance of the Shares under
the Agreement.
3.4 AGREEMENTS; ACTION.
(b) 1. Management Agreement between Adesso Mental Health
Specialties, Inc. and the Corporation, dated
January 1, 1996.
2. Management Agreement between Adesso Heart
Specialists, Inc. and the Corporation, dated January
1, 1996.
3. Management Agreement between Adesso Gastroenterology
Specialists, Inc. and the Corporation, dated January
1, 1996.
4. Management Agreement between Adesso General Surgeons,
Inc. and the Corporation, dated January 1, 1996.
5. Management Agreement between Adesso Otolaryngology
Specialists, Inc. and the Corporation, dated January
1, 1996.
6. Management Agreement between Adesso Urology
Specialists, Inc. and the Corporation, dated January
1, 1996.
7. Management Agreement between Adesso Orthopedic
Specialists, Inc. and the Corporation, dated January
1, 1996.
8. Management Agreement between Adesso Eye Specialists,
Inc. and the Corporation, dated January 1, 1996.
9. Management Agreement between Adesso Obstetrics and
Gynecology Specialists, Inc. and the Corporation,
dated January 1, 1996.
10. Agreement with San Mateo County Individual Practice
Association Medical Group, Inc. dated may 1, 1997.
11. Medical Network Services Agreement with Scottsdale
Physician Hospital Organization, Inc. dated May 28,
1997.
12. Memorandum of Understanding with Adesso Heart
Specialists dated November 21, 1996.
13. Management Agreement with Cardiovascular Physicians
of Arizona, Inc. dated February 2, 1999.
14. Healthcare Information Technology Services Agreement
with Highmark Inc. and Keystone Health Plan West,
Inc. dated November 15, 1999.
15. Administrative Services agreement with Humana Health
Plan of Texas, Inc., Humana HMO Texas, Inc., and PCA
Health Plan of Texas, Inc. dated February 2, 2000.
16. Healthcare Information Services Agreement with Humana
Health Plan, Inc. and Employers Health Insurance
Company dated October 28, 1999.
17. Management Agreement with PacifiCare of Arizona, Inc.
dated May 20, 1999.
18. Agreement with Prudential Health Care Plan, Inc. and
The Prudential Insurance Company of America dated
September 1, 1998.
19. Consulting Services Agreement with UnitedHealthcare
of Florida, Inc. dated September 21, 1999.
20. Issuance of Convertible Promissory Notes to Sequoia
Capital VI, New Enterprise Associates VII, L.P.,
InterWest Partners VI, L.P. and Sequoia
-2-
Technology Partners VI for a total of $945,453.60 on
March 23, 2000, convertible into shares of Series E
Preferred Stock.
(c) 1. See 3.4 (b)(20).
(f) 1. The Corporation has entered into discussions with
Total Therapeutic Management (TTM) for the
acquisition of TTM.
3.5 OBLIGATIONS TO RELATED PARTIES.
1. Xxxxxxx X. Xxxxxx, M.D. is a shareholder in the following
medical corporations, each of which has a contractual
relationship with the Corporation:
Adesso Heart Specialists, Adesso Gastroenterology Specialists,
Adesso General Surgeons, Adesso Mental Health Specialists,
Adesso Obstetrics & Gynecology Specialists, Adesso Eye
Specialists, Adesso Orthopedic Specialists, Adesso
Otolaryngology Specialists and Adesso Urology Specialists
(collectively, the "IPAs").
2. Xxxxxxx Xxxxxx, a director and shareholder of the Corporation
is also a director of each of the IPAs.
3. See 3.4(b)(20).
3.6 TITLE OF PROPERTIES AND ASSETS; LIENS, ETC.
1. Office Lease between Xxxxx & Xxxxxxxxxx Graphics Corporation
and the Corporation, dated February 1, 2000.
2. Office Lease between Kierland South Office Park L.C. and the
Corporation, dated October 30, 1997.
3. Office Lease between WHPX-S Real Estate limited Partnership
and the Corporation, dated September 25, 1997.
4. General Security Agreement in favor of Imperial Bank dated
December 1, 1997, granting Imperial Bank a security interest
in all of the Corporation's personal property, both tangible
and intangible.
5. Subordinated Loan and Security Agreement between Comdisco,
Inc. and the Corporation dated June 11, 1999.
6. On April 21, 1998, the Corporation entered into a Master Loan
and Security Agreement with Transamerica Business Credit
Corporation for the amount of $1,115,019. The equipment
purchased with the borrowings collateralizes this loan. As of
December 31, 1999, the Corporation had $730,461 of borrowings
outstanding.
-3-
3.9 TAX RETURNS, PAYMENTS AND ELECTIONS
The Corporation's 1998 tax return which covers the period from July 1, 1998 to
June 30, 1999 is currently past due with the Federal and State agencies. The
returns are currently being prepared by Price Waterhouse Coopers and we expect
the returns to be filed by April 30, 2000. Any late charges or penalties
associated with the 1998 tax returns are not expected to be material and should
be under $1,000. The Corporation's 1999 tax return which covers the period of
July 1, 1999 to December 31, 1999 is currently under extension and has a filing
date of September 15, 2000. All estimated taxes associated with both 1998 and
1999 income taxes have been paid and are current.
3.10 LITIGATION
SACRAMENTO GASTROENTEROLOGY V. ADESSO GASTROENTEROLOGY SPECIALISTS, INC.: CASE
NO. 99CS01254.
Adesso Gastroenterology Specialists, Inc. (IPA) was ordered to arbitration
with Sacramento Gastroenterology. The IPA's attorneys at Xxxxx & Xxxxxxx have
been in correspondence with Sacramento Gastroenterology's attorney, Xxx
Xxxxxxx regarding the arbitration. The last correspondence from Xx. Xxxxxxx
was October 4, 1999 but he has thus far not commenced arbitration proceedings
and the IPA's attorneys expect that he will not commence the proceedings.
101 PARK, LLC, A DELAWARE LIMITED LIABILITY COMPANY V. ADESSO SPECIALTY SERVICES
ORGANIZATION, INC.: DCOO 389303
This complaint for Unlawful Detainer was filed against the Corporation on
February 9, 2000 while the Corporation was attempting to move its corporate
offices to another building owned by the same landlord that filed the
complaint. The Corporation successfully moved its corporate offices on
February 19, 2000 and is currently in settlement negotiations to pay any
damages alleged by 101 Park, LLC. 101 Park, LLC's demand is for $19,800.67
and an undisclosed reconciliation for the 1999 CAM charges, which will be
determined by 3/31/2000.
3.11 EMPLOYEES.
1. Offer Letter to Xxxx Xxxx dated May 12, 1999.
2. Offer Letter to Xxxxx Xxxx dated June 29, 1999.
3. Offer Letter to Xxxxxxxx Xxxx dated July 16, 1999.
4. Offer Letter to Xxxx Xxxxxxx dated January 6, 1999.
5. Offer Letter to Xxxxx Xxx Xxxxxx dated September 21, 1998.
6. Offer Letter to Xxxx Xxxxx dated June 15, 1999.
7. Offer Letter to Xxxxxxx Xxxx dated January 19, 1999.
8. Offer Letter to Xxxxxxxx Xxxxx dated July 16, 1999.
9. Offer Letter to Xxxx Xxxxx Xxxxxxx dated July 14, 1999.
-4-
10. Offer Letter to Xxxxxxxx Xxxxxx dated October 7, 1999.
11. Offer Letter to Xxxxx Xxxxx dated October 8, 1999.
12. Offer Letter to Xxxxxxxx Xxxxxxx dated October 5, 1999.
13. Offer Letter to Xxxxx Xxxxx dated July 28, 1999.
14. Offer Letter to Xxxxxx Xxxxx dated December 30, 1998.
15. Offer Letter to Xxxx Xxxxxxx dated February 5, 1999.
16. Offer Letter to Xxxx Xxxxx dated July 9, 1999.
17. Offer Letter to Xxxxx Xxxxxx dated August 24, 1999.
18. Offer Letter to Xxxxxx X. Xxxx dated July 28, 1997.
19. Offer Letter to Aloha M. Russian dated July 15, 1997.
20. Offer Letter to Xxxxxx Xxxxx III dated July 12, 1999.
21. Offer Letter to Xxxxxx Xxxx dated January 30, 1997.
22. Offer Letter to Xxxxxx Xxxxxx dated January 24, 2000.
23. Offer Letter to Xxxxxxx Xxx dated October 28, 1999.
24. Offer Letter to Xxxxx Xxx dated July 27, 1999.
25. Offer Letter to Xxxxxxx Xxxx dated May 12, 1999.
26. Offer Letter to Xxxx Xxxxx dated September 30, 1999.
27. Offer Letter to Xxxx Xxxxxxx dated May 28, 1999.
28. Offer Letter to Xxxx Xxxx dated November 9, 1999.
29. Offer Letter to Xxxx Xxxxxxx dated June 30, 1999.
30. Offer Letter to Xxxxxxx Xxxxxx dated November 12, 1999.
31. Offer Letter to Xxxxxxx Xxxxxx dated January 21, 2000.
32. Offer Letter to Xxxxx Xxxxxxxx dated November 25, 1998.
33. Offer Letter to Xxxxxxxxx Xxxxxxxxxx dated December 3, 1998.
34. Offer Letter to Xxxxx Xxxxxxxxxx dated November 25, 1997.
-5-
35. Offer Letter to Xxxxx Xxxxxxx dated August 6, 1998.
36. Offer Letter to Gabrielle Elmidolan dated November 14, 1999.
37. Offer Letter to Xxxx Xxxxxxx dated April 30, 1999.
38. Offer Letter to Xxxxx Xxxxx Roots dated December 30, 1998.
39. Offer Letter to Xxxxxxxx Bench dated August 28, 1999.
40. Offer Letter to Xxxx Xxxx dated July 15, 1999.
41. Offer Letter to Xxxxxxx Xxxxxx dated May 10, 1999.
42. Offer Letter to XxXxxx Xxxxxx dated May 28, 1998.
43. Offer Letter to Xxxxxxx Xxxx Xxxxx dated October 2, 1997.
44. Adesso Employee Benefits Plan, including Medical, Dental, Life
Insurance, Accidental Death & Dismemberment, Long Term
Disability and Vision benefits.
3.22 CHANGES
(a) 1. See 3.4(b)(20).
(j) 1. See 3.4(b)(20).
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EXHIBIT D
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
TABLE OF CONTENTS
PAGE
----
1. GENERAL......................................................................................................1
1.1 Definitions.........................................................................................1
2. REGISTRATION; RESTRICTIONS ON TRANSFER.......................................................................3
2.1 Restrictions on Transfer............................................................................3
2.2 Demand Registration.................................................................................4
2.3 Piggyback Registrations.............................................................................5
2.4 Form S-3 Registration...............................................................................6
2.5 Expenses of Registration............................................................................7
2.6 Obligations of the Corporation......................................................................7
2.7 Termination of Registration Rights..................................................................9
2.8 Delay of Registration; Furnishing Information.......................................................9
2.9 Indemnification.....................................................................................9
2.10 Assignment of Registration Rights..................................................................11
2.11 Amendment of Registration Rights...................................................................12
2.12 Limitation on Subsequent Registration Rights.......................................................12
2.13 "Market Stand-Off" Agreement.......................................................................12
2.14 Rule 144 Reporting.................................................................................12
3. COVENANTS OF THE CORPORATION................................................................................13
3.1 Basic Financial Information and Reporting..........................................................13
3.2 Inspection Rights..................................................................................14
3.3 Confidentiality of Records.........................................................................14
3.4 Reservation of Common Stock........................................................................14
3.5 Stock Vesting......................................................................................14
3.6 Proprietary Information and Inventions Agreement...................................................14
3.7 Real Property Holding Corporation..................................................................14
3.8 Assignment of Right to Repurchase..................................................................15
3.9 Termination of Covenants...........................................................................15
4. RIGHTS OF FIRST REFUSAL.....................................................................................15
4.1 Subsequent Offerings...............................................................................15
4.2 Exercise of Rights.................................................................................16
4.3 Issuance of Equity Securities to Other Persons.....................................................16
4.4 Termination of Rights of First Refusal.............................................................16
4.5 Transfer of Rights of First Refusal................................................................16
4.6 Excluded Securities................................................................................16
4.7 Special Series C Right of First Refusal............................................................17
5. AMENDMENT AND RESTATEMENT...................................................................................17
5.1 Amendment and Restatement..........................................................................17
6. MISCELLANEOUS...............................................................................................17
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TABLE OF CONTENTS
(CONTINUED)
PAGE
----
6.1 Governing Law......................................................................................17
6.2 Survival...........................................................................................17
6.3 Successors and Assigns.............................................................................18
6.4 Severability.......................................................................................18
6.5 Amendment and Waiver...............................................................................18
6.6 Delays or Omissions................................................................................18
6.7 Notices............................................................................................18
6.8 Attorneys' Fees....................................................................................19
6.9 Titles and Subtitles...............................................................................19
6.10 Pronouns...........................................................................................19
6.11 Counterparts.......................................................................................19
-ii-
INDEX OF EXHIBITS
-----------------
Schedule of Purchases Exhibit A
Restated Article Exhibit B
Schedule of Exceptions Exhibit C
Amended and Restated Investors' Rights Agreement Exhibit D
Amended and Restated Co-Sale Agreement Exhibit E
Amended and Restated Voting Agreement Exhibit F
List of Shareholders Exhibit G
Proprietary Information and Inventions Agreement Exhibit H
Form of Legal Opinion Exhibit I
-iii-
AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (the "Agreement")
is entered into as of the 6th day of April, 2000, by and among ADESSO SPECIALTY
SERVICES ORGANIZATION INC., a California corporation (the "Corporation"), the
holders of the Corporation's Series A Preferred Stock (the "Series A Stock"),
Series B Preferred Stock (the "Series B Stock"), Series C Preferred Stock (the
"Series C Stock"), Series D Preferred Stock (the "Series D Stock"), and Series E
Preferred Stock (the "Series E Stock") set forth on Exhibit A hereto and Xxxxxxx
X. Xxxxxx (the "Founder"). The holders of the Series A Stock, Series B Stock,
Series C Stock, Series D Stock, and Series E Stock shall be referred to
hereinafter as the "Investors" and each individually as an "Investor." This
Agreement is being entered into pursuant to Section 5.1 of that certain Series E
Preferred Stock Purchase Agreement of even date herewith between the Corporation
and the Purchasers set forth on Exhibit A thereto (the "Purchase Agreement").
RECITALS
WHEREAS, certain Investors hold shares of the Corporation's Series A
Stock, Series B Stock, Series C Stock, Series D Stock and/or shares of Common
Stock issued upon conversion thereof and possess registration rights,
information rights, and other rights provided pursuant to an Amended and
Restated Investors' Rights Agreement dated as of December 10, 1997, between the
Corporation, the Founder and such Investors (the "Prior Agreement");
WHEREAS, the Corporation, the Founder and the undersigned Investors who
hold Series A Stock, Series B Stock, Series C, and Series D Stock desire to
terminate the Prior Agreement and to provide to such Investors the rights
created pursuant hereto in lieu of the rights granted to it under the Prior
Agreement;
WHEREAS, the Corporation and certain of the Investors have entered into
an agreement or agreements for sale by the Corporation and purchase by such
Investors of Series E Stock; and
WHEREAS, in connection with the purchase and sale of the Corporation's
Series E Stock pursuant to the Purchase Agreement, the Corporation and the
Investors desire to provide for the registration of the Common Stock issued upon
conversion or exercise of the Series E Stock and the granting of certain other
rights to the Investors according to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements, covenants
and considerations and releases contained herein, the parties hereby agree as
follows:
1. GENERAL
1.1 DEFINITIONS. As used in this Agreement the following terms shall
have the following respective meanings:
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"HOLDER" means any person owning of record Registrable Securities that
have not been sold to the public or any assignee of record of such Registrable
Securities in accordance with Section 2.10 hereof.
"INITIAL OFFERING" means the Corporation's first firm commitment
underwritten public offering of its Common Stock registered under the Securities
Act.
"REGISTER," "REGISTERED," and "REGISTRATION" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.
