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EXHIBIT 10.10
REPEATER TECHNOLOGIES, INC.
CONVERTIBLE DEBENTURE
AND WARRANT PURCHASE AGREEMENT
JULY 11, 2000
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TABLE OF CONTENTS
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1. AGREEMENT TO SELL AND PURCHASE.............................................................................1
1.1 Authorization................................................................................1
1.2 Sale and Purchase - Closing..................................................................1
1.3 Separate Purchases...........................................................................2
1.4 Payments.....................................................................................2
2. CLOSING, DELIVERY AND PAYMENT..............................................................................2
2.1 Closing......................................................................................2
2.2 Subsequent Sales.............................................................................2
2.3 Subsequent Closings..........................................................................3
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..............................................................3
3.1 Organization, Good Standing and Qualification................................................3
3.2 Capitalization...............................................................................3
3.3 Authorization; Binding Obligations...........................................................4
3.4 Financial Statements.........................................................................4
3.5 Agreements; Action...........................................................................4
3.6 Changes......................................................................................5
3.7 Title to Properties and Assets; Liens, etc...................................................6
3.8 Patents and Trademarks.......................................................................6
3.9 Compliance with Other Instruments............................................................7
3.10 Litigation...................................................................................7
3.11 Tax Returns and Payments.....................................................................7
3.12 Employees....................................................................................7
3.13 Registration Rights..........................................................................8
3.14 Compliance with Laws.........................................................................8
3.15 Offering Valid...............................................................................8
3.16 Insurance....................................................................................8
3.17 Stockholders, Directors and Officers; Indebtedness...........................................8
3.18 Consents.....................................................................................9
3.19 Environmental and Safety Laws................................................................9
3.20 Composition of Board.........................................................................9
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TABLE OF CONTENTS
(CONTINUED)
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3.21 Minute Books.................................................................................9
3.22 Qualified Small Business.....................................................................9
3.23 Full Disclosure..............................................................................9
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS..........................................................10
4.1 Requisite Power and Authority...............................................................10
4.2 Consents....................................................................................10
4.3 Investment Representations..................................................................10
5. CONDITIONS TO PURCHASERS' OBLIGATIONS AT THE CLOSING......................................................11
5.1 Representations and Warranties Correct......................................................11
5.2 Covenants...................................................................................11
5.3 Compliance Certificates.....................................................................11
5.4 Amended and Restated Investors Rights Agreement.............................................11
5.5 Certificate.................................................................................11
5.6 Minimum Investment..........................................................................12
5.7 Proceedings and Documents...................................................................12
5.8 Qualifications, Legal Investment............................................................12
5.9 Management Rights...........................................................................12
6. CONDITIONS TO COMPANY'S OBLIGATIONS AT CLOSING............................................................12
6.1 Representations Correct.....................................................................12
6.2 Qualifications, Legal Investment............................................................12
6.3 Covenants...................................................................................12
6.4 Certificate.................................................................................12
6.5 Minimum Investment..........................................................................12
7. COVENANTS.................................................................................................13
7.1 Qualified Small Business....................................................................13
7.2 Series EE Preferred.........................................................................13
7.3 Vote of Holders of Debentures...............................................................13
7.4 Waiver of Right of First Refusal............................................................13
8. MISCELLANEOUS.............................................................................................13
8.1 Governing Law...............................................................................13
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TABLE OF CONTENTS
(CONTINUED)
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8.2 Survival....................................................................................13
8.3 Successors and Assigns......................................................................14
8.4 Entire Agreement............................................................................14
8.5 Separability................................................................................14
8.6 Amendment and Waiver........................................................................14
8.7 Delays or Omissions.........................................................................14
8.8 Waiver of Conflicts.........................................................................14
8.9 Notices, etc................................................................................15
8.10 Payment of Fees and Expenses................................................................15
8.11 Attorneys' Fees.............................................................................15
8.12 Titles and Subtitles........................................................................15
8.13 Counterparts................................................................................15
8.14 Broker's Fees...............................................................................15
8.15 Parties in Interest.........................................................................15
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REPEATER TECHNOLOGIES, INC.
CONVERTIBLE DEBENTURE AND
WARRANT PURCHASE AGREEMENT
THIS CONVERTIBLE DEBENTURE AND WARRANT PURCHASE AGREEMENT (the
"Agreement") is entered into as of July 11, 2000, by and among REPEATER
TECHNOLOGIES, INC., a Delaware corporation (the "Company"), and each of those
persons and entities, severally and not jointly, whose names are listed in the
column entitled "Purchaser" on the Schedule of Purchasers attached hereto as
EXHIBIT A (which persons and entities are hereinafter collectively referred to
as "Purchasers" and each individually as a "Purchaser").
RECITALS
WHEREAS, the Company has authorized the sale and issuance, on the terms
and conditions set forth herein, of up to six million dollars ($6,000,000)
principal amount of convertible debentures (the "Debentures") and the issuance
of warrants exercisable for shares of Series EE Preferred Stock (the
"Warrants");
WHEREAS, Purchasers desire to purchase the Debentures and the Warrants
on the terms and conditions set forth herein; and
WHEREAS, the Company desires to issue and sell the Debentures and the
Warrants to Purchasers on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:
1. AGREEMENT TO SELL AND PURCHASE.
1.1 AUTHORIZATION. On or prior to the Initial Closing (as defined in
Section 2 below), the Company shall have authorized (i) the sale and issuance to
Purchasers of up to six million dollars ($6,000,000) principal amount of
Debentures in the form attached hereto as EXHIBIT B and (ii) the issuance of
warrants to purchase Series EE Preferred Stock in the form attached hereto as
EXHIBIT D (exercisable by their terms for shares of Series EE Preferred Stock).
The Company has, or prior to the Initial Closing will have, adopted and filed
the Amended and Restated Certificate of Incorporation (the "Certificate of
Incorporation") in substantially the form attached hereto as EXHIBIT C with the
Secretary of State of the State of Delaware.
1.2 SALE AND PURCHASE - CLOSING. Subject to the terms and conditions
hereof, and in reliance upon the representations, warranties and agreements
contained herein, at the Initial Closing (as hereinafter defined) and any
subsequent Closings, if any, the Company will (i) issue and sell to the
Purchasers, and the Purchasers will buy from the Company, Debentures in the
principal amount specified opposite each Purchaser's name in the column entitled
"Debentures," respectively, on the Schedule of Purchasers attached hereto as
EXHIBIT A, for the appropriate consideration specified on the Schedule of
Purchasers, payable by check or wire
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transfer and (ii) issue to each Purchaser a warrant in substantially the form
attached hereto as Exhibit D (each, a "Warrant" and collectively, the
"Warrants") exercisable for the same number of shares set opposite such
Purchaser's name on Exhibit A.
1.3 SEPARATE PURCHASES. The Company's agreement with each of the
Purchasers is a separate agreement from the other Purchasers, and the sale of
the Debentures to each of the Purchasers is a separate sale from the other
Purchasers. The Company, in its sole and absolute discretion, reserves the right
to approve or disapprove each investor.
1.4 PAYMENTS. Payment of the Purchase Price shall be made only by
check payable to the Company, wire transfer or cancellation of indebtedness of
the Company. Any Purchaser paying by wire transfer authorizes Cooley Godward LLP
to accept the Purchase Price into its trustee account and to disburse such funds
to the Company upon the Initial Closing.
2. CLOSING, DELIVERY AND PAYMENT.
2.1 CLOSING. The closing under this Agreement shall take place at
10:00 a.m. on July 11, 2000 (the "Closing Date"), at the offices of Cooley
Godward LLP, Five Palo Alto Square, 3000 El Camino Real, Palo Alto, California
94306, or at such other time or place as the Company may designate (the "Initial
Closing"). At the Initial Closing, subject to the terms and conditions hereof,
the Company will deliver to each Purchaser (i) the Debenture purchased by such
Purchaser from the Company against payment by or on behalf of such Purchaser of
the purchase price set forth opposite such Purchaser's name on EXHIBIT A (the
"Purchase Price") and (ii) a Warrant exercisable for the number of shares set
forth opposite such Purchaser's name on EXHIBIT A.
2.2 SUBSEQUENT SALES. To the extent that the aggregate amount of the
Debentures authorized for sale as described in Section 1.1 hereof is not sold
pursuant to this Agreement, at any time on or before the ninetieth (90th) day
following the Initial Closing, subject to the terms and conditions of this
Agreement, the Company may sell up to all of the amount of such unsold
Debentures to such persons as the Company may determine, upon the same terms as
the Debentures purchased and sold hereunder. Any such sale shall be upon the
same terms and conditions as those contained herein, may occur on one or more
occasions and such persons or entities shall become parties to this Agreement
and that certain Seventh Amended and Restated Investors' Rights Agreement dated
of even date herewith, by and among the Company and the Purchasers, the form of
which is attached hereto as EXHIBIT F (the "Amended Rights Agreement"), and
shall have the rights and obligations of a Purchaser hereunder and thereunder.
Such persons or entities may become parties to such agreements (i)(a) by
executing copies of such agreements which, as of the date hereof, provide for
execution by them or (b) by appending additional signature pages to such
agreements containing their signatures and (ii) by appending additional pages to
or revising the Exhibit A of each such agreement appropriately, and the Company
is authorized to effect any of such alternatives on one or more occasions
without the further consent of the Purchasers, notwithstanding any provision
hereof to the contrary.
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2.3 SUBSEQUENT CLOSINGS. In the event that there is more than one
closing, the term "Closing" shall apply to each such closing unless otherwise
specified and the term "Debentures" shall apply to all of the Debentures sold
and issued at each such closing.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth on
the Schedule of Exceptions attached hereto as EXHIBIT F, the Company hereby
represents and warrants to each Purchaser as follows:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware. The Company has full power and authority to own
and operate its properties and assets, and to carry on its business as presently
conducted and as presently proposed to be conducted. The Company is duly
qualified and is authorized to do business and is in good standing as a foreign
corporation in all jurisdictions in which the nature of its activities and of
its properties (both owned and leased) makes such qualification necessary,
except for those jurisdictions in which failure to do so would not have a
material adverse effect on the Company or its business. The Company has no
subsidiaries or affiliated companies and owns no equity securities of any other
corporation, limited partnership or similar entity.
3.2 CAPITALIZATION. The authorized capital stock of the Company,
immediately prior to the Initial Closing, will consist of 70,000,000 shares of
Common Stock, 3,320,400 shares of which are issued and outstanding, and
20,000,000 shares of Preferred Stock, 1,228,409 shares of which are designated
Series AA Preferred Stock, all of which are issued and outstanding, 5,081,668
shares of which are designated Series BB Preferred Stock, 4,246,316 of which are
issued and outstanding, 4,600,000 shares of which are designated Series CC
Preferred Stock, 4,402,907 of which are issued and outstanding, 3,300,000 shares
of which are designated Series DD Preferred Stock, none of which are issued and
outstanding, and 1,500,000 shares of which are designated Series EE Preferred
Stock, none of which are issued and outstanding. All shares of the Company's
Common Stock, Series AA Preferred Stock, Series BB Preferred Stock and Series CC
Preferred Stock issued and outstanding immediately prior to the date hereof have
been duly authorized and validly issued and are fully paid and nonassessable.
The rights, preferences, privileges and restrictions of the Series AA Preferred
Stock, Series BB Preferred Stock, Series CC Preferred Stock, Series DD Preferred
Stock and Series EE Preferred Stock are as stated in the Certificate of
Incorporation. As of the Initial Closing, each share of Series AA Preferred
Stock will be convertible into Common Stock on approximately a 1.197-for-one
basis, and each share of Series BB Preferred Stock, Series CC Preferred Stock
and Series DD Preferred Stock will be convertible into Common Stock on a
one-for-one basis. The shares of Common Stock issuable upon the conversion of
the issued and outstanding shares of Series AA Preferred Stock, Series BB
Preferred Stock and Series CC Preferred Stock have been duly and validly
reserved for issuance and, when issued in accordance with the Certificate of
Incorporation, will be validly issued, fully paid and nonassessable. Other than
as set forth on the Schedule of Exceptions, and except as may be granted
pursuant to the Amended Rights Agreement, immediately prior to the Initial
Closing, there are no outstanding options, warrants, rights (including
conversion or preemptive rights), proxy or stockholder agreements, or agreements
of any kind for the purchase or acquisition from the Company of any of its
securities.
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3.3 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on the
part of the Company, its officers, directors and stockholders necessary for the
authorization, sale and issuance of the Debentures pursuant hereto and, subject
to the receipt of appropriate notice or the occurrence of an event upon which
such conversion is required, the Series EE Preferred Stock issuable upon
conversion of the Debentures (the "Conversion Shares") and the Common Stock
issuable upon conversion thereof (the "Conversion Common") pursuant to the
Certificate of Incorporation and for the performance of the Company's
obligations hereunder and under the Debentures and the Amended Rights Agreement
has been taken or will be taken prior to the Initial Closing. The Agreement and
the Debentures, when executed and delivered, will be valid and binding
obligations of the Company enforceable in accordance with their respective
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights; and (ii) as general principles of equity
restrict the availability of equitable remedies. The sale of the Debentures and
the subsequent conversion of Debentures into Conversion Shares and of Conversion
Shares into Conversion Common are not and will not be subject to any preemptive
rights or rights of first refusal that have not been properly waived or complied
with. The Conversion Shares and Conversion Common have been duly authorized by
the Company and when issued in compliance with the provisions of this Agreement,
the Debentures and the Certificate of Incorporation, the Conversion Shares and
the Conversion Common will be validly issued, fully paid and nonassessable, and
will be free of any liens or encumbrances; provided, however, that the
Debentures, Conversion Shares and Conversion Common may be subject to
restrictions on transfer under state and/or federal securities laws as set forth
herein or as otherwise required by such laws at the time a transfer is proposed.
3.4 FINANCIAL STATEMENTS. The Company has delivered to each Purchaser
its audited financial statements for the fiscal year ended March 31, 2000 (the
"Financial Statements"), copies of which are attached hereto as EXHIBIT G. The
Financial Statements are complete and correct in all material respects, have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated, except as
disclosed therein, and present fairly the financial condition and results of
operations of the Company for the periods indicated; provided however, that the
unaudited financial statements are subject to normal recurring year-end audit
adjustments and do not contain all footnotes required under generally accepted
accounting principles.
3.5 AGREEMENTS; ACTION.
(a) Except for agreements explicitly contemplated hereby and
agreements between the Company and its employees with respect to the sale of the
Company's Common Stock, there are no agreements, understandings or proposed
transactions between the Company and any of its officers, directors or
affiliates, or any affiliate or relative thereof.
(b) There are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs or decrees to which
the Company is a party or by which it is bound which may involve (i) obligations
(contingent or otherwise) of, or payments to, the Company in excess of $100,000
(other than obligations of, or payments to, the Company arising from purchase or
sale agreements entered into in the ordinary course of business), or (ii) the
license of any patent, copyright, trade secret or other proprietary right to or
from the
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Company (other than licenses arising from the purchase of "off the shelf" or
other standard products), or (iii) provisions restricting or affecting the
development, manufacture or distribution of the Company's products or services,
or (iv) indemnification by the Company with respect to infringements of
proprietary rights (other than indemnification obligations arising from purchase
or sale agreements entered into in the ordinary course of business).
(c) Since March 31, 2000, the Company has not (i) declared or
paid any dividends, or authorized or made any distribution upon or with respect
to any class or series of its capital stock, (ii) incurred any indebtedness for
money borrowed or any other liabilities (other than with respect to indebtedness
and other obligations incurred in the ordinary course of business or as
disclosed in the Financial Statements) individually in excess of $100,000 or, in
the case of indebtedness and/or liabilities individually less than $100,000, in
excess of $200,000 in the aggregate, (iii) made any loans or advances to any
person, other than ordinary advances for travel expenses, (iv) repurchased,
redeemed or otherwise acquired any shares of its capital stock or agreed to do
so (other than repurchases of Common Stock from employees or consultants of the
Company at the initial purchase price thereof upon termination of their such
person's services to the Company) or (v) sold, exchanged or otherwise disposed
of any of its assets or rights, other than the disposal of unnecessary equipment
or the sale of its inventory in the ordinary course of business.
(d) For the purposes of subsections (b) and (c) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.
3.6 CHANGES. Since March 31, 2000, there has not been:
(a) Any change in the assets, liabilities, financial condition,
operations or prospects of the Company, other than changes in the ordinary
course of business, none of which individually or in the aggregate has had or is
expected to have a material adverse effect on such assets, liabilities,
financial condition, operations or prospects of the Company;
(b) Any change, except in the ordinary course of business, in the
contingent obligations of the Company by way of guaranty, endorsement,
indemnity, warranty, or otherwise, none of which individually or in the
aggregate has had or is expected to have a material adverse effect on the
assets, liabilities, financial condition, operations or prospects of the
Company;
(c) Any damage, destruction, or loss, whether or not covered by
insurance, materially and adversely affecting the properties or business of the
Company;
(d) Any waiver by the Company of a valuable right or of a
material debt owed to it;
(e) Any direct or indirect loans made by the Company to any
stockholder, employee, officer, or director of the Company, other than advances
made in the ordinary course of business;
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(f) Any declaration or payment of any dividend or other
distribution of the assets of the Company;
(g) Any labor organization activity;
(h) Any debt, obligation, or liability incurred, assumed or
guaranteed by the Company, except current liabilities incurred in the ordinary
course of business;
(i) Any change in any material agreement to which the Company is
a party or by which it is bound which materially and adversely affects or, so
far as the Company may now foresee, in the future could materially and adversely
affect the business, assets, liabilities, financial condition, operations or
prospects of the Company, including compensation agreements with the Company's
employees;
(j) Any other event or condition of any character that, either
individually or cumulatively, has materially and adversely affected, or, so far
as the Company may now foresee, in the future could materially and adversely
affect the business, assets, liabilities, financial condition, operations or
prospects of the Company; or
(k) Any agreement on the part of the Company to do any of the
foregoing.
3.7 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC. The Company has good
and marketable title to its properties and assets, including the properties and
assets reflected in the balance sheet as at March 31, 2000 (included in the
Financial Statements), and good title to its leasehold estates, in each case
subject to no mortgage, pledge, lien, lease, encumbrance, or charge, other than
(i) those resulting from taxes which have not yet become delinquent, or (ii)
minor liens and encumbrances which do not materially detract from the value of
the property subject thereto or materially impair the operations of the Company.
3.8 PATENTS AND TRADEMARKS. To the best of the Company's knowledge,
the Company, as of the Closing Date, owns or has sufficient rights to those
trade names, copyrights, trade secrets, information, patents, trademarks,
service marks, licenses, rights and processes necessary for its business as now
conducted and as proposed to be conducted without any conflict with or
infringement of the rights of others. There are no outstanding options,
licenses, or agreements of any kind relating to the foregoing, nor is the
Company bound by or a party to any options, licenses or agreements of any kind
with respect to the patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, proprietary rights and processes of any other person or
entity other than such licenses or agreements arising from the purchase of "off
the shelf" or standard products. To the best knowledge of the Company, the
Company has not violated or infringed or, by conducting its business as
proposed, will violate or infringe any of the patents, trademarks, service
marks, trade names, copyrights or trade secrets or other proprietary rights of
any other person or entity. To the best knowledge of the Company none of the
Company's employees is obligated under any contract (including licenses,
covenants or commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would
interfere with the use of his best efforts to promote the interests of the
Company or that would conflict with the Company's business as
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proposed to be conducted. To the best knowledge of the Company, neither the
execution nor delivery of this Agreement, nor the carrying on of the Company's
business by the employees of the Company, nor the conduct of the Company's
business as proposed, will conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any contract,
covenant or instrument under which any of such employees is now obligated. The
Company does not believe that, as the Company's business is currently conducted
or proposed to be conducted, it is or will be necessary to utilize any
inventions of any of its employees (or people it currently intends to hire) made
prior to their employment by the Company.
3.9 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in
violation, breach or default of any term of its Certificate of Incorporation or
Bylaws, any mortgage, indenture, contract, agreement, instrument, judgment,
decree, order or, to the best of its knowledge, any statute, rule, or regulation
applicable to the Company or by which the Company or its assets is bound which
would materially and adversely affect the business, assets, liabilities,
financial condition, operations or prospects of the Company, and, to the best of
the Company's knowledge, no event or condition has occurred or exists which,
with the lapse of time or the giving of notice or both would constitute such a
violation, breach or default. The execution, delivery, and performance of and
compliance with this Agreement and the issuance and sale of the Debentures
pursuant hereto and of the Conversion Shares and Conversion Common pursuant to
the Certificate of Incorporation, will not result in any such violation, breach
or default or be in conflict with or constitute a default under any such term,
or result in the creation of any mortgage, pledge, lien, encumbrance, or charge
upon any of the properties or assets of the Company.
3.10 LITIGATION. There is no action, suit, proceeding or
investigation pending or currently threatened against the Company which might
result, either individually or in the aggregate, in any material adverse changes
in the assets, liabilities, financial condition, operations, affairs or
prospects of the Company, financially or otherwise, or any change in the current
equity ownership of the Company, nor to the best knowledge of the Company, is
there any basis for the foregoing. The foregoing includes, without limitation,
actions pending or threatened (or any basis therefor known to the Company)
involving the prior employment of any of the Company's employees, their use in
connection with the Company's business of any information or techniques
allegedly proprietary to any of their former employers, or their obligations
under any agreements with prior employers. The Company is not a party or subject
to the provisions of any order, writ, injunction, judgment or decree of any
court or government agency or instrumentality. There is no action, suit,
proceeding or investigation by the Company currently pending or which the
Company intends to initiate.
3.11 TAX RETURNS AND PAYMENTS. The Company has filed or has received
extensions for all tax returns, reports, schedules and other documents which are
required to be filed by it with the Internal Revenue Service or any other
governmental taxing authority. All such tax returns are accurate and complete in
all material respects and all taxes shown to be due and payable on such returns,
any assessments imposed, and all other taxes and estimated payments due and
payable by the Company on or before the Initial Closing have been paid.
3.12 EMPLOYEES. The Company has no collective bargaining agreements
with any of its employees. There is no labor union organizing activity pending
or threatened with
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respect to the Company. No employee has any agreement or contract, written or
oral, regarding his employment with the Company. To the best of the Company's
knowledge, no employee of the Company, nor anyone with whom the Company has
contracted, is in violation of any term of any employment, non-compete or
non-disclosure contract, inventions agreement, patent disclosure agreement or
any other agreement relating to the right of any such individual to be employed
by, or to provide services to or contract with, the Company; and, to the best of
the Company's knowledge after due investigation, the continued employment by the
Company of its present employees, and the performance of the Company's contracts
with its independent contractors, will not result in any such violation. The
Company has not received any notice alleging that any such violation has
occurred. Each employee of the Company has executed a Proprietary Information
and Inventions Agreement in the form delivered to the Purchasers.
3.13 REGISTRATION RIGHTS. Except as required pursuant to the Amended
Rights Agreement, the Company is presently not under any obligation, and has not
granted any rights, to register any of the Company's presently outstanding
securities or any of its securities that may hereafter be issued.
3.14 COMPLIANCE WITH LAWS. The Company is not in violation of any
applicable statute, rule, regulation, order or restriction of any domestic or
foreign government or any instrumentality or agency thereof which violation
would materially and adversely affect the business, assets, liabilities,
financial condition, operations or prospects of the Company. No orders,
permissions, consents, approvals or authorizations are required to be obtained
and no registrations, declarations or other documents are required to be filed
in connection with the execution and delivery of this Agreement, the Debentures
and the Amended Rights Agreement and the issuance of the Debentures or the
Conversion Shares or the Conversion Common, except such as has been duly and
validly obtained or filed, or with respect to any filings that must be made
after the Initial Closing, as will be filed in a timely manner.
3.15 OFFERING VALID. Assuming the accuracy of the representations and
warranties of the Purchasers contained in Section 4.3 hereof, the offer, sale
and issuance of the Debentures, the Conversion Shares and Conversion Common will
be exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act") and will have been registered or qualified (or
are exempt from registration and qualification) under the registration, permit
or qualification requirements of all applicable state securities laws. Neither
the Company nor any agent on its behalf has solicited or will solicit any offers
to sell or has offered to sell or will offer to sell all or any part of the
Debentures to any person or persons so as to bring the offer or sale of such
Debentures by the Company to the Purchasers within the registration provisions
of the Securities Act or any state securities laws.
3.16 INSURANCE. The Company has in full force and effect fire,
casualty and products liability insurance policies, with extended coverage,
sufficient in amount to allow it to replace any of its owned or leased
properties which might be damaged or destroyed.
3.17 STOCKHOLDERS, DIRECTORS AND OFFICERS; INDEBTEDNESS. The Company
has no indebtedness to any of its officers, directors or stockholders or to any
member of the immediate family thereof and none of such person is indebted to
the Company, other than travel, relocation, and other expenses which are
advanced and reimbursed in the ordinary course of
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business and are not material. To the best of the Company's knowledge, none of
the officers or directors or significant employees or consultants of the Company
has, individually or collectively, directly or indirectly, a material interest
in any entity which is a direct competitor, customer or supplier of (or has any
existing contractual relationship with) the Company, other than shares of
publicly traded corporations held by such persons.
