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EXHIBIT 10.1
VIASAT, INC.
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PREFERRED STOCK PURCHASE AGREEMENT
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3,000,000 SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK
Dated as of June 11, 1986
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TABLE OF CONTENTS
(NOT PART OF Agreement)
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1. Authorization, Purchase and Sale of the Shares................ 1
1.1 Authorization of the Shares............................. 1
1.2 Sale and Purchase of the Shares......................... 1
2. Closing, Payment and Delivery................................. 1
2.1 Closing Date and Place of Closing....................... 1
2.2 Payment and Delivery.................................... 1
2.3 Covenant of Best Efforts and Good Faith................. 2
3. Representations and Warranties of the Company................. 2
3.1 organization and Standing; Articles and
Bylaws.................................................. 2
3.2 Subsidiaries............................................ 2
3.3 Capitalization.......................................... 2
3.4 Authorization........................................... 3
3.5 Financial Information................................... 4
3.6 Absence of Undisclosed Liabilities...................... 4
3.7 Contracts............................................... 4
3.8 Interested Party Transactions........................... 5
3.9 Litigation.............................................. 5
3.10 Title to Properties; Liens and
Encumbrances ........................................... 6
3.11 Condition of Properties................................. 6
3.12 Intangible Assets....................................... 6
3.13 Employees............................................... 7
3.14 Compliance with Laws and Other Instruments.............. 7
3.15 Insurance............................................... 7
3.16 No Brokers or Finders................................... 8
3.17 Business Plan........................................... 8
3.18 Disclosure.............................................. 8
4. Representations and Warranties of the Purchaser.............. 8
4.1 Authorization........................................... 8
4.2 Investigation and Experience............................ 9
4.3 Investment Intent....................................... 9
4.4 Accredited Investor..................................... 9
4.5 No Brokers or Finders................................... 9
5. Conditions of Purchasers' Obligations......................... 10
5.1 Representations and Warranties.......................... 10
5.2 Performance............................................. 10
5.3 Opinion of Company's Counsel............................ 10
5.4 Legal Investment........................................ 10
5.5 Compliance Certificate.................................. 10
5.6 Proceedings and Documents............................... 10
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5.7 Qualification........................................... 10
5.8 Certificate............................................. 11
5.9 Election of Directors................................... 11
5.10 Shareholders' Agreement................................. 11
5.11 Supporting Documents.................................... 11
5.12 Founders' Stock Purchase................................ 11
6. Conditions to Closing of the Company.......................... 12
6.1 Representations......................................... 12
6.2 Legal Investment........................................ 12
7. Affirmative Covenants of the Company.......................... 12
7.1 Accounts and Records.................................... 12
7.2 Financial Information................................... 12
7.3 Additional Information.................................. 13
7.4 Preparation of Operating Plan........................... 14
7.5 Prompt Payment of Taxes and Other
Liabilities............................................. 15
7.6 Maintenance of Properties and Leases.................... 15
7.7 Insurance............................................... 15
7.8 Compliance with Laws.................................... 15
7.9 Maintenance of Corporate Existence, etc................. 15
7.10 Availability of Common Stock for Conversion............. 16
7.11 Expenses of Purchasers.................................. 16
7.12 Board of Directors Meetings............................. 16
7.13 Right of First Refusal.................................. 16
7.14 Replacement of Certificates............................. 18
7.15 Notice of Litigation.................................... 18
7.16 Securities Law Filings.................................. 18
7.17 Termination of Certain Obligations...................... 18
8. Transfer of Securities........................................ 18
8.1 Restrictions on Transfer............................... 18
8.2 Restrictive Legend..................................... 19
8.3 Transfers.............................................. 19
8.4 Requested Registration................................. 19
8.5 Company Registration................................... 21
8.6 Expenses of Registration............................... 22
8.7 Registration Procedures................................ 22
8.8 Indemnification........................................ 23
8.9 Information by Holder.................................. 25
8.l0 Limitations on Registration of issues
of Securities.......................................... 25
8.11 Rule 144 Reporting..................................... 26
8.12 Transfer of Registration Rights........................ 26
8.13 "Market Stand-Off" Agreement........................... 27
8.14 No Action Letter or Opinion of Counsel
in Lieu of Registration; Conversion of
Restricted Stock....................................... 27
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9. Enforcement................................................... 27
9.1 Remedies at Law or in Equity........................... 27
9.2 Cumulative Remedies.................................... 28
10. Definitions................................................... 28
11. Miscellaneous ............................................... 30
11.1 Governing Law.......................................... 30
11.2 Survival............................................... 30
11.3 Successors and Assigns................................. 31
11.4 Entire Agreement....................................... 31
11.5 Notices................................................ 31
11.6 Severability; Counterparts............................. 31
11.7 Titles and Subtitles................................... 32
11.8 Waivers and Amendments................................. 32
Exhibit A Amended and Restated
Articles of Incorporation
Exhibit B Schedule of Purchasers
Exhibit C Schedule of Exceptions
Exhibit D Schedule of Shareholders
Exhibit E Balance Sheet
Exhibit F Schedule of Contracts and
Leases
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PREFERRED STOCK PURCHASE AGREEMENT
THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is made as
of the 11th day of June, 1986, by and among ViaSat, Inc., a California
corporation (the "Company"), and Southern California Ventures, a California
limited partnership, Xxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxx (collectively, the
"Purchasers").
SECTION 1
Authorization, Purchase and Sale of the Shares
1.1 Authorization of the Shares. The Company has authorized the
issuance and sale of up to 3,000,000 shares of its Series A Convertible
Preferred Stock (the "Shares") having the rights, restrictions, privileges and
preferences as set forth in the Amended and Restated Articles of Incorporation
(the "Certificate") attached to this Agreement as Exhibit A.
1.2 Sale and Purchase of the Shares. At the Closing (as defined in
Section 2.1 hereof), subject to the terms and conditions hereof and in reliance
upon the representations, warranties and agreements contained herein, the
Company agrees to issue and sell to the Purchasers and the Purchasers agree to
purchase from the Company a total of 3,000,000 Shares at a purchase price of
$.10 per share and an aggregate purchase price of $300,000 (the "Purchase
Price"), in the individual amounts set forth on Exhibit B hereto.
SECTION 2
Closing, Payment and Delivery
2.1 Closing Date and Place of Closing. The closing of the purchase and
sale of the Shares hereunder (the "Closing") shall occur at 3 o'clock P.M.,
Pacific Standard Time, on the date hereof or on such later date (within 30 days
thereafter) as the Company and the Purchasers shall agree (the date of such
Closing being referred to as the "Closing Date"). The place of the Closing
(including the place of delivery to the Purchasers by the Company of the
certificates evidencing all Shares being purchased and the place of payment to
the Company by the Purchasers of the Purchase Price therefor) shall be at such
place as the Purchasers and the Company shall agree.
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2.2 Payment and Delivery. At the Closing, each Purchaser shall pay
the portion of the aggregate Purchase Price set forth opposite the Purchaser's
name on Exhibit B hereto to the Company by check or wire transfer and the
Company shall deliver to each Purchaser a certificate or certificates
representing the number of Shares purchased, as set forth on Exhibit B
registered in the Purchaser's name.
2.3 Covenant of Best Efforts and Good Faith. The Company and the
Purchasers agree to use their respective best efforts and to act in good faith
to cause to occur all conditions to Closing, as set forth in Sections 5 and 6
hereof, which are in the control of such party.
SECTION 3
Representations and Warranties of the Company
The Company hereby covenants with and represents and warrants to the
Purchasers that, except as set forth in the Schedule of Exceptions, attached to
this Agreement as Exhibit C:
3.1 Organization and Standing; Articles and Bylaws.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of California. The
Company has all requisite corporate power and authority to own its properties,
to conduct its business, to enter into this Agreement, to file the Certificate,
to issue and sell the Shares, to issue the Common Stock issuable upon conversion
of the Shares, and to carry out and perform its obligations under this Agreement
and the Certificate.
(b) The Company has furnished the Purchasers or Special Counsel
with true, correct and complete copies of its Articles of Incorporation, Bylaws
and all amendments thereto to date.
3.2 Subsidiaries. The Company has no Subsidiaries or direct or
indirect equity interest, by way of stock ownership or otherwise, in any other
firm, corporation, association or business enterprise.
3.3 Capitalization. The Company's authorized capital stock consists
of (a) 10,000,000 shares of common stock, par value $.01 per share (the "Common
Stock"), of which 3,000,000 shares are issued and outstanding, and (b) 3,000,000
shares of preferred stock (the "Preferred Stock"), 3,000,000 of which have been
designated "Series A Convertible Preferred Stock," no par value, and the Company
has no authority to issue any other capital stock.
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No shares of Preferred Stock have been issued prior to the Closing. ALL of the
issued and outstanding shares of Common Stock have been duly authorized and
validly issued, are fully paid and nonassessable, and have been offered, issued,
sold and delivered by the Company in compliance with all applicable Federal and
state securities laws. Exhibit D hereto contains a true and complete list of the
names and addresses of the beneficial holders of all of the outstanding Common
Stock and of the holders of all outstanding options or other rights to purchase
Common Stock. Except as expressly provided in this Agreement or disclosed in
Exhibit D, there are no outstanding preemptive, conversion or other rights,
options, warrants or agreements granted or issued by or binding upon the Company
for the purchase or acquisition of any shares of its capital stock. To the best
of the Company's knowledge and belief, no holder of Common Stock has granted
options or other rights to purchase any shares of Common Stock from such
shareholder, and there is no voting trust agreement or arrangement among any of
the beneficial holders of Common Stock affecting the exercise of the voting
rights of such Common Stock. The Company has reserved 1,500,000 shares of Common
Stock for issuance to future employees either upon the exercise of stock options
or upon the issuance of stock, in all cases subject to approval of such options
or stock by the Board.
3.4 Authorization. ALL corporate actions and proceedings on the part
of the Company, its directors and shareholders necessary for the authorization,
execution, delivery and performance by the Company of this Agreement and the
Certificate, and otherwise for the authorization, issuance and delivery of the
Shares and the Common Stock issuable upon conversion thereof have been lawfully
and validly conducted. This Agreement and the Certificate are valid and binding
obligations of the Company, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws and equitable
princples relating to or affecting the enforcement of creditors' rights in
general and by general principles of equity, and except that enforcement of the
indemnity provisions of Section 8.8 of this Agreement may be limited by Federal
or state securities laws or public policy underlying such laws. The execution,
delivery and performance by the Company of this Agreement, and the compliance by
the Company with the Certificate, will not result in any violation of, conflict
with, or result in a breach of any of the terms of, or constitute a default
under, any provision of Federal or state law to which the Company is subject,
the Company's Articles of Incorporation or Bylaws, or any mortgage, indenture,
agreement, instrument, judgment, decree, order, rule, regulation or other
restriction to which the Company is a party or by which it or any of its assets
are bound, or result in the creation of any Lien upon any of the assets of the
Company, which violation, conflict, breach, default or Lien could have a
material adverse effect on the condition, financial or otherwise, or operation
of
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the Company. The Shares have been duly authorized, and when issued in compliance
with the provisions of this Agreement, will be validly issued, fully paid and
nonassessable, and will be free of any Liens and restrictions (except
restrictions arising under the Securities Act or the California Corporate
Securities Law of 1968) and will have the rights, preferences, privileges and
restrictions as provided in the Certificate. The shares of Common Stock issuable
upon conversion of the Shares have been duly and validly reserved and, upon
issuance in accordance with the terms of the Certificate, will be duly
authorized, validly issued, fully paid and nonassessable and free and clear of
all Liens and restrictions, except those arising from any acts of the Purchaser
(except restrictions arising under the Securities Act or the California
Corporate Securities Law of 1968).
