BCInet, Inc. SERIES A PREFERRED STOCK PURCHASE AGREEMENT
Exhibit
10.21
BCInet, Inc.
SERIES A PREFERRED STOCK
PURCHASE AGREEMENT
PURCHASE AGREEMENT
BCInet
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Series A SPA
BCInet, Inc.
This Series A Preferred Stock Purchase Agreement (this “Agreement”) is made and entered into
effective August 31,2009 by and between BCINET, INC., a Delaware corporation (the “Company”), and
OCZ TECHNOLOGY GROUP, INC., a Delaware corporation (the “Investor”).
RECITALS
WHEREAS, the Company and Investor are parties to the Asset Purchase Agreement of even date
herewith (the “Asset Purchase Agreement”), pursuant to which Investor assigns and transfers to the
Company certain assets, including the Goodwill (as described in the Asset Purchase Agreement); and
WHEREAS, the Company desires to issue to Investor, and Investor desires to accept from the
Company, the Shares (defined below) as partial consideration for the Goodwill.
NOW, THEREFORE, in consideration of the above recitals, the mutual covenants, agreements,
representations, and warranties contained in this Agreement, the parties hereto agree as follows:
SECTION 1
Purchase and Sale of Stock
1.1 Sale and Issuance of Shares.
(a) The Company shall adopt and file with the Secretary of State of Delaware on or before the
Closing (as defined below) an Amended and Restated Certificate of Incorporation in the form
attached hereto as Exhibit A (the “Restated Certificate”).
(b) Subject to the terms and conditions of this Agreement, Investor agrees to purchase at the
Closing, and the Company agrees to sell and issue to Investor at the Closing, 2,633,333 shares of
the Company’s Series A Preferred Stock (the “Shares”) at a price of $0.31 per share, or a total of
$816,333.23. The Shares shall be deemed paid with the execution of the Asset Purchase Agreement as
partial consideration for the Goodwill.
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SECTION 2
Closing; Delivery
(a) The purchase and sale of the Shares shall take place at the Company’s offices on August
31, 2009, or at such other time and place as the parties shall mutually agree which shall be
contemporaneous with the closing of the Asset Purchase Agreement (which time and place are
designated as the “Closing”).
(b) At the Closing, or as soon as practical thereafter, the Company shall deliver to Investor
a certificate representing the Shares against the transfer of Goodwill of a like amount.
SECTION 3
Representations and Warranties of the Company
Except as set forth on a Schedule of Exceptions delivered by the Company to the Investors at
the Closing, the Company hereby represents and warrants to Investor as of the date of this
Agreement as follows:
3.1 Organization; Good Standing; Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware, has all
requisite corporate power and authority to own, lease, license and operate its properties and
assets and to carry on its business as now conducted and as presently proposed to be conducted, to
execute and deliver this Agreement, and to issue and sell the Shares and the Common Stock issuable
upon conversion thereof.
3.2 Authorization. All corporate action on the part of the Company, its officers,
directors and stockholders necessary for the authorization, execution and delivery of the
Agreement, the Investors’ Rights Agreement, the Right of First Refusal Agreement and any other
related agreements (the “Transaction Documents”), the performance of all obligations of the Company
hereunder and thereunder, and the authorization, issuance (or reservation for issuance), sale and
delivery of the Shares being sold hereunder and the Common Stock issuable upon conversion thereof
has been taken or will be taken prior to the execution of this Agreement, and the Transaction
Documents, when executed and delivered, will constitute valid and legally binding obligations of
the Company, enforceable against the Company in accordance with their respective terms except as
limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, and as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies.
