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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 28, 2000
TELEVIDEO, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-11552 94-2383795
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
2345 Harris Way, San Jose, California 95131
(Address of principal executive offices, including Zip Code)
(408) 954-8333
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
INVESTMENT IN MULIX, INC.
On February 28, 2000, TeleVideo, Inc. (the "Company") purchased an
aggregate of 14,269,230 shares of unregistered Series A Convertible
Preferred Stock of Mulix, Inc., a Delaware corporation. The Company's
investment in Mulix represents a 35% interest in this privately-held
corporation. The cash investment will be accounted for on the equity method
of accounting. The purchase price and other terms of the investment were
arrived at by negotiation between the Company and Mulix, with the per share
price determined by the Mulix Board of Directors in good faith based on
financial and business information and other relevant factors currently known
to and considered by the Mulix board members. The purchase price was paid for
out of the Company's working capital.
Each share of Series A Preferred Stock is convertible into one share of
Mulix Common Stock, at the option of the Company. The Series A Preferred
Stock is automatically convertible into Common Stock under certain
circumstances, including a firm commitment underwritten public offering of
Mulix Common Stock with proceeds, net of underwriter's fees, of not less than
$15,000,000. Prior to conversion, the Series A Preferred Stock is entitled to
one vote per share. In connection with the investment, the Company entered
into a Voting Agreement with the founders of Mulix regarding board size and
membership. Dr. K. Philip Hwang, the Company's Chairman and Chief Executive
Officer, has accepted an appointment to the Mulix Board of Directors, in
accordance with the Voting Agreement. The three founders of Mulix constitute
the remainder of the board.
The Company has the right of first offer on future sales of Mulix equity
securities, subject to certain exceptions such as issuances of stock or
options under employee option plans.
Mulix, Inc. is an Internet e-commerce company that has developed
proprietary technology, which, when operational, will enable its community of
consumers to engage in transactions across product lines through the use of a
flexible item-matching algorithm that facilitates multi-link and multi-loop
exchanges of goods. The Mulix web site is not yet live on the Internet. but
Mulix has advised the Company that it is currently estimating its web site
will be in operation in the second quarter of 2000.
MYSIMON, INC. ACQUISITION BY CNET, INC.
In September 1998, the Company invested in the online comparison
shopping Internet company, mySimon, Inc., receiving convertible preferred
stock. This investment represented an ownership interest of between 3% and 4%
of mySimon, Inc.
On February 29, 2000, CNET Networks, Inc. (formerly, CNET, Inc.)
completed the acquisition of mySimon, Inc. As a result of this acquisition,
the Company is expecting to be issued a total of approximately 375,000 shares
of common stock of CNET in exchange for 100%
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of its interest in mySimon. The Company is currently restricted from selling
any of its interest in CNET until at least three days after the release of
earnings for CNET for the quarter ended March 31, 2000.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The following exhibits are filed as part of this Current Report on Form
8-K:
10.1 Series A Preferred Stock Purchase Agreement, dated as of February
4, 2000 by and among Mulix, Inc. and TeleVideo, Inc.
10.2 Voting Agreement, dated as of February 4, 2000, by and among
TeleVideo, Inc. and the founders of Mulix, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: March 14, 2000
TELEVIDEO, INC.
By: /s/ James D. Wheat
--------------------------------
James D. Wheat
VICE PRESIDENT OF FINANCE AND
CHIEF FINANCIAL OFFICER
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
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<S> <C>
10.1 Series A Preferred Stock Purchase Agreement, dated as of February
4, 2000 by and among Mulix, Inc. and TeleVideo, Inc.
10.2 Voting Agreement, dated as of February 4, 2000, by and among
TeleVideo, Inc. and the founders of Mulix, Inc.
</TABLE>
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MULIX, INC.