3.18 CONSENTS. No consent, approval, qualification, order or
authorization of, or filing with, any governmental authority or other person is
required in connection with the Company's valid execution, delivery or
performance of this Agreement or the offer, sale or issuance of the Debentures
by the Company, the conversion of the Debentures, the issuance of the Conversion
Shares upon conversion of the Debentures, the issuance of Conversion Common upon
conversion of the Conversion Shares or the consummation of any other transaction
contemplated on the part of the Company hereby, except (a) the filing of the
Amended and Restated Certificate of Incorporation with the Secretary of State of
the State of Delaware prior to the Initial Closing, (b) the filing of a notice
of exemption pursuant to Section 25102(f) of the California Corporations Code
with the California Commission of Corporations, which the Company covenants to
complete within fifteen (15) days after the Initial Closing, or (c) other
post-closing state securities law filings which the Company covenants to
complete on a timely basis.
3.19 ENVIRONMENTAL AND SAFETY LAWS. The Company is not, to the best
of its knowledge, in violation of any applicable statute, law, or regulation
relating to the environment or occupational health and safety, and no material
expenditures are or will be required in order to comply with any such existing
statute, law or regulation.
3.20 COMPOSITION OF BOARD. As of the date hereof, the Bylaws of the
Company provide that the authorized number of the Board of Directors is a
minimum of five (5) and a maximum of nine (9) directors.
3.21 MINUTE BOOKS. The minute books of the Company contain a complete
summary of all meetings and actions of the Company's Board of Directors and
stockholders since the time of incorporation and accurately reflect all
transactions referred to in such minutes in all material respects.
3.22 QUALIFIED SMALL BUSINESS. The Company qualifies as a Qualified
Small Business as defined in Section 1202(d) of the Internal Revenue Code of
1986, as amended (the "Code").
3.23 FULL DISCLOSURE. Neither this Agreement, the Exhibits hereto nor
any of the documents delivered by the Company or authorized to be delivered on
behalf of the Company by its representatives to Purchasers or their attorneys or
agents in connection herewith or therewith or with the transactions contemplated
hereby or thereby, contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
or therein not misleading. To the best of the Company's knowledge, there are no
facts which (individually or in the aggregate) materially adversely affect the
business, assets, liabilities, financial condition, prospects or operations of
the Company that have not been set forth in the Agreement.
9
<PAGE> 14
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser
hereby represents and warrants severally and not jointly to the Company as
follows (such representations and warranties do not lessen or obviate the
representations and warranties of the Company set forth in this Agreement):
4.1 REQUISITE POWER AND AUTHORITY. Purchaser has all necessary power
and authority under all applicable provisions of law to execute and deliver this
Agreement and to carry out its provisions. All action on Purchaser's part
required for the lawful execution and delivery of this Agreement has been or
will be effectively taken prior to the Initial Closing. Upon its execution and
delivery, this Agreement will be a valid and binding obligation of Purchaser,
enforceable in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights; and (ii) as general
principles of equity restrict the availability of equitable remedies.
4.2 CONSENTS. All consents, approvals, orders, authorizations,
registrations, qualifications, designations, declarations or filings with any
governmental authority on the part of Purchaser required in connection with the
consummation of the transactions contemplated in the Agreement have been or
shall have been obtained prior to and be effective as of the Initial Closing.
4.3 INVESTMENT REPRESENTATIONS. Purchaser understands that neither
the Debentures, the Conversion Shares nor the Warrants have been registered
under the Securities Act. Purchaser also understands that the Debentures and the
Warrants are being offered and sold pursuant to an exemption from registration
contained in the Securities Act based in part upon Purchaser's representations
contained in the Agreement. Purchaser hereby represents and warrants to the
Company as follows:
(a) PURCHASER BEARS ECONOMIC RISK. Purchaser has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. Purchaser must bear the economic risk of
this investment indefinitely unless the Debentures (or the Conversion Shares) or
the Warrants are registered pursuant to the Securities Act, or an exemption from
registration is available. Purchaser understands that the Company has no present
intention of registering the Debentures, the Conversion Shares, the Warrants or
any shares of its Common Stock. Purchaser also understands that there is no
assurance that any exemption from registration under the Securities Act will be
available and that, even if available, such exemption may not allow Purchaser to
transfer all or any portion of the Debentures, the Conversion Shares or the
Warrants under the circumstances, in the amounts or at the times Purchaser might
propose.
(b) ACQUISITION FOR OWN ACCOUNT. Purchaser is acquiring the
Debentures, the Conversion Shares and the Warrants for Purchaser's own account
for investment only, and not with a view towards their distribution.
(c) PURCHASER CAN PROTECT ITS INTEREST. Purchaser represents that
by reason of its, or of its management's, business or financial experience,
Purchaser has the capacity
10
<PAGE> 15
to protect its own interests in connection with the transactions contemplated in
this Agreement. Purchaser is not a corporation, trust or partnership
specifically formed for the purpose of consummating these transactions.
(d) ACCREDITED INVESTOR. Purchaser represents that it is an
accredited investor within the meaning of Regulation D under the Securities Act.
(e) COMPANY INFORMATION. Purchaser has received and read the
Financial Statements, has had an opportunity to discuss the Company's business,
management and financial affairs with directors, officers and management of the
Company and has had the opportunity to review the Company's operations and
facilities. Purchaser has also had the opportunity to ask questions of and
receive answers from, the Company and its management regarding the terms and
conditions of this investment.
5. CONDITIONS TO PURCHASERS' OBLIGATIONS AT THE CLOSING. The Purchasers'
obligations to purchase the Debentures at the Initial Closing are subject to the
fulfillment on or prior to the Initial Closing of all of the conditions set
forth below in this Section 5 to the extent not waived by each Purchaser.
5.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made in Section 3 hereof shall be true and correct when made, and
shall be true and correct on the Closing Date with the same force and effect as
if they had been made as of the Closing Date.
5.2 COVENANTS. All covenants, agreements and conditions contained in
this Agreement to be performed by the Company on or prior to the Initial Closing
shall have been performed or complied with in all respects.
5.3 COMPLIANCE CERTIFICATES. The Company shall have delivered to the
Purchasers certificates of the Company, (i) one of which has been executed by
the President and Chief Executive Officer of the Company, dated the date of the
Initial Closing, which certifies to the fulfillment of the conditions specified
in Sections 5.1 and 5.2 of this Agreement and (ii) one of which has been
executed by the Secretary of the Company, dated the date of the Initial Closing,
which certifies as to the fact that true and complete copies of the Company's
Certificate of Incorporation, Bylaws and Board of Directors and stockholders
resolutions regarding the sale of the Debentures are attached thereto.
5.4 AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT. The Company and
the Purchasers and the holders of 50% of the outstanding Registrable Securities
as defined in the Sixth Amended and Restated Investors' Rights Agreement dated
as of November 25, 1998, as amended by Amendment No. 1 to the Sixth Amended and
Restated Investors' Rights Agreement dated July 8, 1999, by and among the
Company and certain of its investors, shall have entered into the Amended Rights
Agreement.
5.5 CERTIFICATE. The Amendment to the Certificate of Incorporation,
in substantially the form attached hereto as EXHIBIT C, shall have been filed
with the Secretary of State of the State of Delaware.
11
<PAGE> 16
5.6 MINIMUM INVESTMENT. The Company shall have received a minimum
investment of $3,000,000 at the Initial Closing.
5.7 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated at the Initial Closing hereby and
all documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to the Purchasers, and the Purchasers shall
have received all such counterpart originals or certified or other copies of
such documents as they may reasonably request.
5.8 QUALIFICATIONS, LEGAL INVESTMENT. All authorizations, approvals,
or permits, if any, of any governmental authority or regulatory body of the
United States or of any state that are required in connection with the lawful
sale and issuance of the Debentures pursuant to this Agreement shall have been
duly obtained and shall be effective on and as of the Initial Closing. At the
time of the Initial Closing, the sale and issuance of the Debentures and the
proposed issuance of the Conversion Shares shall be legally permitted by all
laws and regulations to which the Purchasers and the Company are subject.
5.9 MANAGEMENT RIGHTS. The Company shall execute an Amended and
Restated Management Rights Agreement on behalf of Charter Growth Capital, L.P.,
Charter Growth Capital Co-Investment Fund, L.P. and CGC Investors, L.P. in the
form attached hereto as EXHIBIT H.
6. CONDITIONS TO COMPANY'S OBLIGATIONS AT CLOSING. The Company's
obligation to sell the Debentures and Warrants at the Initial Closing is subject
to the fulfillment of the following conditions to the extent not waived by the
Company:
6.1 REPRESENTATIONS CORRECT. The representations made by the
Purchasers in Section 4 hereof shall be true and correct when made, and shall be
true and correct on the Closing Date with the same force and effect as if they
had been made as of the Closing Date.
6.2 QUALIFICATIONS, LEGAL INVESTMENT. All authorizations, approvals,
or permits, if any, of any governmental authority or regulatory body of the
United States or of any state that are required in connection with the lawful
sale and issuance of the Debentures pursuant to this Agreement shall have been
duly obtained and shall be effective on and as of the Initial Closing. At the
time of the Initial Closing, the sale and issuance of the Debentures and the
proposed issuance of the Conversion Shares shall be legally permitted by all
laws and regulations to which the Purchasers and the Company are subject.
6.3 COVENANTS. All covenants, agreements and conditions contained in
this Agreement to be performed by the Purchasers on or prior to the Initial
Closing shall have been performed or complied with in all respects.
6.4 CERTIFICATE. The Certificate of Incorporation, in substantially
the form attached hereto as EXHIBIT C, shall have been filed with the Secretary
of State of the State of Delaware.
6.5 MINIMUM INVESTMENT. The Company shall have received a minimum
aggregate investment of $3,000,000 at the Initial Closing.
12
<PAGE> 17
7. COVENANTS.
7.1 QUALIFIED SMALL BUSINESS. After the Closing Date, the Company
shall (a) not make any purchase of its stock during the one-year period
following the Closing Date having an aggregate value, when added to the
aggregate value of stock purchased by the Company during the one-year period
preceding the Closing Date (in each case determined as of the purchase date),
exceeding 5% of the aggregate value of all of the Company's stock (such value
determined as of the date one year prior to the Closing Date) without having
given the holders of the Series CC, Series DD and Series EE Preferred prior
notice of such purchase and the opportunity to discuss with the Company means of
achieving such purchase without adversely affecting the qualification of the
Series CC, Series DD and Series EE Preferred as a "qualified small business
stock" set forth in Section 1202(c) of the Code and without such repurchase
having been approved by the Board of Directors, (b) use commercially reasonable
efforts to use at least 80% (by value) of its assets in the active conduct of
one or more qualified trades or businesses for substantially all of the
five-year period following the Closing Date, and (c) not cease to be a C
corporation which is an eligible corporation, as defined by Code Section
1202(e)(4). To the extent not otherwise prohibited by applicable law or
regulatory authorities, the Company will include in all future stock option and
stock purchase agreements providing for the sale of unvested stock (subject to a
right of repurchase) with employees and consultants a provision that permits the
Company to delay any repurchase of shares under vesting provisions by a period
of time sufficient to facilitate compliance with the covenant contained in
clause (a) hereof or to assign its right to repurchase shares to a third party.
Notwithstanding anything to the contrary in this Section 7.1, the Company shall
not be obligated to take any action or refrain from taking any action which the
Company has determined, in good faith, is not in its best business interests.
7.2 SERIES EE PREFERRED. After the Closing Date, for the purpose of
determining the number of outstanding shares of Series EE Preferred pursuant to
Section 6 of the Certificate of Incorporation, the Series EE Preferred issuable
upon conversion of the Debentures shall be deemed to be outstanding as of the
Closing Date.
7.3 VOTE OF HOLDERS OF DEBENTURES. After the Closing Date, if the
Company proposes to amend the Certificate of Incorporation, and such amendment
would entitle the Series EE Preferred to a vote if there were shares of Series
EE Preferred outstanding, then the Company shall solicit the consent of the
holders of the Debentures as though such Debentures had been converted to Series
EE Preferred.
8. MISCELLANEOUS.
8.1 GOVERNING LAW. This Agreement shall be governed in all respects
by the laws of the State of California.
8.2 SURVIVAL. The representations, warranties, covenants, and
agreements made herein shall survive any investigation made by any Purchaser and
the Initial Closing of the transactions contemplated hereby. All statements as
to factual matters contained in any certificate or other instrument delivered by
or on behalf of the Company pursuant hereto in
13
<PAGE> 18
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties by the Company hereunder solely as of the date of
such certificate or instrument.
8.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Debentures from time to time.
8.4 ENTIRE AGREEMENT. This Agreement, the Exhibits and Schedules
hereto, constitute the full and entire understanding and agreement between the
parties with regard to the subject matter hereof and no party shall be liable or
bound to any other in any manner by any representations, warranties, covenants,
and agreements except as specifically set forth herein.
8.5 SEPARABILITY. In case any provision of the Agreement shall be
invalid, illegal, or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
8.6 AMENDMENT AND WAIVER.
(a) This Agreement may be amended or modified only upon the
written consent of the Company and holders of not less than 66% of the Common
Stock issued or issuable hereunder (treated as if the Debentures were converted
into Conversion Shares which were subsequently converted into Common Stock that
has not been sold to the public and excluding the Warrants).
(b) The obligations of the Company and the rights of the holders
of the Debentures and the Conversion Shares under the Agreement may be waived
only with the written consent of the holders of not less than 66% of the Common
Stock issued or issuable hereunder (treated as if the Debentures were converted
into Conversion Shares which were subsequently converted into Common Stock that
has not been sold to the public and excluding the Warrants).
8.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Purchaser, upon any breach,
default or noncompliance of the Company under this Agreement, the Debentures,
the Amended Rights Agreement or the Certificate of Incorporation, shall impair
any such right, power, or remedy, nor shall it be construed to be a waiver of
any such breach, default or noncompliance, or any acquiescence therein, or of or
in any similar breach, default or noncompliance thereafter occurring. It is
further agreed that any waiver, permit, consent, or approval of any kind or
character on any Purchaser's part of any breach, default or noncompliance under
this Agreement, the Debentures or under the Certificate of Incorporation or any
waiver on such Purchaser's part of any provisions or conditions of the Agreement
must be in writing and shall be effective only to the extent specifically set
forth in such writing. All remedies, either under this Agreement, the
Debentures, the Certificate of Incorporation, by law, or otherwise afforded to
Purchasers, shall be cumulative and not alternative.
8.8 WAIVER OF CONFLICTS. Each party to this Agreement acknowledges
that Cooley Godward LLP ("Cooley Godward"), outside general counsel to the
Company, has in the
14
<PAGE> 19
past performed and is or may now or in the future represent one or more of the
Purchasers or their affiliates in matters unrelated to the transactions
contemplated by this Agreement (the "Financing"), including representation of
such Purchasers or their affiliates in matters of a similar nature to the
Financing. The applicable rules of professional conduct require that Cooley
Godward inform the parties hereunder of this representation and obtain their
consent. Cooley has served as outside general counsel to the Company and has
negotiated the terms of the Financing solely on behalf of the Company. It is the
belief of Cooley Godward that these terms and conditions represent an arm's
length transaction between the Company and the Purchasers. The Company and each
Purchaser hereby (a) acknowledge that they have had an opportunity to ask for
and have obtained information relevant to such representation, including
disclosure of the reasonably foreseeable adverse consequences of such
representation; (b) acknowledge that with respect to the Financing, Cooley
Godward has represented solely the Company, and not any Purchaser or any
stockholder, director or employee of the Company or any Purchaser; and (c) gives
its informed consent to Cooley Godward's representation of the Company in the
Financing.
8.9 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be sent by registered or
certified mail, return receipt requested, postage prepaid, by means of a
nationally recognized overnight courier service, or by telex or facsimile,
addressed or sent: (a) if to a Purchaser, at such Purchaser's address or
facsimile number as set forth on the Company's records, or at such other address
or facsimile number as such Purchaser shall have furnished to the Company in
writing or (b) if to the Company, at its address or facsimile number as set
forth at the end of this Agreement, or at such other address or facsimile number
as the Company shall have furnished to the Purchasers in writing.
8.10 PAYMENT OF FEES AND EXPENSES. The Company and each Purchaser
shall bear its own expenses incurred on its behalf with respect to this
Agreement and the transactions contemplated thereby.
8.11 ATTORNEYS' FEES. If legal action is brought to enforce or
interpret this Agreement, the prevailing party shall be entitled to recover its
reasonable attorneys' fees and legal costs in connection therewith.
8.12 TITLES AND SUBTITLES. The titles of the paragraphs and
subparagraphs of the Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
8.13 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
8.14 BROKER'S FEES. Each party hereto represents and warrants that no
agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party hereto is or will be entitled to any broker's or
finder's fee or any other commission directly or indirectly in connection with
the transactions contemplated herein. Each party hereto further
15
<PAGE> 20
agrees to indemnify each other party for any claims, losses or expenses incurred
by such other party as a result of the representation in this Section 8.13 being
untrue.
8.15 PARTIES IN INTEREST. None of the provisions of this Agreement is
intended to provide right or remedies to any person or entity other than the
parties hereto and their respective successors and assigns (if any) and except
for rights of Cooley Godward LLP pursuant to Section 1.4.
[the remainder of this page is intentionally blank]
16
<PAGE> 21
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By: /s/ KEN KENITZER
----------------------------------------
Ken Kenitzer
President
PURCHASER:
CHARTER GROWTH CAPITAL, L.P.
By: /s/ STEVEN P. BIRD
----------------------------------------
Name: Steven P. Bird
Title: General Partner
17
<PAGE> 22
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:
----------------------------------------
Ken Kenitzer
President
PURCHASER:
CHARTER GROWTH CAPITAL CO-INVESTMENT FUND, L.P.
By: /s/ STEVEN P. BIRD
----------------------------------------
Name: Steven P. Bird
Title: General Partner
18
<PAGE> 23
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:
----------------------------------------
Ken Kenitzer
President
PURCHASER:
CITIVENTURE 96 PARTNERSHIP FUND, L.P.
By: Chancellor LGT Citiventure 96 Partner, its General Partner
By: INVESCO Private Capital, Inc.
By: /s/ ALESSANDRO PIOL
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
19
<PAGE> 24
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:
----------------------------------------
Ken Kenitzer
President
PURCHASER:
NAZEM & COMPANY IV, L.P.
By: /s/ PHILIP BARAK
----------------------------------------
Name: Philip Barak
--------------------------------------
Title: General Partner
-------------------------------------
20
<PAGE> 25
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:
----------------------------------------
Ken Kenitzer
President
PURCHASER:
OAK INVESTMENT PARTNERS VI, L.P.
By: /s/ BANDEL CARANO
----------------------------------------
Name: Bandel Carano
Title: Managing Member
21
<PAGE> 26
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:
----------------------------------------
Ken Kenitzer
President
PURCHASER:
OAK VI AFFILIATES FUND, L.P.
By: /s/ BANDEL CARANO
----------------------------------------
Name: Bandel Carano
Title: Managing Member
22
<PAGE> 27
INDEX OF EXHIBITS
<TABLE>
<S> <C>
Schedule of Purchasers Exhibit A
Form of Convertible Debenture Exhibit B
Amended and Restated Certificate of Incorporation Exhibit C
Form of Warrant Exhibit D
Seventh Amended and Restated Investors' Right
Agreement Exhibit E
Schedule of Exceptions Exhibit F
Financial Statements Exhibit G
Form of Management Rights Agreement Exhibit H
</TABLE>
<PAGE> 28
EXHIBIT A
SCHEDULE OF PURCHASERS
<TABLE>
<CAPTION>
PURCHASER DEBENTURES
--------- ----------
<S> <C>
Charter Growth Capital, L.P. $ 233,750
Charter Growth Capital Co-Investment Fund, L.P. 866,250
Citiventure 96 Partnership Fund, L.P. 1,500,000
Nazem & Company IV, L.P. 500,000
Oak Investment Partners VI, L.P. 1,954,400
Oak VI Affiliates Fund, L.P. 45,600
----------
TOTAL $5,100,000
==========
</TABLE>
<PAGE> 29
EXHIBIT B
FORM OF CONVERTIBLE DEBENTURE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). NO SALE OR
DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER THE ACT OR
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR UPON RECEIPT OF AN
OPINION OF COUNSEL FOR HOLDER, SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER FROM
THE SECURITIES AND EXCHANGE COMMISSION.
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
SUBORDINATED UNSECURED
CONVERTIBLE DEBENTURE
CD2-<<DEBENTURENUMBER>>
$<<AMOUNT>>.00 June __, 2000
Sunnyvale, California
FOR VALUE RECEIVED, REPEATER TECHNOLOGIES, INC., a Delaware corporation
(the "Company"), unconditionally and without set-off or counterclaim promises to
pay to <<NAME>> (the "Holder"), or its assigns, the principal sum of
<<AmountSpelledOut>> ($<<Amount>>.00) together with interest from the date of
this Subordinated Unsecured Convertible Debenture (this "Debenture") on the
unpaid principal balance at a rate equal to eight percent (8.0%) per annum,
computed on the basis of the actual number of days elapsed and a year of 360
days. All unpaid principal, together with any then unpaid and accrued interest
and other amounts payable hereunder, shall be due and payable on the "Maturity
Date" which date shall be the earlier of (i) November 25, 2003, or (ii) when
such amounts are declared due and payable by the Holder or made automatically
due and payable upon or after the occurrence of an Event of Default (as defined
below). The Company agrees it shall use the proceeds of the purchase of this
Debenture for working capital and business expansion purposes only.
1. DEFINITIONS. As used in this Debenture, the following capitalized terms have
the following meanings:
1.1 "CERTIFICATE" shall mean the Amended and Restated Certificate of
Incorporation of the Company as in effect as of the Initial Closing.
<PAGE> 30
1.2 "CHANGE OF CONTROL" means the occurrence after the date hereof of
(a) any Person, or two or more Persons acting in concert, acquiring beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended), directly or
indirectly, or entering into a contract or arrangement which, upon consummation,
will result in their acquisition or control, of or over Equity Securities of the
Company representing greater than fifty one percent (51%) of the combined voting
power of all Equity Securities of the Company entitled to vote in the election
of directors; (b) during any twenty-four month (24) period, individuals who were
directors of the Company on the first day of such period shall, together with
such directors as are approved by the directors who were directors at the
beginning of such period, cease to constitute a majority of the board of
directors of the Company; (c) the sale of all or substantially all of the
assets; or (d) the acquisition of the Company by another entity as set forth in
Article IV, Part C, Section 3(c) of the Certificate.
1.3 "COMPANY" includes the corporation initially executing this
Debenture and any Person which shall succeed to or assume the obligations of the
Company under this Debenture.
1.4 "DEBENTURE PURCHASE AGREEMENT" shall mean the Convertible Debenture
and Warrant Purchase Agreement dated of even date herewith between the Company
and the Purchasers identified on Exhibit A thereto.
1.5 "EQUITY SECURITIES" of any Person shall mean (a) all common stock,
preferred stock, participations, shares, or other equity interests in and of
such Person (regardless of how designated and whether or not voting or
non-voting) and (b) all warrants, options and other rights to acquire any of the
foregoing.
1.6 "EVENT OF DEFAULT" has the meaning given in Section 7 hereof.
1.7 "FINANCIAL STATEMENTS" shall mean, with respect to any accounting
period for any Person, statements of operations, retained earnings and cash
flows of such Person for such period, and balance sheets of such Person as of
the end of such period, setting forth in each case in comparative form figures
for the corresponding period in the preceding fiscal year if such period is less
than a full fiscal year or, if such period is a full fiscal year, corresponding
figures from the preceding fiscal year, all prepared in reasonable detail and in
accordance with generally accepted accounting principles. Unless otherwise
indicated, each reference to Financial Statements of any Person shall be deemed
to refer to audited Financial Statements prepared on a consolidated basis.
1.8 "FUNDAMENTAL CHANGE" means with respect to the Company (a) a merger
or consolidation, direct or indirect, whether by operation of law or otherwise,
(b) any liquidation, winding up or dissolution pursuant to Article IV, Part C,
Section 3(c) of the Certificate, (c) any sale of all or substantially all of the
assets of the Company.
1.9 "HOLDER" shall mean the Person specified in the introductory
paragraph of this Debenture or any Person who shall at the time be the holder of
this Debenture.
1.10 "INDEBTEDNESS" shall mean and include the aggregate amount of,
without duplication: (a) all obligations for borrowed money, (b) all obligations
evidenced by bonds, debentures, notes or other similar instruments, (c) all
obligations to pay the deferred purchase
2.
<PAGE> 31
price of property or services (other than accounts payable and current
liabilities incurred in the ordinary course of business determined in accordance
with generally accepted accounting principals), (d) all obligations with respect
to capital leases, (e) all guaranty obligations; (f) all obligations created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person, (g) all reimbursement and other
payment obligations, contingent or otherwise, in respect of letters of credit.
1.11 "INTELLECTUAL PROPERTY" shall mean all of the Company's right,
title and interest in and to patents, patent rights (and applications therefor),
trademarks and service marks (and applications and registrations therefor),
inventions, copyrights, mask works (and applications and registrations
therefor), trade names, trade styles, software and computer programs, trade
secrets, methods, processes, know how, drawings, specifications, descriptions,
and all memoranda, notes, and records with respect to any research and
development, all whether now owned or subsequently acquired or developed by the
Company.
1.12 "LIEN" shall mean, with respect to any property, any security
interest, mortgage, pledge, lien, claim, charge or other encumbrance in, of, or
on such property or the income therefrom, including, without limitation, the
interest of a vendor or lessor under a conditional sale agreement, capital lease
or other title retention agreement, or any agreement to provide any of the
foregoing and the filing of any financing statement or similar instrument under
the Uniform Commercial Code or comparable law of any jurisdiction.