3.3 Valid Issuance of Preferred and Common Stock. The Shares that are being purchased
by the Investors hereunder, when issued, sold and delivered in accordance with the terms of this
Agreement for the consideration expressed herein, will be duly and validly issued, fully paid and
nonassessable, and will be free of liens, charges, encumbrances and restrictions on
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transfer other than restrictions on transfer under this Agreement and applicable state and
federal securities laws. The Common Stock issuable upon conversion of the Shares purchased under
this Agreement has been duly and validly reserved for issuance and, upon issuance in accordance
with the terms of the Company’s certificate of incorporation, will be duly and validly issued,
fully paid and nonassessable, and will be free of liens, charges, encumbrances and restrictions on
transfer other than restrictions on transfer under this Agreement and under applicable state and
federal securities laws.
3.4 Capitalization and Voting Rights. The authorized capital of the Company consists,
or will consist immediately prior to the Closing, of:
(a) Preferred Stock. 3,950,000 shares of Preferred Stock (the “Preferred Stock”), all
of which are designated as Series A Preferred Stock, none of which is outstanding.
(b) Common Stock. 24,000,000 shares of common stock (the “Common Stock”), of which
3,950,000 shares are issued and outstanding. Other than a secured convertible note for
$414,200.00, there are no other outstanding subscriptions, options rights, warrants, convertible
securities.
(c) The outstanding shares of Common Stock have been duly authorized and validly issued, are
fully paid and nonassessable and were issued in accordance with the registration or qualification
provisions of the Securities Act of 1933, as amended (the “Securities Act”) and any relevant state
securities laws or pursuant to valid exemptions therefrom.
(d) Except for (i) the conversion privileges of the Shares, (ii) the rights provided in the
Investors’ Rights Agreement and (iii) 8,950,000 shares reserved for issuance under the Company’s
2009 Stock Incentive Plan there are not outstanding any options, warrants, rights (including
conversion or preemptive rights and rights of first refusal), or agreements for the purchase or
acquisition from the Company, or to the Company’s knowledge, from any holders of its securities, of
any shares of its capital stock. The Company is not a party or subject to any agreement or
understanding, and, to the best of the Company’s knowledge, there is no agreement or understanding
between any persons that affects or relates to the voting or giving of written consents with
respect to any security or the voting by a director of the Company.
3.5 Governmental Consents. No consent, approval, qualification, order or
authorization of, or filing with, any local, state or federal governmental authority is required on
the part of the Company in connection with the Company’s valid execution, delivery or performance
of this Agreement, the offer, sale or issuance of the Shares by the Company or the issuance of
Common Stock upon conversion of the Shares, except (a) the filing of the Amended Certificate with
the Secretary of State of the State of Delaware, and (b) such filings and notices of sale required
to be filed with applicable federal and state agencies, which will be timely filed within the
applicable periods therefor.
3.6 Litigation. There is no action, suit, proceeding or investigation pending or to
the best of the Company’s knowledge, currently threatened against the Company nor, to the best of
the Company’s knowledge, is there a basis for the foregoing, including, without limitation, any
that questions the validity of this Agreement or the right of the Company to enter into such
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Agreement, or to consummate the transactions contemplated hereby. The foregoing includes,
without limitation, any action, suit, proceeding or investigation pending or to the best of the
Company’s knowledge, currently threatened involving the prior employment of any of the Company’s
employees, their use in connection with the Company’s business of any information or techniques
allegedly proprietary to any of their former employers or their obligations under any agreements
with prior employers. There is no action, suit, proceeding or investigation by the Company
currently pending or that the Company currently intends to initiate.
3.7 Title to Property and Assets; Leases. With the exception of the liens held by the
Investor pursuant to certain security agreements, the Company believes it owns its property and
assets free and clear of all mortgages, liens, claims and encumbrances. With respect to the
property and assets it leases or licenses, the Company is in compliance with such leases or
licenses and, to the best of its knowledge, holds a valid leasehold interest or license free of any
liens, claims or encumbrances.
3.8 Intellectual Property. To the best of its knowledge, the Company owns or
possesses sufficient legal rights to all patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information and proprietary rights and processes necessary for
its business as now conducted and as proposed to be conducted without any conflict with, or
infringement of the rights of, others.