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
-----------------------
FEBRUARY 4, 2000
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<TABLE>
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TABLE OF CONTENTS
PAGE
<S> <C> <C>
1. PURCHASE AND SALE OF STOCK........................................... 1
1.1 Sale and Issuance of Series A Preferred Stock.................. 1
1.2 Closing........................................................ 1
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................ 1
2.1 Organization, Good Standing and Qualification.................. 1
2.2 Capitalization and Voting Rights............................... 1
2.3 Subsidiaries................................................... 2
2.4 Authorization.................................................. 2
2.5 Valid Issuance of Preferred and Common Stock................... 2
2.6 Governmental Consents.......................................... 3
2.7 Offering....................................................... 3
2.8 Litigation..................................................... 3
2.9 Patents and Trademarks......................................... 3
2.10 Compliance with other Instruments.............................. 3
2.11 Related-Party Transactions..................................... 4
2.12 Business Plan.................................................. 4
2.13 Title to Property and Assets................................... 4
2.14 Finder's Fee................................................... 4
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS...................... 4
3.1 Authorization.................................................. 4
3.2 Purchase Entirely for own Account.............................. 4
3.3 Disclosure of Information...................................... 5
3.4 Investment Experience.......................................... 5
3.5 Accredited Investor............................................ 5
3.6 Restricted Securities.......................................... 5
3.7 Further Limitations on Disposition............................. 5
3.8 Legends........................................................ 6
3.9 Further Representations by Foreign Investors................... 6
4. CALIFORNIA COMMISSIONER OF CORPORATIONS.............................. 6
4.1 Corporate Securities Law....................................... 6
5. CONDITIONS OF INVESTOR'S OBLIGATIONS AT CLOSING...................... 6
5.1 Representations and Warranties................................. 6
5.2 Performance.................................................... 6
5.3 Qualifications ................................................ 7
5.4 Proceedings and Documents ..................................... 7
5.5 Board of Directors............................................. 7
5.6 Voting Agreement............................................... 7
6. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING................... 7
6.1 Representations and Warranties................................. 7
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6.2 Payment of Purchase Price ..................................... 7
6.3 Qualifications................................................. 7
7. RIGHT OF FIRST OFFER................................................. 7
8. MISCELLANEOUS........................................................ 8
8.1 Survival of Warranties......................................... 8
8.2 Successors and Assigns......................................... 8
8.3 Governing Law.................................................. 8
8.4 Counterparts................................................... 8
8.5 Titles and Subtitles........................................... 9
8.6 Notices........................................................ 9
8.7 Amendments and waivers......................................... 9
8.8 Severability................................................... 9
8.9 Entire Agreement............................................... 9
SCHEDULE A - Schedule of Investors......................................... 11
EXHIBIT A - List of Stockholders......................................... 12
</TABLE>
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STOCK PURCHASE AGREEMENT
---------------------------------------------
THIS STOCK PURCHASE AGREEMENT is made as of February 4, 2000, by and
among Mulix, Inc. a Delaware corporation (the "Company"), and the investors
listed on Schedule A hereto, each of which is herein referred to as an
"Investor."
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF STOCK.
1.1 SALE AND ISSUANCE OF SERIES A PREFERRED STOCK.
(a) The Company shall adopt and file with the Secretary of
State of Delaware on or before the Closing (as defined below) the Amended and
Restated Certificate of Incorporation in the form attached hereto as EXHIBIT
A (the "Restated Certificate").
(b) Subject to the terms and conditions of this Agreement,
each Investor agrees, severally, to purchase at the Closing and the Company
agrees to sell and issue to each Investor at the Closing, that number of
shares of the Company's Series A Preferred Stock set forth opposite each
Investor's name on SCHEDULE A hereto for the purchase price set forth thereon.
1.2 CLOSING. The purchase and sale of the Series A Preferred Stock
shall take place at the offices of Morrison & Foerster LLP, Palo Alto,
California, at 9:00 a.m., on February 4, 2000, or at such other time and
place as the Company and Investors acquiring in the aggregate more than half
the shares of Series A Preferred Stock sold pursuant hereto mutually agree
upon orally or in writing (which time and place are designed as the
"Closing"). At the Closing the Company shall deliver to each Investor a
certificate representing the Series A Preferred Stock that such Investor is
purchasing against payment of the purchase price therefor by check, wire
transfer, cancellation of indebtedness, or any combination thereof.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to each Investor that, except as set forth on a
Schedule of Exceptions (the "Schedule of Exceptions") furnished each
Investor, specifically identifying the relevant subparagraph hereof, which
exceptions shall be deemed to be representations and warranties as if made
hereunder:
2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to carry on its business as now conducted and as proposed to be
conducted in its Business Plan dated January 14, 2000, heretofore furnished
to the Investors ("Business Plan"). The Company is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure to
so quality would have a material adverse effect on its business or properties.
2.2 CAPITALIZATION AND VOTING RIGHTS. The authorized capital of
the Company consists, or will consist immediately prior to the Closing, of:
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(i) PREFERRED STOCK. 14,300,000 shares of Preferred Stock
(the "Preferred Stock"), all of which shares have been designated Series A
Preferred Stock (the "Series A Preferred Stock") and up to all of which will
be sold pursuant to this Agreement. The rights, privileges and preferences of
the Series A Preferred Stock will be as stated in the Company's Restated
Certificate.
(ii) COMMON STOCK. 85,700,000 shares of common stock
("Common Stock"), of which 24,999,998 shares are issued and outstanding. The
outstanding shares of Common Stock are owned by the stockholders and in the
numbers specified in EXHIBIT B hereto.
(iii) The outstanding shares of Common Stock are all duly and
validly authorized and issued, fully paid and nonassessable, and were issued
in accordance with the registration or qualification provisions of the
Securities Act of 1933, as amended (the "Act") and any relevant state
securities laws or pursuant to valid exemptions therefrom.
(iv) Except for (A) the conversion privileges of the Series
A Preferred Stock to be issued under this Agreement, and (B) currently
outstanding options to purchase 500,000 shares of Common Stock granted to
employees pursuant to the Company's 1999 Stock Option Plan (the "Option
Plan"), there are not outstanding any options, warrants, rights (including
conversion or preemptive rights) or agreements for the purchase or
acquisition from the Company of any shares of its capital stock. In addition
to the aforementioned options, the Company has reserved an additional
1,000,000 shares of its Common Stock for purchase upon exercise of options to
be granted in the future under the Option Plan. The Company is not a party or
subject to any agreement or understanding, and, to the best of the Company's
knowledge, there is no agreement or understanding between any persons and/or
entities, which affects or relates to the voting or giving of written
consents with respect to any security or by a director of the Company.