1.13 "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on:
(a) the business, assets, operations, or financial condition of the Company; or
(b) the ability of the Company to repay the Indebtedness under this Debenture or
any of the other Transaction Documents.
1.14 "OBLIGATIONS" shall mean and include all loans, advances, debts,
liabilities and obligations, howsoever arising, owed by the Company to the
Holder of every kind and description (whether or not evidenced by any note or
instrument and whether or not for the payment of money), now existing or
hereafter arising under or pursuant to the terms of this Debenture and the other
Transaction Documents, including, all interest, fees, charges, expenses,
attorneys' fees and costs and accountants' fees and costs chargeable to and
payable by the Company hereunder and thereunder, in each case, whether direct or
indirect, absolute or contingent, due or to become due, and whether or not
arising after the commencement of a proceeding under Title 11 of the United
States Code (11 U.S.C. Section 101 et seq.), as amended from time to time
(including post-petition interest) and whether or not allowed or allowable as a
claim in any such proceeding.
1.15 "PERMITTED LIENS" shall mean and include:
(a) liens and security interests existing as of this date and
disclosed in the Schedule attached hereto and incorporated herein by this
reference;
(b) liens for taxes, fees, assessments or other governmental
charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings;
3.
<PAGE> 32
(c) liens and security interests (a) upon or in any property
acquired or held by the Company together with accessions thereto and
replacements and substitutions therefore to secure the purchase price of such
property or indebtedness incurred solely for the purpose of financing the
acquisition of such property and in an amount not greater than the purchase
price thereof (plus taxes, installation and other incidental costs) or (b)
existing on such property at the time of its acquisition, provided that the lien
and security interest is confined solely to the property so acquired and
improvements thereon, and the proceeds of such property;
(d) liens consisting of leases or subleases and licenses and
sublicenses granted to others in the ordinary course of the Company's business
not interfering in any material respect with the business of the Company and any
interest or title of a lessor or licensor under any lease or license, as
applicable;
(e) liens securing claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other like persons or entities imposed
without action of such parties, provided that the payment thereof is not yet
required;
(f) liens incurred or deposits made in the ordinary course of the
Company's business in connection with worker's compensation, unemployment
insurance, social security and other like laws;
(g) liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default;
(h) easements, reservations, rights-of-way, restrictions, minor
defects or irregularities in title and other similar charges or encumbrances
affecting real property not interfering in any material respect with the
ordinary conduct of the Company's business;
(i) liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(j) liens which constitute rights of set-off of a customary nature;
(k) any interest or title of a lessor in equipment subject to any
capitalized lease otherwise permitted hereunder;
(l) any liens arising from the filing of any financing statements
relating to true leases otherwise permitted hereunder;
(m) liens, not otherwise permitted, which liens do not in the
aggregate exceed $100,000 at any time.
1.16 "PERSON" shall mean and include an individual, a partnership, a
corporation (including a business trust), a joint stock company, a limited
liability company, an unincorporated association, a joint venture or other
entity or a governmental authority.
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<PAGE> 33
1.17 "PREFERRED STOCK" shall mean and Series AA Preferred Stock, Series
BB Preferred Stock, Series CC Preferred Stock, Series DD Preferred Stock, Series
EE Preferred Stock, or any other series of preferred stock issued by the
Company.
1.18 "QUALIFIED PUBLIC OFFERING" shall have the meaning ascribed to that
term in the Company's Certificate of Incorporation, as may be amended from time
to time.
1.19 "RELATED DEBENTURES" shall mean the Subordinated Unsecured
Convertible Debenture dated of even date herewith issued to Purchasers by the
Company.
1.20 "REQUIRED HOLDERS" shall mean at any time Holders then holding
greater than fifty percent (50%) of the aggregate Series EE Preferred issued or
issuable upon conversion of this Debenture and Related Debentures (on an
as-if-converted basis).
1.21 "SERIES EE PREFERRED" shall mean the Company's presently authorized
Series EE Preferred Stock.
1.22 "SUBSIDIARY" shall mean: (a) any corporation of which more than 50%
of the issued and outstanding Equity Securities having ordinary voting power to
elect a majority of the Board of Directors of such corporation is at the time
directly or indirectly owned or controlled by the Company, (b) any partnership,
joint venture, or other association of which more than 50% of the equity
interest having the power to vote, direct or control the management of such
partnership, joint venture or other association is at the time directly or
indirectly owned and controlled by the Company (c) any other entity included in
the financial statements of the Company on a consolidated basis.
1.23 "SEVENTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT" shall
mean the Seventh Amended and Restated Investors' Rights Agreement dated of even
date herewith between the Company and the Investors listed therein.
1.24 "TRANSACTION DOCUMENTS" shall mean (a) this Debenture and the
Related Debentures; (b) the Seventh Amended and Restated Investors' Rights
Agreement, (c) the Convertible Debenture Purchase Agreement; and (d) amendments,
exhibits, and schedules to the foregoing.
All capitalized terms used herein and not otherwise defined herein shall
have the respective meanings given to them in the Debenture Purchase Agreement.
2. SOLVENCY.
The Company represents and warrants to the Holder as of the Initial
Closing that the Company is Solvent (as defined below) and, after the execution
and delivery of the Transaction Documents and the consummation of the
transactions contemplated thereby, each of the Company and its Subsidiaries will
be Solvent. "Solvent" shall mean, with respect to any Person on any date, that
on such date (a) the fair value of the property of such Person is greater than
the fair value of the liabilities (including without limitation, contingent
liabilities) of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
5.
<PAGE> 34
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay such debts and
liabilities as they mature and (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's property would constitute unreasonably small capital.
3. INTEREST AND PLACE OF PAYMENT.
Interest on the outstanding principal balance on this Debenture shall be
payable in arrears not later than the first Business Day of each calendar
quarter for the preceding calendar quarter from the date hereof through the
Maturity Date. All amounts payable hereunder shall be payable at the offices of
Holder as designated on the signature page hereof, or any other address
designated by Holder.
4. PREPAYMENT.
4.1 PREPAYMENT. No prepayment of this Debenture in whole or in part is
permitted except that, at the option of the Holder, the Company shall repay, in
whole or in part, this Debenture, upon the occurrence of any of the following:
(a) a Change of Control, or (b) subject to Section 9.2, the completion of a
Qualified Public Offering, or (c) a Fundamental Change, or joint venture,
liquidation or similar transaction of the Company that affects a material
portion of the assets, business lines of the Company or the ability of the
Company to continue as a viable business, (each a "Mandatory Prepayment Event").
4.2 NOTICE.
(a) In the event that any Mandatory Prepayment Event shall occur or
the Company shall have knowledge of any proposed Mandatory Prepayment Event, the
Company will give written notice (the "Company Notice") of such fact in the
manner provided in Section 4.2(a) hereof to the Holders of the Debentures. The
Company Notice shall be delivered promptly upon receipt of such knowledge by the
Company and in any event no later than ten (10) Business Days following the
occurrence of any Mandatory Prepayment Event. The Company Notice shall (i)
describe the facts and circumstances of such Mandatory Prepayment Event in
reasonable detail, (ii) make reference to this Section 4.2(a) and the right of
the Holders of the Debentures to require prepayment, in whole or in part, of the
Debentures on the terms and conditions provided for in this Section 4.2(a),
(iii) offer in writing to prepay the outstanding Debentures, together with
accrued interest to the date of prepayment, and (iv) specify a date for such
prepayment (the "Mandatory Prepayment Event Prepayment Date"), which Mandatory
Prepayment Event Prepayment Date shall be not more than 90 days nor less than 30
days following the date of such the Company Notice. Each Holder of then
outstanding Debentures shall have the right to accept such offer and require
prepayment of the Debentures held by such Holder by written notice to the
Company (a "Debenture Holder Notice") given not later than 20 days after receipt
of the Company Notice. The Company shall on the Mandatory Prepayment Event
Prepayment Date prepay all of the Debentures held by Holders which have so
accepted such offer of prepayment. The prepayment price of the Debentures
payable upon the occurrence of any Mandatory Prepayment Event shall be an amount
equal to the outstanding principal amount of the Debentures so to be prepaid and
accrued interest thereon to the date of such prepayment.
6.
<PAGE> 35
(b) Without limiting the foregoing, notwithstanding any failure on
the part of the Company to give the Company Notice herein required as a result
of the occurrence of a Mandatory Prepayment Event, each Holder of the Debentures
shall have the right on the occurrence of a Mandatory Prepayment Event by
delivery of written notice to the Company to require the Company to prepay, in
whole or in part, and the Company will prepay, such Holder's Debentures,
together with accrued interest thereon to the date of prepayment. Notice of any
required prepayment pursuant to this Section 4.2(b) shall be delivered by any
Holder of the Debentures which was entitled to, but did not receive, such the
Company Notice to the Company after such Holder has actual knowledge of such
Mandatory Prepayment Event. On the date (the "Mandatory Prepayment Event Delayed
Prepayment Date") designated in such Holder's notice (which shall be not more
than 90 days nor less than 30 days following the date of such Holder's notice),
the Company shall prepay all of the Debentures held by such Holder, together
with accrued interest thereon to the date of prepayment. If the Holder of any
Debenture gives any notice pursuant to this Section 4.2(b), the Company shall
give a the Company Notice within three Business Days of receipt of such notice
and identify the Mandatory Prepayment Event Delayed Prepayment Date to all other
Holders of the Debentures and each of such other Holders shall then and
thereupon have the right to accept the Company's offer to prepay the Debentures
held by such Holder and require prepayment of such Debentures by delivery of a
Debenture Holder Notice within 20 days following receipt of such the Company
Notice; provided only that any date for prepayment of such Holder's Debentures
shall be the Mandatory Prepayment Event Delayed Prepayment Date. On the
Mandatory Prepayment Event Delayed Prepayment Date, the Company shall prepay the
Debentures of each Holder thereof which has accepted such offer of prepayment at
a prepayment price equal to the outstanding principal amount of the Debentures
so to be prepaid and accrued interest thereon to the date of such prepayment.
4.3 MATURITY; SURRENDER, ETC. In the case of each complete prepayment of
Debentures pursuant to this Section 4, the principal amount of each Debenture to
be prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such
date. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest, interest
on such principal amount shall cease to accrue. Any Debenture prepaid in full
shall be surrendered to the Company and cancelled and shall not be reissued, and
no Debenture shall be issued in lieu of any prepaid principal amount of any
Debenture.
4.4 AFFILIATES. The Company will not and will not permit any affiliate
to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of
the outstanding Debentures except upon the payment or prepayment of the
Debentures in accordance with the terms of this Debenture and the Debentures.
5. AFFIRMATIVE COVENANTS.
While any amount is outstanding under this Debenture, the Company
covenants that it will do the following:
5.1 COMPLIANCE AND MAINTENANCE OF CORPORATE EXISTENCE. Maintain its
corporate existence and observe and comply in all material respects with all
applicable laws and valid requirements of any governmental authorities relative
to its corporate existence, rights and
7.
<PAGE> 36
franchises, to the conduct of its business and to its property and assets, and
shall maintain and keep in full force and effect all licenses and permits
necessary in any material respect to the proper conduct of its business.
5.2 PROPERTY MAINTENANCE AND INSURANCE. Maintain its properties in good
repair, working order and condition as required for the normal conduct of its
business and shall at all times maintain liability and casualty insurance with
financially sound and reputable insurers in such amounts as the Holder shall
reasonably deem to be adequate. The Company shall furnish to Holder certificates
or other evidence satisfactory to Holder of compliance with the foregoing
insurance provisions.
5.3 TAX. The Company shall pay or cause to be paid all taxes,
assessments or governmental charges on or against it or its properties on or
prior to the time when they become due; provided that this covenant shall not
apply to any tax, assessment or charge that is being contested in good faith by
appropriate proceedings and with respect to which adequate reserves have been
established and are being maintained in accordance with generally accepted
accounting principles if no Lien shall have been filed to secure such tax,
assessment or charge.
5.4 MAINTENANCE OF BOOKS AND RECORDS. The Company shall keep adequate
books and records of account, in which true and complete entries will be made
reflecting all of its business and financial transactions, and such entries will
be made in accordance with generally accepted accounting principles consistently
applied and applicable law.
5.5 NO IMPAIRMENT. The Company will not, by amendment of its Certificate
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company.
5.6 FURTHER ASSURANCE. At any time and from time to time the Company
shall execute and deliver such further instruments and take such further action
as may reasonably be requested by Holder to effect the purposes of this
Debenture.
5.7 ADJUSTMENTS. The Company shall make all adjustments to the Series EE
Conversion Price (as defined in the Certificate) as if such series of Preferred
Stock had been issued and outstanding from the date of this Debenture.
6. NEGATIVE COVENANTS.
From the date hereof until all Obligations to Holder are paid or
converted pursuant to their terms, without the prior written consent of the
Required Holders, the Company shall not do the following:
6.1 INDEBTEDNESS. Create, incur, assume or permit to exist any
Indebtedness except
(a) Indebtedness pursuant to agreements existing on the date
hereof;
(b) trade credit in the ordinary course of business;
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<PAGE> 37
(c) Indebtedness pursuant to the Debenture Purchase Agreement;
(d) Contingent obligations of the Company consisting of guarantees
(and other credit support) of the obligations of vendors and suppliers of the
Company in respect of transactions entered into in the ordinary course of
business;
(e) Indebtedness with respect to capital lease obligations;
(f) Indebtedness related to any Permitted Liens; and
(g) Extensions, renewals, refunding, refinancings, modifications,
amendments and restatements of any of the items (a) through (f) above, which
shall require the approval of Required Holders.
6.2 LIENS. Create, incur, assume or permit to exist any Lien on or with
respect to any of its assets or property of any character, whether now owned or
hereafter acquired, except for Permitted Liens
6.3 DIVIDENDS, REDEMPTIONS, ETC. Do any of the following in excess of
$250,000 in any fiscal year: (a) pay dividends or make any distributions on its
Equity Securities; (b) purchase, redeem, retire, decease or otherwise acquire
for value any of its Equity Securities; (c) return any capital to any holder of
its Equity Securities; (d) make any distribution of assets, Equity Securities,
obligations or securities to any holder of its Equity Securities; or (e) set
apart any sum for any such purpose; provided, however, that any Subsidiary may
pay cash dividends to the Company.
6.4 ERISA. Permit any retirement plan maintained by it to: (a) engage in
any "prohibited transaction", (b) incur any "accumulated funding deficiency" (as
defined in Section 302 of ERISA) whether or not waived, or (c) terminate any
retirement plan in a manner that could result in the imposition of a Lien or
encumbrance on the assets of the Company or any of its Subsidiaries pursuant to
Section 4068 of ERISA.
6.5 SERIES EE PREFERRED. Alter any of the rights, preferences or
privileges of the Series EE Preferred as set forth as of the date of this
Debenture in the Certificate, or otherwise approve any action listed in Article
IV, Part C, Section 6 of the Certificate.
7. EVENTS OF DEFAULT.
The occurrence and continuation of any of the following shall constitute
an "Event of Default" under this Debenture and the other Transaction Documents:
7.1 FAILURE TO PAY. The Company shall fail to pay (a) any principal
payment within fifteen (15) days of the due date, or (b) any interest or other
payment required under the terms of this Debenture or any other Transaction
Document within fifteen (15) days of the due date; or
7.2 BREACHES OF CERTAIN COVENANTS. The Company or any of its
Subsidiaries shall fail to observe or perform any covenant, obligation,
condition or agreement set forth in Sections 5 or 6 of this Debenture; or
9.
<PAGE> 38
7.3 BREACHES OF OTHER COVENANTS. The Company or any of its Subsidiaries
shall fail to observe or perform any other covenant, obligation, condition or
agreement contained in this Debenture or the other Transaction Documents (other
than those specified in Sections 7.1 and 7.2) and (a) such failure shall
continue for fifteen (15) days following the receipt of written notice by the
Company, or (b) if such failure is not curable within such fifteen (15) day
period, but is reasonably capable of cure within forty-five (45) days, either
(i) such failure shall continue for forty-five (45) days or (ii) the Company or
its Subsidiary shall not have commenced a cure in a manner reasonably
satisfactory to the Holder within the initial fifteen (15) day period; or
7.4 REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
certificate, or other statement (financial or otherwise) made or furnished by
the Company to the Holder in writing signed by an officer of the Company in
connection with this Debenture or any of the other Transaction Documents, or as
an inducement to the Holder to enter into this Debenture and the other
Transaction Documents, shall be false, incorrect, incomplete or misleading in
any material respect when made or furnished; or
7.5 OTHER PAYMENT OBLIGATIONS. The Company or any of its Subsidiaries
shall (a)(i) fail to make any payment when due under the terms of any bond,
debenture, note or other evidence of Indebtedness, to be paid by such Person
(excluding this Debenture and the other Transaction Documents but including any
other evidence of Indebtedness of the Company or any of its Subsidiaries to the
Holder) and such failure shall continue beyond any grace period provided with
respect thereto, or (ii) default in the observance or performance of any other
agreement, term or condition contained in any such bond, debenture, note or
other evidence of Indebtedness, and (b) the effect of such failure or default is
to cause the holder or holders thereof to cause, Indebtedness in an aggregate
amount of Two Hundred Thousand Dollars ($200,000) or more to become due prior to
its stated date of maturity;
7.6 VOLUNTARY BANKRUPTCY OR INSOLVENCY PROCEEDINGS. The Company or any
of its Subsidiaries shall (a) apply for or consent to the appointment of a
receiver, trustee, liquidator or custodian of itself or of all or a substantial
part of its property, (b) be unable, or admit in writing its inability, to pay
its debts generally as they mature, (c) make a general assignment for the
benefit of its or any of its creditors, (d) be dissolved or liquidated in full
or in part, (e) become insolvent (as such term may be defined or interpreted
under any applicable statute), (f) commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect or consent to any such relief or to the appointment of or taking
possession of its property by any official in an involuntary case or other
proceeding commenced against it, or (g) take any action for the purpose of
effecting any of the foregoing; or
7.7 INVOLUNTARY BANKRUPTCY OR INSOLVENCY PROCEEDINGS. Proceedings for
the appointment of a receiver, trustee, liquidator or custodian of the Company
or any of its Subsidiaries or of all or a substantial part of the property
thereof, or an involuntary case or other proceedings seeking liquidation,
reorganization or other relief with respect to the Company or any of its
Subsidiaries or the debts thereof under any bankruptcy, insolvency or other
similar law now or hereafter in effect shall be commenced and an order for
relief entered or such proceeding shall not be dismissed or discharged within
sixty (60) days of commencement; or
10.
<PAGE> 39
7.8 JUDGMENTS. A final judgment or order for the payment of money in
excess of Two Hundred Thousand Dollars ($200,000) (exclusive of amounts covered
by insurance issued by an insurer not an affiliate of the Company) shall be
rendered against the Company or any of its Subsidiaries and the same shall
remain unpaid for a period of thirty (30) days during which execution shall not
be effectively stayed, or any judgment, writ, assessment, warrant of attachment,
or execution or similar process shall be issued or levied against a substantial
part of the property of the Company or any of its Subsidiaries and such
judgment, writ, or similar process shall not be released, stayed, vacated or
otherwise dismissed within thirty (30) days after issue or levy.
8. RIGHTS OF HOLDER UPON DEFAULT.
Upon the occurrence or existence of any Event of Default (other than an
Event of Default referred to in Sections 7.6 and 7.7) and at any time thereafter
during the continuance of such Event of Default, the Holder may, by written
notice to the Company, declare all outstanding Obligations payable by the
Company hereunder to be immediately due and payable without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived, anything contained herein or in the other Transaction Documents to the
contrary notwithstanding. Upon the occurrence or existence of any Event of
Default described in Sections 7.6 and 7.7, immediately and without notice, all
outstanding Obligations payable by the Company hereunder shall automatically
become immediately due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived, anything
contained herein or in the other Transaction Documents to the contrary
notwithstanding. In addition to the foregoing remedies, upon the occurrence or
existence of any Event of Default, the Holder may exercise any other right,
power or remedy granted to it by the Transaction Documents or otherwise
permitted to it by law, either by suit in equity or by action at law, or both.
9. CONVERSION.
9.1 CONVERSION BY HOLDER. At any time prior to the Maturity Date, the
Holder shall have the right, at such Holder's option, to convert this Debenture
in accordance with the terms hereof, in whole or in part, into fully paid and
nonassessable shares of Series EE Preferred. The number of shares of Series EE
Preferred into which this Debenture may be converted shall be determined by
dividing the aggregate amount of this Debenture to be converted by the
Conversion Price (as defined below) in effect at the time of such conversion.
The initial "Conversion Price" per share shall be $8.00, or, if the Company has
consummated a Qualified Public Offering, the lesser of $8.00 or the initial
"Price to Public" specified in the final prospectus related thereto. The
Conversion Price shall be subject to adjustment from time to time pursuant to
Section 10 hereof.
9.2 CONVERSION BY THE COMPANY. In the event that the Company completes a
Qualified Public Offering, the Company shall have the right, at the Company's
option, to convert this Debenture, in accordance with the provisions hereof, in
whole or in part, into fully paid and nonassessable shares of Series EE
Preferred. The number of shares of Series EE Preferred into which this Debenture
may be converted shall be determined by dividing the aggregate amount of this
Debenture to be converted by the Conversion Price pursuant to Section 9.1 above,
in effect at the time of such conversion.
11.
<PAGE> 40
9.3 CONVERSION PROCEDURE.
(a) CONVERSION PURSUANT TO SECTION 9.1. Before the Holder shall be
entitled to convert this Debenture into shares of Series EE Preferred, it shall
surrender this Debenture, duly endorsed, at the office of the Company and shall
give written notice, postage prepaid, to the Company at its principal corporate
office, of the election to convert the same pursuant to Section 9.1, and shall
state therein the amount of the unpaid principal amount of this Debenture to be
converted and the name or names in which the certificate or certificates for
shares of Series EE Preferred are to be issued. The Company shall, as soon as
practicable thereafter (but in any event within ten (10) days thereafter), issue
and deliver to the Holder of this Debenture a certificate or certificates for
the number of shares of Series EE Preferred to which the Holder shall be
entitled upon conversion (bearing such legends as are required by applicable
state and federal securities laws), together with a replacement Debenture (if
any principal amount is not converted) and any other securities and property to
which the Holder is entitled upon such conversion under the terms of this
Debenture, including a check payable to Holder for any cash amounts payable as
described in Section 9.4. The conversion shall be deemed to have been made
immediately prior to the close of business on the date of the surrender of this
Debenture, and the Person or Persons entitled to receive the shares of Series EE
Preferred upon such conversion shall be treated for all purposes as the record
holder or holders of such shares of Series EE Preferred as of such date.
(b) CONVERSION PURSUANT TO SECTION 9.2. If this Debenture is
converted by the Company pursuant to Section 9.2 written notice shall be
delivered to the Holder notifying the Holder of the conversion to be effected,
specifying the Conversion Price, the principal amount of the Debenture to be
converted, the date on which such conversion is expected to occur and calling
upon such Holder to surrender to the Company, in the manner and at the place
designated, the Debenture. Upon such conversion of this Debenture, the Holder
shall surrender this Debenture, duly endorsed, at the principal office of the
Company. At its expense, the Company shall, as soon as practicable thereafter
(but in any event within ten (10) days thereafter), issue and deliver to such
Holder a certificate or certificates for the number of shares to which Holder
shall be entitled upon such conversion (bearing such legends as are required by
applicable state and federal securities laws), together with any other
securities and property to which the Holder is entitled upon such conversion
under the terms of this Debenture, including a check payable to the Holder for
any cash amounts payable as described in Section 9.4. Any conversion of this
Debenture pursuant to Section 9.2 shall be deemed to have been made immediately
prior to the closing of the issuance and sale of shares as described in Section
9.2 and on and after such date the Person entitled to receive the shares
issuable upon such conversion shall be treated for all purpose as the record
Holder of such shares as of such date.
9.4 FRACTIONAL SHARES; INTEREST; EFFECT OF CONVERSION. No fractional
shares shall be issued upon conversion of this Debenture. In lieu of the Company
issuing any fractional shares to the Holder upon the conversion of this
Debenture, the Company shall pay to the Holder an amount equal to the product
obtained by multiplying the Conversion Price by the fraction of a share not
issued pursuant to the previous sentence. In addition, the Company shall pay to
the Holder any interest accrued on the amount converted and on the amount to be
paid by the Company pursuant to the previous sentence.
12.
<PAGE> 41
10. CONVERSION PRICE ADJUSTMENTS.
10.1 ADJUSTMENTS FOR STOCK SPLITS AND SUBDIVISIONS. In the event the
Company at any time or from time to time after the date of issuance hereof fixes
a record date for the effectuation of a split or subdivision of the outstanding
shares of Series EE Preferred or the determination of holders of Series EE
Preferred entitled to receive a dividend or other distribution payable in
additional shares of Series EE Preferred or other securities or rights
convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Series EE Preferred (hereinafter referred to as
"Series EE Preferred Equivalents") without payment of any consideration by such
holder for the additional shares of Series EE Preferred or the Series EE
Preferred Equivalents (including the additional shares of Series EE Preferred
issuable upon conversion or exercise thereof), then, as of such record date (or
the date of such dividend distribution, split or subdivision if no record date
is fixed), the Conversion Price of this Debenture shall be appropriately
decreased so that the number of shares of Series EE Preferred issuable upon
conversion of this Debenture shall be increased in proportion to such increase
of outstanding shares.
