1
EXHIBIT 10.28
[CHAPARRAL TECHNOLOGIES, INC. LOGO]
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
This Series A Preferred Stock Purchase Agreement (this "Agreement") is
made and entered into as of (Date) by and among Chaparral Technologies, Inc., a
Delaware corporation (the "Company"), and (Purchaser) ("Purchaser").
WITNESSETH:
WHEREAS, the Company desires to sell to Purchaser, and Purchaser
desires to purchase from the Company, shares of the Company's Series A Preferred
Stock on the terms and conditions set forth in this Agreement; and
WHEREAS, the Company is in the process of preparing the following
documents to be executed by the Company, Purchaser and Adaptec, as applicable:
Series B Preferred Stock Purchase Agreement, Investors' Rights Agreement, and
WHEREAS, the Company has filed an Amended and Restated Certificate of
Incorporation to reflect, inter alia, the relative rights of the stockholders;
NOW, THEREFORE, the parties hereby agree as follows:
1. AGREEMENT TO PURCHASE AND SELL STOCK.
1.1 Authorization. As of the Closing (as defined below) the Company
will have authorized the issuance, pursuant to the terms and conditions of this
Agreement, of (TotalAuthorizedPrefA) shares of the Company's Series A
Preferred Stock, par value $0.001 per share (the "Series A Stock") having the
rights, preferences, privileges and restrictions set forth in the Amended and
Restated Certificate of Incorporation of the Company, a copy of which is
attached as Exhibit A (the "Restated Certificate").
1.2 Agreement to Purchase and Sell. Subject to the terms and
conditions hereof, the Company agrees to sell to Purchaser at the Closing, and
Purchaser agrees to purchase from the Company at the Closing, an aggregate of
(PurchaserNoOfShares) shares of Series A Stock at a price of
$(PurchaserTotalPrice), or $(PricePerShare) per share. The shares of Series A
Stock purchased and sold pursuant to this Agreement will be collectively
hereinafter referred to as the "Purchased Shares" and the shares of Common Stock
issuable upon conversion of the Purchased Shares will be collectively
hereinafter referred to as the "Conversion Shares".
2. CLOSING. The purchase and sale of the Purchased Shares will take
place at the offices of Chaparral Technologies, Inc., 0000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxxx, XX 00000 on (Date), respectively, or at such other time and place as
the Company and Purchaser mutually agree upon (which time and place are referred
to in this Agreement as the "Closing"). At the Closing, the Company will deliver
to Purchaser a certificate or certificates representing the number of Purchased
Shares that Purchaser has agreed to purchase hereunder against delivery to the
Company by Purchaser of the full purchase price of such Purchased Shares, paid
by (a) a check payable to the Company's order, (b) wire transfer of funds to the
Company, (c) a full recourse promissory note, (d) cancellation of indebtedness
of the Company to Purchaser, or (e) any combination of the foregoing.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Purchaser that, except as set forth in the Schedule
of Exceptions ("Schedule of Exceptions") which will be provided to Purchaser
upon its completion and will at that time be attached to this Agreement as
Exhibit B (which Schedule of Exceptions shall be deemed to be representations
and warranties to Purchaser by the Company under this Section 3), the statements
in the following paragraphs of this Section 3 are all true and correct:
3.1 Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
own its properties and assets and to carry on its business as now conducted and
as presently proposed to be conducted. The Company will become qualified to do
business as a foreign corporation in each jurisdiction where failure to be so
qualified would have a material adverse effect on its financial condition,
business, prospects or operations.
Preferred A.doc (Rev. 3/31/99) CONFIDENTIAL Page 1 of 11
2
3.2 Capitalization. Immediately prior to the Closing the
capitalization of the Company will consist of the following:
(a) Preferred Stock. A total of (TotalAuthorizedPref) authorized
shares of preferred stock, $0.001 par value per share (the "Preferred Stock"),
consisting of (TotalAuthorizedPrefA) shares designated as Series A Preferred
Stock ("Series A Stock"), (TotalPreferredIssuedAndOutstanding) of which will be
issued and outstanding upon closing, and (TotalAuthorizedPrefB) shares
designated as Series B Preferred Stock ("Series B Stock"), which will be issued
and outstanding to Adaptec. The rights, preferences and privileges of the Series
A Stock and Series B Stock will be as stated in the Restated Certificate and as
provided by law.
(b) Common Stock. A total of (TotalAuthorizedCommon) authorized
shares of common stock, $0.001 par value per share (the "Common Stock"), of
which(TotalCommonIssuedandOutstanding)shares are issued and outstanding.
(c) Options, Warrants, Reserved Shares. Except for: (i) the
Series B Preferred Stock Purchase Agreement which will be entered into between
the Company and Adaptec, Inc., a California corporation ("Adaptec"), (the
"Series B Agreement"); (ii) the conversion privileges of the Series A Stock and
Series B Stock, (iii) the rights of first refusal provided in Section 2.8 of the
Stockholder Rights Agreement (as defined in Section 5.2(d) below); and (iv) the
(TotalCommonReservedForIssue) shares of Common Stock reserved for issuance under
the Company's 1998 Stock Option Plan under which there are planned options;
there are not outstanding any options, warrants, rights (including conversion or
preemptive rights) or agreements for the purchase or acquisition from the
Company of any shares of its capital stock or any securities convertible into or
ultimately exchangeable or exercisable for any shares of the Company's capital
stock. Apart from the exceptions noted in this Section 3.2(c), and except for
the Company's right of first refusal and repurchase rights under the Investors'
Rights Agreement and rights of first refusal held by the Company to purchase
shares of its stock issued under the Company's form of Employee Stock Purchase
Agreement and 1998 Stock Option Plan, no shares of the Company's outstanding
capital stock, or stock issuable upon exercise or exchange of any outstanding
options, warrants or rights, or other stock issuable by the Company, are subject
to any rights of first refusal or other rights to purchase such stock (whether
in favor of the Company or any other person), pursuant to any agreement or
commitment of the Company.
