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EXHIBIT 10.30
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
This Purchase Agreement ("Agreement") is made as of July 17, 1998,
between Evolve Products, Inc., a Delaware corporation (the "Company"), and each
of the parties listed on Schedule 1 hereto, each of whom is herein referred to
individually as an "Investor" and together as the "Investors"). Except as
otherwise indicated herein, capitalized terms used herein are defined in Section
6 hereof.
The parties hereto agree as follows:
SECTION 1. AUTHORIZATION AND CLOSING.
1a. Authorization of the Series C Preferred Stock. The Company
has authorized or shall authorize the issuance and sale to the Investors of up
to 3,000,000 shares of its Series C Preferred Stock, $.001 par value per share
("Series C Preferred Stock"), having the rights and preferences set forth in
Exhibit A attached hereto.
1b. Purchase and Sale of the Series C Preferred Stock. At the
Closing (as defined below) and subject to the terms and conditions set forth
herein, the Company agrees to sell to each Investor and, each Investor severally
agrees to purchase from the Company, the number of shares of Series C Preferred
Stock shown opposite such Investor's name on Schedule 1 hereto at a price of
$1.66 per share.
1c. Closing. The initial closing of the purchase and sale of
the Series C Preferred Stock (the "Closing") shall take place at the offices of
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 38 Technology Drive, Irvine, California, on the
date or dates and at such time or times as the Company shall designate, but in
no event later than July 17, 1998. At the Closing, the Company shall issue to
each Investor stock certificates evidencing the Series C Preferred Stock to be
purchased by each Investor, registered in the Investor's name, upon payment of
the purchase price thereof by a check or by wire transfer of immediately
available funds to the account designated by the Company.
The Company may sell up to 600,000 additional shares of Series
C Preferred Stock at any time on or before the date which is ninety (90) days
from the date hereof, under the terms of this Agreement. By execution of a
counterpart of this Agreement, a purchaser of any such shares shall be deemed an
"Investor" for all purposes hereof and Schedule 1 hereto shall be amended to
reflect such additional sale of Series C Preferred Stock.
SECTION 2. CONDITIONS OF PURCHASER'S OBLIGATION AT THE CLOSING. The
obligation of each Investor to purchase and pay for the Series C Preferred Stock
at the Closing is subject to the satisfaction as of the Closing of the following
conditions:
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2a. Representations and Warranties; Covenants. The
representations and warranties contained in Section 5 hereof shall be true and
correct at and as of the Closing as though then made, except to the extent the
representations and warranties speak to an earlier date, and the Company shall
have performed in all material respects all of the covenants required to be
performed by it hereunder prior to the Closing.
2b. Restated and Amended Stockholder Rights Agreement. The
Company and the Investors shall have entered into a Restated and Amended
Stockholder Rights Agreement in the form set forth in Exhibit B attached hereto
(the "Rights Agreement"), and the Rights Agreement shall be in full force and
effect as of the Closing.
2c. Stock Restriction Agreement. The Second Restated and
Amended Stock Restriction and Purchase Agreement in the form set forth in
Exhibit C attached hereto (the "Stock Restriction Agreement") shall have been
entered into by the Company, the Investors and the holders of not less than
two-thirds of the shares of Common Stock, Series A Preferred Stock and Series B
Preferred Stock of the Company subject to the Stock Restriction Agreement, and
the Stock Restriction Agreement shall be in full force and effect as of the
Closing.
2d. Certificate of Amendment. The Certificate of Amendment of
the Company in the form attached hereto as Exhibit A (the "Certificate of
Amendment") shall have been filed with the Secretary of State of the State of
Delaware.
2e. Minimum Investment. A minimum of 1,807,722 shares of
Series C Preferred Stock shall have been sold to the Investors pursuant to the
Agreement and at least $3,000,000 of shares of Series C Preferred Stock shall
have been purchased by Investors.
2f. Waiver. Any condition specified in this Section 2 may be
waived in writing by the Investors who have agreed to purchase a majority of
shares of Series C Preferred Stock to be purchased hereunder.
SECTION 3. CONDITIONS OF COMPANY'S OBLIGATION AT THE CLOSING. The
obligation of the Company to sell the Series C Preferred Stock at the Closing is
subject to the satisfaction as of the Closing of the following conditions:
3a. Representations and Warranties; Covenants. The
representations and warranties contained in the Subscription Agreements shall be
true and correct at and as of the Closing as though then made and the Investors
shall have performed in all material respects all of the covenants required to
be performed by them thereunder and hereunder prior to the Closing.
3b. Rights Agreement. The Company and the Investors shall have
entered into the Rights Agreement and the Rights Agreement shall be in full
force and effect as of the Closing.
3c. Stock Restriction Agreement. The Second Restated and
Amended Stock Restriction and Purchase Agreement in the form set forth in
Exhibit C attached hereto (the
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"Stock Restriction Agreement") shall have been entered into by the Company, the
Investors and the holders of not less than two-thirds of the shares of Common
Stock, Series A Preferred Stock and Series B Preferred Stock of the Company
subject to the Stock Restriction Agreement, and the Stock Restriction Agreement
shall be in full force and effect as of the Closing.
3d. Certificate of Amendment. The Certificate of Amendment
shall have been filed with the Secretary of State of the State of Delaware.
3e. Compliance with Applicable Laws. The sale of Series C
Preferred Stock by the Company shall not be prohibited by any applicable law or
governmental rule or regulation and shall not subject the Company to any
penalty, liability or, in the Company's sole judgment, other onerous condition
under or pursuant to any applicable law or governmental rule or regulation, and
the sale of the Series C Preferred Stock by the Company shall be permitted by
laws, rules and regulations of the jurisdictions and governmental authorities
and agencies to which the Company is subject.
3f. Payment of Purchase Price. The Investors shall have
tendered to the Company the purchase price for the Series C Preferred Stock
being purchased on the Closing Date.
SECTION 4. COVENANTS.