10.2 ADJUSTMENTS FOR REVERSE STOCK SPLITS. If the number of shares of
Series EE Preferred outstanding at any time after the date hereof is decreased
by a combination of the outstanding shares of Series EE Preferred then following
the record date of such combination, the Conversion Price for this Debenture
shall be appropriately increased so that the number of shares of Series EE
Preferred issuable on conversion hereof shall be decreased in proportion to such
decrease in outstanding shares.
10.3 ADJUSTMENTS FOR DILUTING ISSUANCES. In the event the Company shall
issue Additional Shares of Common Stock (as defined in the Certificate), then in
such event, the applicable Conversion Price (as defined in the Certificate)
shall be reduced pursuant to Article IV, Part C, Section 4 of the Certificate.
10.4 ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE AND SUBSTITUTION. If the
Series EE Preferred issuable upon the conversion of this Debenture is changed
upon the approval of a majority of the holders of Series EE Preferred (on an
as-if-converted basis) into the same or a different number of shares of any
class or classes of stock, whether by recapitalization, reclassification, or
otherwise (other than a subdivision or combination of shares of stock dividend
of a reorganization, merger, consolidation or sale of assets, provided for
elsewhere in this subsection), then, and in any such event, the Holder shall
have the right thereafter to convert this Debenture into the kind and amount of
stock and other securities and property receivable upon such reorganization,
reclassification, or other change by holders of the number of shares of Series
EE Preferred into which this Debenture would have been converted immediately
prior to such reorganization, reclassification, or change.
10.5 CONVERSION OF SERIES EE PREFERRED. Should all of the Company's
Series EE Preferred be, or if outstanding would be, at any time prior to full
payment of this Debenture, converted into shares of the Company's Common Stock
in accordance with Article IV, Part C, Section 4 of the Certificate, then this
Debenture shall immediately become convertible into that number of shares of the
Company's Common Stock equal to the number of shares of the Common Stock that
would have been received if this Debenture had been converted in full and
13.
<PAGE> 42
the Series EE Preferred received thereupon had been converted as a result of
such event, and the Conversion Price shall be immediately adjusted to equal the
quotient obtained by dividing (a) the aggregate Conversion Price of the maximum
number of shares of Series EE Preferred into which this Debenture was
convertible immediately prior to such conversion, by (b) the number of shares of
Common for which this Debenture is convertible immediately after such
conversion. In any such event, reference to Series EE Preferred Stock in this
Section 10 shall be deemed to be reference to Common Stock.
10.6 NOTICES OF RECORD DATE, ETC. In the event of:
(a) Any taking by the Company of a record of the holders of any
class of securities of the Company for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a cash dividend
payable out of earned surplus at the same rate as that of the last such cash
dividend theretofore paid) or other distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right; or
(b) Any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company or any transfer of all
or substantially all of the assets of the Company to any other Person or any
consolidation or merger involving the Company; or
(c) Any voluntary or involuntary dissolution, liquidation or
winding-up of the Company (including any deemed liquidation pursuant to the
Certificate),
the Company will mail to Holder of this Debenture at least twenty (20) days
prior to the earliest date specified above, a notice specifying (i) the date on
which any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such dividend,
distribution or right; and (ii) the date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding-up is expected to become effective and the record date for determining
stockholders entitled to vote thereon.
10.7 RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Company shall at
all times reserve and keep available out of its authorized but unissued shares
of Series EE Preferred solely for the purpose of effecting the conversion of
this Debenture into such number of its shares of Series EE Preferred (and shares
of its Common Stock for issuance on conversion of such Series EE Preferred or
this Debenture following any of the events specified in Section 10.5) as shall
from time to time be sufficient to effect the conversion of the Debenture; and
if at any time the number of authorized but unissued shares of Series EE
Preferred (and shares of its Common Stock for issuance on conversion of such
Series EE Preferred or this Debenture following any of the events specified in
Section 10.5) shall not be sufficient to effect the conversion of the entire
outstanding principal amount of this Debenture, without limitation of such other
remedies as shall be available to the holder of this Debenture, the Company will
take such corporate action as may, in the opinion of counsel, be necessary to
increase its authorized but unissued shares of Series EE Preferred (and shares
of its Common Stock for issuance on
14.
<PAGE> 43
conversion of such Series EE Preferred or this Debenture following any of the
events specified in Section 10.5) to such number of shares as shall be
sufficient for such purposes.
11. SUCCESSORS AND ASSIGNS.
Neither this Debenture nor any of the rights, interests or obligations
hereunder may be assigned, in whole or in part, by the Company without the prior
written consent of the Required Holders, except in connection with a merger,
acquisition, consolidation or sale of all or substantially all of the assets of
the Company, if no Event of Default has occurred or is continuing or results
therefrom. Subject to the foregoing, the rights and obligations of the Company
and the Holder shall be binding upon and benefit the successors, assigns, heirs,
administrators and transferees of the parties.
12. WAIVER AND AMENDMENT.
Any provision of this Debenture may be amended, waived or modified upon
the written consent of the Company and Required Holders.
13. NOTICES.
Any notice, request or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered or mailed by registered or certified mail, postage prepaid,
or by a recognized overnight courier or personal delivery, addressed (a) if to
the Holder, at such Holder's address as set forth at the end of this Debenture,
or at such other address as such Holder shall have furnished the Company in
writing, or (b) if to the Company, at its address set forth at the end of this
Debenture, or at such other address as the Company shall have furnished to the
Holder in writing. Any party hereto may by notice so given change its address
for future notice hereunder. Notice shall conclusively be deemed to have been
given when received.
14. PAYMENT.
Payment shall be made in lawful tender of the United States.
15. DEFAULT RATE.
During any period in which an Event of Default has occurred and is
continuing, the Company shall pay interest on the unpaid principal balance
hereof and any accrued but unpaid interest at a rate per annum equal to thirteen
percent (13%).
16. USURY.
Anything in this Debenture to the contrary notwithstanding, the Company
shall never be required to pay interest on this Debenture at a rate in excess of
the Highest Lawful Rate (as hereinafter defined), and if the effective rate of
interest which would otherwise be payable under this Debenture would exceed the
Highest Lawful Rate, or if the maturity of this Debenture is accelerated for any
reason before the Maturity Date or if the Holder shall otherwise receive any
unearned interest or shall receive monies that are deemed to constitute interest
which would
15.
<PAGE> 44
increase the effective rate of interest payable under this Debenture to a rate
in excess of the Highest Lawful Rate, or in the event of conversion of this
Debenture prior to the Maturity Date, then (a) the amount of interest which
would otherwise be payable under this Debenture shall be reduced to the maximum
amount allowed under applicable law, and (b) any interest paid by the Company in
excess of the Highest Lawful Rate shall be credited to the principal of this
Debenture. It is further agreed that, without limitation of the foregoing, all
calculations of the rate of interest contracted for, charged, or received by the
Holder under this Debenture that are made for the purpose of determining whether
such rate exceeds the Highest Lawful Rate, shall be made to the extent permitted
by applicable usury laws (now or hereafter enacted), by amortizing, prorating,
and spreading in equal parts during the period of the full stated term of this
Debenture all interest at any time contracted for, charged or received by the
Holder in connection herewith. The "Highest Lawful Rate" shall mean the maximum
rate of interest which the Holder is permitted by applicable law to contract
for, charge, or receive and as to which the Company could not successfully
assert a claim or defense of usury.
17. EXPENSES.
The Company shall pay on demand all reasonable fees and expenses,
including reasonable attorneys' fees and expenses, incurred by the Holder with
respect to the enforcement or attempted enforcement of any of the obligations of
the Company to the Holder under the Transaction Documents or in preserving any
of the Holder's rights and remedies (including, without limitation, all such
fees and expenses incurred in connection with any "workout" or restructuring
affecting the Transaction Documents or the obligations thereunder or any
bankruptcy or similar proceeding involving the Company or any of its
Subsidiaries).
18. REPLACEMENT DEBENTURE.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any Debenture
and (a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it; or (b) in the case of mutilation, upon surrender thereof;
the Company, at its expense, will execute and deliver in lieu thereof a new
Debenture executed in the same manner as the Debenture being replaced, in the
same principal amount as the unpaid principal amount of such Debenture and dated
the date to which interest shall have been paid on such Debenture or, if no
interest shall have yet been so paid, dated the date of such Debenture.
19. GOVERNING LAW; INTERPRETATION.
This Debenture and all actions arising out of or in connection with this
Debenture shall be governed by and construed in accordance with the laws of the
State of California, without regard to the conflicts of law provisions of the
State of California or of any other state. If any provision of this Debenture is
held to be invalid or unenforceable by a court of competent jurisdiction, the
other provisions of this Debenture shall remain in full force and effect and
Holder may at any time thereafter require payment in full of all amounts due
hereunder.
16.
<PAGE> 45
20. WAIVER, REPRESENTATION.
Presentment for payment, demand, notice of dishonor, protest, notice of
protest, and stay of execution in connection with the delivery, acceptance,
performance, default or enforcement of the payment of this Debenture are hereby
waived by the Company and its successors and assigns. Neither extension nor
indulgence granted from time to time shall be construed as a novation of this
Debenture or as a reinstatement of the indebtedness evidenced hereby or as a
waiver of the rights of Holder herein. The liability of the Company shall be
unconditional, without regard to the liability of any other party, and shall not
be in any manner affected by any forbearance, partial action or delay on the
part of Holder in regard to the exercise of any right, power or remedy under
this Debenture.
21. SECTION HEADINGS.
The headings of Sections shall not be taken into account in interpreting
the terms of this Debenture.
17.
<PAGE> 46
IN WITNESS WHEREOF, the Company has caused this Debenture to be issued
as of the date first written above.
REPEATER TECHNOLOGIES, INC.,
a Delaware corporation
By:
----------------------------------------
Ken Kenitzer, President
Address: 1150 Morse Avenue
Sunnyvale, CA 94089
18.
<PAGE> 47
SCHEDULE OF PERMITTED LIENS
Liens filed with the California Secretary of State having the following filing
numbers and related filings with the US Patent and Trademark Office and the US
Copyright Office:
9621160381
9705260834
9819760681
9722760199
9729061040
9731060581
9832460942
9913460830
9913460884
9915960183
9921760509
19.
<PAGE> 48
EXHIBIT C
FORM OF
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
REPEATER TECHNOLOGIES, INC.
Kenneth L. Kenitzer hereby certifies that:
ONE: The date of filing of the original Certificate of Incorporation of
this corporation with the Secretary of State of the State of Delaware was
February 11, 2000.
TWO: He is the duly elected and acting President of Repeater
Technologies, Inc., a Delaware corporation.
THREE: The Certificate of Incorporation of this corporation is hereby
amended and restated to read as follows:
I.
The name of this corporation is REPEATER TECHNOLOGIES, INC.
II.
The address of the registered office of the corporation in the State of Delaware
is 9 East Lockerman Street, City of Dover, County of Kent, and the name of the
registered agent of the corporation in the State of Delaware at such address is
National Registered Agents, Inc.
III.
The purpose of this corporation is to engage in any lawful act or activity for
which a corporation may be organized under the General Corporation Law of the
State of Delaware.
IV.
A. The total number of shares of all classes of stock which the
corporation shall have authority to issue is ninety million (90,000,000) shares,
consisting of seventy million (70,000,000) shares of Common Stock (the "Common")
and twenty million (20,000,000) shares of Convertible Preferred Stock (the
"Preferred"). The Preferred shall have a par value of one-tenth of one cent
($.001) per share and the Common shall have a par value of one-tenth of one cent
($.001) per share.
B. The Preferred may be issued from time to time in one or more series.
Except as provided in this Article IV, the Board of Directors is hereby
authorized, within the limitations and restrictions stated in this Certificate
of Incorporation, to fix or alter the dividend rights, dividend rate, conversion
rights, voting rights, rights and terms of redemption (including sinking
<PAGE> 49
fund provisions), the redemption price or prices, the liquidation preferences of
any wholly unissued series of Preferred other than the Series DD Preferred and
Series EE Preferred (as defined herein), and the number of shares constituting
any such series and the designation thereof, or any of them; and to increase or
decrease the number of shares of any series subsequent to the issue of shares of
that series, but not below the number of shares of such series then outstanding.
In case the number of shares of any series shall be so decreased, the shares
constituting such decrease shall resume the status which they had prior to the
adoption of the resolution originally fixing the number of shares of such
series. One million two hundred twenty-eight thousand four hundred nine
(1,228,409) of the authorized shares of the Preferred are hereby designated
"Series AA Preferred" (the "Series AA Preferred"); five million eighty-one
thousand six hundred sixty-eight (5,081,668) of the authorized shares of the
Preferred are hereby designated "Series BB Preferred" (the "Series BB
Preferred"); four million six hundred thousand (4,600,000) of the authorized
shares of the Preferred are hereby designated "Series CC Preferred" (the "Series
CC Preferred"); three million three hundred thousand (3,300,000) of the
authorized shares of the Preferred are hereby designated "Series DD Preferred"
(the "Series DD Preferred"); and one million five hundred thousand (1,500,000)
of the authorized shares of the Preferred are hereby designated "Series EE
Preferred" (the "Series EE Preferred").
C. The relative rights, preferences, privileges and restrictions granted
to or imposed upon the corporation's Common, Series AA Preferred, Series BB
Preferred, Series CC Preferred, Series DD Preferred and Series EE Preferred are
as follows:
SECTION 1. GENERAL DEFINITIONS. For purposes of this Certificate of
Incorporation, the following definitions shall apply:
(a) "PREFERRED" shall refer collectively to the Series AA Preferred,
Series BB Preferred, Series CC Preferred, Series DD Preferred and Series EE
Preferred.
(b) "COMMON" shall mean all Common Stock.
(c) "BOARD" or "BOARD OF DIRECTORS" shall mean the Board of Directors
of the corporation.
SECTION 2. DIVIDEND RIGHTS OF PREFERRED. The holders of the Preferred
shall be entitled to receive pari passu, out of any funds legally available
therefor, dividends, when, if and as declared by the Board of Directors, at the
rate of $0.51 per annum on each outstanding share of Series AA Preferred
(appropriately adjusted for any combinations, consolidations, stock
distributions, stock dividends or similar events with respect to such shares
after the date hereof (a "Recapitalization")), $0.264 per annum on each
outstanding share of Series BB Preferred (appropriately adjusted for any
Recapitalization), $0.275 per annum on each outstanding share of Series CC
Preferred (appropriately adjusted for any Recapitalization), $0.55 per annum on
each outstanding share of Series DD Preferred (appropriately adjusted for any
Recapitalization), $0.80 per annum on each outstanding share of Series EE
Preferred (appropriately adjusted for any Recapitalization), payable in
preference and priority to any payment of any dividend on Common, when and as
declared by the Board of Directors. After payment of such dividends, any
additional dividends declared shall be distributed among all holders of
Preferred and all holders of Common in proportion to the number of shares of
Common which would be held by
2.
<PAGE> 50
each such holder if all shares of Preferred were converted into Common at the
then effective Conversion Price (as defined in Section 4(a) below). The right to
such dividends on the Preferred shall not be cumulative, and no right shall
accrue to holders of Preferred by reason of the fact that dividends on such
shares are not declared or paid in any prior year.
In the event that the corporation shall have declared but unpaid dividends
outstanding immediately prior to, and in the event of, a conversion of Preferred
(as provided in Section 4 hereof), the corporation shall, at the option of the
holder, pay in cash to the holder(s) of Preferred subject to conversion the full
amount of any such dividends or allow such dividends to be converted into Common
in accordance with, and pursuant to the terms specified in, Section 4 hereof.
SECTION 3. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up of the
corporation, either voluntary or involuntary, and until all preferential amounts
owed to them under this Section 3(a) have been paid, the holders of the
Preferred shall be entitled to receive pari passu, prior and in preference to
any distribution of any asset or property of the corporation to the holders of
Common by reason of their ownership thereof, an amount per share equal to $5.10
(Five Dollars and Ten Cents), $2.64 (Two Dollars and Sixty-Four Cents), $2.75
(Two Dollars and Seventy-Five Cents), $5.50 (Five Dollars and Fifty Cents) and
$8.00 (Eight Dollars) for each share of Series AA Preferred, Series BB
Preferred, Series CC Preferred, Series DD Preferred and Series EE Preferred then
held by them, respectively, plus an amount equal to all declared but unpaid
dividends on the Series AA Preferred, Series BB Preferred, Series CC Preferred,
Series DD Preferred and Series EE Preferred as of the liquidation date (each as
adjusted for stock splits, combinations and similar events with respect to the
Series AA Preferred, Series BB Preferred, Series CC Preferred, Series DD
Preferred or Series EE Preferred). If upon the occurrence of such an event, the
assets and funds thus distributed among the holders of the Preferred shall be
insufficient to permit the payment to such holders of the full aforesaid
preferential amount, then all of the assets and funds of the corporation legally
available for distribution shall be distributed among the holders of the
Preferred in proportion to the liquidation preference of the shares of Preferred
then held by them.
(b) After the payment of the full liquidation preference of the
Preferred as set forth in Section 3(a) above, the entire remaining assets of the
corporation legally available for distribution, if any, shall be distributed
ratably to the holders of the Common, Series CC Preferred, Series DD Preferred
and Series EE Preferred (on an as-if-converted to Common basis).
(c) For purposes of this Section 3, a liquidation, dissolution or
winding up of the corporation shall be deemed to be occasioned by, and to
include, the corporation's sale of all or substantially all of its assets or the
acquisition of the corporation by another entity by means of merger or
consolidation (other than a consolidation or merger in which the holders of
voting securities of the corporation immediately before the consolidation or
merger own (immediately after the consolidation or merger) voting securities of
the surviving or acquiring corporation, or of a parent party of such surviving
or acquiring corporation, possessing more than fifty percent (50%) of the voting
power of the surviving or acquiring corporation or parent party) resulting in
3.
<PAGE> 51
the exchange of the outstanding shares of the corporation for securities or
consideration issued, or caused to be issued, by the acquiring corporation or
its subsidiary or its parent.
SECTION 4. CONVERSION. THE HOLDERS OF THE PREFERRED SHALL HAVE
CONVERSION RIGHTS AS FOLLOWS (THE "CONVERSION RIGHTS"):
(a) RIGHT TO CONVERT. Each share of Preferred shall be convertible,
at the option of the holder thereof, at any time into such number of fully paid
and nonassessable shares of Common as is determined by dividing, with respect to
the Series AA Preferred, $5.10, with respect to the Series BB Preferred, $2.64,
with respect to the Series CC Preferred, $2.75, with respect to the Series DD
Preferred, $5.50, and with respect to the Series EE Preferred, $8.00, by each
series' respective Conversion Price in effect as of the time of conversion. The
conversion price for the Series AA Preferred (the "Series AA Conversion Price")
shall initially be $4.26, the conversion price for the Series BB Preferred (the
"Series BB Conversion Price") shall initially be $2.64, the conversion price for
the Series CC Preferred (the "Series CC Conversion Price") shall initially be
$2.75 the conversion price for the Series DD Preferred (the "Series DD
Conversion Price") shall initially be $5.50 and the Conversion Price for the
Series EE Preferred ("the Series EE Conversion Price") shall initially be $8.00
(collectively with the Series AA Conversion Price, Series BB Conversion Price,
Series CC Conversion Price, the Series DD Conversion Price, and the Series EE
Conversion Price, the "Conversion Prices"). Such initial Conversion Prices shall
be subject to adjustment as hereinafter provided.
(b) AUTOMATIC CONVERSION. Each share of Series AA Preferred, Series
BB Preferred, Series CC Preferred, Series DD Preferred and Series EE Preferred
shall automatically be converted into shares of Common at the then effective
conversion rate and taking into account declared but unpaid dividends, upon the
affirmative vote of the holders of (i) a majority of the shares of the Series AA
Preferred (with respect to the conversion of the Series AA Preferred), (ii) a
majority of the shares of the Series BB Preferred (with respect to the
conversion of the Series BB Preferred), (iii) at least 66-2/3% of the shares of
the Series CC Preferred (with respect to the conversion of the Series CC
Preferred), (iv) a majority of the authorized shares of the Series DD Preferred
(with respect to the conversion of the Series DD Preferred), or (v) a majority
of the authorized shares of the Series EE Preferred (with respect to the
conversion of the Series EE Preferred) or immediately upon the closing of a firm
commitment underwritten public offering of shares of Common pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
covering the offer and sale of Common of the corporation for the account of the
corporation to the public for an aggregate offering price of not less than
$10,000,000 (before deduction for underwriter commissions and expenses relating
to the issuance) and at a public offering price per share of at least $6.50 (as
adjusted for any Recapitalization) (a "Qualified Public Offering").
(c) MECHANICS OF CONVERSION. Before any holder of Preferred shall be
entitled to convert the same into full shares of Common, he shall surrender the
certificate or certificates therefor, duly endorsed, at the office of the
corporation or of any transfer agent for the Preferred, and shall give written
notice to the corporation at such office that he elects to convert the same.
Such notice shall also state whether the holder elects, pursuant to Section 2
hereof, to receive declared but unpaid dividends on the Preferred proposed to be
converted in cash, or to convert such dividends into shares of Common at their
fair market value as
4.
<PAGE> 52
determined by the Board. The corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Preferred, a
certificate or certificates for the number of shares of Common to which he shall
be entitled as aforesaid and a check payable to the holder in the amount of any
cash amounts payable as the result of a conversion into a fractional share of
Common, and any declared but unpaid dividends on the converted Preferred which
the holder elected to receive in cash. Such conversion shall be deemed to have
been made immediately prior to the close of business on the date of such
surrender of the shares of Preferred to be converted, and the person or persons
entitled to receive the shares of Common issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common on such date. If the conversion is in connection with an underwritten
public offering of securities registered pursuant to the Securities Act of 1933,
as amended, the conversion shall be conditioned upon the closing of such public
offering, and the person(s) entitled to receive the Common issuable upon such
conversion of the Preferred shall not be deemed to have converted such Preferred
until immediately prior to such closing.
(d) ADJUSTMENTS TO SERIES AA, SERIES BB, SERIES CC, SERIES DD AND
SERIES EE CONVERSION PRICE FOR DILUTING ISSUES.
(1) SPECIAL DEFINITIONS. For purposes of this Section 4(d), the
following definitions shall apply:
(a) "OPTIONS" shall mean rights, options, or warrants to
subscribe for, purchase or otherwise acquire either Common or Convertible
Securities.
(b) "ORIGINAL ISSUE DATE" shall mean, with respect to a
series of Preferred, the date on which a share of Series AA Preferred, Series BB
Preferred, Series CC Preferred, Series DD Preferred and Series EE Preferred was
first issued, which, in the case of the Series DD Preferred or Series EE
Preferred, shall be deemed to be the date on which a security convertible into
Series DD Preferred or Series EE Preferred was issued, respectively.
(c) "CONVERTIBLE SECURITIES" shall mean any evidences of
indebtedness, shares (other than Series AA Preferred, Series BB Preferred,
Series CC Preferred, Series DD Preferred, or Series EE Preferred) or other
securities convertible into or exchangeable for Common.
(d) "ADDITIONAL SHARES OF COMMON" shall mean all shares of
Common issued (or, pursuant to Section 4(d)(3), deemed to be issued) by the
corporation after the Original Issue Date, other than shares of Series EE
Preferred and securities convertible into Series EE Preferred and other shares
of Common issued or issuable:
(i) upon conversion of shares of Series AA Preferred,
Series BB Preferred, Series CC Preferred, Series DD Preferred and Series EE
Preferred;
(ii) to officers, directors or employees of, or
consultants to, the corporation pursuant to stock option or stock purchase plans
approved by the Board of Directors;
5.
<PAGE> 53
(iii) as a dividend or distribution on any of the Series
AA Preferred, Series BB Preferred, Series CC Preferred, Series DD Preferred or
Series EE Preferred;
(iv) for which adjustment of the Conversion Price is
made pursuant to Section 4(e)(1);
(v) in connection with warrants issued as part of any
debt or lease financing transaction approved by the Board of Directors of the
corporation;
(vi) in connection with the exercise of warrants; or
(vii) by way of dividend or other distribution on shares
excluded from the definition of Additional Shares of Common by the foregoing
clauses (i), (ii), (iii), (iv), (v), (vi) or this clause (vii).
(2) NO ADJUSTMENT OF CONVERSION PRICE. No adjustment in the
Series AA Conversion Price, Series BB Conversion Price, Series CC Conversion
Price or Series DD Conversion Price of a particular share of Series AA
Preferred, Series BB Preferred, Series CC Preferred, Series DD Preferred or
Series EE Preferred, respectively, shall be made in respect of the issuance of
Additional Shares of Common unless the consideration per share for an Additional
Share of Common issued or deemed to be issued by the corporation is less than
the Series AA Conversion Price, Series BB Conversion Price, Series CC Conversion
Price, Series DD Conversion Price or Series EE Preferred, as the case may be, in
effect on the date of, and immediately prior to such issue, for such share of
Series AA Preferred, Series BB Preferred, Series CC Preferred, Series DD
Preferred or Series EE Preferred.