(d) Outstanding Security Holders. Attached to this Agreement as
Exhibit C is a complete list of all outstanding stockholders, option holders,
warrant holders, convertible note holders and other security holders of the
Company as of immediately prior to the Closing.
3.3 Subsidiaries. The Company does not presently own or control,
directly or indirectly, any interest in any other corporation, partnership,
trust, joint venture, association, or other entity.
3.4 Due Authorization. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution, delivery of, and the performance of all obligations of
the Company under this Agreement, and the authorization, issuance, reservation
for issuance and delivery of all of the Purchased Shares being sold under this
Agreement and of the Conversion Shares has been taken or will be taken within a
reasonable time following the Closing, and this Agreement constitutes valid and
legally binding obligations of the Company, enforceable in accordance with its
respective terms, except as may be limited by (a) applicable bankruptcy,
insolvency, reorganization or others laws of general application relating to or
affecting the enforcement of creditors' rights generally and (b) the effect of
rules of law governing the availability of equitable remedies.
3.5 Valid Issuance of Stock.
(a) The Purchased Shares, when issued, sold and delivered in
accordance with the terms of this Agreement for the consideration provided for
herein, will be duly and validly issued, fully paid and non-assessable. The
Conversion Shares have been duly and validly reserved for issuance and, upon
issuance in accordance with the terms of the Restated Certificate, will be duly
and validly issued, fully paid and non-assessable.
(b) Based in part on the representations made by Purchaser in
Section 4 hereof, the Purchased Shares and (assuming no change in applicable law
and no unlawful distribution of Purchased Shares by Purchaser or other parties)
the Conversion Shares will be issued in full compliance with the registration
and prospectus delivery requirements of the U.S. Securities Act of 1933, as
amended (the "1933 Act") or in compliance with applicable exemptions therefrom,
and the registration and qualification requirements of the California Corporate
Securities Law of 1968, as amended, and the rules thereunder (the "Law");
provided that with respect to the Conversion Shares, no commission or other
remuneration is paid or given, directly or indirectly, for soliciting the
issuance of Conversion Shares upon the conversion of the Purchased Shares and no
additional
Preferred A.doc (Rev. 3/31/99) CONFIDENTIAL Page 2 of 11
3
consideration is paid for the Conversion Shares other than surrender of the
applicable Purchased Shares upon conversion thereof in accordance with the
Restated Certificate.
(c) The outstanding shares of the capital stock of the Company
are duly and validly issued, fully paid and non-assessable, and such shares of
such capital stock, and all outstanding options, warrants, convertible notes and
other securities of the Company, have been issued in full compliance with the
registration and prospectus delivery requirements of the 1933 Act or in
compliance with applicable exemptions therefrom, the registration and
qualification requirements of all applicable securities laws of states of the
United States and all other provisions of applicable securities laws of states
of the United States, including, without limitation, anti-fraud provisions.
3.6 Governmental Consents. 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, except for the filing of a Notice of Transaction
pursuant to Section 25102(f) of the Law, which filing will be effected within
the time prescribed by law.
3.7 Litigation. There is no action, suit, proceeding, claim,
arbitration or investigation ("Action") pending or, to the best of the Company's
knowledge, currently threatened against the Company, its activities, properties
or assets or, to the best of the Company's knowledge, against any officer,
director or employee of the Company in connection with such officer's,
director's or employee's relationship with, or actions taken on behalf of, the
Company. To the best of the Company's knowledge, there is no factual or legal
basis for any such Action that might result, individually or in the aggregate,
in any material adverse change in the business, properties, assets, financial
condition, affairs or prospects of the Company. By way of example but not by way
of limitation, there are no Actions pending or, to the best of the Company's
knowledge, threatened (or any basis therefor known to the Company) relating to
the prior employment of any of the Company's employees or consultants, their use
in connection with the Company's business of any information, technology or
techniques allegedly proprietary to any of their former employers, clients or
other parties, or their obligations under any agreements with prior employers,
clients or other parties. The Company is not a party to or subject to the
provisions of any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality and there is no Action by the Company
currently pending or which the Company intends to initiate.
3.8 Employee Inventions and Proprietary Rights Assignment Agreement.
Each employee, officer, consultant and contractor of the Company has entered
into and executed an Employee Inventions and Proprietary Rights Assignment
Agreement in the form attached to this Agreement as Exhibit D or an employment
or consulting agreement containing substantially similar terms.
3.9 Status of Proprietary Assets.
(a) Ownership. The Company has full title and ownership of, or
has license to, all patents, patent applications, trademarks, service marks,
trade names, copyrights, moral rights, mask works, trade secrets, confidential
and proprietary information, compositions of matter, formulas, designs,
proprietary rights, know-how and processes (all of the foregoing collectively
hereinafter referred to as the "Proprietary Assets") necessary to enable it to
carry on its business as now conducted and as presently proposed to be
conducted, without any conflict with or infringement of the rights of others. To
the best of the Company's knowledge, no third party has any ownership right,
title, interest, claim in or lien on any of the Company's Proprietary Assets and
the Company has taken, and in the future the Company will use its best efforts
to take, all steps reasonably necessary to preserve its legal rights in, and the
secrecy of, all its Proprietary Assets, except those for which disclosure is
required for legitimate business or legal reasons.
(b) Licenses; Other Agreements. The Company has not granted,
and, to the best of the Company's knowledge, there are not outstanding, any
options, licenses or agreements of any kind relating to any Proprietary Asset of
the Company, nor is the Company bound by or a party to any option, license or
agreement of any kind with respect to any of its Proprietary Assets. The Company
is not obligated to pay any royalties or other payments to third parties with
respect to the marketing, sale, distribution, manufacture, license or use of any
Proprietary Asset or any other property or rights.
(c) No Infringement. To the best of the Company's knowledge, the
Company has not violated or infringed, and is not currently violating or
infringing, and the Company has not received any communications alleging that
the Company (or any of its employees or consultants) has violated or infringed
or, by conducting its business as proposed, would violate or infringe, any
Proprietary Asset of any other person or entity.
