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EXHIBIT 10.16
SERIES D CONVERTIBLE PREFERRED STOCK
PURCHASE AGREEMENT
between
ASPECT MEDICAL SYSTEMS, INC.
and
THE SEVERAL PURCHASERS NAMED IN SCHEDULE I
Dated as of February 13, 1998
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TABLE OF CONTENTS
Page
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1. AUTHORIZATION AND SALE OF SHARES ...................................... 1
1.01 AUTHORIZATION .................................................. 1
1.02 SALE OF SHARES ................................................. 1
1.03 USE OF PROCEEDS ................................................ 1
2. CLOSING ............................................................... 1
3. REPRESENTATIONS OF THE COMPANY ........................................ 2
3.01 ORGANIZATION AND STANDING ...................................... 2
3.02 CAPITALIZATION ................................................. 2
3.03 SUBSIDIARIES ................................................... 3
3.04 STOCKHOLDER LIST AND AGREEMENTS ................................ 3
3.05 ISSUANCE OF SHARES ............................................. 4
3.06 AUTHORITY FOR AGREEMENTS, ETC .................................. 4
3.07 GOVERNMENTAL AND OTHER CONSENTS ................................ 5
3.08 LITIGATION; COMPLIANCE WITH LAW ................................ 5
3.09 TAXES .......................................................... 6
3.10 FINANCIAL STATEMENTS ........................................... 6
3.11 BOOKS AND RECORDS .............................................. 7
3.12 TITLE TO PROPERTIES, LEASEHOLD INTERESTS, LIENS AND ENCUMBRANCES 7
3.13 COMPLIANCE WITH OTHER INSTRUMENTS .............................. 7
3.14 INDEBTEDNESS TO AFFILIATES ..................................... 7
3.15 CONTRACTS ...................................................... 8
3.16 U.S. REAL PROPERTY HOLDING CORPORATION ......................... 8
3.17 INSURANCE ...................................................... 8
3.18 PATENTS, TRADEMARKS, ETC ....................................... 8
3.19 PROPRIETARY INFORMATION OF THIRD PARTIES ....................... 9
3.20 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTS .............. 9
3.21 KEY EMPLOYEES .................................................. 10
3.22 BROKERS ........................................................ 10
3.23 DISCLOSURE ..................................................... 10
3.24 COMPLIANCE WITH ENVIRONMENTAL AND SAFETY LAWS .................. 10
4. REPRESENTATION AND WARRANTIES OF THE PURCHASERS ....................... 13
4.01 INVESTMENT ..................................................... 13
4.02 AUTHORITY ...................................................... 13
4.03 EXPERIENCE ..................................................... 13
4.04 ACCREDITED INVESTOR ............................................ 13
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5. CONDITIONS TO OBLIGATIONS OF THE PURCHASERS AT THE CLOSING ........... 13
5.01 ISSUANCE OF SHARES ............................................ 13
5.02 ACCURACY OF REPRESENTATIONS AND WARRANTIES .................... 14
5.03 PERFORMANCE ................................................... 14
5.04 ALL PROCEEDINGS TO BE SATISFACTORY ............................ 14
5.05 COMPLIANCE CERTIFICATE ........................................ 14
5.06 CONSENTS; FILINGS ............................................. 14
5.07 OPINION OF COUNSEL ............................................ 14
5.08 FILING OF CHARTER ............................................. 14
5.09 CERTIFICATES AND DOCUMENTS .................................... 14
5.10 VOTING AGREEMENT .............................................. 15
5.11 CO-SALE AGREEMENT ............................................. 15
5.12 RIGHTS OF FIRST REFUSAL ....................................... 15
5.13 REGISTRATION RIGHTS AGREEMENT ................................. 15
5.14 MINIMUM SALES ................................................. 15
5.15 LEGAL FEES .................................................... 16
5.16 NO ADVERSE CHANGES ............................................ 16
6. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY ......................... 16
6.01 ACCURACY OF REPRESENTATIONS AND WARRANTIES .................... 16
7. COVENANTS OF THE COMPANY ............................................. 16
7.01 INSPECTION .................................................... 16
7.02 FINANCIAL STATEMENTS AND OTHER INFORMATION .................... 16
7.03 MATERIAL CHANGES AND LITIGATION ............................... 17
7.04 KEY MAN INSURANCE ............................................. 17
7.05 OTHER INSURANCE ............................................... 18
7.06 ACCOUNTS AND RECORDS .......................................... 18
7.07 AVAILABILITY OF COMMON STOCK FOR CONVERSION ................... 18
7.08 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTS ............. 19
7.09 NON-COMPETITION ............................................... 19
7.10 USE OF PROCEEDS ............................................... 19
7.11 PREPAYMENT OF TAXES; CORPORATE EXISTENCE ...................... 19
7.12 SPECIAL COVENANTS ............................................. 20
7.13 BOARD OF DIRECTORS ............................................ 21
7.14 RIGHT OF FIRST REFUSAL ........................................ 22
7.15 TERMINATION OF COVENANTS ...................................... 23
7.16 WAIVER OF COVENANTS ........................................... 24
8. WAIVER OF PRIOR PREEMPTIVE RIGHTS; TERMINATION OF COVENANTS .......... 24
9. SUCCESSORS AND ASSIGNS ............................................... 24
10. TRANSFERS OF CERTAIN RIGHTS .......................................... 24
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11. CONFIDENTIALITY ...................................................... 25
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES ........................... 25
13. NOTICES .............................................................. 25
14. BROKERS .............................................................. 26
15. ENTIRE AGREEMENT ..................................................... 26
16. AMENDMENTS AND WAIVERS ............................................... 26
17. CONSENTS ............................................................. 26
18. COUNTERPARTS ......................................................... 26
19. HEADINGS ............................................................. 26
20. SEVERABILITY ......................................................... 27
21. GOVERNING LAW ........................................................ 27
INDEX TO SCHEDULES
SCHEDULE I Purchasers
SCHEDULE II Disclosure Schedule
SCHEDULE III Stockholders List
INDEX TO EXHIBITS
EXHIBIT A Third Restated Certificate of Incorporation
EXHIBIT B Third Amended and Restated Right of First Refusal and Co-Sale
Agreement
EXHIBIT C Third Amended and Restated Registration Rights Agreement
EXHIBIT D Third Amended and Restated Voting Agreement
EXHIBIT E Non-Disclosure and Assignment of Inventions Agreement
EXHIBIT F Opinion of Xxxx and Xxxx LLP
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SERIES D CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
This Agreement dated as of February 13, 1998 is entered into by and
among Aspect Medical Systems, Inc., a Delaware corporation (the "Company"), and
the several purchasers listed on SCHEDULE I hereto (individually a "Purchaser"
and collectively the "Purchasers").
In consideration of the mutual promises and covenants contained in this
Agreement, the parties hereto agree as follows:
1. AUTHORIZATION AND SALE OF SHARES.
1.01 AUTHORIZATION. The Company has, on or before the Closing
(as defined in Section 2 below), duly authorized the sale and issuance of up to
1,714,286 shares (the "Preferred Shares") of its Series D Convertible Preferred
Stock, $.01 par value per share (the "Series D Preferred Stock"), having the
rights, restrictions, privileges and preferences as set forth in the Third
Restated Certificate of Incorporation attached as EXHIBIT A hereto (the
"Charter"). The Company has, on or before the Closing, adopted and filed the
Charter with the Secretary of State of the State of Delaware.
1.02 SALE OF SHARES. Subject to the terms and conditions of this
Agreement, at the Closing, the Company agrees to sell and issue to each of the
Purchasers, and each of the Purchasers acting severally and not jointly agrees
to purchase from the Company, the number of shares of Series D Preferred Stock
set forth opposite the name of such Purchaser on SCHEDULE I hereto under the
heading "Preferred Shares to be Purchased" for a purchase price of $7.00 per
share.
1.03 USE OF PROCEEDS. The Company will use the proceeds from the
sale of the Preferred Shares primarily for research and development and working
capital, to purchase capital equipment and for sales and marketing efforts.
2. CLOSING. (a) The closing of the sale and purchase of the Preferred
Shares shall take place at the offices of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, High
Street Tower, 000 Xxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx at 10:00 a.m. on February
__, 1998, or at such other time, date and location as are agreeable to the
Company and the Purchasers (the "Closing"). The date on which the Closing occurs
shall hereinafter be referred to as the "Closing Date."
(b) At the Closing (i) the Company shall deliver to each
Purchaser a certificate evidencing the shares of Series D Preferred Stock
purchased by such Purchaser pursuant to Section 1.02 hereof, with such
certificates registered in the name of such Purchaser, and (ii) each Purchaser
shall deliver to the Company the dollar amount set forth opposite such
Purchaser's name on SCHEDULE I hereto under the heading "Aggregate Purchase
Price For Preferred Shares," (i) in cash, (ii) by
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certified check payable to the order of the Company, (iii) by wire transfer or
(iv) any combination of such methods.
(c) If at the Closing, any of the conditions specified in
Section 5 have not been met, each of the Purchasers may elect to be relieved of
any obligations under this Agreement with respect to the Closing without waiving
any of the rights or remedies such Purchaser may have by reason of such failure
to meet such conditions.
3. REPRESENTATIONS OF THE COMPANY. Except as disclosed by the Company
in SCHEDULE II hereto, the Company hereby represents and warrants to each of the
Purchasers as follows:
3.01 ORGANIZATION AND STANDING. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has full corporate power and authority to conduct its
business as presently conducted and as proposed to be conducted by it, to enter
into and perform this Agreement and any agreements contemplated by this
Agreement and to carry out the transactions and perform the obligations
contemplated herein. The Company is duly qualified to do business as a foreign
corporation and is in good standing in every jurisdiction in which the failure
to so qualify would have a material adverse effect on the operations or
financial condition of the Company. The Company has delivered to the Purchasers
true and complete copies of its Charter and By-Laws, each as amended to date.
