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EXHIBIT 4.1
AMENDED AND RESTATED COMMON STOCK AND WARRANT
PURCHASE AGREEMENT
October 28, 1999
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TABLE OF CONTENTS
Page
1. Purchase and Sale of the Common Shares and the Warrants.................. 2
1.1 Sale and Issuance of Common Shares and the Warrants................. 2
1.2 Closing............................................................. 2
2. Representations and Warranties of the Company............................ 2
2.1 Organization, Good Standing and Qualification....................... 2
2.2 Authorization....................................................... 3
2.3 Governmental Consents............................................... 3
2.4 Valid Issuance of Common Shares and Warrants........................ 3
2.5 Offering............................................................ 3
2.6 Litigation.......................................................... 4
2.7 SEC Filings......................................................... 4
2.8 Capitalization...................................................... 4
2.9 Intellectual Property............................................... 5
2.10 Changes............................................................ 5
2.11 Compliance with Other Instruments.................................. 5
2.12 HSR Act Compliance................................................. 6
3. Representations and Warranties of the Investors.......................... 6
3.1 Authorization....................................................... 6
3.2 Purchase Entirely for Own Account................................... 6
3.3 Disclosure of Information........................................... 7
3.4 Investment Experience............................................... 7
3.5 Accredited Investor................................................. 7
3.6 Restricted Securities............................................... 7
3.7 Further Limitations on Disposition.................................. 7
3.8 Legends............................................................. 8
3.9 HSR Act Compliance.................................................. 8
4. Conditions of Investors' Obligations at Closing.......................... 8
4.1 Representations and Warranties...................................... 8
4.2 Performance......................................................... 8
4.3 Qualifications...................................................... 8
4.4 Consents, Permits and Waivers....................................... 9
4.5 Reservation of Warrant Shares....................................... 9
4.6 Compliance Certificate.............................................. 9
4.7 Proceedings and Documents........................................... 9
4.8 Registration Rights Agreement....................................... 9
4.9 Escrow Agreement.................................................... 9
4.10 Lock-Up Agreement.................................................. 9
4.11 Board of Directors................................................. 9
4.12 Opinion of Company Counsel......................................... 9
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5. Conditions of the Company's Obligations at Closing...................... 9
5.1 Representations and Warranties..................................... 10
5.2 Payment of Original Purchase Price................................. 10
5.3 Qualifications..................................................... 10
6. Miscellaneous........................................................... 10
6.1 Survival of Warranties............................................. 10
6.2 Successors and Assigns............................................. 10
6.3 Governing Law...................................................... 10
6.4 Counterparts....................................................... 10
6.5 Titles and Subtitles............................................... 10
6.6 Notices............................................................ 11
6.7 Finder's Fee....................................................... 11
6.8 Expenses........................................................... 11
6.9 Amendments and Waivers............................................. 11
6.10 Severability...................................................... 11
6.11 Corporate Securities Law.......................................... 12
6.12 Entire Agreement.................................................. 12
SCHEDULE A Schedule of Investors
EXHIBIT A Form of Warrant
EXHIBIT B Registration Rights Agreement
EXHIBIT C Lock-Up Agreement
EXHIBIT D Escrow Agreement
EXHIBIT E Opinion of Counsel for the Company
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XXXXXXXX.XXX, INC.
AMENDED AND RESTATED COMMON STOCK AND WARRANT PURCHASE AGREEMENT
THIS COMMON STOCK AND WARRANT PURCHASE AGREEMENT is made as of the 28th day
of October, 1999, by and among Xxxxxxxx.xxx, Inc., a Delaware corporation (the
"Company"), and the investors, severally and not jointly, listed on Schedule A
hereto, each of which is herein referred to as an "Investor."
