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EXHIBIT 10.44
STOCK PURCHASE AGREEMENT
THIS AGREEMENT made as of the 29th day of March, 1995, by and among
Unitech Telecom, Inc., a Delaware corporation (the "CORPORATION"); Technology
Funding Venture Partners IV, An Aggressive Growth Fund, L.P., a Delaware
limited partnership ("TFVP IV"); Technology Funding Venture Partners V, An
Aggressive Growth Fund, L.P., a Delaware limited partnership ("TFVP V"); Telco
Systems, Inc., a Delaware corporation ("TELCO"), Dr. Pehong Chen, an individual
residing in California and Variamat Resources Sdn. Bhd., a Malaysian
corporation, ("Variamat"), Ding Cho Hee, an individual residing in Malaysia,
William Wittmeyer, an individual (and member of the Board of Directors of the
Corporation) residing in California, and Malaysian Technology Development
Corp., a Malaysian corporation ("MTDC") (the foregoing being hereinafter
sometimes referred to individually as an INVESTOR and collectively as the
"INVESTORS").
WHEREAS, the Investors wish to purchase from the Corporation, and the
Corporation wishes to sell to the Investors, certain shares of the
Corporation's Series A Convertible Preferred Stock, $.01 par value per share
("SERIES A PREFERRED STOCK" or "PREFERRED STOCK"), as described below;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereby agree as follows:
SECTION 1. CERTIFICATE OF AMENDMENT. Immediately prior to the execution and
delivery of this Agreement, the Corporation filed with the Secretary of State
of Delaware a Certificate of Amendment (the "CERTIFICATE OF AMENDMENT"), a copy
of which is attached hereto as EXHIBIT 1, to its Certificate of Incorporation,
as previously amended (the Certificate of Incorporation of the Corporation, as
previously amended and as further amended by the Certificate of Amendment and
in effect on the date hereof being hereinafter referred to as the "CERTIFICATE
OF INCORPORATION"), for the purpose of increasing and amending the authorized
capital stock of the Corporation and setting forth the designations and the
powers, preferences and rights, and the qualifications, limitations and
restrictions thereof, granted to or imposed upon each class of stock of the
Corporation and the holders thereof, including the Preferred Stock.
SECTION 2. PURCHASE AND SALE OF THE PREFERRED STOCK.
(a) The Corporation agrees to sell to each Investor, and
each Investor, severally and not jointly, agrees to purchase from the
Corporation, at the Closing (as hereinafter defined) and upon the terms and
conditions hereinafter set forth, the
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number of shares of Series A Preferred Stock set forth opposite the name of
such Investor on the Schedule of Investors attached hereto as EXHIBIT 2.
(b) The purchase price for the shares of Preferred Stock
to be sold pursuant to this Agreement (the "SHARES") shall be $8.00 per share.
SECTION 3. DELIVERY OF THE SHARES AND OTHER DOCUMENTS.
(a) The closing (the "CLOSING") hereunder with respect to
the transactions with the Investors contemplated hereby shall take place at
the offices of the Corporation as hereinafter provided simultaneously with the
execution and delivery of this Agreement.
(b) At the Closing, the Corporation shall deliver to each
Investor a stock certificate, registered in the name of such Investor,
representing the number of Shares purchased by such Investor at such Closing as
set forth opposite the name of such Investor on the Schedule of Investors
attached hereto. Delivery to each Investor shall be made against receipt by
the Corporation of the full amount of the purchase price for the Shares being
purchased by such Investor as follows:
(i) in the case of the Investors other than
TFVP IV, TFVP V and Variamat, by any combination of certified or official bank
check payable to the order of the Corporation or wire transfer to the
Corporation's account at Bank of Canton of California, 743 Washington Street,
San Francisco, California 94108, Telephone No. (415) 421-5215, ABA No.
121002259, Account No. 02703-046 (the "Bank") or such other payment form by an
Investor as shall be agreed to in writing by the Corporation, such Investor and
counsel to the Investors as set forth in Section 9 hereof, it being agreed that
a promissory note substantially in the form attached hereto as EXHIBIT 3 shall
be such an acceptable form of payment of up to $1,000,000 of purchase price to
be paid by MTDC;
(ii) in the case of each of TFVP IV and TFVP
V, by payment of $275,000 by any combination certified or official bank check
payable to the order of the Corporation or wire transfer to the Corporation's
account at the Bank, and by payment of the remaining $100,000 of purchase
price due from such Investor by surrender for cancellation in full of the
secured convertible promissory note of the Corporation dated May 31,
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1994 issued to such Investor (provided that accrued interest on the notes shall
be paid at the Closing by the Corporation); and
(iii) in the case of Variamat, by
cancellation of outstanding indebtedness (and surrender for cancellation of the
promissory note of the Corporation evidencing such indebtedness), by the
Corporation to Variamat in the amount of $100,000, which indebtedness was
incurred during 1995.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE CORPORATION. The Corporation
hereby represents and warrants to the Investors as follows:
4.1 ORGANIZATION. The Corporation is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own and lease its
properties, to carry on its business as currently conducted and as proposed to
be conducted and to carry out the transactions contemplated hereby. The
Corporation is duly qualified as a foreign corporation and is in good standing
in all such other jurisdictions (which jurisdictions are listed in EXHIBIT 4.1)
in which the current conduct of its business or its ownership or leasing of
property requires such qualification and in which the failure so to qualify or
so to be in good standing would have a materially adverse effect on the
Corporation's operations or financial condition. EXHIBIT 4.1 contains true,
complete and accurate copies of the Certificate of Incorporation and the
By-Laws, amended to date, of the Corporation (the "BY-LAWS").
4.2 CAPITALIZATION. The entire authorized capital stock of the
Corporation consists of:
(a) 2,500,000 shares of Common Stock, $.01 par value per
share (the "COMMON STOCK"), of which (i) 1,243,378 shares have been validly
issued and are outstanding, fully paid and nonassessable; (ii) no shares
are held as treasury shares; (iii) 162,994 shares have been reserved for
issuance upon the exercise of options granted to employees; (iv) 72,728 shares
have been reserved for issuance upon exercise of warrants previously issued to
TFVP IV and TFVP V, (the "TFI WARRANTS"); and (v) 500,000 shares have been
reserved for issuance upon conversion of the Preferred Stock; and
(b) 500,000 shares of Series A Preferred Stock, of which
(i) prior to the Closing, no shares were issued and outstanding; and
(ii) 481,250 shares will be held by the Series A
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Investors after the Closing and will, upon issuance in accordance with this
Agreement, have been validly issued and be outstanding, fully paid and
nonassessable.
EXHIBIT 4.2 contains a list of all holders of Common Stock and options,
warrants or rights to purchase Common Stock from the Corporation, in each case
including the number of shares Of Common Stock held by, or subject to purchase
pursuant to the exercise of any option, warrant or right held by, each such
holder. Except as set forth in EXHIBIT 4.2, there are no oustanding shares of
capital stock of the Corporation or warrants, options, agreements, convertible
securities or other commitments pursuant to which the Corporation is or may
become obligated to issue any shares of its capital stock or other securities
of the Corporation. Except as set forth in EXHIBIT 4.2, the number of shares
of capital stock, if any, reserved for issuance in connection with securities
described in the immediately preceding sentence is not subject to adjustment by
reason of the issuance of the Shares or the shares of Common Stock issuable
upon conversion of the Shares (the "RESERVED SHARES"). Except as set forth in
EXHIBIT 4.2 or pursuant to this Agreement, there are no preemptive or similar
rights to purchase or otherwise acquire shares of capital stock of the
Corporation pursuant to any provision of law, the Certificate of Incorporation
or the By-Laws or any agreement to which the Corporation is a party and, except
as set forth in the Certificate of Incorporation, there is no agreement,
restriction or encumbrance with respect to the sale or voting of any shares of
the Corporation's capital stock (whether outstanding or issuable upon
conversion or exercise of outstanding securities). To the best knowledge of
the Corporation, the Corporation has not violated the Securities Act of 1933,
as amended (the "SECURITIES ACT"), or any state blue sky or securities law in
connection with the issuance of any shares of Common Stock or other securities
prior to the date hereof.
4.3 EQUITY INVESTMENTS. Except as set forth in EXHIBIT 4.3, the
Corporation does not currently have any subsidiaries or own any capital stock
or other proprietary interest, directly or indirectly, in any corporation,
association, trust, partnership, joint venture or other entity. (Any such
subsidiary, or corporation, association, trust, partnership, joint venture or
other entity in which the Corporation, directly or indirectly, owns any capital
stock or other proprietary interest is hereinafter sometimes referred to as a
"SUBSIDIARY"). EXHIBIT 4.3 sets forth all material agreements and commitments
relating to the Corporation's relationship to such Subsidiaries and copies of
their respective charters and by-laws or other comparable
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organizational documents. No stockholder, director, officer or employee of the
Corporation nor any "associate" (as defined in the rules and regulations
promulgated under the Securities Exchange Act of 1934 (the "EXCHANGE ACT")) of
any such person owns any capital stock or other proprietary interest, directly
or indirectly, in any such Subsidiary, other than the indirect interest of the
stockholders of the Corporation in any such Subsidiary arising by virtue of
their ownership of capital stock of the Corporation.
4.4 FINANCIAL STATEMENTS. Attached as EXHIBIT 4.4A are the audited
balance sheets of the Corporation as of December 31, 1992 and 1993, and the
related audited statements of operations, stockholders' equity and cash flows
for the years ending December 31, 1992 and 1993, in each case including the
notes thereto and certified by Coopers & Lybrand, independent certified public
accountants. Attached as EXHIBIT 4.4B are the unaudited balance sheet of the
Corporation as of November 30, 1994 (the "BALANCE SHEET"), and the related
unaudited statements of operations, stockholders equity and cash flows for the
11-month period ended November 30, 1994. (November 30, 1994 is hereinafter
sometimes referred to as the "BALANCE SHEET DATE"). All such financial
statements present fairly the financial position and results of operations of
the Corporation as of the dates and for the periods indicated in accordance
with generally accepted accounting principles applied on a consistent basis,
subject in the case of the unaudited financial statements to normal year-end
audit adjustments.
4.5 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth in
EXHIBIT 4.5 or as reflected in the Balance Sheet, at the Balance Sheet Date (a)
the Corporation had no material liabilities of any nature (matured or
unmatured, fixed or contingent); (b) all reserves established by the
Corporation and set forth in the Balance Sheet were adequate; and (c) there
were no loss contingencies (as such term is used in Statement of Financial
Accounting Standards No. 5 issued by the Financial Accounting Standards Board
in March 1975) which were not adequately disclosed in the Balance Sheet as
required by such Statement No. 5.