4a. Financial Statements and Other Information. Upon request
by any Investor, the Company shall deliver to such Investor (so long as such
Investor holds at least 50,000 shares of the Company's Common Stock, no par
value ("Common Stock"), on an as-converted basis, which number shall be adjusted
proportionately to reflect any stock split, stock combination, stock dividend,
recapitalization or similar event):
(i) Within forty-five (45) days after the end of each of
the first three quarterly accounting periods in each fiscal year, unaudited
statements of income and cash flows of the Company for such quarterly period and
for the period from the beginning of the fiscal year to the end of such quarter,
and an unaudited balance sheet of the Company as of the end of such quarterly
period, setting forth in each case comparisons to the corresponding period in
the preceding fiscal year, all prepared in accordance with generally accepted
accounting principles, consistently applied (subject to the absence of footnote
disclosure);
(ii) within ninety (90) days after the end of each fiscal
year, statements of income and cash flows of the Company for such fiscal year,
and a balance sheet of the Company as of the end of such fiscal year, setting
forth in each case comparisons to the preceding fiscal year, all prepared in
accordance with generally accepted accounting principles, consistently applied,
and audited by a nationally recognized independent accounting firm.
4b. Notwithstanding the foregoing, the provisions of paragraph
4(a) shall not be effective during any period when the Company is subject to the
periodic reporting requirements of the Securities Exchange Act.
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4c. Except as otherwise required by law or judicial order or
decree or by any governmental agency or authority, each Person entitled to
receive information regarding the Company under paragraph 4(a) shall maintain
the confidentiality of all nonpublic information obtained by it hereunder.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to each Investor that, except as set forth on a
Schedule of Exceptions furnished to each Investor, specifically identifying the
relevant subparagraph(s) hereof, which exceptions shall be deemed to be
representations and warranties as if made hereunder:
5a. Organization, Corporate Power and Licenses. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of Delaware and is duly qualified to do business in every jurisdiction in
which the failure to be so qualified would have a material adverse effect on the
business or properties of the Company. The Company possesses all requisite
corporate power and authority and all material licenses, permits and
authorizations necessary to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted and to carry out the
transactions contemplated by this Agreement.
5b. Capital Stock and Related Matters.
(i) Immediately prior to the Closing, the authorized
capital stock of the Company shall consist of 21,000,000 shares of Common Stock,
of which 1,000,080 are issued and outstanding and (b) 21,010,000 shares of
Preferred Stock, of which (X) 9,010,000 shares are designated as Series A
Preferred Stock, of which 9,000,720 are issued and outstanding, (Y) 2,000,000
shares are designated as Series B Preferred Stock, of which 1,189,124 are issued
and outstanding and (Z) 3,000,000 are designated as Series C Preferred Stock, of
which no shares are issued and outstanding. As of the Closing, the Company shall
have no outstanding stock or securities convertible or exchangeable for any
shares of its capital stock or containing any profit participation features, nor
shall it have outstanding any rights or options to subscribe for or to purchase
its capital stock or any stock or securities convertible into or exchangeable
for its capital stock or any stock appreciation rights or phantom stock plans,
except as set forth on the attached on Schedule 5(b) hereto. Schedule 5(b)
accurately sets forth the following information with respect to all outstanding
options and rights to acquire the Company's capital stock: the holder, the
number of shares covered and the exercise price. As of the Closing, the Company
shall be subject to no obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its capital stock or any warrants,
options or other rights to acquire its capital stock, except as set forth on
Schedule 5(b). As of the Closing, all of the outstanding shares of the Company's
capital stock shall be validly issued, fully paid and nonassessable.
(ii) Except as set forth on Schedule 5(b), there are no
statutory or contractual stockholders preemptive rights or rights of first
refusal with respect to the issuance
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of the Series C Preferred Stock hereunder. To the Company's knowledge, there are
no agreements between the Company's stockholders with respect to the voting or
transfer of the Company's capital stock or with respect to any other aspect of
the Company's affairs, except as contemplated by this Agreement and as set forth
on Schedule 5(b).
(iii) The Series C Preferred Stock that is 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
restrictions on transfer other than restrictions on transfer under this
Agreement, the Rights Agreement, the Stock Restriction Agreement and under
applicable state and federal securities laws. The Common Stock issuable upon
conversion of the Series C Preferred Stock purchased under this Agreement has
been or will be prior to Closing 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 restrictions on transfer other than restrictions on transfer
under this Agreement, the Rights Agreement, the Stock Restriction Agreement and
under applicable state and federal securities laws.
(iv) Subject in part to the truth and accuracy of each
Investor's representations set forth in the Subscription Agreement related to
this Agreement, the offer, sale and issuance of the Series C Preferred Stock as
contemplated by this Agreement are exempt from the registration requirements of
any applicable state and federal securities laws, and neither the Company nor
any authorized agent acting on its behalf will take any action hereafter that
would cause the loss of such exemption.
5c. Subsidiaries; Investments. The Company does not own or
hold either directly or indirectly any rights to acquire any shares of stock or
any other security or interest in any other Person, and the Company has never
had any Subsidiary. The Company is not a participant in any partnership, joint
venture or similar arrangement.
5d. Authorization; No Breach. The execution, delivery and
performance of this Agreement, the Stock Restriction Agreement, the Rights
Agreement and all other agreements contemplated hereby to which the Company is a
party have been duly authorized by the Company. This Agreement, the Stock
Restriction Agreement, the Rights Agreement and all other agreements
contemplated hereby to which the Company is a party each constitutes a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms. Except as set forth on the attached Schedule 5(d), the execution
and delivery by the Company of this Agreement, the Stock Restriction Agreement,
the Rights Agreement and all other agreements contemplated hereby to which the
Company is a party, the offering, sale and issuance of the Series C Preferred
Stock hereunder and the fulfillment of and compliance with the respective terms
hereof and thereof by the Company, do not and shall not (i) conflict with or
result in a breach of the terms, conditions or provisions of, (ii) constitute a
default under, (iii) result in the creation of any lien, security interest,
charge or encumbrance upon the Company's capital stock or assets pursuant to,
(iv) give any third party the right to modify, terminate or accelerate any
obligation under, (v) result in a violation of, or (vi) require
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any authorization, consent, approval, exemption or other action by or notice or
declaration to, or filing with, any court or administrative or governmental body
or agency pursuant to, the Certificate of Incorporation or bylaws of the Company
or any law, statute, rule or regulation to which the Company is subject, or any
material agreement, instrument, order, judgment or decree to which the Company
is subject.