"REGISTRABLE SECURITIES" means (i) Common Stock of the Corporation
issued or issuable upon conversion of the Shares; (ii) Common Stock issued or
issuable upon conversion of any Shares issued upon exercise of the Warrants; and
(iii) any Common Stock of the Corporation issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange for or in
replacement of, such above-described securities. Notwithstanding the foregoing,
Registrable Securities shall not include any securities sold by a person to the
public either pursuant to a registration statement or Rule 144 or sold in a
private transaction in which the transferor's rights under Section 2 of this
Agreement are not assigned.
"REGISTRABLE SECURITIES THEN OUTSTANDING" shall be the number of shares
determined by calculating the total number of shares of the Corporation's Common
Stock that are Registrable Securities and either (1) are then issued and
outstanding or (2) are issuable pursuant to then exercisable or convertible
securities.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the
Corporation in complying with Sections 2.2, 2.3 and 2.4 hereof, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Corporation, reasonable fees and
disbursements not to exceed Twenty-five Thousand Dollars ($25,000) of a single
special counsel for the Holders, blue sky fees and expenses and the expense of
any special audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Corporation which shall
be paid in any event by the Corporation).
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale.
"SHARES" shall mean the Corporation's Series A Stock, Series B Stock,
Series C Stock, Series D Stock, and Series E Stock.
"FORM S-3" means such form under the Securities Act as in effect on the
date hereof or any registration form under the Securities Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Corporation with the
SEC.
"SEC" or "COMMISSION" means the Securities and Exchange Commission.
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"WARRANTS" shall mean warrants to purchase Series A Stock held by the
Investors.
2. REGISTRATION; RESTRICTIONS ON TRANSFER
2.1 RESTRICTIONS ON TRANSFER.
(a) Each Holder agrees not to make any disposition of all or
any portion of the Shares or Registrable Securities unless and until:
(i) There is then in effect a registration statement
under the Securities Act covering such proposed disposition and such disposition
is made in accordance with such registration statement; or
(ii) (A) The transferee has agreed in writing to be
bound by this Section 2.1, with the exception of transfers made pursuant to Rule
144 following the Initial offering (B) such Holder shall have notified the
Corporation of the proposed disposition and shall have furnished the Corporation
with a detailed statement of the circumstances surrounding the proposed
disposition, and (C) if reasonably requested by the Corporation, such Holder
shall have furnished the Corporation with an opinion of counsel, reasonably
satisfactory to the Corporation, that such disposition will not require
registration of such shares under the Securities Act. It is agreed that the
Corporation will not require opinions of counsel for transactions made pursuant
to Rule 144 except in unusual circumstances.
(iii) Notwithstanding the provisions of paragraphs
(i) and (ii) above, no such registration statement or opinion of counsel shall
be necessary for a transfer by a Holder that is (A) a partnership to its
partners or former partners in accordance with partnership interests, (B) a
corporation to its shareholders in accordance with their interest in the
corporation, (C) a limited liability company to its members or former members in
accordance with their interest in the limited liability company, or (D) to the
Holder's family member or trust for the benefit of an individual Holder,
provided the transferee will be subject to the terms of this Section 2.1 to the
same extent as if he were an original Holder hereunder.
(b) Each certificate representing Shares or Registrable
Securities shall (unless otherwise permitted by the provisions of the Agreement)
be stamped or otherwise imprinted with a legend substantially similar to the
following (in addition to any legend required under applicable state securities
laws or as provided elsewhere in this Agreement):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER THE ACT OR UNLESS THE CORPORATION HAS RECEIVED
AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION AND ITS COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED.
(c) The Corporation shall be obligated to reissue promptly
unlegended certificates at the request of any holder thereof if the holder shall
have obtained an opinion of counsel (which counsel may be counsel to the
Corporation) reasonably acceptable to the
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Corporation to the effect that the securities proposed to be disposed of may
lawfully be so disposed of without registration, qualification or legend.
(d) Any legend endorsed on an instrument pursuant to
applicable state securities laws and the stop-transfer instructions with respect
to such securities shall be removed upon receipt by the Corporation of an order
of the appropriate blue sky authority authorizing such removal.
2.2 DEMAND REGISTRATION.
(a) Subject to the conditions of this Section 2.2, if the
Corporation shall receive a written request from the Holders of at least a
majority of the Registrable Securities then outstanding (the "Initiating
Holders") that the Corporation file a registration statement under the
Securities Act covering the registration of Registrable Securities having an
aggregate offering price to the public of not less than $5,000,000, then the
Corporation shall, within ten days of the receipt thereof, give written notice
of such request to all Holders, and subject to the limitations of this Section
2.2, use its best efforts to effect, as soon as practicable, and in any event
within 90 days of the receipt of such request, the registration under the
Securities Act of all Registrable Securities that the Holders request to be
registered within 20 days of the mailing of such notice by the Corporation in
accordance with Section 6.7.
(b) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Corporation as a part of their request made pursuant to
this Section 2.2 and the Corporation shall include such information in the
written notice referred to in Section 2.2(a). In such event, the right of any
Holder to include its Registrable Securities in such registration shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the Initiating Holders
and such Holder) to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by a majority in interest of the Initiating
Holders (which underwriter or underwriters shall be reasonably acceptable to the
Corporation). Notwithstanding any other provision of this Section 2.2, if the
underwriter advises the Corporation that marketing factors require a limitation
of the number of securities to be underwritten (including Registrable
Securities) then the Corporation shall so advise all Holders of Registrable
Securities that would otherwise be underwritten pursuant hereto, and the number
of shares that may be included in the underwriting shall be allocated to the
Holders of such Registrable Securities on a pro rata basis based on the number
of Registrable Securities held by all such Holders (including the Initiating
Holders) PROVIDED, HOWEVER, that the number of Registrable Securities to be
included in the underwriting shall not be reduced unless all other securities
are first entirely excluded from the offering. Any Registrable Securities
excluded or withdrawn from such underwriting shall be withdrawn from the
registration.
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(c) The Corporation shall not be required to effect a
registration pursuant to this Section 2.2:
(i) prior to the earlier to occur of (A) 180 days
after the Initial Offering and (B) the second anniversary of the date of this
Agreement; or
(ii) after the Corporation has effected two
registrations pursuant to this Section 2.2, and such registrations have been
declared or ordered effective; or
(iii) during the period starting with the date of
filing of, and ending on the date 180 days following the effective date of the
registration statement pertaining to the Initial Offering; or
(iv) if within ten days of receipt of a written
request from Initiating Holders pursuant to Section 2.2(a), the Corporation
gives notice to the Holders of the Corporation's intention to make its Initial
Offering within 90 days; or
(v) if the Corporation shall furnish to Holders
requesting a registration statement pursuant to this Section 2.2, a certificate
signed by the Chairman of the Board stating that in the good faith judgment of
the Board of Directors of the Corporation, it would be seriously detrimental to
the Corporation and its shareholders for such registration statement to be
effected at such time, in which event the Corporation shall have the right to
defer such filing for a period of not more than 90 days after receipt of the
request of the Initiating Holders; provided that such right to delay a request
shall be exercised by the Corporation not more than once in any twelve month
period.
2.3 PIGGYBACK REGISTRATIONS. The Corporation shall notify all Holders
and the Founder in writing at least 30 days prior to the filing of any
registration statement under the Securities Act for purposes of a public
offering of securities of the Corporation (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Corporation, but excluding registration statements relating to employee benefit
plans or with respect to corporate reorganizations or other transactions under
Rule 145 of the Securities Act) and will afford each such Holder and the Founder
an opportunity to include in such registration statement all or part of such
Registrable Securities held by such Holder or shares of Common Stock held by the
Founder. The Founder and each Holder desiring to include in any such
registration statement all or any part of the Common Stock or Registrable
Securities held by it, respectively, shall, within 15 days after the
above-described notice from the Corporation, so notify the Corporation in
writing. Such notice shall state the intended method of disposition of the
Registrable Securities by such Holder or shares of Common Stock held by the
Founder. If the Founder or a Holder decides not to include all of its Common
Stock or Registrable Securities, respectively, in any registration statement
thereafter filed by the Corporation, such Founder or Holder shall nevertheless
continue to have the right to include any Common Stock or Registrable
Securities, respectively, in any subsequent registration statement or
registration statements as may be filed by the Corporation with respect to
offerings of its securities, all upon the terms and conditions set forth herein.
(a) UNDERWRITING. If the registration statement under which
the Corporation gives notice under this Section 2.3 is for an underwritten
offering, the Corporation shall so advise
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the Holders of Registrable Securities and the Founder. In such event, the right
of any such Holder or Founder to be included in a registration pursuant to this
Section 2.3 shall be conditioned upon such Holder's or Founder's participation
in such underwriting and the inclusion of such Holder's Registrable Securities
or shares of such Founder's Common Stock in the underwriting to the extent
provided herein. Each Holder and Founder proposing to distribute their
securities through such underwriting shall enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by the Corporation. Notwithstanding any other provision of the
Agreement, if the underwriter determines in good faith that marketing factors
require a limitation of the number of shares to be underwritten, the number of
shares that may be included in the underwriting shall be allocated, first, to
the Corporation; second, to the Holders on a pro rata basis based on the total
number of Registrable Securities held by the Holders; third, to the Founder, for
an amount of shares not to exceed 150,000 (as adjusted for stock splits and
combinations); and fourth, to any shareholder of the Corporation (other than a
Holder or the Founder) on a pro rata basis. No such reduction shall reduce the
securities being offered by the Corporation for its own account to be included
in the registration and underwriting, and in no event shall the amount of
securities of the selling Holders included in the registration be reduced below
25% of the total amount of securities included in such registration, unless such
offering is the Initial Offering and such registration does not include shares
of any other selling shareholders, in which event any or all of the Registrable
Securities of the Holders may be excluded in accordance with the immediately
preceding sentence. In no event will shares of any other selling shareholder be
included in such registration which would reduce the number of shares which may
be included by Holders without the written consent of Holders of not less than
two-thirds of the Registrable Securities proposed to be sold in the offering.
(b) RIGHT TO TERMINATE REGISTRATION. The Corporation shall
have the right to terminate or withdraw any registration initiated by it under
this Section 2.3 prior to the effectiveness of such registration whether or not
any Holder has elected to include securities in such registration. The
Registration Expenses of such withdrawn registration shall be borne by the
Corporation in accordance with Section 2.5 hereof.
2.4 FORM S-3 REGISTRATION. In case the Corporation shall receive from
any Holder or Holders of Registrable Securities a written request or requests
that the Corporation effect a registration on Form S-3 (or any successor to Form
S-3) or any similar short-form registration statement and any related
qualification or compliance with respect to all or a part of the Registrable
Securities owned by such Holder or Holders, the Corporation will:
(a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders of Registrable
Securities; and
(b) as soon as practicable, effect such registration and all
such qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such Holder's
or Holders' Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any other Holder or
Holders joining in such request as are specified in a written request given
within 15 days after receipt of such written notice from the Corporation;
provided, however, that the Corporation shall not be obligated to effect any
such registration, qualification or compliance pursuant to this Section 2.4
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(i) if Form S-3 (or any successor or similar form) is
not available for such offering by the Holders, or
(ii) if the Holders, together with the holders of any
other securities of the Corporation entitled to inclusion in such registration,
propose to sell Registrable Securities and such other securities (if any) at an
aggregate price to the public of less than $500,000, or
(iii) if the Corporation shall furnish to the Holders
a certificate signed by the Chairman of the Board of Directors of the
Corporation stating that in the good faith judgment of the Board of Directors of
the Corporation, it would be seriously detrimental to the Corporation and its
shareholders for such Form S-3 Registration to be effected at such time, in
which event the Corporation shall have the right to defer the filing of the Form
S-3 registration statement for a period of not more than 90 days after receipt
of the request of the Holder or Holders under this Section 2.4; provided, that
such right to delay a request shall be exercised by the Corporation not more
than once in any 12 month period, or
(iv) in any particular jurisdiction in which the
Corporation would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification or
compliance.
(c) Subject to the foregoing, the Corporation shall file a
Form S-3 registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt of
the request or requests of the Holders.
(d) Registrations effected pursuant to this Section 2.4 shall
not be counted as demand for registration or registrations effected pursuant to
Sections 2.2 or 2.3, respectively.
2.5 EXPENSES OF REGISTRATION. Except as specifically provided herein,
all Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 2.2 or any registration under
Section 2.3 or Section 2.4 herein shall be borne by the Corporation. All Selling
Expenses incurred in connection with any registrations hereunder, shall be borne
by the holders of the securities so registered pro rata on the basis of the
number of shares so registered. The Corporation shall not, however, be required
to pay for expenses of any registration proceeding begun pursuant to Section 2.2
or 2.4, the request of which has been subsequently withdrawn by the Initiating
Holders unless (a) the withdrawal is based upon material adverse information
concerning the Corporation of which the Initiating Holders were not aware at the
time of such request or (b) the Holders of a majority of Registrable Securities
agree to forfeit their right to one requested registration pursuant to Section
2.2 or Section 2.4, as applicable, in which event such right shall be forfeited
by all Holders. If the Holders are required to pay the Registration Expenses,
such expenses shall be borne by the holders of securities (including Registrable
Securities) requesting such registration in proportion to the number of shares
for which registration was requested. If the Corporation is required to pay the
Registration Expenses of a withdrawn offering pursuant to clause (a) above, then
the Holders shall not forfeit their rights pursuant to Section 2.2 or Section
2.4 to a demand registration.
2.6 OBLIGATIONS OF THE CORPORATION. Whenever required to effect the
registration of any Registrable Securities, the Corporation shall, as
expeditiously as reasonably possible:
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(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use all reasonable efforts to
cause such registration statement to become effective, and, upon the request of
the Holders of a majority of the Registrable Securities registered thereunder,
keep such registration statement effective for up to 90 days or, if earlier,
until the Holder or Holders have completed the distribution related thereto.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Corporation shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
(g) Furnish, at the request of a majority of the Holders
participating in the registration, on the date that such Registrable Securities
are delivered to the underwriters for sale, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated as of such date, of the
counsel representing the Corporation for the purposes of such registration, in
form and substance as is customarily given to underwriters in an underwritten
public offering and reasonably satisfactory to a majority in interest of the
Holders requesting registration, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities and (ii) a letter
dated as of such date, from the independent certified public accountants of the
Corporation, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering
and reasonably satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and if permitted by
applicable accounting standards, to the Holders requesting registration of
Registrable Securities.
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(h) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Corporation are then listed.
(i) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
2.7 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
to a Holder under this Section 2 shall terminate and be of no further force and
effect five years after the Initial Offering. In addition, a Holder's
registration rights shall expire if (i) the Corporation has completed its
Initial Offering and is subject to the provisions of the Exchange Act, (ii) such
Holder (together with its affiliates, partners and former partners) holds less
than 1% of the Corporation's outstanding Common Stock (treating all shares of
convertible Preferred Stock on an as converted basis) and (iii) all Registrable
Securities held by and issuable to such Holder may be sold under Rule 144 during
any 90 day period.
2.8 DELAY OF REGISTRATION; FURNISHING INFORMATION.
(a) No Holder shall have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of this Section 2.
(b) It shall be a condition precedent to the obligations of
the Corporation to take any action pursuant to Section 2.2, 2.3 or 2.4 on behalf
of any selling Holder that such selling Holder shall furnish to the Corporation
such information regarding itself, the Registrable Securities held by it and the
intended method of disposition of such securities as shall be required to effect
the registration of its Registrable Securities.
(c) The Corporation shall have no obligation with respect to
any registration requested pursuant to Section 2.2 or Section 2.4 if, due to the
operation of subsection 2.8(b), the number of shares or the anticipated
aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the anticipated
aggregate offering price required to originally trigger the Corporation's
obligation to initiate such registration as specified in Section 2.2 or Section
2.4, whichever is applicable.
2.9 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under Sections 2.2, 2.3 or 2.4:
(a) To the extent permitted by law, the Corporation will
indemnify and hold harmless each Holder, the partners, officers and directors of
each Holder, any underwriter (as defined in the Securities Act) for such Holder
and each person, if any, who controls such Holder or underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation") by the Corporation: (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein
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or any amendments or supplements thereto, (ii) the omission or alleged omission
to state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Corporation of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law in connection with the offering
covered by such registration statement; and the Corporation will reimburse each
such Holder, partner, officer or director, underwriter or controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided however, that the indemnity agreement contained in this Section 2.9(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Corporation, which consent shall not be unreasonably withheld, nor shall the
Corporation be liable in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon a
Violation that occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
such Holder, partner, officer, director, underwriter or controlling person of
such Holder.
