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AVANEX CORPORATION
FIRST AMENDED AND RESTATED
SERIES A PREFERRED, SERIES B PREFERRED AND
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
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SERIES A CLOSING: FEBRUARY 10, 1998
SERIES B CLOSING: JUNE 29, 1998
SERIES C CLOSING: FEBRUARY __, 1999
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TABLE OF CONTENTS
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SECTION 1 Authorization and Sale of Preferred Stock...........................................................2
1.1 Authorization.......................................................................................2
1.2 Sale of the Shares..................................................................................2
1.3 Additional Sale(s) of Preferred Stock...............................................................2
SECTION 2 Closing Date; Delivery..............................................................................3
2.1 Closing Date........................................................................................3
2.2 Delivery............................................................................................4
SECTION 3 Representations and Warranties of the Company.......................................................4
3.1 Organization and Standing; Qualification............................................................4
3.2 Corporate Power.....................................................................................5
3.3 Subsidiaries........................................................................................5
3.4 Capitalization......................................................................................5
3.5 Authorization.......................................................................................5
3.6 Title to Properties and Assets; Liens, etc..........................................................6
3.7 Patents, Trademarks, etc............................................................................6
3.8 Agreements..........................................................................................6
3.9 Material Contracts and Commitments..................................................................7
3.10 Compliance with Other Instruments, None Burdensome, etc.............................................7
3.11 Litigation, etc.....................................................................................7
3.12 Employees...........................................................................................7
3.13 Employee Agreements.................................................................................8
3.14 No Conflict of Interest.............................................................................8
3.15 No Financial Statements.............................................................................8
3.16 Insurance...........................................................................................8
3.17 Qualified Small Business Stock......................................................................8
3.18 Registration Rights.................................................................................8
3.19 Governmental Consent, etc...........................................................................9
3.20 Permits.............................................................................................9
3.21 Environmental and Safety Laws.......................................................................9
3.22 Brokers or Finders..................................................................................9
3.23 Disclosures.........................................................................................9
3.24 Employee Benefit Plans..............................................................................9
3.25 Minute Books.......................................................................................10
SECTION 4 Representations and Warranties of the Purchasers...................................................10
4.1 Investment Representations and Covenants of the Purchasers.........................................10
4.2 No Public Market...................................................................................11
4.3 Receipt of Information.............................................................................11
4.4 Authorization......................................................................................12
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4.5 Consents...........................................................................................12
SECTION 5 Conditions to Obligations of Purchasers in the Series A Closing....................................12
5.1 Representations and Warranties Correct.............................................................12
5.2 Covenants..........................................................................................12
5.3 Employees..........................................................................................12
5.4 Opinion of Company's Counsel.......................................................................13
5.5 Compliance Certificate.............................................................................13
5.6 Blue Sky...........................................................................................13
5.7 Board of Directors.................................................................................13
5.8 Restated Articles..................................................................................13
5.9 No Material Adverse Change.........................................................................13
5.10 Shareholder Rights Agreement.......................................................................13
5.11 Co-Sale Agreement..................................................................................13
5.12 Voting Agreement...................................................................................13
SECTION 6 Conditions to the Obligations of Purchasers in the Series B Closing................................14
6.1 Representations....................................................................................14
6.2 Covenants..........................................................................................14
6.3 Compliance Certificate.............................................................................14
6.4 Fulfillment of Series B Milestones.................................................................14
6.5 Opinion of Company's Counsel.......................................................................14
SECTION 7 Conditions to the Obligations of Purchasers in each Series C Closing...............................14
7.1 Representations....................................................................................14
7.2 Covenants..........................................................................................15
7.3 Compliance Certificate.............................................................................15
7.4 Certificate of Amendment...........................................................................15
7.5 No Material Adverse Change.........................................................................15
7.6 Shareholder Rights Agreement.......................................................................15
7.7 Co-Sale Agreement..................................................................................15
7.8 Voting Agreement...................................................................................15
7.9 Fulfillment of Series C Milestones.................................................................15
7.10 Opinion of Company's Counsel.......................................................................15
SECTION 8 Conditions to the Obligations of the Company in the Series A Closing...............................16
8.1 Representations....................................................................................16
8.2 Blue Sky...........................................................................................16
8.3 Shareholder Rights Agreement.......................................................................16
8.4 Legal Matters......................................................................................16
SECTION 9 Conditions to the Obligations of the Company in the Series B Closing...............................16
9.1 Representations....................................................................................16
9.2 Blue Sky...........................................................................................16
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9.3 Legal Matters......................................................................................16
SECTION 10 Conditions to the Obligations of the Company in each Series C Closing..............................17
10.1 Representations....................................................................................17
10.2 Blue Sky...........................................................................................17
10.3 Shareholder Rights Agreement.......................................................................17
10.4 Voting Agreement...................................................................................17
10.5 Legal Matters......................................................................................17
SECTION 11 Miscellaneous......................................................................................17
11.1 Governing Law......................................................................................17
11.2 Survival...........................................................................................17
11.3 Successors and Assigns.............................................................................17
11.4 Entire Agreement; Amendment........................................................................18
11.5 Notices, etc.......................................................................................18
11.6 Delays or Omissions................................................................................18
11.7 California Corporate Securities Law................................................................18
11.8 Expenses...........................................................................................19
11.9 Finder's Fee.......................................................................................19
11.10 Counterparts.......................................................................................19
11.11 Severability.......................................................................................19
11.12 Gender.............................................................................................19
11.13 Headings...........................................................................................19
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EXHIBITS
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A. Schedule of Purchasers
B. First Amended and Restated Articles of Incorporation
C. Schedule of Exceptions
D. First Amended and Restated Shareholder Rights Agreement
E. First Amended and Restated Co-Sale Agreement
F. First Amended and Restated Voting Agreement
G. Form of Opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
H. Series B Preferred and Series C Preferred Milestones
I. Certificate of Amendment to the First Amended and
Restated Articles of Incorporation
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EXHIBIT 10.10
AVANEX CORPORATION
FIRST AMENDED AND RESTATED
SERIES A PREFERRED, SERIES B PREFERRED AND
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
This First Amended and Restated Series A Preferred, Series B Preferred
and Series C Preferred Stock Purchase Agreement (this "Agreement") is made as of
February ___, 1999, by and among Avanex Corporation, a California corporation
(the "Company"), with its principal office at 00000 Xxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxx 00000, and the persons and entities listed on the Schedule of
Purchasers attached as Exhibit A hereto (the "Purchasers").
Recitals
A. The Company and certain of the Purchasers entered into that certain
Series A Preferred, Series B Preferred and Series C Preferred Stock Purchase
Agreement on February 10, 1998 (the "Prior Purchase Agreement").
B. Pursuant to the Prior Purchase Agreement, the Company sold 4,530,080
shares of Series A Preferred Stock of the Company to certain Purchasers on
February 10, 1998, and, after the Company had met certain conditions set forth
in the Prior Purchase Agreement, the Company sold 6,296,744 shares of Series B
Preferred Stock of the Company to certain Purchasers on June 29, 1998.