3.02 CAPITALIZATION. Effective immediately after the Closing,
the authorized capital stock of the Company will consist of (i) 14,500,000
shares of Common Stock, $.01 par value per share (the "Common Stock"), of which
1,553,874 shares are issued and outstanding; and (ii) 18,843,224 shares of
Preferred Stock, $.01 par value per share (the "Preferred Stock"), of which (a)
406,898 shares have been designated Series A-1 Convertible Preferred Stock (the
"Series A-1 Preferred Stock"), 406,898 of which are issued and outstanding, (b)
406,898 shares have been designated Series A-2 Convertible Preferred Stock (the
"Series A-2 Preferred Stock"), none of which are issued and outstanding, (c)
3,800,428 shares have been designated Series B-1 Convertible Preferred Stock
(the "Series B-1 Preferred Stock"), 3,800,428 of which are issued and
outstanding, (d) 3,800,428 shares have been designated Series B-2 Convertible
Preferred Stock (the "Series B-2 Preferred Stock"), none of which are issued and
outstanding, (e) 3,500,000 have been designated Series C Convertible Preferred
Stock (the "Series C Preferred Stock"), 3,439,949 of which shares are issued and
outstanding, (f) 3,500,000 have been designated Series C- 2 Convertible
Preferred Stock (the "Series C-2 Preferred Stock"), none of which are issued and
outstanding, (g) 1,714,286 have been designated Series D Preferred Stock,
1,666,234 of which are issued and outstanding, and (h) 1,714,286 have been
designated Series D-2 Convertible Preferred Stock (the "Series X-0 Xxxxxxxxx
Xxxxx"),
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xxxx of which are issued and outstanding. All of the issued and outstanding
shares of Common Stock, Series A-1 Preferred Stock, Series A-2 Preferred Stock,
Series B-1 Preferred Stock, Series B-2 Preferred Stock, Series C Preferred
Stock, Series C-2 Preferred Stock, Series D Preferred Stock and Series D-2
Preferred Stock have been duly authorized and validly issued and, when the
Series D Preferred Stock is issued in accordance with the terms of this
Agreement or the Charter, the issued and outstanding shares of Preferred Stock
will be fully paid and nonassessable. Except as set forth in SCHEDULE II hereto
or as provided in this Agreement, (i) no subscription, warrant, option,
convertible security or other right (contingent or otherwise) to purchase or
acquire any share of capital stock of the Company is authorized or outstanding;
(ii) there is not any commitment of the Company to issue any subscription,
warrant, option, convertible security or other such right or to issue or
distribute to holders of any shares of its capital stock any evidences of
indebtedness or assets of the Company; and (iii) the Company has no obligation
(contingent or otherwise) to purchase, redeem or otherwise acquire any shares of
its capital stock or any interest therein or to pay any dividend or to make any
other distribution in respect thereof. Except as set forth in the Second Amended
and Restated Registration Rights Agreement dated as of February 26, 1997 by and
among the Company and the several parties named in the signature pages thereto
(the "Old Registration Rights Agreement") or as otherwise set forth in SCHEDULE
II or as provided in this Agreement, no person or entity is entitled to (i) any
preemptive or similar right with respect to the issuance of any capital stock of
the Company, or (ii) any rights with respect to the registration of any capital
stock of the Company under the Securities Act of 1933, as amended (the
"Securities Act"). All of the issued and outstanding shares of Common Stock and
Preferred Stock have been offered, issued and sold by the Company in compliance
with applicable federal and state securities laws. To the best of the Company's
knowledge, no stockholder of the Company has granted options or other rights to
purchase any shares of Common Stock.
3.03 SUBSIDIARIES. The Company has no subsidiaries and does not
own or control, directly or indirectly, any shares of capital stock of any other
corporation, or any interest in any partnership, joint venture or other
non-corporate business enterprise.
3.04 STOCKHOLDER LIST AND AGREEMENTS. Attached as SCHEDULE III
is a true and complete list of the stockholders of the Company, showing the
number of shares of Common Stock or other securities of the Company held by each
stockholder as of the date of this Agreement. Except as set forth in the By-Laws
of the Company, the Second Amended and Restated Voting Agreement dated as of
February 26, 1997 by and among the Company and the several parties named in the
signature pages thereto (the "Old Voting Agreement") and the Second Amended and
Restated Right of First Refusal and Co-Sale Agreement dated as of February 26,
1997 by and among the Company and the several parties named in the signature
pages thereto (the "Old Co-Sale Agreement") or as otherwise set forth in
SCHEDULE II, there are no
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agreements, written or oral, between the Company and any holder of its capital
stock, or, to the best knowledge of the Company, among any holders of its
capital stock, relating to the acquisition, disposition or voting of the capital
stock of the Company.
3.05 ISSUANCE OF SHARES. The issuance, sale and delivery of the
Preferred Shares in accordance with this Agreement, the issuance and delivery of
the Series A-2 Preferred Stock, the Series B-2 Preferred Stock, the Series C-2
Preferred Stock and the Series D-2 Preferred Stock (collectively, the "Special
Preferred Stock") and the issuance and delivery of the shares of Common Stock
issuable upon conversion of the shares of Preferred Shares (the "Conversion
Shares") and the Special Preferred Stock, have been duly authorized and reserved
for issuance, as the case may be, by all necessary corporate action on the part
of the Company, and the Preferred Shares when so issued, sold and delivered
against payment therefor in accordance with the provisions of this Agreement,
the Special Preferred Stock when issued in accordance with the terms of Article
Fourth, Paragraph B, Subparagraph 6 as set forth in the Charter (a "Special
Mandatory Conversion"), and the Conversion Shares when issued upon such
conversion and the shares of Common Stock when issued upon conversion of the
Special Preferred Stock, will be duly and validly issued, fully paid and
non-assessable.
3.06 AUTHORITY FOR AGREEMENTS, ETC. The execution and delivery
by the Company of this Agreement; the Third Amended and Restated Right of First
Refusal and Co-Sale Agreement in the form attached as EXHIBIT B (the "Amended
and Restated Co-Sale Agreement"); the Third Amended and Restated Registration
Rights Agreement in the form attached as EXHIBIT C (the "Amended and Restated
Registration Rights Agreement"), and the Third Amended and Restated Voting
Agreement in the form attached as EXHIBIT D (the "Amended and Restated Voting
Agreement") and the performance by the Company of its obligations hereunder and
thereunder have been duly authorized by all necessary corporate action by the
Company, its officers, directors and stockholders. This Agreement, the Amended
and Restated Co-Sale Agreement, the Amended and Restated Registration Rights
Agreement, and the Amended and Restated Voting Agreement have been duly executed
and delivered by the Company and constitute the legal, valid and binding
obligation of the Company, enforceable in accordance with their terms. The
execution of this Agreement, the Amended and Restated Co-Sale Agreement, the
Amended and Restated Registration Rights Agreement, and the Amended and Restated
Voting Agreement by the Company and the performance of its obligations hereunder
and thereunder will not violate any provision of law or any order of any court
or other agency of government, will not conflict with or result in any breach
of, or constitute a default under, any of the terms, conditions or provisions of
its Charter or By-Laws, each as amended to date, or any indenture, lease,
agreement or other instrument to which the Company is a party or by which it or
any of its properties is bound, or any decree, judgment, order, statute, rule or
regulation applicable to the Company and will not result in the creation or
imposition of any lien, charge,
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restriction, claim or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company.
3.07 GOVERNMENTAL AND OTHER CONSENTS. No consent, approval,
order or authorization of, or registration, qualification, designation,
declaration or filing with, any person or any governmental authority is or will
be required for the valid execution and delivery of this Agreement, the Amended
and Restated Co-Sale Agreement, the Amended and Restated Registration Rights
Agreement, and the Amended and Restated Voting Agreement, the offer, issue, sale
and delivery by the Company of the Preferred Shares, or any other transaction
contemplated by this Agreement, except such consents or waivers as shall have
been obtained on or prior to the Closing or such filings as shall have been made
pursuant to state securities laws effective on and as of the Closing (copies of
which have been provided to the Purchasers). Based in part on the
representations made by each of the Purchasers in Section 4 of this Agreement,
the offer and sale of the Preferred Shares to each of the Purchasers will be in
compliance with applicable Federal and state securities laws.
3.08 LITIGATION; COMPLIANCE WITH LAW. There is no (i) action,
suit, claim, proceeding or investigation pending or, to the best of the
Company's knowledge, threatened against or affecting the Company, at law or in
equity, or before or by any Federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign; or (ii) governmental inquiry pending or, to the best of the Company's
knowledge, threatened against or affecting the Company (including without
limitation any inquiry as to the qualification of the Company to hold or receive
any license or permit); and to the best knowledge of the Company, there is no
basis for any of the foregoing. The Company is not in default with respect to
any order, writ, injunction or decree, known to or served upon the Company, of
any court or of any Federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign. There
is no action or suit by the Company pending or threatened against others. The
Company has materially complied with all laws, rules, regulations and orders
applicable to its business, operations, properties, assets, products and
services, and except as otherwise set forth in SCHEDULE II, the Company has all
necessary permits, licenses and other authorizations required to conduct its
business as conducted and as proposed to be conducted (including, without
limitation, the U.S. Food and Drug Administration and its foreign equivalents).
There is no existing law, rule, regulation or order, and the Company is not
aware of any proposed law, rule, regulation or order, whether Federal or state,
which would prohibit or restrict the Company from, or otherwise materially
adversely affect the Company in, conducting its business in any jurisdiction in
which its is now conducting business or in which it proposes to conduct
business.
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3.09 TAXES. The Company has filed or has obtained presently
effective extensions with respect to all Federal, state, county and local tax
returns which are required to be filed by it, such returns are true and correct
and the Company has paid all taxes shown to be due by such returns as well as
all other taxes, assessments and governmental charges which have become due or
payable. All such taxes with respect to which the Company has become obligated
pursuant to elections made by the Company in accordance with generally accepted
practice have been paid and adequate reserves have been established for all
taxes accrued but not yet payable. The Federal income tax returns of the Company
have never been audited by the Internal Revenue Service. No deficiency
assessment with respect to or proposed adjustment of the Company's Federal,
state, county or local taxes is pending or, to the best of the Company's
knowledge, threatened. There is no tax lien, whether imposed by any Federal,
state, county or local taxing authority, outstanding against the assets,
properties or business of the Company. Neither the Company nor its stockholders
has ever filed (a) an election pursuant to Section 1362 of the Internal Revenue
Service Code of 1986, as amended (the "Code"), that the Company be taxed as an S
Corporation or (b) consent pursuant to Section 341(f) of the Code, relating to
collapsible corporations.
3.10 FINANCIAL STATEMENTS. The Company has furnished to each of
the Purchasers complete and correct copies of its audited balance sheet as of
December 31, 1996 (the "Balance Sheet") and the related statements of
operations, cash flows and stockholders' equity for the year ended December 31,
1996 and the unaudited consolidated balance sheet of the Company as of September
30, 1997 and the related unaudited statement of operations, cash flows and
stockholders' equity for the nine months ended September 30, 1997. All such
financial statements have been prepared in accordance with generally accepted
accounting principles consistently applied and fairly present (i) the financial
position of the Company as of December 31, 1996 and the results of its
operations and cash flows for the year ended December 31, 1996 and (ii) the
consolidated financial position of the Company and its subsidiaries as of
September 30, 1997 and the results of their operations and cash flows for the
nine months ended September 30, 1997. Except as set forth in SCHEDULE II hereto,
since the date of the Balance Sheet, the Company has not (i) issued any stock,
bond or other corporate security; (ii) borrowed any amount or incurred or become
subject to any liability (absolute, accrued or contingent), except current
liabilities incurred and liabilities under contracts entered into in the
ordinary course of business; (iii) discharged or satisfied any lien or
encumbrance or incurred or paid any obligation or liability (absolute, accrued
or contingent) other than current liabilities shown on the Balance Sheet and
current liabilities incurred since the date of the Balance Sheet in the ordinary
course of business; (iv) declared or made any payment or distribution to
stockholders or purchased or redeemed any share of its capital stock or other
security; (v) mortgaged, pledged or subjected to lien any of its assets,
tangible or intangible, other than liens of current real property taxes not yet
due and payable; (vi) sold, assigned or transferred any of its tangible assets
except in
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the ordinary course of business, or canceled any debt or claim; (vii) sold,
assigned, transferred or granted any exclusive license with respect to any
patent, trademark, trade name, service xxxx, copyright, trade secret or other
intangible asset; (viii) suffered any loss of property or waived any right of
substantial value whether or not in the ordinary course of business, (ix) made
any change in officer compensation except in the ordinary course of business and
consistent with past practice; (x) made any material change in the manner of
business or operations of the Company; (xi) entered into any transaction except
in the ordinary course of business or as otherwise contemplated hereby; or (xii)
entered into any commitment (contingent or otherwise) to do any of the
foregoing.