(b) To the extent permitted by law, each Holder will, if
Registrable Securities held by such Holder are included in the securities as to
which such registration qualifications or compliance is being effected,
indemnify and hold harmless the Corporation, each of its directors and officers
and each person, if any, who controls the Corporation within the meaning of the
Securities Act, any underwriter and any other Holder selling securities under
such registration statement or any of such other Holder's partners, directors or
officers or any person who controls such Holder, against any losses, claims,
damages or liabilities (joint or several) to which the Corporation or any such
director, officer, controlling person, underwriter or other such Holder, or
partner, director, officer or controlling person of such other Holder may become
subject under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder under an
instrument duly executed by such Holder and stated to be specifically for use in
connection with such registration; and each such Holder will reimburse any legal
or other expenses reasonably incurred by the Corporation or any such director,
officer, controlling person, underwriter or other Holder, or partner, officer,
director or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action if
it is judicially determined that there was such a Violation; provided, however,
that the indemnity agreement contained in this Section 2.9(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld; provided further, that in no event shall any
indemnity under this Section 2.9 exceed the proceeds from the offering received
by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 2.9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.9, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however,
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that an indemnified party shall have the right to retain its own counsel, with
the fees and expenses to be paid by the indemnifying party, if representation of
such indemnified party by the counsel retained by the indemnifying party would
be inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if materially
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
2.9, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 2.9.
(d) If the indemnification provided for in this Section 2.9 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any losses, claims, damages or liabilities referred to
herein, the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the Violation(s) that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; provided, that in no event shall any contribution by a
Holder hereunder exceed the proceeds from the offering received by such Holder.
(e) The obligations of the Corporation and Holders under this
Section 2.9 shall survive completion of any offering of Registrable Securities
in a registration statement. No indemnifying party, in the defense of any such
claim or litigation, shall, except with the consent of each indemnified party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect to such
claim or litigation.
(f) Notwithstanding this Section 2.9, to the extent the
provisions for indemnification and contribution contained in the underwriting
agreement entered into in connection with an underwritten public offering are in
conflict with the provisions of this Section 2.9, the indemnification and
contribution provisions contained in such underwriting agreement shall control.
2.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Corporation to register Registrable Securities pursuant to this Section 2 may be
assigned by a Holder to a transferee or assignee of Registrable Securities that
(i) is a subsidiary, parent, general partner, limited partner or retired partner
or affiliate of a Holder, (ii) is a Holder's family member or trust for the
benefit of an individual Holder, or (iii) acquires at least 50,000 shares of
Registrable Securities (as adjusted for stock splits and combinations);
provided, however, (A) the transferor shall, within ten days after such
transfer, furnish to the Corporation written notice of the name and address of
such transferee or assignee and the securities with respect to which such
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registration rights are being assigned and (B) such transferee shall agree to be
subject to all restrictions set forth in this Agreement.
2.11 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Section 2
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Corporation and the Holders of at least a majority of the
Registrable Securities then outstanding. Any amendment or waiver effected in
accordance with this Section 2.11 shall be binding upon each Holder, the Founder
and the Corporation. By acceptance of any benefits under this Section 2, Holders
of Registrable Securities and the Founder hereby agree to be bound by the
provisions hereunder.
2.12 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. After the date of
this Agreement, the Corporation shall not, without the prior written consent of
the Holders of a majority of the Registrable Securities, enter into any
agreement with any holder or prospective holder of any securities of the
Corporation that would grant such holder registration rights equal to or senior
to those granted to the Holders hereunder.
2.13 "MARKET STAND-OFF" AGREEMENT. If requested by the Corporation or
the representative of the underwriters of Common Stock (or other securities) of
the Corporation, each Holder shall not sell or otherwise transfer or dispose of
any Common Stock (or other securities) of the Corporation held by such Holder
(other than those included in the registration) for a period specified by the
representative of the underwriters not to exceed 180 days following the
effective date of a registration statement of the Corporation filed under the
Securities Act, provided that:
(a) such agreement shall apply only to the Corporation's
Initial Offering; and
(b) all officers and directors of the Corporation enter into
similar agreements.
The obligations described in this Section 2.13 shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The Corporation may impose
stop-transfer instructions with respect to the shares of Common Stock (or other
securities) subject to the foregoing restriction until the end of said 180 day
period.
2.14 RULE 144 REPORTING. With a view to making available to the Holders
the benefits of certain rules and regulations of the SEC that may permit the
sale of the Registrable Securities to the public without registration, the
Corporation agrees to use its best efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act, at all times after the effective date of
the first registration filed by the Corporation for an offering of its
securities to the general public;
(b) File with the SEC, in a timely manner, all reports and
other documents required of the Corporation under the Exchange Act;
(c) So long as a Holder owns any Registrable Securities,
furnish to such Holder forthwith upon request: a written statement by the
Corporation as to its compliance with
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the reporting requirements of said Rule 144 of the Securities Act, and of the
Exchange Act (at any time after it has become subject to such reporting
requirements); a copy of the most recent annual or quarterly report of the
Corporation; and such other reports and documents as a Holder may reasonably
request in availing itself of any rule or regulation of the SEC allowing it to
sell any such securities without registration.
(d) Take such action, including the voluntary registration of
its Common Stock under Section 12 of the Exchange Act, as is necessary to enable
the Holders to utilize Form S-3 for the sale of their Registrable Securities,
such action to be taken as soon as practicable after the end of the fiscal year
in which the first registration statement filed by the Corporation for the
offering of its securities to the general public is declared effective.
3. COVENANTS OF THE CORPORATION.
3.1 BASIC FINANCIAL INFORMATION AND REPORTING.
(a) The Corporation will maintain true books and records of
account in which full and correct entries will be made of all its business
transactions pursuant to a system of accounting established and administered in
accordance with generally accepted accounting principles consistently applied,
and will set aside on its books all such proper accruals and reserves as shall
be required under generally accepted accounting principles consistently applied.
(b) As soon as practicable after the end of each fiscal year
of the Corporation, and in any event within 120 days thereafter, the Corporation
will furnish each Investor a consolidated balance sheet of the Corporation, as
at the end of such fiscal year, and a consolidated statement of operations, a
consolidated statement of cash flows of the Corporation and a consolidated
statement of shareholder equity, for such year, all prepared in accordance with
generally accepted accounting principles consistently applied and setting forth
in each case in comparative form the figures for the previous fiscal year, all
in reasonable detail. Such financial statements shall be accompanied by a report
and opinion thereon by independent auditors of national standing selected by the
Corporation's Board of Directors.
(c) The Corporation will furnish each Investor, as soon as
practicable after the end of the first, second and third quarterly accounting
periods in each fiscal year of the Corporation, and in any event within 45 days
thereafter, a consolidated balance sheet of the Corporation as of the end of
each such quarterly period, and a consolidated statement of operations and a
consolidated statement of cash flows of the Corporation for such period and for
the current fiscal year to date, prepared in accordance with generally accepted
accounting principles, with the exception that no notes need be attached to such
statements and normal year-end audit adjustments may not have been made.
(d) So long as an Investor (with its affiliates) shall own
not less than 50,000 shares of Registrable Securities (as adjusted for stock
splits and combinations) (a "Major Investor"), the Corporation will furnish
each such Major Investor (i) at least 30 days prior to the beginning of each
fiscal year an annual budget and operating plans for such fiscal year (and as
soon as available, any subsequent revisions thereto); and (ii) as soon as
practicable after the end of each month, and in any event within 30 days
thereafter, a consolidated balance sheet of the Corporation as of the end of
each such month, and a consolidated statement of operations and a
-13-
consolidated statement of cash flows of the Corporation for such month and
for the current fiscal year to date, including a comparison to plan figures
for such period, prepared in accordance with generally accepted accounting
principles consistently applied, with the exception that no notes need be
attached to such statements and normal year-end audit adjustments may not
have been made.
3.2 INSPECTION RIGHTS. Each Major Investor shall have the right to
visit and inspect any of the properties of the Corporation or any of its
subsidiaries, and to discuss the affairs, finances and accounts of the
Corporation or any of its subsidiaries with its officers, and to review such
information as is reasonably requested all at such reasonable times and as often
as may be reasonably requested; provided, however, that the Corporation shall
not be obligated under this Section 3.2 with respect to a competitor of the
Corporation or with respect to information which the Board of Directors
determines in good faith is confidential and should not, therefore, be
disclosed.
3.3 CONFIDENTIALITY OF RECORDS. Each Investor agrees to use, and to use
its best efforts to insure that its authorized representatives use, the same
degree of care as such Investor uses to protect its own confidential information
to keep confidential any information furnished to it which the Corporation
identifies as being confidential or proprietary (so long as such information is
not in the public domain), except that such Investor may disclose such
proprietary or confidential information to any partner, subsidiary or parent of
such Investor for the purpose of evaluating its investment in the Corporation as
long as such partner, subsidiary or parent is advised of the confidentiality
provisions of this Section 3.3.
3.4 RESERVATION OF COMMON STOCK. The Corporation will at all times
reserve and keep available, solely for issuance and delivery upon the conversion
of the Preferred Stock, all Common Stock issuable from time to time upon such
conversion.
3.5 STOCK VESTING. Unless otherwise approved by the Board of Directors,
all stock options and other stock equivalents issued after the date of this
Agreement to employees, directors, consultants and other service providers shall
be subject to vesting over a four year period. With respect to any shares of
stock purchased by any such person, the Corporation's repurchase option shall
provide that upon such person's termination of employment or service with the
Corporation, with or without cause, the Corporation or its assignee (to the
extent permissible under applicable securities laws and other laws) shall have
the option to purchase at cost any unvested shares of stock held by such person.
3.6 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT. The Corporation
shall require all directors, officers, consultants and employees who have access
to confidential information of the Corporation to execute and deliver a
Proprietary Information and Inventions Agreement substantially in the form
attached to the Purchase Agreement.
3.7 REAL PROPERTY HOLDING CORPORATION. The Corporation covenants that
it will operate in a manner such that it will not become a "United States real
property holding corporation" as that term is defined in Section 897(c)(2) of
the Internal Revenue Code of 1986, as amended, and the regulations thereunder
("FIRPTA"). The Corporation agrees to make determinations as to its status as a
USRPHC, and will file statements concerning those determinations with the
Internal Revenue Service, in the manner and at the times required under
-14-
Reg. Section 1.897-2(h), or any supplementary or successor provision thereto.
Within 30 days of a request from an Investor or any of its partners, the
Corporation will inform the requesting party, in the manner set forth in Reg.
Section 1.897-2(h)(1)(iv) or any supplementary or successor provision thereto,
whether that party's interest in the Corporation constitutes a United States
real property interest (within the meaning of Internal Revenue Code Section
897(c)(1) and the regulations thereunder) and whether the Corporation has
provided to the Internal Revenue Service all required notices as to its USRPHC
status.
3.8 ASSIGNMENT OF RIGHT TO REPURCHASE. The Corporation agrees that in
the event that the Corporation declines to exercise in full the Right of First
Refusal set forth in the Common Stock Purchase Agreement between such Founder
and the Corporation (the "Right of First Refusal"), the Corporation will provide
each Investor with notice of such determination at least 15 days prior to the
end of the period in which the Right of First Refusal expires under such Common
Stock Purchase Agreement. Each Investor shall then have the right, exercisable
by notice prior to the end of such period, to exercise such Right of First
Refusal as the Corporation's assignee on a pro rata basis (based upon the number
of shares of Registrable Securities) held by such Investor relative to the
aggregate number of shares of Registrable Securities held by all Investors);
provided that if fewer than all Investors elect to participate, the Founders
Stock that would otherwise be allocated to non-participating Investors shall be
allocated to each participating Investor in a manner such that each
participating Investor is entitled to purchase at least such participating
Investor's pro rata portion of such unallocated Founders Stock (based upon the
number of Shares of Common Stock held by all participating Investors) or such
different number of shares as the participating Investor shall mutually agree.
Upon expiration or exercise of the Right of First Refusal, the Corporation will
provide notice to all Investors as to whether or not the Right or First Refusal
has been exercised by the Corporation or the Investors.
3.9 TERMINATION OF COVENANTS. All covenants of the Corporation
contained in Section 3 of this Agreement shall expire and terminate as to each
Investor on the effective date of the registration statement pertaining to the
Initial Offering.
4. RIGHTS OF FIRST REFUSAL.
4.1 SUBSEQUENT OFFERINGS. Each Major Investor shall have a right of
first refusal to purchase its pro rata share of all Equity Securities, as
defined below, that the Corporation may, from time to time, propose to sell and
issue after the date of this Agreement, other than the Equity Securities
excluded by Section 4.6 hereof. Each Investor's pro rata share is equal to the
ratio of (A) the number of shares of the Corporation's Common Stock (including
all shares of Common Stock issued or issuable upon conversion of the Shares)
that such Investor is deemed to be a holder of immediately prior to the issuance
of such Equity Securities to (B) the total number of shares of the Corporation's
outstanding Common Stock (including all shares of Common Stock issued or
issuable upon conversion of the Shares or upon the exercise of any outstanding
warrants or options) immediately prior to the issuance of the Equity Securities.
The term "Equity Securities" shall mean (i) any Common Stock, Preferred Stock or
other security of the Corporation, (ii) any security convertible, with or
without consideration, into any Common Stock, Preferred Stock or other security
(including any option to purchase such a convertible security), (iii) any
security carrying any warrant or right to subscribe to or purchase any Common
Stock, Preferred Stock or other security or (iv) any such warrant or right.
-15-
4.2 EXERCISE OF RIGHTS. If the Corporation proposes to issue any Equity
Securities, it shall give each Major Investor written notice of its intention,
describing the Equity Securities, the price and the terms and conditions upon
which the Corporation proposes to issue the same. Each Major Investor shall have
15 days from the giving of such notice to agree to purchase its pro rata share
of the Equity Securities for the price and upon the terms and conditions
specified in the notice by giving written notice to the Corporation and stating
therein the quantity of Equity Securities to be purchased. Notwithstanding the
foregoing, the Corporation shall not be required to offer or sell such Equity
Securities to any Investor who would cause the Corporation to be in violation of
applicable federal securities laws by virtue of such offer or sale.
4.3 ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS. If not all of the
Major Investors elect to purchase their pro rata share of the Equity Securities,
then the Corporation shall promptly notify in writing the Major Investors who do
so elect and shall offer such Major Investors the right to acquire such
unsubscribed shares. Each Major Investor so notified shall have five days after
receipt of such notice to notify the Corporation of its election to purchase all
or a portion thereof of the unsubscribed shares. If the Major Investors fail to
exercise in full the rights of first refusal, the Corporation shall have 90 days
thereafter to sell the Equity Securities in respect of which the Major
Investor's rights were not exercised, at a price and upon general terms and
conditions materially no more favorable to the purchasers thereof than specified
in the Corporation's notice to the Investors pursuant to Section 4.2 hereof. If
the Corporation has not sold such Equity Securities within 90 days of the notice
provided pursuant to Section 4.2, the Corporation shall not thereafter issue or
sell any Equity Securities, without first offering such securities to the Major
Investors in the manner provided above.
4.4 TERMINATION OF RIGHTS OF FIRST REFUSAL. The rights of first refusal
established by this Section 4 shall not apply to, and shall terminate upon the
effective date of the registration statement pertaining to, the Corporation's
Initial Offering.
4.5 TRANSFER OF RIGHTS OF FIRST REFUSAL. The rights of first refusal of
each Major Investor under this Section 4 may be transferred to the same parties,
subject to the same restrictions as any transfer of registration rights pursuant
to Section 2.10.