2.3 SUBSIDIARIES. The Company does not presently own or control,
directly or indirectly, any interest in any other corporation, association or
other business entity. The Company is not a participant in any joint venture,
partnership or similar arrangement.
2.4 AUTHORIZATION. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement and the Voting
Agreement attached hereto as EXHIBIT C (the "Voting Agreement"), the
performance of all obligations of the Company hereunder and thereunder and
the authorization, issuance (or reservation for issuance), sale and delivery
of the Series A Preferred Stock being sold hereunder and the Common Stock
issuable upon conversion of the Series A Preferred Stock has been taken or
will be taken prior to the Closing, and this Agreement and the Voting
Agreement constitute valid and legally binding obligations of the Company,
enforceable in accordance with their respective terms, except (i) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium, and other
laws of general application affecting enforcement of creditors' rights
generally, and (ii) as limited by laws relating to the availability of
specific performance, injunctive relief, or other equitable remedies.
2.5 VALID ISSUANCE OF PREFERRED AND COMMON STOCK. The Series A
Preferred Stock that is being purchased by the Investors hereunder, when
issued, sold and delivered in accordance with the terms of this Agreement for
the consideration expressed herein, will be duly and validly issued, fully
paid, and nonassessable, and will be free of restrictions on transfer other
than restrictions on transfer under this Agreement and under applicable state
and federal securities laws. The Common Stock issuable upon conversion of the
Series A Preferred
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Stock purchased under this Agreement has been duly and validly reserved for
issuance and, upon issuance in accordance with the terms of the Restated
Certificate, will be duly and validly issued, fully paid, and nonassessable
and will be free of restrictions on transfer other than restrictions on
transfer under this Agreement and under applicable state and federal
securities laws.
2.6 GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part
of the Company is required in connection with the consummation of the
transactions contemplated by this Agreement, except for the filing pursuant
to Section 25102(f) of the California Corporate Securities Law of 1968, as
amended, and the rules thereunder, which filing will be effected within 15
days of the sale of the Series A Preferred Stock hereunder.
2.7 OFFERING. Subject in part to the truth and accuracy of each
Investor's representations set forth in Section 3 of this Agreement, the
offer, sale and issuance of the Series A Preferred Stock as contemplated by
this Agreement are exempt from the registration requirements of the Act, and
neither the Company nor any authorized agent acting on its behalf will take
any action hereafter that would cause the loss of such exemption.
2.8 LITIGATION. There is no action, suit, proceeding or
investigation pending or currently threatened against the Company that
questions the validity of this Agreement, the Voting Agreement, or the right
of the Company to enter into such agreements, or to consummate the
transactions contemplated hereby or thereby, or that might result, either
individually or in the aggregate, in any material adverse changes in the
assets, condition, affairs or prospects of the Company, financially or
otherwise, or any change in the current equity ownership of the Company, nor
is the Company aware that there is any basis for the foregoing. 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 that the Company intends to initiate.
2.9 PATENTS AND TRADEMARKS. The Company has sufficient title and
ownership of all patents, trademarks, service marks, trade names, copyrights,
trade secrets, information, proprietary rights and processes necessary for
its business as now conducted and as proposed to be conducted as described in
the Business Plan 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,
information, proprietary rights and processes of any other person or entity.
2.10 COMPLIANCE WITH OTHER INSTRUMENTS. To the Company's knowledge,
the Company is not in violation or default of any provision of its Restated
Certificate or Bylaws, or of any instrument, judgment, order, writ, decree or
contract to which it is a party or by which it is bound, or, to the best of
its knowledge, or any provision of any federal or state statute, rule or
regulation applicable to the Company. The execution, delivery and performance
of this Agreement and the Voting Agreement, and the consummation of the
transactions contemplated hereby and thereby will not result in any such
violation or be in conflict with or constitute, with or without the passage
of time and giving of notice, either a default under any such provision,
instrument, judgment, order, writ, decree or contract or an event that
results in the creation of any lien, charge or encumbrance upon any assets of
the Company or the suspension, revocation, impairment, forfeiture, or
non-renewal of any material permit, license, authorization, or approval
applicable to the Company, its business or operations or any of its assets or
properties.
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2.11 RELATED-PARTY TRANSACTIONS. No employee, officer, or director
of the Company or member of his or her immediate family is indebted to the
Company, nor is the company indebted (or committed to make loans or extend or
guarantee credit) to any of them. To the best of the Company's knowledge,
none of such persons has any direct or indirect ownership interest in any
firm or corporation with which the Company is affiliated or with which the
Company has a business relationship, or any firm or corporation that competes
with the Company, except that employees, officers, or directors of the
Company and members of their immediate families may own stock in publicly
traded companies that may compete with the Company. No member of the
immediate family of any officer or director of the Company is directly or
indirectly interested in any material contract with the Company.
2.12 BUSINESS PLAN. The Business Plan dated January 14, 2000,
previously delivered to each Investor has been prepared in good faith by the
Company and does no contain any untrue statement of a material fact nor does
it omit to state a material fact necessary to make the statements made
therein not misleading, except that with respect to projections contained in
the Business Plan, the Company represents only that such projections were
prepared in good faith and that the Company reasonably believes there is a
reasonable basis for such projections.