WHEREAS, the Company and Vulcan Ventures Incorporated ("Vulcan") have
entered into that certain Warrant and Common Stock Purchase Agreement dated
October 17, 1999 (the "Prior Agreement");
WHEREAS, the Prior Agreement provided for an additional investor;
WHEREAS, the Company and Vulcan now wish to terminate the Prior Agreement
and replace it in its entirety with the following;
WHEREAS, the Company desires to sell, and the Investors desire to purchase,
up to 1,437,470 shares of the Company's Common Stock (the "Common Shares") at a
price per share equal to Twenty Dollars and Eighty-Seven Cents ($20.87) (the
"Original Purchase Price");
WHEREAS, the Company desires to sell, and the Investors desire to purchase
at a per share purchase price of $0.001, warrants, in the form attached hereto
as Exhibit A (the "Warrants"), to purchase up to 431,241 shares of the Company's
Common Stock (the "Warrant Shares") and with an exercise price equal to Twenty
Six Dollars and Nine Cents ($26.09), all as set forth on Schedule A hereto;
WHEREAS, in connection with the purchase and sale of the Common Shares, the
Company and the Investors wish to enter into a Registration Rights Agreement in
the form of Exhibit B hereto (the "Registration Rights Agreement") providing the
Investors with certain registration rights;
WHEREAS, in connection with the purchase and sale of the Common Shares, the
Investors and the Company wish to enter into a Lock-Up Agreement in the form of
Exhibit C hereto (the "Lock-Up Agreement") with certain directors, executive
officers and other five percent (5%) or greater stockholders of the Company; and
WHEREAS, concurrent with the execution and delivery of this Agreement, the
Company and Vulcan are entering into an Escrow Agreement in substantially the
form of Exhibit D hereto (the "Escrow Agreement") providing for the payment and
delivery of Vulcan's Common Shares and Warrants at the Closing (as defined
below), it being understood by the Company and Vulcan that the Escrow Agreement
is subject to change based upon comments received by the escrow agent
thereunder.
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NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of the Common Shares and the Warrants.
1.1 Sale and Issuance of the Common Shares and the Warrants.
(a) On or prior to the Closing (as defined below), the Company shall
have authorized (i) the sale and issuance to the Investors of the Common Shares,
(ii) the sale and issuance to the Investors of the Warrants and (iii) the
issuance of the Warrant Shares to be issued upon exercise of the Warrants.
(b) Subject to the terms and conditions of this Agreement, each
Investor agrees, severally and not jointly, to purchase at the Closing, and the
Company agrees to sell and issue to each Investor at the Closing, that number of
Common Shares set forth opposite such Investor's name on Schedule A hereto for
the Original Purchase Price set forth opposite such Investor's name on Schedule
A hereto.
(c) Subject to the terms and conditions of this Agreement, each
Investor agrees, severally and not jointly, to purchase at the Closing, and the
Company agrees to sell and issue to each Investor at the Closing, a Warrant to
purchase that number of shares of the Company's Common Stock as is set forth
opposite such Investor's name on Schedule A hereto, for the purchase price set
forth opposite such Investor's name on Schedule A hereto. The Company and each
Investor agrees, severally and not jointly, that as of the date hereof the
purchase price of the Warrants is equal to the fair market value of such
warrants.
1.2 Closing. The purchase and sale of the Common Shares and the Warrants
shall take place at the offices of Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx
& Xxxxxxxxx, LLP, 000 Xxxxxxxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx, at 10:00 A.M.
on the fifth business day after the termination of the applicable waiting period
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976, as amended (the
"HSR Act"), or at such other time and place as the Company and Investors
acquiring in the aggregate more than half of the Common Shares and the Common
Stock issuable or issued upon exercise of the Warrants mutually agree upon
orally or in writing (which time and place are designated as the "Closing"). At
the Closing the Company shall deliver to each Investor (a) a certificate
representing the Common Shares that such Investor is purchasing and (b) a
Warrant to purchase that number of shares of the Company's Common Stock as set
forth in Section 1.1(c) above, against payment of the Original Purchase Price
therefor by wire transfer from the Investors, and with respect to Vulcan
pursuant to the terms of the Escrow Agreement.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Investor that:
2.1 Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted and as proposed to be conducted. The
Company is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure to so qualify would have a material adverse
effect on its business or properties.