Preferred A.doc (Rev. 3/31/99) CONFIDENTIAL Page 3 of 11
4
(d) No Breach by Employee. The Company is not aware that any
employee or consultant of the Company is obligated under any agreement
(including licenses, covenants or commitments of any nature) or subject to any
judgment, decree or order of any court or administrative agency, or any other
restriction that would interfere with the use of his or her best efforts to
carry out his or her duties for the Company or to promote the interests of the
Company or that would conflict with the Company's business as proposed to be
conducted. The carrying on of the Company's business by the employees and
contractors of the Company and the conduct of the Company's business as
presently proposed, will not, to the best of 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
of such employees or contractors or the Company is now obligated. The Company
does not believe it is or will be necessary to utilize any inventions of any
employees of the Company (or persons the Company currently intends to hire) made
prior to their employment by the Company. At no time during the conception of or
reduction of any of the Company's Proprietary Assets to practice was any
developer, inventor or other contributor to such patents operating under any
grants from any governmental entity or agency or private source, performing
research sponsored by any governmental entity or agency or private source or
subject to any employment agreement or invention assignment or nondisclosure
agreement or other obligation with any third party that could adversely affect
the Company's rights in such Proprietary Assets.
3.10 Compliance with Law and Charter Documents. The Company is not
in violation or default of any provisions of its Certificate of Incorporation or
Bylaws, both as amended, and to the best of the Company's knowledge, except for
any violations that individually and in the aggregate would have no material
adverse impact on the Company's business, the Company is in compliance with all
applicable statutes, laws, regulations and executive orders of the United States
of America and all states, foreign countries or other governmental bodies and
agencies having jurisdiction over the Company's business or properties. The
Company has not received any notice of any violation of such statutes, laws,
regulations or orders which has not been remedied prior to the date hereof. The
execution, delivery and performance of this Agreement, and the execution,
delivery, and performance of the Stockholder Rights Agreement and the Co-Sale
Agreement, when entered into, and the consummation of the transactions
contemplated hereby or thereby will not result in any such violation or default,
or be in conflict with or constitute, with or without the passage of time or the
giving of notice or both, either a default under the Company's Certificate of
Incorporation or Bylaws, or any agreement or contract of the Company, or, to the
best of the Company's knowledge, a violation of any statutes, laws, regulations
or orders, or an event which results in the creation of any lien, charge or
encumbrance upon any asset of the Company.
3.11 Material Agreements.
(a) List of Material Agreements. Attached to this Agreement as
Exhibit E is a complete list of all agreements, contracts, leases, licenses,
instruments and commitments (oral or written) to which the Company is a party or
is bound that, individually or in the aggregate, are material to the business,
properties, financial condition, results of operation, affairs or prospects of
the Company ("Material Agreements"); provided that for purposes of this Section
3.11 only, no agreement under which the only remaining obligation of the Company
is to make a payment of money in the amount of $5,000 or less will be deemed to
be material to its business, properties, financial condition or results of
operations if the failure to make such payment will not result in the loss by
the Company of any rights that are material to the conduct of its business.
(b) No Breach. The Company has not breached, nor does the
Company have any knowledge of any claim or threat that the Company has breached,
any term or condition of (i) any Material Agreement set forth in Exhibit E, or
(ii) any other agreement, contract, lease, license, instrument or commitment
that, individually or in the aggregate, would have a material adverse effect on
the business, properties, financial condition, results of operations or affairs
or prospects of the Company. Each Material Agreement set forth in Exhibit E is
in full force and effect, is enforceable against each of the parties thereto,
and, to the Company's knowledge, no other party to such Material Agreement is in
default thereunder. The Company is not a party to any agreement that restricts
its ability to market or sell any of its products (whether by territorial
restriction or otherwise).
3.12 Registration Rights. Except as will be provided in the
Stockholder Rights Agreement, the Company has not granted or agreed to grant to
any person or entity any rights (including piggyback registration rights) to
have any securities of the Company registered with the United States Securities
and Exchange Commission ("SEC") or any other governmental authority.
3.13 Certificate of Incorporation/Bylaws. The Certificate of
Incorporation and the Bylaws of the Company are in the form provided to
Purchaser.
Preferred A.doc (Rev. 3/31/99) CONFIDENTIAL Page 4 of 11
5
3.14 Title to Property and Assets. The Company owns its properties
and assets free and clear of all mortgages, deeds of trust, liens, encumbrances,
security interests and claims except for statutory liens for the payment of
current taxes that are not yet delinquent and liens, encumbrances and security
interests which arise in the ordinary course of business and which do not affect
material properties and assets of the Company. With respect to the property and
assets it leases, the Company is in compliance with such leases and, to the best
of the Company's knowledge, the Company holds valid leasehold interests in such
assets free of any liens, encumbrances, security interests or claims of any
party other than the lessors of such property and assets.
3.15 Material Liabilities. The Company has no material liability or
obligation, absolute or contingent (individually or in the aggregate), except
(a) obligations and liabilities incurred after the date of incorporation in the
ordinary course of business that are not material, individually or in the
aggregate, and (b) obligations under contracts made in the ordinary course of
business that would not be required to be reflected in financial statements
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods indicated.
3.16 ERISA Plans. The Company does not have any Employee Pension
Benefit Plan as defined in Section 3 of the Employee Retirement Income Security
Act of 1974, as amended.
3.17 Insurance. The Company has in full force and effect fire and
casualty insurance policies, with extended coverage, sufficient in amount
(subject to reasonable deductibles) to allow it to replace any of its properties
that might be damaged or destroyed.
3.18 Labor Agreements and Actions. The Company is not bound by or
subject to any contract, commitment or arrangement with any labor union, and to
the Company's best knowledge, no labor union has requested, sought or attempted
to represent any employees, representatives or agents of the Company. There is
no strike or other labor dispute involving the Company pending nor, to the
Company's best knowledge, threatened, nor is the Company aware of any labor
organization activity involving its employees. The Company is not aware that any
officer or employee intends to terminate their employment with the Company, nor
does the Company have any present intention to terminate the employment of any
of its officers or employees.