2.13 TITLE TO PROPERTY AND ASSETS. The Company owns its property
and assets free and clear of all mortgages, liens, loans and encumbrances,
except such encumbrances and liens that arise in the ordinary course of
business and do not materially impair the Company's ownership or use of such
property or assets. With respect to the property and assets it leases, the
Company is in compliance with such leases and, to the best of its knowledge,
holds a valid leasehold interest free of any liens, claims or encumbrances.
2.14 FINDER'S FEE. The Company represents that it neither is nor
will be obligated for any finders' fee or commission in connection with this
transaction. The Company agrees to indemnify and hold harmless each Investor
from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and expenses of defending against such liability
or asserted liability) for which the Company or any of its officers,
employees or representatives is responsible.
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. Each Investor
hereby represents and warrants that:
3.1 AUTHORIZATION. Such Investor has full power and authority to
enter into this Agreement and the Voting Agreement, and each such agreement
constitutes its valid and legally binding obligation, enforceable in
accordance with its terms.
3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made with
such Investor in reliance upon such Investor's representation to the Company,
which by such Investor's execution of this Agreement such Investor hereby
confirms, that the Series A Preferred Stock to be received by such Investor
and the Common Stock issuable upon conversion thereof (collectively, the
"Securities") will be acquired for investment for such Investor's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that such Investor has no present
intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, such Investor further
represents that such Investor does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of
the Securities.
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3.3 DISCLOSURE OF INFORMATION. Such Investor believes it has
received all the information it considers necessary or appropriate for
deciding whether to purchase the Series A Preferred Stock. Such Investor
further represents that it has had an opportunity to ask questions and
receive answers from the Company regarding the terms and conditions of the
offering of the Series A Preferred Stock and the business, properties,
prospects and financial condition of the Company. The foregoing, however,
does not limit or modify the representations and warranties of the Company in
Section 2 of this Agreement or the right of the Investors to rely thereon.
3.4 INVESTMENT EXPERIENCE. Such Investor is an investor in
securities of companies in the development stage and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment, and
has such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Series A
Preferred Stock. If other than an individual, Investor also represents it has
not been organized for the purpose of acquiring the Series A Preferred Stock.
3.5 ACCREDITED INVESTOR. Such Investor is an "accredited investor"
within the meaning of Securities and Exchange Commission ("SEC") Rule 501 of
Regulation D, as presently in effect.
3.6 RESTRICTED SECURITIES. Such Investor understands that the
Securities it is purchasing are characterized as "restricted securities"
under the federal securities laws inasmuch as they are being acquired from
the Company in a transaction not involving a public offering and that under
such laws and applicable regulations such securities may be resold without
registration under the Act, only in certain limited circumstances. In this
connection, such Investor represents that it is familiar with SEC Rule 144,
as presently in effect, and understands the resale limitations imposed hereby
and by the Act.
3.7 FURTHER LIMITATIONS ON DISPOSITION. Without in any way
limiting the representations set forth above, such Investor further agrees
not to make any disposition of all or any portion of the Securities unless
and until the transferee has agreed in writing for the benefit of the Company
to be bound by this Section 3, and:
(a) There is then in effect a registration
statement under the Act covering such proposed disposition and such disposition
is made in accordance with such registration statement; or
(b) (i) Such Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii)
if reasonably requested by the Company, such Investor shall have furnished
the Company with an opinion of counsel, reasonably satisfactory to the
Company that such disposition will not require registration of such shares
under the Act. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.
(c) Notwithstanding the provisions of paragraphs (a) and (b)
above, no such registration statement or opinion of counsel shall be
necessary for a transfer by an Investor that is a partnership or a limited
liability company to a partner of such partnership or a retired partner of
such partnership who retires after the date hereof or a member of such
limited liability company or a retired member of such limited liability
company who retires after the date hereof, or to the estate of any such
partner, retired partner, member or retired member or the transfer by gift,
will or intestate succession of any partner or member to his or her spouse or
to the siblings, lineal descendants or ancestors of such partner or member or
his or her spouse, if the transferee agrees in writing to be subject to the
terms hereof to the same extent as if he or she were an original Investor
hereunder.
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3.8 LEGENDS. It is understood that the certificates evidencing the
Securities may bear one or all of the following legends:
(a) "These securities have not been registered under the
Securities Act of 1933, as amended. They may not be sold, offered for sale,
pledged or hypothecated in the absence of a registration statement in effect
with respect to the securities under such Act or an opinion of counsel
satisfactory to the Company that such registration is not required or unless
sold pursuant to Rule 144 of such Act."
(b) Any legend required by any applicable state securities
laws.
3.9 FURTHER REPRESENTATIONS BY FOREIGN INVESTORS. If an Investor
is not a United States person, such Investor hereby represents that he or she
has satisfied himself or herself as to the full observance of the laws of his
or her jurisdiction in connection with any invitation to subscribe for the
Securities or any use of this Agreement, including (i) the legal requirements
within his jurisdiction for the purchase of the Securities, (ii) any foreign
exchange restrictions applicable to such purchase, (iii) any governmental or
other consents that may need to be obtained, and (iv) the income tax and
other tax consequences, if any, that may be relevant to the purchase,
holding, redemption, sale, or transfer of the Securities. Such Investor's
subscription and payment for, and his or her continued beneficial ownership
of the Securities, will not violate any applicable securities or other laws
of his or her jurisdiction.