5e. Financial Statements. Attached hereto as Schedule 5(e) are
the unaudited balance sheet of the Company as of May 31, 1998 (the "Latest
Balance Sheet"), and the related statements of operations and cash flows (or the
equivalent) for the five (5) month period then ended. Each of the foregoing
financial statements (including in all cases the notes thereto, if any) is
accurate and complete in all material respects, is consistent with the books and
records of the Company (which, in turn, are accurate and complete in all
material respects) and has been prepared in accordance with generally accepted
accounting principles, consistently applied, presents fairly the financial
condition, results of operations and cash flows of the Company in accordance
with generally accepted accounting principles applied on a consistent basis as
of the dates and for the periods set forth therein, subject to the absence of
footnote disclosure.
5f. Absence of Undisclosed Liabilities. Except as set forth on
Schedule 5(f), the Company knows of no obligation or liability arising out of
transactions entered into at or prior to the Closing, or any action or inaction
at or prior to the Closing, or any state of facts existing at or prior to the
Closing other than: (i) liabilities set forth on the Latest Balance Sheet
(including any notes thereto), (ii) liabilities and obligations which have
arisen after the date of the Latest Balance Sheet in the ordinary course of
business (none of which is a material liability resulting from breach of
contract, breach of warranty, tort, infringement, claim or lawsuit) and (iii)
other liabilities and obligations expressly disclosed in the other Schedules to
this Agreement.
5g. No Material Adverse Change. There has been no material
adverse change in the financial condition, operating results, assets,
operations, business prospects, employee relations or customer or supplier
relations of the Company.
5h. Absence of Certain Developments.
(i) Except as expressly contemplated by this Agreement or
as set forth on the attached Schedule 5(h), since the date of the Latest Balance
Sheet, the Company has not:
(a) issued any notes, bonds or other debt securities
or any capital stock or other equity securities or any securities
convertible, exchangeable or exercisable into any capital stock or
other equity securities;
(b) borrowed any amount or incurred or become subject
to any liabilities, except current liabilities incurred in the ordinary
course of business and liabilities under contracts entered into in the
ordinary course of business;
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(c) discharged or satisfied any Lien or paid
any obligation or liability, other than current liabilities paid in the
ordinary course of business;
(d) declared or made any payment or
distribution of cash or other property to its stockholders with respect
to its capital stock or other equity securities or purchased or
redeemed any shares of its capital stock or other equity securities
(including, without limitation, any warrants, options or other rights
to acquire its capital stock or other equity securities);
(e) mortgaged or pledged any of its
properties or assets or subjected them to any Lien, except Liens for
current property taxes not yet due and payable;
(f) sold, assigned or transferred any of its
tangible assets, except in the ordinary course of business, or canceled
any debts or claims;
(g) sold, assigned or transferred any
patents or patent applications, trademarks, service marks, trade names,
corporate names, copyrights or copyright registrations, trade secrets
or other intangible assets, or disclosed any proprietary confidential
information to any Person;
(h) suffered any extraordinary losses or
waived any rights of value, whether or not in the ordinary course of
business or consistent with past practice;
(i) made capital expenditures or commitments
therefor that aggregate in excess of $10,000;
(j) made any loans or advances to,
guarantees for the benefit of, or any Investments in, any Persons in
excess of $5,000 in the aggregate;
(k) made any charitable contributions or
pledges in excess of $5,000 in the aggregate;
(l) suffered any damage, destruction or
casualty loss exceeding in the aggregate $5,000, whether or not covered
by insurance;
(m) made any Investment in or taken steps to
incorporate any Subsidiary; or
(n) entered into any other material
transaction, whether or not in the ordinary course of business.
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(ii) No officer, director, employee or agent of the
Company has been or is authorized to make or receive, and the Company does not
know of any such person making or receiving, any bribe, kickback or other
illegal payment.
5i. Assets. Except as set forth on Schedule 5(i), the Company
has good and marketable title to, a valid leasehold interest in, or a license to
use, the properties and assets used by it, located on its premises or shown on
the Latest Balance Sheet or acquired thereafter, free and clear of all Liens,
except for properties and assets disposed of in the ordinary course of business
since the date of the Latest Balance Sheet and except for Liens disclosed on the
Latest Balance Sheet (including any notes thereto) and Permitted Liens. Except
as described on Schedule 5(i), the Company's buildings, equipment and other
tangible assets, taken as a whole, are in good operating condition in all
material respects and are fit for use in the ordinary course of business. The
Company owns, has a valid leasehold interest in, or a license to use, all
material assets necessary for the conduct of its business as presently
conducted.
5j. Tax Matters.
(i) Except as set forth on Schedule 5(j), the Company has
filed all Tax Returns which it is required to file under applicable laws and
regulations; all such Tax Returns are complete and correct in all material
respects and have been prepared in compliance with all applicable laws and
regulations in all material respects; the Company in all material respects has
paid all Taxes due and owing by it (whether or not such Taxes are required to be
shown on a Tax Return) and has withheld and paid over to the appropriate taxing
authority all Taxes which it is required to withhold from amounts paid or owing
to any employee, stockholder, creditor or other third party; the Company has not
waived any statute of limitations with respect to any Taxes or agreed to any
extension of time with respect to any Tax assessment or deficiency; the accrual
for Taxes on the Latest Balance Sheet would be adequate to pay all Tax
liabilities of the Company if its current tax year was treated as ending on the
date of the Latest Balance Sheet (excluding any amount recorded which is
attributable solely to timing differences between book and Tax income); since
the date of the Latest Balance Sheet, the Company has not incurred any material
liability for Taxes other than in the ordinary course of business; the
assessment of any additional Taxes for periods for which Tax Returns have been
filed by the Company shall not exceed the recorded liability therefor on the
Latest Balance Sheet (excluding any amount recorded which is attributable solely
to timing differences between book and Tax income); the federal income Tax
Returns of the Company have not been audited; no foreign, federal, state or
local tax audits or administrative or judicial proceedings are pending or, to
the Company's knowledge, being conducted with respect to the Company; no
information related to Tax matters has been requested by any foreign, federal,
state or local taxing authority and no written notice indicating an intent to
open an audit or other review has been received by the Company from any foreign,
federal, state or local taxing authority; and to the Company's knowledge, there
are no unresolved questions or claims concerning the Company's Tax liability.