4.6 ABSENCE OF CHANGES. Except as shown on EXHIBIT 4.6, since
December 31, 1993 there has not been any material adverse change in the
financial condition, results of operations, assets, liabilities or business of
the Corporation. Except as shown on EXHIBIT 4.6, since the Balance Sheet Date
there has not been (a) any material asset or property of the Corporation made
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subject to a lien of any kind, (b) any waiver of any valuable right of the
Corporation, or the cancellation of any material debt or claim held by the
Corporation, (c) any payment of dividends on, or other distribution with
respect to, or any direct or indirect redemption or acquisition of, any shares
of the capital stock of the Corporation, or any agreement or commitment
therefor, (d) any mortgage, pledge, sale, assignment or transfer of any
tangible or intangible assets of the Corporation, except in the ordinary course
of business, (e) any loan by the Corporation to, or any loan to the Corporation
from, any officer, director, employee or stockholder of the Corporation, or any
agreement or commitment therefor, (f) any damage, destruction or loss (whether
or not covered by insurance) materially and adversely affecting the assets,
property or business of the Corporation, or (g) any change in the accounting
methods or practices followed by the Corporation.
4.7 ENCUMBRANCES. Except as set forth in EXHIBIT 4.7, the
Corporation has good title to all of its property and assets, real, personal or
mixed, tangible or intangible, free and clear of all liens, security interests,
charges and other encumbrances of any kind.
4.8 BURDENSOME RESTRICTIONS. The Corporation is not obligated under
any contract or agreement (including without limitation any long-term lease,
forward purchase contract, futures contract or covenant not to compete) or
subject to any charter or other corporate restriction which materially
restricts, or in the future (so far as the Corporation can reasonably foresee)
may reasonably be expected to materially restrict, its ability to conduct its
business, or which materially and adversely affects, or in the future (so far
as the Corporation can reasonably foresee) may reasonably be expected to
materially and adversely affect, its financial condition, results of
operations, assets, liabilities, business or prospects.
4.9 INTELLECTUAL PROPERTY RIGHTS. Except in each case as set forth
IN EXHIBIT 4.9:
(a) to the best of its knowledge, the Corporation owns,
possesses, has the right to use and has the right to bring actions for
the infringement of all Intellectual Property Rights (as hereinafter defined)
necessary or required for the conduct of its business as presently conducted or
as proposed to be conducted, which Intellectual Property Rights are identified
in said EXHIBIT 4.9;
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(b) to the best of its knowledge, no royalties or
other amounts are payable by the Corporation to other persons by reason of the
ownership or use of said Intellectual Property Rights; and
(c) to the best of its knowledge, no product marketed
or sold or proposed to be marketed or sold by the Corporation violates
or will violate any license or infringes or will infringe any Intellectual
Property Rights of another. The Corporation has not received any notice that
any of such Intellectual Property Rights or the operation or proposed operation
of the Corporation's business conflicts or will conflict with the rights of
others.
As used herein, the term "INTELLECTUAL PROPERTY RIGHTS" means all patents,
trademarks, service marks, trade names, copyrights, inventions, trade secrets,
proprietary processes and formulae, applications for patents, trademarks,
service marks and copyrights, and other industrial and intellectual property
rights.
4.10 LITIGATION. There is no action, suit, claim, proceeding or
investigation, at law, in equity or otherwise, now pending, or, to the best
knowledge of the Corporation, threatened against or affecting the Corporation
(or, to the best knowledge of the Corporation, any of its officers, directors
or management employees to the extent that such action, suit, claim, proceeding
or investigation arises out of or relates to any such person's work for or
relationship to the Corporation) and, except as otherwise disclosed hereunder,
the Corporation has no actual knowledge of facts which it believes are likely
to be the basis of future litigation that would have a material adverse effect
on the Corporation.
4.11 NO DEFAULTS. The Corporation is not in violation or breach
of, or in default under, any provision of (a) the Certificate of Incorporation
or By-Laws, (b) any material note, indenture, mortgage, lease, contract,
purchase order or other instrument, document or agreement to which the
Corporation is a party or by which it or any of its property is bound or
affected or (c) to the best of its knowledge, any material ruling, writ,
injunction, order, judgment or decree of any court, administrative agency or
other governmental body. To the best knowledge of the Corporation, there
exists no condition, event or act which after notice, lapse of time, or both,
could constitute violation or breach of, or a default under, any of the
foregoing.
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4.12 EMPLOYEES. Except as modified by case law and applicable
statute, all of the Corporation's material employment contracts and agreements
with persons providing employment, consulting and other services to the
Corporation are terminable at will. The Corporation is not subject to any
collective bargaining agreement with respect to any of its employees, has no
current material labor problems or disputes and has in effect no "employee
pension benefit plan" (as defined in the Employee Retirement Income Security
Act of 1974 as amended) or stock-related employee benefit plan (other than the
Corporation's stock option plans, if any, as described in EXHIBIT 4.15). To the
best knowledge of the Corporation, no third party may assert any valid claim
against the Corporation, any Investor, or any Designated Person (as hereinafter
defined) with respect to the continued employment by the Corporation of any of
the present officers or employees of, or consultants to, the Corporation
(collectively, the "DESIGNATED PERSONS"). Each Designated Person and the
Corporation have agreed not to use any information which the Corporation or any
Designated Person would be prohibited from using under any prior agreements or
arrangements or under any laws, including, without limitation, laws applicable
to unfair competition, trade secrets or proprietary information.
4.13 TAXES. The Corporation has filed all federal, state, local
and foreign tax returns which are required to be filed by it and all such
returns are true and correct in all material respects. The Corporation has
paid all taxes pursuant to such returns or pursuant to any assessments received
by it or which it is obligated to withhold from amounts owing to any employee,
creditor or third party, except, in each case, for those which are not yet due
and payable pursuant to such returns. To the best knowledge of the
Corporation, the income tax returns of the Corporation have never been audited
by state or federal authorities. The Corporation has not waived any statute of
limitations with respect to any tax assessment or deficiency. Neither the
Corporation nor, to the best of its knowledge, any of its stockholders, has
ever filed (a) a consent pursuant to Section 1372 of the Internal Revenue Code
of 1986, as amended (the "Code"), that the Corporation be taxed as an S
Corporation or (b) a consent pursuant to Section 341(f) of the Code, relating
to collapsible corporations.
4.14 INTENTIONALLY OMITTED.
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4.15 AGREEMENTS. Except as set forth in EXHIBIT 4.15, the
Corporation is not a party to any material written or oral contract not made in
the ordinary course of business and, whether or not made in the ordinary course
of business, the Corporation is not a party to any material written or oral (a)
contract with any labor union; (b) contract for the future purchase of fixed
assets or for the future purchase of materials, supplies or equipment
materially in excess of normal operating requirements; (c) contract for the
employment of any officer, individual employee or other person or any contract
with any person on a consulting basis; (d) bonus, pension, profit-sharing,
retirement, stock purchase, stock option, hospitalization, medical insurance or
similar plan, contract or understanding in effect with respect to employees or
any of them or the employees of others; (e) agreement or indenture relating to
the borrowing of money or to the mortgaging, pledging or otherwise placing a
lien on any assets of the Corporation; (f) guaranty of any obligation for
borrowed money or otherwise; (g) lease or agreement under which the Corporation
is lessee of or holds or operates any property, real or personal, owned by any
other party; (h) lease or agreement under which the Corporation is lessor of or
permits any third party to hold or operate any property, real or personal,
owned or controlled by the Corporation; (i) license or lease agreement with
respect to any Intellectual Property Rights; (J) agreement or other commitment
for capital expenditures in excess of $25,000; (k) contract, agreement or
commitment under which the Corporation is obligated to pay any broker's fees,
finder's fees or any such similar fees, to any third party; or (1) any other
contract, agreement or arrangement which is material to the business of the
Corporation. Except as set forth in EXHIBIT 4.15, the Corporation is not
actively engaged in any negotiations of any such contract, agreement or
arrangement. The Corporation has furnished, to the Investors true and correct
copies of all such agreements and other documents requested by the Investors or
their authorized representatives.
4.16 COMPLIANCE. To the best of its knowledge, the Corporation has
(a) in all material respects complied with all federal, state, local or foreign
laws, statutes, ordinances, rules, regulations and orders applicable to its
business, including without limitation the United States Export Administration
Act and all rules and regulations thereunder, and (b) all federal, state, local
and foreign governmental licenses, registrations and permits material to or
necessary for the conduct of its business, and such licenses, registrations and
permits are in full force and effect and there have been no violations in
respect of any such licenses, registrations or permits. No
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proceeding is pending or, to the best knowledge of the Corporation, threatened,
to revoke or limit any thereof. Neither the Corporation nor, to the best
knowledge of the Corporation, any of its present officers, directors or
principal stockholders has ever been convicted of a felony. Neither the
Corporation nor, to the best knowledge of the Corporation, any such person is
now or ever has been subject to any governmental decree or order prohibiting it
or him from engaging in specified business activities. To the best knowledge
of the Corporation, there is no pending criminal investigation of any nature
whatsoever into the activities of the Corporation, nor (to the best knowledge
of the Corporation) its officers, directors or principal stockholders.
4.17 INSURANCE. The Corporation maintains insurance against loss,
damage and other hazards and risks and liabilities of the kind customarily
insured against by companies similarly situated, with financially sound and
reputable insurers and in such policy amounts, and such customary deductibles,
as is reasonably adequate to protect the Corporation against material loss or
damage. Without limiting the generality of the foregoing, the Corporation
maintains liability insurance against loss or damage to it for bodily injury or
death in or about any premises occupied by it, and against loss or damage to it
or bodily injury or death or injury to property occurring by reason of the
operation by any of its employees of any motor vehicle on the Corporation's
behalf in amounts customary for companies similarly situated.
4.18 AUTHORIZATION OF THIS AGREEMENT AND RELATED DOCUMENTS. The
execution, delivery and performance by the Corporation of this Agreement and
the Registration Rights Agreement of even date herewith by and among the
Corporation and the Investors (the "REGISTRATION RIGHTS AGREEMENT") have been
duly authorized by all requisite corporate action. This Agreement and the
Registration Rights Agreement have been duly executed and delivered on behalf
of the Corporation and constitute the valid and binding obligations of the
Corporation, enforceable in accordance with their respective terms (except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
affecting enforcement of creditors, rights and the application of equitable
principles in any action, legal or equitable). The execution, delivery and
performance of this Agreement and the Registration Rights Agreement and the
issuance, sale and delivery of the Shares and the Reserved Shares and
compliance with the provisions hereof and thereof by the Corporation do not and
will not, with or without the passage of time or the giving
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of notice or both, (a) violate any provision of law, statute, ordinance, rule
or regulation or any ruling, writ, injunction, order, judgment or decree of any
court, administrative agency or other governmental body or (b) conflict with or
result in any breach of any of the terms, conditions or provisions of, or
constitute a default (or give rise to any right of termination, cancellation or
acceleration) under, or result in the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of the Corporation
under, the Certificate of Incorporation or By-Laws or any note, indenture,
mortgage, lease, contract, purchase order or other instrument, document or
agreement to which the Corporation is a party or by which it or any of its
property is bound or affected, except such violations, conflicts, breaches or
defaults as would not individually or in the aggregate have a material adverse
effect on the Corporation.