4. CALIFORNIA COMMISSIONER OF CORPORATIONS.
4.1 CORPORATE SECURITIES LAW. THE SALE OF THE SECURITIES THAT ARE
THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES
OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH
SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF
SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF
THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE
SALE IS SO EXEMPT.
5. CONDITIONS OF INVESTOR'S OBLIGATIONS AT CLOSING. The obligations of
each Investor under subsection 1.1(b) of this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions, the
waiver of which shall not be effective against any Investor who does not
consent in writing thereto:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 2 shall be true on and as of
the Closing with the same effect as though such representations and
warranties had been made on and as of the date of such Closing.
5.2 PERFORMANCE. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement
that are required to be performed or complied with by it on or before the
Closing.
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5.3 QUALIFICATIONS. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and
sale of the Securities pursuant to this Agreement shall be duly obtained and
effective as of the Closing.
5.4 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings
in connection with the transactions contemplated at the Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to Investors' special counsel, and they shall have received all
such counterpart original and certified or other copies of such documents as
they may reasonably request.
5.5 BOARD OF DIRECTORS. The directors of the Company shall be
Messrs. David Kim, Kwangjae Sung, Yoon Kim and Dr. Philip Hwang.
5.6 VOTING AGREEMENT. The Company and each Investor shall have
entered into the Voting Agreement in the form attached as EXHIBIT C.
6. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations
of the Company to each Investor under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions by
that Investor:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Investor contained in Section 3 shall be true on and as of
the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing.
6.2 PAYMENT OF PURCHASE PRICE. The Investor shall have delivered
the purchase price specified in Section 1.1.
6.3 QUALIFICATIONS. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and
sale of the Securities pursuant to this Agreement shall be duly obtained and
effective as of the Closing.
7. RIGHT OF FIRST OFFER. Subject to the terms and conditions specified
in this Section 7, the Company hereby grants to each Investor a right of
first offer with respect to future sales by the Company of its Shares (as
hereinafter defined). For purposes of this Section 7, Investor includes any
general partners, members and affiliates of an Investor. An Investor shall be
entitled to apportion the right of first offer hereby granted it among itself
and its partners, members and affiliates in such proportions as it deems
appropriate.
Each time the Company proposes to offer any shares of, or securities
convertible into or exercisable for any shares of, any class of its capital
stock ("Shares"), the Company shall first make an offering of such Shares to
each Investor in accordance with the following provisions:
(a) The Company shall deliver a notice by certified mail ("Notice")
to the Investors stating (i) its bona fide intention to offer such shares,
(ii) the number of such Shares to be offered, and (iii) the price and terms,
if any, upon which it proposes to offer such Shares.
(b) Within 20 calendar days after receipt of the Notice, the
Investor may elect to purchase or obtain, at the price and on the terms
specified in the Notice, up to that portion of such Shares which equals the
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<PAGE>
proportion that the number of shares of Common Stock issued and held, or
issuable upon conversion of the Series A Preferred Stock then held, by such
Investor bears to the total number of shares of Common Stock of the Company
then outstanding (assuming full conversion and exercise of all convertible
and exercisable securities).
(c) If all Shares referred to in the Notice which Investors are
entitled to obtain pursuant to Section 7(b) are not elected to be obtained as
provided in Section 7(b) hereof, the Company may, during the 60-day period
following the expiration of the period provided in Section 7(b) hereof, offer
the remaining unsubscribed portion of such Shares to any person or persons at
a price not less than, and upon terms no more favorable to the offeree than
those specified in the Notice. If the Company does not enter into an
agreement for the sale of the Shares within such period, or if such agreement
is not consummated within 60 days of the execution thereof, the right
provided hereunder shall be deemed to be revived and such Shares shall not be
offered unless first re-offered to the Investors in accordance herewith.
(d) The right of first offer in this Section 7 shall not be
applicable (i) to the issuance or sale of shares of Common Stock (or options
therefor) to employees for the primary purpose of soliciting or retaining
their employment, (ii) the issuance of securities pursuant to the conversion
or exercise of convertible or exercisable securities, (iii) the issuance of
securities in connection with a bona fide business acquisition of or by the
Company, whether by merger, consolidation, sale of assets, sale or exchange
of stock or otherwise, or (iv) the issuance of stock, warrants or other
securities or rights to persons or entities with which the Company has
business relationships provided such issuances are for other than primarily
equity financing purposes.
(e) The right of first refusal set forth in this Section 7 may not
be assigned or transferred, except that (i) such right is assignable by each
Investor to any wholly owned subsidiary or parent of, or to any corporation
or entity that is, within the meaning of the Act, controlling, controlled by
or under common control with, any such Investor, and (ii) such right is
assignable between and among any of the Investors.
8. MISCELLANEOUS.
8.1 SURVIVAL OF WARRANTIES. The warranties, representations and
covenants of the Company and Investors contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Investors or the Company.
8.2 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and
be binding upon the respective successors and assigns of the parties
(including transferees of any Securities). Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
8.3 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.
8.4 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8
<PAGE>
8.5 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
8.6 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof, or at such other
address as such party may designate by ten (10) days' advance written notice
to the other parties.