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2.2 Authorization. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for the authorization, execution
and delivery of this Agreement, the Registration Rights Agreement, the Lock-Up
Agreement and the Escrow Agreement, the performance of all obligations of the
Company hereunder and thereunder, and the authorization, issuance (or
reservation for issuance), sale and delivery of the Common Shares and the
Warrants being sold hereunder and the Warrant Shares issuable upon conversion of
the Warrants has been taken or will be taken prior to the Closing, and this
Agreement, the Registration Rights Agreement, the Lock-Up Agreement and the
Escrow Agreement constitute valid and legally binding obligations of the
Company, enforceable in accordance with their respective terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors' rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies, and (iii) to the
extent the indemnification provisions contained in the Registration Rights
Agreement may be limited by applicable federal or state securities laws. The
sale of the Common Shares, the Warrants and the Warrant Shares are not and will
not be subject to any preemptive rights or rights of first refusal that have not
been properly waived or complied with.
2.3 Governmental Consents. Except as may be required under the HSR Act, no
consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or local
governmental authority on the part of the Company is required in connection with
the consummation of the transactions contemplated by this Agreement, other than
(i) compliance with the Securities Act of 1933, as amended (the "Act") and (ii)
such filings as may be required to be made with the National Association of
Securities Dealers, Inc.
2.4 Valid Issuance of Common Shares and Warrants. The Common Shares and the
Warrants 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 restrictions on transfer other than
restrictions on transfer under this Agreement and the Registration Rights
Agreement and under applicable state and federal securities laws. The Warrant
Shares issuable upon conversion of the Warrants purchased under this Agreement
have been duly and validly reserved for issuance and, upon issuance in
accordance with the terms of the Company's Amended and Restated 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 and the Registration Rights Agreement and under applicable
state and federal securities laws.
2.5 Offering. Subject in part to the truth and accuracy of each Investor's
representations set forth in Section 3 of this Agreement, the offer, sale and
issuance of the Common Shares, the Warrants and the Warrant Shares 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.
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2.6 Litigation. Except as disclosed in the SEC Filings (as defined below),
(i) there is no action, suit, proceeding or investigation pending or, to the
Company's knowledge, currently threatened against the Company that questions the
validity of this Agreement, the Registration Rights Agreement, the Lock-Up
Agreement or the Escrow Agreement, or the right of the Company to enter into
such agreements, or to consummate the transactions contemplated hereby or
thereby, and (ii) there is no action, suit, proceeding or investigation pending
or, to the knowledge of the Company, currently threatened in writing against the
Company, or against any executive officer or director of the Company which might
result, either individually or in the aggregate, in any material adverse change
in the business, properties, financial condition or operating results of the
Company, as such business is presently conducted, or any change in the current
equity ownership of the Company. The Company is not a party or subject to the
provisions of any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality. There is no action, suit proceeding or
investigation by the Company currently pending or which the Company intends to
initiate.
2.7 SEC Filings. The Company has timely filed all filings with the United
States Securities and Exchange Commission (the "SEC") under the Act or under
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or under the rules and regulations promulgated by the SEC (any
such filing, an "SEC Filing") required to be filed by the Company pursuant to
such acts and no SEC Filing contained, on the date on which such document was
filed with the SEC, any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary in order to make
the statements, in the light of the circumstances under which they were made,
not misleading. The financial statements of the Company included in SEC Filings
(including any similar documents filed after the date of this Agreement) comply
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles (except, in
the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied
on a consistent basis during the periods involved (except as may be indicated in
the notes thereto), and fairly present the consolidated financial position of
Company as of the dates thereof and the consolidated results of its operations
and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).