3.19 Environmental Matters. The Company is not in violation of any
applicable statute, law or regulation relating to the environment or
occupational health and safety, and no material expenditures are or will be
required in order to comply with any such existing statute, law or regulation.
3.20 Real Property Holding Corporation Status. Since its inception,
the Company has not been a "United States real property holding corporation", as
defined in Section 897(c)(2) of the U.S. Internal Revenue Code of 1986, as
amended (the "Code"), and in Section 1.897-2(b) of the Treasury Regulations
issued thereunder (the "Regulations"), and the Company has filed with the
Internal Revenue Service all statements, if any, with its United States income
tax returns which are required under Section 1.897-2(h) of the Regulations.
3.21 Interested Party Transactions. To the Company's knowledge, no
officer or director of the Company or any "affiliate" or "associate" (as those
terms are defined in Rule 405 promulgated under the 0000 Xxx) of any such person
has had, either directly or indirectly, a material interest in: (a) any person
or entity which purchases from or sells, licenses or furnishes to the Company
any goods, property, technology, intellectual or other property rights or
services; or (b) any contract or agreement to which the Company is a party or by
which it may be bound or affected.
3.22 Stock Restriction Agreements. Each person who, pursuant to any
benefit, bonus or incentive plan of the Company, holds any currently outstanding
shares of Common Stock or other securities of the Company or any option, warrant
or right to acquire such shares or other securities, has entered into or is
otherwise bound by, an agreement granting the Company (a) the right to
repurchase the shares for the original purchase price, or to cancel the option,
warrant or right, in the event the holder's employment or services with the
Company terminate for any reason, subject to release of such repurchase or
cancellation right on terms and conditions specified by the Board of Directors
of the Company, and (b) a right of first refusal with respect to all such
shares. All currently outstanding shares of Common Stock have been sold and
issued for a cash purchase price of not less than $.001 per share.
3.23 Disclosure. This Agreement, and the Exhibits hereto (when read
together) do not contain any untrue statement of a material fact and do not omit
to state a material fact necessary to make the statements therein or herein not
misleading.
Preferred A.doc (Rev. 3/31/99) CONFIDENTIAL Page 5 of 11
6
3.24 Tax Elections. The Company has not elected pursuant to the Code
to be treated as an "S" corporation or a collapsible corporation pursuant to
Section 341(f) or Section 1362(a) of the Code, nor has it made any other
elections pursuant to the Code (other than elections which relate solely to
matters of accounting, depreciation or amortization) which would have a material
affect on the Company, its financial condition, its business as presently
conducted or presently proposed to be conducted or any of its properties or
material assets.
3.25 Qualified Small Business Stock. As of the Closing: (a) the
Company will be an eligible corporation as defined in Section 1202(e)(4) of the
Code, (b) the Company will not have made any purchases of its own stock during
the one-year period preceding the Closing having an aggregate value exceeding 5%
of the aggregate value of all its stock as of the beginning of such period, and
(c) the Company's aggregate gross assets, as defined by Code Section 1202(d)(2),
at no time between the Company's inception and through the Closing have exceeded
or will exceed $50 million, taking into account the assets of any corporations
required to be aggregated with the Company in accordance with Code Section
1202(d)(3).
3.26 Section 83(b) Elections. To the best of the Company's
knowledge, all Purchasers who have purchased unvested shares of the Company's
Common Stock have timely filed elections under Section 83(b) of the Code and any
analogous provisions of applicable state tax laws.
4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF PURCHASER.
Purchaser hereby represents and warrants to, and agrees with, the Company that:
4.1 Authorization. This Agreement constitutes Purchaser' valid and
legally binding obligation, enforceable in accordance with its terms except as
may be limited by (a) applicable bankruptcy, insolvency, reorganization or other
laws of general application relating to or affecting the enforcement of
creditors' rights generally and (b) the effect of rules of law governing the
availability of equitable remedies. Purchaser represents that he has full power
and authority to enter into this Agreement, the Stockholder Rights Agreement,
and the Co-Sale Agreement.
4.2 Purchase for Own Account. The Purchased Shares to be purchased
by Purchaser hereunder will be acquired for investment for Purchaser' own
account, not as a nominee or agent, and not with a view to the public resale or
distribution thereof within the meaning of the 1933 Act, and Purchaser has no
present intention of selling, granting any participation in, or otherwise
distributing the same.
4.3 Disclosure of Information. Purchaser has received or has had
full access to all the information he considers necessary or appropriate to make
an informed investment decision with respect to the Purchased Shares to be
purchased by Purchaser under this Agreement. Purchaser further has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the offering of the Purchased Shares 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 any
information furnished to Purchaser or to which Purchaser had access. The
foregoing, however, does not in any way limit or modify the representations and
warranties made by the Company in Section 3.
4.4 Investment Experience. Purchaser understands that the purchase
of the Purchased Shares involves substantial risk. Purchaser: (a) has experience
as an investor in securities of companies in the development stage and
acknowledges that it is able to fend for himself, can bear the economic risk of
its investment in the Purchased Shares and has such knowledge and experience in
financial or business matters that he is capable of evaluating the merits and
risks of this investment in the Purchased Shares and protecting its own
interests in connection with this investment and/or (b) has a preexisting
personal or business relationship with the Company and certain of its officers,
directors or controlling persons of a nature and duration that enables it to be
aware of the character, business acumen and financial circumstances of such
persons.
4.5 Accredited Investor Status. Purchaser is an "accredited
investor" within the meaning of Regulation D promulgated under the 1933 Act.
4.6 Restricted Securities. Purchaser understands that the Purchased
Shares are characterized as "restricted securities" under the 1933 Act inasmuch
as they are being acquired from the Company in a transaction not involving a
public offering and that under the 1933 Act and applicable regulations
thereunder such securities may be resold without registration under the 1933 Act
only in certain limited circumstances. In this connection, Purchaser represents
that he is familiar with Rule 144 of the SEC, as presently in effect, and
understands the resale limitations imposed thereby and by the 1933 Act.