8.7 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders
of a majority of the Common Stock issued or issuable upon conversion of the
Series A Preferred Stock. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each holder of any securities purchased
under this Agreement at the time outstanding (including securities into which
such securities are convertible), each future holder of all such securities,
and the Company.
8.8 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
8.9 ENTIRE AGREEMENT. This Agreement and the documents referred to
herein constitute the entire agreement among the parties and no party shall
be liable or bound to any other party in any manner by any warranties,
representations, or covenants except as specifically set forth herein or
therein.
* * *
9
<PAGE>
Mulix Inc. Series A Stock Purchase Agreement
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
MULIX, INC.
By: /s/ David Kim
---------------------------------------
David Kim, CHIEF EXECUTIVE OFFICER
Address: 2727 Walsh Avenue, Suite 206
-----------------------------------
Santa Clara, CA 95051
-----------------------------------
INVESTOR:
TELEVIDEO, INC.
/s/ K. Philip Hwang
-----------------------------------
Name: Dr. Philip Hwang, Chairman and CEO
Address: 2345 Harris Way
-----------------------------------
San Jose, CA 95131
-----------------------------------
10
<PAGE>
SCHEDULE A
Schedule of Investors
<TABLE>
<CAPTION>
INVESTORS SHARES PURCHASED PURCHASE PRICE
<S> <C> <C>
TeleVideo, Inc. 14,269,230 $1,000,000.00
</TABLE>
11
<PAGE>
EXHIBIT A
LIST OF STOCKHOLDERS
<TABLE>
<S> <C>
David D. Kim 5,500,000
Yoon W. Kim 5,500,000
Kwangjae Sung 11,000,000
Innopia, Inc. 3,000,000
</TABLE>
12
<PAGE>
VOTING AGREEMENT
THIS VOTING AGREEMENT (the "Agreement") is made and entered into as
of February 4, 2000, by and among Mulix, Inc., a Delaware corporation (the
"Company"), the holders of the Company's Series A Preferred Stock, (the
"Preferred Stock") listed on the Schedule of Investors attached as SCHEDULE A
hereto (the "Investors"), and the holders of Common Stock of the Company (the
"Founders") listed on the Schedule of Founders attached as SCHEDULE B hereto.
The Company, the Founders and the Investors are individually each referred to
herein as a "Party" and are collectively referred to herein as the "Parties."
The Company's Board of Directors is referred to herein as the "Board."
WITNESSETH:
WHEREAS, the Company and the Investors have entered into that
certain Series A Preferred Stock Purchase Agreement of even date herewith
(the "Purchase Agreement"), which provides for, among other things, the
purchase by such Investors of shares of the Company's Series A Preferred
Stock (the "Series A Preferred Stock"), and which further provides that as a
condition to the closing of the sale of shares of Series A Preferred Stock,
this Agreement must be executed and delivered by such Investors, the Founders
and the Company;
WHEREAS, TeleVideo, Inc. is one of the Investors; and
WHEREAS, the Company, the Founders and the Investors desire to grant
the rights created herein.
NOW, THEREFORE, in consideration of the foregoing premises and
certain other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:
1. AGREEMENT TO VOTE. Each Investor, as a holder of Preferred
Stock, hereby agrees on behalf of itself and any transferee or assignee of
any such shares of the Preferred Stock, to hold all of the shares of
Preferred Stock registered in its name (and any securities of the Company
issued with respect to, upon conversion of, or in exchange or substitution of
the Preferred Stock, and any other voting securities of the Company
subsequently acquired by such Investor) (hereinafter collectively referred to
as the "Investor Shares") subject to, and to vote the Investor Shares at a
regular or special meeting of stockholders (or by written consent) in
accordance with, the provisions of this Agreement. Each Founder, as a holder
of Common Stock of the Company, hereby agrees on behalf of itself and any
transferee or assignee of any such shares of Common Stock, to hold all of
such shares of Common Stock and any other voting securities of the Company
acquired by such Founder in the future (and any securities of the Company
issued with respect to, upon conversion of, or in exchange or substitution
for such securities) (the "Founder Shares") subject to, and to vote the
Founder Shares at a regular or special meeting of stockholders (or by written
consent) in accordance with, the provisions of this Agreement.
2. BOARD SIZE. The holders of Investor Shares and Founder
Shares shall vote at a regular or special meeting of stockholders (or
1
<PAGE>
by written consent) such shares that they own (or as to which they have
voting power) to ensure that the size of the Board shall be set and remain at
four (4) directors; provided, however, that such Board size may be
subsequently increased or decreased pursuant to an amendment of this
Agreement in accordance with Section 15 hereof.
3. ELECTION OF DIRECTORS. In any election of directors of the
Company, the Parties shall each vote at any regular or special meeting of
stockholders (or by written consent) such number of shares of voting capital
stock then owned by them (or as to which they then have voting power) as may
be necessary to elect the following individuals to the Board:
(a) the Founders; and
(b) TeleVideo, Inc.
4. REMOVAL. Any director of the Company may be removed from
the Board in the manner allowed by law and the Company's Amended and Restated
Certificate of Incorporation and Bylaws, but with respect to a director
designated pursuant to Sections 3(a) and (b) above, only upon the vote or
written consent of the stockholders entitled to designate such director.