3.5 Financial Information. The Company's unaudited balance sheet at
May 23, 1986, a copy of which is attached hereto as Exhibit E, (i) is in
accordance with the books and records of the Company, (ii) presents fairly the
financial condition of the Company at such date and (iii) was prepared in
accordance with generally accepted accounting principles.
3.6 Absence of Undisclosed Liabilities. Except as disclosed on
Exhibit E hereto, the Company has no obligations or liabilities (whether
accrued, absolute, contingent, liquidated or otherwise, including without
limitation, any tax liabilities due or to become due), except current
liabilities incurred and obligations under agreements entered into in the usual
and ordinary course of business since the inception of the Company, none of
which (individually or in the aggregate) is material.
3.7 Contracts. Except as to those contracts, leases and other
documents set forth in the Schedule of Contracts and Leases, attached hereto as
Exhibit F (correct and complete copies of which have been previously delivered
to Special Counsel or described in all material respects in Exhibit F), the
Company is not a party to any material written or oral agreement not made in the
ordinary course of business and the Company is not a party to any written or
oral:
(a) Employment, bonus or consulting agreement, pension, profit
sharing, deferred compensation, stock bonus, retirement, stock option, stock
purchase, phantom stock or similar plan, including any agreement evidencing
rights to purchase securities of the Company or agreement among shareholders and
the Company;
(b) Loan or other agreement, note, indenture, or instrument
relating to or evidencing Indebtedness for Borrowed Money, or mortgaging,
pledging, granting or creating a Lien or security interest or other encumbrance
on, any of the Company's
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properties or assets, or any agreement or instrument evidencing any guaranty by
the Company of payment or performance by any other Person;
(c) Joint venture contract or arrangement or other agreement
involving a sharing of profits or expenses to which the Company is a party;
(d) Agreement limiting the freedom of the Company to compete in
any line of business or in any geographic area or with any person;
(e) Agreement or letter of intent with respect to the
acquisition of the business assets or shares of any other business;
(f) Agreement obligating the Company to pay any royalty or
similar charge for the use or exploitation of any tangible or intangible
property;
(g) Lease of real property or any material lease of personal
property or equipment; or
(h) Agreement to register securities of the Company under the
Securities Act.
3.8 Interested Party Transactions. No officer, director, or
shareholder of the Company or any "affiliate" or "associate" (as such terms are
defined in Rule 405 under the Securities Act) of any such Person or the Company
has or has had either directly or indirectly, (a) a beneficial interest in any
Person which (i) furnishes or sells services or products which are furnished or
sold or proposed to be furnished or sold by the Company or (ii) purchases from
or sells or furnishes to the Company any goods or services, or (b) a beneficial
interest in any contract or agreement to which the Company is a party or by
which it may be bound or affected, except to the extent arising solely from the
ownership of shares of the Company's capital stock.
3.9 Litigation. There is neither pending nor, to the Company's best
knowledge, threatened any action, suit, arbitration, proceeding (whether
Federal, state, local or foreign) or claim, or any basis therefor, whether or
not purportedly on behalf of the Company, to which the Company is or may be
named as a party or its property, assets or business is or may be subject and in
which an unfavorable outcome, ruling or finding could have a material adverse
effect on the condition, financial or otherwise, or operations of the Company.
The Company has no knowledge of any unasserted claim, the assertion of which is
likely and which, if asserted, will be for legal or equitable relief which
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if granted would have a material adverse effect on the condition, financial or
otherwise, or operations of the Company.
3.10 Title to Properties; Liens and Encumbrances. The Company has
good and marketable title to all of its properties and assets, excluding any and
all property and assets described in Section 3.15 hereof, and has good title to
all of its leasehold interests in each case subject to no Lien except as
disclosed in Exhibit F and except for any Lien on personal property in the
nature of a purchase money security interest granted in the usual and ordinary
course of business.
3.11 Condition of Properties. All facilities, machinery, equipment
fixtures, vehicles and other tangible property owned, leased or used by the
Company are in good operating condition and repair.
3.12 Intangible Assets.
(a) The Company has all franchises, permits, certificates,
authorizations, licenses and other similar authority required by law or
governmental regulations from all applicable Federal, state or local authorities
and any other regulatory authorities, which are necessary for the conduct of its
business as now being conducted by it and as planned to be conducted, the lack
of which could have a material and adverse effect on the operations or
condition, financial or otherwise, of the Company, and it is not in default or
noncompliance in any material respect under any of such franchises, permits,
certificates, authorizations, licenses or other similar authority.
(b) The Company owns or has the right to use all patents,
trademarks, trade names, copyrights and rights with respect to any of the
foregoing necessary to conduct its business as now being conducted and as
planned to be conducted, without conflict with or infringement upon any right or
claimed right of any Person and without any obligation or liability for
royalties, fees, or other compensation to any owner, licensor, or other claimant
to any of the foregoing.
(c) The Company owns and has the unrestricted right to use all
trade secrets, including know-how, inventions, designs, processes, computer
programs and technical data and information (collectively herein "Intellectual
Property") required for or incident to the development, manufacture, operation
and sale of all products and services sold or proposed to be sold by the
Company, free and clear of any right, Lien, or claim of any Person, including
without limitation former employers of its employees; provided, however, the
possibility exists that other Persons, completely independent of the Company or
its employees
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or agents, could have developed trade secrets or items of technical information
similar or identical to those of the Company.
(d) The Company has taken reasonable security measures to
protect the secrecy, confidentiality and value of all of its Intellectual
Property. Each employee of the Company and all other Persons who, either alone
or in concert with others, have developed, discovered or conceived the
Intellectual Property, or who have or have had access to the Intellectual
Property, will have entered into proprietary information agreements in
substantially the form approved by Special Counsel on or prior to September 9,
1986.
3.13 Employees. To the best of the Company's knowledge, no officer or
key employee of the Company has any plans to terminate his or her employment
with the Company and no employee of the Company is in violation of any term of
any employment contract, invention assignment or nondisclosure agreement,
non-competition agreement, or any other contract or agreement or any restrictive
covenant relating to the right of any such employee to be employed by the
Company because of the nature of the business conducted or to be conducted by
the Company or relating to the use of trade secrets or proprietary information
of others, and the employment of the Company's employees does not subject the
Company or the Purchaser to any liability arising by reason of any such
contract, agreement or restrictive covenant or by reason of trade secret or
unfair competition laws. The Company does not have any collective bargaining
agreement covering any of its employees and has encountered no material labor
difficulties.
3.14 Compliance with Laws and Other Instruments. The business and
operations of the Company have been and are being conducted in accordance with
all applicable Federal, state and local laws, rules and regulations. The Company
is not in violation of any term of its Articles of Incorporation or Bylaws or
any term of any mortgage, indenture, contract, agreement, instrument, judgment,
decree, order, statute, rule or regulation to which the Company is subject. The
offer, issuance and sale of the Shares as contemplated by this Agreement, and
the issuance of Common Stock upon conversion of the Shares in accordance with
the terms of the Certificate are and will be, exempt from the registration and
prospectus delivery requirements of the Securities Act and have been registered
or qualified (or are exempt from registration and qualification) under all
applicable state securities laws.
3.15 Insurance. There are in full force and effect one or more
policies of insurance issued by insurers of recognized
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responsibility, insuring the Company and its properties and business against
such losses and risks, and in such amounts, as are customary for the
contemplated business of the Company. On or before September 9, 1986, the
Company will have acquired a policy of guaranteed renewable term life insurance
naming the Company as beneficiary and providing $330,000 of coverage on the life
of Xxxx X. Xxxxxxxx.
3.16 No Brokers or Finders. The Company has retained no finder or
broker with the transactions contemplated by this Agreement, and hereby agrees
to indemnify and hold harmless the Purchasers from any liability for any
commission or compensation in the nature of an agent's fee to any broker or
other Person (and the costs and expenses of defending against such liability or
asserted liability) arising from any act by the Company or any of its employees
or representatives.
3.17 Business Plan. The Company has heretofore furnished to each of
the Purchasers and Special Counsel a business plan of the Company dated May 24,
1986 ("Business Plan"). The Business Plan represents a good faith effort by the
Company to describe its proposed business and projected growth and the Company
does not believe that these projections, or any other information contained in
the Business Plan are materially and adversely misleading or that there are any
materially and adversely misleading omissions in the Business Plan.
3.18 Disclosure. To the best of the Company's knowledge, this
Agreement: and all other documents or writings delivered to the Purchasers or
Special Counsel pursuant to this Agreement or otherwise in connection with the
offering of the Shares do not contain any untrue statement of a material fact,
or omit to state any fact necessary to make the statements made therein not
misleading.
SECTION 4
Representations and Warranties of the Purchasers
Each of the Purchasers represents and warrants to the Company as
follows:
4.1 Authorization. The execution, delivery and performance of
this Agreement have been duly authorized by each Purchaser as necessary and this
Agreement is a valid and binding obligation of each Purchaser, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws and equitable
principles relating to or affecting the enforcement of creditors' rights in
general and by general principles of equity
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and except that enforcement of the indemnity provisions of Section 8.8 of this
Agreement may be limited by Federal or state securities laws or public policy
underlying such laws.
4.2 Investigation and Experience. Each Purchaser has carefully
reviewed the representations concerning the Company contained in this Agreement.
Each Purchaser understands that this investment involves substantial risks and
has had an opportunity to discuss the Company's business, management and
financial affairs with the Company's management and has had the opportunity to
inspect the Company's facilities. The officers of the Company have made
available to the Purchasers any and all written information that has been
requested and have answered to the satisfaction of the Purchasers all inquiries
made by them. Each Purchaser is experienced in evaluating and investing in newly
organized companies in the electronics and communications industries such as the
Company and has such knowledge and experience in financial and business matters
that he or it is capable of evaluating the merits and risks of an investment in
the Company and has the capacity to protect his or its own interests in
connection with this Agreement and the transactions contemplated hereby and at
the present time could afford a complete loss of such investment, within the
meaning of Section 25102(f) of the California Corporations Code. Each Purchaser
has been further advised that no public market now exists for any of the
securities issued by the Company and that a public market may never exist for
the Shares.
4.3 Investment Intent. Each Purchaser is acquiring the Shares, and the
shares of Common Stock issuable upon conversion of the Shares, for investment
for the Purchaser's own account and not with the view to, or for resale in
connection with, any distribution thereof. Each Purchaser understands that the
Shares and the shares of Common Stock issuable upon conversion of the Shares
have not been registered under the Securities Act by reason of specified
exemptions therefrom which depend upon, among other things, the bona fide nature
of its investment intent as expressed herein.
4.4 Accredited Investor. Each Purchaser is an "accredited investor"
within the meaning of Rule 501 of Regulation D promulgated under the Securities
Act.
4.5 No Brokers or Finders. Each Purchaser has retained no finder or
broker in connection with the transactions contemplated by this Agreement and
hereby agrees to indemnify and to hold the Company harmless from any liability
for any commission or compensation in the nature of an agent's fee to any broker
or other Person (and the costs and expenses of defending against such liability
or asserted liability) arising from any act by the Company or any of its
employees or representatives.
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SECTION 5
Conditions of Purchasers' Obligations
The obligation of the Purchasers to purchase the Shares at the Closing
is subject to the fulfillment on or prior to the Closing Date of each of the
following conditions, any of which may be waived in whole or in part by the
Purchasers:
5.1 Representations and Warranties. The representations and warranties
made by the Company in Section 3 hereof shall be true and correct in all
respects when made and shall be true and correct in all respects on the Closing
Date with the same force and effect as if they had been made on and as of the
Closing Date.
5.2 Performance. All covenants, agreements and conditions contained in
this Agreement to be performed or complied with by the Company on or prior to
the Closing Date shall have been performed or complied with in all respects.
5.3 Opinion of Company's Counsel. The Purchasers shall have received
from Xxxxx, Circuit and Xxxxxxxx, counsel to the Company, an opinion addressed
to them, dated the Closing Date, in form and substance acceptable to the
Purchasers and Special Counsel.