4.6 EXCLUDED SECURITIES. The rights of first refusal established by
this Section 4 shall have no application to any of the following Equity
Securities:
(a) shares of Common Stock (and/or options, warrants or other
Common Stock purchase rights issued pursuant to such options, warrants or other
rights) issued or to be issued to employees, officers or directors of, or
consultants or advisors to the Corporation or any subsidiary, pursuant to stock
purchase or stock option plans or other arrangements that are approved by the
Board of Directors;
(b) stock issued pursuant to any rights or agreements
outstanding as of the date of this Agreement, options and warrants outstanding
as of the date of this Agreement; and stock issued pursuant to any such rights
or agreements granted after the date of this Agreement, provided that the rights
of first refusal established by this Section 4 applied with respect to the
initial sale or grant by the Corporation of such rights or agreements;
-16-
(c) any Equity Securities issued for consideration other than
cash pursuant to a merger, consolidation, acquisition or similar business
combination;
(d) shares of Common Stock issued in connection with any stock
split, stock dividend or recapitalization by the Corporation;
(e) shares of Common Stock issued upon conversion of the
Shares; or
(f) any Equity Securities issued pursuant to any equipment
leasing arrangement, or debt financing from a bank or similar financial
institution.
4.7 SPECIAL SERIES C RIGHT OF FIRST REFUSAL. Notwithstanding any other
provisions of this Section 4, for so long as New Enterprise Associates VII, L.P.
("NEA VII") or any funds affiliated with New Enterprise Associates hold at least
400,000 shares of Series C Preferred Stock of the Corporation, or shares of
Common Stock issuable upon conversion of Series C Preferred Stock, NEA VII shall
have the right to participate in any subsequent sale of Series C Preferred Stock
by the Corporation, on the same terms and conditions of such subsequent sale, to
the extent necessary to maintain its pro rata share of all outstanding shares of
Series C Preferred Stock. NEA VII's pro rata share of Series C Preferred Stock
is equal to the ratio of (A) the number of shares of Series C Preferred Stock
(including all shares of Common Stock issued or issuable on conversion of the
Series C Preferred Stock) that NEA VII and any funds affiliated with New
Enterprise Associates are deemed to be holders immediately prior to any
subsequent sale of Series C Preferred Stock to (B) the total number of shares of
the Corporation's outstanding Series C Preferred Stock immediately prior to any
subsequent sale of Series C Preferred Stock.
5. AMENDMENT AND RESTATEMENT.
5.1 AMENDMENT AND RESTATEMENT. Effective upon the closing of the sale
and issuance of the Series E Stock on the date hereof, all provisions of, rights
granted and covenants made in the Prior Agreement and any other agreement
between the Corporation, the Investors and the Founder, are hereby waived,
released and terminated in their entirety and shall have no further force or
effect whatsoever. The rights and covenants contained in this Agreement set
forth the sole and entire agreement among the Corporation, the Investors and the
Founder on the subject matter hereof and supersede any and all rights granted or
covenants made under any prior agreement.
6. MISCELLANEOUS
6.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of California.
6.2 SURVIVAL. The representations, warranties, covenants, and
agreements made herein shall survive any investigation made by any Holder 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 Corporation pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Corporation hereunder solely as of the date of such certificate or instrument.
-17-
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 Registrable Securities from time to time;
provided, however, that prior to the receipt by the Corporation of adequate
written notice of the transfer of any Registrable Securities specifying the full
name and address of the transferee, the Corporation may deem and treat the
person listed as the holder of such shares in its records as the absolute owner
and holder of such shares for all purposes, including the payment of dividends
or any redemption price.
6.4 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.
6.5 AMENDMENT AND WAIVER.
(a) Except as otherwise expressly provided, any term of this
Agreement may be amended or modified only upon the written consent of the
Corporation and the holders of at least a majority of the Registrable
Securities.
(b) Except as otherwise expressly provided, the obligations of
the Corporation and the rights of the Holders under this Agreement may be waived
only with the written consent of the holders of at least a majority of the
Registrable Securities; PROVIDED, HOWEVER, that any amendment which would
adversely affect the Founder in a manner different than the Holders, shall
additionally require the consent of the Founder.
(c) Notwithstanding the foregoing, this Agreement may be
amended with only the written consent of the Corporation to include additional
purchasers of Series E Preferred Stock in accordance with Section 2.3 of the
Purchase Agreement as "Investors," "Holders" and parties hereto.
6.6 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Corporation under this Agreement shall impair
any such right, power, or remedy, nor shall it be construed to be a waiver of
any such breach, default or noncompliance, or any acquiescence therein, or of
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
any Holder's part of any breach, default or noncompliance under the Agreement or
any waiver on such Holder's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, by law, or otherwise afforded to Holders, shall be cumulative and not
alternative.
6.7 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient; if not, then on the next business
day, (iii) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (iv) one business day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt.
-18-
All communications shall be sent to the party to be notified at the address as
set forth on the signature pages hereof or Exhibit A hereto or at such other
address as such party may designate by ten days' advance written notice to the
other parties hereto.
6.8 ATTORNEYS' FEES. In the event that any dispute among the parties to
this Agreement should result in litigation, 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.
6.9 TITLES AND SUBTITLES. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
6.10 PRONOUNS. All pronouns contained herein and any variations thereof
shall be deemed to refer to the masculine, feminine or neuter, singular or
plural, as the identity of the parties hereto may require.
6.11 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 instrument.
-19-
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
CORPORATION: INVESTORS:
SEQUOIA CAPITAL VI
SEQUOIA TECHNOLOGY PARTNERS VI
ADESSO SPECIALTY SERVICES ----------------------------------
ORGANIZATION INC. (Print Name of Purchaser)
By:/s/ Xxxxx X. Xxxxxxx By: XXXXXX XXXXXXXXXX
------------------------------ ------------------------------
Xxxxx X. Xxxxxxx (Signature)
Chief Executive Officer
Title: General Partner
----------------------------
Address:
--------------------------
--------------------------
FOUNDER:
/s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx, M.D.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
INVESTORS:
TECHNOLOGY FUNDING MEDICAL PARTNERS I, L.P.
A Delaware Limited Partnership
By: Technology Funding Inc., Managing General Partner
-----------------------------------------------------
(Print Name of Purchaser)
By: /s/ XXXXXXX X. XXXXXX
------------------------------------
(Signature)
Title: Vice President
----------------------------------
Address: 2000 Alameda de las Pulgas
--------------------------------
Xxx Xxxxx, XX 00000
--------------------------------
TECHNOLOGY FUNDING PARTNERS III, L.P.,
A Delaware Limited Partnership
By: Technology Funding Inc.,
Managing General Partner
By: /s/ XXXXXXX X. XXXXXX
------------------------------------
Title: Vice President
----------------------------------
TECHNOLOGY FUNDING VENTURE PARTNERS V, TECHNOLOGY FUNDING VENTURE PARTNERS V,
AN AGGRESSIVE GROWTH FUND, L.P. AN AGGRESSIVE GROWTH FUND, L.P.
A Delaware Limited Partnership A Delaware Limited Partnership
By: Technology Funding Inc., By: Technology Funding Inc.,
Managing General Partner Managing General Partner
By: /s/ XXXXXXX X. XXXXXX By: /s/ XXXXXXX X. XXXXXX
----------------------------------- ------------------------------------
Title: Vice President Title: Vice President
--------------------------------- ----------------------------------
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
INVESTORS:
HYBRID VENTURE PARTNERS, L.P., a
Delaware limited partnership
BY: Rosemont Venture Management I, L.L.C.
Its General Partner
By: /s/ XXXXXX X. XXXXXXXX
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
-----------------------------------
Title: Managing Member
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
INVESTORS:
NEA Presidents Fund, L.P.
By: NEA General Partners, L.P.
By: General Partner
---------------------------------------
(Print Name of Purchaser)
By: /s/ XXXXXX XXXX
------------------------------------
(Signature)
Title: General Partner
---------------------------------
Address: 0000 Xxxx Xxxx Xxxx
-------------------------------
Xxxxx Xxxx, XX 00000
-------------------------------
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
INVESTORS:
NEA Ventures 1997, Limited Partnership
By: Vice President
------------------------------------
(Print Name of Purchaser)
By: /s/ XXXX XXXXXXXXXX
------------------------------------
(Signature)
Title: Vice President
---------------------------------
Address: 0000 Xxxx Xxxx Xxxx
-------------------------------
Xxxxx Xxxx, XX 00000
-------------------------------
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
INVESTORS:
NEW ENTERPRISES ASSOCIATES VII, LIMITED
PARTNERSHIP
By: NEA Partners VII, Limited Partnership
Its General Partner
---------------------------------------
(Print Name of Purchaser)
By: /s/ XXXXXX XXXX
-----------------------------------
(Signature)
Title: General Partner
---------------------------------
Address: 0000 Xxxx Xxxx Xxxx
-------------------------------
Xxxxx Xxxx, XX 00000
-------------------------------
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
INVESTORS:
InterWest Partners VI, L.P.
InterWest Investors VI, L.P.
---------------------------------------
(Print Name of Purchaser)
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------
(Signature)
Title: Venture Member
---------------------------------
Address: 0000 Xxxx Xxxx Xxxx #0-000
-------------------------------
Xxxxx Xxxx, XX 00000
-------------------------------
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement as of the date set forth in the first
paragraph hereof.
CORPORATION: INVESTORS:
COMDISCO, INC.
ADESSO SPECIALTY SERVICES ---------------------------------------
ORGANIZATION INC. (Print Name of Purchaser)
By: By: /s/ Xxxx X. Xxxxxx
------------------------ ------------------------------------
Xxxxx X. Xxxxxxx (Signature)
Chief Executive Officer
Xxxx X. Xxxxxx
Title: Senior Vice President
---------------------------------
Address: 0000 Xxxxx Xxxxx Xxxx
-------------------------------
Xxxxxxxx XX 00000
-------------------------------
FOUNDER:
------------------------
Xxxxxxx X. Xxxxxx, M.D.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
EXHIBIT A
SCHEDULE OF INVESTORS
TECHNOLOGY FUNDING VENTURES PARTNERS V,
AN AGGRESSIVE GROWTH FUND, L.P.
0000 Xxxxxxx xx xxx Xxxxxx #000
Xxx Xxxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxxx
TECHNOLOGY FUNDING VENTURE PARTNERS IV,
AN AGGRESSIVE GROWTH FUND, L.P.
0000 Xxxxxxx xx xxx Xxxxxx #000
Xxx Xxxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxxx
TECHNOLOGY FUNDING PARTNERS III, L.P.
0000 Xxxxxxx xx xxx Xxxxxx #000
Xxx Xxxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxxx
TECHNOLOGY FUNDING MEDICAL PARTNERS I, L.P.
0000 Xxxxxxx xx xxx Xxxxxx #000
Xxx Xxxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxxx
SEQUOIA CAPITAL VI
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
ATTN: Xxxxxx X. Xxxxxxxxxx
SEQUOIA TECHNOLOGY PARTNERS VI
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
ATTN: Xxxxxx X. Xxxxxxxxxx
SEQUOIA 1995
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
ATTN: Xxxxxx X. Xxxxxxxxxx
SEQUOIA 1997
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
ATTN: Xxxxxx X. Xxxxxxxxxx
SQP 1997
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
ATTN: Xxxxxx X. Xxxxxxxxxx
NEW ENTERPRISE ASSOCIATES VII, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
NEA VENTURES 1997, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
NEA PRESIDENT'S FUND, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
INTERWEST PARTNERS VI, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxxx, MD
COMDISCO VENTURES
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
HYBRID VENTURE PARTNERS, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
XXXX AND XXXXX XXXXXXX
000 Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
-22-
XXXXXXX X. AND XXXXXX XXXXXXX XXXXXX
0000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
STUART AND XXXXXX STREUVER
0000 Xxxxxx Xxxxx
Xxxxx Xx, XX 00000
XXXXXX AND XXXXXXXX XXXXXXXX
0000 Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
GC & H INVESTMENTS
Xxx Xxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Attn: Xxxx Xxxxxxx
XXXXX X. XXXXXXX
0000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
XXXXXX XXXXX
0000 X. Xxxxxxxxxx
0xx Xxxxx
Xxxxxx Xxxxx, XX 00000
XXXXXXX XXXXXXXXX
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
CARDIOVASCULAR MEDICINE & CARDIAC ARRHYTHMIAS AN
INCORPORATED MEDICAL GROUP PROFIT SHARING TRUST FBO: XXXXX X. XXXXXX
000 Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
CARDIOVASCULAR MEDICINE & CARDIAC ARRHYTHMIAS AN
INCORPORATED MEDICAL GROUP PROFIT SHARING TRUST FBO: XXXXX XXXXXXXX
000 Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
XXXXX X. XXXXXXXX
000 Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
R. XXXXXXX XXXX
-23-
000 Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
COMPASS MANAGEMENT PARTNER
000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
XXXXXX XXXXXXXX
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
XXXXXX X. XXXXX
000 Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
R. XXXX XXXXXX
00000 Xxx Xxxxxxxxx
Xxxx xx Xxxx,XX 00000
XXXXX XXXXX
00 Xxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
XXXXX XXXXX
0000 Xxxx'x Xxxx
Xxx Xxxxx, XX 00000
XXXXXXXXX XXXXXX
000 00xx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
BERN 1996 TRUST
0000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
XXXX XXXXXXXXX
0000 Xxxxxx Xxxxxx
Xxxxxxx Xxxx, XX 00000
XXXX (XXXXX) COMES
000 Xxxxx Xxxx
Xxxxx Xxxx, XX 00000
XXXXX X. XXXXX
00 XxXxxx Xxxxx #000
-00-
Xxx Xxxxx, XX 00000
XXXXXX X. XXXXXX
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
XXXXXXXX XXXXX
000 Xxxxxx Xxxxx
Xxxxx, XX 00000
XXXXXXXX X. XXXXXXX
00000 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
XXXX XXXXXX
000 Xxxx Xxxx
Xxxxxxxx Xxxxx, XX 00000
XXXX XXXXXXXX
0000 Xxxxxxxx #0
Xxx Xxxxxxxxx, XX 00000
XXXXXXXX X. XXXX
0000 Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
XXXXX REVOCABLE INTERVIVOS TRUST DTD 9/15/93
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
ATTN: Xxxx Xxxxx, MD
XXXXXX X. XXXXXXXX
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
XXXXX LIVING TRUST DTD 7/27/90
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
ATTN: Xxxxx Xxxxx
XXXXXX X. XXXXXXX
41 Castledown
Xxxxxxxxxx, XX 00000
XXXXXX XXXXXX
Champion Fund
0000 Xxxxxxxxxxx Xxxx
Xxxxxxx Xxxx, XX 00000
-25-
XXXXX XXXXX
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
XXXXXXX XXXXXXX MD (as an Individual)
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
-26-
EXHIBIT E
AMENDED AND RESTATED
RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
AMENDED AND RESTATED CO-SALE AGREEMENT
THIS AMENDED AND RESTATED CO-SALE AGREEMENT (the "Agreement") is made
as of this 6th day of April, 2000, by and among ADESSO SPECIALTY SERVICES
ORGANIZATION INC., a California corporation (the "Corporation"), the holders of
the Corporation's Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred and Series E Preferred Stock listed on
Exhibit A hereto (the "Shareholders"), and Xxxxxxx X. Xxxxxx, M.D. (the
"Founder").
RECITALS
WHEREAS, certain of the Shareholders hold shares of the Corporation's
Series A Preferred Stock (the "Series A Preferred Stock"), Series B Preferred
Stock (the "Series B Preferred Stock"), Series C Preferred Stock (the "Series C
Preferred Stock"), Series D Preferred Stock (the "Series D Preferred Stock")
and/or shares of Common Stock issued upon conversion thereof and possess certain
rights provided pursuant to an Amended and Restated Co-Sale Agreement dated as
of December 10, 1997, among certain of the Shareholders, the Founder and the
Corporation (the "Prior Agreement").
WHEREAS, the Corporation, the Founder and the Shareholders who hold
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and
Series D Preferred Stock desire to terminate the Prior Agreement and to provide
to such Shareholders the rights created pursuant hereto in lieu of the rights
granted to it under the Prior Agreement;
WHEREAS, the Corporation and certain of the Shareholders have entered
into an agreement or agreements for sale by the Corporation and purchase by
certain of the Shareholders of shares of the Corporation's Series E Preferred
Stock; and
WHEREAS, in connection with the purchase and sale of the Corporation's
Series E Preferred Stock, the Corporation, the Founder and such Shareholders
desire to provide for the granting of certain other rights to the Shareholders
according to the terms of this Agreement ("Co-Sale Rights").