3.11 BOOKS AND RECORDS. The minute books of the Company contain
complete and accurate records of all meetings and other corporate actions of its
stockholders and its board of directors and committees thereof. The stock ledger
of the Company is complete and reflects all issuances, transfers, repurchases
and cancellations of shares of capital stock of the Company.
3.12 TITLE TO PROPERTIES, LEASEHOLD INTERESTS, LIENS AND
ENCUMBRANCES. The Company has good and marketable title to all the property and
assets recorded on the Balance Sheet or acquired by them since the date of the
Balance Sheet, free from all material mortgages, pledges, liens, security
interests, conditional sale agreements, charges, and other encumbrances except
liens for taxes not yet due or payable. Each lease or agreement to which the
Company is a party under which it is a lessee of any property, real or personal,
is a valid and subsisting agreement without any default of the Company
thereunder and, to the best of the Company's knowledge, without any default
thereunder of any other party thereto. No event has occurred and is continuing
which, with due notice or lapse of time or both, would constitute a default or
event of default by the Company under any such lease or agreement or, to the
best of the Company's knowledge, by any other party thereto. The Company's
possession of such property has not been disturbed and, to the best of the
Company's knowledge, no claim has been asserted against the Company adverse to
its rights in such leasehold interests.
3.13 COMPLIANCE WITH OTHER INSTRUMENTS. Except as otherwise set
forth in SCHEDULE II, the Company is not in violation of any term of its Charter
or ByLaws, as amended to date. The Company is not in violation of any term of
mortgage, indenture, contract, agreement, instrument, judgment, decree, order,
statute, rule or regulation to which the Company is subject, which violation
would have a material adverse effect on the condition, financial or otherwise,
or operations of the Company.
3.14 INDEBTEDNESS TO AFFILIATES. Except as otherwise set forth
on SCHEDULE II, the Company has no outstanding indebtedness to any of its
directors or stockholders, or affiliates thereof, except for payment of accrued
salary and
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reimbursement of travel and other expenses incurred in the ordinary course of
business.
3.15 CONTRACTS. Except for this Agreement, the Amended and
Restated Voting Agreement, the Amended and Restated Co-Sale Agreement, the
Amended and Restated Registration Rights Agreement, the Amended and Restated
Voting Agreement, and the Series C Convertible Preferred Stock Purchase
Agreement dated as of February 26, 1997, as amended, by and among the Company
and the parties named on SCHEDULE I thereto (the "1997 Agreement"), or as
otherwise set forth on SCHEDULE II, there are no material indentures, leases,
agreements or other instruments to which the Company is a party or by which it
or any of its properties is bound. All of the contracts and agreements of the
Company which are material to its business are valid, binding and in full force
and effect, and neither the Company nor, to its knowledge, any other party to
such contracts and agreements is in default thereof. The Company is not a party
to or otherwise bound by any written or oral contract or instrument or other
restriction which individually or in the aggregate could materially adversely
affect the business, prospects, financial condition, operating property or
affairs of the Company.
3.16 U.S. REAL PROPERTY HOLDING CORPORATION. The Company is not
now and has never been a "United States real property holding corporation," as
such term in defined in Section 897(c)(2) of the Code, and Section 1.897-2(b) of
the Regulations promulgated by the Internal Revenue Service, and the Company has
filed with the Internal Revenue Service all statements, if any, with its Federal
income tax returns which are required under Section 1.897(2)(h) of such
Regulations.
3.17 INSURANCE. The Company has liability, fire and casualty
insurance policies, with extended coverage, sufficient in amount to allow it to
replace any of its properties which might be damaged or destroyed, and is
otherwise insured against all risks usually insured against by companies of
similar size operating similar businesses.
3.18 PATENTS, TRADEMARKS, ETC. Set forth in SCHEDULE II is a
list and brief description of all patents, patent rights, patent applications,
trademarks, trademark applications, service marks, service xxxx applications,
trade names and copyrights, and all applications for such, which are owned by or
registered in the name of the Company or are in the process of being prepared or
of which the Company is a licensor or licensee or in which the Company has any
right, and in each case a brief description of the nature of such right. The
Company owns or possesses adequate licenses or other rights to use all patents,
patent applications, trademarks, trademark applications, service marks, service
xxxx applications, trade names, copyrights, formulae, trade secrets and know how
(collectively, "Intellectual Property") necessary or desirable to the conduct of
its business as conducted and as proposed to be conducted, and no claim is
pending or, to the best of the Company's
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knowledge, threatened, to the effect that the operation of the Company infringes
upon or conflicts with the asserted rights of any other person under any
Intellectual Property, and there is no basis for any such claim (whether or not
pending or threatened). No claim is pending or threatened to the effect that any
such Intellectual Property owned or licensed by the Company, or which the
Company otherwise has the right to use, is invalid or unenforceable by the
Company, and, to the best of the Company's knowledge, there is no basis for any
such claim (whether or not pending or threatened). To the best of the Company's
knowledge, all material technical information developed by and belonging to the
Company which has not been patented has been kept confidential. The Company has
not granted or assigned to any other person or entity any right to manufacture,
have manufactured, assemble or sell the products or proposed products or to
provide the services or proposed services of the Company except as set forth in
SCHEDULE II.
3.19 PROPRIETARY INFORMATION OF THIRD PARTIES. Except as
otherwise set forth on SCHEDULE II, to the best of the Company's knowledge, no
third party has claimed or has reason to claim that any person employed by or
affiliated with the Company has (a) violated or may be violating any of the
terms or conditions of an employment, non-competition or non-disclosure
agreement with such third party, (b) disclosed, may be disclosing or utilized or
may be utilizing any trade secret or proprietary information or documentation of
such third party or (c) interfered or may be interfering in the employment
relationship between such third party and any of its present or former
employees. No third party has requested information from the Company which
suggests that such a claim might be contemplated. To the best of the Company's
knowledge, no person employed by or affiliated with the Company has employed or
proposes to employ any trade secret or any information or documentation
proprietary to any former employer, and to the best of the Company's knowledge,
no person employed by or affiliated with the Company has violated any
confidential relationship which such person may have had with any third party,
in connection with the development, manufacture or sale of any product or
proposed product or the development or sale of any service or proposed service
of the Company, and the Company has no reason to believe there will be any such
employment or violation. To the best of the Company's knowledge, none of the
execution or delivery of this Agreement, or the carrying on of the business of
the Company as officers, employees or agents by any officer, director or key
employee of the Company, or the conduct or proposed conduct of the business of
the Company, 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 such person in obligated.
3.20 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTS. The
Company and each person now employed by it with access to confidential
information have entered into a non-disclosure and assignment of inventions
agreement in substantially the form of EXHIBIT E hereto.
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3.21 KEY EMPLOYEES. Xxxxxx X. Xxxxxxx and any other employees of
the Company determined by the board of directors of the Company to be key
employees, if any (the "Key Employees"), have signed agreements not to compete
with the Company during the term of their employment and for a period of two
years after termination of their employment. Such non-competition agreements
contain substantially the terms set forth in Section 5 of EXHIBIT E hereto.
3.22 BROKERS. The Company has no contract, arrangement or
understanding with any broker, finder or similar agent with respect to the
transactions contemplated by this Agreement.
3.23 DISCLOSURE. Neither this Agreement nor any Schedule or
Exhibit hereto, nor any other agreement, document, written statement or
certificate furnished or to be furnished to the Purchasers through the Closing
pursuant hereto or in connection with the transactions contemplated hereby,
taken as a whole, contains any untrue statement of material fact or omits to
state a material fact necessary in order to make the statements contained herein
or therein not misleading in light of the circumstances under which they were
made. There is no fact which the Company has not disclosed to the Purchasers and
their counsel in writing and of which the Company is aware which materially and
adversely affects or could materially and adversely affect the business,
prospects, financial condition, operation, property or affairs of the Company.
3.24 COMPLIANCE WITH ENVIRONMENTAL AND SAFETY LAWS.
(a) ENVIRONMENTAL DEFINITIONS. The following terms, as used
herein, have the following meanings:
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"Environment" means any and all environmental media, including
without limitation ambient air, surface water, ground water, drinking water
supply, land surface or subsurface strata, and also means any indoor location.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws (including common or case law), regulations, ordinances,
rules, judgments, judicial decisions, orders, decrees, codes, plans,
injunctions, Environmental Permits, or governmental restrictions, relating to
the protection of human health or safety or the Environment or to emissions,
discharges or Releases of any Hazardous Substance into the Environment, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of any Hazardous Substance or the
containment, removal or remediation thereof.
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"Environmental Liabilities" means any and all liabilities arising
in connection with or in any way relating to the Company's business, whether
vested or unvested, contingent or fixed, actual or potential, known or unknown,
which (i) arise under or relate to matters governed by Environmental Laws or
arise in connection with or relate to any matter disclosed or required to be
disclosed in EXHIBIT 3.24 and (ii) arise from or relate in any way to actions
occurring or conditions existing before the Closing Date.
"Environmental Permits" means any and all governmental permits,
licenses, concessions, grants, franchises, agreements, authorizations,
registrations or other governmental approvals issued or required under any
Environmental Laws.
"Hazardous Substance" means any and all pollutants and
contaminants, and any and all toxic, caustic, radioactive, biohazardous or
otherwise hazardous materials, substances or wastes that are regulated under any
Environmental Laws, and includes, without limitation, petroleum and its
derivatives and by-products, and any other hydrocarbons.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing into
the Environment (including, without limitation, the abandonment or discarding of
barrels, containers and other closed receptacles containing any Hazardous
Substance).
(b) ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES. Except as
expressly and fully disclosed on EXHIBIT 3.24:
(i) The Company has complied in all material respects with all
Environmental Laws.
(ii) No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been filed, no
penalty has been assessed and no investigation or review is pending, or to the
Company's knowledge, threatened by any governmental or other entity with respect
to any (A) alleged violation by the Company of any Environmental Law, or any
liability thereunder, (B) alleged failure by the Company to have any
Environmental Permit required in connection with the conduct of the Company's
business or (C) the use, generation, treatment, storage, recycling,
transportation or disposal or Release of any Hazardous Substance by the Company.