Purchaser understands that the Company is under no obligation to register any of
the securities sold hereunder except as will be provided
Preferred A.doc (Rev. 3/31/99) CONFIDENTIAL Page 6 of 11
7
in the Investors' Rights Agreement. Purchaser understands that no public market
now exists or is likely to exist for any of the Purchased Shares and that it is
uncertain whether a public market will ever exist for the Conversion Shares.
4.7 Further Limitations on Disposition. Without in any way limiting
the representations set forth above, Purchaser further agrees not to make any
disposition of all or any portion of the Purchased Shares or the Conversion
Shares unless and until:
(a) There is then in effect a registration statement under the
1933 Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) (i) Purchaser shall have notified the Company of the
proposed disposition and shall have furnished the Company with a statement of
the circumstances surrounding the proposed disposition, and (ii) Purchaser shall
have furnished the Company, at the expense of Purchaser or his transferee, with
an opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of such securities under the 1933 Act.
Notwithstanding the provisions of paragraphs (a) and (b) above, no such
registration statement or opinion of counsel shall be required: (i) for any
transfer of any Purchased Shares or Conversion Shares in compliance with SEC
Rule 144 or Rule 144A; or (ii) for any transfer of any Purchased Shares or
Conversion Shares by Purchaser to (A) a partner of Purchaser, or (B) the estate
of any such partner, or (iii) for the transfer by gift to any trust for any of
the foregoing or for the benefit of any family member of Purchaser, or (iv) to
any entity controlled by Purchaser or any member of Purchaser; provided that in
each of the foregoing cases the transferee agrees in writing to be subject to
the terms of this Section 4 (other than Section 4.5) to the same extent as if
the transferee were Purchaser hereunder.
4.8 Legends. It is understood that the certificates evidencing the
Purchased Shares and the Conversion Shares will bear the legends set forth
below:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS
ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
(b) Any legend required by the Law or by the laws of the State
of Delaware, including a legend substantially in the form of the following:
THE SHARES EVIDENCED BY THIS CERTIFICATE: (1) ARE CONVERTIBLE
INTO SHARES OF COMMON STOCK OF THE COMPANY AT THE OPTION OF THE HOLDER AT ANY
TIME PRIOR TO AUTOMATIC CONVERSION THEREOF; AND (2) AUTOMATICALLY CONVERT INTO
COMMON STOCK OF THE COMPANY IN THE EVENT OF A PUBLIC OFFERING MEETING CERTAIN
REQUIREMENTS OR UPON CERTAIN CONSENTS OF THE HOLDERS OF THE COMPANY'S PREFERRED
STOCK; ALL PURSUANT TO AND UPON THE TERMS AND CONDITIONS SPECIFIED IN THE
COMPANY'S CERTIFICATE OF INCORPORATION. A COPY OF SUCH CERTIFICATE OF
INCORPORATION MAY BE OBTAINED, WITHOUT CHARGE, AT THE COMPANY'S PRINCIPAL
OFFICE.
The legend set forth in (a) above shall be removed by the
Company from any certificate evidencing Purchased Shares or Conversion Shares
upon delivery to the Company of an opinion by counsel, reasonably satisfactory
to the Company, that a registration statement under the 1933 Act is at that time
in effect with respect to the legended security or that such security can be
freely transferred in a public sale without such a registration statement being
in effect and that such transfer will not jeopardize the exemption or exemptions
from registration pursuant to which the Company issued the Purchased Shares or
Conversion Shares. The Company will not require options of counsel for
transactions made pursuant to Rule 144 except in unusual circumstances.
5. CONDITIONS TO PURCHASER' OBLIGATIONS AT THE CLOSING. The obligations
of Purchaser under Section 2 of this Agreement are subject to the fulfillment or
waiver, on or before the Closing, of
Preferred A.doc (Rev. 3/31/99) CONFIDENTIAL Page 7 of 11
8
each of the following conditions, the waiver of which shall not be effective
against Purchaser if he does not consent to such waiver, which consent may be
given by written, oral or telephone communication to the Company or its counsel:
5.1 Representations and Warranties True. Each of the representations
and warranties of the Company contained in Section 3 shall be true and correct
on and as of the Closing with the same effect as though such representations and
warranties had been made on and as of the date of the Closing, subject to the
delivery of a Schedule of Exceptions updated through the Closing.
5.2 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 and
shall have obtained all approvals, consents and qualifications necessary to
complete the purchase and sale described herein.
5.3 Restated Certificate Effective. The Restated Certificate has
been duly adopted by the Company by all necessary corporate action of its Board
of Directors and stockholders, and has been duly filed with and accepted by the
Secretary of State of the State of Delaware.
5.4 Compliance Certificate. The Company shall, upon reasonable
request, deliver to Purchaser a certificate signed on its behalf by its
President, Chief Executive Officer, or Chief Financial Officer certifying that
the conditions specified in paragraphs 5.1, 5.2 and 5.3 have been fulfilled and
stating that there shall have been no material adverse change in the business,
affairs, prospects, operations, properties, assets or condition of the Company
not generally contemplated by the Company's Business Plan or otherwise
previously disclosed to Purchaser in writing.
5.5 Securities Exemptions. The offer and sale of the Purchased
Shares to Purchaser pursuant to this Agreement shall be exempt from the
registration requirements of the 1933 Act, the qualification requirements of the
Law and the registration and/or qualification requirements of all other
applicable state securities laws.
5.6 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 Purchaser as he may reasonably request. Such documents shall
include (but not be limited to) the following:
(a) Certified Charter Documents. A copy of the Restated
Certificate and the Bylaws of the Company (as amended through the date of the
Closing), certified by the Secretary of the Company as true and correct copies
thereof as of the Closing.
(b) Secretary's Incumbency Certificate. A certificate of the
Secretary or an Assistant Secretary or other officer of the Company certifying
the names of the officers of the Company authorized to sign this Agreement, the
certificates for the Purchased Shares and the other documents, instruments or
certificates to be delivered pursuant to this Agreement by the Company or any of
its officers, together with the true signatures of such officers.