In consideration of the mutual covenants set forth herein, the parties
agree hereto as follows:
1. DEFINITIONS.
(a) "CO-SALE STOCK" shall mean shares of the Corporation's
Common Stock now owned or subsequently acquired by the Founder, but shall not
include shares of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock or Series E Preferred Stock held by
Founder or any shares of Common Stock issued upon conversion thereof. The number
of shares of Co-Sale Stock owned by the Founder are set forth on Exhibit B,
which
Exhibit shall automatically be deemed to be amended from time to time to reflect
changes in the number of shares owned by the Founder.
(b) "COMMON STOCK" shall mean the Corporation's Common Stock
and shares of Common Stock issued or issuable upon conversion of the
Corporation's outstanding Preferred Stock.
2. SALES BY FOUNDER.
(a) If the Founder proposes to sell or otherwise transfer any
shares of Co-Sale Stock, or any interest therein, then the Founder shall
promptly give written notice (the "Notice") simultaneously to the Corporation
and to each of the Shareholders at least 30 days prior to the closing of such
sale or transfer. The Notice shall describe in reasonable detail the proposed
sale or transfer including, without limitation, the number of shares of Co-Sale
Stock to be sold or transferred, the nature of such sale or transfer, the
consideration to be paid, and the name and address of each prospective purchaser
or transferee. In the event that the sale or transfer is being made pursuant to
the provisions of Section 3(a), the Notice shall state under which subsection
the sale or transfer is being made, together with such additional information as
may be necessary to demonstrate appropriate reliance upon such exemption within
Section 3(a).
(b) To the extent that the Right of First Refusal as set forth
in Section 4 of the Amended and Restated Investors Rights Agreement (the
"Investors Rights Agreement") is not exercised by the Corporation and the
Purchase Right is not exercised by the Major Investors, as defined in the
Investors Rights Agreement, each Shareholder shall have the right, exercisable
upon written notice delivered to the Founder within 15 days after receipt of the
Notice, to participate in such sale of Co-Sale Stock on the terms and conditions
set forth in the Notice. Such notice shall indicate the number of shares of
Common Stock such Shareholder wishes to sell under his or her right to
participate. To the extent one or more of the Shareholders exercise such right
of participation in accordance with the terms and conditions set forth below,
the number of shares of Co-Sale Stock that the Founder may sell in the
transaction shall be correspondingly reduced.
(c) Each Shareholder may sell all or any part of that number
of shares equal to the product obtained by multiplying (i) the aggregate number
of shares of Co-Sale Stock covered by the Notice by (ii) a fraction the
numerator of which is the number of shares of Common Stock owned by the
Shareholder at the time of the sale or transfer and the denominator of which is
the total number of shares of Common Stock owned by the Founder and the
Shareholders at the time of the sale or transfer. Each Shareholder shall have a
right of overallotment to sell pursuant to the terms of this Section 2 its pro
rata share of the Co-Sale Stock not purchased by the Shareholders as provided
for above.
(d) Each Shareholder who elects to participate in the sale
pursuant to this Section 2 (a "Participant") shall effect its participation in
the sale by promptly delivering to the Founder for transfer to the prospective
purchaser one or more certificates, properly endorsed for transfer, which
represent:
-2-
(i) the type and number of shares of Common Stock
that such Participant elects to sell; or
(ii) that number of shares of Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
Stock and/or Series E Preferred Stock that is at such time convertible into the
number of shares of Common Stock which such Participant elects to sell;
provided, however, that if the prospective purchaser objects to the delivery of
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock and/or Series E Preferred Stock in lieu of Common
Stock, such Participant shall convert such Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and/or
Series E Preferred Stock into Common Stock and deliver Common Stock as provided
in Section 2(d)(i) above. The Corporation agrees to make any such conversion
concurrent with the actual transfer of such shares to the purchaser.
(e) The stock certificate or certificates that the Participant
delivers to the Founder pursuant to Section 2(d) shall be transferred to the
prospective purchaser in consummation of the sale of the Common Stock pursuant
to the terms and conditions specified in the Notice, and the Founder shall
concurrently therewith remit to such Participant that portion of the sale
proceeds to which such Participant is entitled by reason of its participation in
such sale. to the extent that any prospective purchaser or purchasers prohibits
such assignment or otherwise refuses to purchase shares or other securities from
a Participant exercising its rights of co-sale hereunder, the Founder shall not
sell to such prospective purchaser or purchasers any Co-Sale Stock unless and
until, simultaneously with such sale, the Founder shall purchase such shares or
other securities from such Participant on the same terms and conditions
specified in the Notice.
(f) The exercise or non-exercise of the rights of the
Participants hereunder to participate in one or more sales of Co-Sale Stock made
by the Founder shall not adversely affect their rights to participate in
subsequent sales of Co-Sale Stock subject to Section 2(a).
(g) If none of the Shareholders elect to participate in the
sale of the Co-Sale Stock subject to the Notice, the Founder may, not later than
60 days following delivery to the Corporation of the Notice, enter into an
agreement providing for the closing of the transfer of the Co-Sale Stock covered
by the Notice within 30 days of such agreement on terms and conditions not more
materially favorable to the transferor than those described in the Notice. Any
proposed transfer on terms and conditions materially more favorable than those
described in the Notice, as well as any subsequent proposed transfer of any of
the Co-Sale Stock by the Founder, shall again be subject to the co-sale rights
of the Shareholders and shall require compliance by the Founder with the
procedures described in this Section 2.
(h) Any attempt by the Founder to transfer Co-Sale Stock in
violation of this Section 2 shall be void.
3. EXEMPT TRANSFERS.
-3-
(a) Notwithstanding the foregoing, the co-sale rights of the
Shareholders shall not apply to any transfer to trusts for the Founder's
children or to a trust for the benefit of the Founder, provided, that (A) the
Founder shall inform the Shareholders of such transfer prior to effecting it and
(B) the transferee shall furnish the Shareholders with a written agreement to be
bound by and comply with all provisions of Section 2. Such transferred Co-Sale
Stock shall remain "Co-Sale Stock hereunder, and such transferee shall be
treated as the "Founder" for purposes of this Agreement.
(b) Notwithstanding the foregoing, the provisions of Section 2
shall not apply to the sale of any Co-Sale Stock to the public pursuant to a
registration statement filed with, and declared effective by, the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the
"Securities Act").
(c) This Agreement is subject to, and shall in no manner limit
the right which the Corporation may have to repurchase securities from the
Founder provided that any repurchases by the Corporation shall remain subject to
any limitations in the Corporation's Restated Articles or any Certificate of
Designation to such Restated Articles.
4. PROHIBITED TRANSFERS.
(a) In the event that the Founder should sell any Co-Sale
Stock in contravention of the co-sale rights of each Shareholder under this
Agreement (a "Prohibited Transfer"), each Shareholder, in addition to such other
remedies as may be available at law, in equity or hereunder, shall have the put
option provided below, and the Founder shall be bound by the applicable
provisions of such option.
(b) In the event of a Prohibited Transfer, each Shareholder
shall have the right to sell to the Founder the type and number of shares of
Common Stock equal to the number of shares each Shareholder would have been
entitled to transfer to the purchaser under Section 2(c) hereof had the
Prohibited Transfer been effected pursuant to and in compliance with the terms
hereof. Such sale shall be made on the following terms and conditions:
(i) The price per share at which the shares are to be
sold to the Founder shall be equal to the price per share paid by the purchaser
to the Founder in such Prohibited Transfer. The Founder shall also reimburse
each Shareholder for any and all fees and expenses, including legal fees and
expenses, incurred pursuant to the exercise or the attempted exercise of the
Shareholder's rights under Section 2.
(ii) Within 90 days after the later of the dates on
which the Shareholder (a) received notice of the Prohibited Transfer or (b)
otherwise became aware of the Prohibited Transfer, each Shareholder shall, if
exercising the option created hereby, deliver to the Founder the certificate or
certificates representing shares to be sold, each certificate to be properly
endorsed for transfer.
(iii) The Founder shall, upon receipt of the
certificate or certificates for the shares to be sold by a Shareholder, pursuant
to this Section 4(b), pay the aggregate purchase price therefor and the amount
of reimbursable fees and expenses, as specified in Section 4(b)(i), in cash or
by other means acceptable to the Shareholder.
-4-
(iv) Notwithstanding the foregoing, any attempt by
the Founder to transfer Co-Sale Stock in violation of Section 2 hereof shall be
voidable at the option of a majority in interest of the Shareholders if the
Shareholders do not elect to exercise the put option set forth in this Section
4, and the Corporation agrees it will not effect such a transfer nor will it
treat any alleged transferee as the holder of such shares without the written
consent of a majority in interest of the Shareholders.
5. LEGEND.
(a) Each certificate representing shares of Co-Sale Stock now
or hereafter owned by the Founder or issued to any person in connection with a
transfer pursuant to Section 3(a) hereof shall be endorsed with the following
legend:
"THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS
OF A CERTAIN AMENDED AND RESTATED CO-SALE AGREEMENT BY AND BETWEEN THE
SHAREHOLDER, THE CORPORATION AND CERTAIN HOLDERS OF STOCK OF THE
CORPORATION. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN
REQUEST TO THE SECRETARY OF THE CORPORATION."
(b) The Founder agrees that the Corporation may instruct its
transfer agent to impose transfer restrictions on the shares represented by
certificates bearing the legend referred to in Section 5(a) above to enforce the
provisions of this Agreement and the Corporation agrees to promptly do so. The
legend shall be removed upon termination of this Agreement.
(c) The Corporation agrees it will not effect a transfer in
violation of Section 2 nor will it treat any alleged transferee as a holder of
such shares without the written consent of a majority in interest of the Common
Stock held by the Shareholders.
6. MISCELLANEOUS.
(a) CONDITIONS TO EXERCISE OF RIGHTS. Exercise of the
Shareholders' rights under this Agreement shall be subject to and conditioned
upon, and the Founder and the Corporation shall use their best efforts to assist
each Shareholder in, compliance with applicable laws.
(b) GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of California.
(c) AMENDMENT. Any provision of this Agreement may be amended
and the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only by the written consent
of (i) as to the Corporation, only by the Corporation, (ii) as to the
Shareholders, by persons holding a majority in interest of the Common Stock held
by the Shareholders and their assignees, pursuant to Section 6(d) hereof, and
(iii) as to the Founder, only by the Founder. Any amendment or waiver effected
in accordance with clauses (i),
-5-
(ii), and (iii) of this Section 6(c) shall be binding upon each Shareholder, its
successors and assigns, the Corporation and the Founder.
(d) ASSIGNMENT OF RIGHTS. This Agreement constitutes the
entire agreement between the parties relative to the specific subject matter
hereof. Any previous agreement among the parties relative to the specific
subject matter hereof is superseded by this Agreement. This Agreement and the
rights and obligations of the parties hereunder shall inure to the benefit of,
and be binding upon, their respective successors, assigns and legal
representatives.
(e) TERM. This Agreement shall terminate upon the closing of a
firm commitment underwritten public offering of the Corporation's Common Stock
pursuant to an effective registration statement under the Securities Act of
1933, as amended.
(f) OWNERSHIP. The Founder represents and warrants that he is
the sole legal and beneficial owner of those shares of Co-Sale Stock he
currently holds subject to the Agreement and that no other person has any
interest (other than a community property interest) in such shares.
(g) NOTICES. All notices required or permitted hereunder shall
be in writing and shall be deemed effectively given: (i) upon personal delivery
to the party to be notified, (ii) when sent by confirmed telex or facsimile if
sent during normal business hours of the recipient; if not, then on the next
business day, (iii) five days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, or (iv) one 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
party to be notified at the address as set forth on the signature page hereof or
at such other address as such party may designate by ten days advance written
notice to the other parties hereto.
(h) SEVERABILITY. In the event one or more of the provisions
of this Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
(i) ATTORNEYS' FEES. In the event that any dispute among the
parties to this Agreement should result in litigation, 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.
(j) COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-6-
The foregoing AMENDED AND RESTATED CO-SALE AGREEMENT is hereby executed
as of the date first above written.
CORPORATION:
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Xxxxx X. Xxxxxxx,
Chief Executive Officer
FOUNDER:
/s/ Xxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxx X. Xxxxxx, M.D.
SHAREHOLDERS:
----------------------------------
(Print Name of Shareholder)
By:
-------------------------------
(Signature)
Title:
----------------------------
The foregoing AMENDED AND RESTATED CO-SALE AGREEMENT is hereby executed
as of the date first above written.
CORPORATION:
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
By:
-------------------------------
Xxxxx X. Xxxxxxx,
Chief Executive Officer
FOUNDER:
----------------------------------
Xxxxxxx X. Xxxxxx, M.D.
SHAREHOLDERS:
SEQUOIA CAPITAL VI
SEQUOIA TECHNOLOGY PARTNERS VI
----------------------------------
(Print Name of Shareholder)
By: /s/ XXXXXX XXXXXXXXXX
-------------------------------
(Signature)
Title: General Partner
----------------------------
-10-
The foregoing AMENDED AND RESTATED CO-SALE AGREEMENT is hereby executed
as of the date first above written.
CORPORATION:
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
By:
--------------------------------------------------
Xxxxx X. Xxxxxxx,
Chief Executive Officer
FOUNDER:
-----------------------------------------------------
Xxxxxxx X. Xxxxxx, M.D.
SHAREHOLDERS:
Technology Funding Venture Partners V
Technology Funding Venture Partners IV
Technology Funding Partners III, L.P.
Technology Funding Medical Partners I, L.P.
By: Technology Funding Inc., Managing General Partner
--------------------------------------------------
(Print Name of Shareholder)
By: /s/ XXXXXXX X. XXXXXX
--------------------------------------------------
(Signature)
Title: Vice President
-----------------------------------------------
-10-
The foregoing AMENDED AND RESTATED CO-SALE AGREEMENT is hereby executed as
of the date first above written.
CORPORATION:
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
By:
-------------------------------
Xxxxx X. Xxxxxxx,
Chief Executive Officer
FOUNDER:
-----------------------------------
Xxxxxxx X. Xxxxxx, M.D.
SHAREHOLDERS:
New Enterprise Associates VII, L.P. NEA Ventures 1997, Limited Partnership
NEA Ventures 1997, L.P. By: Vice President
NEA President's Associates VII, L.P.
-----------------------------------
(Print Name of Shareholder)
By: /s/ XXXX XXXXXXXXXX
--------------------------------
(Signature)
Title: Vice President
-----------------------------
-11-
The foregoing AMENDED AND RESTATED CO-SALE AGREEMENT is hereby executed as
of the date first above written.
CORPORATION:
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
By:
-------------------------------
Xxxxx X. Xxxxxxx,
Chief Executive Officer
FOUNDER:
-----------------------------------
Xxxxxxx X. Xxxxxx, M.D.
SHAREHOLDERS:
New Enterprise Associates VII, L.P. NEA Presidents Find, L.P.
NEA Ventures 1997, L.P. By: NEA General Partners, L.P.
NEA President's Associates VII, L.P. By: General Partner
-----------------------------------
(Print Name of Shareholder)
By: /s/ XXXXXX XXXX
--------------------------------
(Signature)
Title: General Partner
-----------------------------
-11-
The foregoing AMENDED AND RESTATED CO-SALE AGREEMENT is hereby executed as
of the date first above written.
CORPORATION:
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
By:
-------------------------------
Xxxxx X. Xxxxxxx,
Chief Executive Officer
FOUNDER:
-----------------------------------
Xxxxxxx X. Xxxxxx, M.D.
SHAREHOLDERS:
New Enterprise Associates VII, L.P. NEW ENTERPRISE ASSOCIATES VII, LIMITED
NEA Ventures 1997, L.P. PARTNERSHIP
NEA President's Associates VII, L.P. By: NEA Partners VII, Limited Partnership
Its General Partner
-----------------------------------
(Print Name of Shareholder)
By: /s/ XXXXXX XXXX
--------------------------------
(Signature)
Title: General Partner
-----------------------------
-11-
The foregoing AMENDED AND RESTATED CO-SALE AGREEMENT is hereby executed as
of the date first above written.