2.8 Capitalization. As of September 30, 1999, the authorized capital stock
of the Company consisted of 5,000,000 shares of Preferred Stock, none of which
were issued and outstanding, and 50,000,000 shares of Common Stock, 11,379,735
shares of which were issued and outstanding (the "Preferred Stock" and the
"Common Stock" are collectively referred to herein as the "Capital Stock"). An
additional 300,000 shares of Common Stock are reserved for future issuance to
employees pursuant to the Company's Employee Stock Purchase Plan and an
additional 3,889,910 shares of Common Stock are reserved for future issuance to
employees pursuant to the Company's 1998 Omnibus Equity Incentive Plan,
1,627,941 shares of which are currently subject to outstanding options. All of
the issued and outstanding shares of Capital Stock have been duly authorized,
validly issued and are fully paid and nonassessable. There has been no material
change in the capitalization of the Company from September 30, 1999 to the date
of this Agreement. Other than as set forth in the Company's SEC Filings,
warrants to purchase 50,000 shares of the Company's Common Stock, and except as
may be granted under this Agreement, there are no outstanding options, warrants,
rights (including conversion or
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preemptive and rights of first refusal), proxy or shareholder agreements, or
agreements of any kind for the purchase or acquisition from the Company of any
of its securities.
2.9 Intellectual Property. Except as disclosed in the SEC Filings, the
Company has sufficient title and ownership of all patents, trademarks, service
marks, trade names, copyrights, trade secrets, information, proprietary rights
and processes necessary for its business as now conducted without any conflict
with or infringement of the rights of others. Other than as disclosed in the SEC
Filings, there are no outstanding options, licenses, or agreements of any kind
relating to the foregoing, nor is the Company bound by or a party to any
options, licenses or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information, proprietary rights and processes of any other person or entity. The
Company has not received any communications alleging that the Company 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 Company 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 Company or that would conflict with the
Company's business as presently proposed to be conducted. Neither the execution
nor delivery of this Agreement or the other agreements contemplated hereby,
will, to the Company's knowledge, conflict with or result in a breach of the
terms, conditions or provisions of, or constitute a default under, any contract,
covenant or instrument under which any employee is now obligated. The Company
does not believe it is or will be necessary to utilize any inventions, trade
secrets or proprietary information of any of its employees made prior to their
employment by the Company, except for inventions, trade secrets or proprietary
information that have been assigned to the Company.
2.10 Changes. Since the date of the Company's last quarterly report filed
on Form 10-QSB with the SEC, there has not been, to the Company's knowledge, any
material change in the assets, liabilities, financial condition or operations of
the Company from that reflected in the financial statements included in such SEC
Filing, 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 Company, or 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 Company.
2.11 Compliance with Other Instruments. The Company is not in violation or
default of any term of its Amended and Restated Certificate of Incorporation or
Bylaws, or of any provision of any mortgage, indenture, agreement, instrument or
contract to which it is a party or by which it is bound or of any judgment,
decree, order or writ. The execution, delivery and performance of and compliance
with this Agreement and the other agreements contemplated hereby, and the
issuance and sale of the Common Shares, the Warrants and the Warrant Shares,
will not, with or without the passage of time or giving of notice, result in any
such material violation, or be in conflict with or constitute a default under
any such term, or result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of the Company or the
suspension, revocation, impairment, forfeiture or nonrenewal of
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any permit, license, authorization or approval applicable to the Company, its
business or operations or any of its assets or properties.
2.12 HSR Act Compliance. As applicable, the Company will (i) cause to be
prepared and filed as promptly as practicable after the date hereof a
Notification and Report Form relating to the transactions contemplated herein
with the United States Federal Trade Commission (the "FTC") and the Antitrust
Division of the United States Department of Justice ("DOJ") under the HSR Act,
in connection with its sale and issuance of the Common Shares and the Warrants
hereunder, (ii) not to withdraw the aforementioned Form prior to completion or
early termination of the applicable HSR Act waiting period, and (iii) to respond
to all requests for further information from the FTC or DOJ as promptly and as
completely as is practicable, and otherwise to use commercially reasonable
efforts to ensure that its sale and issuance of the Common Shares and the
Warrants shall be effected as promptly as practicable after the date hereof and
in compliance with the HSR Act.