(iii) To the Company's knowledge, (A) no urea formaldehyde or
polychlorinated biphenyls are or have been present at any property owned or
operated by the Company; (B) no asbestos or asbestos-containing materials are or
have been present at any property owned or operated by the Company; (D) there
are no and have been no underground storage tanks or related piping for
Hazardous
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Substances, active or abandoned, at any property owned or operated by the
Company; (E) no Hazardous Substance has been Released at, on or under any
property owned or operated by the Company and (F) no Hazardous Substance has
been Released or is present, at, on or under any property owned or operated by
the Company in a reportable or threshold planning quantity, where such a
quantity has been established by any Environmental Law except in compliance with
any Environmental Law.
(iv) The Company has not transported or arranged for the
transportation (directly or indirectly) of any Hazardous Substance to any
location which is (A) listed or proposed for listing on the National Priorities
List promulgated pursuant to CERCLA or on any similar state list of sites
requiring investigation or clean-up or (B) the subject of federal, state or
local enforcement actions or other investigations which may lead to claims
against the Purchaser for any Environmental Liabilities including, without
limitation, clean-up costs, remedial work, damages to natural resources or for
personal injury claims, and claims under CERCLA.
(v) No oral or written notification of a Release of a Hazardous
Substance has been filed by or on behalf of the Company and no property owned or
operated by the Company is listed or, to the Company's knowledge, proposed for
listing, on the National Priorities List promulgated pursuant to CERCLA or on
any similar state list of sites requiring investigation or clean-up.
(vi) To the Company's knowledge, no notice, lien or other
restriction relating to the presence of Hazardous Substances or otherwise
arising under any Environmental Law has been placed on any property or facility
owned or operated by the Company, and no governmental actions have been taken or
are in process that could subject any such property or facility to such a
notice, lien or other restriction. The Company is not required to place any
notice, lien or other restriction, relating to the presence of Hazardous
Substances, at any property used in connection with the operation of the
Company's business or in any deed to such property.
(vii) There have been no environmental investigations, studies,
audits, tests, reviews or other analyses conducted by or for the Company, or
which are in the Company's possession, in relation to any property or facility
now or previously owned or operated by the Company, which have not been
delivered to Purchaser at least ten (10) business days prior to the date hereof.
(viii) The Company has applied for and received all material
Environmental Permits required in connection with the operation of its business.
SCHEDULE 3.24 sets forth a list of all such Environmental Permits, each of which
is in full force and effect. No suspension or cancellation is threatened and
there is no basis for believing that any such Environmental Permit will not be
renewable upon expiration. Except as set forth in SCHEDULE 3.24, each such
Environmental Permit will
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continue to be in full force and effect immediately following the Closing in
accordance with the terms thereof as in effect immediately prior to the Closing,
and the consummation of the transactions contemplated herein will not conflict
with, result in a violation or breach of or constitute a default under (or would
result in a violation, breach or default with the giving of notice or the
passage of time or both) any such Environmental Permit.
4. REPRESENTATION AND WARRANTIES OF THE PURCHASERS. Each of the
Purchasers severally represents and warrants to the Company as follows:
4.01 INVESTMENT. Each Purchaser is acquiring the Preferred
Shares and the Conversion Shares for such Purchaser's own account for the
purpose of investment and not with a view to, or for sale in connection with,
any distribution thereof, and, except as contemplated by this Agreement and the
Exhibits hereto, such Purchaser has no present or contemplated agreement,
undertaking, arrangement, obligation, indebtedness or commitment providing for
the disposition thereof.
4.02 AUTHORITY. Such Purchaser has full power and authority to
enter into and to perform this Agreement in accordance with its terms. Any
Purchaser which is a corporation, partnership or trust represents that it has
not been organized, reorganized or recapitalized specifically for the purpose of
investing in the Company.
4.03 EXPERIENCE. Each Purchaser has carefully reviewed the
representations concerning the Company contained in this Agreement, and has made
detailed inquiry concerning the Company, its business and its personnel; the
officers of the Company have made available to each Purchaser any and all
written information requested including all items outlined in SCHEDULE II and
have answered all inquiries to such Purchaser's satisfaction; such Purchaser has
sufficient business experience to evaluate the merits and risks of this
investment; such Purchaser has adequate net worth and means of providing for
current needs and personal contingencies to sustain a complete loss of
investment in the Company; and such Purchaser's overall commitment to
investments which are not readily marketable is not disproportionate to such
Purchaser's net worth.
4.04 ACCREDITED INVESTOR. Each Purchaser is an Accredited
Investor as defined in Rule 501 of Regulation D promulgated under the Securities
Act.
5. CONDITIONS TO OBLIGATIONS OF THE PURCHASERS AT THE CLOSING. The
obligation of each of the Purchasers under this Agreement is subject to the
fulfillment, or the waiver by such Purchaser, of the following conditions on or
before the Closing:
5.01 ISSUANCE OF SHARES. The Company shall have duly issued and
delivered certificates representing the Preferred Shares to the Purchasers.
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5.02 ACCURACY OF REPRESENTATIONS AND WARRANTIES. Each
representation and warranty contained in Section 3 shall be true, complete and
correct on and as of the Closing Date with the same effect as though such
representation and warranty had been made on as of that date.
5.03 PERFORMANCE. The Company shall have performed and complied
with all agreements and conditions contained in this Agreement required to be
performed or complied with by the Company prior to or at the Closing and shall
have executed in satisfactory form all agreements required to be executed
hereunder prior to or at the Closing.
5.04 ALL PROCEEDINGS TO BE SATISFACTORY. All corporate and other
proceedings to be taken by the Company in connection with the transaction
contemplated hereby and all documents incident thereto shall be satisfactory in
form and substance to the Purchasers and their special counsel.
5.05 COMPLIANCE CERTIFICATE. The Company shall have delivered to
the Purchasers a certificate, executed by the President of the Company, dated as
of the Closing Date, certifying to the fulfillment of the conditions specified
in subsections 5.02, 5.03, and 5.04 of this Agreement.
5.06 CONSENTS; FILINGS. All necessary consents shall have been
obtained and all necessary filings shall have been made to permit the
consummation of the transactions contemplated by this Agreement.
5.07 OPINION OF COUNSEL. Each Purchaser shall have received an
opinion from Xxxx and Xxxx LLP, counsel for the Company, dated as of the Closing
Date, addressed to the Purchasers in substantially the form of EXHIBIT F hereto.
5.08 FILING OF CHARTER. The Company's Charter in the form of
EXHIBIT A hereto shall have been filed with and accepted by the Secretary of
State of the State of Delaware prior to the Closing.
5.09 CERTIFICATES AND DOCUMENTS. The Company shall have
delivered to the special counsel to the Purchasers:
(i) The Certificate of Incorporation of the Company, as
amended and restated, and in effect immediately prior to the Closing,
certified by the Secretary of State of the State of Delaware;
(ii) Certificate, as of the most recent practicable date,
as to the corporate good standing of the Company issued by the
Secretary of State of the State of Delaware;
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(iii) By-Laws of the Company, as amended, certified by its
Secretary as of the Closing Date;
(iv) Resolutions of the Board of Directors of the
Company, authorizing and approving all matters in connection with this
Agreement and the transactions contemplated hereby, certified by the
Secretary of the Company, dated as of the Closing Date; and
(v) Such other documents as special counsel to the
Purchasers may have reasonably requested.
5.10 VOTING AGREEMENT. The Purchasers and (i) holders of at
least 85% of the outstanding shares of the Company's Series A-1 Preferred Stock,
Series B-1 Preferred Stock and Series C Preferred Stock, voting together as a
single class, and (ii) holders of a majority of the outstanding shares of Common
Stock of the Company held by those who are a party to the Old Voting Agreement,
shall have authorized, in accordance with Section 6(a) of the Old Voting
Agreement, and shall have executed, the Amended and Restated Voting Agreement.
5.11 CO-SALE AGREEMENT. The Purchasers and holders of at least
55% of the issued and outstanding shares of the Series A-1 Preferred Stock,
Series B-1 Preferred Stock of the Company, and Series C Preferred Stock
(including shares of Common Stock into which any such shares may have been
converted), voting together as a single class, then held or deemed to be held by
those who are a party to the Old Co-Sale Agreement shall have authorized, in
accordance with Section 11 of the Old Co-Sale Agreement, and shall have executed
the Amended and Restated Co-Sale Agreement.
5.12 RIGHTS OF FIRST REFUSAL. All preemptive rights, rights of
first refusal or other rights with respect to the issuance of the Preferred
Shares or Conversion Shares, of any stockholders of the Company, shall have been
irrevocably waived in writing.
5.13 REGISTRATION RIGHTS AGREEMENT. The Company and the holders
of at least 55% of the shares of Common Stock issuable upon conversion of
Preferred Stock held by those who are a party to the Old Registration Rights
Agreement shall have authorized, in accordance with Sections 12 and 16(d) of the
Old Registration Rights Agreement, and shall have executed the Amended and
Restated Registration Rights Agreement.
5.14 MINIMUM SALES. The Company shall have raised a minimum of
$10,000,000 from the sale of the Series D Preferred Stock pursuant to the
Closing hereunder.
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5.15 LEGAL FEES. The Company shall have paid the reasonable
legal fees and expenses of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP as special counsel to
the Purchasers in the transactions contemplated hereby, provided that the
Company shall not be obligated to pay any such fees and expenses in excess of
$17,000.
5.16 NO ADVERSE CHANGES. Prior to the Closing, there shall be no
present or anticipated material adverse change in the condition (financial or
otherwise), properties, proposed business operations, management, potential
competition of, or any matter affecting, the Company or its prospects.
All such documents shall be satisfactory in form and substance to the
Purchasers and their special counsel.
6. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligations of
the Company under Section 1.02 of this Agreement are subject to fulfillment, on
or before the Closing, of the following condition:
6.01 ACCURACY OF REPRESENTATIONS AND WARRANTIES. Each
representation and warranty of the Purchasers contained in Section 4 shall be
true, complete and correct on and as of the Closing Date with the same effect as
though such representation and warranty had been made on and as of such date.
7. COVENANTS OF THE COMPANY. The Company covenants and agrees with
each of the Purchasers that, subject to earlier termination as set forth in
Section 7.16 below, so long as any of the Preferred Shares or the Conversion
Shares are outstanding:
7.01 INSPECTION. The Company shall permit each Purchaser holding
at least 2% of the outstanding shares of Preferred Stock of the Company on a
fully diluted basis (a "2% Holder"), or any authorized representative thereof,
to visit and inspect the properties of the Company, to examine and copy its
corporate and financial records, to discuss its business and finances with
officers, directors, Key Employees and accountants of the Company, during normal
business hours following reasonable notice and as often as may be reasonably
requested, and at any time to audit the Company at the expense of such
Purchaser.