5.4 Legal Investment. At the time of the Closing, the purchase of the
Shares hereunder shall be legally permitted by all laws and regulations to which
the Purchasers and the Company are subject.
5.5 Compliance Certificate. The Company, if requested by Special
Counsel, shall have delivered to the Purchasers a certificate of the President
of the Company, dated the Closing Date, certifying the fulfillment of the
conditions specified in Sections 5.1 and 5.2.
5.6 Proceedings and Documents. All corporate and other proceedings and
actions taken in connection with the transactions contemplated hereby and all
certificates, opinions, agreements, instruments and documents mentioned herein
or incident to such transactions shall be satisfactory in substance and form to
the Purchasers and Special Counsel.
5.7 Qualification. All authorizations, registrations, qualifications,
approvals or permits, if any, of any governmental authority or regulatory body
that are required in connection with the lawful issuance and sale of the Shares
pursuant to this Agreement, the conversion of the Shares into Common Stock and
the issuance of such Common Stock upon such conversion, shall have
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been duly obtained and shall be effective on and as of the Closing.
5.8 Certificate. The Certificate shall have been properly executed
and filed with the Secretary of State of California and a copy of the
Certificate certified by the Secretary of State shall have been delivered to
Special Counsel.
5.9 Election of Directors. The Company's Bylaws shall provide for
three authorized directors. Xxxxxx X. Xxxxxxx shall have been elected to the
Board as a representative of the Purchasers effective as of the Closing.
5.10 Shareholders' Agreement. Xxxx X. Xxxxxxxx, Xxxxxx X. Xxxx, Xxxx
X. Xxxxxx, the Company and the Purchasers shall have entered into a
Shareholders' Agreement in form and substance acceptable to the Purchasers,
relating to the election to the Board of Directors of certain persons chosen or
nominated by the Purchasers and other shareholders.
5.11 Supporting Documents. The Purchasers or Special Counsel
shall have received the following:
(a) Copies of resolutions of the Board certified by the
Secretary of the Company, authorizing and approving the Certificate and the
execution, delivery and performance of this Agreement and and all other
documents and instruments to be delivered pursuant hereto;
(b) A certificate of incumbency executed by the Secretary of
the Company certifying the names, titles and signatures of the officers
authorized to execute the documents referred to in paragraph (a) above and
certifying that the Articles of Incorporation and Bylaws delivered to the
Purchasers pursuant to Section 3.1 are in full force and effect without
modification or amendment.
(c) Such additional supporting documentation with respect to
the transactions contemplated hereby as the Purchasers or Special Counsel may
reasonably request.
5.12 Founders' Stock Purchase. Each of Xxxx X. Xxxxxxxx, Xxxxxx X.
Xxxx and Xxxx X. Xxxxxx shall have entered into stock restriction agreements
with the Company in form and substance satisfactory to the Purchasers.
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SECTION 6
Conditions to Obligations of the Company
The Company's obligation to sell the Shares at the Closing is subject
to the fulfillment on or prior to the Closing Date of each of the following
conditions:
6.1 Representations. The representations and warranties made by the
Purchasers in Section 4 hereof shall be true and correct in all respects when
made and shall be true and correct in all respects on the Closing Date with the
same force and effect as if they had been made on and as of the Closing Date.
6.2 Legal Investment. At the time of the Closing, the conditions set
forth in Sections 5.4, 5.6, 5.7, 5.8 and 5.10 shall have been satisfied.
SECTION 7
Affirmative Covenants of the Company
The Company hereby covenants and agrees that, so long as the
Purchasers or their assigns are the Holders in the aggregate of more than 50% of
the Restricted Stock purchased hereunder:
7.1 Accounts and Records. The Company will keep true records and books
of account in which full, true and correct entries will be made of all dealings
or transactions in relation to its business and affairs in accordance with
generally accepted accounting principles applied on a consistent basis.
7.2 Financial Information. The Company will furnish the following
reports to the Purchasers (or their representative):
(a) As soon as available and in any event within 60 days after
the end of each fiscal year of the Company, a consolidated balance sheet of
the Company and its Subsidiaries, if any, as of the end of such fiscal year, and
consolidated statements of income, shareholders' equity and changes in financial
condition 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, if unaudited, certified by the
principal financial or accounting officer of the Company. Upon written request
delivered prior to the end of any fiscal year of the Company from Purchasers
holding a majority of the Restricted Stock, such financial statements for that
fiscal year shall be audited and certified by independent accountants of
recognized national
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reputation selected by the Company. If audited financial information is so
requested, the Company shall provide such audited information within 90 days of
the end of the fiscal year for which the audited financial information was
requested.
(b) As soon as available and in any event within 30 days after
the end of each fiscal quarter of the Company, a consolidated balance sheet of
the Company and its Subsidiaries, if any, as of the end of each such fiscal
quarter and consolidated statements of income, shareholders' equity and changes
in financial position of the Company and its Subsidiaries, if any, for such
fiscal quarter and for the current fiscal year to date, prepared in accordance
with generally accepted accounting principles consistently applied and setting
forth in comparative form the figures for the corresponding periods of the
previous fiscal year, subject only to changes resulting from normal year-end
audit adjustments, if any, all in reasonable detail and certified by the
principal financial or accounting officer of the Company.
(c) During such time as the Company is subject to the reporting
requirements of Section 13(a) or 15(d) of the Exchange Act, and in lieu of the
financial information required pursuant to Sections 7.2(a) and (b), copies of
its Annual and Quarterly Reports on Forms 10-K and 10-Q, respectively, or any
similar successor forms, and all registration statements proxy statements and
other reports, filed with the Commission, such reports to be furnished to the
Purchasers no later than the deadline for filing them with the Commission.
7.3 Additional Information.
(a) Except as prohibited by federal law, the Company will
permit representatives of the Purchasers to visit and inspect any of the
properties of the Company (with the understanding that, when security demands,
the Purchasers shall be accompanied by an authorized individual), including its
books of account, and to discuss its affairs, finances and accounts with the
Company's officers and its independent public accountants, during normal
business hours and as often as the Purchasers may reasonably request. Partners
and full-time employees of the Purchasers shall be granted access to proprietary
data on the same basis as employees and directors of the Company provided that,
if requested, they agree in writing to undertake the same fiduciary duty and
responsibility to protect the proprietary data as would be required of an
employee or a director having access to such proprietary data. As used herein,
"proprietary data" shall mean data which has been classified and is being
controlled (as of the date of the requested access) as confidential and
proprietary by the Company.
(b) As long as a Purchaser holds at least 150,000 of the Shares
or 150,000 shares of Restricted Stock, adjusted as
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appropriate for stock splits and combinations and stock dividends and other
distributions, the Company will deliver to such Purchaser:
(i) As soon as available and in any event within 30 days
after the end of each month, a consolidated balance sheet of the Company and its
Subsidiaries, if any, as of the end of such month, and consolidated statements
of income and sources and applications of funds of the Company and its
Subsidiaries, for each month and for the current fiscal year of the Company to
date, prepared in accordance with generally accepted accounting principles
consistently applied, together with a comparison of such statements to the
Company's operating plan then in effect and approved by its Board, and
certified, subject only to changes resulting from normal year-end audit
adjustments, by the principal financial or accounting officer of the Company,
together with a report of operations by the Company's President including a
statement of orders received, shipments made and a backlog analysis reflecting
orders to be delivered within six months of the reporting date, and orders to be
delivered after six months from the reporting date.
(ii) As soon as available and in any event within 60 days
after the Closing Date for the Company's partial fiscal year ending after the
Closing Date and within 30 days before the commencement of each subsequent
fiscal year, a copy of the operating plan for such partial or full fiscal year
prepared and approved by the Board in accordance with section 7.4. Any
modifications in such operating plan shall be submitted as promptly as
practicable after such changes have been approved by the Board.
(iii) With reasonable promptness, such other information
and data with respect to the Company and its Subsidiaries, if any, as any
Purchaser may from time to time reasonably request.
7.4 Preparation of Operating Plan. The Company shall, within 60 days
after the Closing Date for the Company's partial fiscal year ending after the
Closing Date and at least 30 days prior to the beginning of each subsequent
fiscal year, prepare and submit to the Board, for its approval, an annual plan
for such partial or full fiscal year which shall include monthly capital and
operating expense budgets, cash flow statements and profit and loss and
quarterly balance sheet projections. Each annual plan shall be modified as often
as necessary, but in any event every six months to reflect material changes
required as a result of operating results and other events that occur, or may be
reasonably expected to occur, during the year covered by the annual plan, and
copies of these modifications shall be submitted to and approved by the Board.
The Company may dispense with any
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six month modification if the Board reasonably determines that no material
change is required in the budget for that six-month fiscal period.
7.5 Prompt Payment of Taxes and Other Liabilities. The Company will
promptly pay and discharge, or cause to be paid and discharged, before the same
shall become delinquent and before penalties accrue thereon, all lawful taxes,
assessments and governmental charges or levies imposed upon the income, profits,
property or business of the Company; provided, however, that any such tax,
assessment, charge or levy need not be paid if the validity thereof shall
concurrently be contested in good faith and by appropriate proceedings in such a
manner as not to have any materially adverse effect on the Company's financial
condition or operation and if the Company shall have set aside on its books
adequate reserves with respect thereto; provided, further, that the Company will
promptly pay all such taxes, assessments, charges or levies upon the
commencement of proceedings to foreclose any Lien which may have attached as
security therefor. The Company will promptly pay or cause to be paid when due,
or in conformance with customary trade terms, all other Indebtedness incident to
operations of the Company.
7.6 Maintenance of Properties and Leases. The Company will keep its
tangible properties and those of any Subsidiary necessary to the business of the
Company or such Subsidiary in good repair and in working order and condition,
reasonable wear and tear excepted, and will from time to time make all necessary
and proper repairs, renewals, replacements, additions and improvements thereto.
The Company and all of its Subsidiaries will at all times comply with each
provision of all leases to which any of them is a party or under which any of
them occupies property if the breach of such provision might have a material
adverse effect on the condition, financial or otherwise, or operations of the
Company or such Subsidiary.
7.7 Insurance. The Company will keep its assets and those of any
Subsidiary which are of an insurable character insured by financially sound and
reputable insurers against loss or damage by fire, extended coverage, explosion
and such other hazards, risks and liability to persons and property, and in such
amounts, as are customary and prudent for companies in similar businesses
similarly situated.
7.8 Compliance with Laws. The Company and all of its Subsidiaries
shall duly observe and conform to all applicable laws and requirements of
governmental authorities relating to the conduct of their businesses or to their
property or assets.
7.9 Maintenance of Corporate Existence. The Company shall maintain in
full force and effect its corporate existence,
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rights and franchises and all licenses and other rights to use patents,
processes, licenses, trademarks, trade names or copyrights owned or licensed by
it or any Subsidiary, and deemed by the Company to be necessary for the conduct
of its business, and conduct its business in an orderly manner without voluntary
interruption.
7.10 Availability of Common Stock for Conversion. The Company will,
from time to time, in accordance with the laws of California, increase the
authorized amount of Common Stock prior to such time as the failure to do so
would cause the number of shares of Common Stock remaining authorized and
unissued to be insufficient to permit conversion of all the then outstanding
Shares.
7.11 Expenses of Purchasers. The Company shall pay, and hold the
Purchasers harmless from liability for the payment of, (i) all reasonable fees
and expenses of Special Counsel arising in connection with the negotiation of
execution of this Agreement and consummation of the transactions contemplated
hereby, which fees (not including expenses) shall not exceed $12,000.
7.12 Board of Directors Meetings. The Company shall hold meetings of
the Board at least once every month unless the failure to hold any meeting is
consented to by Purchasers holding a majority of the Restricted Stock, and shall
furnish to the Purchasers upon request, a complete and accurate copy of the
minutes and other records of all meetings and other proceedings of the Board and
its committees as well as of the written consents of the members of the Board by
which action is taken by the Board or any committee without a meeting.