3. Representations and Warranties of the Investors. Each Investor hereby
represents and warrants that:
3.1 Authorization. Such Investor has full power and authority to enter into
this Agreement, the Registration Rights Agreement, and the Lock-Up Agreement and
Vulcan further represents that it has full power and authority to enter into the
Escrow Agreement, and each such agreement constitutes its valid and legally
binding obligation, enforceable in accordance with its terms except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors' rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies, and (iii) to the
extent the indemnification provisions contained in the Registration Rights
Agreement may be limited by applicable federal or state securities laws.
3.2 Purchase Entirely for Own Account. This Agreement is made with such
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 Common Shares and the Warrant to be received by such Investor and the
Warrant Shares issuable upon exercise of the Warrant to be received by such
Investor (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, such 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.
3.3 Disclosure of Information. Such Investor believes it has received all
the information it considers necessary or appropriate for deciding whether to
purchase the Common Shares and the Warrant. Such 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 Common Shares
and the Warrant and the business, properties, prospects and financial condition
of the Company.
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3.4 Investment Experience. Such Investor is an investor 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 Common Shares and the Warrant. If
other than an individual, Investor also represents it has not been organized for
the purpose of acquiring the Common Shares and the Warrant.
3.5 Accredited Investor. Such Investor is an "accredited investor" within
the meaning of Securities and Exchange Commission ("SEC") Rule 501 of Regulation
D, as presently in effect.
3.6 Restricted Securities. Such Investor understands that the Securities
are characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Act only in certain
limited circumstances. In this connection, such Investor represents that it is
familiar with SEC Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and by the Act.
3.7 Further Limitations on Disposition. Without in any way limiting the
representations set forth above, such Investor further agrees not to make any
disposition of all or any portion of the Securities unless:
(a) There is then in effect a Registration Statement under the Act,
covering such proposed disposition and such disposition is made in accordance
with such Registration Statement;
(b) Such Securities are sold in compliance with SEC Rule 144 under
the Act; or
(c) Notwithstanding the provisions of Paragraphs (a) and (b) above,
no such registration statement or opinion of counsel shall be necessary for a
transfer by an Investor that is a partnership to a partner of such partnership
(including limited liability companies and partnerships and their members and
partners) or a retired partner of such partnership who retires after the date
hereof, or to the estate of any such partner or retired partner or the transfer
by gift, will or intestate succession of any partner to his or her spouse or to
the siblings, lineal descendants or ancestors of such partner or his or her
spouse.
3.8 Legends. It is understood that the certificates evidencing the
Securities may bear one or all of the following legends:
(a) "These securities have not been registered under the Securities
Act of 1933, as amended. They may not be sold, offered for sale, pledged or
hypothecated in the absence of a registration statement in effect with respect
to the securities under such Act or an opinion of counsel satisfactory to the
Company that such registration is not required or unless sold pursuant to Rule
144 of such Act."
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(b) Any legend required by the laws of the State of California,
including any legend required by the California Department of Corporations and
Sections 417 and 418 of the California Corporations Code.
(c) Any legend required by applicable blue sky law.
3.9 HSR Act Compliance. If required by law, such Investor will (i) cause to
be prepared and filed as promptly as practicable after the date hereof a
Notification and Report Form relating to the transactions contemplated herein
with the FTC and the DOJ under the HSR Act, in connection with its purchase of
the Common Shares and the Warrants hereunder, (ii) not to withdraw the
aforementioned Form prior to completion or early termination of the applicable
HSR Act waiting period, and (iii) to respond to all requests for further
information from the FTC or DOJ as promptly and as completely as is practicable,
and otherwise to use commercially reasonable efforts to ensure that its purchase
of the Common Shares and the Warrants shall be effected as promptly as
practicable after the date hereof and in compliance with the HSR Act.