(ii) The Company has not made an election under ss.341 (f)
of the IRC. The Company is not liable for the Taxes of another Person in a
material amount under (a) Treas. Reg. ss. 1.1502-6 (or comparable provisions of
state, local or foreign law), (b) as a
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transferee or successor, (c) by contract or indemnity or (d) otherwise. The
Company is not a party to any tax sharing agreement. The Company has disclosed
on its federal income Tax Returns any position taken for which substantial
authority (within the meaning of IRC ss.6662(d)(2)(B)(i)) did not exist at the
time the return was filed. The Company has not made any payments, is not
obligated to make payments and is not a party to an agreement that could
obligate it to make any payments that would not be deductible under IRC ss.280G.
(iii) "Tax" or "Taxes" means federal, state, county,
local, foreign or other income, gross receipts, ad valorem, franchise, profits,
sales or use, transfer, registration, excise, utility, environmental,
communications, real or personal property, capital stock, license, payroll, wage
or other withholding, employment, social security, severance, stamp, occupation,
alternative or add-on minimum, estimated and other taxes of any kind whatsoever
(including, without limitation, deficiencies, penalties, additions to tax, and
interest attributable thereto) whether disputed or not. "Tax Return" means any
return, information report or filing with respect to Taxes, including any
schedules attached thereto and including any amendment thereof. "Affiliated
Group" means any affiliated group as defined in IRC ss.1504 that has filed a
consolidated return for federal income tax purposes (or any similar group under
state, local or foreign law) for a period during which the Company was a member.
5k. Contracts and Commitments.
(i) Except for verbal contracts with the Company's
customers in the ordinary course of business or as expressly contemplated by
this Agreement or as set forth on Schedule 5(k), the Company is not a party to
or bound by any written or oral:
(a) pension, profit sharing, stock option, employee
stock purchase or other plan or arrangement providing for deferred or
other compensation to employees or any other employee benefit plan or
arrangement, or any collective bargaining agreement or any other
contract with any labor union, or severance agreements, programs,
policies or arrangements;
(b) contract for the employment of any officer,
individual employee or other Person on a full-time, part-time,
consulting or other basis providing annual compensation in excess of
$50,000 or contract relating to loans to officers, directors or
Affiliates;
(c) contract under which the Company or Subsidiary has
advanced or loaned any other Person amounts in the aggregate exceeding
$5,000;
(d) agreement or indenture relating to borrowed money
or other Indebtedness or the mortgaging, pledging or otherwise placing
a Lien on any material asset or material group of assets of the
Company;
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(f) lease or agreement under which the
Company is lessee of or holds or operates any property, real or
personal, owned by any other party;
(g) lease or agreement under which the
Company is lessor of or permits any third party to hold or operate any
property, real or personal, owned or controlled by the Company;
(h) contract or group of related contracts
with the same party or group of affiliated parties the performance of
which involves consideration in excess of $10,000;
(i) assignment, license, indemnification or
agreement with respect to any intangible property (including, without
limitation, any Intellectual Property Rights);
(j) warranty agreement with respect to its
services rendered or its products sold or leased;
(k) agreement under which it has granted any
Person any registration rights (including, without limitation, demand
and piggyback registration rights);
(l) sales, distribution or franchise
agreement;
(m) agreement with a term of more than six
(6) months which is not terminable by the Company upon less than thirty
(30) days notice without penalty;
(n) contract or agreement prohibiting it
from freely engaging in any business or competing anywhere in the
world; or
(o) any other agreement which is material to
its operations and business prospects or involves a consideration in
excess of $10,000 annually.
(ii) All of the material contracts,
agreements and instruments set forth on Schedule 5(k) (the "Material Contracts")
are valid, binding and enforceable against the Company in accordance with their
respective terms. The Company has performed in all material respect all
obligations required to be performed by it and is not in default under or in
breach of nor in receipt of any claim of default or breach under any material
contract, agreement or instrument to which the Company is subject; no event has
occurred which with the passage of time or the giving of notice or both would
result in a default, breach or event of noncompliance by the Company under any
material contract, agreement or instrument to which the Company is subject; the
Company has no present expectation or intention of not fully performing all such
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obligations; and the Company has no knowledge of any breach or anticipated
breach by the other parties to any material contract, agreement, instrument or
commitment to which it is a party.
5l. Intellectual Property Rights.
(i) Schedule 5(l) contains a complete and accurate list of
all (a) patented or registered Intellectual Property Rights owned by the
Company, (b) pending patent applications and applications for registrations of
other Intellectual Property Rights filed by the Company, (c) unregistered trade
names and corporate names owned by the Company and (d) unregistered trademarks,
service marks, copyrights, mask works and computer software owned by the Company
and which are material to the business of the Company. Schedule 5(l) also
contains a complete and accurate list of all licenses and other rights granted
by the Company to any third party with respect to any Intellectual Property
Rights and all licenses and other rights granted by any third party to the
Company with respect to any Intellectual Property Rights, in each case
identifying the subject Intellectual Property Rights.