CORPORATION:
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
By:
--------------------------------------
Xxxxx X. Xxxxxxx,
Chief Executive Officer
FOUNDER:
------------------------------------------
Xxxxxxx X. Xxxxxx, M.D.
SHAREHOLDERS:
HYBRID VENTURE PARTNERS, L.P., a
Delaware limited partnership
BY: Rosemont Venture Management I, L.L.C.
Its General Partner
By: /s/ XXXXXX X. XXXXXXXX
---------------------------------------
Name: XXXXXX X. XXXXXXXX
-------------------------------------
Title: Managing Member
------------------------------------
The foregoing AMENDED AND RESTATED CO-SALE AGREEMENT is hereby executed as
of the date first above written.
CORPORATION:
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
By:
--------------------------------------
Xxxxx X. Xxxxxxx,
Chief Executive Officer
FOUNDER:
------------------------------------------
Xxxxxxx X. Xxxxxx, M.D.
SHAREHOLDERS:
InterWest Partners VI, L.P.
InterWest Investors VI, L.P.
------------------------------------------
(Print Name of Shareholder)
By: InterWest Management Partners VI, LLC
Their General Partner
By: /s/ XXXXXXX X. XXXXXX
---------------------------------------
(Signature)
Title: VENTURE MEMBER
------------------------------------
-8-
The foregoing AMENDED AND RESTATED CO-SALE AGREEMENT is hereby executed
as of the date first above written.
CORPORATION:
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
By:
---------------------------------------
Xxxxx X. Xxxxxxx,
Chief Executive Officer
FOUNDER:
------------------------------------------
Xxxxxxx X. Xxxxxx, M.D.
SHAREHOLDERS:
COMDISCO, INC.
------------------------------------------
(Print Name of Shareholder)
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
(Signature)
XXXX X. XXXXXX
Title: SENIOR VICE PRESIDENT
------------------------------------
EXHIBIT A
LIST OF SHAREHOLDERS
Technology Funding Ventures Partners V
Technology Funding Venture Partners IV
An Aggressive Growth Fund, L.P.
Technology Funding Partners III, L.P.
Technology Funding Medical Partners I, L.P.
Sequoia Capital VI
Sequoia Technology Partners VI
Sequoia 1995
Sequoia 1997
SQP 1997
New Enterprise Associates VII, L.P.
NEA Ventures 1997, L.P.
NEA President's Fund, L.P.
InterWest Partners VI, L.P.
Comdisco Ventures
Hybrid Venture Partners, L.P.
Xxxx and Xxxxx Xxxxxxx
Xxxxxxx X. and Xxxxxx Xxxxxxx Xxxxxx
Xxxxxx and Xxxxxx Streuver
Xxxxxx and Xxxxxxxx Xxxxxxxx
GC & H Investments
Xxxxx X. Xxxxxxx
Xxxxxx Xxxxx
Xxxxxxx Xxxxxxxxx
Cardiovascular Medicine & Cardiac Arrhythmias an Incorporated Medical
Group Profit Sharing Trust FBO: Xxxxx X. Xxxxxx
Cardiovascular Medicine & Cardiac Arrhythmias an Incorporated Medical
Group Profit Sharing Trust FBO: Xxxxx Xxxxxxxx
Xxxxx X. Xxxxxxxx
R. Xxxxxxx Xxxx
Compass Management Partner
Xxxxxx Xxxxxxxx
-18-
Xxxxxx X. Xxxxx
R. Xxxx Xxxxxx
Xxxxx Xxxxx
Xxxxx Xxxxx
Xxxxxxxxx Xxxxxx
Bern 1996 Trust
Xxxx XxXxxxxxx
Xxxx (Xxxxx) Comes
Xxxxx X. Xxxxx
Xxxxxx X. Xxxxxx
Xxxxxxxx Xxxxx
Xxxxxxxx X. Xxxxxxx
Xxxx Xxxxxx
Xxxx Xxxxxxxx
Xxxxxxxx X. Xxxx
Xxxxx Revocable lntervivos Trust DTD 9/15/93
Xxxxxx X. Xxxxxxxx
Xxxxx Living Trust DTD 7/27/90
Xxxxxx X. Xxxxxxx
Xxxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxxx Xxxxxxx MD
-19-
EXHIBIT B
CO-SALE STOCK OWNERSHIP
FOUNDER COMMON STOCK
Xxxxxxx X. Xxxxxx, M.D. 150,000
EX 10.1
EXHIBIT F
AMENDED AND RESTATED VOTING AGREEMENT
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
AMENDED AND RESTATED VOTING AGREEMENT
THIS AMENDED AND RESTATED VOTING AGREEMENT (the "Agreement") is made
and entered into this 6th day of April, 2000, by and among ADESSO SPECIALTY
SERVICES ORGANIZATION INC., a California corporation (the "Corporation"),
Xxxxxxx X. Xxxxxx (the "Holder") and the persons and entities listed on Exhibit
A hereto (the "Investors").
WITNESSETH
WHEREAS, certain Investors hold shares of the Corporation's Series A
Preferred Stock (the "Series A Preferred Stock"), Series B Preferred Stock (the
"Series B Preferred Stock"), Series C Preferred Stock (the "Series C Preferred
Stock"), Series D Preferred Stock (the "Series D Preferred Stock") and/or shares
of Common Stock issued upon conversion thereof and are parties to an Amended and
Restated Voting Agreement dated as of Dec. 10, 1997, between the Corporation,
the Holder and such Investors (the "Prior Agreement");
WHEREAS, the Corporation, the Holder and the undersigned Investors who
hold Series A Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock and Series D Preferred Stock desire to terminate the Prior Agreement and
to provide to such Investors the rights created pursuant hereto in lieu of the
rights granted under the Prior Agreement;
WHEREAS the Corporation and certain of the Investors have entered into
an agreement or agreements for sale by the Corporation and purchase by the
Investors of shares of the Corporation's Series E Preferred Stock (the "Series E
Preferred Stock"); and
WHEREAS in connection with the purchase and sale of the Corporation's
Series E Preferred Stock, the Corporation, the Holder and the Investors desire
to provide for the future voting of their shares of the Corporation's capital
stock as set forth below.
Now, THEREFORE, in consideration of the mutual agreements, covenants
and considerations and releases contained herein, the parties hereby agree as
follows:
ARTICLE I
1. VOTING
1.1 (a) The Holder agrees to vote all shares of voting capital stock of
the Corporation registered in his name or beneficially owned by him as of the
date hereof, and any and all other securities of the Corporation legally or
beneficially acquired by the Holder after the date hereof, (hereinafter
collectively referred to as the "Holder Shares") subject to, and in accordance
with, the provisions of this Agreement.
(b) The Investors each agree to vote all shares of voting
capital stock of the Corporation (including without limitation, all shares of
Common Stock issued upon conversion of
the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock, Series D Preferred Stock and Series E Preferred Stock) registered in
their respective names or beneficially owned by them as of the date hereof, and
any and all other securities of the Corporation legally or beneficially acquired
by each of the Investors after the date hereof, (hereinafter collectively
referred to as the "Investor Shares") subject to, said in accordance with, the
provisions of this Agreement.
1.2 At each election of directors, Holder-shall vote all of his Holder
Shares, and each Investor shall vote all of such person's Investor Shares for
the election as directors: (a) one representative of Technology Funding Venture
Partners V ("TFVP V"), for so long as TFVP V and any funds affiliated with TFVP
V hold at least 100,000 shares of Series A Preferred Stock and in the event TFVP
V and any funds affiliated with TFVP V cease to hold at least 100,000 shares of
Series A Preferred Stock, one representative nominated by a majority in interest
of the Series A Preferred Stock; (b) one representative of Sequoia Capital VI,
for so long as Sequoia Capital VI and any funds affiliated with Sequoia Capital
VI hold at least 100,000 shares of Series B Preferred Stock and in the event
Sequoia Capital VI and any funds affiliated with Sequoia Capital VI cease to
hold at least 100,000 shares of Series B Preferred Stock, one representative
nominated by a majority in interest of the Series B Preferred Stock, (c) one
representative of New Enterprise Associates VII, L.P. ("NEA VII") for so long as
NEA VII and any funds affiliated with New Enterprise Associates hold at least
100,000 shares of Series C Preferred Stock and in the event NEA VU and any funds
affiliated with New Enterprise Associates cease to hold at least 100,000 shares
of Series C Preferred Stock, one representative nominated by a majority in
interest of the Series C Preferred Stock, (d) one representative of InterWest
Partner VI, L.P. ("IW6") for so long as IW6 and any funds affiliated with IW6
hold at least 100,000 shares of Series D Preferred Stock and in the event that
IW6 and any funds affiliated with IW6 cease to hold 100,000 shares of Series D
Preferred Stock, one representative nominated by a majority in interest of the
Series D Preferred Stock; (e) the then-current Chief Executive Officer of the
Corporation; and (e) three nominees that are mutually acceptable to a majority
in interest of the holders of Common Stock and a majority in interest of the
holders of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock and Series E Preferred Stock, voting
together as a single class on an as-if-converted to Common Stock basis. Any vote
taken to remove any director elected pursuant to this Section 1.2, or to fill
any vacancy created by the resignation of a director elected pursuant to this
Section 1.2, shall also be subject to the provisions of this Section 1.2.
1.3 Concurrently with the execution of this Agreement, there shall be
imprinted or otherwise placed, on certificates representing the Holder Shares
and the Investor Shares the following restrictive legend (the "Legend").:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS OF AN AMENDED AND RESTATED VOTING AGREEMENT, DATED MARCH
__ 2000 WHICH PLACES CERTAIN RESTRICTIONS ON THE VOTING OF THE SHARES
REPRESENTED HEREBY. ANY PERSON ACCEPTING ANY INTEREST IN SUCH SHARES
SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE
PROVISIONS OF SUCH AGREEMENT. A COPY OF SUCH VOTING AGREEMENT WILL BE
FURNISHED TO THE RECORD HOLDER
-2-
OF THIS CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO THE
CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS."
1.4 The Corporation agrees that, during the term of this Agreement, it
will not remove, and will not permit to be removed (upon registration of
transfer, reissuance of otherwise), the Legend from any such certificate and
will place or cause to be placed the Legend on any new certificate issued to
represent Holder Shares or Investor Shares theretofore represented by a
certificate carrying the Legend.
1.5 The provisions of this Agreement shall be binding upon the
successors in interest to any of the Holder Shares or Investor Shares. The
Corporation shall not permit the transfer of any of the Holder Shares or
Investor Shares on its books or issue a new certificate representing any of the
Holder Shares or Investor Shares unless and until the person to whom such
security is to be transferred shall have executed a written Agreement, pursuant
to which such person becomes a party to this Agreement or otherwise agrees to be
bound by all the provisions hereof as if such person were a Holder or an
Investor, as applicable.
1.6 Except as provided by this Agreement, the Holder and Investors
shall exercise the full rights of a shareholder with respect to the Holder
Shares and the Investor Shares, respectively.
ARTICLE II
2. TERMINATION
2.1 This Agreement shall continue in full force and effect from the
date hereof through the earliest of the following dates, on which it shall
terminate in its entirety:
(a) the date of the closing of a firmly underwritten public
offering of the Corporation's Common Stock pursuant to a registration statement
filed with, and declared effective under the Securities Act of 1933, as amended,
(b) the date as of which the parties hereto terminate this
Agreement by written consent of holders of a majority of the Investor Shares and
a majority of the Holder Shares; or
(c) ten years from the date hereof.
ARTICLE III
3. MISCELLANEOUS
3.1 The parties hereto hereby declare that it is impossible to measure
in money the damages which will accrue to a party hereto or to their heirs,
personal representatives, or assigns by reason of a failure to perform any of
the obligations under this Agreement and agree that the terms of this Agreement
shall be specifically enforceable. If any party hereto or his heirs, personal
representatives, or assigns institutes any action or proceeding to specifically
enforce the provisions hereof, any person against whom such action or proceeding
is brought hereby waives the claim or defense therein that such party or such
personal representative has an adequate remedy at law, and
-3-
such person shall not offer in any such action or proceeding the claim or
defense that such remedy at law exists.
3.2 This Agreement, and the rights of the parties hereto, shall be
governed by and construed in accordance with the laws of the State of
California, without giving effect to conflict of laws.
3.3 This Agreement may be amended and any term hereof may be waived
only by an instrument in writing signed by the Corporation, holders of a
majority of the Investor Shares and holders of a majority of the Holder Shares.
3.4 If any provision of this Agreement is held to be invalid or
unenforceable, the validity and enforceability of the remaining provisions of
this Agreement shall not be affected thereby.
3.5 This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective heirs, successors, assigns,
administrators, executors and other legal representatives.
3.6 This Agreement may be executed in one or more counterparts, each of
which will be deemed an original but all of which together shall constitute one
and the same agreement
3.7 No waivers of any breach of this Agreement extended by any party
hereto to any other party shall be construed as a waiver of any rights or
remedies of any other party hereto or with respect to any subsequent breach.
3.8 In the event that any suit or action is instituted to enforce any
provision in this Agreement, the prevailing party shall be entitled to all costs
and expenses of maintaining such suit or action including reasonable attorneys'
fees.
3.9 Any notice required or permitted by this Agreement shall be in
writing and shall be deemed sufficient on the date of delivery, when delivered
personally or by overnight courier or sent by telegram or fax, or 48 hours after
being deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed to the party to be notified at such party's address as
set forth below or on Exhibit A hereto, or as subsequently modified by written
notice.
-4-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CORPORATION:
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
By:
------------------------------------------
Xxxxx X. Xxxxxxx,
Chief Executive Officer
FOUNDER:
---------------------------------------------
Xxxxxxx X. Xxxxxx, M.D.
INVESTORS:
SEQUOIA CAPITAL VI
SEQUOIA TECHNOLOGY PARTNERS VI
---------------------------------------------
(Print name of Investor)
By: /s/ XXXXXX XXXXXXXXXX
------------------------------------------
Title: General Partner
---------------------------------------
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CORPORATION:
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
By:
--------------------------------------------------
Xxxxx X. Xxxxxxx,
Chief Executive Officer
FOUNDER:
-----------------------------------------------------
Xxxxxxx X. Xxxxxx, M.D.
INVESTORS:
Technology Funding Venture Partners V
Technology Funding Venture Partners IV
Technology Funding Partners III, L.P.
Technolgoy Funding Medical Partners I, L.P.
By: Technology Funding Inc., Managing General Partner
--------------------------------------------------
(Print name of Investor)
By: /s/ XXXXXXX X. XXXXXX
--------------------------------------------------
Title: Vice President
-----------------------------------------------
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CORPORATION:
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
By:
--------------------------------------------------
Xxxxx X. Xxxxxxx,
Chief Executive Officer
FOUNDER:
-----------------------------------------------------
Xxxxxxx X. Xxxxxx, M.D.
INVESTORS:
New Enterprise Associates VII, L.P. NEW ENTERPRISE VII, LIMITED PARTNERSHIP
NEA Ventures 1997, L.P. By: NEA Partners VII Limited Partnership
NEA President's Associates VII, L.P. Its General Partner
------------------------------------------------
(Print name of Investor)
By: /s/ XXXXXX XXXX
--------------------------------------------------
Title: General Partner
-----------------------------------------------
AMENDED AND RESTATED VOTING AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CORPORATION:
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
By:
--------------------------------------------------
Xxxxx X. Xxxxxxx,
Chief Executive Officer
FOUNDER:
-----------------------------------------------------
Xxxxxxx X. Xxxxxx, M.D.
INVESTORS:
New Enterprise Associates VII, L.P. NEA Presidents Fund, L.P.
NEA Ventures 1997, L.P. By: NEA General Partners, L.P.
NEA President's Associates VII, L.P By: General Partner
-----------------------------------------------------
(Print name of Investor)
By: /s/ XXXXXX XXXX
--------------------------------------------------
Title: General Partner
-----------------------------------------------
AMENDED AND RESTATED VOTING AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CORPORATION:
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
By:
--------------------------------------------------
Xxxxx X. Xxxxxxx,
Chief Executive Officer
FOUNDER:
-----------------------------------------------------
Xxxxxxx X. Xxxxxx, M.D.