C. The Prior Purchase Agreement provided for, among other things, the
issuance and sale, upon the Company meeting certain milestones set forth in the
Prior Purchase Agreement, of up to 7,350,000 of the Company's Series C Preferred
Stock to certain of the Purchasers.
D. The parties to the Prior Purchase Agreement wish to increase the
number of shares of Series C Preferred Stock of the Company authorized for sale
and issuance by 3,500,000 shares from 7,350,000 to 10,850,000 shares in order to
permit additional investors to become Purchasers under this Agreement.
E. The parties to the Prior Purchase Agreement wish to amend, restate
and supersede the Prior Purchase Agreement in its entirety and to accept the
terms and conditions of this Agreement in lieu of the Prior Purchase Agreement.
NOW THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the Purchasers and the Company hereby agree as follows:
SECTION 1
Authorization and Sale of Preferred Stock
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1.1 Authorization.
(a) Series A Preferred Stock. The Company has, or before the
Series A Closing Date (as that term is hereinafter defined) will have,
authorized the sale and issuance of up to 4,600,000 shares of its Series A
Preferred Stock ("Series A Preferred" or, together with the shares of Series B
Preferred Stock described in Section 1.1(b) below and Series C Preferred Stock
described in Section 1.1(c) below, the "Shares") and up to 4,600,000 shares of
Common Stock issuable upon conversion of the Series A Preferred pursuant to the
First Amended and Restated Articles of Incorporation of the Company, as amended,
in the form attached hereto as Exhibit B (the "Restated Articles"). The Series A
Preferred shall be sold for a purchase price of $0.223 per share.
(b) Series B Preferred Stock. The Company has, or before the
Series A Closing Date (as that term is hereinafter defined) will have,
authorized the sale and issuance of up to 6,350,000 shares of its Series B
Preferred Stock ("Series B Preferred" or, as described in Section 1.1(a) above,
the "Shares") and up to 6,350,000 shares of Common Stock issuable upon
conversion of the Series B Preferred pursuant to the Restated Articles. The
Series B Preferred shall be sold for a purchase price of $0.40 per share.
(c) Series C Preferred Stock. The Company has, or before the
Series C Closing Date (as that term is hereinafter defined) will have,
authorized the sale and issuance of up to 10,850,000 shares of its Series C
Preferred Stock ("Series C Preferred" or, as described in Section 1.1(a) above,
the "Shares") and up to 10,850,000 shares of Common Stock issuable upon
conversion of the Series C Preferred pursuant to the Restated Articles, as
amended by the Certificate of Amendment to the Restated Articles (the
"Certificate of Amendment") in the form attached hereto as Exhibit I. The Series
C Preferred shall be sold for a purchase price of $0.756 per share.
1.2 Sale of the Shares. Subject to the terms and conditions
hereof, the Company will issue and sell to each of the Purchasers, and the
Purchasers will severally buy from the Company, the number of shares (the
"Shares") of Series A Preferred, Series B Preferred and Series C Preferred
specified opposite each Purchaser's name on the Schedule of Purchasers, at the
aggregate purchase price set forth therein. The Company's agreements with each
of the Purchasers are separate agreements, and the sales of the Shares to each
of the Purchasers are separate sales.
1.3 Additional Sale(s) of Preferred Stock. Any of the authorized
shares of Preferred Stock not sold at the Series A Closing, Series B Closing or
Series C Closing, as defined below, may be sold to one or more additional
purchasers at a subsequent closing(s) to be held at any time before ninety (90)
days after the applicable Closing Date without any further action or approval of
the other parties to this Agreement, provided that each such purchaser agrees to
be bound by the terms hereof as a "Purchaser" hereunder and provided further
that any such sale or sales be on terms identical to the terms contained in this
Agreement, and each subsequent Purchaser shall become a party to this Agreement
(and Exhibit A hereto shall be amended to include such subsequent Purchaser) and
to that certain First Amended and Restated Shareholder Rights Agreement dated as
of the date hereof by and among the Purchasers and
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the Company, in the form attached hereto as Exhibit D (the "Shareholder Rights
Agreement"); and to that certain First Amended and Restated Voting Agreement
dated as of the date hereof by and among the Company, the Purchasers and the
Founders, the form of which is attached hereto as Exhibit F (the "Voting
Agreement"); and that certain First Amended and Restated Co-Sale Agreement dated
as of the date hereof by and among the Company, certain of the Purchasers, and
the Founders named therein, the form of which is attached hereto as Exhibit E
(the "Co-Sale Agreement,") (and together with the Shareholder Rights Agreement
and the Voting Agreement, the "Ancillary Agreements"), and shall have the rights
and obligations of a Purchaser hereunder and thereunder. The shares of Preferred
Stock sold at such additional closing(s) shall be deemed to be "Shares"
hereunder and the purchasers thereof shall be deemed to be "Purchasers"
hereunder. The subsequent closings shall take place at Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, at 10:00 a.m., local
time, or at such other times and places as the Company and Purchasers acquiring
in the aggregate more than a majority of the shares of Series C Preferred Shares
sold pursuant hereto at such Closing mutually agreed upon orally or in writing
(which each time and place are designated as a "Closing").
SECTION 2
Closing Date; Delivery
2.1 Closing Date.
(a) Series A Closing Date. The closing of the purchase and
sale of the Series A Preferred shall be held at the offices of Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx, at 10:00 a.m.,
local time, on or prior to February 10, 1998, or at such other time and place
upon which the Company and the Purchasers shall agree (which time and place
shall be referred to as the "Series A Closing" and the date of the Series A
Closing is hereinafter referred to as the "Series A Closing Date").
(b) Series B Closing Date. In addition, within ten (10)
business days following delivery of notice by the Company that the conditions
set forth in Section 6 below have been satisfied, the closing of the purchase
and sale of the Series B Preferred shall be held at the offices of Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx (which time
and place shall be referred to as the "Series B Closing" and the date of the
Series B Closing is hereinafter referred to as the "Series B Closing Date").
Such Series B Closing shall be held on such date and at such time as the parties
agree and absent such agreement, on the tenth (10th) business day following
delivery of the foregoing described notice at 10:00 a.m., local time.
(c) Series C Closing Date. Provided that the conditions set
forth in Section 7 below have been satisfied, the first closing of the purchase
and sale of the Series C Preferred shall be held on or prior to February __,
1999, or at such other time and place upon which the Company and the Purchasers
shall agree. The second closing of the purchase and sale of the Series C
Preferred Shall be held on or prior to March __, 1999, or at such other time and
place upon which the Company and the
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Purchasers shall agree. Such time and place for the first closing, the second
closing and any subsequent closing(s) are each referred to individually herein
as a "Series C Closing," and the date of each such Series C Closing is
hereinafter referred to individually herein as a "Series C Closing Date").