(c) Corporate Actions. A copy of the resolutions of the Board of
Directors and, if required, the stockholders of the Company evidencing the
amendment to the Company's Certificate of Incorporation providing for the
authorization of the Series A Stock.
(d) Good Standing Certificates. Good standing certificate issued
by the Delaware Secretary of State dated within ten (10) days of the Closing.
5.7 Board of Directors. The directors of the Company shall be Xxxx
X. Xxxxxxx, Xxxxx X. Xxxxxx , Xxxxxxx X. Xxxxx, and F. Xxxxx Xxxxxxx.
5.8 Investors' Rights Agreement. The Company and Adaptec have
executed an Investors' Rights Agreement.
5.9 Series B Agreement. The Company and Adaptec have executed a
Series B Agreement.
5.10 Due Diligence. Purchaser shall have completed his business and
legal due diligence in a manner which is satisfactory to Purchaser.
5.11 Adaptec Technology Agreement. The Company and Adaptec have
executed a Technology Cross-License Agreement.
Preferred A.doc (Rev. 3/31/99) CONFIDENTIAL Page 8 of 11
9
5.12 Asset Transfer Agreement. The Company and Adaptec have executed
an Asset Transfer Agreement.
6. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT THE CLOSING. The
obligations of the Company to Purchaser under this Agreement are subject to the
fulfillment or waiver by the Company on or before the Closing of each of the
following conditions:
6.1 Representations and Warranties. Each of the representations and
warranties of Purchaser contained in Section 4 shall be true and correct on the
date of the Closing with the same effect as though such representations and
warranties had been made on and as of the date of the Closing.
6.2 Payment of Purchase Price. Purchaser shall have delivered to the
Company the purchase price for the Purchased Shares to be purchased at the
Closing in accordance with the provisions of Section 2.
6.3 Restated Certificate Effective. The Restated Certificate have
been duly adopted by the Company by all necessary corporate action of its Board
of Directors and stockholders, and have been duly filed with and accepted by the
Secretary of State of the State of Delaware.
6.4 Securities Exemptions. The offer and sale of the Purchased
Shares to Purchaser pursuant to this Agreement shall be exempt from the
registration requirements of the 1933 Act, the qualifications requirements of
the Law and the registration and/or qualification requirements of all other
applicable state securities laws.
6.5 Investors' Rights Agreement. Purchaser and Adaptec have executed
the Investors' Rights Agreement.
6.6 Series B Agreement. Adaptec has executed the Series B Agreement.
7. MISCELLANEOUS.
7.1 Survival of Warranties. The representations, warranties and
covenants of the Company and Purchaser contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of any of Purchaser, his counsel or the
Company, as the case may be.
7.2 Successors and Assigns. 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.
7.3 Governing Law. This Agreement shall be governed by and construed
under the internal laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California, without reference to principles of conflict of laws or choice of
laws.
7.4 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.
7.5 Headings. The headings and captions used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to sections,
paragraphs, exhibits and schedules shall, unless otherwise provided, refer to
sections and paragraphs hereof and exhibits and schedules attached hereto, all
of which exhibits and schedules are incorporated herein by this reference.
7.6 Notices. 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 or upon four business days after deposit
with the United States Post Office, by registered or certified mail, postage
prepaid and addressed in the case of Purchaser, (PurchaserAddress) or, in the
case of the Company, to 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxx, XX 00000,
Attention: Chief Executive Officer, or at such other address as any party or the
Company may designate by giving ten (10) days advance written notice to all
other parties.
7.7 No Finder's Fees. Each party represents that it neither is nor
will be obligated for any finder's or broker's fee or commission in connection
with this transaction. Purchaser agrees to indemnify and to hold harmless the
Company from any liability for any commission or compensation in the nature of a
finders' or broker's fee (and any asserted liability) for which Purchaser or any
of his partners, employees, or representatives
Preferred A.doc (Rev. 3/31/99) CONFIDENTIAL Page 9 of 11
10
is responsible. The Company agrees to indemnify and hold harmless Purchaser from
any liability for any commission or compensation in the nature of a finder's or
broker's fee (and any asserted liability) for which the Company or any of its
officers, employees or representatives is responsible.
7.8 Attorneys' Fees. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement or the Restated Certificate,
the prevailing party shall be entitled to reasonable attorneys' fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.
7.9 Costs, Expenses. Each of the parties to this Agreement shall be
responsible for its own fees and expenses in connection with the preparation,
execution and delivery of this Agreement, the issuance of the Purchased Shares
and the other transactions contemplated hereby.
7.10 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
Purchased Shares and/or Conversion Shares representing at least a majority of
the aggregate number of shares of Common Stock into which the Purchased Shares
then are convertible and/or have been converted (excluding any of such shares
that have been sold to the public or pursuant to SEC Rule 144). Any amendment or
waiver effected in accordance with this Section shall be binding upon Purchaser,
each future holder of such securities, and the Company.
7.11 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision(s) shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
7.12 Entire Agreement. This Agreement, together with all exhibits
and schedules hereto, constitutes the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes any and all
prior negotiations, correspondence, agreements, understandings duties or
obligations between the parties with respect to the subject matter hereof.
7.13 Further Assurances. From and after the date of this Agreement,
upon the request of Purchaser or the Company, the Company and Purchaser shall
execute and deliver such instruments, documents or other writings as may be
reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Series A
Preferred Stock Purchase Agreement as of the date first above written.
CHAPARRAL TECHNOLOGIES, INC. (Purchaser)
a Delaware corporation (PurchaserStreet)
0000 Xxxxx Xxxxxxx Xxxxxx (XxxxxxxxxXxxxXxxxxXxx)
Xxxxxxxx, XX 00000 (PurchaserPhoneNumber)
303/000-0000
----------------------------------- -----------------------------------
Xxxx X. Xxxxxxx, Chairman & CEO (Purchaser)
Preferred A.doc (Rev. 3/31/99) CONFIDENTIAL Page 10 of 11
11
CHAPARRAL
NETWORK STORAGE
THE SECURITIES TO WHICH THIS AGREEMENT RELATES HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
ANY STATE SECURITIES LAWS, AND ARE BEING OFFERED AND SOLD PURSUANT TO RULE 701,
REGULATION D, OR OTHER APPLICABLE EXEMPTIONS UNDER THE SECURITIES ACT. THESE
SECURITIES MAY NOT BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES LAWS, UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
CHAPARRAL NETWORK STORAGE, INC.