(ii) Except as set forth on Schedule 5(l), (a) the Company
owns all right, title and interest in and to all of the material Intellectual
Property Rights listed on such schedule, free and clear of all Liens other than
the Permitted Liens, (b) there have been no claims made against the Company
asserting the invalidity, misuse or unenforceability of any of such Intellectual
Property Rights, and to the Company's knowledge there are no grounds for the
same, (c) the Company has received no notices of, and is not aware of any facts
which indicate a likelihood of, any infringement or misappropriation by, or
conflict with, any third party with respect to such Intellectual Property Rights
(including, without limitation, any demand or request that the Company license
any rights from a third party), (d) to the best of the Company's knowledge, the
conduct of the Company's business has not infringed, misappropriated or
conflicted with and does not infringe, misappropriate or conflict with any
Intellectual Property Rights of other Persons in a manner that would result in a
material liability to the Company, and (e) to the best of the Company's
knowledge, the Intellectual Property Rights owned by or licensed to the Company
have not been infringed, misappropriated or conflicted by other Persons.
5m. Litigation, etc. Except as set forth on Schedule 5(m),
there are no actions, suits, proceedings, orders, investigations or claims
pending or, to the Company's knowledge, threatened against or affecting the
Company, or pending or threatened by the Company against any third party, at law
or in equity, or before or by any governmental department, commission, board,
bureau, agency or instrumentality (including, without limitation, any actions,
suit, proceedings or investigations with respect to the transactions
contemplated by this Agreement); and, to the Company's knowledge, there is no
reasonable basis for any of the foregoing. The Company is subject to no
judgment, order or decree of any court or other governmental agency.
5n. Brokerage. Except as set forth on Schedule 5(n), there are
no claims for brokerage commissions, finders' fees or similar compensation in
connection with the
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transactions contemplated by this Agreement based on any arrangement or
agreement binding upon the Company.
5o. Governmental Consent, etc. Except as set forth on Schedule
5(o), no permit, consent, approval or authorization of, or declaration to or
filing with, any governmental authority is required in connection with the
execution, delivery and performance by the Company of this Agreement or the
other agreements contemplated hereby, or the consummation by the Company of any
other transactions contemplated hereby or thereby.
5p. Insurance. Schedule 5(p) contains a description of each
insurance policy maintained by the Company with respect to its properties,
assets and businesses, and each such policy is in full force and effect as of
the Closing. The Company is not in default with respect to its obligations under
any insurance policy maintained by it, and the Company has not been denied
insurance coverage. Except as set forth on Schedule 5(p), the Company does not
have any self-insurance or co-insurance programs, and the reserves set forth on
the Latest Balance Sheet are adequate to cover all anticipated liabilities with
respect to any such self-insurance or co-insurance programs.
5q. Employees. Except as set forth on Schedule 5(q), the
Company is not aware that any executive or key employee of the Company or any
group of employees of the Company has any plans to terminate employment with the
Company. The Company has complied in all material respects with all laws
relating to the employment of labor (including, without limitation, provisions
thereof relating to wages, hours, equal opportunity, collective bargaining and
the payment of social security and other taxes), and the Company is not aware
that it has any material labor relations problems (including, without
limitation, any union organization activities, threatened or actual strikes or
work stoppages or material grievances). Neither the Company nor, to the
Company's knowledge, any of its employees is subject to any noncompete,
nondisclosure, confidentiality, employment, consulting or similar agreements
relating to, affecting or in conflict with the present business activities of
the Company, except for agreements between the Company and its present and
former employees and independent contractors.
5r. ERISA.
(i) Multiemployer Plans. Except as set forth on Schedule
5(r), the Company does not have any obligation to contribute to (or any other
liability, including current or potential withdrawal liability, with respect to)
any "multiemployer plan" (as defined in Section 3(37) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")).
(ii) Retiree Welfare Plans. Except as set forth on
Schedule 5(r), the Company does not maintain or have any obligation to
contribute to (or any other liability with respect to) any plan or arrangement
whether or not terminated, which provides medical, health, life insurance or
other welfare-type benefits for current or future retired or
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terminated employees (except for limited continued medical benefit coverage
required to be provided under Section 4980B of the IRC or as required under
applicable state law).
(iii) Defined Benefit Plans. Except as set forth in
the Employee Benefits Schedule, the Company does not maintain, contribute to or
have any liability under (or with respect to) any employee plan which is a
tax-qualified "defined benefit plan" (as defined in Section 3(35) of ERISA),
whether or not terminated.
(iv) Defined Contribution Plans. Except as set forth
on Schedule 5(r), the Company does not maintain, contribute to or have any
liability under (or with respect to) any employee plan which is a tax-qualified
"defined contribution plan" (as defined in Section 3(34) of ERISA), whether or
not terminated.
(v) Other Plans. Except as set forth on Schedule
5(r), the Company does not maintain, contribute to or have any liability under
(or with respect to) any plan or arrangement providing benefits to current or
former employees, including any bonus plan, plan for deferred compensation,
employee health or other welfare benefit plan or other arrangement, whether or
not terminated.
(vi) The Company. For purposes of this Schedule 5(r),
the term "Company" includes all organizations under common control with the
Company pursuant to Section 414(b) or (c) of the IRC.
5s. Compliance with Laws. Except as set forth on Schedule
5(s), the Company is not in violation of any provision of its Certificate of
Incorporation or By-laws, or any judgment, order, writ, decree or law or any
governmental regulation or requirement which violation has had or would
reasonably be expected to have a material adverse effect upon the financial
condition, operating results, assets, operations or business prospects of the
Company, and the Company has received no notice of any such violation. Except as
set forth on Schedule 5(s), the Company is not subject to, and has no reason to
believe it may become subject to, any material liability (contingent or
otherwise) or corrective or remedial obligation arising under any federal,
state, local or foreign law, rule or regulation (including the common law)
relating to or regulating health, safety, pollution or the protection of the
environment ("Environmental Laws"). Without limiting the generality of the
foregoing, (i) the Company has obtained all permits, licenses and authorizations
required under, and has complied in all material respects with, all
Environmental Laws, (ii) no notice has been received by the Company regarding
any violation of, or any claim, liability or corrective or remedial obligation
under, any Environmental Laws and (iii) no facts or circumstances exist with
respect to the past or present operations or facilities of the Company which
would give rise to a material liability or corrective or remedial obligation
under any Environmental Laws.