(d) The Series A Closing, the Series B Closing and the Series
C Closing shall sometimes be referred to individually herein as a "Closing."
2.2 Delivery.
(a) Series A Preferred. At the Series A Closing, the Company
will issue to each Purchaser a certificate or certificates registered in such
Purchaser's name as set forth on the Schedule of Purchasers attached hereto as
Exhibit A, representing the number of shares of Series A Preferred set forth
opposite such Purchaser's name on such Schedule of Purchasers against payment of
the purchase price therefor. Such payment shall be by check or wire transfer
payable to the Company or by the cancellation of outstanding indebtedness.
(b) Series B Preferred. At the Series B Closing, the Company
will issue to each Purchaser a certificate or certificates registered in such
Purchaser's name as set forth on the Schedule of Purchasers attached hereto as
Exhibit A, representing the number of shares of Series B Preferred set forth
opposite such Purchaser's name on such Schedule of Purchasers against payment of
the purchase price therefor. Such payment shall be by check or wire transfer
payable to the Company or by the cancellation of outstanding indebtedness.
(c) Series C Preferred. At the Series C Closing, the Company
will issue to each Purchaser a certificate or certificates registered in such
Purchaser's name as set forth on the Schedule of Purchasers attached hereto as
Exhibit A, representing the number of shares of Series C Preferred set forth
opposite such Purchaser's name on such Schedule of Purchasers against payment of
the purchase price therefor. Such payment shall be by check or wire transfer
payable to the Company or by the cancellation of outstanding indebtedness.
SECTION 3
Representations and Warranties of the Company
Except as set forth on the Schedule of Exceptions attached as Exhibit C
hereto, the Company hereby represents and warrants to the Purchasers as follows:
3.1 Organization and Standing; Qualification. The Company is a
corporation duly organized and existing under, and by virtue of, the laws of the
State of California and is in good standing under such laws. The Company has
requisite corporate power to own and operate its properties and assets, and to
carry on its business as presently conducted. The Company is not qualified to do
business as a foreign corporation in any jurisdiction and such qualification is
not presently required.
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3.2 Corporate Power. The Company will have at the Closing Date all
requisite legal and corporate power to execute and deliver this Agreement, the
Shareholder Rights Agreement, the Co-Sale Agreement and the Voting Agreement, to
sell, issue and deliver the Shares hereunder, to issue the Common Stock issuable
upon conversion of the Shares (the "Conversion Shares") and to carry out and
perform its obligations under the terms of this Agreement, the Shareholder
Rights Agreement, the Co-Sale Agreement and the Voting Agreement.
3.3 Subsidiaries. The Company has no subsidiaries or affiliated
companies and does not otherwise own or control, directly or indirectly, any
other corporation, association or business entity.
3.4 Capitalization. The authorized capital stock of the Company
consists of 50,000,000 shares of Common Stock, of which 4,980,000 shares are
issued and outstanding, 4,600,000 shares of Series A Preferred Stock ("Series A
Preferred"), 4,530,080 of which are issued and outstanding prior to the Series C
Closing Date, 6,350,000 shares of Series B Preferred Stock ("Series B
Preferred"), 6,296,744 of which are issued and outstanding prior to the Series C
Closing Date, and 10,850,000 shares of Series C Preferred, none of which are
issued or outstanding prior to the Series C Closing Date. All such issued and
outstanding shares have been duly authorized and validly issued, are fully paid
and nonassessable and have been issued in compliance with all applicable federal
and state securities laws. The Company has reserved (i) 4,600,000 shares of
Common Stock for issuance upon conversion of the Series A Preferred, 6,350,000
shares of Common Stock for issuance upon conversion of the Series B Preferred,
and 10,850,000 shares of Common Stock for issuance upon conversion of the Series
C Preferred and (ii) 10,200,000 shares of Common Stock for issuance to employees
pursuant to the Company's 1998 Stock Plan, 4,510,501 of which are subject to
outstanding options, and 2,709,499 of which remain available for future grant.
The Series A Preferred, Series B Preferred and Series C Preferred shall have the
rights, preferences, privileges and restrictions set forth in the Restated
Articles. Except as set forth in Exhibit C hereto, and as set forth in the
Shareholder Rights Agreement, there are no options, warrants, conversion
privileges or other rights presently outstanding to purchase or otherwise
acquire any authorized but unissued shares of capital stock or other securities
of the Company. Except for the Shareholders Rights Agreement, the Company is not
a party or subject to any agreement or understanding which affects or relates to
the voting or giving of written consents with respect to any security or by a
director of the Company. Assuming the accuracy of each Purchaser's
representations in Section 4 below, upon issuance in accordance with this
Agreement and the Company's Restated Articles, the Shares will have been issued
in compliance with all federal and state securities laws.
3.5 Authorization. All corporate action on the part of the
Company, its directors and shareholders necessary for the authorization,
execution, delivery and performance of this Agreement, the Shareholder Rights
Agreement, the Co-Sale Agreement and the Voting Agreement by the Company, the
authorization, sale, issuance and delivery of the Shares (and the Conversion
Shares) and the performance of the Company's obligations hereunder has been
taken or will be taken prior to the Closing. This Agreement, the Shareholder
Rights Agreement, the Co-Sale Agreement and the Voting Agreement, when executed
and delivered by the Company, shall constitute the valid and binding obligations
of the Company enforceable in accordance with their respective terms. The
Shares, when
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issued in compliance with the provisions of this Agreement and the Company's
Restated Articles, will be duly and validly issued, fully paid and
nonassessable. The Common Stock issuable upon conversion of the Shares has been
duly and validly reserved and, when issued in compliance with the provisions of
this Agreement and the Company's Restated Articles, will be duly and validly
issued, fully paid and nonassessable.
3.6 Title to Properties and Assets; Liens, etc. The Company has
good and marketable title to its properties and assets, and has good title to
all its leasehold interests, in each case subject to no mortgage, pledge, lien,
lease, encumbrance or charge, other than (i) the lien of current taxes not yet
due and payable, and (ii) possible minor liens and encumbrances which do not in
any case materially detract from the value of the property subject thereto or
materially impair the operations of the Company, and which have not arisen
otherwise than in the ordinary course of business.
3.7 Patents, Trademarks, etc. The Company owns or has the right to
use, free and clear of all liens, charges, claims and restrictions, all patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses and
proprietary rights necessary to its business as now conducted, and is not
infringing upon or otherwise acting adversely to the right or claimed right of,
to the Company's knowledge, any person under or with respect to any of the
foregoing. 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 currently proposed, would violate any
patent, trademark, service xxxx, trade name, copyright or trade secret or other
proprietary right of any other person or entity. To the Company's knowledge,
after reasonable investigation, none 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 the use of such employee's best
efforts to promote the interests of the Company or that would conflict with the
Company's business as currently proposed to be conducted. Neither the execution
nor delivery of this Agreement, the Shareholders Rights Agreement or the Co-Sale
Agreement, nor the carrying on of the Company's business by the employees of the
Company, nor the conduct of the Company's business as currently proposed to be
conducted, will 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 is now obligated. The Company does
not believe, after reasonable investigation, that it is or will be necessary to
utilize any inventions of any of the Company's employees (or people it currently
intends to hire) made prior to their employment by the Company.