INVESTORS:
New Enterprise Associates VII, L.P. NEA Ventures 1997, Limited Partnership
NEA Ventures 1997, L.P. By: Vice President
NEA President's Associates VII, L.P.
-----------------------------------------------------
(Print name of Investor)
By: /s/ XXXX XXXXXXXXXX
--------------------------------------------------
Title: Vice President
-----------------------------------------------
AMENDED AND RESTATED VOTING AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CORPORATION:
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
-----------------------------------------------------
Xxxxx X. Xxxxxxx,
Chief Executive Officer
HOLDER:
-----------------------------------------------------
Xxxxxxx X. Xxxxxx, M.D.
INVESTORS:
InterWest Partners VI, L.P.
InterWest Investors VI, L.P.
-----------------------------------------------------
(Print name of Investor)
By: InterWest Management Partners VI, LLC
their General Partner
By: /s/ XXXXXX XXXX
--------------------------------------------------
Title: Venture Manager
-----------------------------------------------
AMENDED AND RESTATED VOTING AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CORPORATION:
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
By:
--------------------------------------------------
Xxxxx X. Xxxxxxx,
Chief Executive Officer
FOUNDER:
-----------------------------------------------------
Xxxxxxx X. Xxxxxx, M.D.
INVESTORS:
HYBRID VENTURE PARTNERS, L.P., a
Delaware limited partnership
By: Rosemont Venture Management I, L.L.C
Its General Partner
By: /s/ XXXXXX X. XXXXXXXX
--------------------------------------------------
Name: /s/ XXXXXX X. XXXXXXXX
------------------------------------------------
Title: Managing Member
-----------------------------------------------
AMENDED AND RESTATED VOTING AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CORPORATION:
ADESSO SPECIALTY SERVICES ORGANIZATION INC.
--------------------------------------------------
Xxxxx X. Xxxxxxx,
Chief Executive Officer
HOLDER:
-----------------------------------------------------
Xxxxxxx X. Xxxxxx, M.D.
INVESTORS:
COMDISCO, INC.
-----------------------------------------------------
(Print name of Investor)
By: /s/ Xxxx X. Xxxxxx
--------------------------------------------------
XXXX X. XXXXXX
Title: SENIOR VICE PRESIDENT
-----------------------------------------------
AMENDED AND RESTATED VOTING AGREEMENT
EXHIBIT A
LIST OF INVESTORS
Technology Funding Venture Partners V, An Aggressive Growth Fund, L.P.
Technology Funding Venture Partners IV, An Aggressive Growth Fund, L.P.
Technology Funding Partners 111, L.P.
Technology Funding Medical Partners 1, L.P.
Sequoia Capital VI
Sequoia Technology Partners VI
Sequoia 1995
Sequoia 1997
SQP 1997
New Enterprise Associates VII, L.P.
NEA Ventures 1997, L.P.
NEA President's Fund, L.P.
Comdisco Ventures
Hybrid Venture Partners, L.P.
Xxxxxxx X. Xxxxxxx
InterWest Partners VI, L.P.
InterWest Investors VI, L.P.
Xxxx and Xxxxx Xxxxxxx
Xxxxxxx X. and Xxxxxx Xxxxxxx Xxxxxx
Xxxxxx Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxx and Xxxxxxxx Xxxxxxxx
GC & H Investments
Xxxxx X. Xxxxxxx
Xxxxxx Xxxxx
Xxxxxxx Xxxxxxxxx
Cardiovascular Medicine & Cardiac Arrhythmias an
Incorporated Medical Group Profit Sharing Trust FBO: Xxxxx X. Xxxxxx
Xxxxx Revocable lntervivos Trust DTD 9/15/93
Xxxxxx X. Xxxxxxxx
R. Xxxxxxx Xxxx
Xxxxxx X. Xxxxx
Xxxxx X. Xxxxxxxx
Cardiovascular Medicine & Cardiac Arrhythmias an
Incorporated Medical Group Profit Sharing Trust FBO: Xxxxx X. Xxxxxxxx
Xxxxxx Xxxxxx
Xxxxx Living Trust DTD 7/27/90
Xxxxxx X. Xxxxxxx
Compass Management Partners
EXHIBIT G
LIST OF SHAREHOLDERS
LIST OF SHAREHOLDERS
Technology Funding Ventures Partners V
Technology Funding Venture Partners IV
An Aggressive Growth Fund, L.P.
Technology Funding Partners III, L.P.
Technology Funding Medical Partners I, L.P.
Sequoia Capital VI
Sequoia Technology Partners VI
Sequoia 1995
Sequoia 1997
SQP 1997
New Enterprise Associates VII, L.P.
NEA Ventures 1997, L.P.
NEA President's Fund, L.P.
InterWest Partners VI, L.P.
Comdisco Ventures
Hybrid Venture Partners, L.P.
Xxxx and Xxxxx Xxxxxxx
Xxxxxxx X. and Xxxxxx Xxxxxxx Xxxxxx
Xxxxxx and Xxxxxx Streuver
Xxxxxx and Xxxxxxxx Xxxxxxxx
GC & H Investments
Xxxxx X. Xxxxxxx
Xxxxxx Xxxxx
Xxxxxxx Xxxxxxxxx
Cardiovascular Medicine & Cardiac Arrhythmias an Incorporated Medical
Group Profit Sharing Trust FBO: Xxxxx X. Xxxxxx
Cardiovascular Medicine & Cardiac Arrhythmias an Incorporated Medical
Group Profit Sharing Trust FBO: Xxxxx Xxxxxxxx
Xxxxx X. Xxxxxxxx
R. Xxxxxxx Xxxx
Compass Management Partner
Xxxxxx Xxxxxxxx
-14-
Xxxxxx X. Xxxxx
R. Xxxx Xxxxxx
Xxxxx Xxxxx
Xxxxx Xxxxx
Xxxxxxxxx Xxxxxx
Bern 1996 Trust
Xxxx XxXxxxxxx
Xxxx (Xxxxx) Comes
Xxxxx X. Xxxxx
Xxxxxx X. Xxxxxx
Xxxxxxxx Xxxxx
Xxxxxxxx X. Xxxxxxx
Xxxx Xxxxxx
Xxxx Xxxxxxxx
Xxxxxxxx X. Xxxx
Xxxxx Revocable lntervivos Trust DTD 9/15/93
Xxxxxx X. Xxxxxxxx
Xxxxx Living Trust DTD 7/27/90
Xxxxxx X. Xxxxxxx
Xxxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxxx Xxxxxxx MD
-15-
EXHIBIT H
PROPRIETARY INFORMATION AND INVENTIONS ASSIGNMENT
ADESSO HEALTHCARE TECHNOLOGY SERVICES, INC.
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
As an independent contractor with ADESSO HEALTHCARE TECHNOLOGY SERVICES,
INC., its subsidiary or its affiliate (together, the "Company"), and as a
condition of my contract by the Company and in consideration of the
compensation now and hereafter paid to me, I agree to the following:
1. MAINTAINING CONFIDENTIAL INFORMATION
(a) COMPANY INFORMATION. I agree at all times during the term of my
Agreement and thereafter to hold in strictest confidence, and not to use,
except for the benefit of the Company, or to disclose to any person, firm or
corporation, without written authorization of the Board of Directors of the
Company, any trade secrets, confidential knowledge, confidential data or
other similar proprietary information of the Company.
(b) FORMER EMPLOYER INFORMATION. I agree that I will not, during the
term of my Agreement with the Company, improperly use or disclose any
proprietary information or trade secrets of my former or concurrent employers
or companies, if any, and that I will not bring onto the premises of the
Company any unpublished documents or any property belonging to my former or
concurrent employers or companies unless previously and specifically
consented to in writing by said employers or companies.
(c) THIRD PARTY INFORMATION. I recognize that the Company has received
and in the future will receive confidential or proprietary information from
third parties subject to a duty on the Company's part to maintain the
confidentiality of such information and, in some cases, to use it only for
certain limited purposes. I agree that I owe the Company and such third
parties, both during the term of my Agreement and thereafter, a duty to hold
all such confidential and proprietary information in the strictest confidence
and not to disclose it to any person, firm or corporation (except in a manner
that is consistent with the Company's Agreement with the third party) or use
it for the benefit of anyone other than the Company or such third party
(consistent with the Company's Agreement with the third party), unless
expressly authorized to act otherwise by an officer of the Company.
2. ASSIGNMENT OF INVENTIONS AND ORIGINAL WORKS.
(a) INVENTIONS AND ORIGINAL WORKS RETAINED BY ME. I have attached
hereto as Exhibit A a complete disclosure of all inventions, original works
of authorship, developments, improvements, and trade secrets that I have,
alone or jointly with others, conceived, developed or reduced to practice or
caused to be conceived, developed or reduced to practice prior to the
commencement of my Agreement with the Company, that I consider to be my
property or the property of third parties and that I wish to have excluded
from the scope of the Agreement. If
Page 1 of 8
disclosure of an item on Exhibit A would cause me to violate any prior
confidentiality Agreement, I understand that I am not to disclose such on
Exhibit A but in the applicable space on Exhibit A. I am only to disclose a
cursory name for each such invention, a listing of the party(ies) to whom it
belongs and the fact that full disclosure as to such inventions has not been
made for that reason. A space is provided on Exhibit A for such purpose. If
no disclosure is attached, I represent that there are no such inventions.
(b) INVENTIONS AND ORIGINAL WORKS ASSIGNED TO THE COMPANY. I agree that
I will make prompt written disclosure to the Company, will hold in trust for
the sole right and benefit of the Company, and hereby assign to the Company
all my right, title and interest in and to any ideas, inventions, original
works of authorship, developments, improvement or trade secrets which I may
solely or jointly conceive or reduce to practice, or cause to be conceived or
reduced to practice, during the period of my Agreement with the Company. I
recognize that this Agreement does not require assignment of any invention
which qualifies fully for protection under Section 2870 of the California
Labor Code (hereafter "Section 2870"), which provides as follows:
(i) Any provision in an Agreement which provides that a contractor
shall assign, or offer to assign, any of his or her rights in an invention to
Adesso shall not apply to an invention that the contractor developed
entirely on his or her own time without using the Company's equipment,
supplies, facilities, or trade secret information except for those inventions
that either:
(1) Relate at the time of conception or reduction to practice
of the invention to Adesso's business, or actual or demonstrably anticipated
research or development of Adesso; or
(2) Result from any work performed by the contractor for
Adesso.
(ii) To the extent a provision in an Agreement purports to require a
contractor to assign an invention otherwise excluded form being required to
be assigned under subdivision (a), the provision is against the public policy
of this state and is unenforceable.
I acknowledge that all original works of authorship which are made by me
(solely or jointly with others) within the scope of my Agreement and which
are protectable by copyright are "works made for hire" as that term is
defined in the United States Copyright Act (17 U.S.C., Section 101).
(c) INVENTIONS AND ORIGINAL WORKS ASSIGNED TO THE UNITED STATES. I
hereby assign to the United States government all my right, title and
interest in and to any and all inventions, original works of authorship,
developments, improvements or trade secrets whenever full title to same is
required to be in the United States by a contract between the Company and the
United States or any of its agencies.
(d) OBTAINING LETTERS PATENT, COPYRIGHT REGISTRATIONS AND OTHER
PROTECTIONS. I will assist the Company in every proper way to obtain and
enforce United States and foreign
Page 2 of 8
proprietary rights relating to any and all inventions, original works of
authorship, developments, improvements or trade secrets of the Company in
any and all countries. To that end I will execute, verify and deliver such
documents and perform such other acts (including appearing as a witness) the
Company may reasonably request for use in applying for, obtaining,
perfecting, evidencing, sustaining and enforcing such proprietary rights and
the assignment thereof. In addition, I will execute, verify and deliver
assignments of such proprietary rights to the Company or its designee. My
obligation to assist the Company with respect to proprietary rights in any
and all countries shall continue beyond the termination of my Agreement, but
the company shall compensate me at a reasonable rate after my termination for
the time actually spent by me at the Company's request on such assistance.
In the event that the Company is unable for any reason, after reasonable
effort, to secure my signature on any document needed in connection with the
actions specified in the preceding paragraph, I hereby irrevocably designate
and appoint the Company and its duly authorized officers and agents as my
agent and attorney-in-fact, to act for and in my behalf to execute, verify
and file such documents with the same legal force and effect as if executed
by me. I hereby waive and quitclaim to the Company any and all claims of any
nature whatsoever which I now or may hereafter have for infringement of any
proprietary rights assigned to the Company.
(e) OBLIGATION TO KEEP THE COMPANY INFORMED. In addition to my
obligations under paragraph 2(b) above, during the period of my contract and
for one (1) year after termination of my contract for any reason, I will
promptly disclose to the Company fully and in writing all patent applications
filed by me or on my behalf. At the time of each such disclosure, I will
advise the Company in writing of any inventions that I believe fully qualify
for protection under Section 2870; and I will at that time provide to the
Company in writing all evidence necessary to substantiate that belief. I
understand that the Company will keep in confidence and not disclose to third
parties without my consent any proprietary information disclosed in writing
to the Company pursuant to this Agreement relating to inventions that qualify
fully for protection under the provisions of Section 2870. I will preserve
the confidentiality of any such invention that does not qualify fully for
protection under Section 2870. I agree to keep and maintain adequate and
current records (in the form of notes, sketches, drawings and in any other
form that may be required by the Company) of all proprietary information
developed by me and all inventions made by me during the period of contract
at the Company at all times.
3. NO CONFLICTING EMPLOYMENT; NO INDUCEMENT OF OTHER EMPLOYEES OR
SOLICITATION OF CUSTOMERS.
I agree that during the period of my Agreement by the Company I will
not, without the Company's express written consent, engage in any other
employment or business activity directly related to the business in which the
Company is now involved or becomes involved, nor will I engage in any other
activities which conflict with my obligations to the Company. For the period
of my employment by the company and for one (1) year after the date of
termination of my contract by the Company I will not induce any employee of
the Company to leave the employ of the Company.
Page 3 of 8
If any restriction set forth in this Section is found by any court of
competent jurisdiction to be unenforceable because it extends for too long a
period of time or over too great a range of activities or in too broad of a
geographic area, it shall be interpreted to extend only over the maximum
period of time, range of activities or geographic area as to which it may be
enforceable.
4. NO CONFLICTING OBLIGATIONS.
I represent that my performance of all the terms of this Agreement as a
contractor of the Company does not and will not breach any Agreement or
obligation of mine relating to any time prior to my Agreement by the Company.
I have not entered into, and I agree I will not enter into, any Agreement
either written or oral in conflict herewith.
5. RETURN OF COMPANY DOCUMENTS.
At termination of my contract with the Company, I will deliver to the
Company (and will not keep in my possession, photocopy or deliver to anyone
else) any and all devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, sketches, materials,
equipment, other documents or property, together with all copies thereof (in
whatever medium recorded) belonging to the Company, its successors or assigns
whether kept at the Company, home or elsewhere. Prior to leaving, I will
cooperate with the Company in completing and signing the Company's
termination statement for technical and management personnel confirming the
above and my obligations under this Agreement.
I HAVE BEEN INFORMED AND ACKNOWLEDGE THAT THE UNAUTHORIZED TAKING OF THE
COMPANY'S TRADE SECRETS:
(i) COULD RESULT IN CIVIL LIABILITY UNDER CALIFORNIA CODE SECTION
3426, AND THAT, IF WILLFUL, COULD RESULT IN AN AWARD FOR TRIPLE THE AMOUNT OF
THE COMPANY'S DAMAGES AND ATTORNEYS' FEES; AND
(ii) IS A CRIME UNDER CALIFORNIA PENAL CODE SECTION 444(c),
PUNISHABLE BY IMPRISONMENT FOR A TIME NOT EXCEEDING ONE (1) YEAR, OR BY A
FINE NOT EXCEEDING FIVE THOUSAND ($5,000), OR BY BOTH.
6. NOTIFICATION OF NEW EMPLOYER.
Upon termination of my contact with the Company, I hereby consent to the
notification of my new employer of my rights and obligations under this
Agreement.