4. Conditions of Investors' Obligations at Closing. The obligations of each
Investor under Section 1 of this Agreement are subject to the fulfillment on or
before the Closing of each of the following conditions, the waiver of which
shall not be effective against any Investor who does not consent thereto:
4.1 Representations and Warranties. The representations and warranties of
the Company contained in Section 2 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 such Closing.
4.2 Performance. The Company shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
4.3 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 in connection with the lawful issuance and sale of the
Securities pursuant to this Agreement shall be duly obtained and effective as of
the Closing, including the expiration or termination of the applicable waiting
period under the HSR Act.
4.4 Consents, Permits and Waivers. The Company shall have obtained any and
all consents, permits and waivers necessary or appropriate for the consummation
of the transactions contemplated by the Agreement and the other agreements
contemplated hereby.
4.5 Reservation of Warrant Shares. The Warrant Shares issuable upon
exercise of the Warrants shall have been duly authorized and reserved for
issuance upon such exercise.
4.6 Compliance Certificate. The President and Chief Executive Officer of
the Company shall deliver to the Investors at the Closing a certificate
certifying that the conditions specified in Sections 4.1, 4.3. 4.4 and 4.5 have
been fulfilled.
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4.7 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
incident thereto shall be reasonably satisfactory in form and substance to
Investors' special counsel, and they shall have received all such counterpart
original and certified or other copies of such documents as they may reasonably
request.
4.8 Registration Rights Agreement. The Company and each Investor shall have
entered into the Registration Rights Agreement.
4.9 Escrow Agreement. The Company and Vulcan shall have entered into the
Escrow Agreement. As soon as practicable after the date hereof the Company shall
have deposited that number of Common Shares and Warrants being purchased by
Vulcan as set forth on Schedule A hereto into escrow pursuant to the terms of
the Escrow Agreement, at which time the Vulcan shall deposit the Original
Purchase Price into escrow pursuant to the terms thereof.
4.10 Lock-Up Agreement. The Company, each Investor, and the other persons
named in the form of Lock-Up Agreement shall have entered into the Lock-Up
Agreement.
4.11 Board of Directors. As of the Closing, the authorized number of
directors shall be eight (8) members, and the Board of Directors shall be
comprised of Xxxxx X. Xxxxxxxx, Xxxxx Xxxxxx, Xxxxx X. Xxxxxxx, Xxxx Xxxxxx, Xxx
Xxxxxxx, Xxxxx XxxXxxxxx, Xxx Xxxxxxxxx and Xxxxx Xxxxxxx.
4.12 Opinion of Company Counsel. Investor shall have received from
Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx & Xxxxxxxxx, LLP, counsel for the
Company, an opinion, dated as of the Closing, in substantially the form attached
hereto as Exhibit E.
5. Conditions of the Company's Obligations at Closing. The obligations of
the Company to each Investor under this Agreement are subject to the fulfillment
on or before the Closing of each of the following conditions by that Investor:
5.1 Representations and Warranties. The representations and warranties of
the Investors 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 Closing.
5.2 Payment of Original Purchase Price. The Investor shall have delivered
the Original Purchase Price specified in Section 1.1, and with respect to
Vulcan, payment shall be made pursuant to the terms of the Escrow Agreement.
5.3 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 in connection with the lawful issuance and sale of the
Securities pursuant to this Agreement shall be duly obtained and effective as of
the Closing, including the expiration or termination of the applicable waiting
period under the HSR Act.
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6. Miscellaneous.
6.1 Survival of Warranties. The warranties, representations and covenants
of the Company and Investors contained in or made pursuant to this Agreement
shall survive the execution and delivery of this Agreement and the Closing for a
period of two years and shall in no way be affected by any investigation of the
subject matter thereof made by or on behalf of the Investors or the Company.
6.2 Successors and Assigns. Except as otherwise provided herein, the terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties (including transferees
of any Securities). 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.