5t. Affiliated Transactions. Except as set forth on
Schedule 5(t), no officer, director, employee, stockholder or Affiliate of the
Company or, to the knowledge of the Company, any individual related by blood,
marriage or adoption to any such individual or any entity in which any such
Person or individual owns any beneficial interest, is a party to any
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agreement, contract, commitment or transaction with the Company or has any
material interest in any material property used by the Company.
5u. Business Plan. The Business Plan Executive Summary (the
"Business Plan") previously delivered to each Investor has been prepared in good
faith by the Company and does not contain any untrue statement of a material
fact nor does it omit to state a material fact necessary to make the statements
made therein not misleading except that with respect to projections contained in
the Business Plan, the Company represents only that such projections were
prepared in good faith and that the Company reasonably believes in its business
judgment there is a reasonable basis for such projections based upon information
currently available to the Company (as such projections have been revised on the
Business Plan Schedule).
5v. Registration Rights. Except as provided in the Rights
Agreement and Schedule 5(v), the Company has not granted or agreed to grant any
registration rights, including piggyback rights, to any person or entity.
SECTION 6. Representations and Warranties of the Investors. Each
Investor as to itself severally and not jointly hereby represents and warrants
to the Company that:
6a. Authorization. Each Investor represents that it has full
power and authority to enter into this Agreement and that this Agreement
constitutes a valid and legally binding obligation of such Investor.
6b. Purchase Entirely for Own Account. This Agreement is made
with each Investor in reliance upon such Investor's representation to the
Company, which by such Investor's execution of this Agreement such Investor
hereby confirms, that the Series C Preferred Stock to be purchased by such
Investor and the Common Stock issuable upon conversion thereof (collectively,
the "Securities") will be acquired for investment for such Investor's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that such Investor has no present
intention of selling, granting any participation in, or otherwise distributing
the same. By executing this Agreement, each Investor further represents that
such Investor does not have any contract, undertaking, agreement or arrangement
with any Person to sell, transfer or grant participations to such Person or to
any third person, with respect to any of the Securities.
6c. Reliance Upon Investors' Representations. Each Investor
understands that the Series C Preferred Stock is not, and any Common Stock
acquired on 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 issuance of securities hereunder is exempt from registration
under the Securities Act pursuant to section 4(2) thereof, and that the
Company's reliance on such exemption is predicated on the Investors'
representations set forth herein. Each Investor realizes that the basis for the
exemption may not be present if, notwithstanding such representations, the
Investor has in mind merely acquiring shares of the Series C Preferred Stock for
a fixed or determinable period in the future, or for a market rise, or for sale
if the market does not rise. No Investor has any such intention.
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6d. Receipt of Information. Each Investor believes it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Series C Preferred Stock. Each Investor further
represents that it has had an opportunity to ask questions and receive answers
from the Company regarding the terms and conditions of the offering of the
Series C Preferred Stock 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 it or to which it had access. The foregoing, however, does not limit or
modify the representations and warranties of the Company in Section 6 of this
Agreement or the right of the Investors to rely thereon.
6e. Investment Experience. Each Investor represents that it is
experienced in evaluating and investing in securities of companies in the
development stage and acknowledges that it is able to fend for itself, can bear
the economic risk of its investment, and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Series C Preferred Stock. If other than an
individual, Investor also represents it has not been organized for the purpose
of acquiring the Series C Preferred Stock.
6f. Accredited Investor.
(i) The term "Accredited Investor" as used herein refers
to a person or entity who:
(a) is a director or executive officer of the
Company; or
(b) Any bank as defined in section 3(a)(2) of the Act,
or any savings and loan association or other institution as defined in
section 3(a)(5)(A) of the Act whether acting in its individual or
fiduciary capacity; any broker or dealer registered pursuant to section
15 of the Securities Exchange Act of 1934; insurance company as defined
in section 2(13) of the Act; investment company registered under the
Investment Company Act of 1940 or a business development company as
defined in section 2(a)(48) of that Act; Small Business Investment
Company licensed by the U.S. Small Business Administration under
section 301(c) or (d) of the Small Business Investment Act of 1958;
employee benefit Retirement Income Security Act of 1974, if the
investment decision is made by a plan fiduciary, as defined in section
3(21) of such Act, which is either a bank, savings and loan
association, insurance company, or registered investment adviser, or if
the employee benefit plan has total assets in excess of $5,000,000 or,
if a selfdirected plan, with investment decisions made solely by
persons that are accredited investors;
(c) Any private business development company as
defined in section 202(a)(22) of the Investment Advisers Act of 1940;
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(d) Any organization described in section
501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or
similar business trust, or partnership, not formed for the specific
purpose of acquiring the securities offered, with total assets in
excess of $5,000,000;
(e) Any natural person whose individual net
worth, or joint net worth with that person's spouse, at the time of his
purchase exceeds $1,000,000;
(f) Any natural person who had an individual
income in excess of $200,000 in each of the two most recent years or
joint income with that person's spouse in excess of $300,000 in each of
those years and has a reasonable expectation of reaching the same
income level in the current year;
(g) Any trust, with total assets in excess
of $5,000,000, not formed for the specific purpose of acquiring the
securities offered, whose purchase is directed by a person who has such
knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of the prospective
investment; or
(h) Any entity in which all of the equity
owners are accredited investors.
As used in this Section 6(f), the term "net worth" means the
excess of total assets over total liabilities. For the purpose of determining a
person's net worth, the principal residence owned by an individual should be
valued at fair market value, including the cost of improvements, net of current
encumbrances. As used in this Section 6(f), "income" means actual economic
income, which may differ from adjusted gross income for income tax purposes.
Accordingly, the undersigned should consider whether it should add any or all of
the following items to its adjusted gross income for income tax purposes in
order to reflect more accurately its actual economic income: any amounts
attributable to tax-exempt income received, losses claimed as a limited partner
in any limited partnership, deductions claimed for depletion, contributions to
an XXX or Xxxxx retirement plan, and alimony payments.