4.19 AUTHORIZATION OF SHARES. The issuance, sale and delivery by
the Corporation of the Shares has been duly authorized by all requisite
corporate action, and when so issued, sold, delivered and paid for in
accordance with the terms hereof, the Shares will be validly issued and
outstanding and not subject to preemptive or any other similar rights of the
stockholders of the Corporation or others and the Shares will be fully paid and
nonassessable.
4.20 AUTHORIZATION OF RESERVED SHARES. The issuance, sale and
delivery by the Corporation of the Reserved Shares has been duly authorized by
all requisite corporate action of the Corporation, and the Reserved Shares have
been duly reserved for issuance upon conversion of all or any of the Shares,
and when so issued and delivered in accordance with the terms of the
Certificate of Amendment, the Reserved Shares will be validly issued and
outstanding, fully paid and nonassessable, and not subject to preemptive or any
other similar rights of the stockholders of the corporation or others.
4.21 RELATED TRANSACTIONS. Except as set forth in EXHIBIT 4.21, no
current or former stockholder, director, officer or employee of the Corporation
nor any "associate" (as defined in the rules and regulations promulgated under
the Exchange Act) of any such person, is currently, or since the date of
inception of the Corporation has been, directly or indirectly, a party to any
transaction (other than as an employee) with the Corporation or any Subsidiary
providing for the furnishing of services by, or rental of real or personal
property from, or otherwise requiring cash payments to, any such person.
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4.22 OFFEREES. The Corporation has not, either directly or through
any agent, offered any Shares or securities convertible into or exercisable for
Common Stock or Preferred Stock or any security or securities similar to any
thereof, for sale to, or solicited any offers to buy any Shares, or securities
convertible into or exercisable for Common Stock or Preferred Stock, or any
such similar security or securities from, or otherwise approached or negotiated
in respect thereof with, any person or entity other than the Investors and a
limited number of, to the best knowledge of the Corporation, institutional or
sophisticated investors, but in any event not more than 25 persons or entities,
including the Investors.
4.23 USE OF PROCEEDS.
(a) The proceeds received by the Corporation from
the sale of the Shares shall be used by the Corporation only for general
corporate purposes, including working capital, funding operating losses,
capital expenditures and funding accrued compensation as provided in Section
4.23(b).
(b) The Corporation shall be restricted from
making payments of accrued compensation existing as of the date hereof
("Accrued Compensation") whether from proceeds of this financing or otherwise
to the founders and employees of the Corporation, except in accordance with the
following and subject to the approval of the Board of Directors of the
Corporation:
(i) During 1995, the Corporation may pay Accrued
Compensation in an aggregate amount of up to $194,325
to Hong Liang Lu, Peter Wang and Charles Xue (the
"FOUNDERS"), such payments to be made only by applying
such payments from time to time during the year, at
the respective Founders' election, to the exercise of
stock options of the Corporation outstanding on the
date hereof, all as set forth in EXHIBIT 4.23;
(ii) In addition, during 1995, the Corporation may pay to
each of the Founders Accrued Compensation in an amount
equal to up to 10% of the aggregate Accrued
Compensation paid to such Founder pursuant to clause
(i) above in order to permit such Founder to pay FICA
liabilities arising from the receipt by such Founder
of Payable Accrued Compensation;
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(iii) In addition, during 1996, the Corporation may pay to
each of the Founders Accrued Compensation in an amount
equal to up to 30% of the aggregate Accrued
Compensation paid to such Founder pursuant to clause
(i) above in order to permit such Founder to pay
income tax liabilities arising from the receipt by
such Founder of Payable Accrued Compensation; and
(iv) At any time, the Corporation may pay to persons other
than the Founders a cumulative aggregate amount of up
to $50,000.
The balance of accrued compensation shall continue to be outstanding and shall
not accrue interest. Payment of such balance shall be withheld until such time
as the Corporation effects its initial public offering, there is an acquisition
(by whatever means) of the Corporation, or other liquidity event approved by
the two Directors elected by the holders of the Preferred Stock. The
Corporation represents that the individuals to whom such accrued compensation
is owed have agreed to the provisions set forth herein and in EXHIBIT 4.23,
which sets forth the accrued compensation and unpaid salaries as of the
Closing.
4.24 NO GOVERNMENTAL CONSENT OR APPROVAL REQUIRED. No
authorization, consent, approval or other order of, declaration to, or filing
with, any United States (federal, state or local) governmental agency or body
is required for or in connection with the valid and lawful authorization,
execution and delivery by the Corporation of this Agreement or the Registration
Rights Agreement, in connection with the valid and lawful authorization,
issuance, sale and delivery of the Shares or in connection with the valid and
lawful authorization, reservation, issuance, sale and delivery of the Reserved
Shares, except such exemptive filings under applicable securities laws as are
required to be made, and shall be made, following the Closing or such exemptive
filings under applicable securities laws as shall have been made prior to and
are in effect on and as of the Closing.
4.25 REGISTRATION RIGHTS. Except as contemplated by the
Registration Rights Agreement, no person has any right to cause the Corporation
to effect the registration under the Securities Act of any shares of Common
Stock or any other securities of the Corporation.
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4.26 BROKERS. Except as set forth in EXHIBIT 4.15, neither the
Corporation nor any of its officers, directors, employees or stockholders has
employed any broker or finder in connection with the transactions contemplated
by this Agreement and no person or entity will have, as a result of the
transactions contemplated by this Agreement, any right to, interest in or valid
claim against or upon the Corporation for any commission, fee or other
compensation as a finder or broker because of any act or omission by the
Corporation or any agent of the Corporation.
4.27 INVENTION AND NON-DISCLOSURE AGREEMENTS. Except as set forth
in EXHIBIT 4.27, each current United States employee of the Corporation who has
or is proposed to have access to confidential and/or proprietary information of
the Corporation is a signatory to, and is bound by, an agreement with the
Corporation relating to non-disclosure of confidential and proprietary
information, patent and invention assignment and non-solicitation of employees,
a copy of the form of which agreements is attached hereto as EXHIBIT 4.27.
4.28 EXEMPTIONS FROM SECURITIES LAWS. Subject to the accuracy of
the representations and warranties of the Investors set forth in Section 5
hereof, the provisions of Section 5 of the Securities Act are inapplicable to
the offering, issuance, sale and delivery of the Shares and the Reserved
Shares, and no consent, approval, qualification or registration or filing under
any state securities or blue sky laws is required in connection therewith,
except such exemptive filings as are required to be made, and shall be made,
following the Closing, or such exemptive filings as shall have been made prior
to and are in effect on and as of the Closing.
4.29 ABSENCE OF CERTAIN PAYMENTS. Neither the Corporation nor, to
the best knowledge of the Corporation, any director, officer, agent, employee
or other person acting on the Corporation's behalf has used any funds of the
Corporation for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity, or made any direct or indirect
unlawful payments to government officials or employees from corporate funds, or
established or maintained any unlawful or unrecorded funds, or violated any
provisions of the Foreign Corrupt Practices Act of 1977 or any rules or
regulations promulgated thereunder.
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4.30 ISSUANCE TAXES. All taxes, if any, imposed on the Corporation
in connection with the sale, issuance and delivery of the Shares and the
Reserved Shares have been or will be fully satisfied by the Corporation.
4.31 ENVIRONMENTAL COMPLIANCE.
(a) There are no claims, investigations, litigation or
administrative proceedings pending or, to the best knowledge of the
Corporation, threatened, or judgments or orders, relating to any hazardous
substances, hazardous wastes, discharges, emissions or other forms of
environmental pollution relating in any way to any facility now or previously
used or occupied by the Corporation or otherwise relating to the business of
the Corporation under any federal, state, local or foreign statute, rule or
regulation applicable to the Corporation.
(b) To the best knowledge of the Corporation, no
hazardous or toxic substances, within the meaning of applicable federal, state,
local or foreign statutes, rules and regulations, are currently stored or
otherwise located on real estate owned or leased by the Corporation or, to the
best knowledge of the Corporation, on adjacent parcels of real estate to the
extent that the same might contaminate or affect the Corporation or the real
estate owned or leased by it.
4.32 DISCLOSURE. Neither this Agreement nor any other document,
certificate or statement furnished to the Investors by or on behalf of the
Corporation in connection with the transactions contemplated by this Agreement
when read or considered together contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances in which
they are or were made, not misleading. To the best knowledge of the
Corporation, there is no fact which materially adversely affects or in the
future may (so far as it can now reasonably foresee) materially adversely
affect the business, operations, affairs, prospects, condition, properties or
assets of the Corporation which has not been set forth in this Agreement or in
the other documents, certificates or statements furnished to the Investors by
or on behalf of the Corporation.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS.
(a) Each Investor, severally and not jointly, represents
and warrants to the Corporation as follows:
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(i) Such Investor is acquiring the Shares for its
own account, for investment and not for, with a view to, or in connection with
any distribution or public offering thereof within the meaning of the
Securities Act.
(ii) Such Investor understands that the Shares have
not been, and the Reserved Shares will not be, registered under the Securities
Act or any state securities law, by reason of their issuance in a transaction
exempt from the registration requirements of the Securities Act and such laws,
and that they must be held indefinitely unless they are subsequently registered
under the Securities Act and such laws or a subsequent disposition thereof is
exempt from registration. Such Investor acknowledges that the certificates for
the Shares and the Reserved Shares shall bear legends to such effect.
(iii) Such Investor has sufficient knowledge and
experience in business and financial matters and with respect to investment in
securities of privately held companies so as to enable it to analyze and
evaluate the merits and risks of the investment contemplated hereby and is able
to bear the economic risk of such investment, including a complete loss of the
investment.
(iv) Such Investor acknowledges that such Investor
has made detailed inquiry concerning the Corporation, its business and its
personnel and that the officers of the Corporation have made available to such
Investor any and all written information which it has requested and have
answered to such Investor's satisfaction all inquiries made by such Investor.
(v) Such Investor understands that the exemption
from registration afforded by Rule 144 (the provisions of which are known to
such Investor) promulgated by the Securities and Exchange Commission (the
"COMMISSION") under the Securities Act depends upon the satisfaction of various
conditions, that such exemption is not currently available and that, if
applicable, Rule 144 affords the basis for sales only in limited amounts.
(vi) Unless otherwise indicated in writing by such
Investor to the Corporation, such Investor is an "accredited investor" within
the definition of that term set forth in the Securities Act Rule 501(a).
(vii) Such Investor has not employed any broker or
finder in connection with the transactions contemplated by this Agreement.