7.02 FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company
shall prepare and deliver to each 2% Holder (i) within thirty (30) days after
the close of each month, unless otherwise agreed to by the holders of a majority
of the outstanding shares of Preferred Stock, unaudited income statements,
balance sheets and summaries of bookings and backlogs, (ii) within thirty (30)
days after the end of each of the first three fiscal quarters of each year,
unless otherwise agreed to by the holders of a majority of the outstanding
shares of Preferred Stock, quarterly unaudited financial statements (including
income statements, summaries, balance
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sheets, cash flow statements and summaries of bookings and backlogs); (iii) as
soon as available, but in any event during the fourth fiscal quarter of each new
fiscal year, unless otherwise agreed to by the holders of a majority of the
outstanding shares of Preferred Stock, an annual strategic and operation plan,
and promptly after preparation, any revisions to any forecasts contained
therein. The Company shall deliver to each 2% Holder within (90) days after the
end of each fiscal year, unless otherwise agreed to by the holders of a majority
of the outstanding shares of Preferred Stock audited financial statements of the
Company (which shall be audited by a nationally recognized accounting firm which
shall be approved annually by a majority of the members of the board of
directors). The Company shall prepare and deliver to each Purchaser holding less
than 2% of the outstanding shares of Preferred Stock who shall request in
writing the monthly and quarterly financial information described in clauses (i)
and (ii) of the first sentence of this Section 7.02 and the annual audited
financial statements. The financial statements to be delivered pursuant to this
Section 7.02 shall be prepared in accordance with generally accepted accounting
principles consistently applied, subject only, in the case of the audited
financial statements, to the matters described in the accountant's report
attached thereto and, in the case of the financial statements to be delivered
pursuant to clauses (i) and (ii) of the first sentence of this Section 7.02, to
the fact that they have been prepared for the internal use of management and may
not be in accordance with generally accepted accounting principles because of
the absence of footnotes normally contained therein and are subject to normal
year-end audit adjustments. The financial statements delivered pursuant to this
Section 7.02 shall be accompanied by a certificate signed by the then-acting
chief financial officer of the Company or person performing comparable functions
that such statements fairly present the financial condition and results of
operations for the periods covered thereby except as noted therein. In addition,
the Company will provide each 2% Holder other customary information and
materials, including without limitation reports of adverse developments, copies
of any management letters, communications with stockholders or directors, press
releases and registration statements.
7.03 MATERIAL CHANGES AND LITIGATION. The Company will promptly
notify the Purchasers of any material adverse change in the business,
properties, assets or condition, financial or otherwise, of the Company and of
any litigation or governmental proceeding or investigation pending or, to the
best knowledge of the Company, threatened against the Company, or against any
officer, director, Key Employee or principal stockholder of the Company, which
materially affects or which, if adversely determined, would materially adversely
affect its present or proposed business properties, assets or condition taken as
a whole.
7.04 KEY MAN INSURANCE. The Company shall have obtained a "Key
Man" life insurance policy, payable to the Company, in the amount of exactly
$1,500,000 on the life of Xxxxxx X. Xxxxxxx. The Company shall not cause or
permit any assignment or change in beneficiary and shall not borrow against such
policy.
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7.05 OTHER INSURANCE. The Company will use its best efforts to
keep all its insurable properties properly insured against loss or damage by
fire and other risks; maintain public liability insurance against claims for
personal injury, death or property damage suffered by others upon or in or about
any premises occupied by it or arising from equipment owned by the Company and
leased to and located upon or in or about any premises occupied by any other
person; maintain all such worker's compensation or similar insurance as may be
required under the laws of any state or jurisdiction in which it may be engaged
in business; and maintain such other insurance as is usually maintained by
persons engaged in the same or similar business as is the Company; PROVIDED,
HOWEVER, that the Company shall not be required to maintain product liability
insurance if the board of directors determines that it is not in the best
interests of the Company to obtain such product liability insurance. All such
insurance shall be maintained against such risks and in at least such amounts as
such insurance is usually carried by persons engaged in the same or similar
businesses, and all insurance herein provided for shall be effected and
maintained in force under a policy or policies issued by insurers or recognized
responsibility, except that the Company may effect worker's compensation or
similar insurance in respect of operations in any state or other jurisdiction
either through an insurance fund operated by such state or other jurisdiction or
by causing to be maintained a system or systems of self-insurance which is in
accord with applicable laws.
7.06 ACCOUNTS AND RECORDS. The Company will keep true, complete
and accurate records and books of account in which true, complete and accurate
entries will be made of all dealings or transactions in relation to its business
and affairs in accordance with generally accepted accounting principles applied
on a consistent basis.
7.07 AVAILABILITY OF COMMON STOCK FOR CONVERSION. The Company
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, for the purpose of effecting the conversion of the
Preferred Stock and otherwise complying with the terms of this Agreement, such
number of its duly authorized shares of Common Stock as shall be sufficient to
effect the conversion of the Preferred Stock from time to time outstanding or
otherwise to comply with the terms of this Agreement. If at any time the number
of authorized but unissued shares of Common Stock shall not be sufficient to
effect the conversion of the Preferred Stock or otherwise to comply with the
terms of this Agreement, the Company will forthwith take such corporate action
as may be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purposes. The
Company will obtain any authorization, consent, approval or other action by or
make any filing with any court or administrative body that may be required under
applicable state securities laws in connection with the issuance of shares of
Common Stock upon conversion of the Preferred Stock.
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7.08 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTS. The
Company and each person hereafter employed by it or any subsidiary with access
to confidential information of the Company will enter into a non-disclosure and
assignment of inventions agreement in substantially the form of EXHIBIT E
hereto.
7.09 NON-COMPETITION. The Company shall cause each of its Key
Employees hereafter employed by the Company promptly to execute a
non-competition agreement substantially in the form of EXHIBIT E hereto.
7.10 USE OF PROCEEDS. The Company will use the proceeds from the
sale of the Preferred Shares primarily for research and development, working
capital, to purchase capital equipment and for sales and marketing efforts. The
approximate percentage of the proceeds to be used for each such use is as set
forth on Schedule II, and may be amended if approved by the Board of Directors
of the Company.
7.11 PREPAYMENT OF TAXES; CORPORATE EXISTENCE. The Company will:
(a) pay and discharge promptly, or cause to be paid and
discharged promptly, when due and payable, all taxes, assessment and
governmental charges or levies imposed upon it or upon its income or upon any of
its property, real, personal and mixed, or upon any part thereof, as well as all
claims of any kind (including claims for labor, materials and supplies) which,
if unpaid might by law become a lien or charge upon its property; PROVIDED,
HOWEVER, that the Company shall not be required to pay any tax, assessment,
charge, levy or claim if the amount, applicability or validity thereof currently
shall be contested in good faith by appropriate proceedings and if the Company
shall have set aside on its books reserves (classified to the extent required by
generally accepted accounting principles) deemed by it adequate with respect
thereto; and PROVIDED FURTHER, that the Company shall have no obligation to make
any payments under this paragraph (a) with respect to property subject to leases
pursuant to the terms of which the lessees thereof have undertaken to make such
payments;
(b) do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights and
franchises, provided, however, that nothing in this paragraph (b) shall (i)
prevent the abandonment or termination of the Company's authorization to do
business in any foreign state or jurisdiction if, in the opinion of the
Company's Board of Directors, such abandonment or termination is in the interest
of the Company and not disadvantageous in any material respect to the holders of
the Preferred Shares or (ii) require compliance with any law so long as the
validity or applicability thereof shall be contested in good faith; and
(c) maintain and keep, or cause to be maintained and
kept, its properties in good repair, or working order and condition, and from
time to time
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make, or cause to be made, all repairs, renewals and replacement which in the
opinion of the Company are necessary and proper so that the business carried on
in connection therewith may be properly and advantageously conducted at all
times.
7.12 SPECIAL COVENANTS. The Corporation shall not, without the
prior approval of the holders of a majority of the Preferred Stock (or by such
holders as may be otherwise required in the Charter), given in writing or by
vote at a meeting, consenting or voting (as the case may be) together as a
single class:
(a) amend, repeal or add any provision to the Charter or
By-Laws of the Company.
(b) authorize, create or issue any debt or equity
securities, except for: (i) shares of Common Stock which may be issued to
employees, directors, consultants, scientific advisors or other persons pursuant
to arrangements, contracts or plans as are recommended by management and
approved by the vote of a majority of the members of the Board of Directors
(which number of shares shall be appropriately adjusted for stock splits, stock
dividends, combinations, reorganizations, recapitalizations and other similar
events involving a change in the capital structure of the Company) (the
"Reserved Employee Shares"); and (ii) indebtedness for borrowed money from a
bank or other institutional lender or indebtedness in connection with a capital
equipment leasing arrangement, other lease financing arrangement or for
operating capital purposes; in each case under this subsection (ii) approved by
a vote of a majority of the members of the board of directors.
(c) merge or consolidate with, or sell, assign, lease or
otherwise dispose of or voluntarily part with the control of (whether in one
transaction or in a series of transactions) substantially all of its assets
(whether now owned or hereafter acquired) or permit any subsidiary to do any of
the foregoing, except for sales or other dispositions of assets in the ordinary
course of business EXCEPT that (1) any wholly-owned subsidiary may merge into or
consolidate with or transfer assets to any other wholly-owned subsidiary, (2)
any wholly-owned subsidiary may merge into or transfer assets to the Company,
and (3) the Company may merge another entity into it or otherwise acquire such
entity so long as the Company is the surviving entity, the holders of voting
stock of the Company immediately prior to such merger are the holders of not
less than a majority of the Company immediately following such merger, such
merger or acquisition does not result in the violation of any of the provisions
of this Agreement and no such violation exists at the time of such merger or
acquisition;
(d) sell, transfer or license any intellectual property
rights of the Company, except in connection with clinical testing or in the
ordinary course of business;
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(e) file a registration statement with the Securities and
Exchange Commission with respect to any securities (except with respect to a
registration statement filed in connection with a demand registration right);
(f) increase or decrease the authorized number of
directors constituting the Board of Directors;
(g) declare or pay any dividends, or purchase, redeem,
retire, or otherwise acquire for value any of its capital stock (or rights,
options or warrants to purchase such shares) now or hereafter outstanding,
return any capital to its stockholders as such, or make any distribution of
assets to its stockholders as such, or permit any subsidiary to do any of the
foregoing, PROVIDED, HOWEVER, that nothing herein contained shall prevent the
Company from:
(i) effecting a stock split (except for a reverse
stock split) or declaring or paying any dividends consisting of shares
of any class or series of capital stock to the holders of shares of
such class or series of capital stock, as the case may be;
(ii) complying with any specific provisions of the
terms of the Preferred Stock or the terms of this Agreement; or
(iii) repurchasing any stock at cost pursuant to
restricted stock agreements with employees, consultants, directors,
scientific advisors and others under restricted stock agreements
previously approved by the board of directors;
(h) create any subsidiary that is not a wholly-owned
subsidiary;
(i) reclassify any securities into shares having
preferences or priority equal to or superior to the Preferred Stock; or
(j) grant to any of its employees options to purchase
Reserved Employee Shares which shall become exercisable at a rate in excess of
25% per annum from the date of such grant (unless such vesting schedule is
approved by a majority of the members of the board of directors).