7.13 Right of First Refusal. The Company hereby grants to each
Purchaser the right of first refusal to purchase a pro rata part of any New
Securities (as defined in this section 7.13) which the Company may, from time to
time, propose to sell and issue. Each Purchaser's pro rata share, for purposes
of this right of first refusal, is the ratio of (i) the number of shares of
Restricted Stock held by the Purchaser as of the date of the proposed sale (ii)
the aggregate number of shares of Common Stock outstanding and the aggregate
number of shares of such stock issuable upon the conversion of all securities
convertible into Common Stock. This right of first refusal shall be subject to
the following provisions:
(a) "New Securities" shall mean any capital stock (including
Common Stock or preferred shares) of the Company and all rights, options or
warrants to purchase capital stock, and securities of any type whatsoever that
are, or may become, convertible into capital stock; provided, however, that the
term
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"New Securities" does not include (i) securities purchased under this Agreement
and securities outstanding on the Closing date; (ii) securities offered to the
public pursuant to a registration statement filed pursuant to the Securities
Act; (iii) securities issued pursuant to the acquisition of another corporation
by the Company by merger, purchase of all or substantially all the assets or
other reorganization whereby the Company shall become the owner of more than 50%
of the voting power of such corporation; (iv) shares of Common Stock issued in
connection with any stock split, stock dividend or recapitalization of the
Company; (v) any borrowings, direct or indirect, from financial institutions or
other Persons by the Company, whether or not presently authorized, including any
type of loan or payment evidenced by any type of debt instrument, provided such
borrowings do not have equity features, including warrants, options or other
rights to purchase capital stock, and are not convertible into capital stock of
the Company; or (vi) shares of Common Stock of the Company issued to employees,
consultants or directors of the Company upon the exercise of stock options or
pursuant to stock purchase agreements or other incentive arrangements or
otherwise, all of which options, agreements, arrangements and other issuances
are approved by the Board.
(b) In the event the Company proposes to undertake an issuance
of New Securities, it shall give each Purchaser written notice of its intention,
describing the type or New Securities, the price and the general terms upon
which the Company proposes to issue the same. Each Purchaser shall have 30 days
from the date such notice is given to agree to purchase all or any portion of
the Purchaser's pro rata share of such New Securities for the price and upon the
general 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 the Purchasers fail to exercise the right of
first refusal as to all of the New Securities proposed to be issued within
said 30-day period, the Company shall give written notice of such fact,
specifying the amount of securities not elected to be purchased, to each
Purchaser who has elected to purchase any of such New Securities, and each such
Purchaser shall have five days, after the giving of such further notice, to
purchase all or any part of its pro rata share of such unpurchased portion by
giving written notice thereof to the Company. After the expiration of the period
for the exercise of the over-allotment provisions of this section 7.13, the
Company shall have 180 days thereafter to sell or enter into an agreement
(pursuant to which the sale of New Securities covered thereby shall be closed,
if at all, within 180 days from the date of said agreement) to sell that portion
of the New Securities for which the Purchasers' option was not exercised, at a
price and upon general terms no more favorable to the purchasers thereof than
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22
specified in the Company's notice. In the event the Company has not sold the New
Securities within said 180-day period (or sold and issued New Securities in
accordance with the foregoing within 180 days from the date of said agreement),
the Company shall not thereafter issue or sell any New Securities, without first
offering such securities to the Purchasers in the manner provided above.
7.14 Replacement of Certificates. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
any certificate representing any of the Shares, and upon receipt of an
appropriate indemnity bond in the case of any reasonable request therefor by the
Company, the Company shall issue a new certificate representing such Shares in
lieu of such lost, stolen, destroyed or mutilated certificate.
7.15 Notice of Litigation. The Company shall promptly provide notice
to the Purchasers of any material suit or litigation instituted against the
Company.
7.16 Securities Law Filings. The Company shall make any filing
necessary to perfect in a timely fashion an exemption from the registration and
prospectus delivery requirements of the Securities Act, and to register or
qualify or secure an exemption from such registration or qualification under any
applicable Blue Sky or securities laws of any state or other jurisdiction for
the issuance of the Shares to the Purchasers.
7.17 Termination of Certain Obligations. The obligations of the
Company under Sections 7.1, 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.12, 7.13, and
7.15 hereof shall terminate upon the occurrence of any event specified in the
Certificate as a condition precedent for the automatic conversion of the Shares
or upon the voluntary conversion pursuant to the Certificate of more than 50% of
the Shares.
SECTION 8
Transfer of Securities
8.1 Restrictions on Transfer. The Shares shall not be transferable,
except upon the conditions specified in this Section 8, which are intended to
insure compliance with the provisions of the Securities Act and the California
Corporate Securities Act of 1968 or, in the case of Section 8.13 hereof, to
assist in an orderly distribution. Each Purchaser agrees to cause any proposed
transferee of Shares held by the Purchaser to agree to take and hold those
securities subject to the provisions of this Section 8.
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8.2 Restrictive Legend. Each certificate representing the Shares or
any Restricted Stock shall be imprinted with a legend substantially in the
following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A)
COVERED BY AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, (B) IN
COMPLIANCE WITH RULE 144 UNDER SUCH ACT, OR (C) THE
COMPANY HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT NO
REGISTRATION IS LEGALLY REQUIRED BY SUCH TRANSFER.
8.3 Transfers. Prior to any proposed transfer of any Shares or any
Restricted Stock (other than under circumstances described in Section 8.4 and
8.5 hereof), and so long as such securities bear the restrictive legend required
under Section 8.2, the Holder thereof shall deliver to the Company (except in
transactions demonstrated to the Company's reasonable satisfaction to be in
compliance with Rule 144 of the Commission, or any substantially similar
successor rule of the Commission) either (i) a written opinion of legal counsel
reasonably satisfactory to the Company to the effect that the proposed transfer
of such securities may be effected without registration under the Securities Act
and any applicable state securities laws, or (ii) a "no action" letter from the
Commission (and any necessary state securities administrators) to the effect
that the distribution of such securities without registration will not result in
a recommendation by the staff of the Commission (or such administrators) that
action be taken with respect thereto, whereupon the Holder of such securities
shall be entitled to transfer such securities in accordance with the terms of
such opinion or "no action" letter. Upon the request of a Holder complying with
either of these conditions, the Company will issue a new certificate for such
securities free of any legend.
8.4 Requested Registration.
(a) If the Company shall receive from any Purchaser or
Purchasers a written request that the Company effect a registration for the sale
of Restricted Stock, the Company will, as soon as practicable, effect such
registration as may be so requested and as would permit or facilitate the sale
and distribution of the Restricted Stock specified in such request, provided
that the Company shall not be obligated to effect, or to take any action to
effect, any such registration pursuant to this Section 8.4:
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(i) Prior to the earlier of the fifth anniversary of the date
hereof or the completion of the initial, firm-commitment underwritten
public offering of the Common Stock pursuant to an effective
registration statement under the Securities Act;
(ii) If the request from the Purchaser(s) is for a registration
on Form X-0, X-0 or S-18 (or their equivalents) and the Company has
previously effected two such registrations pursuant to this Section
8.4(a);
(iii) If the Company has effected any registration pursuant to
this Section 8.4(a) within twelve months of such request;
(iv) If the aggregate proposed selling price of the Restricted
Stock to be included by the Purchaser(s) is less than $1,000,000 in
the case of a registration on Form X-0, X-0 or S-18 or $500,000 in
the case of a registration on Form S-3; or
(v) If the request from the Purchaser(s) is for registration of
a class of securities other than Common Stock, and the Company has
not previously effected a registered public offering of such class of
securities.
(b) If a Purchaser, in making a valid request for registration
pursuant to Section 8.4(a), intends to distribute the Restricted Stock covered
by its request by means of an underwriting, it shall so advise the Company as a
part of its request and the Company shall include such information in the
written notice referred to in Section 8.4(a) above. The right of the Purchaser
to registration pursuant to this Section 8.4 shall be conditioned upon the
inclusion of the Purchaser's Restricted Stock in the underwriting. If holders of
securities of the Company (other than holders of Restricted Stock) who are
entitled by contract with the Company to have securities included in any
registration initiated pursuant to this Section 8.4 (the "Other Shareholders")
request such inclusion, the Purchaser(s) shall offer to include the securities
of such Other Shareholders in the underwriting and may condition such offer on
their acceptance of the further applicable provisions of this Section 8. If the
managing underwriter or underwriters of the offering advise the Purchaser(s) in
writing that marketing factors require a limitation on the number of shares to
be underwritten, the securities of the Company held by the Other Shareholders
shall, to the extent necessary, be first excluded from such registration before
any shares of Restricted Stock held by the Purchaser(s) are excluded. No
securities excluded from the underwriting by reason of the underwriter's
marketing limitation shall be included in
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such registration. If any Purchaser disapproves of the terms of any
underwriting, it may elect to withdraw therefrom by written notice to the
Company and the underwriter. In such event, the registration shall not be
counted as a registration for the purposes of Section 8.4(a). If the managing
underwriter or underwriters have not limited the amount of Restricted Stock to
be underwritten, the Company may include its securities for its own account in
such registration unless such inclusion will limit the sale of any Restricted
Stock in the underwriting. The managing underwriter or underwriters of any
underwritten public offering requested pursuant to this Section 8.4 shall be
selected by mutual agreement of the Company and the Purchaser(s).
8.5 Company Registration.
(a) If the Company shall determine to register any of its
securities either for its own account or the account of any security holder or
holders, other than a registration relating solely to employee benefit plans, or
a registration relating solely to a transaction pursuant to Rule 145 of the
Commission (or substantially similar successor rule) or a registration on any
registration form which does not permit secondary sales or does not include
substantially the same information regarding the Company as would be required to
be included in a registration statement covering the sale of Restricted Stock,
the Company will:
(i) promptly give to each Holder of Restricted Stock written
notice thereof (which shall include a list of the jurisdictions in
which the Company intends to attempt to qualify such securities under
the applicable Blue Sky or other state securities laws, and the name
of the managing underwriter or underwriters, if any, of the
offering); and
(ii) include in such registration all the Restricted Stock of
the same class or classes of securities to be registered by the
Company, as specified in a written request or requests given by any
Holder within 15 days after such written notice from the Company
described in clause (i) above is given, except as set forth in
Section 8.5(b) below.
(b) The right of any Holder to include Restricted Stock in a
registration pursuant to Section 8.5 involving an underwritten public offering
shall be conditioned upon the inclusion of such Holder's Restricted Stock in the
underwriting to the extent provided herein. Notwithstanding any other provision
of this Section 8.5, if the managing underwriter or underwriters determine that
marketing factors require a limitation on the number of shares to be
underwritten, and if such registration is
21.
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the first registered public offering of the Company's securities, the
underwriter may (subject to the allocation priority set forth below) exclude
from such registration and underwriting some or all of the Restricted Stock
requested to be included. The Company shall so advise all holders of securities
requesting registration, and the securities of the Company held by Other
Shareholders shall, to the extent necessary, be first excluded from such
registration before any shares of Restricted Stock held by the Purchaser are
excluded. If the Purchaser disapproves of the terms of any such underwriting, it
may elect to withdraw therefrom by written notice to the Company and the
underwriter. Any Restricted Stock excluded or withdrawn from such underwriting
shall be withdrawn from such registration.
8.6 Expenses of Registration. The Company shall bear all
Registration Expenses incurred in connection with (i) the first two
registrations on Form X-0, X-0, X-0 or S-18 (or their equivalents) effected
pursuant to Section 8.4, and (ii) all registrations pursuant to Section 8.5;
provided, however, that if any holder of Registrable Securities shall withdraw
from any registration commenced pursuant to this Section 8, such holder shall
pay his or its portion of any expenses incurred in connection with such
registration prior to such withdrawal pro rata, on the basis of the number of
shares such holder had requested to include in the registration. All Selling
Expenses shall be borne by the holders of the securities so registered and sold,
pro rata on the basis of the number of their shares so registered and sold.