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(b) In addition to the representations and warranties
contained in Section 5(a), each of Variamat, Ding Cho Hee and MTDC represents
and warrants to the Corporation that such Investor has satisfied itself as to
the full observance of the laws of such Investor's jurisdiction in connection
with any invitation to subscribe for the Shares or any use of this Agreement,
including (i) the legal requirements of such Investor's jurisdiction for the
purchase of the Shares, (ii) any foreign exchange restrictions applicable to
such purchase, (iii) any governmental or other consents that may be required,
and (iv) the income tax and other tax consequences, if any, which may be
relevant to the purchase, holding, redemption, sale, or transfer of the Shares.
Such Investor's subscription and payment for, and such Investor's continued
beneficial ownership of the Shares, will not violate any applicable securities
or other laws of such Investor's jurisdiction.
SECTION 6. CONDITIONS PRECEDENT TO CLOSING BY THE INVESTORS. The obligation of
each Investor to purchase and pay for the Shares at the Closing is subject to
the satisfaction, or waiver by each Investor, of the following conditions
precedent at or before the Closing:
(a) CORPORATE PROCEEDINGS. All corporate and
other proceedings to be taken and all waivers and consents to be obtained in
connection with the transactions contemplated by this Agreement shall have been
taken or obtained and all documents incident to such transactions shall be
satisfactory in form and substance to the Investors and their counsel, who
shall have received all such originals or certified or other copies of such
documents as they may reasonably request.
(b) REPRESENTATIONS AND WARRANTIES CORRECT. The
representations and warranties made by the Corporation in Section 4 hereof
shall be true and correct when made, and shall be true and correct at the time
of the Closing, with the same force and effect as if they had been made at and
as of the time of the Closing.
(c) COMPLIANCE WITH COVENANTS. The Corporation
shall have duly complied with and performed all covenants and agreements of the
Corporation herein which are required to be complied with and performed at or
before the Closing.
(d) CERTIFICATE OF PRESIDENT. The Corporation
shall have provided to the Investors a certificate, signed by its President and
dated the date of the Closing, in form and
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substance reasonably satisfactory to the Investors and their counsel,
confirming compliance with the conditions set forth in Sections 6(a), 6(b) and
6(c).
(e) OPINION OF COUNSEL. At the Closing, each
Investor shall have received from Parker Chapin Flattau & Klimpl, LLP counsel
for the Corporation, its opinion addressed to each of the Investors, dated the
date of the Closing in the form and substance acceptable to the Investors and
their counsel.
(f) RELATED AGREEMENTS AND DOCUMENTS. At or
before the Closing, the parties thereto shall have executed and delivered the
Registration Rights Agreement and the Corporation shall have delivered to the
Investors such other documents as they shall reasonably request.
(g) BLUE SKY MATTERS. All consents, approvals,
qualifications, registrations and filings required to be obtained or effected
under any applicable state securities or "blue sky" laws in connection with the
issuance, sale and delivery of the Shares and the Reserved Shares shall have
been obtained or effected and copies of the same delivered to each of the
Investors, other than exemptive filings required to be made after the Closing
under such laws.
(h) TERMINATION OF SECURITY INTERESTS. All
security interests in the assets of the Corporation arising out of the Loan and
Security Agreements dated May 31, 1994 between the Corporation and TFVP IV and
TFVP V or the transactions contemplated thereby shall have been terminated, and
TFVP IV and TFVP V shall have executed and delivered to the Corporation UCC
termination statements with respect thereto, the receipt by the Corporation of
which termination statements shall be a condition precedent to the obligation
of the Corporation to deliver to TFVP IV and TFVP V the Shares purchased by
them at the Closing.
(i) COMPOSITION OF BOARD OF DIRECTORS. As of
immediately following the Closing, the Corporation's Board of Directors will
have an authorized number of members equal to five (5) and the following five
(5) individuals will comprise the Board of Directors: Hong Liang Lu, Charles
Xue, Peter Wang, Terry Campbell and Bill Wittmeyer.
(j) DISTRIBUTION AGREEMENTS. As a condition
precedent only with respect to the obligation of Telco to purchase and pay for
the Shares to be purchased by Telco hereunder, each of Telco and the
Corporation shall have executed and delivered
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to the other distribution agreements mutually agreeable to the parties thereto.
SECTION 7. INFORMATION RIGHTS OF INVESTORS.
7.1 ACCESS TO RECORDS. The Corporation agrees to afford to each
of the Investors and their respective employees, counsel and other authorized
representatives, as well as to each director designated by any of them, upon
reasonable prior request, free and full access, during normal business hours
and at all other reasonable times, to all books, records and properties of the
Corporation and to all officers of the Corporation and those other employees of
the Corporation having responsibility for financial or accounting matters
generally, for any reasonable purpose whatsoever.
7.2 FINANCIAL REPORTS. The Corporation agrees to furnish each of
the Investors with the following:
7.2.1. Within 30 days after the end of each month
and each fiscal quarter, an unaudited financial report of the Corporation,
which report shall be prepared in accordance with generally accepted accounting
principles consistently applied (except that the financial report may (i) be
subject to normal year-end audit adjustments neither individually nor in the
aggregate material and (ii) not contain all notes thereto which may be required
in accordance with generally accepted accounting principles) and shall be
certified by either the Chief Executive Officer or the Chief Financial Officer
of the Corporation to have been so prepared, and which shall include the
following:
(a) a statement of operations for such month or
quarter, together with a cumulative statement of operations from the first
day of the then-current fiscal year to the last day of such month or quarter;
(b) a balance sheet as of the last day of such month
or quarter;
(c) a statement of sources and application of funds and
statement of changes in working capital for such month or quarter; and
(d) a comparison between the actual figures for such
month or quarter, the comparable figures (with respect to the foregoing
clauses (a) and (b) only) for the prior year (if
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any) and the comparable figures included in the Budget (as hereinafter defined)
for such month or quarter, with an explanation of any material differences
between them.
The financial report for each fiscal quarter shall be accompanied by a
report by the Chief Executive Officer of the Corporation explaining business
developments and problems occurring during the quarter.
7.2.2. Within 120 days after the end of each fiscal
year of the Corporation, audited financial statements of the Corporation,
which shall include a statement of operations for such fiscal year and a
balance sheet as of the last day thereof, and statements of stockholders,
equity and cash flows for such fiscal year, prepared in accordance with
generally accepted accounting principles consistently applied and certified by
independent certified public accountants of recognized national standing
satisfactory to the Investors, together with such accountants' annual
management letter.
7.2.3. If for any period the Corporation shall have
any subsidiary whose accounts are consolidated with those of the Corporation,
then in respect of such period the financial statements delivered
pursuant to the foregoing Sections 7.2.1 and 7.2.2 shall be the consolidated
and consolidating financial statements of the Corporation and all such
consolidated subsidiaries.
7.2.4. Within 10 days after the close of each month,
a written report of the Chief Executive Officer or Chief Financial Officer of
the Corporation listing orders booked and sales made during the month, cash
position as of the end of the month and any significant events occurring during
the month.
7.2.5. Promptly upon becoming available:
(a) copies of all financial statements, reports,
notices, press releases, proxy statements and other documents sent by the
Corporation to its stockholders or released to the public and copies of
all regular and periodic reports, if any, filed by the Corporation with the
Commission, any securities exchange or the National Association of Securities
Dealers, Inc.; and
(b) any other financial or other information
available to management of the Corporation as any of the Investors shall have
reasonably requested on a timely basis.
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7.3 BUDGET AND OPERATING FORECAST. With respect to the fiscal year
of the Corporation beginning on January 1, 1995, the Corporation will prepare
and submit to each of the Investors by March 1, 1995 a monthly operating plan
of the Corporation, with monthly break-downs, for such fiscal year (such plan
for each fiscal year of the Corporation being hereinafter referred to as a
"BUDGET"). With respect to each fiscal year thereafter, the Corporation agrees
to prepare and submit a proposed Budget to the Board of Directors of the
Corporation and each of the Investors at least 60 days prior to the beginning
of each such fiscal year. The Budget shall be accepted as the Budget for such
fiscal year when it has been approved by the Board of Directors of the
Corporation. The Budget shall be reviewed by the Corporation periodically and
all changes therein and all material deviations therefrom which are proposed to
be made by the Corporation shall be resubmitted and approved in accordance with
procedures established by the Board of Directors, and the Corporation shall not
make any such changes or material deviations to or from the Budget without
compliance with such procedures. The Budget shall include an income statement,
balance sheet and cash flow information.
7.4 LIMITATIONS ON RIGHTS OF INVESTORS UNDER SECTION 7. The
Corporation shall provide the information required by this Section 7 to each
Investor so long as such Investor shall continue to own at least 25,000 shares
(subject to adjustment in the event of a stock split, stock dividend,
reclassification or other similar event) of Common Stock or Preferred Stock;
provided, however, that all Investors, irrespective of the number of shares
held, shall be entitled to annual financial statements as provided above in
this Section 7. The foregoing provisions of this Section 7 to the contrary
notwithstanding, the Investors shall not have any rights and the Corporation
shall not have any obligations under the foregoing provisions of this Section 7
at such time as the Common Stock is registered under Section 12 of the Exchange
Act.
7.5 RELATIONSHIP TO PREVIOUS AGREEMENTS. This Section 7 shall
supersede Sections 6.1 through 6.5 of the Loan and Security Agreements dated
May 31, 1994 between the Corporation and TFVP IV and TFVP V, and such Sections
6.1 through 6.5 shall no longer have any force or effect.
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SECTION 8. ADDITIONAL AGREEMENTS OF THE CORPORATION.
8.1 NOTICE OF MEETINGS OF THE BOARD OF DIRECTORS; PAYMENT OF
EXPENSES OF PREFERRED STOCK DIRECTOR.
(a) The Corporation shall give each Investor holding at
least 60,000 shares (subject to adjustment in the event of a stock split,
stock dividend, reclassification or other similar event) of Common Stock or
Preferred Stock not less than five (5) business days, prior written notice
(or such greater amount of prior written notice as shall be given to
directors) of each meeting of its Board of Directors and of any committee or
group exercising responsibilities comparable to those exercised by its Board
of Directors, specifying the time and place of such meeting and, to the
extent then known, the matters to be discussed thereat and inviting each such
Investor (or its representative) to attend and participate therein (without,
however, a right to vote thereat in such capacity) and (ii) furnish each such
Investor (or such representative) with copies of all notices, minutes,
consents and other materials that the Corporation provides to its directors.
Failure to give such notice shall not affect the validity of any action taken
at such meeting. Such notice may be waived by written instrument executed
before or after such meeting.
(b) The Corporation shall pay all reasonable travel and
other out-of-pocket expenses of the two directors elected solely by the
holders of Preferred Stock in connection with the attendance of such
directors at meetings of the Corporation's Board of Directors.