(SERIES A PREFERRED STOCK)
Ladies and Gentlemen:
The undersigned, (PURCHASER) (the "Purchaser"), hereby irrevocably
subscribes for and agrees to purchase [no. of shares] shares of Series A
Preferred Stock, $.001 par value (the "Preferred Stock") of Chaparral Network
Storage, Inc., a Delaware corporation (the "Company"), at a purchase price of
$(purchase price) or $(price per share) per share (the "Purchase Price").
The Purchaser's subscription pursuant to this agreement constitutes a
binding subscription for and offer to purchase the amount of Preferred Stock
referred to herein at the aggregate price referred to herein.
1. DELIVERY AND PAYMENT. The Company will deliver to Purchaser a
certificate or certificates representing the number of shares of Preferred Stock
that Purchaser has agreed to purchase hereunder against delivery to the Company
by Purchaser of the Purchase Price, paid by (a) check payable to the Company's
order, (b) wire transfer of funds to the Company, (c) cancellation of
indebtedness of the Company to Purchaser or (d) any combination of the
foregoing. Purchaser also agrees to deliver to the Company:
(a) one completed and duly signed copy of this Purchase Agreement;
(b) one completed and duly signed copy of the Investors' Rights
Agreement, as amended; and
(c) all other documentation as may be required by applicable
securities laws.
2. CLOSING. Delivery of a certificate for the Preferred Stock will be
completed, against payment of the purchase price as set out above, upon delivery
to the Company of the signed agreement and Investor Questionnaire (the "Closing
Date").
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER. The
Purchaser makes the following representations, warranties, acknowledgments and
covenants to and for the benefit of the Company:
(a) the Purchaser acknowledges and understands that the Preferred
Stock has not been registered under the Securities Act or any other
applicable securities laws, that the Company has
Subscription Agreement (Pub. 1/18/00) CONFIDENTIAL Page 1 of 6
12
no obligation to register the Preferred Stock under the Securities
Act or any other applicable securities laws, and that the Preferred
Stock may not be offered, sold or otherwise transferred except in
compliance with the registration requirements of the Securities Act
and any other applicable securities laws or pursuant to an exemption
therefrom and in each case in compliance with the conditions for
transfer set in Section 3(o);
(b) the Purchaser is purchasing the Preferred Stock as a principal
for the Purchaser's own account and not for the benefit of any other
person;
(c) the Purchaser is a resident of the jurisdiction included in its
address on the signature page of this agreement;
(d) the Purchaser has attained the age of majority and is legally
competent to execute this agreement and to take all actions pursuant
hereto;
(e) the Purchaser will execute and deliver all documentation as may
be required by all applicable securities laws to permit the purchase
of the Preferred Stock hereunder on the terms as set forth herein;
(f) the Purchaser is purchasing the Preferred Stock for investment
only and not with a view to resale or distribution;
(g) the Purchaser has such knowledge and experience in financial and
business affairs as to be capable of evaluating the merits and risks
of this investment;
(h) the Purchaser's decision to enter into this agreement and to
purchase Preferred Stock pursuant hereto has not been based upon any
oral or written representation as to fact or otherwise by the
Company or any other person other than as set forth herein, and the
Purchaser has not received and is not relying on any document; the
Purchaser has had access to any financial and other information
concerning the Company and the Preferred Stock as it has deemed
necessary in connection with its decision to purchase the Preferred
Stock, including an opportunity to ask questions of and request
information of the Company;
(i) the Purchaser acknowledges and understands that there is no
public market for the Preferred Stock and there is no certainty that
such a market will ever develop;
(j) the Purchaser recognizes that the Company has a history of
financial losses and that an investment in the Company involves
substantial risks, and the Purchaser has taken full cognizance of
and understands all of the risk factors related to the purchase of
the Preferred Stock; the Purchaser acknowledges and understands that
no governmental agency has made any finding or determination as to
the fairness of this offering for investment, nor any recommendation
or endorsement of the Preferred Stock;
(k) the Purchaser has carefully considered and has, to the extent
the Purchaser believes such discussion necessary, discussed with the
Purchaser's professional legal, tax and financial advisors the
suitability of an investment in the Company for the Purchaser's
particular tax and financial situation and the Purchaser has
determined that the Preferred Stock is a suitable investment for the
Purchaser; the Purchaser understands and acknowledges that there can
be no assurance as to the tax results of an investment in the
Preferred Stock;
(l) the Purchaser shall indemnify and hold harmless the Company or
any of its officers, employees, registered representatives,
directors, control persons or agents who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of or arising from any
actual or alleged misrepresentation or misstatement of facts or
omission to represent or state
Subscription Agreement (Pub. 1/18/00) CONFIDENTIAL Page 2 of 6
13
facts made by the Purchaser to the Company concerning itself or its
financial position in connection with the offering or sale of the
Preferred Stock that is not remedied by timely notice to the
Company, against losses, liabilities and expenses for which the
Company or any of its officers, employees, registered
representatives, directors, control persons or agents have not
otherwise been reimbursed (including attorneys fees, judgments,
fines and amounts paid in settlement) as actually and reasonably
incurred by such person or entity in connection with such action,
suit or proceeding;
(m) the Purchaser understands and acknowledges that upon issuance
thereof, and until such time as the same is no longer required under
applicable securities laws, the Preferred Stock will bear a legend
in the form attached hereto as Exhibit A;
(n) the Purchaser acknowledges that it has not purchased the
Preferred Stock as a result of any general solicitation or general
advertising (as those terms are used in Regulation D under the
Securities Act), including advertisements, articles, notices or
other communications published in any newspaper, magazine or similar
media or broadcast over radio or television, or any seminar or
meeting whose attendees have been invited by general solicitation or
general advertising; and
(o) the Purchaser acknowledges that it will not offer, sell or
otherwise transfer the Preferred Stock, directly or indirectly,
unless:
(i) the sale is made pursuant to the exemption from the
registration requirements under the Securities Act provided by
Rule 144 thereunder, if available, and in accordance with any
applicable U.S. state securities or `blue sky' laws;
(ii) the Preferred Stock is sold in a transaction that does not
require registration under the Securities Act or any applicable
U.S. state laws and regulations governing the offer and sale of
securities; or
(iii) the sale is made outside of the United States in a
transaction meeting the requirements of Rule 904 of Regulation S
under the Securities Act and in compliance with applicable local
laws and regulations.