8.7 Registration Procedures. In the case of each registration
effected by the Company pursuant to this Section 8, the Company will advise the
Purchasers in writing as to the initiation of such registration and as to the
completion thereof, and the Company will as expeditiously as possible:
(a) Keep such registration effective for a period of 90 days
or until the Holder or Holders of Restricted Stock included in such registration
have completed the distribution described in the registration statement relating
thereto, whichever first occurs;
(b) Furnish such number of prospectuses and other documents
incident thereto as a Holder of Restricted Stock included in such registration
may from time to time reasonably request;
(c) If the offering is to be underwritten, in whole or in
part, enter into a written underwriting agreement in form and substance
reasonably satisfactory to the Company, the underwriter of the public offering
and the Holders of the Restricted Stock included in such offering;
22.
27
(d) Register or qualify the securities covered by such
registration statement under state securities or Blue Sky laws of such
jurisdictions as such participating Holders of Restricted Stock and underwriters
may reasonably request, except 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;
(e) Notify the Holders participating in such registration,
promptly after it shall receive notice thereof, of the date and time when such
registration statement and each post-effective amendment thereto has become
effective or a supplement to any prospectus forming a part of such registration
statement has been filed;
(f) Notify counsel for such Holders promptly of any request by
the Commission for the amending or supplementing of such registration statement
or prospectus or for additional information;
(g) Advise such Holders promptly after it shall receive notice
or obtain knowledge thereof, of the issuance of any stop order by the Commission
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued; and
(h) Refrain from making any sale or distribution of Common
Stock or other equity security, except pursuant to any employee benefit plan
approved by the Board and any pre-existing agreement for the sale or
distribution of such securities, for at least 90 days after the closing of the
public offering pursuant to such registration statement.
8.8 Indemnification.
(a) The Company will indemnify and hold harmless each Holder
of Restricted Stock included in a registration pursuant to this Section 8, each
of such Holder's officers, directors and partners, and each person controlling
such Holder within the meaning of the Securities Act and the rules and
regulations thereunder, and each underwriter, if any, and each person who
controls any underwriter, 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 prospectus,
offering circular or other document (including any related registration
statement, notification or the like) 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
23.
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therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
thereunder 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 such Holder's officers,
directors and partners, 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 and
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) based upon
written information furnished to the Company by such Holder or underwriter and
stated to be specifically for use therein; provided, however, that in the case
of a registration pursuant to Section 8.5 hereof, the obligation of the Company
hereunder shall be limited to an amount equal to the aggregate proceeds to the
Company of securities sold in such registration.
(b) Each Holder of Restricted Stock included in a registration
pursuant to this Section 8 will indemnify the Company, each of the Company's
directors and officers and each underwriter, if any, of the Company's securities
covered by such registration, each Person who controls the Company or such
underwriter within the meaning of the Securities Act and the rules and
regulations thereunder, each other such Holder of Restricted Stock included in
such registration and such other Holder's officers, directors and partners, and
each Person controlling such other Holder 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 underwriters and such other
Holders, directors, officers, partners, and 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 such Holder and
stated to be specifically for use therein; provided, however, that the
obligations of the Purchaser hereunder shall be limited to an amount equal to
the proceeds to the Purchaser of securities sold as contemplated herein.
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(c) Each party entitled to indemnification under this Section
8.8 (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 any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be 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 Section 8. 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.
8.9 Information by Holder. Each Holder of Restricted Stock included
in a registration pursuant to this Section 8 shall furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Section 8.
8.10 Limitations on Registration of Issues of Securities. From and
after the date of this Agreement, so long as the Purchasers or their assigns are
together the Holders of more than 50% of the Restricted Stock purchased
hereunder, the Company shall not enter into any agreement with any holder or
prospective holder of any securities of the Company giving such holder or
prospective holder the right to require the Company to initiate any registration
of any securities of the Company or to participate in any registration effected
pursuant to Section 8.4 hereof. This Section 8.10 shall not limit the right of
the Company to enter into any agreements with any holder or prospective holder
of any securities of the Company giving such holder or prospective holder the
right to require the Company, upon any registration of any of its securities
other than pursuant to Section 8.4 hereof, to include, among the securities
which the Company is then registering, securities owned by such holder subject
to the terms and conditions of this Section 8 applicable to Other Shareholders.
Any right given by the Company to any holder or prospective holder of the
Company's securities in connection with the registration of securities shall be
conditioned such that it shall be consistent with the rights of the Holders of
Restricted Stock provided in this Agreement.
25.
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8.11 Rule 144 Reporting. With a view to making available the benefits
of the rules and regulations of the Commission which may permit the sale of the
Restricted Stock to the public without registration and the benefits of using
Form S-3, 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
from and after 90 days following the effective date of the first registration of
the Company under the Securities Act of an offering of its securities to the
general public;
(b) File with the Commission in a timely manner all reports
and other documents as the Commission may prescribe under Section 13(a) or
15(d) of the Exchange Act, whether or not the Company is required to do so, at
any time after it has become subject to such reporting requirements of the
Exchange Act; and
(c) So long as any Purchaser holds any Restricted Stock,
furnish to the Purchaser forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of Rule 144 (at any
time from and after 90 days following the effective date of the first
registration of 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), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
so filed as the Purchaser may reasonably request to avail itself of any rule or
regulation of the Commission allowing the Purchaser to sell any such securities
without registration.
(d) Use reasonable efforts to qualify for the use
of Form S-3 (or its equivalent).
8.12 Transfer of Registration Rights. The rights to cause the Company
to register securities granted by the Company under Sections 8.4 and 8.5 may be
assigned by any Purchaser to any of its limited partners or to the spouse of any
Purchaser, without regard to the amount of securities transferred, and to any
other transferees or assignees of such stock acquiring at least 50% of the
shares held by the Purchaser, provided that the Company is given written notice
at the time of or within a reasonable time after any said transfer, stating the
name and address of said transferees or assignees and identifying the securities
with respect to which such registration rights are being assigned, and provided
further that the transferees or assignees of such rights assume the obligations
of the Purchaser(s) under this section 8.
26.
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8.13 "Market Stand-Off" Agreement. The Purchasers, if requested by the
Company and the underwriter of any public offering of the Company, shall agree
not to sell or otherwise transfer or dispose of any Common Stock (or other
securities) of the Company held by it during the 90 day period following the
effective date of the registration statement covering the public offering,
provided that all officers and directors of the Company shall also enter into
similar agreements. Such agreement shall be in writing in a form satisfactory to
the Company and such underwriter. The Company may impose stop-transfer
instructions with respect to the securities subject to the foregoing
restrictions until the end of said 90 day period.
8.14 No Action Letter or Opinion of Counsel in Lieu of Registration;
Conversion of Restricted Stock. Notwithstanding anything else in this Section 8,
if Company shall have obtained from the Commission a "no action" letter in which
the Commission has indicated that it will take no action, if without
registration under the Securities Act, any holder disposes of securities covered
by any request for a registration made under this section in the specific manner
in which such holder proposes to dispose of the Restricted Stock, included in
such request, or if in the opinion of counsel for the Company concurred in by
counsel for such holder, which concurrence shall not be unreasonably withheld,
no registration under the Securities Act is required in connection with such
disposition, the shares included in such request shall not be eligible for
registration under this Section 8.
SECTION 9
Enforcement
9.1 Remedies at Law or in Equity. If any Default should occur or if
any representation or warranty made by or on behalf of either party to this
Agreement or in any certificate, report or other instrument delivered under or
pursuant to any term hereof shall be untrue or misleading in any material
respect as of the date of this Agreement or as of the Closing Date or as of the
date it was made, furnished or delivered, the other party may proceed to protect
and enforce its rights by suit in equity or action at law, whether for the
specific performance of any term contained in this Agreement or the Certificate
or for the injunction against the breach of any such term or in aid of the
exercise of any power granted in this Agreement or the Certificate or to enforce
any other legal or equitable right of such party, or to take any one or more of
such actions. In the event of such an action, the prevailing party in any such
dispute shall
27.
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be entitled to recover from the losing party all fees, costs, and expenses of
enforcing any right of such prevailing party under or with respect to this
Agreement or the Certificate, including without limitation such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs, and expenses of appeals.
9.2 Cumulative Remedies. None of the rights, powers or remedies
conferred under this Agreement shall be mutually exclusive, and each such right,
power or remedy shall be cumulative and in addition to any other right, power or
remedy whether conferred by this Agreement or by the Certificate or now or
hereafter available at law, in equity, by statute or otherwise.
SECTION 10
Definitions
Unless the context otherwise requires, the terms defined in this
section 10 shall have the meaning herein specified for all purposes of this
Agreement, applicable to both the singular and plural forms of any of the terms
herein defined. All accounting terms used in this Agreement not defined in this
section 10 shall, except as otherwise provided for herein, be construed in
accordance with those generally accepted accounting principles that the Company
is required to employ by the terms of this Agreement. If and so long as the
Company has any Subsidiary, the accounting terms appearing in this Agreement
shall refer to accounting on a consolidated basis for the Company and each of
its Subsidiaries.
"Agreement" shall mean this Agreement.
"Certificate" shall have the meaning assigned to it in section 1.1
hereof.
"Board" shall mean the Board of Directors of the Company.
"Business Plan" shall have the meaning assigned to it in section 3.20
hereof.
"Closing" and "Closing Date" shall have the meanings assigned to them
in section 2.1 hereof.
"Common Stock" shall have the meaning assigned to it in section 3.3
hereof.
28.
33
"Commission" shall mean the Securities and Exchange Commission.
"Company" shall mean Intellicom, Inc.
"Default" shall mean a default or failure in the due observance or
performance of any covenant, condition or agreement to be observed or performed
under the terms of this Agreement or the Certificate, if such default or failure
in performance shall remain unremedied for thirty days.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Holder" shall mean, with respect to any outstanding security, the
record owner of such security and, with respect to the Common Stock or other
securities issuable upon conversion of any Shares, the record owner of such
Shares.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind, including, without limitation, any
conditional sales or other title retention agreement, any lease in the nature
thereof, and the filing of or agreement to give any financing statement under
the Uniform Commercial code of any jurisdiction and including any lien or charge
arising by statute or other law.
"Other Shareholder" shall have the meaning assigned to it in section
8.4(b) hereof.
"Person" shall include all natural persons, corporations, business
trusts, associations, companies, partnerships, joint ventures and other entities
and governments and agencies and political subdivisions.
"Preferred Stock" shall have the meaning assigned to it in section
3.3 hereof.
"Purchasers" shall mean Southern California Ventures, Xxxxxx X.
Xxxxxxx and Xxxxxx X. Xxxxx.
The terms "register", "registered" and "registration" shall refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"Registration Expenses" shall mean all expenses incurred by the
Company in order to comply with sections 8.4, 8.5 and 8.7 hereof, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of accountants
29.
34
and legal counsel for the Company, fees and disbursements NASD fees, blue sky
fees and expenses, and the expenses associated with the Company's obligations
under section 8.7, but excluding Selling Expenses.
"Restricted Stock" shall mean (i) all Common Stock issued or issuable
upon conversion of the Shares and (ii) any securities issued or issuable with
respect to such Common Stock or the Shares upon any stock dividend, stock split,
recapitalization, merger, consolidation or similar event; provided, however,
that any shares of such Common Stock or other, securities shall cease to be
Restricted Stock after they have been lawfully sold to the public or
certificates representing such shares shall be issued in accordance with Section
8.3 without the legend required under Section 8.2.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions relating solely to the sale of Restricted Stock.
"Shares" shall have the meaning assigned to it in section 1.1 hereof.
"Special Counsel" shall mean Xxxxxxx & XxXxxxxx, legal counsel for
the Purchasers in connection with the purchase and sale of the Shares.