3.8 Agreements. There are no agreements, understandings,
instruments, contracts or transactions currently in negotiation, which the
Company is a party that may involve (i) obligations (contingent or otherwise)
of, or payments to the Company in excess of, $10,000, (ii) the license of any
patent, copyright, trade secret or other proprietary right to or from the
Company or (iii) indemnification by the Company with respect to infringements of
proprietary rights.
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3.9 Material Contracts and Commitments. Neither the Company, nor,
to the knowledge of the Company, any third party is in default under any
material contract, agreement or instrument to which the Company is a party.
3.10 Compliance with Other Instruments, None Burdensome, etc. The
Company is not in violation of any term of its Restated Articles or Bylaws, or
in any material respect of any term or provision of any mortgage, indenture,
contract, agreement, instrument, judgment or decree to which it is a party, and
the Company is not in violation of any federal or state judgment, order,
statute, law, rule or regulation applicable to the Company, which violation
would have a material adverse effect on the Company's business. The execution,
delivery and performance of and compliance with this Agreement, the Shareholder
Rights Agreement and the Co-Sale Agreement and the issuance of the Shares and
the Conversion Shares, will not result in any violation of, or conflict with, or
constitute a default under, any material contract, agreement, instrument or
mortgage, or any pledge, lien, encumbrance or charge upon any of the properties
or assets of the Company; and there is no such violation or default or event
which, with the passage of time or giving of notice or both, would constitute a
violation or default which materially and adversely affects the business of the
Company or any of its properties or assets.
3.11 Litigation, etc. There are no actions, suits, proceedings or
investigations pending against the Company or its properties before any court or
governmental agency (nor, to the Company's knowledge, is there any threat
thereof or basis therefor), which, either in any case or in the aggregate, would
result in any material adverse change in the business or financial condition of
the Company or any of its properties or assets, or in any material impairment of
the right or ability of the Company to carry on its business as now conducted or
as proposed to be conducted, or in any material liability on the part of the
Company, and none which questions the validity of this Agreement, the
Shareholders Rights Agreement or the Co-Sale Agreement, or any action taken or
to be taken in connection herewith or therewith. The foregoing includes, without
limitation, any action, suit, proceeding, or investigation pending or, to the
Company's knowledge, currently threatened involving the prior employment of any
of the Company's employees, such employees' use in connection with the Company's
business of any information or techniques allegedly proprietary to any of their
former employers, such employees' obligations under any agreements with prior
employers, or negotiations by the Company with potential backers of, or
investors in, the Company or its proposed business. The Company is not a party
to, or to its knowledge, named in any order, writ, injunction, judgment or
decree of any court or government agency or instrumentality. There is no action,
suit or proceeding by the Company currently pending or that the Company
currently intends to initiate.
3.12 Employees. To the Company's knowledge, no employee of the
Company is in violation of any term of any employment contract, patent
disclosure agreement or any other contract or agreement relating to the
relationship of any such employee with the Company or any other party because of
the nature of the business conducted or to be conducted by the Company. The
Company does not have any collective bargaining agreements covering any of its
employees. The employment of each officer and employee of the Company is
terminable at the will of the Company.
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3.13 Employee Agreements. Each person presently employed by the
Company has executed (or will execute by the Closing Date) an Employment,
Confidential Information and Invention Assignment Agreement in the form
previously provided to or made available to the Purchasers. To the Company's
knowledge, neither the execution, delivery or performance of such agreements,
nor the carrying on of the Company's business as employees by such persons, nor
the conduct of the Company's business as currently proposed will 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
persons is now obligated.
3.14 No Conflict of Interest. The Company is not indebted, directly
or indirectly, to any of its officers or directors or to their respective
spouses or children, in any amount whatsoever other than in connection with
expenses or advances of expenses incurred in the ordinary course of business or
relocation expenses of employees. To the Company's knowledge, none of the
Company's officers or directors, or any members of their immediate families,
are, directly or indirectly, indebted to the Company (other than in connection
with purchases of the Company's stock) or have any direct or indirect ownership
interest in any firm or corporation with which the Company is affiliated or with
which the Company has a business relationship, or any firm or corporation which
competes with the Company except that officers, directors and/or shareholders of
the Company may own stock in (but not exceeding two percent of the outstanding
capital stock of ) any publicly traded companies that may compete with the
Company. To the Company's knowledge, none of the Company's officers or directors
or any members of their immediate families are, directly or indirectly,
interested in any material contract with the Company. The Company is not a
guarantor or indemnitor of any indebtedness of any other person, firm or
corporation.
3.15 No Financial Statements. The Company has not prepared any
balance sheet, income statement, statement of changes in financial position and
shareholders' equity or other financial statement and has kept its financial
records on a cash basis since the Company's incorporation on October 24, 1997.
3.16 Insurance. The Company has, or within 30 days following the
Closing, will have 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.
3.17 Qualified Small Business Stock. The Company represents and
warrants to the Purchasers that, to the best of its knowledge, the Shares should
qualify as "Qualified Small Business Stock" as defined in Section 1202(c) of the
Internal Revenue code of 1986, as amended as of the date hereof.
3.18 Registration Rights. Except as set forth in the Shareholder
Rights Agreement, the Company is not currently under any obligation to register
under the Securities Act of 1933, as amended (the "Securities Act") any of its
presently outstanding securities or any of its securities which may hereafter be
issued.
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3.19 Governmental Consent, etc. No consent, approval, qualification
or authorization of, or designation, declaration or filing with, any federal,
state or local governmental authority on the part of the Company is required in
connection with the valid execution and delivery of this Agreement, the
Shareholder Rights Agreement and the Co-Sale Agreement, or the offer, sale or
issuance of the Shares (and the Conversion Shares), or the consummation of any
other transaction contemplated hereby, except (a) filing of the Restated
Articles in the office of the Secretary of State of the State of California, and
(b) qualification (or taking such action as may be necessary to secure an
exemption from qualification, if available) of the offer and sale of the Shares
(and the Conversion Shares) under the California Corporate Securities Law and
other applicable Blue Sky laws, which filing and qualification, if required,
will be accomplished in a timely manner prior to or promptly upon completion of
the Closing.
3.20 Permits. The Company has all franchises, permits, licenses,
and any similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which could materially and adversely affect the
business, properties or financial condition of the Company and believes it can
obtain without undue burden or expense, any similar authority for the conduct of
its business as currently planned to be conducted. The Company is not in default
in any material respect under any of such franchises, permits, licenses or other
similar authority.