8.2 RIGHT OF FIRST REFUSAL.
(a) The Corporation hereby grants to each of the Investors
and any assignee of the Investors described in paragraph (i) of this
Section 8.2 (the "RIGHT HOLDER") the right of first refusal to purchase, pro
rata, all (or any part) of any New Securities (as defined in this Section 8.2)
that the Corporation may, from time to time, propose to sell or issue. Each
such Right Holder's pro rata share, for purposes of this right of first
refusal, is the ratio of (i) the number of shares of Common Stock (including
shares subject to Warrants) then held of record by, or issuable on conversion
of Preferred Stock then held of record by, such Right Holder to (ii) the sum of
the total number of shares of the Common Stock issued and outstanding plus the
total number of shares of Common Stock issuable
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upon conversion of the Preferred Stock in each case at such time (the "BASIC
AMOUNT").
(b) "NEW SECURITIES" shall mean any equity securities of
the Corporation, whether now authorized or not, and rights, options, or
warrants to purchase said equity securities, and securities of any
type whatsoever that are, or may become, convertible into said equity
securities; PROVIDED, HOWEVER, that "New Securities" does not include (i)
securities offered to the public pursuant to a registration statement filed
under the Securities Act, the gross proceeds to the Corporation from the sale
of which would equal or exceed $8,000,000; (ii) securities issued pursuant to
the acquisition of another corporation by the Corporation by merger, purchase
of substantially all of the assets, or other reorganization whereby the
Corporation acquires not less than 51% of the voting power of such corporation;
(iii) shares of Common Stock issued in exchange for consideration having a fair
market value (in the judgment of the Board of Directors) equal to the fair
market value of such Common Stock (or related options having exercise prices of
not less than fair market value at the time of grant) issued to employees,
officers or other persons performing services for the Corporation pursuant to
any stock offering, plan or arrangement approved by the Board of Directors of
the Corporation (including each of the two directors elected by the holders of
the Preferred Stock); (iv) shares of Common Stock issued in connection with any
stock split, stock dividend or recapitalization by the Corporation; (v) shares
of Common Stock issued upon conversion of the Shares; or (vi) shares of Common
Stock issued upon exercise of the TFI Warrants.
(c) The Corporation shall not issue, sell or exchange,
agree to issue, sell or exchange, or reserve or set aside for issuance,
sale or exchange any New Securities unless the Corporation shall deliver
to each Right Holder a written notice of any proposed or intended
issuance, sale or exchange of New Securities (the "OFFER"), which Offer shall
(i) identify and describe the New Securities, (ii) describe the price and other
terms upon which they are to be issued, sold or exchanged, and the number or
amount of the New Securities to be issued, sold or exchanged, (iii) identify
the persons or entities to which or with which the New Securities are to be
offered, issued, sold or exchanged and (iv) offer to issue and sell to or
exchange with such Right Holder (A) such Right Holder's Basic Amount, and (B)
any additional portion of the New Securities as such Right Holder shall
indicate it will purchase or acquire should the other Right Holders subscribe
for less than their Basic Amounts
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(the "UNDERSUBSCRIPTION AMOUNT"). Each Right Holder shall have the right, for
a period of 30 days following delivery of the Offer, to purchase or acquire, at
a price and upon the other terms specified in the Offer, the number or amount
of New Securities described above. The Offer by its term shall remain open and
irrevocable for such 30-day period.
(d) To accept an Offer, in whole or in part, a Right
Holder must deliver a written notice to the Corporation prior to the end
of the 30-day period of the Offer, setting forth the portion of the Right
Holder's Basic Amount that such Right Holder elects to purchase and, if such
Right Holder shall elect to purchase all of its Basic Amount, the
Undersubscription Amount (if any) that such Right Holder elects to purchase
(the "NOTICE OF ACCEPTANCE"). If the Basic Amounts subscribed for by all Right
Holders are less than the total New Securities, then each Right Holder who has
set forth an Undersubscription Amount in its Notice of Acceptance shall be
entitled to purchase, in addition to the Basic Amount subscribed for, the
Undersubscription Amount it has subscribed for; PROVIDED, HOWEVER, that should
the Undersubscription Amounts subscribed for exceed the difference between the
New Securities and the Basic Amounts subscribed for (the "AVAILABLE
UNDERSUBSCRIPTION AMOUNT"), each Right Holder who has subscribed for any
Undersubscription Amount shall be entitled to purchase only that portion of the
Available Undersubscription Amount as the Undersubscription Amount subscribed
for by such Right Holder bears to the total Undersubscription Amounts
subscribed for by all Right Holders, subject to rounding by the Board of
Directors to the extent it reasonably deems necessary.
(e) In the event that Notices of Acceptance are not
given by the Right Holders in respect of all the New Securities, the
Corporation shall have 90 days from the expiration of the period set forth in
Subsection (c) above to issue, sell or exchange all or any part of such New
Securities as to which a Notice of Acceptance has not been given by the Right
Holders (the "REFUSED SECURITIES"), but only to the offerees or purchasers and
only upon terms and conditions (including, without limitation, unit prices and
interest rates) which are described in the Offer.
(f) In the event the Corporation shall propose to sell
less than all the Refused Securities (any such sale to be in the manner
and on the terms specified in Subsection (e) above), then each Right Holder
may, at its sole option and in its sole discretion, reduce the number or amount
of the New
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Securities specified in its Notice of Acceptance to an amount that shall be not
less than the number or amount of the New Securities that the Right Holder
elected to purchase pursuant to Subsection (d) above multiplied by a fraction,
(i) the numerator of which shall be the number or amount of New Securities the
Corporation actually proposes to issue, sell or exchange (including New
Securities to be issued or sold to Right Holders pursuant to Subsection (d)
above prior to such reduction) and (ii) the denominator of which shall be the
amount of all New Securities. In the event that any Right Holder so elects to
reduce the number or amount of New Securities specified in its Notice of
Acceptance, the Corporation may not issue, sell or exchange more than the
reduced number or amount of the New Securities unless and until such securities
have again been offered to the Right Holders in accordance with Subsection (c)
above.
(g) Upon the closing of the issuance, sale or
exchange of all or less than all the Refused Securities, the Right Holders
shall acquire from the Corporation, and the Corporation shall issue to the
Right Holders, the number or amount of New Securities specified in the Notices
of Acceptance, as reduced pursuant to Subsection (f) above if the Right Holders
have so elected upon the terms and conditions specified in the Offer. The
purchase by the Right Holders of any New Securities is subject in all cases to
the preparation, execution and delivery by the Corporation and the Right
Holders of a purchase agreement relating to such New Securities reasonably
satisfactory in form and substance to the Right Holders and their respective
counsel.
(h) Any New Securities not acquired by the Right
Holders or other persons in accordance with Subsection (e) above may not be
issued, sold or exchanged until they are again offered to the Right Holders
under the procedures specified in this Agreement.
(i) This right of first refusal may be assigned, in whole
or in part, (i) to a partner, stockholder or Affiliate (as hereinafter
defined) of any Right Holder or (2) to any assignee who acquires not less than
50,000 shares of Common Stock (including in such number shares of Common Stock
issuable upon conversion of Preferred Stock), appropriately adjusted to take
account of any stock split, stock dividend, combination of shares, or the like.
(j) As used in this Section, an Affiliate of a
Right Holder shall mean any partner of the Right Holder or any person
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or entity that, directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Right
Holder.
8.3 INSURANCE. The Corporation has obtained and shall maintain,
with financially sound and responsible insurers (a) fire, casualty, product
liability and other liability insurance policies, with extended coverage, in
amounts customary for companies similarly situated; and (b) term life insurance
payable to the Corporation on the lives of Hong Lu and Peter Wang in the amount
of $1,000,000 each.
8.4 EMPLOYEE AGREEMENTS. The Corporation shall cause each person
who becomes an employee of the Corporation subsequent to the date hereof, and
who shall have or be proposed to have access to confidential or proprietary
information of the Corporation, upon the commencement of such person's
employment by the Corporation, to execute an agreement relating to matters of
non-disclosure of confidential and proprietary information and assignment of
patents, inventions and other Intellectual Property Rights in form and
substance satisfactory to the Board of Directors. The Corporation shall use
its best efforts to enforce each such agreement.
8.5 HIRING OF NEW CHIEF FINANCIAL OFFICER. The Corporation shall
promptly commence a search for a qualified Chief Financial Officer of the
Corporation, with the individual hired to be approved by the Board of
Directors, including the favorable vote of the two directors elected by the
Preferred Stock.
8.6 COMPOSITION OF THE BOARD OF DIRECTORS. The holders of the
Preferred Stock are given the power to elect two members of the Board of
Directors by their separate vote under the terms of the Corporation's
Certificate of Incorporation. It is agreed as among the Investors and the
Corporation that one such member shall be an individual designated from time to
time by TFVP IV and TFVP V and that the other individual shall be designated
from time to time by the remaining holders of the Preferred Stock. It is
understood and agreed by such parties that the right of TFVP IV and TFVP V to
so designate a member to the Board of Directors shall be conditioned upon their
continued collective ownership of at least eighty (80%) of the shares of Series
A Preferred Stock initially purchased hereunder. Additionally, the parties
contemplate reconsideration and revision of their agreement under this Section
at the time of the next significant equity round of financing is completed to
reflect appropriate Board representation among the Investors hereunder
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and of future venture capital-type investors. Additionally, the Corporation
and the Investors agree that the authorized number of Directors shall be five
(5) until changed by resolution adopted by the Board of Directors with the
favorable vote of both Directors elected solely by the Preferred Stock.
8.7 LIMITATION ON RIGHTS OF INVESTORS. The rights of Right
Holders under Section 8.2 and the Investors under Sections 8.1, 8.3, 8.4, 8.5
and 8.6 and the obligations of the Corporation under Sections 8.1 through 8.6
shall terminate and be of no effect upon and following the closing date of an
underwritten public offering of the Corporation's Common Stock pursuant to an
effective registration statement under the Securities Act in which the
aggregate gross proceeds to the Corporation from such offering are not less
than $8,000,000.
SECTION 9. FEES. Except as provided below, each party hereto shall be
responsible for and shall pay its own fees and expenses in connection with the
transactions contemplated by this Agreement. The Corporation agrees to
reimburse the Investors for the reasonable fees (up to $10,000.00) and the
expenses billed to them by Tomlinson Zisko Morosoli & Maser, as counsel to the
Investors.
SECTION 10. EXCHANGES; LOST, STOLEN OR MUTILATED CERTIFICATES. Upon surrender
by any Investor to the Corporation of a certificate or certificates
representing shares of Preferred Stock purchased or acquired by such Investor
hereunder or Reserved Shares received upon conversion of any such shares of
Preferred Stock, the Corporation at its expense shall issue in exchange
therefor, and deliver to such Investor, a new certificate or certificates
representing such shares, in such denomination or denominations as may be
requested by such Investor. Upon receipt of evidence satisfactory to the
Corporation of the loss, theft, destruction or mutilation of any certificate
representing any shares of Preferred Stock purchased or acquired by the
Investor hereunder or Reserved Shares received upon conversion of any such
shares of Preferred Stock and in case of any such loss, theft or destruction,
upon delivery of any indemnity agreement satisfactory to the Corporation, or in
case of any such mutilation, upon surrender and cancellation of such
certificate, the Corporation at its expense shall issue and deliver to such
Investor a new certificate for such shares of Preferred Stock or Reserved
Shares, of like tenor, in lieu of such lost, stolen or mutilated certificate.