5. LEGEND ON SHARE CERTIFICATES. Each certificate representing
any Investor Shares or Founder Shares shall be endorsed by the Company with a
legend reading substantially as follows:
"The Shares evidenced hereby are subject to a Voting Agreement (a
copy of which may be obtained upon written request from the issuer),
and by accepting any interest in such shares the person accepting
such interest shall be deemed to agree to and shall become bound by
all the provisions of said Voting Agreement."
6. COVENANTS OF THE COMPANY. The Company agrees to use its
best efforts to ensure that the rights granted hereunder are effective and
that the Parties hereto enjoy the benefits thereof. Such actions include,
without limitation, the use of the Company's best efforts to cause the
nomination and election of the directors as provided above. The Company will
not, by any voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be performed hereunder by the Company, but
will at all times in good faith assist in the carrying out of all of the
provisions of this Agreement and in the taking of all such actions as may be
necessary, appropriate or reasonably requested by the holders of a majority
of the outstanding voting securities held by the Parties hereto assuming
conversion of all outstanding securities in order to protect the rights of
the Parties hereunder against impairment.
7. NO LIABILITY FOR ELECTION OF RECOMMENDED DIRECTORS. Neither
the Company, the Founders, the Investors, nor any officer, director,
stockholder, partner, employee or agent of such Party, makes any
representation or warranty as to the fitness or competence of the nominee of
any Party hereunder to serve on the Company's Board by virtue of such Party's
execution of this Agreement or by the act of such Party in voting for such
nominee pursuant to this Agreement.
8. GRANT OF PROXY. Should the provisions of this Agreement be
construed to constitute the granting of proxies, such proxies shall be deemed
coupled with an interest and are irrevocable for the term of this Agreement.
2
<PAGE>
9. SPECIFIC ENFORCEMENT. It is agreed and understood that
monetary damages would not adequately compensate an injured Party for the
breach of this Agreement by any Party, that this Agreement shall be
specifically enforceable, and that any breach or threatened breach of this
Agreement shall be the proper subject of a temporary or permanent injunction
or restraining order. Further, each Party hereto waives any claim or defense
that there is an adequate remedy at law for such breach or threatened breach.
10. EXECUTION BY THE COMPANY. The Company, by its execution in
the space provided below, agrees that it will cause the certificates
evidencing the shares of Common Stock and Preferred Stock to bear the legend
required by Section 5 herein, and it shall supply, free of charge, a copy of
this Agreement to any holder of a certificate evidencing shares of capital
stock of the Company upon written request from such holder to the Company at
its principal office. The parties hereto do hereby agree that the failure to
cause the certificates evidencing the shares of Common Stock and Preferred
Stock to bear the legend required by Section 5 herein and/or failure of the
Company to supply, free of charge, a copy of this Agreement as provided under
this Section 10 shall not affect the validity or enforcement of this
Agreement.
11. CAPTIONS. The captions, headings and arrangements used in
this Agreement are for convenience only and do not in any way limit or
amplify the terms and provisions hereof.
12. NOTICES. Any notice required or permitted by this Agreement
shall be in writing and shall be sent prepaid registered or certified mail,
return receipt requested, addressed to the other Party at the address shown
below or at such other address for which such Party gives notice hereunder.
Such notice shall be deemed to have been given three (3) days after deposit
in the mail.
13. TERM. This Agreement shall terminate and be of no further
force or effect upon the earlier of (a) the consummation of the Company's
sale of its Common Stock or other securities pursuant to a registration
statement under the Securities Act of 1933, as amended, (other than a
registration statement relating either to the sale of securities to employees
of the Company pursuant to its stock option, stock purchase or similar plan
or a SEC Rule 145 transaction), (b) the acquisition of the Company by another
entity by means of any transaction or series of related transactions
(including, without limitation, any reorganization, merger or consolidation)
that results in the transfer of fifty percent (50%) or more of the
outstanding voting power of the Company or a sale of all or substantially all
of the assets of the Company, or (c) February __, 2010.
14. MANNER OF VOTING. The voting of shares pursuant to this
Agreement may be effected in person, by proxy, by written consent, or in any
other manner permitted by applicable law.
15. AMENDMENTS AND WAIVERS. Any term hereof may be amended and
the observance of any term hereof may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of (i) the Company, (ii) the holders of a majority of the
then-outstanding Investor Shares, and (iii) the holders of a majority of the
then-outstanding Founder Shares. Any amendment or waiver so effected shall be
binding upon all of the Parties hereto and their successors, assigns and
transfers.
3
<PAGE>
16. STOCK SPLITS, STOCK DIVIDENDS, ETC. In the event of any
issuance of shares of the Company's voting securities hereafter to any of the
Parties hereto (including, without limitation, in connection with any stock
split, stock dividend, recapitalization, capital reorganization or the like),
such shares shall become subject to this Agreement and shall be endorsed with
the legend set forth in Section 5.
17. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be held to
be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
18. BINDING EFFECT. In addition to any restriction or transfer
that may be imposed by any other agreement by which any Party hereto may be
bound, this Agreement shall be binding upon the Parties, their respective
heirs, successors and assigns and to such additional individuals or entities
that may become stockholders of the Company and that desire to become Parties
hereto; provided that for any such transfer to be deemed effective, the
transferee shall have executed and delivered an Adoption Agreement
substantially in the form attached hereto as EXHIBIT A. Upon the execution
and delivery of an Adoption Agreement by any transferee reasonably acceptable
to the Company, such transferee shall be deemed to be a Party hereto as if
such transferee's signature appeared on the signature pages hereto. By their
execution hereof of any Adoption Agreement, each of the Parties hereto
appoints the Company as its attorney-in-fact for the purpose of executing any
Adoption Agreement which may be required to be delivered hereunder.
19. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without
regard to conflicts of law principles thereof.
20. ENTIRE AGREEMENT. This Agreement is intended to be the sole
agreement of the Parties as it relates to this subject matter and does hereby
supersede all other agreements of the Parties relating to the subject matter
hereof.
21. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
22. ARBITRATION. Any controversy between the Parties hereto
involving any claim arising out of or relating to this Agreement, will be
submitted to and be settled by final and binding arbitration in Palo Alto,
California, in accordance with the then current Commercial Arbitration Rules
of the American Arbitration Association (the "AAA"), and judgment upon the
award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. Such arbitration shall be conducted by one (1)
arbitrator mutually agreeable to the Company, a majority-in-interest of the
Founders and a majority-in-interest of the Investors, or failing such
agreement, an arbitrator experienced in similarly-sized companies appointed
by the AAA. There shall be limited discovery prior to the arbitration hearing
as follows: (a) exchange of witness lists and copies of documentary evidence
and documents relating to or arising out of the issues to be
4
<PAGE>
arbitrated, (b) depositions of all party witnesses, and (c) such other
depositions as may be allowed by the arbitrator upon a showing of good cause.
Depositions shall be conducted in accordance with the California Code of
Civil Procedure, the arbitrator shall be required to provide in writing to
the Parties the basis for the award or order of such arbitrator, and a court
reporter shall record all hearings, with such record constituting the
official transcript of such proceedings.
* * *
5
<PAGE>
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date first above written.
COMPANY:
MULIX, INC.
By: /s/ David D. Kim
----------------------------------------
David D. Kim, CHIEF EXECUTIVE OFFICER
Address: 2727 Walsh Avenue, Suite 206
-------------------------------------
Santa Clara, CA 95051
-------------------------------------
SIGNATURE PAGE TO THE VOTING AGREEMENT
<PAGE>
INVESTORS:
TeleVideo, Inc.
/s/ Dr. K. Philip Hwang
--------------------------------------
Name: Dr. Philip Hwang, Chairman and CEO
Address: 2345 Harris Way
-------------------------------
San Jose, CA 95131
-------------------------------
SIGNATURE PAGE TO THE VOTING AGREEMENT
<PAGE>
FOUNDERS:
/s/ David D. Kim
----------------------------------
David D. Kim
Address: 2727 Walsh Avenue, Suite 206
-----------------------------------
Santa Clara, CA 95051
-----------------------------------
/s/ Kwangjae Sung
----------------------------------
Kwangjae Sung
Address: 2727 Walsh Avenue, Suite 206
-----------------------------------
Santa Clara, CA 95051
-----------------------------------
/s/ Yoon Kim
----------------------------------
Yoon Kim
Address: 2727 Walsh Avenue, Suite 206
-----------------------------------
Santa Clara, CA 95051
-----------------------------------
SIGNATURE PAGE TO THE VOTING AGREEMENT
<PAGE>
SCHEDULE A
Schedule OF INVESTORS
- --------------------------------------------------
TeleVideo, Inc.
- --------------------------------------------------
- --------------------------------------------------
- --------------------------------------------------
- --------------------------------------------------
- --------------------------------------------------
<PAGE>
SCHEDULE B
LIST OF FOUNDERS:
David D. Kim
Yoon W. Kim
Kwangjae Sung
<PAGE>
EXHIBIT A
ADOPTION AGREEMENT
This Adoption Agreement ("Adoption Agreement") is executed by the
undersigned (the "Transferee") pursuant to the terms of that certain Voting
Agreement dated as of February __, 2000 (the "Agreement") by and among Mulix,
Inc. (the "Company") and certain of its stockholders. Capitalized terms used
but not defined herein shall have the respective meanings ascribed to such
terms in the Agreement. By the execution of this Adoption Agreement, the
Transferee agrees as follows:
(a) ACKNOWLEDGMENT. Transferee acknowledges that Transferee is
acquiring certain shares of the capital stock of the Company (the "Stock")
subject to the terms and conditions of the Agreement.
(b) AGREEMENT. Transferee (i) agrees that the Stock acquired by
Transferee shall be bound by and subject to the terms of the Agreement, and
(ii) hereby adopts and agrees to be bound by the Agreement with the same
force and effect as if Transferee were originally a Party thereto.
(c) NOTICE. Any notice required or permitted by the Agreement
shall be given to Transferee at the address listed beside Transferee's
signature below.
EXECUTED AND DATED this ________ day of ________________, ____.
TRANSFEREE:
By:
---------------------------------------
Name and Title
Address:
----------------------------------
----------------------------------
Facsimile:
--------------------------------
Accepted and Agreed:
COMPANY
MULIX, INC.
By:
-----------------------------
Title:
--------------------------