3.21 Environmental and Safety Laws. The Company is not in violation
of any applicable statute, law or regulation relating to the environment or
occupational health and safety, and to its knowledge, no material expenditures
are or will be required in order to comply with any such existing statute, law
or regulation.
3.22 Brokers or Finders. The Company has not incurred, and will not
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or any similar charges in connection with this Agreement or
any transaction contemplated hereby.
3.23 Disclosures. No representation, warranty or statement by the
Company in this Agreement, or in any written statement or certificate furnished
to the Purchasers pursuant to this Agreement, contains any untrue statement of a
material fact or, when taken together, omits to state a material fact necessary
to make the statements made herein, in light of the circumstances under which
they were made, not misleading. However, as to any projections furnished to the
Purchasers, such projections were prepared in good faith by the Company, but the
Company makes no representation or warranty that it will be able to achieve such
projections. The Company has fully provided each Purchaser with all the
information that such Purchaser has requested for deciding whether to purchase
the Shares.
3.24 Employee Benefit Plans. The Company does not have any Employee
Benefit Plan as defined in the Employee Retirement Income Security Act of 1974.
3.25 Minute Books. The minute books of the Company made available
to the Purchasers contain summaries of all meetings of directors and
shareholders since the time of incorporation.
-9-
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SECTION 4
Representations and Warranties of the Purchasers
Each Purchaser hereby represents and warrants to the Company with
respect to its purchase of the Shares as follows:
4.1 Investment Representations and Covenants of the Purchasers.
(a) This Agreement is made by the Company with each Purchaser
in reliance upon such Purchaser's representations and covenants made in this
Section 4, which by its execution of this Agreement each Purchaser hereby
confirms. Each Purchaser represents that the Shares to be received will be
acquired for investment for its own account, not as a nominee or agent, and not
with a view to the sale or distribution of any part thereof, and that it has no
present intention of selling, granting any participation in or otherwise
distributing the same. Each Purchaser further represents that it 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 Shares or any Common Stock acquired on conversion thereof.
(b) Each Purchaser understands and acknowledges that the
offering of the Shares pursuant to this Agreement will not, and any issuance of
Common Stock on conversion thereof may not, be registered under the Securities
Act on the ground that the sale provided for in this Agreement and the issuance
of securities hereunder is exempt pursuant to Section 4(2) or Section 3(b) of
the Securities Act, and that the Company's reliance on such exemption is
predicated on the Purchasers' representations set forth herein.
(c) Each Purchaser covenants that in no event will it make any
disposition of any of the Shares, or any Conversion Shares acquired upon the
conversion thereof, except in accordance with Section 4 of the Shareholder
Rights Agreement.
(d) Each Purchaser represents that it is experienced in
evaluating recently organized, high technology companies such as the Company, is
able to fend for itself in transactions such as the one contemplated by this
Agreement, has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of its prospective
investment in the Company, and has the ability to bear the economic risks of the
investment.
(e) Each Purchaser acknowledges and understands that the
Shares, and any Conversion Shares, must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available, and that, except as otherwise provided in the
Shareholder Rights Agreement, the Company is under no obligation to register
either the Shares or Conversion Shares.
-10-
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(f) Each Purchaser acknowledges that it has received and
reviewed a copy of Rule 144 promulgated under the Act, which permits limited
public resales of securities acquired in a non-public offering, subject to the
satisfaction of certain conditions. Each Purchaser understands that before the
Shares, or any Conversion Shares, may be sold under Rule 144, the following
conditions must be fulfilled, except as otherwise described below: (i) certain
public information about the Company must be available, (ii) the sale must occur
at least one year after the later of the date the Shares were sold by the
Company or the date they were sold by an affiliate of the Company, (iii) the
sale must be made in a broker's transaction and (iv) the number of Shares sold
must not exceed certain volume limitations. If, however, the sale occurs at
least two years after the Shares were sold by the Company or an affiliate of the
Company, and if the Purchaser is not an affiliate of the Company, the foregoing
conditions will not apply. Each Purchaser understands that the current
information referred to above is not now available and the Company has no
present plans to make such information available.
(g) Each Purchaser acknowledges that in the event the
applicable requirements of Rule 144 are not met, registration under the
Securities Act or compliance with another exemption from registration will be
required for any disposition of its stock. Each Purchaser understands that
although Rule 144 is not exclusive, the Commission has expressed its opinion
that persons proposing to sell restricted securities received in a private
offering other than in a registered offering or pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales and that such persons and the brokers who
participate in the transactions do so at their own risk.
(h) Each Purchaser covenants that, in the absence of an
effective registration statement covering the stock in question, it will sell,
transfer, or otherwise dispose of the Shares and any Conversion Shares only in a
manner consistent with its representations and covenants set forth in this
Section 4. In connection therewith each Purchaser acknowledges that the Company
shall make a notation on its stock books regarding the restrictions on transfer
set forth in this Section 4 and shall transfer shares on the books of the
Company only to the extent not inconsistent therewith.
(i) Each Purchaser represents that it is an "accredited
investor" as defined in Rule 501 pursuant to the Securities Act.
4.2 No Public Market. Each Purchaser understands that no public
market now exists for any of the securities issued by the Company and that it is
unlikely that a public market will ever exist for the Shares.
4.3 Receipt of Information. Each Purchaser has received and
reviewed this Agreement and all Exhibits hereto; it, its attorney and its
accountant have had access to, and an opportunity to review all documents and
other materials requested of the Company; it and they have been given an
opportunity to ask any and all questions of, and receive answers from, the
Company concerning the terms and conditions of the offering and to evaluate the
suitability of an investment in the Shares; and, in evaluating the suitability
of an investment in the Shares, it and they have not relied upon any
representations or other information (whether oral or written) other than as set
forth in the documents
-11-
17
and answers referred to above. The foregoing, however, does not limit or modify
the representations and warranties of the Company in Section 3 of this Agreement
or the right of the Purchasers to rely thereon.
4.4 Authorization. Each of the Purchasers has the full right,
power and authority to enter into and perform the Purchasers' obligations under
this Agreement, the Shareholder Rights Agreement and the Co-Sale Agreement, and
this Agreement and the Shareholder Rights Agreement and the Co-Sale Agreement
constitute valid and binding obligations of the Purchaser enforceable in
accordance with their terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditor's 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 that the indemnification provisions
set forth in the Shareholder Rights Agreement may be limited by applicable laws.
4.5 Consents. No consent, approval or authorization of, or
designation, declaration or filing with, any governmental authority on the part
of the Purchaser is required in connection with the valid execution and delivery
of this Agreement, the Shareholder Rights Agreement or the Co-Sale Agreement.