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SECTION 11. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The
covenants, representations and warranties of the Corporation contained herein
shall survive the Closing. Each of the Investors may rely on such covenants,
representations and warranties irrespective of any investigation made, or
notice or knowledge held by, it or any other person. ALL statements contained
in any certificate or other instrument delivered by the Corporation pursuant to
this Agreement or in connection with the transactions contemplated by this
Agreement shall constitute representations and warranties by the Corporation
under this Agreement.
SECTION 12. INDEMNIFICATION. The Corporation shall indemnify, defend and hold
the Investors harmless from and against all liabilities, losses, and damages,
together with all reasonable costs and expenses related thereto (including,
without limitation, legal and accounting fees and expenses), which would not
have been incurred if (a) all of the representations and warranties of the
Corporation herein had been true and correct when made or (b) all of the
covenants and agreements of the Corporation herein had been duly and timely
complied with and performed.
SECTION 13. REMEDIES. In case any one or more of the covenants or agreements
set forth in this Agreement shall have been breached by the Corporation, the
Investors may proceed to protect and enforce their rights either by suit in
equity or by action at law, including, but not limited to, an action for
damages as a result of any such breach or an action for specific performance of
any such covenant or agreement contained in this Agreement.
SECTION 14. SUCCESSORS AN ASSIGNS. This Agreement shall be binding upon, and
inure to the benefit of, each of the parties hereto and, except as otherwise
expressly provided herein, each other person who shall become a registered
holder named in any certificate evidencing shares of Common Stock or Preferred
Stock transferred to such holder by any of the Investors or their permitted
transferees, and (except as aforesaid) their respective legal representatives,
successors and assigns.
SECTION 15. ENTIRE AGREEMENT; EFFECT ON PRIOR DOCUMENTS. This Agreement and
the other documents referred to herein or delivered pursuant hereto contain the
entire agreement among the parties with respect to the financing transactions
contemplated hereby and supersede all prior negotiations, commitments,
agreements and understandings among them with respect thereto.
-28-
29
SECTION 16. NOTICES. All notices, requests, consents and other communications
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or duly sent by express overnight
delivery providing written receipt of delivery, charges prepaid, or by first
class registered or certified mail, postage prepaid, return receipt requested,
addressed to such party at the address set forth below or such other address as
may hereafter be designated in writing by the addressee to the addressor
listing all parties:
(i) if to the Corporation, to:
Unitech Telecom, Inc.
333 Hegenberger Road, Suite 328
Oakland, CA 94621
Attention- President
with a copy to:
Gary J. Simon, Esq.
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
(ii) if to the Investors, to their respective
addresses set forth on the signature page
hereof with a copy to:
Jim C. Curlett, Esq.
Tomlinson Zisko Morosoli & Maser
200 Page Mill Road
Second Floor
Palo Alto, California 94306
All such notices, requests, consents and other communications so given shall be
deemed given or served and received for all purposes (i) three (3) days after
being sent by first class registered or certified mail, (ii) one business day
after being sent by express overnight delivery, or (iii) on the date of
delivery when delivered by hand.
SECTION 17. AMENDMENTS; WAIVERS. This Agreement may be amended, and
compliance with any provision of this Agreement may be omitted or waived, by
the written agreement of the Corporation and Investors or transferees of their
rights hereunder holding eighty (80%) in voting power of the Preferred Stock
-29-
30
(including Common Stock issued upon conversion thereof) held by the Investors
and such transferees.
SECTION 18. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each such counterpart shall be deemed to be an original
instrument, and all such counterparts together shall constitute but one
agreement.
SECTION 19. HEADINGS. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be a part of this Agreement.
SECTION 20. NOUNS AND PRONOUNS. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of names and pronouns shall include the
plural and vice-versa.
-30-
31
SECTION 21. GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the substantive laws of the State of
California without regard to its principles of conflicts of laws.
SECTION 22. SEVERABILITY. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 23. CALIFORNIA CORPORATE SECURITIES LAW. THE SALE OF THE SECURITIES
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF
SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR
SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF
SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE
CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE
IS SO EXEMPT.
IN WITNESS WHEREOF, the parties have executed this Stock Purchase
Agreement under seal as of the day and year first above written.
UNITECH TELECOM, INC.
By: /s/
------------------------------
Its President
By:
------------------------------
Title: President
--------------------------
32
TECHNOLOGY FUNDING VENTURE TECHNOLOGY FUNDING VENTURE
PARTNERS IV, AN AGGRESSIVE PARTNERS V, AN AGGRESSIVE
GROWTH FUND, L.P. GROWTH FUND, L.P.
By: TECHNOLOGY FUNDING, INC., By: TECHNOLOGY FUNDING, INC.,
Its Managing General Its Managing General
Partner Partner
By: By:
------------------------ ----------------------
Its Its
Address: Address:
- ------- -------
2000 Alameda de las Pulgas 2000 Alameda de las Pulgas
San Mateo, California 94403 San Mateo, California 94403
TELCO SYSTEMS, INC. DR. PEHONG CHEN
By:
------------------------ -------------------------------
Its
Address: Address:
- -------- --------
4305 Cushing Parkway 3 Lagoon Drive #350
Fremont, California 94538 Redwood City, California 94065
VARIAMAT RESOURCES SDN. BHD.
By:
------------------------
Its
Address:
- --------
c/o Sabkar Holding Sdn. Bhd.
Suite 16.06
Pernas International
Jalan Sultan Ismail
50250 Kuala Lumpur, Malaysia
-31-
33
TECHNOLOGY FUNDING VENTURE TECHNOLOGY FUNDING VENTURE
PARTNERS IV, AN AGGRESSIVE PARTNERS V, AN AGGRESSIVE
GROWTH FUND, L.P. GROWTH FUND, L.P.
By: TECHNOLOGY FUNDING, INC., By: TECHNOLOGY FUNDING, INC.,
Its Managing General Its Managing General
Partner Partner
By: /s/ By: /s/
------------------------ ------------------------
Its Investment Officer Its Investment Officer
By: By:
------------------------ ------------------------
Its Vice President Its Vice President
Address: Address:
- -------- --------
2000 Alameda de las Pulgas 2000 Alameda de las Pulgas
San Mateo, California 94403 San Mateo, California 94403
TELCO SYSTEMS, INC. DR. PEHONG CHEN
By:
----------------------------- -----------------------------
Its
Address: Address:
- -------- --------
4305 Cushing Parkway 3 Lagoon Drive #350
Fremont, California 94538 Redwood City, California 94065
VARIAMAT RESOURCES SDN. BHD. DING CHO HEE
By:
----------------------------- -----------------------------
Its
Address: Address:
- -------- --------
c/o Sabkar Holding Sdn. Bhd. 31 Jalan BU 2/9
Suite 16.06 Bandar Utama
Pernas International 47800 Petaling Jaya
Jalan Sultan Ismail Selangor Darul Ehsan, Malaysia
50250 Kuala Lumpur, Malaysia
WILLIAM WITTMEYER MALAYSIAN TECHNOLOGY DEVELOPMENT
CORP.
By:
----------------------------- -----------------------------
-32-
34
TECHNOLOGY FUNDING VENTURE TECHNOLOGY FUNDING VENTURE
PARTNERS IV, AN AGGRESSIVE PARTNERS V, AN AGGRESSIVE
GROWTH FUND, L.P. GROWTH FUND, L.P.
By: TECHNOLOGY FUNDING, INC., By: TECHNOLOGY FUNDING, INC.,
Its Managing General Its Managing General
Partner Partner
By: By:
------------------------ ------------------------
Its Its
Address: Address:
- -------- --------
2000 Alameda de las Pulgas 2000 Alameda de las Pulgas
San Mateo, California 94403 San Mateo, California 94403
TELCO SYSTEMS, INC. DR. PEHONG CHEN
By: /s/ Pehong Chen
----------------------------- -----------------------------
Its
Address: Address:
- -------- --------
4305 Cushing Parkway 3 Lagoon Drive #350
Fremont, California 94538 Redwood City, California 94065
VARIAMAT RESOURCES SDN. BHD. DING CHO HEE
By:
----------------------------- -----------------------------
Its
Address: Address:
- -------- --------
c/o Sabkar Holding Sdn. Bhd. 31 Jalan BU 2/9
Suite 16.06 Bandar Utama
Pernas International 47800 Petaling Jaya
Jalan Sultan Ismail Selangor Darul Ehsan, Malaysia
50250 Kuala Lumpur, Malaysia
WILLIAM WITTMEYER MALAYSIAN TECHNOLOGY DEVELOPMENT
CORP.
By:
----------------------------- -----------------------------
-32-
35
TECHNOLOGY FUNDING VENTURE TECHNOLOGY FUNDING VENTURE
PARTNERS IV, AN AGGRESSIVE PARTNERS V, AN AGGRESSIVE
GROWTH FUND, L.P. GROWTH FUND, L.P.
By: TECHNOLOGY FUNDING, INC., By: TECHNOLOGY FUNDING, INC.,
Its Managing General Its Managing General
Partner Partner
By: By:
---------------------- ----------------------
Its Its
Address: Address:
- -------- --------
2000 Alameda de las Pulgas 2000 Alameda de las Pulgas
San Mateo, California 94403 San Mateo, California 94403
TELCO SYSTEMS, INC. DR. PEHONG CHEN
By:
---------------------- ---------------------------
Its
Address: Address:
- -------- --------
4305 Cushing Parkway 3 Lagoon Drive #350
Fremont, California 94538 Redwood City, California 94065
VARIAMAT RESOURCES SDN. BHD. DING CHO HEE
By:
---------------------- ---------------------------
Its
Address: Address:
- -------- --------
c/o Sabkar Holding Sdn. Bhd. 31 Jalan BU 2/9
Suite 16.06 Bandar Utama
Pernas International 47800 Petaling Jaya
Jalan Sultan Ismail Selangor Darul Ehsan, Malaysia
50250 Kuala Lumpur, Malaysia
WILLIAM WITTMEYER MALAYSIAN TECHNOLOGY DEVELOPMENT
CORP.
By:
- ---------------------------- ----------------------------
-32-
36
TECHNOLOGY FUNDING VENTURE TECHNOLOGY FUNDING VENTURE
PARTNERS IV, AN AGGRESSIVE PARTNERS V, AN AGGRESSIVE
GROWTH FUND, L.P. GROWTH FUND, L.P.