(3) DEEMED ISSUE OF ADDITIONAL SHARES OF COMMON. In the event the
corporation at any time or from time to time after the Original Issue Date shall
issue any Options or Convertible Securities or shall fix a record date for the
determination of holders of any class of securities then entitled to receive any
such Options or Convertible Securities, then the maximum number of Additional
Shares of Common (as set forth in the instrument relating thereto without regard
to any provisions contained therein designed to protect against dilution)
issuable upon the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange of such Convertible
Securities, shall be deemed to be Additional Shares of Common issued as of the
time of such issue or, in case such a record date shall have been fixed, as of
the close of business on such record date, provided that Additional Shares of
Common shall not be deemed to have been issued unless the consideration per
share (determined pursuant to Section 4(d)(5) hereof) of such Additional Shares
of Common would be less than the Series AA Conversion Price, Series BB
Conversion Price, Series CC Conversion Price, Series DD Conversion Price or
Series EE Conversion Price, as the case may be, in effect on the date of and
immediately prior to such issue, or such record date, as the case may be, and
provided further that in any such case in which Additional Shares of Common are
deemed to be issued:
(a) no further adjustments in the Series AA Conversion Price,
Series BB Conversion Price, Series CC Conversion Price, Series DD Conversion
Price or Series
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EE Preferred shall be made upon the subsequent issue of Convertible Securities
or shares of Common upon the exercise of such Options or conversion or exchange
of such Convertible Securities;
(b) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase in the
consideration payable to the corporation, or decrease in the number of shares of
Common issuable, upon the exercise, conversion or exchange thereof, the Series
AA Conversion Price, Series BB Conversion Price, Series CC Conversion Price,
Series DD Conversion Price or Series EE Preferred computed upon the original
issue thereof (or upon the occurrence of a record date with respect thereto),
and any subsequent adjustments based thereon, shall, upon any such increase or
decrease becoming effective, be recomputed to reflect such increase or decrease
insofar as it affects such Options or the rights of conversion or exchange under
such Convertible Securities (provided, however, that no such adjustment of the
Series AA Conversion Price, Series BB Conversion Price, Series CC Conversion
Price, Series DD Conversion Price or Series EE Conversion Price shall affect
Common previously issued upon conversion of the Preferred);
(c) upon the expiration of any such Options or any rights of
conversion or exchange under such Convertible Securities which shall not have
been exercised, the Series AA Conversion Price, Series BB Conversion Price,
Series CC Conversion Price, Series DD Conversion Price or Series EE Conversion
Price computed upon the original issue thereof (or upon the occurrence of a
record date with respect thereto), and any subsequent adjustments based thereon,
shall, upon such expiration, be recomputed as if:
(i) in the case of Convertible Securities or Options for
Common the only Additional Shares of Common issued were the shares of Common, if
any, actually issued upon the exercise of such Options or the conversion or
exchange of such Convertible Securities and the consideration received therefor
was the consideration actually received by the corporation for the issue of all
such Options, whether or not exercised, plus the consideration actually received
by the corporation upon such exercise, or for the issue of all such Convertible
Securities which were actually converted or exchanged, plus the additional
consideration, if any, actually received by the corporation upon such conversion
or exchange, and
(ii) in the case of Options for Convertible Securities,
only the Convertible Securities, if any, actually issued upon the exercise
thereof were issued at the time of issue of such Options and the consideration
received by the corporation for the Additional Shares of Common deemed to have
been then issued was the consideration actually received by the corporation for
the issue of all such Options, whether or not exercised, plus the consideration
deemed to have been received by the corporation (determined pursuant to Section
4(d)(5)) upon the issue of the Convertible Securities with respect to which such
Options were actually exercised;
(d) no readjustment pursuant to clauses (b) or (c) above
shall have the effect of increasing the Series AA Conversion Price, Series BB
Conversion Price, Series CC Conversion Price, Series DD Conversion Price or
Series EE Preferred Conversion Price to an amount which exceeds the lower of (i)
such Conversion Price, as the case may be, on the original
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adjustment date, or (ii) such Conversion Price, as the case may be, that would
have resulted from any issuance of Additional Shares of Common between the
original adjustment date and such readjustment date;
(e) in the case of any Options which expire by their terms
not more than 30 days after the date of issue thereof, no adjustment of the
Series AA Conversion Priced, Series BB Conversion Price, Series CC Conversion
Price, Series DD Conversion Price, or Series EE Conversion Price shall be made,
except as to shares of Preferred converted in such period, until the expiration
or exercise of all such Options, whereupon such adjustment shall be made in the
same manner provided in clause (c) above; and
(f) if any such record date shall have been fixed and such
Options or Convertible Securities are not issued on the date fixed thereof, the
adjustment previously made in the Series AA Conversion Price, Series BB
Conversion Price, Series CC Conversion Price, Series DD Conversion Price or
Series EE Conversion Price which became effective on such record date shall be
canceled as of the close of business on such record date, and shall instead be
made on the actual date of issuance, if any.
(4) ADJUSTMENT OF CONVERSION PRICE UPON ISSUANCE OF ADDITIONAL
SHARES OF COMMON. In the event the corporation shall issue Additional Shares of
Common (including Additional Shares of Common deemed to be issued pursuant to
Section 4(d)(3)) without consideration or for a consideration per share less
than the Series AA Conversion Price, Series BB Conversion Price, Series CC
Conversion Price, Series DD Conversion Price or Series EE Conversion Price in
effect on the date of and immediately prior to such issue, then and in such
event, such Series AA Conversion Price, Series BB Conversion Price, Series CC
Conversion Price, Series DD Conversion Price or Series EE Conversion Price, as
the case may be, shall be reduced, concurrently with such issue, to a price
(calculated to the nearest cent) determined by multiplying such Series AA
Conversion Price, Series BB Conversion Price, Series CC Conversion Price, Series
DD Conversion Price or Series EE Conversion Price, as the case may be, by a
fraction, the numerator of which shall be the number of shares of Common
outstanding immediately prior to such issuance (including for this purpose the
number of shares of Common issuable upon conversion of the shares of Preferred
outstanding immediately prior to such issue) plus the number of shares of Common
which the aggregate consideration received by the corporation for the total
number of Additional Shares of Common so issued would purchase at such Series AA
Conversion Price, Series BB Conversion Price, Series CC Conversion Price, Series
DD Conversion Price or Series EE Conversion Price, as the case may be, and the
denominator of which shall be the number of shares of Common outstanding
immediately prior to such issuance (including for this purpose the number of
shares of Common issuable upon conversion of the shares of Preferred outstanding
immediately prior to such issue) plus the number of such Additional Shares of
Common so issued.
(5) DETERMINATION OF CONSIDERATION. For purposes of this Section
4(d), the consideration received by the corporation for the issue of any
Additional Shares of Common shall be computed as follows:
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(a) CASH AND PROPERTY. Such consideration shall:
(i) insofar as it consists of cash, be computed at the
aggregate amount of cash paid therefor, prior to deducting any discounts,
commissions or other expenses allowed, paid or incurred by the corporation but
excluding any amounts paid or payable for accrued interest or accrued dividends;
(ii) insofar as it consists of property other than cash,
be computed at the fair value thereof at the time of such issue, as determined
in good faith by the Board of Directors; and
(iii) in the event Additional Shares of Common are
issued together with other shares or securities or other assets of the
corporation for consideration which covers both, be the proportion of such
consideration so received, computed as provided in clauses (i) and (ii) above,
as determined in good faith by the Board of Directors.
(b) OPTIONS AND CONVERTIBLE SECURITIES. The consideration per
share received by the corporation for Additional Shares of Common deemed to have
been issued pursuant to Section 4(d)(3), relating to Options and Convertible
Securities, shall be determined by dividing:
(i) the total amount, if any, received or receivable by
the corporation as consideration for the issue of such Options or Convertible
Securities, plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to any provision
contained therein designed to protect against dilution) payable to the
corporation upon the exercise of such Options or the conversion or exchange of
such Convertible Securities, or in the case of Options for Convertible
Securities, the exercise of such Options for Convertible Securities and the
conversion or exchange of such Convertible Securities by
(ii) the maximum number of shares of Common (as set
forth in the instruments relating thereto, without regard to any provision
contained therein designed to protect against dilution) issuable upon the
exercise of such Options or the conversion or exchange of such Convertible
Securities.
(e) CONVERSION PRICE ADJUSTMENTS OF PREFERRED. The Series AA
Conversion Price, Series BB Conversion Price, Series CC Conversion Price, Series
DD Conversion Price and Series EE Conversion Price shall be subject to
adjustment from time to time as follows:
(1) ADJUSTMENTS FOR COMBINATIONS OR SUBDIVISIONS OF COMMON. In
the event the corporation at any time or from time to time after the Original
Issue Date shall declare or pay any dividend on the Common payable in Common or
in any right to acquire Common, or shall effect a subdivision of the outstanding
shares of Common into a greater number of shares of Common (by stock split,
reclassification or otherwise), or in the event the outstanding shares of Common
shall be combined or consolidated, by reclassification or otherwise, into a
lesser number of shares of Common, then the Conversion Prices of the Preferred
in effect immediately
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prior to such event shall, concurrently with the effectiveness of such event, be
proportionately decreased or increased, as appropriate.
(2) OTHER DISTRIBUTIONS. In the event the corporation shall at
any time or from time to time after the Original Issue Date make or issue, or
fix a record date for the determination of holders of Common entitled to
receive, a dividend or other distribution payable in securities of the
corporation or any of it subsidiaries other than Additional Shares of Common,
then in each such event provision shall be made so that the holders of Preferred
shall receive, upon the conversion thereof, the securities of the corporation
which they would have received had their stock been converted into Common on the
date of such event.
(3) ADJUSTMENTS. After the Original Issuance Date, in case of any
reorganization or any reclassification of the capital stock of the corporation,
or, subject to Section 3(c) above, which shall control in the circumstances
specified therein, any consolidation or merger of the corporation with or into
another corporation or corporations, or the conveyance of all or substantially
all of the assets of the corporation to another corporation, each share of
Preferred shall thereafter be convertible into the number of shares of stock or
other securities or property (including cash) to which a holder of the number of
shares of Common deliverable upon conversion of such share of Preferred would
have been entitled upon the record date of (or date of, if no record date is
fixed) such reorganization, reclassification, consolidation, merger or
conveyance; and, in any case, appropriate adjustment (as determined by the Board
of Directors) shall be made in the application of the provisions herein set
forth with respect to the rights and interests thereafter of the holders of such
Preferred, to the end that the provisions set forth herein shall thereafter be
applicable, as nearly as equivalent as is practicable, in relation to any shares
of stock or the securities or property (including cash) thereafter deliverable
upon the conversion of the shares of such Preferred.
(f) NO IMPAIRMENT. The corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the corporation, but will at
all times in good faith assist in the carrying out of all the provisions of this
Section 4 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Preferred against impairment.
(g) CERTIFICATES AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the Series AA Conversion Price, Series BB
Conversion Price, Series CC Conversion Price, Series DD Conversion Price or
Series EE Conversion Price pursuant to this Section 4, the corporation at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each holder of Preferred a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The corporation shall, upon
the written request at any time of any holder of Preferred, furnish or cause to
be furnished to such holder a like certificate setting forth (i) such
adjustments and readjustments, (ii) the applicable Conversion Price at the time
in effect and (iii) the number of shares of Common and the amount, if any, of
other property which at the time would be received upon the conversion of
Preferred.
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(h) NOTICES OF RECORD DATE. In the event that the corporation shall
propose at any time:
(1) to declare any Common dividend or distribution, whether in
cash, property, stock or other securities, whether or not a regular cash
dividend and whether or not out of earnings or earned surplus;
(2) to offer for subscription pro rata to the holders of any
class or series of its stock any additional shares of stock of any class or
series or other rights;
(3) to effect any reclassification or recapitalization of
outstanding shares of its Common which involve a change in the Common; or
(4) to merge or consolidate with or into any other corporation,
or sell, lease or convey all or substantially all its property or business, or
to liquidate, dissolve or wind up; then, in connection with each such event, the
corporation shall send to the holders of the Preferred:
(a) at least 20 days' prior written notice of the record date
for such dividend, distribution or subscription rights (and specifying the date
on which the holders of shares of Common shall be entitled thereto) or for
determining rights to vote in respect of the matters referred to in subsections
4(h)(iii) and (iv) above; and
(b) in the case of the matters referred to in subsections
4(h)(iii) and (iv) above, at least 20 days' prior written notice of the date
when the same shall take place (and specifying the date on which the holders of
shares of Common shall be entitled to exchange their shares of Common for
securities or other property deliverable upon the occurrence of such event).
Each such written notice shall be given by first class mail, postage prepaid,
addressed to the holders of Preferred at the address for each such holder as
shown on the books of the corporation.
(i) ISSUE TAXES. The corporation shall pay any and all issue and
other taxes, excluding federal, state or local income taxes, that may be payable
in respect of any issue or delivery of shares of Common on conversion of shares
of Preferred pursuant hereto; provided, however, that the corporation shall not
be obligated to pay any transfer taxes resulting from any transfer requested by
any holder in connection with any such conversion.
(j) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of Common, solely for the purpose of effecting the conversion of the
shares of the Preferred, such number of its shares of Common as shall from time
to time be sufficient to effect the conversion of all outstanding shares of the
Preferred, and if at any time the number of authorized but unissued shares of
Common shall not be sufficient to effect the conversion of all then outstanding
shares of the Preferred, the corporation will take such corporate action as may,
in the opinion of its counsel, be necessary to increase its authorized but
unissued shares of Common to such number of shares as shall be sufficient for
such purpose, including, without limitation, engaging in best
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efforts to obtain the requisite stockholder approval of any necessary amendment
to this Certificate of Incorporation.
(k) FRACTIONAL SHARES. No fractional share shall be issued upon the
conversion of any share or shares of the Preferred. All shares of Common
(including fractions thereof) issuable upon conversion of more than one share of
Series AA Preferred, Series BB Preferred, Series CC Preferred, Series DD
Preferred or Series EE Preferred by a holder thereof shall be aggregated for
purposes of determining whether the conversion would result in the issuance of
any fractional share. If, after the aforementioned aggregation, the conversion
would result in the issuance of a fraction of a share of Common, the corporation
shall, in lieu of issuing any fractional share, pay the holder otherwise
entitled to such fraction a sum in cash equal to the fair market value of such
fraction on the date of conversion (as determined in good faith by the Board of
Directors of the corporation).
(l) NOTICES. Any notice required by the provisions of this Section 4
to be given to the holders of shares of Preferred shall be deemed given if
deposited in the United States mail, postage prepaid, and addressed to each
holder of record at its address appearing on the books of the corporation.
SECTION 5. VOTING RIGHTS AND DIRECTORS.
(a) VOTE OTHER THAN FOR DIRECTORS. Except as otherwise required by
law and as provided in section (b) below with respect to the election of
directors, the holders of Preferred and the holders of Common shall be entitled
to notice of any stockholders' meetings and to vote as a single class upon any
matter submitted to the stockholders for a vote, as follows:
(1) the holders of Preferred shall have one vote for each full
share of Common into which their respective shares of Preferred would be
convertible on the record date for the vote; and
(2) the holders of Common have one vote per share of Common.
(b) VOTING FOR DIRECTORS. The members of the Board of Directors shall
be elected as follows: (i) holders of the Series AA Preferred shall be entitled
to elect one member of the Board of Directors at or pursuant to each meeting or
consent of the corporation's stockholders for the election of directors, and to
remove from office such director and to fill any vacancy caused by the
resignation, death or removal of such director; (ii) holders of the Series BB
Preferred shall be entitled to elect two members of the Board of Directors at or
pursuant to each meeting or consent of the corporation's stockholders for the
election of directors, and to remove from office such directors and to fill any
vacancy caused by the resignation, death or removal of such directors; (iii)
holders of the Series CC Preferred shall be entitled to elect one member of the
Board of Directors at or pursuant to each meeting or consent of the
corporation's stockholders for the election of directors, and to remove from
office such director and to fill any vacancy caused by the resignation, death or
removal of such director, (iv) holders of the Common shall be entitled to elect
two members of the Board of Directors at or pursuant to each meeting or consent
of the corporation's stockholders for the election of directors, and to remove
from office such directors and to fill any vacancy caused by the resignation,
death or removal of
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such directors; and (iv) holders of the Common, Series AA Preferred, Series BB
Preferred, Series CC Preferred, Series DD Preferred and Series EE Preferred,
voting together, shall be entitled to elect the balance of directors, if any, at
or pursuant to each meeting or consent of the corporation's stockholders for the
election of directors, and to remove from office such directors and to fill any
vacancy caused by the resignation, death or removal of such directors.
SECTION 6. COVENANTS.
(a) In addition to any other rights provided by law, (i) so long as
an aggregate of at least 1,187,500 shares of Series AA Preferred and Series BB
Preferred remain outstanding (appropriately adjusted for any Recapitalization)
the corporation shall not, without first obtaining the affirmative vote or
written consent of the holders of not less than a majority of such outstanding
shares of Series AA Preferred and Series BB Preferred, voting together as a
class, (ii) so long as an aggregate of at least 1,500,000 shares of Series CC
Preferred remain outstanding (appropriately adjusted for any Recapitalization),
the corporation shall not, without first obtaining the affirmative vote or
written consent of the holders of not less than 55% of such outstanding shares
of Series CC Preferred, (iii) so long as an aggregate of at least 900,000 shares
of Series DD Preferred remain outstanding (appropriately adjusted for any
Recapitalization), the corporation shall not, without first obtaining the
affirmative vote or written consent of the holders of not less than 50% of such
outstanding shares of Series DD Preferred and (iv) so long as an aggregate of at
least 250,000 shares of Series EE Preferred remain outstanding (appropriately
adjusted for any Recapitalization), the corporation shall not, without first
obtaining the affirmative vote or written consent of the holders of not less
than 50% of such outstanding shares of Series EE Preferred:
(1) Any amendment, alteration, or repeal of any provision of the
Certificate of Incorporation or the Bylaws of the corporation (including any
filing of a Certificate of Designation), that affects adversely the voting
powers, preferences, or other special rights or privileges, qualifications,
limitations, or restrictions of the Preferred;
(2) Any increase or decrease (other than by redemption or
conversion) in the authorized number of shares of Common or Preferred;
(3) Any authorization or any designation, whether by
reclassification or otherwise, of any new class or series of stock or any other
securities convertible into equity securities of the corporation ranking on a
parity with or senior to the Preferred in right of redemption, liquidation
preference, voting or dividends or any increase in the authorized or designated
number of any such new class or series;
(4) Any redemption, repurchase, payment of dividends or other
distributions with respect to Common or Preferred (except for acquisitions of
Common by the corporation pursuant to agreements which permit the company to
repurchase such shares upon termination of services to the corporation or in
exercise of the corporation's right of first refusal upon a proposed transfer);
(5) Any action that results in the payment or declaration of a
dividend on any shares of Common or Preferred; or
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(6) Any voluntary dissolution or liquidation of (or so deemed
pursuant to Section 3(c) above) the corporation.
SECTION 7. STATUS OF CONVERTED STOCK. In the event any shares of
Preferred shall be converted pursuant to Section 4 hereof, the shares so
converted shall be canceled and shall not be issuable by the corporation.
SECTION 8. RESIDUAL RIGHTS. All rights accruing to the outstanding
shares of the corporation not expressly provided for to the contrary herein
shall be vested in the Common.
SECTION 9. CONSENT FOR CERTAIN REPURCHASES OF COMMON DEEMED TO BE
DISTRIBUTIONS. Each holder of Preferred shall be deemed to have consented, for
purposes of Section 502, 503 and 506 of the California Corporations Code, to
distributions made by the corporation in connection with the repurchase of
shares of Common issued to or held by employees or consultants upon termination
of their employment or services or pursuant to agreements providing for the
right of said repurchase between the corporation and such persons.
V.
For the management of the business and for the conduct of the affairs of
the corporation, and in further definition, limitation and regulation of the
powers of the corporation, of its directors and of its stockholders or any class
thereof, as the case may be, it is further provided that:
A. The management of the business and the conduct of the affairs of the
corporation shall be vested in its Board of Directors. The number of directors
which shall constitute the whole Board of Directors shall be fixed exclusively
by one or more resolutions adopted by the Board of Directors.
B. Subject to the rights of the holders of any series of Preferred Stock
to elect additional directors under specified circumstances, following the
closing of the initial public offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the "1993 Act"),
covering the offer and sale of Common Stock to the public (the "Initial Public
Offering"), the directors shall be divided into three classes designated as
Class I, Class II and Class III, respectively. Directors shall be assigned to
each class in accordance with a resolution or resolutions adopted by the Board
of Directors. At the first annual meeting of stockholders following the closing
of the Initial Public Offering, the term of office of the Class I directors
shall expire and Class I directors shall be elected for a full term of three
years. At the second annual meeting of stockholders following the Initial Public
Offering, the term of office of the Class II directors shall expire and Class II
directors shall be elected for a full term of three years. At the third annual
meeting of stockholders following the Initial Public Offering, the term of
office of the Class III directors shall expire and Class III directors shall be
elected for a full term of three years. At each succeeding annual meeting of
stockholders, directors shall be elected for a full term of three years to
succeed the directors of the class whose terms expire at such annual meeting.
During such time or times that the corporation is subject to Section 2115(b) of
the California General Corporation Law ("CGCL"), this paragraph B of this
Article V shall become
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effective and be applicable only when the corporation is a "listed" corporation
within the meaning of Section 301.5 of the CGCL.
C. In the event that the corporation is unable to have a classified
board under applicable law, Section 301.5 of the CGCL, paragraph B of this
Article V shall not apply and all directors shall be elected at each annual
meeting of stockholders to hold office until the next annual meeting.
D. No stockholder entitled to vote at an election for directors may
cumulate votes to which such stockholder is entitled, unless, at the time of
such election, the corporation (i) is subject to Section 2115(b) of the CGCL and
(ii) is not or ceases to be a "listed" corporation under Section 301.5 of the
CGCL. During this time, every stockholder entitled to vote at an election for
directors may cumulate such stockholder's votes and give one candidate a number
of votes equal to the number of directors to be elected multiplied by the number
of votes to which such stockholder's shares are otherwise entitled, or
distribute the stockholder's votes on the same principle among as many
candidates as such stockholder thinks fit. No stockholder, however, shall be
entitled to so cumulate such stockholder's votes unless (i) the names of such
candidate or candidates have been placed in nomination prior to the voting and
(ii) the stockholder has given notice at the meeting, prior to the voting, of
such stockholder's intention to cumulate such stockholder's votes. If any
stockholder has given proper notice to cumulate votes, all stockholders may
cumulate their votes for any candidates who have been properly placed in
nomination. Under cumulative voting, the candidates receiving the highest number
of votes, up to the number of directors to be elected, are elected.
Notwithstanding the foregoing provisions of this section, each director shall
serve until his successor is duly elected and qualified or until his death,
resignation or removal. No decrease in the number of directors constituting the
Board of Directors shall shorten the term of any incumbent director.
E. REMOVAL OF DIRECTORS
SECTION 1. During such time or times that the corporation is subject to
Section 2115(b) of the CGCL, the Board of Directors or any individual director
may be removed from office at any time without cause by the affirmative vote of
the holders of at least a majority of the outstanding shares entitled to vote on
such removal; provided, however, that unless the entire Board is removed, no
individual director may be removed when the votes cast against such director's
removal, or not consenting in writing to such removal, would be sufficient to
elect that director if voted cumulatively at an election which the same total
number of votes were cast (or, if such action is taken by written consent, all
shares entitled to vote were voted) and the entire number of directors
authorized at the time of such director's most recent election were then being
elected.
SECTION 2. At any time or times that the corporation is not subject to
Section 2115(b) of the CGCL and subject to any limitations imposed by law,
Section 1 shall no longer apply and removal shall be as provided in Section
141(k) of the DGCL.
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F. VACANCIES
SECTION 1. Subject to the rights of the holders of any series of
Preferred Stock, any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal or other causes and any newly created
directorships resulting from any increase in the number of directors, shall,
unless the Board of Directors determines by resolution that any such vacancies
or newly created directorships shall be filled by the stockholders, except as
otherwise provided by law, be filled only by the affirmative vote of a majority
of the directors then in office, even though less than a quorum of the Board of
Directors, and not by the stockholders. Any director elected in accordance with
the preceding sentence shall hold office for the remainder of the full term of
the director for which the vacancy was created or occurred and until such
director's successor shall have been elected and qualified.
SECTION 2. If at the time of filling any vacancy or any newly created
directorship, the directors then in office shall constitute less than a majority
of the whole board (as constituted immediately prior to any such increase), the
Delaware Court of Chancery may, upon application of any stockholder or
stockholders holding at least ten percent (10%) of the total number of the
shares at the time outstanding having the right to vote for such directors,
summarily order an election to be held to fill any such vacancies or newly
created directorships, or to replace the directors chosen by the directors then
in offices as aforesaid, which election shall be governed by Section 211 of the
DGCL.
SECTION 3. At any time or times that the corporation is subject to
Section 2115(b) of the CGCL, if, after the filling of any vacancy by the
directors then in office who have been elected by stockholders shall constitute
less than a majority of the directors then in office, then
(a) Any holder or holders of an aggregate of five percent (5%) or
more of the total number of shares at the time outstanding having the right to
vote for those directors may call a special meeting of stockholders; or
(b) The Superior Court of the proper county shall, upon application
of such stockholder or stockholders, summarily order a special meeting of
stockholders, to be held to elect the entire board, all in accordance with
Section 305(c) of the CGCL. The term of office of any director shall terminate
upon that election of a successor.
G. Subject to paragraph (h) of Section 43 of the Bylaws, the Bylaws may
be altered or amended or new Bylaws adopted by the affirmative vote of at least
sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the
then-outstanding shares of the voting stock of the corporation entitled to vote.
The Board of Directors shall also have the power to adopt, amend, or repeal
Bylaws.
SECTION 1. The directors of the corporation need not be elected by
written ballot unless the Bylaws so provide.