SECTION 5
Conditions to Obligations of Purchasers in the Series A Closing
The Purchasers' obligations to purchase the Series A Preferred at the
Series A Closing are, at the option of each Purchaser, subject to the
fulfillment on or prior to the Series A Closing Date of each of the following
conditions:
5.1 Representations and Warranties Correct. The representations
and warranties made by the Company in Section 3 hereof shall be true and correct
when made and shall be true and correct on and as of the Series A Closing Date
with the same force and effect as if they had been made on and as of said date.
5.2 Covenants. All covenants, agreements and conditions contained
in this Agreement to be performed by the Company on or prior to the Series A
Closing Date shall have been performed or complied with in all material
respects.
5.3 Employees. Xxxxx Xxx, Xxxxx Xxxx and Xxxx Xxxxx shall have
become employees of the Company prior to the Series A Closing Date and entered
into Employment, Confidential Information, Invention Assignment and Arbitration
Agreements with the Company.
5.4 Opinion of Company's Counsel. The Purchasers shall have
received from Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, counsel to the Company, an
opinion addressed to them, dated the Series A Closing Date, in substantially the
form of Exhibit G.
-12-
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5.5 Compliance Certificate. The Company shall have delivered to
the Purchasers a certificate executed by the President of the Company, dated the
Series A Closing Date, and certifying to the fulfillment of the conditions
specified in Sections 5.1, 5.2, and 5.9 of this Agreement, and that he has made,
or caused to be made, such investigations as he deemed necessary in order to
permit him to verify the accuracy of the information set forth in such
certificate.
5.6 Blue Sky. The Company shall have obtained all necessary Blue
Sky law permits and qualifications, or secured an exemption therefrom, required
by any state for the offer and sale of the Series A Preferred and the Common
Stock issuable upon conversion of the Series A Preferred.
5.7 Board of Directors. On or before the Closing, the Bylaws of
the Company shall provide for a flexible number of directors from four to seven
and fixing the current number of directors at seven. The Board of Directors
shall at the Closing consist of Xxxxxxx Xxxxxx, Xxxx Xxxxxx, Xxxx Xxxxxx, Xxxxx
Xxx, Xxxxx Xxxx and two vacancies.
5.8 Restated Articles. The Restated Articles shall have been filed
with the Secretary of State of the State of California.
5.9 No Material Adverse Change. There shall have been no material
adverse change in the Company's business or financial condition.
5.10 Shareholder Rights Agreement. The Purchasers and the Company
shall have executed that certain Shareholder Rights Agreement dated February 10,
1998, pursuant to the Prior Purchase Agreement.
5.11 Co-Sale Agreement. The Purchasers and the Company shall have
executed that certain Co-Sale Agreement dated February 10, 1998, pursuant to the
Prior Purchase Agreement.
5.12 Voting Agreement. The Company, Xxxxx Xxx, Xxxxx Xxxx and Xxxx
Xxxxx shall have executed that certain Voting Agreement dated February 10, 1998,
pursuant to the Prior Purchase Agreement.
SECTION 6
Conditions to the Obligations of Purchasers in the Series B Closing
The Purchasers' obligations to purchase the Series B Preferred at the
Series B Closing are, at the option of Purchaser, subject to the fulfillment on
or prior to the Series B Closing Date of each of the following conditions:
6.1 Representations and Warranties Correct. The representations
and warranties made by the Company in Section 3 hereof shall be true and correct
when made and shall be true and correct on
-13-
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and as of the Series B Closing Date with the same force and effect as if they
had been made on and as of said date with such exceptions as are set forth in
Exhibit C attached hereto, which shall be updated as of the Series B Closing
Date.
6.2 Covenants. All covenants, agreements and conditions contained
in this Agreement to be performed or complied with by the Company on or prior to
the Series B Closing Date shall have been performed or complied with.
6.3 Compliance Certificate. The Company shall have delivered to
the Purchasers a certificate of the Company, executed by the President of the
Company, dated the Series B Closing Date, and certifying, among other things, to
the fulfillment of the conditions specified in Sections 6.1 and 6.2 of this
Agreement.
6.4 Fulfillment of Series B Milestones. The Company shall have
achieved and completed all of the Series B Milestones as set forth in and
determined (with regard to the achievement thereof) in accordance with Exhibit H
attached hereto.
6.5 Opinion of Company's Counsel. The Purchasers shall have
received from Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, counsel to the Company, an
opinion addressed to them, dated the Series B Closing Date, in form and
substance reasonably satisfactory to Purchasers and their special counsel.
SECTION 7
Conditions to the Obligations of Purchasers in each Series C Closing
The Purchasers' obligations to purchase the Series C Preferred at each
Series C Closing are, at the option of each Purchaser, subject to the
fulfillment of the following conditions:
7.1 Representations and Warranties Correct. The representations
and warranties made by the Company in Section 3 hereof shall be true and correct
when made and shall be true and correct on and as of each Series C Closing Date
with the same force and effect as if they had been made on and as of said date
with such exceptions as are set forth in Exhibit C attached hereto, which shall
be updated as of each Series C Closing Date.
7.2 Covenants. All covenants, agreements and conditions contained
in this Agreement to be performed or complied with by the Company on or prior to
each Series C Closing Date shall have been performed or complied with.
7.3 Compliance Certificate. The Company shall have delivered to
the Purchasers a certificate of the Company, executed by the President of the
Company, dated each Series C Closing Date, and certifying, among other things,
to the fulfillment of the conditions specified in Sections 7.1 and 7.2 of this
Agreement.
-14-
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7.4 Certificate of Amendment. The Certificate of Amendment shall
have been filed with the Secretary of State of the State of California.
7.5 No Material Adverse Change. There shall have been no material
adverse change in the Company's business or financial condition.
7.6 Shareholder Rights Agreement. The Purchasers and the Company
shall have executed the Shareholder Rights Agreement.
7.7 Co-Sale Agreement. The Company and the Founders shall have
entered into the Co-Sale Agreement with the Purchasers.
7.8 Voting Agreement. The Company and the Founders shall have
entered into the Voting Agreement with the Purchasers.
7.9 Fulfillment of Series C Milestones. The Company shall have
achieved and completed all of the Series C Milestones as set forth in and
determined (with regard to the achievement thereof) in accordance with Exhibit H
attached hereto.
7.10 Opinion of Company's Counsel. The Purchasers shall have
received from Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, counsel to the Company, an
opinion addressed to them, dated each Series C Closing Date, in form and
substance reasonably satisfactory to Purchasers and their special counsel.
SECTION 8
Conditions to the Obligations of the Company in the Series A Closing
The Company's obligation to sell and issue the Series A Preferred at
the Series A Closing is, at the option of the Company, subject to the
fulfillment as of the Series A Closing Date of the following conditions:
8.1 Representations. With respect to each Purchaser, the
representations made by such Purchaser in Section 4 hereof shall be true and
correct when made, and shall be true and correct on the Series A Closing Date.
8.2 Blue Sky. The Company shall have obtained all necessary blue
sky law permits and qualifications, or have the availability of exemptions
therefrom, required by any state for the offer and sale of the Shares.