The provisions of this Section 7.12 shall not apply to actions taken by the
Company to effect a Special Mandatory Conversion.
7.13 BOARD OF DIRECTORS. The Company shall use its best efforts
to ensure that meetings of its board of directors are held at least four times
each year and at least once each quarter. The Company shall at all times
maintain provisions
-21-
26
in its By-laws and/or Charter indemnifying all directors against liability to
the maximum extent permitted under the laws of the State of Delaware.
7.14 RIGHT OF FIRST REFUSAL.
(a) The Company hereby grants to each of the holders of
the Company's Preferred Stock (individually a "Preferred Shareholder" and
collectively the "Preferred Shareholders") a right of first refusal to purchase,
on a pro rata basis, all or any part of New Securities (as defined below) which
the Company may, from time to time, propose to sell and issue, subject to the
terms and conditions set forth below; PROVIDED HOWEVER, that the right of first
refusal set forth in this Section 7.14 shall only be granted to Preferred
Shareholders who have certified to the Company upon request by the Company from
time to time (and provided such substantiation as the Company requests) that
such person is an "accredited investor" within the meaning of Rule 501(a) under
the Securities Act of 1933, as amended. Notwithstanding any other provision in
this Agreement, the Company has no obligations under this Section 7.14 to any
that has not so certified to the Company that such person is an accredited
investor. A Preferred Shareholder's pro rata share, for purposes of this Section
7.14, shall equal a fraction, the numerator of which is the number of shares of
Common Stock then held by such Preferred Shareholder or issuable upon conversion
or exercise of any shares of Preferred Stock, convertible securities, options,
rights or warrants then held by such Preferred Shareholder, and the denominator
of which is the total number of shares of Common Stock then held by all
Preferred Shareholders or issuable upon conversion or exercise of then
outstanding shares of Preferred Stock, convertible securities, options, rights
or warrants then held by all Preferred Shareholders.
(b) "New Securities" shall mean any capital stock of the
Company whether now authorized or not, and rights, options or warrants to
purchase capital stock, and securities of any type whatsoever which are, or may
become, convertible into capital stock; PROVIDED, HOWEVER, that the term "New
Securities" does not include (i) the Preferred Shares issuable under this
Agreement, the Special Preferred Stock, the Conversion Shares, the shares of
Common Stock issuable upon conversion of the Special Preferred Stock or any
other convertible securities or the shares of Common Stock issuable upon
conversion of such convertible securities outstanding or committed for issuance
on the date hereof as shown on SCHEDULE III; (ii) securities offered to the
public pursuant to a registration statement filed by the Company with the
Securities and Exchange Commission for a public offering and sale of securities
of the Company (other than a registration statement on Form S-8 or Form S-4, or
their successors, or any registration statement covering only securities
proposed to be issued in exchange for securities or assets of another
corporation), in connection with a Qualified Public Offering (as defined in
Section 7.15); (iii) securities issued for the acquisition of another
corporation by the Company by merger, purchase of substantially all the assets
of such corporation or
-22-
27
other reorganization resulting in the ownership by the Company of not less than
a majority of the voting power of such corporation; (iv) the Reserved Employee
Shares; or (v) securities issued as a result of any stock split, stock dividend
or reclassification of Common Stock, distributable on a pro rata basis to all
holders of Common Stock.
(c) In the event the Company intends to issue New
Securities, it shall give each Preferred Shareholder written notice of such
intention, describing the type of new Securities to be issued, the price thereof
and the general terms upon which the Company proposes to effect such issuance.
Each Preferred Shareholder shall have twenty (20) days from the date of receipt
of any such notice to agree to purchase all or part of such Preferred
Shareholder's pro rata share of such New Securities by giving written notice to
the Company stating the quantity of New Securities to be so purchased for the
price and upon the general terms and conditions specified in the Company's
notice.
(d) In the event any Preferred Shareholder or Preferred
Shareholders fails to exercise the foregoing right of first refusal with respect
to any New Securities within such twenty (20)-day period, the Company may within
120 days thereafter sell any or all of such New Securities not agreed to be
purchased by the Preferred Shareholders to any third party or parties at a price
and upon general terms no more favorable than specified in the notice given to
each Preferred Shareholder pursuant to paragraph (c) above. In the event the
Company has not sold such New Securities within such 120-day period, the Company
shall not thereafter issue or sell any New Securities without first offering
such New Securities to the Preferred Shareholders in the manner provided above.
(e) For purposes of this Section 7.14, the term
"Preferred Shareholder" shall include the general partners, officers or other
affiliates of a Preferred Shareholder, and a Preferred Shareholder may apportion
its pro rata share among itself and such general partners, officers and other
affiliates in such proportions as it deems appropriate.
(f) Anything contained in this Section 7.14 to the
contrary notwithstanding, in the event that the Preferred Stock held by a
Preferred Shareholder or its successor or assign shall have been converted
pursuant to the Special Mandatory Conversion, then in such case, the rights
pursuant to this Section 7.14 as to any series of Preferred Stock shall
terminate immediately upon the occurrence of such conversion, and such Preferred
Shareholder's (or its successor's or assign's as the case may be) pro rata share
as determined under Section 7.14(a) shall be calculated without taking into
account such Preferred Shareholder's or its successor's or assign's Preferred
Stock.
7.15 TERMINATION OF COVENANTS. The covenants of the Company
contained in Section 7.14 shall terminate upon the closing of a firm
underwritten
-23-
28
public offering of shares of Common Stock of the Company which (i) results in
aggregate gross proceeds of at least $20,000,000, and (ii) is at a price per
share of at least $12.00, which number shall be appropriately adjusted for stock
splits, stock dividends, combinations, reorganizations, recapitalizations and
other similar events involving a change in the capital structure of the Company
(the "Qualified Public Offering").
7.16 WAIVER OF COVENANTS. Any provision in the covenants of the
Company contained in this Section 7 may be waived or amended by the written
consent of a majority of the outstanding shares of Common Stock issued or
issuable upon the conversion of the Preferred Stock.
8. WAIVER OF PRIOR PREEMPTIVE RIGHTS; TERMINATION OF COVENANTS.
(a) The Company and certain of the Purchasers who hold
Series A-1 Preferred Stock, Series B-1 Preferred Stock and/or Series C Preferred
Stock (the "Old Investors"), it being acknowledged that such Old Investors
collectively hold at least 55% of the Preferred Stock (as such term is defined
in the Series C Convertible Preferred Stock Purchase Agreement, dated as of
February 26, 1997 (the "1997 Agreement")), hereby agree that the operation of
Section 7.14 of the 1997 Agreement is hereby waived as it may apply to the
authorization, offer, issuance and sale by the Company of the Preferred Shares
and the Conversion Shares, as applicable.
(b) In addition, the Company and each Old Investor signatory to
this Agreement, it being acknowledged that such Old Investors collectively hold
at least 55% of the shares of Preferred Shares (as defined in the 1997
Agreement) hereby agree that the 1997 Agreement be amended by deleting Section
7.14 of the 1997 Agreement in its entirety, such that such Section 7.14 of the
1997 Agreement shall be of no further force and effect.
9. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon, and inure to the benefit of, the respective successors, assigns,
heirs, executors and administrators of the parties hereto.
10. TRANSFERS OF CERTAIN RIGHTS.
(a) The rights granted to a Purchaser under Section 7 may be
transferred by such Purchaser to a Purchaser, to any affiliate of the transferor
or to any person or entity acquiring at least 25,000 shares of Series D
Preferred Stock or Conversion Shares; PROVIDED, HOWEVER, that the Company is
given written notice by the transferee at the time of such transfer stating the
name and address of the transferee and identifying the securities with respect
to which such rights are being assigned.
-24-
29
(b) A transferee to whom rights are transferred pursuant to this
Section 10 may not again transfer such rights to any other person or entity,
other than as provided in paragraph (a) above.
(c) Notwithstanding anything to the contrary herein, any
Purchaser which is a partnership or corporation may transfer rights granted to
such Purchaser under Section 7 to any partner or stockholder thereof to whom
Preferred Shares are transferred pursuant to and in accordance with the Amended
and Restated Registration Rights Agreement, provided that in addition to any
transfer requirements set forth in the Amended and Restated Registration Rights
Agreement, such Purchaser delivers to the Company a written instrument
containing a representation that the transfer is exempt from registration under
the Securities Act of 1933, as amended. In the event of such transfer, such
transferee partner or stockholder shall be deemed a Purchaser for purposes of
this Section 10 and may again transfer such rights to any other person or entity
which acquires shares of Preferred Stock from such partner or stockholder, in
accordance with, and subject to, the provisions of this Section 10.
11. CONFIDENTIALITY. Each Purchaser agrees to keep confidential and
not to disclose or divulge any confidential, proprietary or secret information
which such Purchaser may obtain from the Company pursuant to financial
statements, reports and other materials submitted by the Company to such
purchaser pursuant to this Agreement, or pursuant to visitation or inspection
rights granted hereunder, unless such information is known, or until such
information becomes known, to the public.
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All agreements,
representations and warranties contained herein shall survive the execution and
delivery of this Agreement and the closing of the transactions contemplated
hereby.
13. NOTICES. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be delivered by hand or
mailed by first class certified or registered mail, return receipt requested,
postage prepaid:
If to the Company: 0 Xxxxxx Xxxxx, Xxxxxx XX 00000, Attention:
President, or at such other address or addresses as may have been furnished in
writing by the Company to the Purchasers, with a copy to Xxxx and Xxxx LLP, 00
Xxxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Xxxxx X. Xxxxxx, Esq.
If to a Purchaser: at the address set forth opposite such
Purchaser's name on SCHEDULE I hereto, respectively, or at such other address or
addresses as may have been furnished to the Company in writing by such
Purchaser, with a copy to Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, High Street Tower,
000 Xxxx Xxxxxx, Xxxxxx, XX 00000, Attention: Xxxxxxxx X. Xxxxxxxxxx, Xxx.
-00-
00
00. BROKERS. The Company and each Purchaser (i) represents and
warrants to the other parties hereto that no finder or broker has been retained
in connection with the transactions contemplated by this Agreement, and (ii)
will indemnify and save the other parties harmless from and against any and all
claims, liabilities or obligations with respect to brokerage or finders' fees or
commissions, or consulting fees in connection with the transactions contemplated
by this Agreement asserted by any person on the basis of any statement or
representation alleged to have been made by such indemnifying party.
15. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
16. AMENDMENTS AND WAIVERS.
(a) Except as otherwise expressly set forth in this Agreement,
the terms 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), with the written consent of the Company
and the holders of at least 55% of the outstanding Preferred Shares, PROVIDED,
that no condition set forth in Section 5 may be waived with respect to any
Purchaser who does not consent thereto.
(b) Any amendment or waiver effected in accordance with this
Section 16 shall be binding upon each holder of Preferred Shares or Conversion
Shares, and each future holder of all such securities and the Company. No
waivers of or exceptions to any term, condition or provision of this Agreement,
in any one or more instances, shall be deemed to be, or construed as, a further
or continuing waiver of any such term, condition or provision.
17. CONSENTS. The Purchasers hereby consent to the transactions
contemplated by this Agreement to the extent that such consent is required by
the terms of the Company's Charter or the instruments delivered under this
Agreement.
18. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
19. HEADINGS. The headings of the sections, subsections, and
paragraphs of this Agreement have been added for convenience only and shall not
be deemed to be a part of this Agreement.
-26-
31
20. SEVERABILITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision.
21. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
-27-
32
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
ASPECT MEDICAL SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Xxxxxx X. Xxxxxxx
President
/s/
--------------------------------------------
Xxxxx X. Xxxxxxx, Xxxxx Xxxxxxxx Xxxxxxx and
X. X. Xxxxxxxxxxxx, Trustees of the Xxxxx X.
Xxxxxxx Trust U/A dated 11/18/85
/s/
--------------------------------------------
X. X. Xxxxxxxxxxxx and Xxxxxx X. Xxxxxx,
Trustees U/A/T dated 8/28/68 for
Juliet Xxx Xxxxxxx
/s/
--------------------------------------------
X. X. Xxxxxxxxxxxx and Xxxxxx X. Xxxxxx,
Trustees U/A/T dated 8/28/68 for
Xxxxxx Xxxxxxxx Xxxxxxx
/s/
--------------------------------------------
X. X. Xxxxxxxxxxxx and Xxxxxx X. Xxxxxx,
Trustees U/A/T dated 8/28/68 for
Xxxxxxx Xxxxxxx Xxxxxxx
[Preferred Stock Purchase Agreement]
Aspect - Series D -28-
33
/s/
--------------------------------------------
X. X. Xxxxxxxxxxxx and Xxxxxx X. Xxxxxx,
Trustees U/A/T dated 8/28/68 for
Xxxxx X. Xxxxxxx, Xx.
VENHILL LIMITED PARTNERSHIP
By: /s/
----------------------------------------
Name:
Title:
JULIET CHALLENGER, INC.
By: /s/
----------------------------------------
Name:
Title:
BT XXXX XXXXX EMPLOYEE VENTURE FUND
By: /s/
----------------------------------------
Name:
Title:
SECOND CENTURY GROWTH DEFERRED
COMPENSATION PLAN: Xxxxx Xxxxxxx, Inc.
By: /s/
----------------------------------------
Name:
Title:
[Preferred Stock Purchase Agreement]
Aspect - Series D -29-
34
THE XXXX XXXXXXXXX SCHOOL ENDOWMENT FUND
By: /s/
----------------------------------------
Name:
Title:
/s/ Xxxxxx Xxxxxx
--------------------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxxx
--------------------------------------------
Xxxxxxx Xxxxxxx
POLARIS VENTURE PARTNERS, L.P.
By: Polaris Venture Management Co., LLC
Its General Partner
By: /s/
----------------------------------------
Member
ONE LIBERTY FUND III, L.P.
By: One Liberty Partners III, L.P.,
Its General Partner
By: /s/ Xxxxx X. Xxxxx, Xx.
----------------------------------------
Xxxxx X. Xxxxx, Xx.
General Partner
[Preferred Stock Purchase Agreement]
Aspect - Series D -30-
35
XXXXXXX RIVER PARTNERSHIP VII,
LIMITED PARTNERSHIP
By: /s/
----------------------------------------
Name:
Title:
HIGHLAND CAPITAL PARTNERS II,
LIMITED PARTNERSHIP
By: /s/
----------------------------------------
Name:
Title:
XXXXXXXX MEDICAL PARTNERS XXXXXXXX VI
By: /s/ By: /s/
-------------------------- ----------------------------------------
Name: Name:
Title: Title:
XXXXXXXX ASSOCIATES
By: /s/
----------------------------------------
Name:
Title:
MERRILL, PICKARD, XXXXXXXX & EYRE IV,
LIMITED PARTNERSHIP
By: MPAE IV Management Co., L.P.
By: /s/
----------------------------------------
Name:
Title:
[Preferred Stock Purchase Agreement]
Aspect - Series D -31-
36
ORCHID & CO., nominee for
X. Xxxx Price Threshold Fund III, L.P.
By: X. Xxxx Price Threshold Fund Associates, Inc.
General Partner
By: /s/
---------------------------------------------
Name:
Title:
HLM PARTNERS VII, L.P.
By: /s/
---------------------------------------------
Name:
Title:
XXXXXX XXXX VENTURES, A CALIFORNIA LIMITED
PARTNERSHIP
By: /s/
---------------------------------------------
Name:
Title:
[Preferred Stock Purchase Agreement]
Aspect - Series D -32-
37
/s/ Xxxxxx X. Xxxx
-------------------------------------------------
Xxxxxx X. Xxxx
/s/ Xxxxxxx X. Xxxx
-------------------------------------------------
Xxxxxxx X. Xxxx
/s/ Xxxxxx X. Xxxxxxx
-------------------------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxxx Xxxxxxxxx
-------------------------------------------------
Xxxxxx Xxxxxxxxx
/s/ Xxxxxxxx and Xxxx Xxxxxxx
-------------------------------------------------
Xxxxxxxx and Xxxx Xxxxxxx
THE XXXXXXX RESEARCH FOUNDATION
By: /s/
---------------------------------------------
Name:
Title:
/s/ Xxxxx Xxxxx
-------------------------------------------------
Xxxxx Xxxxx
/s/ Xxxxxxx Xxxxxx
-------------------------------------------------
Xxxxxxx Xxxxxx
/s/ J. Xxxx Xxxxxxxxx
-------------------------------------------------
J. Xxxx Xxxxxxxxx
[Preferred Stock Purchase Agreement]
Aspect - Series D -33-
38
/s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxx Xx Xxxxxx
-------------------------------------------------
Xxxx Xx Xxxxxx
/s/ Xxxx X. Xxxxxx
-------------------------------------------------
Xxxx X. Xxxxxx
ZED INTERNATIONAL, INC.
By: /s/
---------------------------------------------
Name:
Title:
SVM STAR VENTURES
MANAGEMENTGESELLSCHAFT MBH NR.
3 & CO. BETEILIGUNGS KG
By: SVM Star Ventures
Managementgesellschaft mbH Nr. C
By: /s/
---------------------------------------------
Authorized Signatory
[Preferred Stock Purchase Agreement]
Aspect - Series D -34-
39
SVE STAR VENTURE ENTERPRISES NO. V,
A GERMAN CIVIL LAW PARTNERSHIP
(WITH LIMITATION OF LIABILITY)
By: SVM Star Ventures
Managementgesellschaft mbH Nr. C
By: /s/
---------------------------------------------
Authorized Signatory
UNTERSTOCK ANSTALT FUR VERMOGENS UND TRUST
VERWALTUNG
By: /s/
---------------------------------------------
Authorized Signatory
/s/ Xxxxxxx and Xxxxx Xxxxxx
-------------------------------------------------
Xxxxxxx and Xxxxx Xxxxxx
/s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------------------
Xxxxxxxx X. Xxxxxxx
CITIVENTURE 96 PARTNERSHIP, L.P.
By: Chancellor LGT Asset Management, Inc.
as investment advisor
By: /s/
---------------------------------------------
Name:
Title:
[Preferred Stock Purchase Agreement]
Aspect - Series D -35-
40
GENSTAR INVESTMENT CORPORATION
By: /s/
---------------------------------------------
Name:
Title:
TOW PARTNERS, A CALIFORNIA LIMITED PARTNERSHIP
By: /s/
---------------------------------------------
Name:
Title:
/s/
-------------------------------------------------
Xxxxxxx X. Xxxxxxx, Xx., Trustee of the
Younger Living Trust
/s/
-------------------------------------------------
Xxxx X. and Xxxxxx X. Xxxxxx, Trustees of
the Wythes Living Trust
/s/
-------------------------------------------------
G. Xxxxxxx Xxxxx
/s/ Xxxxxx X. Xxxxxxx
-------------------------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxx
-------------------------------------------------
Xxxxx X. Xxxxxxx
[Preferred Stock Purchase Agreement]
Aspect - Series D -36-
41
XXXXX FARGO BANK, TRUSTEE SHV
M/P/T FBO XXXXX X. XXXXXXXX
By: /s/
---------------------------------------------
Name:
Title:
XXXXX FARGO BANK, TRUSTEE SHV
M/P/T FBO XXXXX XXXX
By: /s/
---------------------------------------------
Name:
Title:
/s/ Xxxxxx X. Xxxxx
-------------------------------------------------
Xxxxxx X. Xxxxx
XXXXXXXXXX LGT PRIVATE CAPITAL PARTNERS III, L.P.
By: CPCP Associates, L.P.,
its general partner
By: Chancellor LGT Venture Partners, Inc.,
its general partner
By: /s/
---------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Managing Director
[Preferred Stock Purchase Agreement]
Aspect - Series D -37-
42
POLARIS VENTURE PARTNERS FOUNDERS' FUND, L.P.
By: Polaris Venture Management Co., LLC
Its General Partner
By: /s/
---------------------------------------------
Member
[Preferred Stock Purchase Agreement]
Aspect - Series D -38-
43
SCHEDULE I
----------
Preferred Shares Purchase Price for
Name and Address of Purchaser to be Purchased Preferred Shares
----------------------------- --------------- ----------------
Juliet Challenger, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000 357,143 $ 2,500,001.00
Attn: Xxxxxx XxXxxxxxx
Orchid & Co., nominee for
X. Xxxx Price Threshold
Fund III, L.P.
x/x Xxxxxxxx Xxxxxxx 000,000 $ 2,350,005.00
X. Xxxx Price Assoc. Inc.
000 Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Polaris Venture Partners, L.P.
Bay Colony Corporate Center
0000 Xxxxxx Xxxxxx, Xxxxx 0000 195,450 $ 1,368,150.00
Xxxxxxx, XX 00000
Xxxxxxx River Partnership VII,
Limited Partnership
0000 Xxxxxx Xxxxxx, 114,286 $ 800,002.00
Xxxxx 0000
Xxxxxxx, XX 00000
Venhill Limited Partnership
c/o Xxxxxx X. Xxxxxxx
Autotrol Technology
00000 X. Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000 107,143 $ 750,001.00
with copy to: Xxxxx Xxxxx
Taconic Group, Inc.