"Subsidiary" shall mean any corporation, association or other
business entity at least 50% of the outstanding voting stock of which is at the
time owned or controlled directly or indirectly by the Company or by one or more
of such subsidiary entities or both.
SECTION 11
Miscellaneous
11.1 Governing Law. This Agreement shall be governed in all respects
by the laws of the State of California.
11.2 Survival. All representations, warranties, covenants and
agreements made in Section 3 of this Agreement, the Exhibits hereto or in the
Business Plan shall survive until 30 days following the delivery to the
Purchasers of the financial statements for the year ended April 30, 1988
pursuant to Section 7.2(a) hereof. All statements contained in any certificate,
instrument or other writing delivered by or on behalf of the Company pursuant
30.
35
hereto or in connection with or in contemplation of the transactions herein
contemplated shall constitute representations and warranties by the Company
hereunder.
11.3 Successors and Assigns. Except as otherwise expressly provided
herein, the terms and provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto; provided, however, that the Company may not assign its
rights hereunder and the Purchasers may not assign their rights hereunder except
to any Purchaser's limited partners or to the spouse of any Purchaser, without
regard to the amount of shares transferred to such Person or to any other
person to whom a Purchaser transfers at least 50% of the Restricted Stock
purchased by such Purchaser.
11.4 Entire Agreement. This Agreement (including the Exhibits hereto)
constitutes the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof.
11.5 Notices. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given upon delivery, if delivered personally,
or upon the expiration of 72 hours after mailing, if mailed, first class mail,
postage prepaid, addressed as follows:
(a) If to the Purchasers, at the addresses set forth below or
at such other address or addresses as the Purchaser may specify by written
notice to the Company:
Xx. Xxxxxx X. Xxxxxxx Xxxxx X. Xxxxx, Esq.
Southern California Ventures Xxxxxxx & XxXxxxxx
0000 Xxxxxxxx Xxxxxx Xxxxx 000 Xxxxx Xxxxx Xxxxxx
Xxxxx 000 Xxxxx 0000
Xxxxxx, XX 00000 Xxx Xxxxxxx, XX 00000
(b) If to the Company, at the addresses set forth below or at
such other address or addresses as the Company may specify by written notice to
the Purchaser:
Xx. Xxxx X. Xxxxxxxx Xxxxxxx X. Circuit, Esq.
ViaSat, Inc. Xxxxx, Circuit and Xxxxxxxx
0000 Xxxxx Xxxxx 0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000 Xx Xxxxx, Xxxxxxxxxx 00000
11.6 Severability; Counterparts.
(a) In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and
31.
36
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
(b) 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.
11.7 Titles and Subtitles. The titles of the sections of this
Agreement are for convenience and reference only and are not to be considered in
construing this Agreement.
11.8 Waivers and Amendments. With the written consent of Purchasers
holding a majority of the Restricted Stock the obligations of the Company and
the rights of the Purchasers under this Agreement may be waived (either
generally or in a particular instance, either retroactively or prospectively and
either for a specified period of time or indefinitely), and with the same
consent, the Company, when authorized by resolution of its Board, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of any supplemental agreement or modifying in any manner the rights and
obligations hereunder of the Purchasers and the Company; provided, however, that
no such waiver or supplemental agreement shall affect any of the rights of the
Purchasers created by the Certificate or by the California Corporations Code
unless such waiver or supplemental agreement shall comply with the requirements
of the Certificate or the California Corporations Code. Neither this Agreement
nor any provision hereof may be changed, waived, discharged or terminated orally
or by course of dealing, but only by a statement in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, except to the extent provided in this section 11.8.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed And delivered by their proper and duly authorized officers or
representatives as of the day and year first written above.
VIASAT, INC. SOUTHERN CALIFORNIA VENTURES
By /s/ Xxxx X. Xxxxxxxx By
_______________________________________ ______________________________________
_______________________________________ ______________________________________
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxx
32.
37
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
(b) 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.
11.7 Titles and Subtitles. The titles of the sections of this
Agreement are for convenience and reference only and are not to be considered in
construing this Agreement.
11.8 Waivers and Amendments. With the written consent of Purchasers
holding a majority of the Restricted Stock the obligations of the Company and
the rights of the Purchasers under this Agreement may be waived (either
generally or in a particular instance, either retroactively or prospectively and
either for a specified period of time or indefinitely), and with the same
consent, the Company, when authorized by resolution of its Board, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of any supplemental agreement or modifying in any manner the rights and
obligations hereunder of the Purchasers and the Company; provided, however, that
no such waiver or supplemental agreement shall affect any of the rights of the
Purchasers created by the Certificate or by the California Corporations Code
unless such waiver or supplemental agreement shall comply with the requirements
of the Certificate or the California Corporations Code. Neither this Agreement
nor any provision hereof may be changed, waived, discharged or terminated orally
or by course of dealing, but only by a statement in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, except to the extent provided in this section 11.8.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers or
representatives as of the day and year first written above.
VIASAT, INC. SOUTHERN CALIFORNIA VENTURES
By____________________________________ By_____________________________________
/s/ Xxxxxx X. Xxxxx
______________________________________ ______________________________________
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxx
32.
38
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
(b) 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.
11.7 Titles and Subtitles. The titles of the sections of this
Agreement are for convenience and reference only and are not to be considered in
construing this Agreement.
11.8 Waivers and Amendments. With the written consent of Purchasers
holding a majority of the Restricted Stock the obligations of the Company and
the rights of the Purchasers under this Agreement may be waived (either
generally or in a particular instance, either retroactively or prospectively and
either for a specified period of time or indefinitely), and with the same
consent, the Company, when authorized by resolution of its Board, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of any supplemental agreement or modifying in any manner the rights and
obligations hereunder of the Purchasers and the Company; provided, however, that
no such waiver or supplemental agreement shall affect any of the rights of the
Purchasers created by the Certificate or by the California Corporations Code
unless such waiver or supplemental agreement shall comply with the requirements
of the Certificate or the California Corporations Code. Neither this Agreement
nor any provision hereof may be changed, waived, discharged or terminated orally
or by course of dealing, but only by a statement in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, except to the extent provided in this section 11.8.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers or
representatives as of the day and year first written above.
VIASAT, INC. SOUTHERN CALIFORNIA VENTURES
By____________________________________ By_____________________________________
/s/ Xxxxxx X. Xxxxxxx
______________________________________ _______________________________________
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxx
32.
39
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
(b) 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.
11.7 Titles and Subtitles. The titles of the sections of this
Agreement are for convenience and reference only and are not to be considered in
construing this Agreement.
11.8 Waivers and Amendments. With the written consent of Purchasers
holding a majority of the Restricted Stock the obligations of the Company and
the rights of the Purchasers under this Agreement may be waived (either
generally or in a particular instance, either retroactively or prospectively and
either for a specified period of time or indefinitely), and with the same
consent, the Company, when authorized by resolution of its Board, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of any supplemental agreement or modifying in any manner the rights and
obligations hereunder of the Purchasers and the Company; provided, however, that
no such waiver or supplemental agreement shall affect any of the rights of the
Purchasers created by the Certificate or by the California Corporations Code
unless such waiver or supplemental agreement shall comply with the requirements
of the Certificate or the California Corporations Code. Neither this Agreement
nor any provision hereof may be changed, waived, discharged or terminated orally
or by course of dealing, but only by a statement in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, except to the extent provided in this section 11.8.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers or
representatives as of the day and year first written above.
VIASAT, INC. SOUTHERN CALIFORNIA VENTURES
By By /s/ ,General Partner
______________________________________ _______________________________________
______________________________________ _______________________________________
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxx
32.
40
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
(b) 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.
11.7 Titles and Subtitles. The titles of the sections of this
Agreement are for convenience and reference only and are not to be considered in
construing this Agreement.
11.8 Waivers and Amendments. With the written consent of Purchasers
holding a majority of the Restricted Stock the obligations of the Company and
the rights of the Purchasers under this Agreement may be waived (either
generally or in a particular instance, either retroactively or prospectively and
either for a specified period of time or indefinitely), and with the same
consent, the Company, when authorized by resolution of its Board, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of any supplemental agreement or modifying in any manner the rights and
obligations hereunder of the Purchasers and the Company; provided, however, that
no such waiver or supplemental agreement shall affect any of the rights of the
Purchasers created by the Certificate or by the California Corporations Code
unless such waiver or supplemental agreement shall comply with the requirements
of the Certificate or the California Corporations Code. Neither this Agreement
nor any provision hereof may be changed, waived, discharged or terminated orally
or by course of dealing, but only by a statement in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, except to the extent provided in this section 11.8.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers or
representatives as of the day and year first written above.
VIASAT, INC. SOUTHERN CALIFORNIA VENT
By By /s/ ,General Partner
______________________________________ _______________________________________
______________________________________ _______________________________________
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxx
32.
41
EXHIBIT A
AMENDED AND RESTATED ARTICLES OF
INCORPORATION OF
VIASAT, INC.
a California Corporation
XXXX X. XXXXXXXX and XXXXXXX X. CIRCUIT hereby certify that:
1. They are the President and Assistant Secretary, respectively, of
ViaSat, Inc., a California corporation.
2. The Articles of Incorporation of this corporation are amended and
restated to read as follows:
ONE: The name of this corporation is ViaSat, Inc.
TWO: 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 California other than the banking
business, the trust company business or the practice of a profession
permitted to be incorporated by the California Corporations Code.
THREE: A. This corporation is authorized to issue thirteen
million (13,000,000) shares of its capital stock, which shall be
divided into two classes known as common stock and preferred stock,
respectively, and the par value of each share of common and
preferred stock shall be One Cent ($.01).
B. The total number of shares of common stock which
this corporation is authorized to issue is ten million (10,000,000).
The total number of shares of preferred stock which this corporation
is authorized to issue is three million (3,000,000). This corporation
is authorized to issue one series of its preferred stock, which shall
be known as its Series A convertible preferred stock ("Series A
Preferred Stock") and shall consist of three million (3,000,000)
shares.
C. This corporation shall from time to time, in
accordance with the laws of the State of
42
California, increase the authorized amount of its common stock, if
at any time the number of shares of common stock remaining unissued
and available for issuance shall not be sufficient to permit
conversion of the preferred stock in accordance with the applicable
conversion provisions.
FOUR: The rights, preferences, privileges and restrictions
granted to or imposed upon the shares of Series A Preferred Stock
or the holders thereof are as follows:
(a) Dividends.
(1) Right to Dividends. The holders of the outstanding shares
of Series A Preferred Stock shall be entitled to receive, when and as declared
by the Corporation's Board of Directors, and out of any funds legally available
therefor, cumulative dividends at the annual rate of $.009 per share, payable,
if earned and declared, in cash on the 1st day of May of each year with respect
to the prior fiscal year. Subject to the remainder of this subsection (a), such
dividends shall accrue on each such share from the date of its original issue
and shall accrue from month to month. Such dividends shall accumulate and accrue
during each fiscal year only to the extent of the net income of the Company for
such fiscal year. For the purposes of this section, "net income" of the Company
for a period shall mean the consolidated net income of the Company, and its
subsidiaries, for that period determined in accordance with generally accepted
accounting principles.
(2) Priority. No dividend shall be paid or declared and no
distribution shall be made on any Common Stock, no shares of Common Stock shall
be purchased, redeemed or otherwise acquired by the Corporation and no monies
shall be paid into or set aside or otherwise made available for a sinking fund
for the purchase, redemption or acquisition of any shares of Common Stock if
dividends on the Series A Stock for the then current annual dividend period and
accrued dividends for all previous dividend periods, at the annual rate
specified above, have not been paid or declared and a sum sufficient for the
payment thereof set apart; provided, however, that subject to subparagraph
(g)(1)(i), the restrictions shall not apply to the repurchase of shares of
Common Stock from directors or employees of, or consultants to the Corporation
pursuant to stock purchase or stock option agreements under which the
Corporation has the option or obligation to repurchase such shares upon the
occurrence of certain events including the termination of employment. Any
accumulation of dividends on Series A Stock shall not bear interest.