SECTION 2. No action shall be taken by the stockholders of the
corporation except at an annual or special meeting of stockholders called in
accordance with the Bylaws or by written consent of stockholders in accordance
with the Bylaws prior to the closing of the Initial Public Offering and
following the closing of the Initial Public Offering no action shall be taken by
the stockholders by written consent.
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SECTION 3. Advance notice of stockholder nominations for the election of
directors and of business to be brought by stockholders before any meeting of
the stockholders of the corporation shall be given in the manner provided in the
Bylaws of the corporation.
VI.
A. The liability of the directors for monetary damages shall be
eliminated to the fullest extent under applicable law.
B. This corporation is authorized to provide indemnification of agents
(as defined in Section 317 of the CGCL) for breach of duty to the corporation
and its stockholders through bylaw provisions or through agreements with the
agents, or through stockholder resolutions, or otherwise, in excess of the
indemnification otherwise permitted by Section 317 of the CGCL, subject, at any
time or times the corporation is subject to Section 2115(b), to the limits on
such excess indemnification set forth in Section 204 of the CGCL.
C. Any repeal or modification of this Article VI shall be prospective
and shall not affect the rights under this Article VI in effect at the time of
the alleged occurrence of any act or omission to act giving rise to liability or
indemnification.
VII.
A. The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, except as provided in paragraph B of this
Article VII, and all rights conferred upon the stockholders herein are granted
subject to this reservation.
B. Notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the voting stock required by law, this Certificate
of Incorporation or any Preferred Stock Designation, the affirmative vote of the
holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting
power of all of the then-outstanding shares of the voting stock, voting together
as a single class, shall be required to alter, amend or repeal Articles V, VI,
and VII.
* * * *
FOUR: This Amended and Restated Certificate of Incorporation has been
duly approved by the Board of Directors of this corporation.
FIVE: This Amended and Restated Certificate of Incorporation has been
duly adopted in accordance with the provisions of Sections 228, 242 and 245 of
the General Corporation Law of the State of Delaware by the Board of Directors
and the stockholders of the corporation. A majority of the outstanding shares of
Common and Preferred, voting as a single class on an as-converted basis, a
majority of the outstanding shares of Series AA Preferred and Series BB
Preferred, voting together as a class, fifty-five percent (55%) of the
outstanding shares of Series CC Preferred and fifty percent (50%) of the
outstanding shares of Series DD Preferred approved this Amended and Restated
Certificate of Incorporation by written consent in
17.
<PAGE> 65
accordance with Section 228 of the General Corporation Law of the State of
Delaware and written notice of such was given by the corporation in accordance
with said Section 228.
18.
<PAGE> 66
IN WITNESS WHEREOF, REPEATER TECHNOLOGIES, INC. has caused this Amended
and Restated Certificate of Incorporation to be signed by its President this
_______ day of _______________, 2000.
REPEATER TECHNOLOGIES, INC.
By:
----------------------------------------
Kenneth L. Kenitzer
President
19.
<PAGE> 67
EXHIBIT D
FORM OF WARRANT
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF
ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT
AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
REPEATER TECHNOLOGIES, INC.
WARRANT FOR THE PURCHASE OF
SHARES OF SERIES EE PREFERRED STOCK
NO. WEE-<<WarrantNumber>> __________, 2000
FOR VALUE RECEIVED, REPEATER TECHNOLOGIES, INC., a Delaware corporation
(the "Company"), with its principal office at 1150 Morse Avenue, Sunnyvale, CA
94089-1605, hereby certifies that <<NAME>> or its assigns (the "Holder") is
entitled, subject to the provisions of this Warrant, to purchase from the
Company, at any time prior to the Expiration Date (as defined in Section 11
below), the number of fully paid and nonassessable shares of Series EE Preferred
Stock of the Company equal to twenty percent (20%) of
<<AmountSpelledOut>>Dollars ($<<Amount>>.00) divided by the Conversion Price, at
an exercise price per share equal to eight dollars ($8.00) (the "Exercise
Price"). The initial "Conversion Price" per share shall be $8.00, or, if the
Company has consummated a Qualified Public Offering (as defined in the Company's
Certificate of Incorporation, as may be amended from time to time), the lesser
of $8.00 or the initial "Price to Public" specified in the final prospectus
related thereto. The term "Series EE Preferred" shall mean the aforementioned
Series EE Preferred Stock of the Company or any other equity securities that may
be issued by the Company in addition thereto or in substitution therefor as
provided herein.
The number of shares of Series EE Preferred to be received upon the
exercise of this Warrant and the price to be paid for a share of Series EE
Preferred are subject to adjustment from time to time as hereinafter set forth.
The shares of Series EE Preferred deliverable upon such exercise, as adjusted
from time to time, are hereinafter sometimes referred to as "Warrant Shares."
SECTION 1. EXERCISE OF WARRANT. This Warrant may be exercised in whole
or in part on any business day prior to the Expiration Date by presentation and
surrender to the Company at its principal office at the address set forth in the
initial paragraph hereof (or at such other address as the Company may hereafter
notify the Holder in writing) with the Purchase
<PAGE> 68
Form annexed hereto duly executed and accompanied by proper payment of the
Exercise Price in lawful money of the United States of America in the form of a
check, subject to collection, for the number of Warrant Shares specified in the
Purchase Form. If this Warrant should be exercised in part only, the Company
shall, upon surrender of this Warrant, execute and deliver a new Warrant
evidencing the rights of the Holder thereof to purchase the balance of the
Warrant Shares purchasable hereunder. Upon receipt by the Company of this
Warrant and such Purchase Form, together with proper payment of the Exercise
Price, at such office, the Holder shall be deemed to be the holder of record of
the Warrant Shares, notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such Warrant Shares shall
not then be actually delivered to the Holder.
SECTION 2. NET ISSUE EXERCISE. Notwithstanding any provisions herein to
the contrary, in lieu of exercising this Warrant for cash, the Holder may elect
to receive shares equal to the value (as determined below) of this Warrant (or
the portion thereof being canceled) by surrender of this Warrant at the
principal office of the Company together with notice of such election in which
event the Company shall issue to the Holder a number of shares of Series EE
Preferred computed using the following formula:
X = Y (A - B)
--------
A
Where X = the number of shares of Series EE Preferred to be
issued to the Holder
Y = the number of shares of Series EE Preferred
purchasable under the Warrant or, if only a portion of
the Warrant is being exercised, the number of shares
purchased under the Warrant being canceled (at the date
of such calculation)
A = the fair market value of one share of the Series EE
Preferred (at the date of such calculation)
B = Exercise Price (as adjusted to the date of such
calculation)
For purposes of the above calculation, the fair market
value of one share of Series EE Preferred shall be
determined by the Company's Board of Directors in good
faith; provided, however, that in the event that the
warrant is exercised concurrent with an initial public
offering of the Company's Common Stock in which the
Series EE Preferred is converted to Common Stock, then
the price to the public of the Common Stock in such
offering shall be used to determine the fair market
value and, provided further, that in the event that this
warrant becomes exercisable for Common Stock and the
Company's Common Stock is publicly traded, the closing
price of the Company's stock in the principal market or
exchange on which is it traded on the date of exercise
(or if not traded on
2.
<PAGE> 69
such date, the most recent date on which it was traded)
shall be used to determine the fair market value.
SECTION 3. ISSUANCE OF NEW WARRANT. In the event of any exercise of the
rights represented by this Warrant, certificates for the Warrant Shares so
purchased shall be delivered to the holder hereof as soon as practicable and,
unless this Warrant has been fully exercised or has expired, a new Warrant
representing the portion of the Warrant Shares, if any, with respect to which
this Warrant shall not then have been exercised shall also be issued to the
holder hereof within a reasonable time. Such exercise shall be deemed to have
been made immediately prior to the close of business on the date of surrender of
this Warrant.
SECTION 4. RESERVATION OF SHARES. The Company hereby agrees that at all
times there shall be reserved for issuance and delivery upon exercise of this
Warrant (i) all shares of Series EE Preferred Stock issuable upon exercise of
this Warrant and (ii) all shares of Common Stock issuable upon the conversion of
such shares of Series EE Preferred Stock. All shares of such Series EE Preferred
Stock shall be duly authorized and, when issued upon such exercise in accordance
with the terms of this Warrant, shall be validly issued, fully paid and
nonassessable.
SECTION 5. FRACTIONAL INTEREST. The Company will not issue a fractional
share of Series EE Preferred upon exercise of this Warrant. Instead, the Company
will deliver its check for the current fair market value of the fractional
share, as determined in good faith by the Board of Directors of the Company.
SECTION 6. ASSIGNMENT OR LOSS OF WARRANT.
(a) Except as provided in Section 10, the Holder of this Warrant shall
be entitled, without obtaining the consent of the Company, to assign its
interest in this Warrant in whole or in part to any person or persons. Subject
to the provisions of Section 10, upon surrender of this Warrant to the Company
or at the office of its stock transfer agent or warrant agent, with the
Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees named in such
instrument of assignment and, if the Holders entire interest is not being
assigned, in the name of the Holder, and this Warrant shall promptly be
canceled.
(b) Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant, and (in the case of loss,
theft or destruction) of indemnification satisfactory to the Company, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.
SECTION 7. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof,
be entitled to any rights of a shareholder in the Company, either at law or
equity, and the rights of the Holder are limited to those expressed in this
Warrant. Nothing contained in this Warrant shall be construed as conferring upon
the Holder hereof the right to vote or to consent or to receive notice as a
shareholder of the Company on any matters or with respect to any rights
whatsoever as a shareholder of the Company. No dividends or interest shall be
payable or
3.
<PAGE> 70
accrued in respect of this Warrant or the interest represented hereby or the
Warrant Shares purchasable hereunder until, and only to the extent that, this
Warrant shall have been exercised in accordance with its terms.
SECTION 8. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number
and kind of securities purchasable upon the exercise of the Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) RECLASSIFICATION OF OUTSTANDING SECURITIES. In case of any
reclassification, change or conversion of securities of the class issuable upon
exercise of this Warrant (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a subdivision
or combination), the Company shall execute a new Warrant (in form and substance
reasonably satisfactory to the Holder of this Warrant) providing that the Holder
of this Warrant shall have the right to exercise such new Warrant and upon such
exercise to receive, in lieu of each share of Series EE Preferred theretofore
issuable upon exercise of this Warrant, the kind and amount of shares of stock,
other securities, money and property receivable upon such reclassification or
change by a holder of one share of Series EE Preferred. Such new Warrant shall
provide for adjustments that shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Section 8. The provisions of this
subsection (a) shall similarly apply to successive reclassification or changes.
(b) SUBDIVISIONS OR COMBINATION OF SHARES. If the Company at any time
while this Warrant remains outstanding and unexpired shall subdivide or combine
its Series EE Preferred, the Exercise Price and the number of Warrant Shares
issuable upon exercise hereof shall be proportionately adjusted.
(c) STOCK DIVIDENDS. If the Company at any time while this Warrant is
outstanding and unexpired shall pay a dividend payable in shares of Series EE
Preferred Stock (except any distribution specifically provided for in the
foregoing subsections (a) and (b)), then the Exercise Price shall be adjusted,
from and after the date of determination of shareholders entitled to receive
such dividend or distribution, to that price determined by multiplying the
Exercise Price in effect immediately prior to such date of determination by a
fraction (a) the numerator of which shall be the total number of shares of
Series EE Preferred Stock outstanding immediately prior to such dividend or
distribution, and (b) the denominator of which shall be the total number of
shares of Series EE Preferred Stock outstanding immediately after such dividend
or distribution and the number of Warrant Shares subject to this Warrant shall
be proportionately adjusted.
(d) NOTICE OF RECORD DATE. In the event of any taking by the Company of
a record of its shareholders for the purpose of determining shareholders who are
entitled to receive payment of any dividend (other than a cash dividend) or
other distribution, any right to subscribe for, purchase or otherwise acquire
any share of any class or any other securities or property, or to receive any
other right, or for the purpose of determining shareholders who are entitled to
vote in connection with any proposed merger or consolidation of the Company with
or into any other corporation, or any proposed sale, lease or conveyance of all
or substantially all of the assets of the Company, or any proposed liquidation,
dissolution or winding up of the Company, the Company shall mail to the Holder
of this Warrant, at least ten days prior to the date specified
4.
<PAGE> 71
therein, a notice specifying the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and the amount and
character of such dividend, distribution or right.
(e) NO ADJUSTMENT UPON EXERCISE OF WARRANTS. No adjustments shall be
made under any Section herein in connection with the issuance of Warrant Shares
upon exercise of the Warrants.
SECTION 9. OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be
adjusted as required by the provisions of Section 8, the Company shall deliver
an officer's certificate showing the adjusted Exercise Price determined as
herein provided, setting forth in reasonable detail the facts requiring such
adjustment and the manner of computing such adjustment. Each such officer's
certificate shall be signed by the chairman, president or chief financial
officer of the Company.
SECTION 10. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933. This
Warrant may not be exercised and neither this Warrant nor any of the Warrant
Shares, nor any interest in either, may be sold, assigned, pledged,
hypothecated, encumbered or in any other manner transferred or disposed of, in
whole or in part, except in compliance with applicable United States federal and
state securities or Blue Sky laws and the terms and conditions hereof. Each
Warrant shall bear a legend in substantially the same form as the legend set
forth on the first page of this Warrant. Each certificate for Warrant Shares
issued upon exercise of this Warrant, unless at the time of exercise such
Warrant Shares are acquired pursuant to a registration statement that has been
declared effective under the Act, shall bear a legend substantially in the
following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES
LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THESE
SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.
Any certificate for any Warrant Shares issued at any time in exchange or
substitution for any certificate for any Warrant Shares bearing such legend
(except a new certificate for any Warrant Shares issued after the acquisition of
such Warrant Shares pursuant to a registration statement that has been declared
effective under the Act) shall also bear such legend unless, in the opinion of
counsel for the Company, the Warrant Shares represented thereby need no longer
be subject to the restriction contained herein. The provisions of this Section
10 shall be binding upon all subsequent Holders of certificates for Warrant
Shares bearing the above legend and all subsequent Holders of this Warrant, if
any. In addition in connection with the issuance of this
5.
<PAGE> 72
Warrant, the Holder specifically represents to the Company by acceptance of this
Warrant as follows:
(a) The Holder is aware of the Company's business affairs and financial
condition, and has acquired information about the Company sufficient to reach an
informed and knowledgeable decision to acquire this Warrant. The Holder is
acquiring this Warrant for its own account for investment purposes only and not
with a view to, or for the resale in connection with, any "distribution" thereof
in violation of the Act.
(b) The Holder understands that this Warrant has not been registered
under the Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of the Holder's
investment intent as expressed herein.
(c) The Holder further understands that this Warrant must be held
indefinitely unless subsequently registered under the Act and qualified under
any applicable state securities laws, or unless exemptions from registration and
qualification are otherwise available. Moreover, the Holder understands that the
Company is under no obligation to register and qualify this Warrant.
(d) The Holder is aware of the provisions of Rule 144 promulgated under
the Act, which, in substance, permit limited public resale of "restricted
securities" acquired, directly or indirectly, from the issuer thereof (or from
an affiliate of such issuer), in a non-public offering subject to the
satisfaction of certain conditions, if applicable, including, among other
things: The availability of certain public information about the Company, the
resale occurring not less than one year after the party has purchased and paid
for the securities to be sold; the sale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934, as
amended) and the amount of securities being sold during any three month period
not exceeding the specified limitations stated therein.
(e) The Holder further understands that at the time it wishes to sell
this Warrant there may be no public market upon which to make such a sale, and
that, even if such a public market then exits, the Company may not be satisfying
the current public information requirements of Rule 144, and that, in such
event, the Holder may be precluded from selling this Warrant under Rule 144 even
if the two year minimum holding period had been satisfied.
(f) The Holder further understands that in the event all of the
requirements of Rule 144 are not satisfied, registration under the Act,
compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rule 144 is not exclusive, the
staff of the Securities and Exchange Commission (the "SEC") has expressed its
opinion that persons proposing to sell private placement securities other than
in a registered offering and otherwise than pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales, and that such persons and their
respective brokers who participate in such transactions do so at their own risk.
SECTION 11. EXPIRATION DATE. This Warrant shall expire and shall be
wholly void and have no effect after 5:00 p.m. on the fifth anniversary of the
date hereof.
6.
<PAGE> 73
SECTION 12. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY.
Nothing contained in this Warrant shall be construed as conferring upon the
Holder hereof the right to vote or to consent or to receive notice as a
shareholder of the Company or any other matters or any rights whatsoever as a
shareholder of the Company. No dividends or interest shall be payable or accrued
in respect of this Warrant or the interest represented hereby or the shares
purchasable hereunder until, and only to the extent that, this Warrant shall
have been exercised. No provisions hereof, in the absence of affirmative action
by the holder to purchase shares of Series EE Preferred, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such Holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by its creditors.
SECTION 13. MARKET STANDOFF. The holder of this Warrant, by acceptance
hereof, agrees that such holder will not, without the prior written consent of
the lead underwriter of the initial public offering of the Common Stock of the
Company pursuant to a registration statement filed under the Act (the
"Offering"), directly or indirectly offer to sell, contract to sell (including,
without limitation, any short sale), grant any option for the sale of, acquire
any option to dispose of, or otherwise dispose of any Warrant Shares for a
period of 180 days following the day on which the registration statement filed
on behalf of the Company in connection with the Offering shall become effective
by order of the SEC.
SECTION 14. GOVERNING LAW. This Warrant is delivered in the State of
California and shall be construed in accordance with and governed by the laws of
that State.
SECTION 15. MODIFICATION AND WAIVER. Neither this Warrant nor any term
hereof may be amended, waived, discharged or terminated other than by an
instrument in writing signed by the Company and by the Holder hereof.
SECTION 16. NOTICES. Any notice, request or other document required or
permitted to be given or delivered to the Holder hereof or the Company shall be
delivered or shall be sent by certified mail, postage prepaid, to each such
Holder at its address as shown on the books of the Company or to the Company at
the address indicated therefor in the first paragraph of this Warrant.
SECTION 17. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description
headings of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. This Warrant
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the State of California.
SECTION 18. ENTIRE AGREEMENT. This Warrant constitutes the entire
agreement between the parties pertaining to the subject matter herein and
supersedes all prior and contemporaneous agreements, representation and
undertakings of the parties.
7.
<PAGE> 74
IN WITNESS WHEREOF, the Company has duly caused this Warrant to be
signed by its duly authorized officer and to be dated as of _________________,
2000.
REPEATER TECHNOLOGIES, INC.
BY:
-------------------------------------
Ken Kenitzer,
President and Chief Executive Officer
8.
<PAGE> 75
PURCHASE FORM
Dated ___________, ____
The undersigned hereby irrevocably elects to exercise Warrant WEE-_____
(the "Warrant") to purchase _______ shares of Series EE Preferred Stock of
REPEATER TECHNOLOGIES, INC. and hereby makes payment of ___________________ in
payment of the exercise price thereof.
or
The undersigned hereby elects to convert ____ percent (__%) of the value
of the Warrant pursuant to the provisions of Section 2 of the Warrant.
Signature____________________
9.
<PAGE> 76
ASSIGNMENT FORM
Dated _________, ____
FOR VALUE RECEIVED, ________________________________ hereby sells,
assigns and transfers unto __________________________________________________
(the "Assignee"), (please type or print in block letters)
--------------------------------------------------------------------------------
(insert address)
its right to purchase up to ____ shares of Series EE Preferred Stock of REPEATER
TECHNOLOGIES, INC. represented by this Warrant and does hereby irrevocably
constitute and appoint ____________________________ Attorney, to transfer the
same on the books of the Company, with full power of substitution in the
premises.
Signature____________________
10.
<PAGE> 77
EXHIBIT E
FORM OF
SEVENTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
<PAGE> 78
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C> <C>
I. DEFINITIONS..........................................................................1
1.1 "Restricted Securities".......................................................1
1.2 "Registrable Securities"......................................................1
1.3 The terms "register," "registered" and "registration".........................1
1.4 "Registration Expenses".......................................................2
1.5 "Selling Expenses"............................................................2
1.6 "Holder"......................................................................2
1.7 "Preferred Stock".............................................................2
II. AMENDMENT AND RESTATEMENT OF PRIOR INVESTORS' RIGHTS AGREEMENT.......................2
III. REGISTRATION; RESTRICTIONS ON TRANSFER...............................................2
3.1 Restrictions on Transferability...............................................2
3.2 Restrictive Legend............................................................2
3.3 Notice of Proposed Transfers..................................................3
3.4 Requested Registration........................................................3
3.5 Company Registration..........................................................5
3.6 Expenses of Registration......................................................6
3.7 Registration Procedures.......................................................6
3.8 Registration on Form S-3......................................................7
3.9 Termination of Registration Rights............................................7
3.10 Lockup Agreement..............................................................7
3.11 Indemnification...............................................................7
3.12 Information by Holder.........................................................9
3.13 Rule 144 Reporting............................................................9
3.14 Transfer of Registration Rights..............................................10
IV. COVENANTS OF THE COMPANY............................................................10
4.1 Annual Financial Information.................................................10
4.2 Inspection...................................................................10
4.3 Assignment of Rights to Financial Information................................10
4.4 Proprietary Information and Non-Competition Agreements.......................10
4.5 Confidentiality Agreement....................................................11
</TABLE>
i.
<PAGE> 79
<TABLE>
<CAPTION>
TABLE OF CONTENTS
(CONTINUED)
<S> <C> <C> <C>
4.6 Insider Transactions.........................................................11
4.7 Employee Stock and Option Plans..............................................11
4.8 Financial Updates to Board...................................................11
4.9 Termination of Covenants.....................................................11
V. RIGHTS OF FIRST REFUSAL.............................................................11
5.1 New Securities...............................................................11
5.2 Outstanding Securities.......................................................13
VI. MISCELLANEOUS.......................................................................13
6.1 Governing Law................................................................13
6.2 Survival.....................................................................13
6.3 Successors and Assigns.......................................................14
6.4 Separability.................................................................14
6.5 Amendment and Waiver.........................................................14
6.6 Delays or Omissions..........................................................14
6.7 Notices, etc.................................................................15
6.8 Attorneys' Fees..............................................................15
6.9 No Investment Obligation.....................................................15
6.10 Aggregation and Affiliate Status.............................................15
6.11 Entire Agreement.............................................................15
6.12 Titles and Subtitles.........................................................15
6.13 Counterparts.................................................................15
</TABLE>
ii.
<PAGE> 80
REPEATER TECHNOLOGIES, INC.
THIS SEVENTH AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (the
"Agreement") is entered into as of _______________, 2000, by and among REPEATER
TECHNOLOGIES, INC., a Delaware corporation (the "Company"), and those purchasers
of the Company's securities set forth on Exhibit A hereto (the "Purchasers").
I. DEFINITIONS
1.1 "RESTRICTED SECURITIES" shall mean the securities of the Company
required to bear the legend set forth in Section 3.2 hereof (or any similar
legend).
1.2 "REGISTRABLE SECURITIES" shall mean (i) shares of the Company's
Common Stock issued or issuable pursuant to the conversion of the Company's
Series A Preferred Stock (the "Series A Stock"), Series B Preferred Stock (the
"Series B Stock"), Series C Preferred Stock (the "Series C Stock"), Series D
Preferred Stock (the "Series D Stock"), Series E Preferred Stock (the "Series E
Stock"), Series AA Preferred Stock (the "Series AA Stock"), Series BB Preferred
Stock (the "Series BB Stock"), Series CC Preferred Stock (the "Series CC
Stock"), Series DD Preferred Stock (the "Series DD Stock") and Series EE
Preferred Stock (the "Series EE Stock"), (ii) shares of the Company's Common
Stock issued or issuable upon exercise of the Warrants granted in connection
with the Company's interim financings in 1985, 1986 and 1990 (the "Prior
Warrants"), (iii) shares of the Company's Common Stock issued upon exercise of
Warrants granted in connection with the Series A Preferred Stock Purchase
Agreements dated April 17, 1987 and November 23, 1988 pursuant to Warrant
Agreements of even date therewith (the "1987 Warrants" and the "1988 Warrants"
respectively), (iv) shares of the Company's Common Stock issued upon exercise of
Warrants granted in 1995 (the "1995 Warrants"), (v) shares of Series BB
Preferred Stock issued upon exercise of Warrants granted in connection with the
Company's 1997 Series BB and Warrant financing (the "1997 Warrants"), (vi)
shares of Series DD Preferred Stock issued or issuable upon conversion of
convertible debentures issued pursuant to the Debenture Purchase Agreement dated
November 25, 1998 (the "Series DD Convertible Debentures"), (vii) shares of the
Company's Common Stock issued or issuable upon conversion of the Series DD
Preferred Stock, (viii) shares of Series EE Preferred Stock issued or issuable
upon conversion of convertible debentures (the "Series EE Convertible
Debentures") issued pursuant to the Convertible Debenture and Warrant Purchase
Agreement dated as of the date hereof (the "Debenture Purchase Agreement"), (ix)
shares of Series EE Preferred Stock issuable upon exercise of warrants issued
pursuant to the Debenture Purchase Agreement ("2000 Warrants"), (x) shares of
the Company's Common Stock issued or issuable upon conversion of the Series EE
Preferred Stock, and (xi) any Common Stock of the Company issued or issuable in
respect of any of such shares upon any stock split, stock dividend,
recapitalization or similar event. References to securities in the foregoing
definitions shall be deemed to include the securities issued by Repeater
Technologies, Inc., a California corporation, as reincorporated in Delaware on
May 18, 2000.