(ii) Each Investor as to itself severally and not
jointly further represents to the Company that except as otherwise disclosed to
the Company, in writing, prior to its execution hereof, such Investor is either:
(a) such Investor is an Accredited Investor
(as indicated on such Investor's counterpart signature page attached hereto); or
(b) such Investor is not an Accredited
Investor and neither such Investor nor any beneficiary of any trust or any
investment client for whose account such Investor is purchasing is a citizen or
resident of the United States or Canada, or any state, territory or possession
thereof, including but not limited to any estate of any such person, or any
corporation, partnership, trust or
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other entity created or existing under the laws thereof, or any entity
controlled or owned by any of the foregoing (a "U.S. Person").
(iii) "The capital contribution of the Investor does not
exceed 10% of the Investor's net worth or, in the case of an individual, joint
net worth with that person's spouse."
6g. Restricted Securities. Each Investor understands that the
Securities may not be sold, transferred, or otherwise disposed of without
registration under the Securities Act or an exemption therefrom, and that in the
absence of an effective registration statement covering the Securities or an
available exemption from registration under the Securities Act, the Securities
must be held indefinitely. In particular, each Investor is aware that the
Securities 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.
6h. Legends. To the extent applicable, each certificate or
other document evidencing any of the Series C Preferred Stock or any Common
Stock issued upon conversion thereof shall be endorsed with the legends set
forth below, and each Investor covenants that, except to the extent such
restrictions are waived by the Company, such 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:
(i) The following legend under the Act:
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED ABSENT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE
144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT
SUCH REGISTRATION IS NOT REQUIRED."
(ii) In the case of an Investor that is not a U.S. Person
and is not an Accredited Investor:
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF PRIOR TO ONE YEAR FROM THE DATE OF THE CLOSING AT
WHICH SUCH SHARES WERE PURCHASED, WITHIN THE UNITED STATES, CANADA,
THEIR TERRITORIES AND
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POSSESSIONS OR ANY AREA SUBJECT TO THEIR JURISDICTION OR TO ANY CITIZEN
OR RESIDENT OF THE UNITED STATES OR CANADA, OR ANY STATE, TERRITORY OR
POSSESSION THEREOF, INCLUDING ANY ESTATE OF SUCH PERSON OR ANY
CORPORATION, PARTNERSHIP, TRUST OR OTHER ENTITY CREATED OR EXISTING
UNDER THE LAWS THEREOF, AND THEREAFTER MAY NOT BE SO TRANSFERRED ABSENT
AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH
RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED
AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL,
THAT SUCH REGISTRATION IS NOT REQUIRED."
6i. Public Sale. Each Investor agrees not to make, without the
prior written consent of the Company, any public offering or sale of the Series
C Preferred Stock, or any Common Stock issued upon the conversion thereof,
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 or (ii)
the date on which it becomes a registered company pursuant to section 12(g) of
the Securities Exchange Act or (iii) five years after the Closing of the sale of
such Securities to Investor by the Company.
6j. 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
more than 50% of the Common Stock (that has not been sold to the public) issued
or issuable upon conversion of the Series C Preferred Stock. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any securities purchased under this Agreement at the time outstanding
(including securities into which such securities have been converted), each
future holder of all such securities, and the Company.
SECTION 7. DEFINITIONS.
7a. Definitions. For the purposes of this Agreement, the
following terms have the meanings set forth below:
"Affiliate" of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of
voting securities, contract or otherwise.
"Indebtedness" means at a particular time, without duplication, (i) any
indebtedness for borrowed money or issued in substitution for or exchange of
indebtedness for borrowed money, (ii) any indebtedness evidenced by any note,
bond, debenture or other debt security, (iii) any indebtedness for the deferred
purchase price of property or services with
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respect to which a Person is liable, contingently or otherwise, as obligor or
otherwise (other than trade payables and other current liabilities incurred in
the ordinary course of business), (iv) any commitment by which a Person assures
a creditor against loss (including, without limitation, contingent reimbursement
obligations with respect to letters of credit), (v) any indebtedness guaranteed
in any manner by a Person (including, without limitation, guarantees in the form
of an agreement to repurchase or reimburse), (vi) any obligations under
capitalized leases with respect to which a Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or with respect to which
obligations a Person assures a creditor against loss, (vii) any indebtedness
secured by a Lien on a Person's assets and (viii) any unsatisfied obligation for
"withdrawal liability" to a "multiemployer plan" as such terms are defined under
ERISA.
"Intellectual Property Rights" means all (i) patents, patent
applications, patent disclosures and inventions, (ii) trademarks, service marks,
trade dress, trade names, logos and corporate names and registrations and
applications for registration thereof together with all of the goodwill
associated therewith, (iii) copyrights (registered or unregistered) and
copyrightable works and registrations and applications for registration thereof,
(iv) mask works and registrations and applications for registration thereof, (v)
computer software, and documentation thereof, and (vi) copies and tangible
embodiments thereof (in whatever form or medium).
"Investment" as applied to any Person means (i) any direct or indirect
purchase or other acquisition by such Person of any notes, obligations,
instruments, stock, securities or ownership interest (including partnership
interests and joint venture interests) of any other Person and (ii) any capital
contribution by such Person to any other Person.
"IRC" means the Internal Revenue Code of 1986, as amended, and any
reference to any particular IRC section shall be interpreted to include any
revision of or successor to that section regardless of how numbered or
classified.
"IRS" means the United States Internal Revenue Service.
"Liens" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including, without limitation, any conditional sale
or other title retention agreement or lease in the nature thereof), any sale of
receivables with recourse against the Company, any filing or agreement to file a
financing statement as debtor under the Uniform Commercial Code or any similar
statute other than to reflect ownership by a third party of property leased to
the Company under a lease which is not in the nature of a conditional sale or
title retention agreement, or any subordination arrangement in favor of another
Person (other than any subordination arising in the ordinary course of
business).