3.9 Proprietary Agreements. The Company shall have each officer, employee and consultant
of the Company execute the Company’s standard form of proprietary information and invention
agreements prior to disclosing any proprietary information to any such officer, employee and
consultant.
3.10 Disclosure. The Company has provided the Investors with all the information
reasonably available to it without undue expense that Investor has requested for deciding whether
to purchase the Shares and all information that the Company believes is reasonably necessary to
enable Investor to make such decision.
SECTION 4
Representations and Warranties of Investor
Investor hereby represents and warrants to the Company as of the date of this Agreement as
follows:
4.1 Authorization. Investor has full power and authority to enter into this
Agreement. This Agreement constitutes a valid and legally binding obligation of Investor.
4.2 Reliance Upon Investor’s Representations. Investor understands that the Shares
are not and the securities issuable upon conversion thereof at the time of issuance may not be,
registered under the Securities Act on the ground that the sale provided for in this Agreement and
the exchange of securities hereunder is exempt from registration under Section 4(2) of the
Securities Act of 1933 (the “Securities Act”), as amended, and that the Company’s reliance on such
exemption(s) is based on Investor’s representations set forth herein.
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4.3 Receipt of Information. Investor believes it has received all the information it
considers necessary or appropriate for deciding whether to consummate the transaction contemplated
hereunder. Investor further represents that it has had an opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of investment in the Company and the
business, properties, prospects and financial condition of the Company and to obtain additional
information (to the extent the Company possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify the accuracy of any information furnished to
Investor or to which Investor had access. The foregoing, however, does not limit or modify the
representations and warranties of the Company in Section 2 hereof or the right of Investor to rely
thereon.
4.4 Investment Experience. Investor represents that Investor is experienced in
evaluating and investing in securities of companies in the development stage and acknowledges that
Investor is able to fend for itself, can bear the economic risk of its investment, and has such
knowledge and experience in financial and business matters that it is capable of evaluating the
merits and risks of the investment in the Shares. If other than an individual, Investor also
represents it has not been organized for the purpose of acquiring the Shares.
4.5 Accredited Investor. Investor is an “Accredited Investor” as defined in Rule
501(a) of Regulation D under the Securities Act.
4.6 Restricted Securities. Investor understands that the Shares may not be sold,
transferred or otherwise disposed of without registration under the Securities Act or an exemption
therefrom, or compliance with the Securities laws of any applicable jurisdiction and that in the
absence of an effective registration statement covering the Shares or an available exemption from
registration under the Securities Act, the Shares must be held indefinitely. In particular,
Investor is aware that the Shares may not be sold pursuant to Rule 144 promulgated under the
Securities Act unless all of the conditions of that Rule are met. Among the conditions for use of
Rule 144 is the availability of current information to the public about the Company. Such
information is not now available and the Company has no present plans to make such information
available.
4.7 Legends. To the extent applicable, each certificate or other document evidencing
any of the Shares shall be endorsed with the legends set forth below, and Investor covenants that,
except to the extent such restrictions are waived by the Company, Investor shall not transfer the
shares represented by any such certificate without complying with the restrictions on transfer
described in the legends endorsed on such certificate:
(a) The following legend under the Act:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER
THE UNITED STATES SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, OR REGION AND
MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS
OF FEDERAL, STATE AND OTHER SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND
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QUALIFICATION UNDER FEDERAL, STATE AND OTHER SECURITIES LAWS IS NOT REQUIRED.”
(b) Any legend imposed or required by any applicable state securities laws.
4.8 Public Sale. Investor agrees not to make, without the prior written consent of
the Company, any public offering or sale of the Shares, although permitted to do so pursuant to
Rule 144(k) promulgated under the Securities Act, until the earlier of (i) the date on which the
Company effects its initial registered public offering pursuant to the Securities Act, (ii) the
date on which it becomes a registered company pursuant to section 12(g) of the United States
Securities Exchange Act of 1934, as amended, or (c) five (5) years after the Closing hereunder.