1.3 THE TERMS "REGISTER," "REGISTERED" AND "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act of
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1933, as amended (the "Securities Act"), and the declaration or ordering of the
effectiveness of such registration statement.
1.4 "REGISTRATION EXPENSES" shall mean all expenses incurred by the
Company in complying with Sections 3.4, 3.5 and 3.8 hereof, including, without
limitation, all registration, qualification, and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, fees and
disbursements of one special counsel for all Holders which shall be the same as
counsel for the Company unless the holders of a majority of the Registrable
Securities of the selling Holders specify otherwise, blue sky fees and expenses,
and the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the Company
which shall be paid in any event by the Company).
1.5 "SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions, and stock transfer taxes applicable to the securities registered by
the Holders.
1.6 "HOLDER" shall mean any holder of Registrable Securities, or any
transferee of such Holder under Section 3.14, which have not been sold to the
public.
1.7 "PREFERRED STOCK" shall mean shares of the Company's Series A Stock,
Series B Stock, Series C Stock, Series D Stock, Series E Stock, Series AA Stock,
Series BB Stock, Series CC Stock, Series DD Stock and Series EE Stock.
II. AMENDMENT AND RESTATEMENT OF PRIOR INVESTORS' RIGHTS AGREEMENT
Effective and contingent upon the first closing of the sale of
Convertible Debentures of the Company pursuant to the Convertible Debenture
Purchase Agreement, that certain Sixth Amended and Restated Investors' Rights
Agreement dated as of November 25, 1998, as amended by Amendment No. 1 to the
Sixth Amended and Restated Investors' Rights Agreement dated July 8, 1999 (the
"Sixth Amended and Restated Investors' Rights Agreement"), by and among the
Company and certain holders of the Company's securities shall be null and void
and superseded by the rights and obligations set forth in this Agreement.
III. REGISTRATION; RESTRICTIONS ON TRANSFER
3.1 RESTRICTIONS ON TRANSFERABILITY. The Registrable Securities shall
not be transferable except upon the conditions specified in this Article III,
which conditions are intended to ensure compliance with the provisions of the
Securities Act. Each Holder will cause any proposed transferee of
Registrable Securities held by a Holder to agree to take and hold such
securities subject to the provisions and upon the conditions specified in this
Article III.
3.2 RESTRICTIVE LEGEND. Each certificate representing Preferred Stock or
Registrable Securities shall (unless otherwise permitted by the provisions of
Section 3.3 below) be stamped or otherwise imprinted with a legend in the
following form (in addition to any legend required under applicable state
securities laws):
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT OR EXCEPT
PURSUANT TO RULE 144. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF
THESE SECURITIES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO
COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE
TO THE SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES
OF THE CORPORATION.
3.3 NOTICE OF PROPOSED TRANSFERS. The holder of each certificate
representing Preferred Stock or Registrable Securities by acceptance thereof
agrees to comply in all respects with the provisions of this Section 3.3. Prior
to any proposed transfer of any Preferred Stock or Registrable Securities,
unless there is in effect a Registration Statement under the Securities Act
covering the proposed transfer, the holder thereof shall give written notice to
the Company of such holder's intention to effect such transfer. Each such notice
shall describe the manner and circumstances of the proposed transfer in
sufficient detail, and shall, if the Company so requests, be accompanied (except
in transactions in compliance with Rule 144) by either (i) an unqualified
written opinion of legal counsel who shall be reasonably satisfactory to the
Company, addressed to the Company and reasonably satisfactory in form and
substance to the Company's counsel, to the effect that the proposed transfer of
the Preferred Stock or Registrable Securities may be effected without
registration under the Securities Act, or (ii) a "No Action" letter from the
Securities and Exchange Commission (the "Commission") to the effect that the
transfer of such securities without registration will not result in a
recommendation by the staff of the Commission that action be taken with respect
thereto, whereupon the holder of such Preferred Stock or Registrable Securities
shall be entitled to transfer such Preferred Stock or Registrable Securities in
accordance with the terms of the notice delivered by the holder to the Company;
provided, however, that no opinion or No Action letter need be obtained with
respect to a transfer to (A) a partner, active or retired, of a Holder, (B) the
estate of any such partner, or (C) an "affiliate" of a Holder, as that term is
defined in Rule 405 promulgated by the Commission under the Securities Act, if
the transferee agrees to be subject to the terms hereof. Each certificate
evidencing the Preferred Stock or Registrable Securities transferred as above
provided shall bear the appropriate restrictive legend set forth in Section 3.2
above, except that such certificate shall not bear such restrictive legend if in
the opinion of counsel for the Company such legend is not required in order to
establish compliance with any provisions of the Securities Act.
3.4 REQUESTED REGISTRATION.
(a) REQUEST FOR REGISTRATION. In case the Company shall receive
from any Holder or group of Holders holding at least 35% of the Registrable
Securities a written request that the Company effect any registration,
qualification, or compliance with respect to such Holder's or Holders'
Registrable Securities having an anticipated aggregate offering price of at
least $10,000,000, the Company will:
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(i) promptly give written notice of the proposed registration,
qualification, or compliance to all other Holders; and
(ii) as soon as practicable, use its best efforts to effect such
registration, qualification, or compliance (including, without limitation, the
execution of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws, and
appropriate compliance with applicable regulations promulgated under the
Securities Act and any other governmental requirements or regulations) as may be
so requested and as would permit or facilitate the sale and distribution of all
or such portion of such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request received
by the Company within 15 days after receipt of such written notice from the
Company; provided, however, that the Company shall not be obligated to take any
action to effect any such registration, qualification, or compliance pursuant to
this Section 3.4:
(A) in any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration, qualification, or compliance unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act;
(B) prior to November 25, 2001, or six months following
the close of the Company's initial underwritten public offering, whichever shall
first occur;
(C) after the Company has effected two such registrations
pursuant to this subparagraph 3.4(a), such registrations have been declared or
ordered effective and the securities offered pursuant to such registration have
been sold.
Subject to the foregoing clauses (A) through (C), the Company shall file
a registration statement covering the Registrable Securities so requested to be
registered as soon as practicable, after receipt of the request or requests of
any Holder or Holders. If, however, the Company shall furnish to the Holder or
Holders requesting a registration statement pursuant to this Section 3.4, a
certificate signed by the President of the Company stating that, in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its shareholders for such registration statement
to be filed and that it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer such filing
for a period of not more than 120 days after receipt of the request of the
Holder or Holders requesting such registration; provided, however, that the
Company may not utilize this right more than once in any twelve-month period.
(b) UNDERWRITING. If the Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
Section 3.4 and the Company shall include such information in the written notice
referred to in Section 3.4(a)(i). The right of any Holder to registration
pursuant to Section 3.4 shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's Registrable Securities in
the underwriting to the
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extent requested (unless otherwise mutually agreed by a majority in interest of
the Holders) to the extent provided herein.
The Company shall (together with all Holders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form with the managing underwriter selected for such underwriting
by a majority in interest of the Holders requesting registration and reasonably
acceptable to the company. Notwithstanding any other provision of this Section
3.4, if the managing underwriter advises the Holders in writing that the
marketing factors require a limitation of the number of shares to be
underwritten, then, subject to the provisions of Section 3.4(a), shares will be
excluded from such underwriting as follows: securities (other than Registrable
Securities) held by officers or directors of the Company shall first be
excluded; second, if required, all securities (other than Registrable
Securities) shall be excluded on a pro rata basis; and third, if required, the
Registrable Securities requested to be registered under this Section 3.4 shall
be excluded on a pro rata basis. No Registrable Securities excluded from the
underwriting by reason of the managing underwriter's marketing limitation shall
be included in such registration.
If any Holder of Registrable Securities disapproves of the terms of the
underwriting, such Holder may elect to withdraw therefrom by written notice to
the Company, the managing underwriter, and the other Holders. The Registrable
Securities and/or other securities so withdrawn shall also be withdrawn from
registration; provided, however, that if by the withdrawal of such Registrable
Securities a greater number of Registrable Securities held by other Holders may
be included in such registration (up to the maximum of any limitation imposed by
the underwriters), then, the Company shall offer to all Holders who have
included Registrable Securities in the same proportion used in determining the
underwriter limitation in this Section 3.4(b). If the registration does not
become effective due to the withdrawal of Registrable Securities, then, unless
the withdrawal was due to the discovery by the withdrawing Holder of material
information relating to the registration that was not previously known by such
Holder, either, at the option of a majority of the Holders requesting such
registration, (1) the Holders requesting registration shall reimburse the
Company for expenses incurred in complying with the request or (2) the aborted
registration shall be treated as effected for purposes of Section 3.4(a)(ii)(C).
3.5 COMPANY REGISTRATION.
(a) NOTICE OF REGISTRATION. If at any time the Company shall
determine to register any of its securities, either for its own account or the
account of a security holder or holders exercising their respective demand
registration rights, other than (i) a registration relating solely to employee
benefit plans or (ii) a registration relating solely to a Commission Rule 145
transaction, the Company will:
(i) promptly give to each Holder of the Company written
notice thereof; and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable
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Securities specified in a written request or requests, made within 15 days after
receipt of such written notice from the Company, by any Holder or Holders.
(b) If the registration of which the Company gives notice
is for a registered public offering involving an underwriting, the Company shall
so advise the Holders as a part of the written notice given pursuant to
subsection 3.5(a)(i). In such event the right of any Holder to registration
pursuant to this Section 3.5 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting
shall, together with the Company and the other parties distributing their
securities through such underwriting, enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this Section
3.5, if the underwriter shall advise the Company in writing that marketing
factors (including, without limitation, an adverse effect on the per share
offering price) require a limitation of the number of shares to be underwritten,
then shares (other than securities to be sold for the account of the Company),
shall be excluded as follows: securities (other than Registrable Securities) and
second, if required, the Registrable Securities requested to be registered shall
be excluded on a pro rata basis; provided, however, that in connection with any
registration under this Section 3.5, other than the registration pertaining to
the Company's initial public offering of securities, the amount of Registrable
Securities of the selling Holders to be included in the offering shall not be
reduced below 50% of the securities included in such offering. No Registrable
Securities excluded from the underwriting by reason of the managing
underwriter's marketing limitation shall be included in such registration.
If any Holder disapproves of the terms of the underwriting, it may elect
to withdraw therefrom by written notice to the Company and the underwriter. Any
securities so withdrawn shall also be withdrawn from registration. If by the
withdrawal of such securities a greater number of securities held by other
Holders may be included in such registration (up to the maximum of any
limitation imposed by the underwriters), then the Company shall offer to all
Holders who have included securities in the registration the right to include
additional securities in the same proportion used in determining the underwriter
limitation in this paragraph 3.5(b).
3.6 EXPENSES OF REGISTRATION. Except as set forth in Section 3.4(b), the
Registration Expenses incurred in connection with (i) registrations pursuant to
Section 3.4, (ii) all registrations pursuant to Section 3.8 below, and (iii) all
registrations pursuant to Section 3.5 shall be borne by the Company. Unless
otherwise stated, all Selling Expenses relating to securities registered by the
Holders shall be borne by the holders of such securities pro rata on the basis
of the number of shares so registered.
3.7 REGISTRATION PROCEDURES. In the case of each registration,
qualification, or compliance effected by the Company pursuant to this Article
III, the Company will keep each Holder advised in writing as to the initiation
of each registration, qualification, and compliance and as to the completion
thereof. At its expense, the Company will:
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(a) Keep such registration, qualification, or compliance
effective for a period of 120 days or until the Holder or Holders have completed
the distribution described in the registration statement relating thereto,
whichever first occurs; and
(b) Furnish such number of prospectuses and other documents
incident thereto as a Holder from time to time may reasonably request.
3.8 REGISTRATION ON FORM S-3. In addition to the rights set forth in
Section 3.4, if Holder or Holders of at least 25% of the then outstanding
Registrable Securities of the Company request that the Company file a
registration statement on Form S-3 (or any successor thereto) for a public
offering of shares of such Registrable Securities, the reasonably anticipated
aggregate price to the public of which would exceed $3,000,000, and the Company
is a registrant entitled to use Form S-3 to register securities for such an
offering, the Company shall use its best efforts to cause such shares to be
registered for the offering on such form (or any successor thereto), provided,
however, that the Company shall not be required to effect any such registration
within 180 days of the effective date of any registration statement pertaining
to an underwritten public offering of the Company's securities or if the Company
has, within the 12 month period preceding the date of such request, already
effected a registration on Form S-3 for the Holders pursuant to this Section
3.8.
3.9 TERMINATION OF REGISTRATION RIGHTS. The registration rights granted
pursuant to this Article III shall terminate as to each Holder at such time as
all Registrable Securities or held by such Holder (including any Common Stock
issued upon conversion of the Preferred Stock of each Holder) can be sold
without compliance with the registration requirements of the Securities Act
pursuant to Rule 144(k).
3.10 LOCKUP AGREEMENT. In consideration for the Company agreeing to its
obligations under this Article III, each Holder and each transferee pursuant to
Section 3.14 hereof agrees (but only if each Company officer, director and
shareholder beneficially owning 5% or more of the Company's equity securities,
and each shareholder selling shares in such offering, also agrees), in
connection with the initial registration of the Company's securities, upon
request of the Company or the underwriters managing any underwritten offering of
the Company's securities, not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any Registrable Securities
(other than those included in the registration) without the prior written
consent of the Company or such underwriters, as the case may be, for such period
of time (not to exceed 180 days) from the effective date of such registration as
the Company or the underwriters may specify. The Holders agree that the Company
may instruct its transfer agent to place stop-transfer notations in its records
to enforce the provisions of this Section 3.10.
3.11 INDEMNIFICATION. The Company will indemnify each Holder, each of
its officers, directors, and partners, and such Holder's legal counsel and
independent accountants, and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, with respect to which registration,
qualification, or compliance has been effected pursuant to this Article III, and
each underwriter, if any, and each person who controls any underwriter within
the meaning of Section 15 of the Securities Act, against all expenses, claims,
losses, damages,
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and liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened, arising out
of or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, prospectus, offering circular, or
other document, or any amendment or supplement thereto, incident to any such
registration, qualification, or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, or any violation by the Company of any rule or
regulation promulgated under the Securities Act or under state securities laws
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, qualification, or compliance,
and will reimburse each such Holder, each of its officers, directors, and
partners, and such Holder's legal counsel and independent accountants, and each
person controlling such Holder, each such underwriter, and each person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating, preparing, or defending any such
claim, loss, damage, liability, or action, provided that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability, or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder or underwriter and stated to be specifically for
use therein.
(a) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration,
qualification, or compliance is being effected, severally and not jointly,
indemnify the Company, each of its directors and officers and its legal counsel
and independent accountants, each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of Section 15 of the
Securities Act, and each other such Holder, each of its officers and directors,
and each person controlling such Holder within the meaning of Section 15 of the
Securities Act, against all claims, losses, damages, and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular, or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company, such Holders, such directors, officers, legal counsel, independent
accountants, underwriters, or control persons for any legal or any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability, or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular, or other document in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder and stated to be specifically for use therein;
provided, however, that the obligations of such Holders hereunder shall be
limited to an amount equal to the net proceeds after expenses and commissions to
each such Holder of Registrable Securities sold as contemplated herein.
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(b) Each party entitled to indemnification under this Section
3.11 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Article III, except to the
extent, but only to the extent, that the Indemnifying Party's ability to defend
against such claim or litigation is impaired as a result of such failure to give
notice. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
3.12 INFORMATION BY HOLDER. Each Holder including securities of the
Company in any registration shall furnish to the Company such information
regarding such Holder and the distribution proposed by such Holder as the
Company may request in writing and as shall be required in connection with any
registration, qualification, or compliance referred to in this Article III.
3.13 RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Preferred Stock and/or Registrable Securities to the public without
registration, after such time as a public market exists for the Common Stock of
the Company, the Company agrees to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after the effective date of the first registration under the Securities Act
filed by the Company for an offering of its securities to the general public;
(b) Use its best efforts to then file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (at any time after it has become subject to such reporting
requirements);
(c) So long as a Holder owns Preferred Stock and/or Registrable
Securities to furnish to the Holder forthwith upon request (i) a written
statement by the Company as to its compliance with the reporting requirements of
Rule 144 (at any time after 90 days after the effective date of the first
registration statement filed by the Company for an offering of its securities to
the general public) and of the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), (ii) a copy of the
most recent annual or quarterly report of the Company, and (iii) such other
reports and documents of the Company as a
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Holder may reasonably request in availing itself of any rule or regulation of
the Commission allowing a Holder to sell any such securities without
registration.
3.14 TRANSFER OF REGISTRATION RIGHTS. The right to cause the Company to
register securities granted Holders under Sections 3.4, 3.5, and 3.8 may be
assigned to a transferee or assignee who acquires at least 25,000 shares of
Preferred Stock (or securities convertible thereinto) (or Common Stock issued
upon conversion of the Preferred Stock or a combination of such Common Stock and
Preferred Stock) then held by such Holder, provided that the Company is given
written notice of such assignment prior to such assignment. In addition, rights
to cause the Company to register securities may be freely assigned to any
constituent partner of a Holder, where such Holder is a partnership, or to any
affiliate (as that term is defined in Rule 405 promulgated by the Commission
under the Securities Act) or any officer, director, or principal shareholder
thereof, where such Holder is a corporation.
IV. COVENANTS OF THE COMPANY
The Company hereby covenants and agrees as follows:
4.1 ANNUAL FINANCIAL INFORMATION. The Company will furnish the following
reports to each Holder for so long as such Holder (together will all of its
affiliates) is a holder of more than 5% of any series of Preferred Stock, as
soon as practicable after the end of each fiscal year, and in any event within
90 days thereafter: (i) consolidated balance sheet of the Company and its
subsidiaries, if any, as of the end of such fiscal year, and (ii) consolidated
statement of income and consolidated statement of cash flows of the Company and
its subsidiaries, if any, for such year, prepared in accordance with generally
accepted accounting principles consistently applied and setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail and certified in an unqualified opinion by a national
accounting firm selected by the Company.
4.2 INSPECTION. For so long as a Holder is eligible to receive reports
under Section 4.1, it shall also have the right, at its expense, to visit and
inspect any of the properties of the Company or any of its subsidiaries, and to
discuss their affairs, finances, and accounts with their officers, all at such
reasonable times and as often as may be reasonably requested.
4.3 ASSIGNMENT OF RIGHTS TO FINANCIAL INFORMATION. The rights granted
pursuant to Sections 4.1 and 4.2 may be assigned or otherwise conveyed by any
Holder or by any subsequent transferee of any such rights, upon written notice
to the Company; provided, however, that such rights may not be transferred to
any transferee who the Company, acting in good faith, deems to be a competitor
of the Company.
4.4 PROPRIETARY INFORMATION AND NON-COMPETITION AGREEMENTS. The Company
will require each person employed by the Company in a technical or management
position, whether at present or in the future, to execute a Proprietary
Information Agreement in the Company's standard form, as a condition of such
employment. The Company will also require certain key employees to enter into
non-competition agreements as a condition of their continued employment.
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4.5 CONFIDENTIALITY AGREEMENT. Each Holder agrees that it will use its
best efforts to hold any information such Holder receives after the date of this
Agreement regarding the Company pursuant to Section 4.1 or 4.2, or while in
attendance at meetings of the Board of Directors, and which the Company deems to
be confidential, in confidence and will use its best efforts not to disclose
such information without the prior consent of the Company, except to the extent
such information: (i) is or becomes publicly known from a source other than a
Holder, (ii) is made publicly known by the Company, (iii) is known by the Holder
at the time of disclosure by the Company or (iv) is disclosed to the Holder by a
source other than the Company or another Holder free of any obligation of
confidentiality. Notwithstanding the foregoing, the Company will collaborate
with each Holder as necessary to develop mutually agreed-upon information which
such Holder can provide to its investors.
4.6 INSIDER TRANSACTIONS. The Company will not enter into any material
insider transactions without the approval of a majority of the representatives
of the Holders, if any, to the Board of Directors.
4.7 EMPLOYEE STOCK AND OPTION PLANS. The Company will not sell shares of
its Common Stock or options to purchase shares of its Common Stock to its
employees except pursuant to an existing plan and any future plan approved by a
unanimous vote of the Board of Directors of the Company.
4.8 FINANCIAL UPDATES TO BOARD. At each meeting of the Board of
Directors of the Company, each member of the Board of Directors will receive
actual and forecasted updated financial statements for the current year by
quarter.
4.9 TERMINATION OF COVENANTS. Notwithstanding anything to the contrary
set forth herein, the covenants set forth in this Article IV shall terminate and
be of no further force or effect on or after the date of the first sale of the
Company's securities pursuant to which a registration statement is filed by the
Company under the Securities Act in connection with an underwritten public
offering of its securities.
V. RIGHTS OF FIRST REFUSAL
5.1 NEW SECURITIES The Company hereby grants to the holders of the
Series DD Convertible Debentures and the holders of the Series EE Convertible
Debentures (the "Debenture Holders") and the Series CC Preferred Stock, Series
DD Preferred Stock and Series EE Preferred Stock (the "Series CC, DD and EE
Holders," and, together with the Debenture Holders, the "Rightholders") the
right of first refusal to purchase such Rightholder's pro rata share of "New
Securities" (as defined in this Section 5.1) that the Company may propose to
sell and issue. Such Rightholder's pro rata share, for purposes of this right of
first refusal, is the ratio of (X) the number of shares of Registrable
Securities with respect to which such Rightholder is deemed to be a holder
immediately prior to the issuance of such New Securities to (Y) the total number
of outstanding shares of Common Stock on an as-converted basis. For all purposes
in this Agreement of determining the Preferred Stock held by a Purchaser, all
Series DD Convertible Debentures and Series EE Convertible Debentures shall be
treated as if converted to
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<PAGE> 91
Series DD Preferred and Series EE Preferred Stock, respectively. This right of
first refusal shall be subject to the following provisions:
(a) "New Securities" shall mean any Common Stock and Preferred Stock of
the Company whether or not authorized on the date hereof, and rights, options,
or warrants to purchase said Common Stock or Preferred Stock and securities of
any type whatsoever that are, or may become, convertible into said Common Stock
or Preferred Stock; provided, however, that "New Securities" does not include
the following:
(i) shares of Common Stock, or options to purchase shares of
Common Stock, issued, issuable or granted to officers, directors, and employees
of or consultants to the Company pursuant to stock plans or option plans
approved by the Board of Directors;
(ii) shares of Common Stock issuable upon conversion of the
Preferred Stock;
(iii) securities of the Company offered to the public pursuant to
a registration statement filed under the Securities Act;
(iv) securities of the Company issued in connection with
strategic transactions approved by the Board of Directors of the Company;
(v) securities of the Company issued pursuant to the acquisition
of another corporation by the Company by merger, purchase of all or
substantially all of the assets, or other reorganization whereby the Company
owns more than fifty percent (50%) of the voting power of such other
corporation, so long as such transactions were approved by the Board of
Directors of the Company;
(vi) shares of stock issuable upon conversion of convertible
debentures;
(vii) shares of stock issuable upon exercise of warrants; or
(VIII) securities issued in connection with any stock split,
stock dividend, or recapitalization by the Company.
(b) In the event that Company proposes to undertake an issuance of New
Securities, the Company shall give each Rightholder written notice of its
intention, describing the type of New Securities, the price, and the general
terms upon which the Company proposes to issue the same. Each Rightholder shall
have 20 days after receipt of such notice to agree to purchase its pro rata
share of such New Securities at the price and upon the terms specified in the
notice by giving written notice to the Company and stating therein the quantity
of New Securities to be purchased.
(c) In the event that any Rightholder fails to exercise in full the
right of first refusal within the 20-day period specified above, the Company
shall have 120 days thereafter to sell (or enter into an agreement pursuant to
which the sale of New Securities covered thereby
12
<PAGE> 92
shall be closed, if at all, within 60 days from the date of said agreement) any
remaining New Securities respecting which the Rightholders' Rights were not
exercised, at a price and upon terms no more favorable to the purchasers thereof
than specified in the Company's notice to the Rightholders. In the event the
Company has not sold any remaining New Securities within such 120 day period (or
sold and issued New Securities in accordance with the foregoing within 60 days
from the date of such agreement) the Company shall not thereafter issue or sell
any New Securities, without first offering such New Securities to the
Rightholders in the manner provided above.
(d) The right of first refusal granted under this Section 5.1
shall not apply to, and shall terminate on the earlier of (i) the date of a
liquidation, dissolution or winding up of the Company pursuant to Section 3 of
the Articles of Incorporation, or (ii) the date upon which a registration
statement filed by the Company under the Securities Act, in connection with an
underwritten public offering, first becomes effective.
(e) This right of first refusal is nonassignable except to any
transferee to whom registration rights may be transferred pursuant to Section
3.14.
5.2 OUTSTANDING SECURITIES. If (i) the Company receives notice under
Section 10.1(a) of the Company's Bylaws of the proposed sale of shares of the
Company's capital stock by (A) an officer of the Company, (B) a director of the
Company or (C) a holder of at least 5% of the Company's capital stock
(determined on an as-converted-to Common Stock basis) and (ii) the Company
elects not to purchase such shares pursuant to the right of first refusal in
favor of the Company provided in Section 10.1 of the Company's Bylaws, then the
Company shall within ten days of such notice assign its right of first refusal
to the Rightholders (on a pro-rata basis with respect to the number of shares of
Common Stock (as determined on an as-converted-basis) by each such holder) and
provide notice of such assignment to such holders and, thereafter, shall take
such actions as are reasonably necessary to permit such holders to exercise such
right of first refusal.