Page 4 of 8
7. LEGAL AND EQUITABLE REMEDIES.
Because my services are personal and unique and because I may have
access to and become acquainted with the proprietary information of the
Company, the Company shall have the right to enforce this Agreement and any
of its provisions by injunction, specific performance or other equitable
relief, without bond and without prejudice to any other rights and remedies
that the Company may have for a breach of this Agreement.
8. GENERAL PROVISIONS
(a) GOVERNING LAW; CONSENT TO PERSONAL JURISDICTION. This Agreement
will be governed by and construed according to the laws of the State of
California, excluding conflicts of laws principles. I hereby expressly
consent to the personal jurisdiction of the state and federal courts located
in California for any lawsuit filed there against me by the Company arising
from or relating to this Agreement.
(b) ENTIRE AGREEMENT. This Agreement, and Exhibit A attached hereto and
hereby incorporated herein, sets forth the final, complete and exclusive
Agreement and understanding between the Company and me relating to its subject
matter. No modification of or amendment to this Agreement, nor any waiver of
any rights under this Agreement will be effective unless in writing and
signed by both the Company and me. Any subsequent change or changes in my
duties, salary or compensation will not affect the validity or scope of this
Agreement.
(c) SEVERABILITY. If one or more of the provision in this Agreement are
deemed unenforceable by law, then the remaining provision will continue in
full force and effect.
(d) SUCCESSORS AND ASSIGNS. This Agreement will be binding upon my
heirs, executors, administrators and other legal representatives and will be
for the benefit of the Company, its successors and its assigns.
(e) SURVIVAL. The provisions of this Agreement shall survive the
termination of my Agreement with the Company and the assignments of this
Agreement by the Company to any successor in interest or other assignee.
(f) WAIVER. No waiver by the Company of any breach of this Agreement
shall be a waiver of any preceding or succeeding breach. No waiver by the
Company of any right under this Agreement shall be construed as a waiver of
any other right. The Company shall not be required to give notice to enforce
strict adherence to all terms of this Agreement.
(g) NOTICE. Any notices required or permitted thereunder shall be given
to the appropriate party at the address specified below or at such other
address as the party shall specify in writing. Such notice shall be deemed
given upon personal delivery by certified or registered mail, postage
prepaid, three (3) days after the date of mailing.
Page 5 of 8
This Agreement shall be effective as of the first day of Agreement with
the Company, namely: _______________, 2000.
I UNDERSTAND THAT THIS AGREEMENT AFFECTS MY RIGHTS TO INVENTIONS I MAKE
DURING MY CONTRACT AGREEMENT DATES, AND RESTRICTS MY RIGHT TO DISCLOSE OR USE
THE COMPANY'S PROPRIETARY INFORMATION DURING OR SUBSEQUENT TO MY AGREEMENT.
I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE
COMPLETELY FILLED OUT EXHIBIT A TO THIS AGREEMENT.
Dated: ______________, 2000
------------------------------------
Signature
------------------------------------
Name of Contractor
------------------------------------
Address
------------------------------------
City, State, Zip Code
ACCEPTED AND AGREED TO:
ADESSO HEALTHCARE TECHNOLOGY SERVICES, INC.
0000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
By:__________________________________
Authorized Signatory
Page 6 of 8
EXHIBIT A
ADESSO HEALTHCARE TECHNOLOGY SERVICES, INC.
0000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Gentlemen:
1. Except as listed in Section 2 below the following is a complete
disclosure of all inventions relevant to the subject matter of my employment
by Adesso Healthcare Technology Services, Inc. (the "Company") that have been
made or conceived or first reduced to practice by me alone or jointly with
others prior to my engagement by the Company:
/ / No inventions.
/ / See below.
--------------------------------------------------------------------------
/ / Additional sheets attached.
2. Due to a prior confidentiality Agreement, I cannot complete the
disclosure under Section 1 above with respect to inventions generally listed
below, the proprietary rights and duty of confidentiality with respect to
which I owe to the following party(ies):
INVENTION PARTY(IES) RELATIONSHIP
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1.
------------------------- ------------------------- -------------------------
2.
------------------------- ------------------------- -------------------------
3.
------------------------- ------------------------- -------------------------
/ / Additional sheets attached.
Page 7 of 8
3. I propose to bring the following devices, materials and documents of a
former employer or other person to whom I have an obligation of
confidentiality that are not generally available to the public, which
materials and documents may be used in my employment pursuant to the express
written authorization of my former employer of such other person (a copy of
which is attached hereto):
/ / No inventions.
/ / See below.
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/ / Additional sheets attached.
Dated: ______________, 2000 Very truly yours,
------------------------------
CONTRACTOR
Page 8 of 8
EXHIBIT I
LEGAL OPINION
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April 6, 2000
To the Investors Listed in
EXHIBIT A to the Adesso Specialty Services Organization Inc.
Series E Preferred Stock Purchase Agreement
Ladies and Gentlemen:
Reference is made to the Series E Preferred Stock Purchase Agreement,
dated as of April 6, 2000 (the "PURCHASE AGREEMENT"), complete with all listed
exhibits thereto, by and between Adesso Specialty Services Organization Inc., a
California corporation (the "CORPORATION"), and the persons and entities listed
in EXHIBIT A to the Purchase Agreement (the "INVESTORS"), which provides for the
issuance by the Corporation to the Investors of shares of Series E Preferred
Stock of the Corporation (the "SHARES"). Reference is also made to the Amended
and Restated Investors' Rights Agreement, dated as of April 6, 2000 (the
"INVESTORS' RIGHTS AGREEMENT"), complete with all listed exhibits thereto, by
and among the Corporation, Xxxxxxx X. Xxxxxx (the "FOUNDER"), the holders of
Series A Preferred Stock (the "SERIES A HOLDERS"), the holders of Series B
Preferred Stock (the "SERIES B HOLDERS"), the holders of Series C Preferred
Stock (the "SERIES C HOLDERS"), the holders of Series D Preferred Stock (the
"SERIES D HOLDERS") and the Investors. Reference is also made to the Amended and
Restated Co-Sale Agreement, dated as of April 6, 2000 (the "CO-SALE AGREEMENT"),
by and among the Corporation, the Series A Holders, the Series B Holders, the
Series C Holders, the Series D Holders, the Investors, and the Founder.
Reference is also made to the Amended and Restated Voting Agreement (the "VOTING
AGREEMENT") dated as of April 6, 2000, by and among the Corporation, the Series
A Holders, the Series B Holders, the Series C Holders, the Series D Holders, the
Investors, and the Founder. This opinion is rendered to you pursuant to Section
5.1(l) of the Purchase Agreement, and all terms used herein have the meanings
defined for them in the Purchase Agreement unless otherwise defined herein.
We have acted as counsel for the Corporation in connection with the
negotiation of the Purchase Agreement, the Rights Agreement, the Co-Sale
Agreement, the Voting Agreement and the issuance of the Shares. As such counsel,
we have made such legal and factual examinations and inquiries as we have deemed
advisable or necessary for the purpose of rendering this opinion. In addition,
we have examined originals or copies of such corporate records of the
Corporation, certificates of public officials and such other documents, that we
consider necessary or advisable for the purpose of rendering this opinion.
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Adesso Specialty Services Organization Inc.
Page 2
In such examination, we have assumed the genuineness of all signatures on
original documents, the authenticity and completeness of all documents submitted
to us as originals, the conformity to original documents of all copies submitted
to us and the due execution and delivery of all documents (except as to due
execution and delivery by the Corporation) where due execution and delivery are
prerequisite to the effectiveness thereof.
As used in this opinion, the expression "to our knowledge," "known to
us" or similar language with reference to matters of fact means that, after an
examination of documents made available to us by the Corporation, and after
inquiries of officers of the Corporation, but without any further independent
factual investigation, we find no reason to believe that the opinions expressed
herein are factually incorrect. Further, the expression "to our knowledge,"
"known to us" or similar language with reference to matters of fact refers to
the current actual knowledge of those attorneys of this firm who have worked on
matters for the Corporation in connection with the Purchase Agreement, the
Rights Agreement, the Co-Sale Agreement, the Voting Agreement and the
transactions contemplated thereby. Except to the extent expressly set forth
herein or as we otherwise believe to be necessary to our opinion, we have not
undertaken any independent investigation to determine the existence or absence
of any fact, and no inference as to our knowledge of the existence or absence of
any fact should be drawn from our representation of the Corporation or the
rendering of the opinion set forth below.
For the purposes of this opinion, we are assuming that the Investors
have all requisite power and authority, and, to the extent applicable, have
taken any and all necessary corporate or partnership action, to execute and
deliver the Purchase Agreement, the Rights Agreement, the Co-Sale Agreement and
the Voting Agreement, and we are assuming that the representations and
warranties made by the Investors on all matters and by the Corporation as to
factual matters are true and correct. We are also assuming that the Investors
have purchased the Shares for value, in good faith and without notice of any
adverse claim.
The opinions hereinafter expressed are subject to the following
qualifications:
(a) We express no opinion as to the effect of applicable bankruptcy,
insolvency, reorganization, moratorium or other similar federal or state laws
affecting the rights of creditors generally;
(b) We express no opinion as to the effect of rules of law governing
specific performance, injunctive relief or other equitable remedies (regardless
of whether any such remedy is considered in a proceeding at law or in equity);
(c) We express no opinion as to compliance with the anti-fraud
provisions of applicable federal and state securities laws;
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Adesso Specialty Services Organization Inc.
Page 3
(d) We express no opinion as to the enforceability of the
indemnification provisions of the Rights Agreement to the extent the provisions
thereof may be subject to limitations of public policy and the effect of
applicable statutes and judicial decisions;
(e) We express no opinion as to the enforceability of telecopy
execution and delivery of the Purchase Agreement, Rights Agreement, Co-Sale
Agreement, Voting Agreement and related agreements.
(f) We are members of the Bar of the state of California and we express
no opinion as to any matter relating to the laws of any jurisdiction other than
the federal laws of the United States of America and the laws of the State of
California.
Based upon and subject to the foregoing, and except as set forth in the
Purchase Agreement, the Schedule of Exceptions to the Purchase Agreement, the
Rights Agreement, the Co-Sale Agreement and the Voting Agreement, we are of the
opinion that:
1. The Corporation is a corporation duly organized and validly existing
under, and by virtue of, the laws of the State of California. The Corporation
has requisite corporate power to own and operate its properties and assets, and
to carry on its business as currently conducted.
2. The Corporation has all requisite legal and corporate power to
execute and deliver the Purchase Agreement, the Rights Agreement, the Co-Sale
Agreement and the Voting Agreement to sell and issue the Shares thereunder, to
issue the Common Stock issuable upon conversion of the Shares and to carry out
and perform its obligations under the terms of the Purchase Agreement, the
Rights Agreement, the Co-Sale Agreement and the Voting Agreement.
3. Immediately prior to the Closing: the authorized capital stock of
the Corporation consists of 7,000,000 shares of Common Stock, 277,082 shares of
which are issued and outstanding, and 5,535,000 shares of Preferred Stock,
1,000,000 of which have been designated Series A Preferred Stock, 790,000 of
which are outstanding, 1,185,000 of which have been designated Series B
Preferred Stock, 1,021,356 of which are issued and outstanding, 900,000 of which
have been designated Series C Preferred Stock, 853,631 of which are issued and
outstanding, 1,250,000 of which have been designated Series D Preferred Stock,
1,196,570 of which are issued and outstanding, 1,200,000 of which have been
designated Series E Preferred Stock, none of which is issued and outstanding
prior to the Closing, and no shares that have been undesignated prior to the
Closing. The Series E Preferred Stock shall have the rights, preferences,
privileges and restrictions as set forth in the Amended and Restated Articles of
Incorporation of the Corporation. All issued and outstanding shares have been
duly authorized and validly issued, are fully paid and nonassessable. To the
best of our knowledge, there are no options, warrants, conversion privileges or
other rights (or agreements for any such rights) outstanding to acquire any of
[LETTERHEAD]
Adesso Specialty Services Organization Inc.
Page 4
the Corporation's securities, except that (i) there are currently 1,091,525
shares of Common Stock reserved for issuance under the Corporation's 1995 Stock
Option Plan and its 1997 Stock Option Plan of which 1,420,421 shares are
outstanding or subject to options as of the Closing Date and (ii) there are
warrants outstanding to purchase 135,615 shares of Series A Preferred Stock
exercisable upon the liquidation, dissolution or winding up of the Corporation
and subject to other terms and conditions as set forth in the Warrants dated
March 8, 1996.
4. The Common Stock issuable upon conversion of the Shares has been
duly and validly reserved, and when issued in accordance with the Corporation's
Amended and Restated Articles of Incorporation will be validly issued, fully
paid and nonassessable. The Shares issued under the Purchase Agreement are
validly issued, fully paid (assuming receipt by the Corporation of the
appropriate consideration therefor), nonassessable and are free of any liens,
encumbrances and preemptive or similar rights except as set forth in the Co-Sale
Agreement. Notwithstanding the foregoing, the Shares (and the Common Stock
issuable upon conversion thereof) may be subject to restrictions on transfer
under state and/or federal securities laws and as set forth in the Purchase
Agreement, the Rights Agreement, the Co-Sale Agreement and the Voting Agreement.
5. All corporate action on the part of the Corporation, its directors
and shareholders necessary for the authorization, execution and delivery of the
Purchase Agreement, the Rights Agreement, the Co-Sale Agreement and the Voting
Agreement by the Corporation, the authorization, sale, issuance and delivery of
the Shares (and the Common Stock issuable upon conversion thereof) and the
performance of the Corporation's obligations under the Purchase Agreement, the
Rights Agreement, the Co-Sale Agreement and the Voting Agreement has been taken.
The Purchase Agreement, the Rights Agreement and the Co-Sale Agreement have been
duly and validly executed and delivered by the Corporation and constitute valid
and binding obligations of the Corporation, enforceable against the Corporation
in accordance with their terms, except as set forth above.
6. The execution, delivery and performance of and compliance with the
terms of the Purchase Agreement, the Rights Agreement and the Co-Sale Agreement
and the issuance of the Shares (and the Common Stock issuable upon conversion
thereof) do not violate any provision of any applicable federal, or, to our
knowledge, local law, rule or regulation, do not violate any provision of the
Corporation's Amended and Restated Articles of Incorporation or Bylaws and do
not conflict with or constitute a default under the provisions of any judgment,
writ, decree or order specifically identified in the Schedule of Exceptions to
the Purchase Agreement or any material agreement specifically identified in the
Schedule of Exceptions to the Purchase Agreement to which the Corporation is a
party or by which it is bound.
7. To our knowledge, there is no action, suit, proceeding or
investigation pending against the Corporation or its properties before any court
or governmental agency
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Adesso Specialty Services Organization Inc.
Page 5
(nor, to our knowledge, has the Corporation received any written threat thereof)
which, either in any case or in the aggregate, are likely to result in any
material adverse change in the business or financial condition of the
Corporation or any of its properties, or in any material impairment of the right
or ability of the Corporation to carry on its business as now conducted, or
which question the validity of the Purchase Agreement, the Rights Agreement, the
Co-Sale Agreement or the Voting Agreement or any action taken or to be taken by
the Corporation in connection therewith.
8. All consents, approvals, permits, orders or authorizations of, and
all qualifications, registrations, designations, declarations or filings with,
any federal governmental authority on the part of the Corporation required in
connection with the execution and delivery of the Purchase Agreement and
consummation at the Closing of the transactions contemplated by the Purchase
Agreement have been obtained, and are effective, and we are not aware of any
proceedings, or threat thereof, that question the validity thereof.
9. Based in part upon your representations in the Purchase Agreement,
the offer and sale of the Series E Preferred Stock to you pursuant to the terms
of the Purchase Agreement are exempt from the registration requirements of
Section 5 of the Securities Act of 1933, as amended, by virtue of Section 4(2)
thereof and the issuance of Common Stock to you upon conversion of the Series E
Preferred Stock will also be exempt from such registration and qualification
requirements.
This opinion is furnished to the Investors solely for their benefit in
connection with the purchase of the Shares and the Common Stock issuable upon
conversion of the Shares pursuant to the Purchase Agreement, and this opinion
may not be relied upon by any other person or for any other purpose without our
prior written consent.
Very truly yours,
/s/ Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
XXXXXX XXXXXXX XXXXXXXX & XXXXXX
Professional Corporation