SECTION 5
Conditions of the Investor’s Obligations at Closing
The obligations of Investor under subsection 1.1(b) of this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions:
5.1 Representations and Warranties. The representations and warranties of the Company
contained in SECTION 3 shall be true on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of the Closing.
5.2 Due Diligence. The Investors shall have completed their financial and legal due
diligence on the Company to their reasonable satisfaction.
5.3 Amended and Restated Certificate of Incorporation. The Restated Certificate shall have
been filed with the Secretary of State of Delaware and shall continue to be in full force and
effect as of the Closing.
5.4 Investors’ Rights Agreement. The Company, the Investors and any other parties
thereto shall have entered into the Investors’ Rights Agreement substantially in the form attached
hereto as Exhibit B.
5.5 Right of First Refusal and Co-Sale Agreement. The Company, the Investors and any other
parties thereto shall have entered into the Right of First Refusal and Co-Sale Agreement
substantially in the form attached hereto as Exhibit C.
SECTION 6
Conditions of the Company’s Obligations at Closing
The obligations of the Company to Investor under this Agreement are subject to the fulfillment
on or before the Closing of each of the following conditions by Investor:
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6.1 Representations and Warranties. The representations and warranties of the
Investor contained in SECTION 4 hereof shall be true on and as of the Closing with the same effect
as though such representations and warranties had been made on and as of the Closing.
6.2 Qualifications. All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state that are required
pursuant to this Agreement shall be duly obtained and effective as of the Closing.
6.3 Amended and Restated Certificate of Incorporation. The Restated Certificate shall
have been filed with the Secretary of State of Delaware and shall continue to be in full force and
effect as of the Closing.
SECTION 7
Miscellaneous
7.1 Successors and Assigns. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
7.2 Governing Law; Jurisdiction. This Agreement shall be governed by and construed
under the laws of the California as applied to agreements among California residents entered into
and to be performed entirely within the California. Investor specifically consents to the
jurisdiction of the Superior Court located in Santa Xxxxx County, California, or if that Court is
unable to exercise jurisdiction for any reason, to the jurisdiction of the United States Northern
District Court located in Santa Xxxxx County, California, to resolve any dispute or claim under
this Agreement.
7.3 Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument. A facsimile signature page is deemed as an original.
7.4 Notices, Etc. All notices and other communications required or permitted
hereunder will be in writing, and may be delivered in person, by telecopy, overnight delivery
service or United States mail, in which event they may be mailed by first class, certified or
registered, postage prepaid. All such notices and other communications will be deemed received (x)
in the case of personal delivery, and telecopy, on the date of such delivery, (y) in the case of
overnight delivery service, on the date of such delivery, and (z) in the case of mailing, on the
third business day following the date of such mailing.
7.5 Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written consent of the Company
and the holders of at least a majority of the Series A Preferred Stock (including Common Stock
issued upon conversion of the Series A Preferred Stock) purchased under this Agreement. Any
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amendment or waiver effected in accordance with this section shall be binding upon the Company
and all holders of any securities purchased or to be purchased under this Agreement (including
securities into which such securities have been converted), provided, however, in no event shall
the obligation of any holder that purchased securities under this Agreement be materially
increased, except upon the written consent of such holder, provided, further, that no amendment or
waiver will be effective as to any non-consenting party that has purchased securities under this
Agreement if such party is treated disproportionately from the consenting holders. Notwithstanding
the foregoing, this Agreement may be amended by the Company alone to add additional Investors
hereto.
7.6 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this Agreement and the
balance of the Agreement shall be interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Series A Preferred Stock
Purchase Agreement as of the date first written above.
| BCINET, INC. | ||||
By: |
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| OCZ TECHNOLOGY GROUP, INC. | ||||
By: |
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President & CEO |
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Exhibit A
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
Exhibit A
BCInet
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Exhibit B
INVESTORS’ RIGHTS AGREEMENT
Exhibit B
BCInet
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Exhibit C
RIGHT OF FIRST REFUSAL AGREEMENT
Exhibit C
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