5.3 WAIVER OF RIGHT OF FIRST REFUSAL. The rights of the Rightholders
under Section 5.1 of the Sixth Amended and Restated Investors' Rights Agreement
to (i) notice of the issuance of the Series EE Convertible Debentures and 2000
Warrants and (ii) purchase their pro-rata shares of such debentures and
warrants, are hereby waived.
VI. MISCELLANEOUS
6.1 GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of California.
6.2 SURVIVAL. The representations, warranties, covenants, and agreements
made herein shall survive any investigation made by any Holder and the closing
of the transactions contemplated hereby. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder solely as of the date of such certificate or instrument.
13
<PAGE> 93
6.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of Registrable Securities from time to time;
provided, however, that prior to the receipt by the Company of adequate written
notice of the transfer of any Registrable Securities specifying the full name
and address of the transferee, the Company may deem and treat the person listed
as the holder of such shares in its records as the absolute owner and holder of
such shares for all purposes, including the payment of dividends or any
redemption price.
6.4 SEPARABILITY. In case any provision of the Agreement shall be
invalid, illegal, or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
6.5 AMENDMENT AND WAIVER.
(a) This Agreement may be amended or modified only upon the
written consent of the Holders of not less than 66-2/3% of the Registrable
Securities; provided, however, that the rights set forth in paragraph 3.5 of
this Agreement may be amended or modified only with the written consent of the
Company and Holders of more than 66-2/3% of the aggregate outstanding shares of
Registrable Securities.
(b) The obligations of the Company and the rights of the Holders
under this Agreement may be waived only with the written consent of the Holders
of not less than 66-2/3% of the Registrable Securities; provided, however, that
the obligations of the Company and the rights of the Holders set forth in
Section 3.5 of this Agreement may be waived only with the written consent of the
Company and Holders of more than 66-2/3% of the aggregate outstanding shares of
Registrable Securities.
(c) Except to the extent provided in this Section 6.5, neither
this Agreement nor any provision hereof may be changed, waived, discharged, or
terminated, except by a statement in writing signed by the party against which
enforcement of the change, waiver, discharge, or termination is sought.
6.6 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Company under this Agreement shall impair any
such right, power, or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of or in
any similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent, or approval of any kind or character on
any Holder's part of any breach, default or noncompliance under the Agreement or
any waiver on such Holder's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, by law, or otherwise afforded to Holders, shall be cumulative and not
alternative.
14
<PAGE> 94
6.7 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be sent by registered or
certified mail, return receipt requested, postage prepaid, by means of a
nationally recognized overnight courier service, by telex or by facsimile,
addressed or sent: (a) if to a Holder, at such Holder's address or facsimile
number as set forth on the Company's records, or at such other address or
facsimile number as such Holder shall have furnished to the Company in writing,
or (b) if to the Company, at its address or facsimile number as set forth at the
end of this Agreement, or at such other address or facsimile number as the
Company shall have furnished to the Holders in writing.
6.8 ATTORNEYS' FEES. If legal action is brought to enforce or interpret
this Agreement, the prevailing party shall be entitled to recover its reasonable
attorneys' fees and legal costs in connection therewith.
6.9 NO INVESTMENT OBLIGATION. The Company and each of the Purchasers
hereby agree and acknowledge that the Purchasers, individually and jointly, are
under no express or implied obligation to continue to invest in the Company. The
decision to make any future investments in the Company is within the complete
and absolute discretion of each Purchaser.
6.10 AGGREGATION AND AFFILIATE STATUS. For purposes of determining the
amount of shares or Registrable Securities held by a Purchaser or Holder, all
shares or Registrable Securities held by entities affiliated with such Purchaser
or Holder shall be aggregated with the shares or Registrable Securities held by
such Purchaser or Holder. For such purpose, all entities under the management of
Chancellor LGT Asset Management shall be deemed to be affiliates of each other
and of Chancellor LGT Asset Management.
6.11 ENTIRE AGREEMENT. The Company and each of the Purchasers hereby
agrees and acknowledges that this Agreement and all exhibits hereto constitute
the full and entire understanding and agreement between the parties with regard
to the subject matter hereof. There are no other agreements or understandings
with respect to the subject matter set forth herein, express or implied, other
than this Agreement.
6.12 TITLES AND SUBTITLES. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
6.13 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
15
<PAGE> 95
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:___________________________________
Ken Kenitzer
President
PURCHASER:
CHARTER GROWTH CAPITAL, L.P.
By:___________________________________
Name: Kevin J. McQuillan
Title: General Partner
<PAGE> 96
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
CHARTER GROWTH CAPITAL CO-INVESTMENT FUND, L.P.
By:_________________________________
Name: Kevin J. McQuillan
Title: General Partner
<PAGE> 97
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
CITIVENTURE 96 PARTNERSHIP FUND, L.P.
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 98
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
NAZEM & COMPANY
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 99
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
OAK INVESTMENT PARTNERS VI, L.P.
By:_________________________________
Name: Bandel Carano
Title: Managing Member
<PAGE> 100
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
OAK VI AFFILIATES FUND, L.P.
By:_________________________________
Name: Bandel Carano
Title: Managing Member
<PAGE> 101
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
TRANS CAPITAL SDN. BHD.
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 102
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
NAZEM & COMPANY IV, L.P.
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 103
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
TRANSATLANTIC VENTURE FUND
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 104
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
J.F. SHEA COMPANY, INC., AS NOMINEE 1990-13
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 105
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
BRENTWOOD ASSOCIATES VI
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 106
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
CHANCELLOR LGT PRIVATE CAPITAL OFFSHORE PARTNERS II
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 107
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
HALLADOR VENTURE FUND II, A CALIFORNIA LIMITED PARTNERSHIP
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 108
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
BAY PARTNERS IV
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 109
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
CHANCELLOR LGT PRIVATE CAPITAL III
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 110
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
HMS CAPITAL PARTNERS
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 111
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
JOHN E. ROGERS & LOIS A. ROGERS JTWROS
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 112
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
HMS CAPITAL PARTNERS (ANNEX)
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 113
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
CHANCELLOR LGT PRIVATE CAPITAL OFFSHORE PARTNERS I
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 114
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
HMS GROUP (1)
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 115
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
CALIFORNIA BPIV L.P.
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 116
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
FURMAN SELZ INVESTORS L.P.
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 117
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
HARVEST TECHNOLOGY PARTNERS I
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 118
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
REPEATER TECHNOLOGIES, INC.
By:_________________________________
Ken Kenitzer
President
PURCHASER:
HMS (OVERSEAS) PARTNERS
By:_________________________________
Name:_______________________________
Title:______________________________
<PAGE> 119
EXHIBIT A
SCHEDULE OF PURCHASERS
Bay Partners IV, L.P.
Brentwood Associates VI
California BPIV, L.P.
CGC Investors, L.P.
Chancellor LGT Private Capital Partners III, L.P.
Chancellor LGT Private Capital Offshore Partners I, C.V.
Chancellor LGT Private Capital Offshore Partners II, L.P.
Charter Growth Capital, L.P.
Charter Growth Capital Co-investment Fund L.P.
Citiventure 96 Partnership Fund, L.P.
Dixon R. Doll & Carol Doll as Trustees
DMW Investors '95
Doll Family Partnership
Hallador Venture Fund II, a California Limited Partnership
HMS Capital Partners
HMS Capital Partners (Annex) HMS Group HMS (Overseas) Partners Michael Hone as
Trustee International Synergies Ltd.
J.F. Shea Company, Inc., as nominee 1990-13
Nazem & Company IV, L.P.
Oak Investment Partners VI, L.P.
Oak VI Affiliates Fund, L.P.
Kevin J. McQuillen
Spring Point Partners, L.P.
Edward F. Straube
Transatlantic Venture Fund
University of Michigan Business School Growth Fund
WA&H Investment, L.L.C.
<PAGE> 120
EXHIBIT F
SCHEDULE OF EXCEPTIONS
This Schedule of Exceptions is made and given pursuant to Section 3 of
the Convertible Debenture Purchase Agreement (the "Agreement") dated as of
July 11, 2000, by and among Repeater Technologies, Inc. (the "Company") and
the Purchasers set forth on the Schedule of Purchasers attached thereto as
EXHIBIT A. The section numbers in this Schedule of Exceptions correspond to the
section numbers in the Agreement. Any terms used in this Schedule of Exceptions
shall have the meanings defined for them in the Agreement unless otherwise
defined herein.
3.2 CAPITALIZATION.
The Company has outstanding stock options to purchase 2,394,642 shares
of its Common Stock pursuant to its 1990 Incentive Stock Plan, under which an
aggregate of 2,716,910 shares have been authorized for issuance. The Company has
outstanding stock options to purchase 1,093,104 shares of its Common Stock
pursuant to its Key Executives Stock Option Plan, under which an aggregate of
1,351,544 shares have been authorized for issuance. The Company has outstanding
stock options to purchase 545,850 shares of its Common Stock pursuant to its
2000 Equity Incentive Plan, under which an aggregate of 3,000,000 shares have
been authorized for issuance. The Company has no outstanding stock options to
purchase shares of its Common Stock pursuant to its 2000 Employee Stock Purchase
Plan, under which an aggregate of 500,000 shares have been authorized for
issuance.
The Company has outstanding the following warrants to purchase Common
Stock:
<TABLE>
<CAPTION>
NAME OF NUMBER OF PRICE PER EXPIRATION
WARRANTHOLDER SHARES SHARE DATE
------------- --------- --------- ----------
<S> <C> <C> <C>
BAY PARTNERS IV 6,749 $0.10 November 6, 2000
BP IV 586 $0.10 November 6, 2000
BRENTWOOD VI 40,917 $0.10 November 6, 2000
CARL MARSZEWSKI 450 $0.10 November 6, 2000
CLOYD MARVIN 1,840 $0.10 November 6, 2000
DOLL FAMILY PARTNERSHIP 3,027 $0.10 November 6, 2000
DMW INVESTORS 409 $0.10 November 6, 2000
DMW INVESTORS `95 613 $0.10 March 10, 2002
DMW INVESTORS `95 613 $0.10 March 10, 2002
ED TUCK 678 $0.10 November 6, 2000
ERIC DI BENEDETTO 204 $0.10 November 6, 2000
FURMAN SELZ 4,552 $0.10 November 6, 2000
G C & H 192 $0.10 November 6, 2000
GOODMAN-E.KALISH TRUST 41 $0.10 November 6, 2000
GOODMAN-P.KALISH TRUST 41 $0.10 November 6, 2000
</TABLE>
i.
<PAGE> 121
<TABLE>
<CAPTION>
NAME OF NUMBER OF PRICE PER EXPIRATION
WARRANTHOLDER SHARES SHARE DATE
------------- --------- --------- ----------
<S> <C> <C> <C>
HALLADOR VENTURE FUND II 8,800 $0.10 November 6, 2000
HMS CAPITAL PARTNERS 3,816 $0.10 November 6, 2000
HMS CAPITAL PARTNERS (ANNEX) 4,176 $0.10 November 6, 2000
HMS OVERSEAS 245 $0.10 November 6, 2000
INTERNATIONAL SYNERGIES 409 $0.10 November 6, 2000
J F SHEA 3,007 $0.10 November 6, 2000
JOHN RICHARDSON 1,022 $0.10 November 6, 2000
KEN KENITZER 361 $0.10 November 6, 2000
MICHAEL HONE 912 $0.10 November 6, 2000
MICHIGAN BUSINESS SCHOOL GROWTH FUND 245 $0.10 November 6, 2000
MOMS CC PARTNERS 1,070 $0.10 November 6, 2000
NAZEM IV 81,834 $0.10 November 6, 2000
OAK INVESTMENT PARTNERS VI 79,968 $0.10 November 6, 2000
OAK VI AFFILIATES FUND 1,865 $0.10 November 6, 2000
TAO CHOW 204 $0.10 November 6, 2000
TOTAL 248,846
</TABLE>
The Company has outstanding the following warrants to purchase Series BB
Preferred Stock:
<TABLE>
<CAPTION>
NAME OF NUMBER OF PRICE PER EXPIRATION
WARRANTHOLDER SHARES SHARE DATE
------------- --------- --------- ----------
<S> <C> <C> <C>
LIGHTHOUSE CAPITAL PARTNERS 18,940 $2.64 July 31, 2004
BAY PARTNERS IV 36,434 $2.64 August 21, 2002
BRENTWOOD ASSOCIATES VI 26,882 $2.64 August 21, 2002
CALIFORNIA BP IV 3,168 $2.64 August 21, 2002
DIXON R. DOLL 4,563 $2.64 August 21, 2002
DOLL FAMILY PARTNERSHIP 261 $2.64 August 21, 2002
DMW INVESTORS `95 1,630 $2.64 August 21, 2002
HALLADOR VENTURE FUND II 45,895 $2.64 August 21, 2002
HMS CAPITAL PARTNERS 46,388 $2.64 August 21, 2002
MICHAEL HONE 2,930 $2.64 August 21, 2002
INTERNATIONAL SYNERGIES 652 $2.64 August 21, 2002
J.F. SHEA CO. 19,469 $2.64 August 21, 2002
NAZEM & COMPANY IV 90,122 $2.64 August 21, 2002
OAK INVESTMENT PARTNERS VI 277,614 $2.64 August 21, 2002
OAK VI AFFILIATES FUND 6,477 $2.64 August 21, 2002
JOHN E. ROGERS 27,252 $2.64 August 21, 2002
</TABLE>
ii.
<PAGE> 122
<TABLE>
<CAPTION>
NAME OF NUMBER OF PRICE PER EXPIRATION
WARRANTHOLDER SHARES SHARE DATE
------------- --------- --------- ----------
<S> <C> <C> <C>
TRANS CAPITAL 226,284 $2.64 August 21, 2002
UNIVERSITY OF MICHIGAN GROWTH FUND 391 $2.64 August 21, 2002
TOTAL 835,352
</TABLE>
The Company has outstanding the following warrants to purchase Series DD
Preferred Stock:
<TABLE>
<CAPTION>
NAME OF NUMBER OF PRICE PER EXPIRATION
WARRANTHOLDER SHARES SHARE DATE
------------- --------- --------- ----------
<S> <C> <C> <C>
PHOENIX LEASING INCORPORATED 3,955 $5.50 January 25, 2009
TRANSAMERICA BUSINESS CREDIT 100,000 $5.50 July 8, 2006
CORPORATION
TOTAL 103,955
</TABLE>
The Company has outstanding the following debentures convertible into
shares of Series DD Preferred Stock:
<TABLE>
<CAPTION>
NAME OF DEBENTURE HOLDER PRINCIPAL AMOUNT
<S> <C>
BRENTWOOD ASSOCIATES VI, L.P. $99,995.50
CHANCELLOR LGT PRIVATE CAPITAL PARTNERS III, L.P. 95,540.50
CHANCELLOR LGT PRIVATE CAPITAL OFFSHORE PARTNERS I, C.V. 13,491.50
CHANCELLOR LGT PRIVATE CAPITAL OFFSHORE PARTNERS II, L.P. 172,111.50
CITIVENTURE 96 PARTNERSHIP FUND, L.P. 386,985.50
CHARTER GROWTH CAPITAL, L.P. 1,999,998.00
CHARTER GROWTH CAPITAL CO-INVESTMENT FUND, L.P. 7,875,004.50
CGC INVESTORS, L.P. 124,998.50
DIXON R. DOLL AND CAROL DOLL AS TRUSTEES UTA 51,870.50
9-10-92 OF THE DIXON AND CAROL DOLL FAMILY TRUST
DOLL FAMILY PARTNERSHIP 2,959.00
DMW INVESTORS '95 18,524.00
HALLADOR VENTURE FUND II, A CALIFORNIA LIMITED PARTNERSHIP 99,995.50
HMS GROUP 49,995.00
INTERNATIONAL SYNERGIES LTD. 7,403.00
</TABLE>
iii.
<PAGE> 123
<TABLE>
<S> <C>
J.F. SHEA CO., INC. 499,999.50
AS NOMINEE 1990-13
NAZEM & COMPANY IV, L.P. 1,123,320.00
OAK INVESTMENT PARTNERS VI, LIMITED PARTNERSHIP 1,249,996.00
TRANSATLANTIC VENTURE FUND 1,123,320.00
UNIVERSITY OF MICHIGAN 4,438.50
BUSINESS SCHOOL GROWTH FUND
TOTAL $14,999,946.50
</TABLE>
3.5 AGREEMENTS; ACTION.
(a) Certain directors, officers and employees of the Company have
purchased shares of the Company's Preferred Stock in connection
with equity financings of the Company.
(b) The Company has filed with the Securities and Exchange
Commission a Registration Statement on Form S-1, covering the
offer and sale of 5,462,500 shares of its Common Stock for a
proposed maximum aggregate offering price of $54,625,000.
Loan and Security Agreement, dated July 8, 1999, between the
Company and Transamerica Business Credit Corporation.
Senior Loan and Security Agreement No. L6216, dated January 25,
1999, between the Company and Phoenix Leasing Incorporated.
Master Equipment Lease Agreement, dated July 24, 1997, between
the Company and Lighthouse Capital Partners II, L.P.
Lease Line Schedule No. 1 to Master Equipment Lease Agreement
No. 171, dated July 24, 1997, between the Company and Lighthouse
Capital Partners II, L.P.
Side Letter Agreement No.1 to Lease Line Schedule No. 1 to
Master Equipment Lease Agreement No. 171, dated July 24, 1997,
between the Company and Lighthouse Capital Partners II, L.P.
Equipment Schedule No.2 to Lease Line Schedule No. 1 to Master
Equipment Lease Agreement No. 171, dated October 20, 1997,
between the Company and Lighthouse Capital Partners II, L.P.
Equipment Schedule No.3 to Lease Line Schedule No. 1 to Master
Equipment Lease Agreement No. 171, dated June 29, 1998, between
the Company and Lighthouse Capital Partners II, L.P.
iv.
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Equipment Schedule No.4 to Lease Line Schedule No. 1 to Master
Equipment Lease Agreement No. 171, dated October 30, 1998,
between the Company and Lighthouse Capital Partners II, L.P.
Master Lease Agreement, dated December 1, 1995, between the
Company and NEC America, Inc.
Volume Purchase Agreement, dated February 4, 1998, between the
Company and Clearnet, Inc.
Volume Purchase Agreement, Issue 01, dated October 16, 1998,
between the Company and Amica Wireless.
Volume Purchase Agreement, Issue 03, dated August 26, 1998,
between the Company and Alaska DigiTel, LLC.
Volume Purchase Agreement, dated May 7, 1999, between the
Company and Montana Wireless, Inc., DBA Blackfoot
Communications.
Assignment of Lease, dated March 1, 2000, between the Company
and The Gwydion Company, LLC.
Agreement, dated May 13, 1998, between the Company and US West
Wireless, LLC, as amended by Amendment No. Two to Agreement No.
98050992, dated March 31, 1999, between the Company and US West
Wireless, LLC.
Volume Purchase Agreement, Issue 02, dated August 11, 1998,
between the Company and Three Rivers PCS.
Volume Purchase Agreement, Issue 02, dated May 27, 1998, between
the Company and Virginia and West Virginia Alliance, Inc.
Master Purchase Agreement for Equipment, Software and Services,
dated August 29, 1999, between the Company and Sprint Spectrum
L.P.
General Purchase Agreement, dated January 12, 1999, between the
Company and PrimeCo Personal Communications, L.P.
Asset Purchase Agreement, dated November 4, 1999, among the
Company, The Gwydion Company, LLC, Harry Ayvazian and Gary
Grimes.
Manufacturing License Agreement, dated as of January 29, 1991,
between the Company and Sierra Digital.
Lease, dated August 7, 1992, between the Company and The Sobrato
1979 Trust, as amended by the First Amendment to Lease, dated
October 16, 1998, between the Company and Sobrato Interests II.
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Lease Financing Agreement, dated July 24, 1997, between the
Company and Lighthouse Capital Partners.
General Lease Agreement, dated as of October 1, 1996, between
the Company and AT&T Capital Corporation and schedules thereto.
Master Lease Agreement, dated as of October 30, 1995, between
the Company and Comdisco, Inc. and schedules thereto.
License Agreement, dated May 12, 1998, between the Company and
Matthew Fuerter.
Change of Control Agreement, dated November 3, 1999, between the
Company and Timothy Marcotte.
3.7 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC. Pursuant to the
Company's loan agreement with Transamerica Business Credit Corporation ("TBCC"),
all of the Company's properties and assets are subject to a general lien.
Pursuant to the Company's capital equipment leases, such leases are secured by a
lien on the leased assets.
3.8 PATENTS AND TRADEMARKS. The Company jointly owns certain receive
diversity inventions relating to CDMA repeater technology with an employee
pursuant to the License Agreement dated May 12, 1998, between the Company and
Matthew Fuerter.
3.9 COMPLIANCE WITH OTHER INSTRUMENTS.
In connection with the Company's acquisition of substantially all of the
assets and assumption of substantially all of the liabilities of The Gwydion
Company LLC, the Company is in breach of Sections 5.17 and 5.23 of that certain
Loan and Security Agreement, dated as of July 8, 1999, between the Company and
TBCC. By letter dated April 10, 2000, TBCC waived such breaches.
3.16 INSURANCE. The Company does not maintain sufficient insurance to
replace its leased facilities should they be destroyed.
vi.
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EXHIBIT H
FORM OF
AMENDED AND RESTATED MANAGEMENT RIGHTS AGREEMENT
This Agreement will confirm that REPEATER TECHNOLOGIES, INC. (the "Company")
agrees that CHARTER GROWTH CAPITAL, L.P., CHARTER GROWTH CAPITAL CO-INVESTMENT
FUND, L.P. and CGC INVESTORS, L.P. (collectively, the "Investors") shall have
the following rights as long as any amount remains outstanding under any of the
Company's Subordinated Unsecured Convertible Debentures dated November 25, 1998
or dated the Effective Date of this Agreement ("Debentures") held by any of the
Investors or any of the Investors are stockholders of the Company:
1. The Investors shall be entitled to consult with and advise management of the
Company on significant business issues, including management's proposed annual
operating plans, and management will meet with the Investors regularly during
each year at the Company's facilities at mutually agreeable times for such
consultation and advice and to review progress in achieving said plans;
2. The Investors may examine the books and records of the Company and inspect
its facilities, and will receive upon request information at reasonable times
and intervals concerning the general status of the Company's financial condition
and operations, provided that access to highly confidential proprietary
information and facilities need not be provided;
3. The Company shall invite one representative of the Investors to attend all
meetings of its Board of Directors (and all committees thereof) in a nonvoting
observer capacity and, in this respect, shall give such representative copies of
all notices, minutes, consents and other material that it provides to its
directors; provided, however, that the Company reserves the right to exclude
such representative from access to any material or meeting or portion thereof if
the Company believes upon advice of counsel that such exclusion is reasonably
necessary to preserve the attorney-client privilege, to protect highly
confidential proprietary information or for other similar reasons. Such
representative may participate in discussions of matters brought to the Board.
4. The Company shall provide the Investors and/or their representative with
unaudited quarterly financial statements as soon as practicable, but in no event
later than 30 days after the end of each fiscal quarter.
5. The Company shall reimburse the Investors and/or their representative for all
reasonable costs and expenses incurred by them in connection with the exercise
of their rights under this Agreement.
The occurrence and continuation of the Company's breach of any of the above
obligations shall constitute an "Event of Default" under the Debentures, in
accordance with their terms, and make available to the Investors the rights and
remedies set forth in the Debentures. For all purposes, including without
limitation, of determining whether a breach of the above obligations has
i.
<PAGE> 127
occurred and is continuing, this Agreement shall be deemed to be a "Transaction
Document" under the terms of the Debentures.
The aforementioned rights are intended to satisfy the requirement of management
rights for purposes of qualifying each Investor's investment in the Company as a
"venture capital investment" for purposes of the Department of Labor "plan
asset" regulations, 29 C.F.R. Section 2510.3-101, and in the event the
aforementioned rights are not satisfactory for such purpose, the Company and the
Investors shall reasonably cooperate in good faith to agree upon mutually
satisfactory management rights that satisfy such regulations.
The Investors agree, and any representative of the Investors will agree, to hold
in confidence and trust and not use or disclose any confidential information
provided to or learned by them in connection with their rights under this
Agreement.
The rights described herein shall terminate and be of no further force or effect
upon the consummation of a firmly underwritten public offering on Form S-1 or
SB-2 of the Company's Common Stock, provided that the offering price to the
public is at least $6.50 per share (after adjustments for any stock splits,
stock dividends, stock combinations or other recapitalizations).
This Agreement amends and restates the Management Rights Agreement dated
November 25, 1998 between the Company and the Investors in its entirety and such
agreement is superceded hereby.
[the remainder of this page is intentionally blank]
ii.
<PAGE> 128
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original, and such counterparts, together, shall constitute
but one and the same instrument.
Agreed and accepted this ______ day of _______________, 2000 (the "Effective
Date").
REPEATER TECHNOLOGIES, INC. CHARTER GROWTH CAPITAL, L.P.
By:________________________ By:________________________
Name:______________________ Name:______________________
Title:_____________________ Title:_____________________
CHARTER GROWTH CAPITAL
CO-INVESTMENT FUND, L.P.
By:________________________
Name:______________________
Title:_____________________
CGC INVESTORS, L.P.
By:________________________
Name:______________________
Title:_____________________
iii.