"Permitted Liens" means:
(i) tax liens with respect to taxes not yet due and payable or which
are being contested in good faith by appropriate proceedings and for which
appropriate reserves have been established in accordance with generally accepted
accounting principles, consistently applied;
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(ii) deposits or pledges made in connection with, or to secure payment
of, utilities or similar services, workers' compensation, unemployment
insurance, old age pensions or other social security obligations;
(iii) purchase money security interests in any property acquired by the
Company;
(iv) interests or title of a lessor under any lease permitted by this
Agreement;
(v) mechanics', materialmen's or contractors' liens or encumbrances or
any similar lien or restriction for amounts not yet due and payable;
(vi) easements, rights-of-way, restrictions and other similar charges
and encumbrances not interfering with the ordinary conduct of the business of
the Company and its Subsidiaries or detracting from the value of the assets of
the Company;
(vii) rights of licensors under licenses granted to the Company; and
(viii) liens outstanding on the date hereof which secure Indebtedness
and which are described in the schedules to this Agreement.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"Securities and Exchange Commission" includes any governmental body or
agency succeeding to the functions thereof.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal law then in force.
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of
which (i) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the partnership or other similar ownership interest thereof is at the time
owned or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
limited liability
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company, partnership, association or other business entity if such Person or
Persons shall be allocated a majority of limited liability company, partnership,
association or other business entity gains or losses or shall be or control any
managing director or general partner of such limited liability company,
partnership, association or other business entity.
SECTION 8. MISCELLANEOUS.
8a. Consent to Amendments. The provisions of this Agreement
may be amended and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company has
obtained the written consent of the holders of a majority of the outstanding
shares of the Series C Preferred Stock.
8b. Survival of Representations and Warranties. All
representations and warranties contained herein or made in writing by any party
in connection herewith shall survive the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby.
8c. Successors and Assigns. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors, assigns, heirs, legatees and personal representatives
of the parties hereto, as the case may be.
8d. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
8e. Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
shall constitute one and the same Agreement.
8f. Descriptive Headings; Interpretation. The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a substantive part of this Agreement. The use of the word "including"
in this Agreement shall be by way of example rather than by limitation.
8g. Governing Law. The construction, validity, enforcement and
interpretation of this Agreement and the exhibits and schedules hereto shall be
governed by, and construed in accordance with, the laws of the State of
Delaware.
8h. Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by reputable overnight
courier service (charges prepaid) or mailed to the recipient by
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certified or registered mail, return receipt requested and postage prepaid. Such
notices, demands and other communications shall be sent to each Investor and to
the Company at the respective addresses indicated below:
To the Company at: Evolve Products, Inc.
000 Xxxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
With a copy to: Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
38 Technology
Irvine, California 92618-2301
Attention: Xxxxxxx X. Xxxx, Esq.
To any Investor at: At such Investor's address set forth on
Exhibit B hereto or to such other address
or to the attention of such other person
as the recipient party has specified by
prior written notice to the sending party.
8i. Entire Agreement. This Agreement and the documents
referred to herein constitute the entire agreement among the parties and no
party shall be liable or bound to any other party in any manner by any
warranties, representations or covenants except as specifically set forth herein
or therein.
8j. 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
more than 50% of the Common Stock (that has not been sold to the public) issued
or issuable upon conversion of the Series C Preferred Stock. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any securities purchased under this Agreement at the time outstanding
(including securities into which such securities have been converted), each
future holder of all such securities, and the Company.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Purchase Agreement has been executed as of the
date first written above by the parties hereto.
COMPANY:
EVOLVE PRODUCTS, INC.
By:
------------------------------------
Its:
-----------------------------------
INVESTORS:
ANTEC CORPORATION
By:
------------------------------------
Its:
-----------------------------------
B.E. XXXXX COMPANY PROFIT SHARING PLAN
By:
------------------------------------
Its:
-----------------------------------
B.E. XXXXX COMPANY
By:
------------------------------------
Its:
-----------------------------------
XXXXXX X. XXXXX TRUST DTD 9/1/91
By:
------------------------------------
Xxxxxx Xxxxx
Its: Trustee
EMERALD PRIVATE EQUITY FUND, LLC
By: Ashlay Asset Maintenance Company
Its: Manager
By:
------------------------------------
Xxxxxxx X. Xxxxx
Its: President
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XXXXXX XXXXXX XXXXXXXX TRUST
By:
---------------------------
Xxxxxx X. Xxxxxx
Its: Trustee
------------------------------
XXXXXXX X. XXXXXX
------------------------------
XXXXXXX XXXXX
------------------------------
XXXXXXX XXXXX
------------------------------
XXXXXXX X. XXXXXX III
------------------------------
XXXX X. XXXXXX
------------------------------
XXXXX XXXXXXX
------------------------------
XXXXX X'XXXXXXX
------------------------------
XXXXX X. XXXXX
------------------------------
XXXXXX XXXXXXXXX
------------------------------
XXXXXX X. XXXXXX
------------------------------
XXXXXX X. XXXXXXX
------------------------------
XXXXXX XXXXXXX
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FIDELITONE, INC.
By:
---------------------------
Name: Xxx X. Comm
Its:
--------------------------
By:
---------------------------
Name:
-------------------------
Its:
--------------------------
By:
---------------------------
Name:
-------------------------
Its:
--------------------------
By:
---------------------------
Name:
-------------------------
Its:
--------------------------
By:
---------------------------
Name:
-------------------------
Its:
--------------------------
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-------------------------------
XXXXXXXX XXXXXX
-------------------------------
XXXXXX XXXXX, JR.
-------------------------------
XXXXXXX X. XXXXXXX
By:
----------------------------
Its:
---------------------------
By:
----------------------------
Its:
---------------------------
By:
----------------------------
Its:
---------------------------
By:
----------------------------
Its:
---------------------------
By:
----------------------------
Its:
---------------------------
By:
----------------------------
Its:
---------------------------
By:
----------------------------
Its:
---------------------------
By:
----------------------------
Its:
---------------------------
By:
----------------------------
Its:
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LIST OF EXHIBITS
Schedule 1 - Investors
Exhibit A - Certificate of Incorporation
Exhibit B - Rights Agreement
Exhibit C - Stock Restriction Agreement
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