In each such case, the Purchaser agrees to furnish to the Company,
prior to such sale, an opinion of counsel reasonably satisfactory to
the Company with respect to the matters set forth above; and
(p) the Purchaser is an "accredited investor" as defined in Rule
501(a) under the Securities Act; the undersigned has previously
completed the Investor Questionnaire attached hereto as Exhibit B
and the information set forth therein remains true and accurate in
all material respects.
Purchaser acknowledges that the foregoing representations, warranties
and covenants are made by Purchaser with the intent that they may be relied upon
in determining Purchaser's suitability as a purchaser of Preferred Stock.
Purchaser further agrees that by accepting Preferred Stock at the Closing Date,
Purchaser shall be representing and warranting that the foregoing
representations and warranties are true as at the Closing Date, as if they had
been made by Purchaser at that time.
5. SURVIVAL. This Purchase Agreement, including without limitation the
representations, warranties and covenants contained herein, shall survive and
continue in full force and effect and be binding upon the Purchaser
notwithstanding the completion of the purchase of the Preferred Stock by the
Purchaser hereto and any subsequent disposition by the Purchaser of the
Preferred Stock.
6. GOVERNING LAW. This Purchase Agreement shall be enforced, governed
and construed in all respects in accordance with the laws of the State of
Colorado, as such laws are applied by Colorado courts.
Subscription Agreement (Pub. 1/18/00) CONFIDENTIAL Page 3 of 6
14
7. ASSIGNMENT. This Purchase Agreement shall be binding upon the
Purchaser, the Purchaser's heirs, estate, legal representatives, successors and
assigns, and shall inure to the benefit of the Company and its successors and
assigns. This Purchase Agreement is not transferable or assignable by the
Purchaser.
8. FACSIMILE SUBSCRIPTIONS. The Company will be entitled to rely upon
delivery by facsimile machine of an executed copy of this Purchase Agreement and
acceptance of the Company of such facsimile copy will be legally effective to
create a valid and binding agreement between the Purchaser and the Company in
accordance with the terms hereof.
9. ENTIRE AGREEMENT. This Purchase Agreement contains the entire
agreement of the parties hereto relating to the subject matter hereof and there
are no representations, covenants or other agreements relating to the subject
matter hereof except as stated or referred to herein. This Purchase Agreement
may be amended only by a writing executed by all parties hereto.
10. DETAILS OF SUBSCRIPTION. The Purchaser subscribes for Preferred
Stock as set forth below:
NUMBER OF SHARES OF PREFERRED STOCK SUBSCRIBED FOR:
TOTAL AMOUNT OF SUBSCRIPTION:
NAME & ADDRESS OF PURCHASER:
--------------------------------
(Street Address)
--------------------------------
(City, Province and Postal Code)
DELIVERY INSTRUCTIONS: The name and address (including contact name and
telephone number) of the person to whom the certificate representing the
Preferred Stock is to be delivered, if other than the Purchaser:
Name:
Contact Name:
Telephone No.:
Address:
Subscription Agreement (Pub. 1/18/00) CONFIDENTIAL Page 4 of 6
15
IN WITNESS WHEREOF the Purchaser has executed, or caused its duly
authorized representative to execute, on its own behalf, this Subscription
Agreement as of the (date)
---------------------- ----------------------------------------
Signature of Purchaser Name of Purchaser (if not an individual)
(if an individual)
Xxxx X. Xxxxxxx Per:
------------------ ------------------------------------
Name of Purchaser (signature of authorized representative)
(if an individual) Name:
-----------------------------------
Title:
----------------------------------
* * *
This Subscription Agreement is confirmed and accepted by the Company as
of the (date)
CHAPARRAL NETWORK STORAGE, INC.
-------------------------------------------------------
Xxxxxxx X. Xxxxx, President and Chief Operating Officer
Subscription Agreement (Pub. 1/18/00) CONFIDENTIAL Page 5 of 6
16
EXHIBIT A
LEGEND FOR PREFERRED STOCK
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF CERTAIN
STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT
AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER
OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS
IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
THE SHARES EVIDENCED BY THIS CERTIFICATE: (1) ARE CONVERTIBLE INTO SHARES OF
COMMON STOCK OF THE COMPANY AT THE OPTION OF THE HOLDER AT ANY TIME PRIOR TO
AUTOMATIC CONVERSION THEREOF; AND (2) AUTOMATICALLY CONVERT INTO COMMON STOCK OF
THE COMPANY IN THE EVENT OF A PUBLIC OFFERING MEETING CERTAIN REQUIREMENTS OR
UPON CERTAIN CONSENTS OF THE HOLDERS OF THE COMPANY'S PREFERRED STOCK; ALL
PURSUANT TO AND UPON THE TERMS AND CONDITIONS SPECIFIED IN THE COMPANY'S
CERTIFICATE OF INCORPORATION. A COPY OF SUCH CERTIFICATE OF INCORPORATION MAY BE
OBTAINED, WITHOUT CHARGE, AT THE COMPANY'S PRINCIPAL OFFICE.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER AND OTHER
RESTRICTIONS IN ACCORDANCE WITH THE TERMS OF AN INVESTORS' RIGHTS AGREEMENT, AS
AMENDED FROM TIME TO TIME, BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY OF
WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
Subscription Agreement (Pub. 1/18/00) CONFIDENTIAL Page 6 of 6