(3) Partial Payment. If the Board shall declare a payment of
dividend and the amount declared for dividend payment
2.
43
is insufficient to permit the payment of the full preferential amounts required
to be paid to the holders of the outstanding Series A Stock and to holders of
any other Preferred Stock on a parity therewith as to dividend preferences,
then the entire amount declared for dividend payment shall be distributed
ratably among the holders of Series A Stock and such other holders according to
the respective preferential amounts to which such holders would otherwise be
entitled.
(b) Preference on Liquidation.
(1) In the event of any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, the holders of shares of
Series A Stock then outstanding shall be entitled to be paid out of the assets
of the Corporation available for distribution to it stockholders, whether from
capital, surplus or earnings before any payment shall be made in respect of the
Common Stock of the Corporation, an amount equal to $.10 plus all accrued, but
unpaid dividends, if any, per share (the "Preference Price"). In the case of any
liquidation, dissolution, or winding up of the corporation occurring on or prior
to June 11, 1989, after the holders of shares of Series A Stock have received an
amount equal to the Preference Price, and the further payment of the full
preferential amounts to which the holders of any other Preferred Stock are
specifically entitled, the assets remaining shall be distributed ratably among
the holders of Common Stock until each holder of Common Stock has received an
amount per share equal to the price paid per share to the Corporation by the
original holder of each share of Common Stock plus all accrued but unpaid
dividends, if any, on such Common Stock. Thereafter, any assets remaining
shall be distributed ratably among the holders of all of the stock of the
Corporation (Preferred and Common). In case of any liquidation, dissolution or
winding up of the Corporation occurring subsequent to June 11, 1989, after the
holders of shares of Series A Stock have received an amount equal to the
Preference Price, and the further payment of the full preferential amounts to
which the holders of any other Preferred Stock are specifically entitled, the
assets remaining shall be distributed ratably among the holders of Common Stock
until each holder of Common Stock has received an amount equal to the Preference
Price. (The amount required to pay the full Preference Price to each holder of
Series A Stock and other preferred stock and the amount required to be paid to
each holder of Common Stock hereunder is hereinafter collectively referred to as
the "Payout.") Thereafter, any assets remaining shall be distributed ratably
among the holders of all of the stock of the Corporation (Preferred and Common).
(2) The sale, transfer or lease of all or substantially all of
the assets of the Corporation, the gross proceeds of which do not exceed the
Payout, shall be deemed to be a liquidation, dissolution or winding up of the
Corporation as those terms are used in this paragraph (b).
- 3 -
44
(3) If upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the assets of the Corporation
available for distribution to its shareholders shall be insufficient to pay the
full preferential amounts required to be paid to the holders of series A Stock
and the holders of any other Preferred Stock on a parity therewith as to
liquidation preferences, then the entire assets of the Corporation legally
available to be distributed shall be distributed ratably among the holders of
Series A Stock and such other holders according to the respective preferential
amounts to which such holders would otherwise be entitled.
(c) voting.
(1) Preferred Stock. Each holder of shares of Series A Stock
shall be entitled to vote on all matters and, except as otherwise expressly
provided herein, shall be entitled to the number of votes equal to the largest
number of full shares of Common Stock into which such shares of Series A Stock
could be converted, pursuant to the provisions of paragraph (d) of this Article
Four, at the record date for the determination of the shareholders entitled to
vote on such matters or, if no such record date is established, at the date such
vote is taken.
(2) Common Stock. Each holder of shares of Common stock shall
be entitled to one vote for each share thereof held. Except as otherwise
expressly provided herein or as required by law, the holders of Series A Stock
and the holders of Common Stock shall vote together and not as separate classes.
(d) Conversion Rights.
The holders of Series A Stock shall have the following conversion
rights (the "Conversion Rights"):
(1) Right to Convert. The Series A Stock shall be convertible,
at any time or from time to time, at the option of any holder thereof, into
fully paid and nonassessable shares of Common Stock.
(2) Conversion Price. Each share of Series A Stock shall be
convertible into the number of shares of Common Stock which results from
dividing the Conversion Price in effect at the time of conversion into $.10 for
each share of Series A Stock being converted. The initial Conversion Price shall
be $.10 subject to adjustment from time to time as provided below.
(3) Mechanics of Conversion. Each holder of Series A Stock who
desires to convert the same into shares of Common Stock shall surrender the
certificate or certificates therefor, duly endorsed, at the office of the
Corporation or of
4.
45
any transfer agent for the Series A Stock or Common Stock, and shall give
written notice to the Corporation at such office that such holder elects to
convert the same and shall state therein the number of shares of Series A Stock
being converted. Thereupon, the Corporation shall promptly issue and deliver at
such office to such holder a certificate or certificates for the number of
shares of Common Stock to which such holder is entitled. 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 Series A Stock to be converted and the
person entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder of such shares
of Common Stock on such date.
(4) Adjustment for Stock Splits and Combinations. If the
Corporation at any time or from time to time after the date of original issue of
the Series A Stock (the "Commitment Date") effects a subdivision of the
outstanding Common Stock, the Conversion Price then in effect immediately before
the subdivision shall be proportionately decreased, and conversely, if the
Corporation at any time or from time to time after the Commitment Date combines
the outstanding shares of Common Stock, the Conversion Price then in effect
immediately before the combination shall be proportionately increased. Any
adjustment under this subparagraph (4) shall become effective as of the date and
time the subdivision or combination becomes effective.
(5) Adjustment for Certain Dividends and Distributions. In the
event the Corporation at any time or from time to time after the Commitment Date
makes, or fixes a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in additional
shares of Common Stock, then and in each such event the Conversion Price then in
effect shall be decreased as of the time of such issuance or, in the event such
a record date is fixed, as of the close of business on such record date, by
multiplying the Conversion Price then in effect by a fraction (i) the numerator
of which is the total number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the close of business on such
record date, and (ii) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date plus the number of
shares of Common Stock issuable in payment of such dividend or distribution;
provided, however, that if such record date is fixed and such dividend or
distribution is not fully paid on the date fixed therefor, the Conversion Price
shall be recomputed accordingly as of the close of business on such record date
and thereafter the Conversion Price shall be adjusted pursuant to this
subparagraph (5) as of the time of and on the basis of the actual dividend or
distribution paid.
5.
46
(6) Adjustments for Other Dividends and Distributions. In the
event the Corporation at any time or from time to time after the Commitment Date
makes, or fixes a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in securities of
the Corporation other than shares of Common Stock, then and in each such event
provision shall be made so that the holders of Series A Stock shall receive upon
conversion thereof, in addition to the number of shares of Common Stock
receivable thereupon, the amount of securities of the Corporation which they
would have received had their Series A Stock been converted into Common Stock on
the date of such event and had they thereafter, during the period from the date
of such event to and including the date of conversion, retained such securities
receivable by them as aforesaid during such period, subject to all other
adjustments called for during such period under this paragraph (d) with respect
to the rights of the holders of Series A Stock.
(7) Adjustment for Recapitalizations, Reclassifications and
Exchanges. If the Common Stock issuable upon the conversion of the Series A
Stock is changed into the same or a different number of shares of any class or
classes of stock, whether by recapitalization, reclassification or exchange
(other than by subdivision, combination, stock dividend, reorganization,
merger, consolidation or sale of assets, as provided for elsewhere in this
paragraph (d)), then the holders of Series A Stock shall have the right
thereafter to convert their Series A Stock into the kind and amount of stock and
other securities and property receivable upon such recapitalization,
reclassification or exchange by holders of the maximum number of shares of
Common Stock into which such shares of Series A Stock might have been converted
immediately prior to such recapitalization, reclassification or exchange, all
subject to further adjustment as provided herein.
(8) Reorganizations, Mergers, Consolidations or
Sales of Assets. If at any time or from time to time there is a capital
reorganization of the Common Stock (other than a recapitalization,
reclassification, exchange, subdivision, combination, or stock dividend provided
for elsewhere in this paragraph (d)), merger or consolidation of the Corporation
with or into another corporation, or sale of all or substantially all of the
Corporation's properties and assets to any other person, then, as a part of such
reorganization, merger, consolidation or sale, provision shall be made so that
the holders of Series A Stock shall thereafter be entitled to receive, upon
conversion of the Series A Stock, the number of shares of stock or other
securities or property of the Corporation, or of the successor corporation
resulting from such reorganization, merger, consolidation or sale, to which a
holder of Common Stock deliverable upon conversion would otherwise have been
entitled on such reorganization, merger, consolidation, or sale. In any such
case, appropriate adjustment
6.
47
shall be made in the application of the provisions of this paragraph (d) with
respect to the rights of the holders of the Series A Stock after the
reorganization, merger, consolidation or sale to the end that the provisions of
this paragraph (d) (including adjustment of the Conversion Price then in effect
and number of shares purchasable upon conversion of the Series A Stock) shall be
applicable after that event and be as nearly equivalent to the provisions hereof
as may be practicable.
(9) Accountants' Certificate of Adjustment. In any case of an
adjustment or readjustment of the Conversion Price or the number of shares of
Common Stock, or other securities issuable upon conversion of Series A Stock,
the Corporation at its expense, shall cause independent public accountants of
recognized standing selected by the Corporation (who may be the independent
public accountants then auditing the books of the Corporation) to compute such
adjustment or readjustment in accordance with the provisions hereof and prepare
a certificate showing such adjustment or readjustment, and shall mail such
certificate, by first class mail, postage prepaid, to each registered holder of
Series A Stock at the holder's address as shown in the Corporation's books. The
certificate shall set forth such adjustment or readjustment showing in detail
the facts upon which such adjustment or readjustment is based.
(10) Notices of Record Date. In the event of (i) any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, or (ii) any capital reorganization of the
Corporation, any reclassification or recapitalization of the capital stock of
the Corporation, any transfer of all or substantially all of the assets of the
Corporation to any other person, any consolidation, any merger, or any voluntary
or involuntary dissolution, liquidation or winding up of the Corporation, the
Corporation shall mail to each holder of Series A Stock no less than 10 days and
no more than 50 days prior to the record date specified therein or the effective
date thereof, a notice specifying (A) the material terms and conditions of the
proposed action, (B) the date on which any such record is to be taken for the
purpose of such dividend or distribution and a description of such dividend or
distribution, (C) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding up is expected to become effective, and (D) the time, if any, that is to
be fixed, as to when the holders of record of Common Stock (or other securities)
shall be entitled to exchange their shares of Common Stock (or other securities)
for securities or other property deliverable upon such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding up.
7.
48
(11) Automatic Conversion.
(i) Each share of Series A Stock shall automatically be
converted into shares Of Common Stock based on the then effective Conversion
Price immediately upon the closing of any public offering pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
in which the aggregate gross proceeds received by the Corporation at the public
offering price equals or exceeds $3,000,000, and the public offering price per
share of which equals or exceeds $.50 per share of Common Stock (appropriately
adjusted for stock dividends, recapitalizations, subdivisions and combinations
of shares of Common Stock).
(ii) Each share of Series A Stock shall automatically be
converted into shares of Common Stock based on the then effective Conversion
Price immediately prior to the closing of a merger, consolidation or combination
of the Corporation with or into another Corporation or entity, or a sale of
substantially all of the Corporation's assets, in which the Corporation receives
cash in the aggregate amount of, or freely tradeable securities with an
aggregate value of, at least $3,000,000 and at a price per share of Common Stock
equal to or exceeding $.50 per share.