6.3 Governing Law. This Agreement shall be governed by and construed under
the laws of the State of California as applied to agreements among California
residents entered into and to be performed entirely within California.
6.4 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.
6.5 Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
6.6 Notices. Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in writing and shall be deemed effectively
given upon personal delivery to the party to be notified, deposit with a
nationally recognized overnight courier, confirmed facsimile or upon deposit
with the United States Post Office, by registered or certified mail, postage
prepaid and addressed to the party to be notified at the address or addresses
indicated for such party on the signature page hereof, or at such other address
as such party may designate by ten (10) days' advance written notice to the
other parties.
6.7 Finder's Fee. Each party represents that it neither is nor will be
obligated for any finders' fee or commission in connection with this
transaction. Each Investor agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Investor or any of its officers, partners,
employees, or representatives is responsible.
The Company agrees to indemnify and hold harmless each Investor from any
liability for any commission or compensation in the nature of a finders' fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees or
representatives is responsible.
10
14
6.8 Expenses. Each party shall pay all costs and expenses that it incurs
with respect to the negotiation, execution, delivery and performance of this
Agreement; provided, however that if the transactions contemplated by this
Agreement are completed, then the Company shall reimburse the Investors for the
reasonable fees and expenses of a single counsel for the Investors in an amount
not to exceed $15,000. In addition, the Company shall reimburse the Investors
for all fees incurred in connection with the filings under the HSR Act pursuant
to Section 3.9 hereof. If any action at law or in equity is necessary to enforce
or interpret the terms of this Agreement, the Warrants, the Registration Rights
Agreement, the Lock-Up Agreement or the Escrow Agreement, the prevailing party
shall be entitled to reasonable attorney's fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.
6.9 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 (a) the Company and (b) the holders of seventy percent
(70%) of the Common Shares. 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 are convertible), each future holder of all such securities, and
the Company.
6.10 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.
6.11 Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE THE
SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR
THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO
EXEMPT.
6.12 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.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
XXXXXXXX.XXX, INC.
By:
------------------------------------
Xxxxx XxxXxxxxx,
President and Chief Executive Officer
Address: 0000 Xxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
VULCAN VENTURES INCORPORATED
By:
-------------------------------------
Xxxxxxx Xxxxx
President
Address: 000 000xx Xxxxxx, X.X. Xxxxx 000
Xxxxxxxx, XX 00000
HIGHLAND CAPITAL PARTNERS IV
LIMITED PARTNERSHIP
By: Highland Management Partners IV LLC
-------------------------------------
By:
-------------------------------------
Managing Member
Address: Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
16
HIGHLAND ENTREPRENEURS' FUND IV
LIMITED PARTNERSHIP
By: Highland Entrepreneurs' Fund IV LLC
By:
-------------------------------------
Managing Member
Address: Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
17
SCHEDULE A
SCHEDULE OF INVESTORS
AGGREGATE
ORIGINAL PURCHASE
PRICE OF NUMBER OF COMMON PURCHASE PRICE NUMBER OF
NAME AND ADDRESS COMMON SHARES SHARES OF WARRANT WARRANT SHARES
---------------- ----------------- ---------------- -------------- --------------
Vulcan Ventures Incorporated $19,999,992.31 958,313 $ 287.49 287,494
000 000xx Xxxxxx, X.X. Xxxxx 000
Xxxxxxxx, XX 00000
Highland Capital Partners IV $ 9,600,012.17 459,991 $ 136.56 136,560
Limited Partnership
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Highland Entrepreneurs' Fund IV $ 399,994.42 19,166 $ 7.19 7,187
Limited Partnership
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
-------------- --------- -------- -------
TOTAL $29,999,998.90 1,437,470 $ 431.24 431,241
============== ========= ======= =======
18
EXHIBIT A
Form of Warrant
19
EXHIBIT B
Registration Rights Agreement
20
EXHIBIT C
Lock-Up Agreement
21
EXHIBIT D
Escrow Agreement
22
EXHIBIT E
Opinion of Counsel for the Company