8.3 Shareholder Rights Agreement. The Purchasers and the Company
shall have entered into the Shareholder Rights Agreement.
-15-
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8.4 Legal Matters. All material matters of a legal nature which
pertain to this Agreement and the transactions contemplated hereby, shall have
been reasonably approved by counsel to the Company.
SECTION 9
Conditions to the Obligations of the Company in the Series B Closing
The Company's obligation to sell and issue the Series B Preferred at
the Series B Closing is, at the option of the Company, subject to the
fulfillment as of the Series B Closing Date of the following conditions:
9.1 Representations. With respect to each Purchaser, the
representations made by such Purchaser in Section 4 hereof shall be true and
correct when made, and shall be true and correct on the Series B Closing Date
with such exceptions as are set forth in Exhibit C attached hereto, which shall
be updated as of the Series B Closing Date.
9.2 Blue Sky. The Company shall have obtained all necessary blue
sky law permits and qualifications, or have the availability of exemptions
therefrom, required by any state for the offer and sale of the Shares.
9.3 Legal Matters. All material matters of a legal nature which
pertain to this Agreement and the transactions contemplated hereby, shall have
been reasonably approved by counsel to the Company.
SECTION 10
Conditions to the Obligations of the Company in each Series C Closing
The Company's obligation to sell and issue the Series C Preferred at
each Series C Closing is, at the option of the Company, subject to the
fulfillment as of each Series C Closing Date of the following conditions:
10.1 Representations. With respect to each Purchaser, the
representations made by such Purchaser in Section 4 hereof shall be true and
correct when made, and shall be true and correct on each Series C Closing Date
with such exceptions as are set forth in Exhibit C attached hereto, which shall
be updated as of each Series C Closing Date.
10.2 Blue Sky. The Company shall have obtained all necessary blue
sky law permits and qualifications, or have the availability of exemptions
therefrom, required by any state for the offer and sale of the Shares.
-16-
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10.3 Shareholder Rights Agreement. The Purchasers and the Company
shall have entered into the Shareholder Rights Agreement.
10.4 Voting Agreement. The Company, the Founders and the Purchasers
shall have executed the Voting Agreement.
10.5 Legal Matters. All material matters of a legal nature which
pertain to this Agreement and the transactions contemplated hereby, shall have
been reasonably approved by counsel to the Company.
SECTION 11
Miscellaneous
11.1 Governing Law. This Agreement shall be governed in all
respects by the laws of the State of California, without giving effect to the
conflicts of laws principles thereof.
11.2 Survival. The representations, warranties, covenants, and
agreements made herein shall survive any investigation made by any Purchaser and
the closing of the transactions contemplated hereby.
11.3 Successors and Assigns. Except as otherwise provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties hereto,
provided, however, that the rights of a Purchaser to purchase Shares shall not
be assignable without the consent of the Company.
11.4 Entire Agreement; Amendment. This Agreement and the other
documents delivered pursuant hereto constitute the full and entire understanding
and agreement between the parties with regard to the subjects hereof and
thereof. This Agreement shall supersede and cancel all prior agreements between
the parties hereto with regard to the subject matter hereof, including, but not
limited to, the Prior Purchase Agreement. Neither this Agreement nor any term
hereof may be amended, waived, discharged, or terminated other than by a written
instrument signed by the party against whom enforcement of any such amendment,
waiver, discharge, or termination is sought; provided, however, that holders of
sixty-seven percent (67%) of the shares of Common Stock issued or issuable upon
conversion of the outstanding Shares and (whether or not converted) not resold
to the public may waive or amend, on behalf of all Purchasers, any provisions
hereof, so long as the effect thereof will be that all such Purchasers and other
holders of the Shares will be treated equally.
11.5 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon delivery to the party to be notified in person by facsimile or by courier
service or five days after deposit with the United States mail, by registered or
certified mail, postage prepaid, addressed (a) if to a Purchaser, at such
Purchaser's address set forth in Exhibit A, or at such other address as such
Purchaser shall have furnished to the Company in writing, or (b) if to any other
holder of any Shares, at such address as such holder shall have furnished the
-17-
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Company in writing, or, until any such holder so furnishes an address to the
Company, then to and at the address of the last holder of such Shares who has so
furnished an address to the Company, or (c) if to the Company, one copy should
be sent to its address and facsimile number set forth at the end of this
Agreement and addressed to the attention of the Corporate Secretary, or at such
other address as the Company shall have furnished to the Purchasers (with a copy
to Xxxxxx X. X'Xxxxx, Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxx Xxxx, Xxxx
Xxxx, Xxxxxxxxxx 00000; facsimile: (000) 000-0000).
11.6 Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any holder of any Shares, upon any breach or
default of the Company under this Agreement, shall impair any such right, power
or remedy of such holder nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any holder of any breach or default under this
Agreement, or any waiver on the part of any holder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
11.7 California Corporate Securities Law. THE SALE OF THE
SECURITIES WHICH 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
THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS AN EXEMPTION FROM SUCH
QUALIFICATION IS AVAILABLE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, OR SUCH EXEMPTION
BEING AVAILABLE.
11.8 Expenses. The Company and the Purchasers shall each bear their
own expenses and legal fees with respect to this Agreement and the transactions
contemplated hereby; except that, upon the Series A Closing, the Company will
pay at the Series A Closing the reasonable legal fees (up to a maximum of
$10,000) and reasonable expenses upon receipt of a xxxx therefor, incurred by
Venture Law Group, special counsel to the Purchasers.
11.9 Finder's Fee. The Company and the Purchasers shall each
indemnify and hold the other harmless from any liability for any commission or
compensation in the nature of a finder's fee (including the costs, expenses and
legal fees of defending against such liability) for which the Company or the
Purchaser's, or any of their respective partners, employees, or representatives,
as the case may be, is responsible.
11.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all of the Purchasers,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
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11.11 Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that no such severability shall be
effective if it materially changes the economic benefit of this Agreement to any
party.
11.12 Gender. The use of the neuter gender herein shall be deemed to
include the masculine and the feminine gender, if the context so requires.
11.13 Headings. Headings and the table of contents in this Agreement
are for reference purposes only and shall not be deemed to have an substantive
effect.
[This space intentionally left blank.]
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The foregoing agreement is hereby executed as of the date first above
written.