By: TECHNOLOGY FUNDING, INC., By: TECHNOLOGY FUNDING, INC.,
Its Managing General Its Managing General
Partner Partner
By: By:
---------------------- ----------------------
Its Its
Address: Address:
- -------- --------
2000 Alameda de las Pulgas 2000 Alameda de las Pulgas
San Mateo, California 94403 San Mateo, California 94403
TELCO SYSTEMS, INC. DR. PEHONG CHEN
By:
-------------------------- -------------------------------
Its
Address: Address:
- -------- --------
4305 Cushing Parkway 3 Lagoon Drive #350
Fremont, California 94538 Redwood City, California 94065
VARIAMAT RESOURCES SDN. BHD. DING CHO HEE
By:
-------------------------- -------------------------------
Its
Address: Address:
- -------- --------
c/o Sabkar Holding Sdn. Bhd. 31 Jalan BU 2/9
Suite 16.06 Bandar Utama
Pernas International 47800 Petaling Jaya
Jalan Sultan Ismail Selangor Darul Ehsan, Malaysia
50250 Kuala Lumpur, Malaysia
WILLIAM WITTMEYER MALAYSIAN TECHNOLOGY DEVELOPMENT
CORP.
/s/ William Wittmeyer By:
- ---------------------------- ----------------------------
-32-
37
TECHNOLOGY FUNDING VENTURE TECHNOLOGY FUNDING VENTURE
PARTNERS IV, AN AGGRESSIVE PARTNERS V, AN AGGRESSIVE
GROWTH FUND, L.P. GROWTH FUND, L.P.
By: TECHNOLOGY FUNDING, INC., By: TECHNOLOGY FUNDING, INC.,
Its Managing General Its Managing General
Partner Partner
By: By:
---------------------- ----------------------
Its Its
Address: Address:
- -------- --------
2000 Alameda de las Pulgas 2000 Alameda de las Pulgas
San Mateo, California 94403 San Mateo, California 94403
TELCO SYSTEMS, INC. DR. PEHONG CHEN
By:
--------------------------- -------------------------------
Its
Address: Address:
- -------- --------
4305 Cushing Parkway 3 Lagoon Drive #350
Fremont, California 94538 Redwood City, California 94065
VARIAMAT RESOURCES SDN. BHD. DING CHO HEE
By: /s/ Ding Cho Hee
--------------------------- -------------------------------
Its
Address: Address:
- -------- --------
c/o Sabkar Holding Sdn. Bhd. 31 Jalan BU 2/9
Suite 16.06 Bandar Utama
Pernas International 47800 Petaling Jaya
Jalan Sultan Ismail Selangor Darul Ehsan, Malaysia
50250 Kuala Lumpur, Malaysia
WILLIAM WITTMEYER MALAYSIAN TECHNOLOGY DEVELOPMENT
CORP.
By: /s/
- ---------------------------- ----------------------------
-32-
38
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is entered into as of March
29, 1995 by and among Unitech Telecom, Inc., a Delaware corporation (the
"CORPORATION"); Technology Funding Venture Partners IV, An Aggressive Growth
Fund, L.P., a Delaware limited partnership ("TFVP IV"); Technology Funding
Venture Partners V, an Aggressive Growth Fund, L.P., a Delaware limited
partnership ("TFVP V"); Telco Systems, Inc., a Delaware corporation ("Telco");
Dr. Pehong Chen, a California resident, and Variamat Resources Sdn. Bhd., a
Malaysian corporation, Ding Cho Hee, a Malaysian resident, William Wittmeyer, a
California resident and Malaysian Technology Development Corp., a Malaysian
corporation (the foregoing being hereinafter sometimes referred to individually
as an "INVESTOR" and collectively as the "INVESTORS").
WHEREAS, the Corporation wishes to sell to the Investors
certain shares of its Series A Convertible Preferred Stock, par value $.01 per
share ("PREFERRED STOCK"), which are convertible into shares of the
Corporation's Common Stock, par value $.01 per share ("COMMON STOCK"); and
WHEREAS, as a condition to their purchase of such Preferred
Stock, in a Stock Purchase Agreement of even date herewith (the "PURCHASE
AGREEMENT"), the Investors have required that the Corporation execute this
Agreement to provide the Investors rights to register the Common Stock into
which their Preferred Stock is convertible and certain other stock;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth, the parties hereto agree as follows:
1. DEFINITIONS. As used in this Agreement, the
following terms shall have the following meanings:
(a) The term "Act" means the Securities Act of 1933,
as amended;
(b) The term "HOLDER" means any Investor and any
other person or entity holding Registrable Securities to whom the registration
rights granted in this Agreement have been transferred pursuant to Section 15
hereof;
(c) The terms "REGISTER," "REGISTERED," and
"REGISTRATION" refer to a registration effected by preparing and filing a
registration statement in compliance with the Act and the declaration or
ordering of effectiveness of such registration statement; and
39
(d) The term "REGISTRABLE SECURITIES" means (1) the
Common Stock issuable upon conversion of the Preferred Stock, (2) Common Stock
purchased by an Investor pursuant to Section 9.2 of the Purchase Agreement (or
Common Stock for or into which New Securities (as therein defined) purchased
by the Investor pursuant to such Section 9.2 may be exercised or converted),
and (3) shares of Common Stock issuable upon exercise of the Warrants dated
May 31, 1994 issued to TFVP IV and TFVP V, and (4) any Common Stock of the
Corporation issued as a dividend or other distribution with respect to, or in
exchange for or in replacement of, such Preferred Stock or Common Stock.
In addition, for purposes of all calculations, and notices
under, and all provisions of this Agreement, where the context permits, the
term "REGISTRABLE SECURITIES" shall include securities issuable upon conversion
of the Preferred Stock, a holder of the Preferred Stock shall be deemed the
Holder of such securities and such securities shall be deemed outstanding
Registrable Securities hereunder. The foregoing notwithstanding, nothing in
this Agreement shall require the Corporation actually to register any shares of
the Preferred Stock.
2. REQUEST FOR REGISTRATION. At any time after
the earlier of (i) September 1, 1997 or (ii) the initial public offering of the
Common Stock, if the Corporation shall receive a written request (specifying
that it is being made pursuant to this Section 2) from the Holder or Holders of
more than thirty-three and one-third percent (33 1/3%) of the then outstanding
Registrable securities that the Corporation file a registration statement under
the Act, or a similar document pursuant to any other statute then in effect
corresponding to the Act, covering the registration of at least the lesser of
(i) at least twenty percent (20%) of the then outstanding Registrable
Securities and, (ii) Registrable Securities the expected offering price to the
public of which equals or exceeds $3,000,000, then the Corporation shall
promptly notify all other Holders of such request and shall use its best
efforts to cause all Registrable Securities that Holders have requested be
registered to be registered under the Act.
Notwithstanding the foregoing, (a) the Corporation shall not
be obligated to effect a registration pursuant to this Section 2 during the
period starting with the date sixty (60) days prior to the Corporation's
estimated date of filing of, and ending on a date three (3) months following
the effective date of, a registration statement pertaining to an underwritten
public offering of securities for the account of the Corporation, provided that
the Corporation is actively employing in good
-2-
40
faith its best efforts to cause such registration statement to become effective
and that the Corporation's estimate of the date of filing such registration
statement is made in good faith; (b) the Corporation shall not be obligated to
effect a registration pursuant to this Section 2 within six (6) months after
the effective date of a prior registration under such Section; (c) if the
Corporation shall furnish to the Holders a certificate signed by the President
of the Corporation stating that in the good faith judgment of the Board of
Directors it would be materially detrimental to the Corporation or its
shareholders for a registration statement to be filed in the near future, then
the Corporation's obligation to use its best efforts to file a registration
statement shall be deferred for a period not to exceed three (3) months; and
(d) the Corporation may postpone a registration pursuant to this Section 2 for
such period of time as may be required to permit the use of regular audited
year-end figures with supplemental short period figures for a period not
exceeding six (6) months unless the Holders agree to bear the costs of any
special audit.
The Corporation shall not be obligated to effect more than one
(1) registration pursuant to this Section 2. Any request for registration under
this Section 2 must be for a firm commitment underwritten public offering to be
managed by an underwriter or underwriters of recognized national standing
reasonably acceptable to the Corporation.
3. CORPORATION REGISTRATION. Subject to Section
8 of this Agreement, if at any time the Corporation proposes to register any of
its Common Stock under the Act in connection with the public offering of such
securities for its own account or for the accounts of other shareholders,
solely for cash on a form that would also permit the registration of the
Registrable Securities, the Corporation shall, each such time, promptly give
each Holder written notice of such determination. Upon the written request of
any Holder given within thirty (30) days after mailing of any such notice by
the Corporation, the Corporation shall use its best efforts to cause to be
registered under the Act all of the Registrable Securities that each such
Holder has requested be registered; provided that the Corporation shall have
the right to postpone or withdraw any such registration effected pursuant to
this Section 3.
4. OBLIGATIONS OF THE CORPORATION. Whenever
required under Section 2, 3, or 11 to use its best efforts to effect the
registration of any Registrable Securities, the Corporation shall, as
expeditiously as reasonably possible:
-3-
41
(a) Prepare and file with the Securities and Exchange
Commission ("SEC") a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to
become and remain effective; provided, however, that in connection with any
proposed registration intended to permit an offering of any securities from
time to time (i.e., a so-called "shelf registration"), the Corporation shall
in no event be obligated to cause any such registration to remain effective
for more than one hundred eighty (180) days.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply with
the provisions of the Act until the earlier of (i) the disposition of all
securities covered by such registration statement or (ii) 120 days after the
effective date thereof.
(c) Furnish to each selling Holder such number of copies of
each preliminary and final prospectus in conformity with the requirements of
the Act, and such other documents as such Holder may reasonably request, in
order to facilitate the disposition of Registrable Securities owned by it.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities
or Blue Sky laws of such jurisdictions as shall be reasonably appropriate for
the distribution of the securities covered by the registration statement,
provided that the Corporation shall not be required in connection therewith or
as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions, and further provided
that (anything in this Agreement to the contrary notwithstanding with respect
to the bearing of expenses) if any jurisdiction in which the securities shall
be qualified shall require that expenses incurred in connection with the
qualification of the securities in that jurisdiction be borne by selling
shareholders, then such expenses shall be payable by selling shareholders pro
rata, to the extent required by such jurisdiction.
(e) Provide a transfer agent for the Common Stock no later
than the effective date of the first registration of any Registrable Securities.
(f) Otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC.
-4-
42
(g) Use its best efforts to cause all the Registrable
Securities either (i) to be listed on a national securities exchange (if
the Registrable Securities are not already so listed) and on each additional
national securities exchange on which similar securities issued by the
Corporation are then listed, if the listing of the Registrable Securities is
then permitted under the rules of such exchange, or (ii) to secure designation
of all the Registrable Securities as a Nasdaq "national market system security"
within the meaning of Rule 11Aa2-1 of the SEC or, failing that, to secure
listing on Nasdaq for the Registrable Securities and, without limiting the
generality of the foregoing, to arrange for at least two (2) market makers to
register as such with respect to Registrable Securities with the National
Association of Securities Dealers, Inc.