000 Xxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Xxxxx X. Xxxxxxx, Xxxxx Xxxxxxxx Xxxxxxx
and X. X. Xxxxxxxxxxxx, Trustees of the
Xxxxx X. Xxxxxxx Trust U/A dated
11/18/85 107,143 $ 750,001.00
0000 Xxxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
Aspect - Series D -39-
44
SCHEDULE I
----------
Preferred Shares Purchase Price for
Name and Address of Purchaser to be Purchased Preferred Shares
----------------------------- --------------- ----------------
One Liberty Fund III, L.P.
One Liberty Ventures
One Liberty Square 71,429 $ 500,003.00
Xxxxxx, XX 00000
X. X. Xxxxxxxxxxxx and Xxxxxx X. Xxxxxx,
Trustees U/A/T dated 8/28/68 for
Xxxxxxx Xxxxxxx Xxxxxxx 35,715 $ 250,005.00
0000 Xxxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
X. X. Xxxxxxxxxxxx and Xxxxxx X. Xxxxxx, $ 250,005.00
Trustees U/A/T dated 8/28/68 for
Xxxxxx Xxxxxxxx Xxxxxxx 35,715
0000 Xxxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
X. X. Xxxxxxxxxxxx and Xxxxxx X. Xxxxxx,
Trustees U/A/T dated 8/28/68 for
Xxxxx X. Xxxxxxx, Xx. 35,715 $ 250,005.00
0000 Xxxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
X. X. Xxxxxxxxxxxx and Xxxxxx X. Xxxxxx,
Trustees U/A/T dated 8/28/68 for
Juliet Xxx Xxxxxxx 35,715 $ 250,005.00
0000 Xxxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
Interstock Anstalt fur Vermogens
und Trust Verwaltung
x/x Xxxxx Xxxxxxxxxxxx
Xxxxxxxxxxx 00 23,429 $ 164,003.00
FL-9490 Vaduz
Liechtenstein
HLM Partners VII, L.P.
HLM Management Company
c/o Xxxxx Xxxx 21,429 $ 150,003.00
000 Xxxxxxxx Xxxxxx, #0000
Xxxxxx, XX 00000
Aspect - Series D -40-
45
SCHEDULE I
----------
Preferred Shares Purchase Price for
Name and Address of Purchaser to be Purchased Preferred Shares
----------------------------- --------------- ----------------
Xxxxxxx Xxxxxx
000 Xxxxxxxxx Xxxxx 21,429 $ 150,003.00
Xxxxxxxx, XX 00000
Xxxxxx Xxxx Ventures,
a California Limited Partnership
c/o Sutter Hill Ventures
000 Xxxx Xxxx Xxxx 18,166 $ 127,162.00
Xxxxx X-000
Xxxx Xxxx, XX 00000
ABS Employees' Venture Fund Limited
Partnership
Attn: Xxx Xxxxxx 14,286 $ 100,002.00
000 Xxxx Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Merrill, Pickard, Xxxxxxxx &
Eyre IV Limited Partnership
0000 Xxxxxx Xxxxxx 14,286 $ 100,002.00
Xxxxx 0000
Xxxxxxx, XX 00000
Second Century Growth Deferred
Compensation Plan:
Xxxxx Xxxxxxx Inc.
Attn: Buzz Xxxxxx, Managing Director 14,286 $ 100,002.00
000 Xxxxx 0xx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxx, XX 00000
Polaris Venture Partners Founders'
Fund, L.P.
Bay Colony Corporate Center 11,693 $ 81,851.00
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Aspect - Series D -41-
46
SCHEDULE I
----------
Preferred Shares Purchase Price for
Name and Address of Purchaser to be Purchased Preferred Shares
----------------------------- --------------- ----------------
SVE Star Venture Enterprises
No. V, A German Civil Law
Partnership (with limitation of liability)
c/o Xxxxxxx Xxxxxxxx
Star Venture Managment 10,029 $ 70,203.00
Xxxxxxxxxx. 0
X-00000 Xxxxxx
Xxxxxxx
Citiventure 96 Partnership, L.P.
c/o Xxxx Xxxxxxxxxxxx
1166 Avenue of the Americas 9,963 $ 69,741.00
Xxx Xxxx, XX 00000
The Xxxx Xxxxxxxxx School Endowment
Fund
c/o Xxxxx Xxxxxx 7,143 $ 50,001.00
000 Xxxxx Xxxxx Xxxx
Xx. Xxxxx, XX 00000
Xxxxx Xxxxx, M.D.
00 Xxxxx Xxxxxx 7,143 $ 50,001.00
Xxxxxxxxx, XX 00000
Xxxxxxx & Xxxxx Xxxxxx
0 Xxxxxxx Xxxx 7,143 $ 50,001.00
Xxxxx, XX 00000
Highland Capital Partners II,
Limited Partnership
Two International Place 4,286 $ 30,002.00
Xxxxxx, XX 00000
Xxxxxxxx VI
0000 Xxxx Xxxx Xxxx 3,927 $ 27,489.00
Xxxxx Xxxx, XX 00000
Xxxxxx Afeyen
c/o PerSeptive BioSystems
000 Xxx Xxxxxxxxxxx Xxxx 3,572 $ 25,004.00
Xxxxxxxxxxx, XX 00000
Aspect - Series D -42-
47
SCHEDULE I
----------
Preferred Shares Purchase Price for
Name and Address of Purchaser to be Purchased Preferred Shares
----------------------------- --------------- ----------------
J. Xxxx Xxxxxxxxx
00 Xxxxx Xxxxx Xxxx 3,572 $ 25,004.00
X. Xxxxxxxxx, XX 00000
Xxxxxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxx B107 3,572 $ 25,004.00
Xxxxxxxxxx, XX 00000
Xxxxxxx X. Xxxx
00 Xxxxxxxxx Xxxx 3,572 $ 25,004.00
Xxxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx, M.D.
00 Xxxxx Xxxx Xxxx 3,572 $ 25,004.00
Xxxxxxx, XX 00000
Xxxxxx X. Xxxx
0 Xxx Xxxxxx'x Xxx 3,572 $ 25,004.00
Xxxxx, XX 00000
Xxxxxx X. Xxxxx
0 Xxxxxxxxx Xxxx 3,572 $ 25,004.00
Xxxxxx, XX 00000
Xxxxxxxx X. Xxxxxxx &
Xxxx X. Xxxxxxx
0000 Xxx Xxxxxxx 2,988 $ 20,916.00
Xxxx Xxxx Xxxx, Xxxx 00000
Chancellor LGT Private Capital Partners
III, L.P.
c/o Xxxx Radovonovich 2,491 $ 17,437.00
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Tow Partners, a California Limited
Partnership
c/o Sutter Hill Ventures
000 Xxxx Xxxx Xxxx 2,477 $ 17,339.00
Xxxxx X-000
Xxxx Xxxx, XX 00000
Aspect - Series D -43-
48
SCHEDULE I
----------
Preferred Shares Purchase Price for
Name and Address of Purchaser to be Purchased Preferred Shares
----------------------------- --------------- ----------------
G. Xxxxxxx Xxxxx, Xx.
c/o Sutter Hill Ventures
000 Xxxx Xxxx Xxxx 2,386 $ 16,702.00
Xxxxx X-000
Xxxx Xxxx, XX 00000
Xxxxx Fargo Bank, Trustee
SHV M/P/T FBO Xxxxx X. Xxxxxxxx
Attention: Xxxxx Xxxxxxxxx
MAC #0101-021 2,386 $ 16,702.00
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
SVM StarVentures
Managementgesellschaft mbH Nr.3 & Co.
Beteiligungs KG
c/o Xxxxxxx Xxxxxxxx
Star Venture Managment 2,257 $ 15,799.00
Xxxxxxxxxx. 0
X-00000 Xxxxxx
Xxxxxxx
Xxxxxxx Xxxxxxx
c/o Exact Laboratories, Inc.
00 Xxxxx Xxxx 1,429 $ 10,003.00
Xxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx, Xx., Trustee
Younger Living Trust
x/x Xxxxxx Xxxx Xxxxxxxx
000 Xxxx Xxxx Xxxx 1,303 $ 9,121.00
Xxxxx X-000
Xxxx Xxxx, XX 00000
Xxxxx Fargo Bank, Trustee
SHV M/P/T FBO Xxxxx Xxxx
Attention: Xxxxx Xxxxxxxxx
MAC #0101-021 663 $ 4,641.00
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Aspect - Series D -44-
49
SCHEDULE I
----------
Preferred Shares Purchase Price for
Name and Address of Purchaser to be Purchased Preferred Shares
----------------------------- --------------- ----------------
Xxxxxxx Research Foundation
0000 Xxx Xxxxxxx 584 $ 4,088.00
Xxxx Xxxx Xxxx, Xxxx 00000
Xxxxxxxx Medical Partners
0000 Xxxx Xxxx Xxxx 000 $ 3,962.00
Xxxxx Xxxx, XX 00000
Genstar Investement Corporation
Xxxxx Xxxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000 517 $ 3,619.00
Attention: Xx. X.X. Xxxxxxxx
Xxxxxx Xxxxxxxxx
0 Xxxxxx Xxxx 000 $ 3,164.00
Xxxxxxxxx Xxxxx, XX 00000
Xxxx X. and Xxxxxx X. Xxxxxx,
Trustees of the Wythes Living Trust
c/o Sutter Xxxx Ventures
000 Xxxx Xxxx Xxxx 000 $ 2,919.00
Xxxxx X-000
Xxxx Xxxx, XX 00000
Xxxxxx X. Xxxxxxx
c/o Sutter Xxxx Ventures
000 Xxxx Xxxx Xxxx 000 $ 1,316.00
Xxxxx X-000
Xxxx Xxxx, XX 00000
Xxxxxxxx Associates
0000 Xxxx Xxxx Xxxx 187 $ 1,309.00
Xxxxx Xxxx, XX 00000
Xxxxx X. Xxxxxxx
c/o Sutter Hill Ventures
755 Page Xxxx Xxxx 00 $ 000.00
Xxxxx X-000
Xxxx Xxxx, XX 00000
Xxxx Xxxxxx, M.D.
00 Xxxxxxx Xxxx 42 $ 294.00
Xxxxxxxxx, XX 00000
Aspect - Series D -45-
50
SCHEDULE I
----------
Preferred Shares Purchase Price for
Name and Address of Purchaser to be Purchased Preferred Shares
----------------------------- --------------- ----------------
Zed International, Inc.
c/o Xxxxxx X. Xxxxxxxxx
BankBoston, N.A.
01-05-03 11 $ 77.00
X.X. Xxx 0000
Xxxxxx, XX 00000
Xxxx DeGheest
12133 Foothill Land 6 $ 42.00
Xxx Xxxxx, XX 00000
Xxxxxx X. Xxxxxxx
000 Xxxx Xxxx 4 $ 28.00
Xxxxxxxxx, XX 00000
TOTAL 1,666,234 $11,663,638.00
Aspect - Series D -46-