(iii) Upon the occurrence of the event specified in
subparagraph (i) or (ii) above, the outstanding shares of Series A Stock shall
be converted automatically without any further action by the holders of such
shares and whether or not the certificates representing such shares are
surrendered to the Corporation or its transfer agent; provided, however, that
the Corporation shall not be obligated to issue certificates evidencing the
shares of Common Stock issuable upon such conversion unless the certificates
evidencing such shares of Series A Stock are either delivered to the Corporation
or its transfer agent as provided below, or the holder notifies the Corporation
or its transfer agent that such certificates have been lost, stolen or
destroyed and executes an agreement satisfactory to the Corporation to indemnify
the Corporation from any loss incurred by it in connection therewith. Upon the
occurrence of such automatic conversion of the Series A Stock, each holder of
Series A Stock shall surrender the certificates representing such shares at the
office of the Corporation or any transfer agent for the Series A Stock or Common
Stock. Thereupon, there shall be issued and delivered to such holder promptly at
such office and in his name as shown on such surrendered certificate or
certificates, a certificate or certificates for the number of shares of Common
Stock into which the shares of Series A Stock surrendered were convertible on
the date on which such automatic conversion occurred.
8.
49
(12) Fractional Shares. No fractional shares of Common Stock
shall be issued upon conversion of the shares of Series A Stock of any holder.
In lieu of any fractional shares to which the holder would otherwise be
entitled, the Corporation shall, to the extent legally permissible, pay cash
equal to the product of such fraction multiplied by the Common Stock's fair
market value as of the date of conversion as determined in good faith by the
Board.
(13) 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 Stock, solely for the purpose of effecting the
conversion of the shares of Series A Stock, such number of its shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
outstanding shares of Series A Stock; and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all then outstanding shares of Series A Stock, 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 Stock to such
number of shares as shall be sufficient for such purpose.
(14) Notices. Any notice required by the provisions of this
paragraph (d) to be given to the holder of shares of the Series A Stock shall be
deemed given upon the earlier of actual receipt or 72 hours after the same has
been deposited in the United States mail, by certified or registered mail,
return receipt requested, postage prepaid, and addressed to each holder of
record at his address appearing on the books of the Corporation.
(15) Payment of Taxes. The Corporation will pay all taxes
(other than taxes based upon income) and other governmental charges that may be
imposed with respect to the issue or delivery of shares of Common Stock upon
conversion of shares of Series A Stock, including without limitation, any tax or
other charge imposed in connection with any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that in which the shares
of Series A Stock so converted were registered.
(e) Redemption.
The Company may only redeem or otherwise acquire for value any
outstanding Series A Stock as follows:
(1) Mandatory Redemption. So long as any Series A Stock
remains outstanding, the Company will, if it may lawfully do so, redeem one
third of the number of shares of Series A Stock held on January 1, 1991 by each
holder thereof, on each of April
9.
50
1, 1991, April 1, 1992, and April 1, 1993 ("Redemption Date(s)"), at the
redemption price hereinafter specified; provided, however, that the Company
shall not redeem any shares of Series A Stock required to be redeemed on a
Redemption Date which a holder elects not to have redeemed by delivery of a
written notice to the Company within 45 days after the receipt of the Redemption
Notice (as defined below) for such Redemption Date. If the funds of the Company
legally available for redemption of Series A Stock on any Redemption Date are
insufficient to redeem the total number of shares required under this subsection
to be redeemed on such date, the funds which are legally available will be used
to redeem the maximum possible number of shares. At any time thereafter when
additional funds of the Company are legally available for the redemption of the
Series A Stock, such funds will immediately be used to redeem Series A Stock
which the Company has become obligated to redeem on any Redemption Date but has
not yet redeemed. In the event of the redemption of less' than one third of the
Series A Stock held by each holder thereof on any Redemption Date, the Company
shall effect such redemption pro rata from the holders of Series A Stock
according to the number of shares held by each.
(2) Redemption Price. The redemption price shall be an amount per
share in cash equal to $.10 plus all accrued and unpaid dividends thereon (the
"Redemption Price").
(3) Redemption Notice. The Company shall, not less than 60 nor more
than 90 days prior to each date for the redemption of the Series A Stock, mail
written notice ("Redemption Notice"), postage prepaid, to each holder of record
of Series A Stock to be redeemed at such post office address last shown on the
records of the Company. The Redemption Notice shall state:
(i) The total number of the outstanding shares of Series A
Stock to be redeemed;
(ii) The number of shares of Series A Stock held by the holder
which the Company intends to redeem;
(iii) The Redemption Date and Redemption Price;
(iv) The date on or before which the holder of Series A Stock
may elect not to have redeemed any or all of such holder's Series A Stock
scheduled for redemption.
(v) The time and manner in, and place at, which the holder is
to surrender to the Company the certificate or certificates representing the
shares of Series A Stock to be redeemed.
10.
51
(4) Surrender of Stock. On or before the Redemption Date, each
holder of Series A Stock to be redeemed, unless the holder has converted the
shares to be redeemed as provided in paragraph (d), shall surrender the
certificate or certificates representing such shares to the Company, in the
manner and at the place designated in the Redemption Notice, and thereupon the
Redemption Price for such shares shall be payable to the order of the person
whose name appears on such certificate or certificates as the owner thereof, and
each surrendered certificate shall be cancelled and retired. In the event less
than all of the shares of Series A Stock represented by such certificate are
redeemed, a new certificate representing the unredeemed shares shall be issued
to the holder of such shares.
(5) Termination of Rights. If the Redemption Notice is duly
given, and if on or prior to the Redemption Date the Redemption Price is either
paid or made available for payment through the arrangement specified in
subparagraph (6) below, then notwithstanding that the certificates evidencing
any of the shares of Series A Stock so called for redemption have not been
surrendered, such shares will thereupon be deemed to be redeemed and no longer
outstanding, and the dividends with respect to such shares shall cease to accrue
and all rights with respect to such shares shall forthwith cease and terminate,
except the right of the holders to receive the Redemption Price without interest
upon surrender of their certificates therefor.
(6) Deposit of Funds. On or prior to the Redemption Date, the
Company shall deposit with any bank or trust company in San Diego, California,
having a capital and surplus of at least $100,000,000, as a trust fund, a sum
equal to the aggregate Redemption Price of all outstanding shares of Series A
Stock and any other Preferred Stock on a parity therewith as to redemption,
called for redemption and not yet redeemed, with irrevocable instructions and
authority to the bank or trust company to pay, on or after the Redemption Date
or prior thereto, the Redemption Price to the respective holders upon the
surrender of their share certificates. Any monies so deposited and unclaimed at
the end of one year from the Redemption Date shall be released or repaid to the
Company, after which the holders of shares called for redemption shall be
entitled only to receive payment of the Redemption Price from the Company.
(f) Restrictions and Limitations.
(1) So long as at least 300,000 shares of Series A Stock remain
outstanding, the Corporation shall not, and shall not permit any Subsidiary (as
hereinafter defined) to, without the vote or written consent by the holders of
more than 50% of the then outstanding Series A Stock voting as a single class:
11.
52
(i) Purchase, redeem or otherwise acquire (or pay into or set
aside for a sinking fund for such purpose) any of the Common Stock; provided,
however, that this restriction shall not apply to the repurchase of shares of
Common Stock from Corporation or any Subsidiary pursuant to an agreement under
which the Corporation has the option or the obligation to repurchase such shares
upon the occurrence of certain events, including the termination of employment,
provided that the total amount applied to such repurchase does not exceed
$50,000 during any twelve-month period;
(ii) Prior to April 1, 1993, effect any sale, lease,
assignment, transfer or other conveyance of all or substantially all of the
assets of the Corporation or any corporation more than 50% of whose outstanding
voting stock is owned by the Corporation ("Subsidiary"), or any consolidation or
merger involving the Corporation or any Subsidiary, or any recapitalization,
dissolution, liquidation or winding up, of the Corporation in which the
consideration received by or allocable to the holders of the Series A Stock is
cash in an amount, or freely tradeable Securities with a value, which is less
than $.50 per share, appropriately adjusted for stock splits, combinations and
dividends, or make any agreement or become obligated to do so unless the
obligations of the Corporation under the agreement are expressly conditioned
upon the requisite approval of the holders of the Series A Stock.
(iii) Permit any Subsidiary to issue or sell, except to the
Corporation or any wholly-owned Subsidiary, any stock of such Subsidiary;
(iv) Until the earlier of April 1, 1993 or the end of the
second consecutive fiscal year in which the Corporation has pre-tax earned
income (determined in accordance with generally accepted accounting principles
consistently applied) of at least $500,000, amend the Bylaws of the Corporation
to change the authorized number of directors.
(2) The Corporation shall not amend its Articles of Incorporation
without the approval, by vote or written consent, of the holders of more than
50% of the Series A Stock voting as a single class if such amendment would
change any of the rights, preferences, privileges of or limitations provided for
herein for the benefit of the Series A Stock.
(g) Replacement of Certificates. Upon receipt of evidence reasonably
satisfactory to the Corporation of the loss, theft, destruction, or mutilation
of any certificate representing any of the Series A Stock, and, in the case of
loss, theft, or destruction, the execution of an agreement satisfactory to the
Corporation to indemnify the Corporation from any loss incurred
12.
53
by it in connection therewith, the Corporation will issue, or cause to be
issued, a new certificate representing such Series A Stock in lieu of such lost,
stolen, destroyed, or mutilated certificate.
3. The foregoing amendment and restatement of the Articles of
Incorporation has been duly approved by the Board of Directors.
4. The foregoing amendment and restatement of the Articles of
Incorporation has been duly approved by the required vote of shareholders in
accordance with Sections 902 and 903 of the California Corporations Code. The
total number of outstanding shares of common stock of the corporation is three
million (3,000,000). The number of shares voting in favor of the amendment and
restatement equaled or exceeded the vote required. The percentage vote required
was more than fifty percent (50%).
We declare, under the penalty of perjury, under the laws of the
State of California, that the matters set forth in this certificate are true on
our own knowledge.
Executed this 9th day of June, 1986, at La Jolla, California.
/s/ Xxxx X. Xxxxxxxx
___________________________________
XXXX X. XXXXXXXX
President
/s/ Xxxxxxx X. Circuit
___________________________________
XXXXXXX X. CIRCUIT
Assistant Secretary
13.
54
EXHIBIT B
SCHEDULE OF PURCHASERS
Number of
Purchaser Shares Consideration
--------- ---------- -------------
Southern California
Ventures 2,720,000 $272,000
Xxxxxx X. Xxxxxxx 250,000 25,000
Xxxxxx X. Xxxxx 30,000 3,000
---------- --------
3,000,000 $300,000
---------- --------
55
ViaSat, Inc.
Schedule of Exceptions to
Preferred Stock Purchase Agreement
Dated June 11 , 1986
1. Xxxx Xxxxxxxx, the Company's President, owns 263 shares of the common
stock of M/A - COM, Inc., his former employer and a potential competitor of the
Company.
EXHIBIT C
56
ViaSat, Inc.
Schedule of Shareholders of Record
June 11, 1986
Xxxx Xxxxxxxx 1,200,000 shares
0000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Xxxxxx X. Xxxx 900,000 shares
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Xxxx X. Xxxxxx 900,000 shares
00000 Xxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
EXHIBIT "D"
57
ViaSat, Inc.
Opening Statement of Assets and Liabilities
May 23, 1986
ASSETS
Cash in bank accounts $ 5,000.00
Notes receivable 25,000.00
----------
Total Assets: $30,000.00
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities None
Shareholders' equity:
Common stock, par value $.01, 30,000.00
10,000,000 shares authorized,
3,000,000 issued and out-
standing ----------
Total Liabilities and
Shareholders' Equity $30,000.00
EXHIBIT "E"
58
ViaSat, Inc.
Schedule of Contracts and Leases
1. Cincinnati Electric Technical Support Contract dated May 22, 1986.
2. TRW Personal Consulting Contracts with Messr. Dankberg, Xxxxxx and
Xxxx, beneficially assigned to Company, dated May 20, 1986.
EXHIBIT F