"COMPANY"
AVANEX CORPORATION
a California corporation
By:
--------------------------------------
Xxxxxxx Xxxxxx, Chief Executive Officer
[Signature page to the First Amended and Restated Preferred Stock
Purchase Agreement]
26
"PURCHASERS"
SEQUOIA CAPITAL VII
a California Limited Partnership
SEQUOIA TECHNOLOGY PARTNERS VII
a California Limited Partnership
SQP 1997
SEQUOIA 1997 LLC
SEQUOIA INTERNATIONAL PARTNERS
By: SC VII-A Management, LLC
A California Limited Liability Company
By:
--------------------------------------
Managing Member
CROSSPOINT VENTURE PARTNERS 1997
By:
--------------------------------------
Xxxx Xxxxxx
Partner
[Signature page to the First Amended and Restated Preferred Stock
Purchase Agreement]
27
WS INVESTMENT 98
By:
--------------------------------------
Partner
XXXXXXXX X. X'XXXXX AND XXXXXX X. X'XXXXX,
TRUSTEES OF THE O'BRIEN FAMILY TRUST U/D/T
DATED 7/1/92
By:
--------------------------------------
[Signature page to the First Amended and Restated Preferred Stock
Purchase Agreement]
28
JAFCO CO., LTD.
By:
--------------------------------------
JAFCO America Ventures, Inc.
Its Executive Partner
JAFCO R-3 INVESTMENT ENTERPRISE
PARTNERSHIP
By:
--------------------------------------
JAFCO America Ventures, Inc.
Its Executive Partner
JAFCO JS-3 INVESTMENT ENTERPRISE
PARTNERSHIP
By:
--------------------------------------
JAFCO America Ventures, Inc.
Its Executive Partner
JAFCO G6-(A) INVESTMENT ENTERPRISE
PARTNERSHIP
By:
--------------------------------------
JAFCO America Ventures, Inc.
Its Executive Partner
JAFCO G6-(B) INVESTMENT ENTERPRISE
PARTNERSHIP
By:
--------------------------------------
JAFCO America Ventures, Inc.
Its Executive Partner
U.S. INFORMATION TECHNOLOGY No. 2
INVESTMENT ENTERPRISE PARTNERSHIP
By:
--------------------------------------
JAFCO America Ventures, Inc.
Its Executive Partner
XXXXXXX XXXXXX
-----------------------------------------
[Signature page to the First Amended and Restated Preferred Stock
Purchase Agreement]
29
XXXXXX XXXX
-----------------------------------------
[Signature page to the First Amended and Restated Preferred Stock
Purchase Agreement]
30
EXHIBIT A
SCHEDULE OF PURCHASERS
SERIES A CLOSING
Amount of
Aggregate Cash Cancellation of Number
Name of Purchaser Purchase Price Amount Debt of Shares
----------------- --------------- ---------- ------------- ---------
Crosspoint Venture Partners 1997 $ 334,500.00 $309,500.00 $25,000.00 1,500,000
JAFCO Co., Ltd. $ 13,399.84 60,089
JAFCO R-3 Investment Enterprise $ 13,399.84 60,089
Partnership
JAFCO JS-3 Investment Enterprise $ 13,399.84 60,089
Partnership
JAFCO G6-(A) Investment Enterprise $ 13,399.84 60,089
Partnership
JAFCO G6-(B) Investment Enterprise $ 13,399.84 60,089
Partnership
U.S. Information Technology No. 2 $ 267,500.76 1,199,555
Investment Enterprise Partnership
Sequoia Capital VII, a California $ 306,067.50 $281,067.50 $25,000.00 1,372,500
Limited Partnership
Sequoia Technology Partners VII, a $ 13,380.00 60,000
California Limited Partnership
SQP 1997 $ 6,208.32 27,840
Sequoia 1997 LLC $ 3,492.18 15,660
Sequoia International Partners $ 5,352.00 24,000
WS Investment 98 $ 5,589.94 25,067
Xxxxxxxx X. X'Xxxxx and Xxxxxx X. $ 1,117.90 5,013
O'Brien, Trustees of the O'Brien Family
Trust U/D/T
dated 7/1/92
TOTAL $1,010,207.80 4,530,080
============= =========
31
SERIES B CLOSING
Aggregate Number
Name of Purchaser Purchase Price of Shares
----------------- -------------- ---------
Crosspoint Venture Partners 1997 $ 834,000.00 2,085,000
JAFCO Co., Ltd. $ 33,443.20 83,608
JAFCO R-3 Investment Enterprise Partnership $ 33,443.20 83,608
JAFCO JS-3 Investment Enterprise Partnership $ 33,443.20 83,608
JAFCO G6-(A) Investment Enterprise Partnership $ 33,443.20 83,608
JAFCO G6-(B) Investment Enterprise Partnership $ 33,443.20 83,608
U.S. Information Technology No. 2 Investment $ 666,784.00 1,666,960
Enterprise Partnership
Sequoia Capital VII, a California Limited $ 834,000.00 2,085,000
Partnership
Sequoia Technology Partners VII, a California
Limited Partnership
SQP 1997
Sequoia 1997 LLC
Sequoia International Partners
WS Investment 98 $ 13,915.00 34,787
Xxxxxxxx X. X'Xxxxx and Xxxxxx X. X'Xxxxx, $ 2,782.80 6,957
Trustees of the O'Brien Family Trust U/D/T
dated 7/1/92
TOTAL $2,518,697.80 6,296,744
============= =========
32
SERIES C CLOSING
Aggregate Number
Name of Purchaser Purchase Price of Shares
----------------- -------------- ---------
Crosspoint Venture Partners 1997 $1,599,999.91 2,116,402
JAFCO Co., Ltd. $ 199,999.80 264,550
U.S. Information Technology No. 2 Investment $ 799,999.96 1,058,201
Enterprise Partnership
Sequoia Capital VII, a California Limited $1,464,000.05 1,936,508
Partnership
Sequoia Technology Partners VII, a California $ 63,999.94 84,656
Limited Partnership
SQP 1997 $ 29,695.68 39,280
Sequoia 1997 LLC $ 16,703.82 22,095
Sequoia International Partners $ 25,600.43 33,863
WS Investment 98 $ 30,494.77 40,337
Xxxxxxxx X. X'Xxxxx and Xxxxxx X. X'Xxxxx, $ 6,098.65 8,067
Trustees of the O'Brien Family Trust U/D/T
dated 7/1/92
Xxxxxxx Xxxxxx $ 296,352.00 392,000
TOTAL $4,532,945.01 5,995,959
------------- -------------
33
EXHIBIT B
FIRST AMENDED AND RESTATED ARTICLES OF INCORPORATION
34
EXHIBIT C
SCHEDULE OF EXCEPTIONS
35
EXHIBIT D
FIRST AMENDED AND RESTATED SHAREHOLDER RIGHTS AGREEMENT
36
EXHIBIT E
FIRST AMENDED AND RESTATED CO-SALE AGREEMENT
37
EXHIBIT F
FIRST AMENDED AND RESTATED VOTING AGREEMENT
38
EXHIBIT G
FORM OF OPINION OF XXXXXX XXXXXXX XXXXXXXX & XXXXXX
39
EXHIBIT H
SERIES B PREFERRED AND SERIES C PREFERRED MILESTONES
40
EXHIBIT I
CERTIFICATE OF AMENDMENT TO THE
AMENDED AND RESTATED ARTICLES OF INCORPORATION