(h) Enter into such customary agreements (including an
underwriting agreement in customary form) and take such other actions as
sellers of Registrable Securities shall reasonably request in order to expedite
or facilitate the disposition of such Registrable Securities.
(i) Make available for inspection and copying by any seller
of Registrable Securities, by any underwriter participating in any disposition
to be effected pursuant to such registration statement and by any attorney,
accountant or other agent retained by any such seller or any such underwriter,
all pertinent financial and other records and pertinent corporate documents and
properties of the Corporation, and cause all of the Corporation's officers,
directors and employees to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in connection with such
registration statement.
(j) Use every reasonable effort to prevent the issuance of
any stop order suspending the effectiveness of such registration statement or
of any order preventing or suspending the use of any preliminary prospectus
and, if any such order is issued, to obtain the lifting thereof at the earliest
reasonable time.
(k) Make such representations and warranties to the selling
Holders and the underwriters as are customarily made by issuers to underwriters
and selling shareholders, as the case may be, in primary underwritten public
offerings.
(l) Furnish to each selling Holder a signed counterpart of
-5-
43
(i) an opinion of counsel for the Corporation,
dated the effective date of the registration statement, and
(ii) "comfort" letters signed by the Corporation's
independent public accountants who have examined and reported on the
Corporation's financial statements included in the registration statement, to
the extent permitted by the standards of the American Institute of Certified
Public Accountants, covering substantially the same matters with respect to
the registration statement (and the prospectus included therein) and (in the
case of the accountants' "comfort" letters) with respect to events subsequent
to the date of the financial statements, as are customarily covered in
opinions of issuer's counsel and in accountants' "comfort" letters delivered
to the underwriters in underwritten public offerings of securities, to the
extent that the Corporation is required to deliver or cause the delivery of
such opinion or "comfort" letters to the underwriters in an underwritten public
offering of securities.
(m) Furnish to each selling Holder a copy of all documents
filed and all correspondence from or to the SEC in connection with the
registration statement and the offering to which it relates.
(n) Use its best efforts to insure the obtaining of all
necessary approval from the National Association of Securities Dealers, Inc.
in connection with such offering.
5. FURNISH INFORMATION. It shall be a condition precedent to
the obligations of the Corporation to take any action pursuant to this
Agreement that the Holders shall furnish to the Corporation such
information regarding them, the Registrable Securities held by them, and the
intended method of disposition of such securities as the Corporation shall
reasonably request and as shall be required in connection with the action to be
taken by the Corporation.
6. EXPENSES OF DEMAND REGISTRATION. All expenses incurred in
connection with registrations pursuant to Section 2 (excluding underwriters'
discounts and commissions), including, without limitation, all registration
and qualification fees, printers', and accounting fees, fees and disbursements
of counsel for the Corporation, and the reasonable fees and disbursements of
one counsel for the selling Holders, shall be borne by the Corporation;
PROVIDED, HOWEVER, that if a registration under Section 2 is withdrawn at the
request of the selling Holders
-6-
44
requesting such registration (other than as a result of information concerning
the business or financial condition of the Corporation which is made known to
the selling Holders after the date on which such registration was requested)
and if such selling Holders elect not to have such registration counted as
registration requested under Section 2, the requesting selling Holders shall
pay the registration expenses of such registration pro rata in accordance with
the number of the Registrable Securities included in such registration.
7. CORPORATION REGISTRATION EXPENSES. All expenses (excluding
underwriters' discounts and commissions) incurred in connection with a
registration pursuant to Section 3 (other than a registration on Form S-3
filed pursuant to Section 11 hereof), including, without limitation, any
additional registration and qualification fees and any additional fees and
disbursements of counsel to the Corporation that result from the inclusion of
securities held by the Holders in such registration and the reasonable fees and
disbursements of one counsel for the selling Holders, shall be borne by the
Corporation.
8. UNDERWRITING REQUIREMENTS.
-------------------------
(a) In connection with any offering involving an
underwriting of shares being issued by the Corporation, the Corporation shall
not be required to include any of the Holders' Registrable Securities in
such underwriting unless they accept the terms of the underwriting as agreed
upon between the Corporation and the underwriters selected by it, and, in
connection with any such offering under Section 3, only in such quantity as
will not exceed a limitation on the amount of securities to be underwritten,
such limitation to be reasonably determined by the underwriters' or their
representatives based on marketing factors (the "Underwriters' Limitation").
If the total amount of securities that all Holders request to be included in an
underwritten offering exceeds the Underwriters' Limitation on the amount of
securities, the Corporation shall only be required to include in the offering
so many of the securities of the selling Holders as the underwriters reasonably
believe will not exceed that limitation (the securities so included to be
apportioned pro rata among the selling Holders according to the total amount of
securities owned by said selling Holders, or in such other proportions as shall
mutually be agreed to by such selling Holders), provided that (in the case of
an offering subject to Section 3) no such reduction shall be made with respect
to any securities offered by the Corporation for its own account, and provided
further that no securities of any shareholder who is not a Holder shall be
included unless ail securities which the
-7-
45
Holders and their permitted assignees have requested to be included are
included.
(b) With respect to any underwriting of shares to be
registered under Section 2 or Section 11, the Holders of a majority of the
then outstanding Registrable Securities to be included in such offering shall
have the right to designate the managing underwriter or underwriters. In all
other circumstances under such Sections and in connection with registrations
under Section 3, the Board of Directors of the Corporation shall designate the
managing underwriter or underwriters.
9. DELAY OF REGISTRATION. No Holder shall have any right to
take any action to restrain, enjoin, or otherwise delay any registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.
10. INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under this Agreement:
(a) To the extent permitted by law, the Corporation will
indemnify and hold harmless each Holder requesting or joining in a
registration, any underwriter (as defined in the Act) for it, and each
person, if any, who controls such Holder or underwriter within the meaning of
the Act, against any losses, claims, damages or liabilities, joint or several,
to which they may become subject under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based on any untrue or alleged untrue statement of any material
fact contained in such registration statement, including, without limitation,
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading or
arise out of any violation by the Corporation of any rule or regulation
promulgated under the Act applicable to the Corporation and relating to action
or inaction required of the Corporation in connection with any such
registration; and will reimburse each such Holder, such underwriter, or
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability, or action, provided, however, that the indemnity agreement contained
in this Section 10(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action
-8-
46
if such settlement is effected without the consent of the Corporation (which
consent shall not be unreasonably withheld or delayed) nor shall the
Corporation be liable in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in connection with such registration statement, preliminary prospectus,
final prospectus, or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by or on behalf of any such Holder, underwriter or
controlling person.
(b) To the extent permitted by law, each Holder requesting
or joining in a registration will indemnify and hold harmless the Corporation,
each of its directors, each of its officers who has signed the registration
statement, each underwriter for the Corporation (within the meaning of the
Act), and each person, if any, who controls the Corporation or any such
underwriter within the meaning of the Act, against any losses, claims, damages
or liabilities to which the Corporation or any such director, officer,
controlling person or underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereto) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in such registration statement, preliminary prospectus or final
prospectus, or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished by or on behalf of such Holder
expressly for use in connection with such registration; and will reimburse the
Corporation or any such director, officer, controlling person or underwriter
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section 10(b)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of such
Holder (which consent shall not be unreasonably withheld) and provided further
that no Holder shall have any liability under this Section
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47
10(b) in excess of the net proceeds actually received by such Holder in the
relevant public offering.
(c) Promptly after receipt by an indemnified party under
this Section 10 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 10, notify the indemnifying party in
writing of the commencement thereof and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the
defense thereof with counsel mutually satisfactory to the parties. The failure
to notify an indemnifying party promptly of the commencement of any such
action, if actually prejudicial to his ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 10, but the omission so to notify the indemnifying party will not
relieve him of any liability that he may have to any indemnified party
otherwise than under this Section 10.
11. REGISTRATIONS ON FORM S-3.
(a) If (i) the Corporation shall receive a written request
(specifying that it is being made pursuant to this Section 11) from the Holder
or Holders of more than fifteen percent (15%) of the then-outstanding
Registrable Securities that the corporation file a registration statement on
Form S-3 (or any successor form to Form S-3 regardless of its designation) for
a public offering of shares of the Registrable Securities the reasonably
anticipated aggregate price to the public of which would equal or exceed Five
Hundred Thousand Dollars ($500,000), and (ii) the Corporation is a registrant
entitled to use Form S-3 to register such shares, then the Corporation shall
use its best efforts to cause such shares to be registered on Form S-3 (or any
successor form to Form S-3).
(b) All expenses (excluding underwriters' discounts and
commissions) incurred in connection with a registration requested pursuant to
Section 11(a), including, without limitation, all registration, qualification,
printing, and accounting fees, and fees and disbursements of one counsel for
the selling Holder or Holders and counsel to the Corporation, shall be borne by
the Corporation.
(c) Holders' rights to registration under this Section 11
are in addition to, and not in lieu of, their rights to registration under
Sections 2 and 3 of this Agreement.
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48
(d) The Corporation shall not be obligated to effect more
than two registrations pursuant to this Section 11 during any period of twelve
(12) consecutive calendar months.
12. LIMITATION ON CORPORATION OFFERINGS. The Corporation shall
not register securities for sale for its own account (or, except as permitted
by Section 14, any securities other than Registrable Securities held by a
Holder) in any registration requested pursuant to Section 2 or 11 unless
permitted to do so by the written consent of the Holders of more than eighty
percent (80%) of the Registrable Securities as to which registration has been
requested. The Corporation may not cause any other registration of securities
for its own account (other than a registration effected solely to implement an
employee benefit plan) which would become effective less than ninety (90) days
after the effective date of any registration requested pursuant to Section 2 or
11 to be initiated after such requested registration.
13. REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view
to making available to the Holders the benefits of Rule 144 promulgated under
the Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Corporation to the public without
registration, the corporation agrees to use its best efforts to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144, at all times subsequent to
ninety (90) days after the effective date of the first registration statement
covering an underwritten public offering filed by the Corporation;
(b) file with the SEC in a timely manner all reports and
other documents required of the Corporation under the Act and the Securities
Exchange Act of 1934, as amended (the "1934 ACT"); and
(c) furnish to any Holder forthwith upon request a written
statement by the Corporation that it has complied with the reporting
requirements of Rule 144 (at any time after ninety (so) days after
the effective date of said first registration statement filed by the
Corporation), and of the Act and the 1934 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 Corporation, and such other reports and documents so
filed by the Corporation as may be reasonably requested in availing any such
Holder to take advantage of any rule or
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49
regulation of the SEC permitting the selling of any such securities without
registration.
14. LIMITATIONS IN CONNECTION WITH FUTURE GRANTS OF REGISTRATION
RIGHTS. Without the prior written consent of Holders that hold at least
eighty percent (80%) in voting power of Registrable Securities, the Corporation
shall not grant rights to cause the Corporation to register any of
its securities to any person or entity which are more favorable than the rights
granted to the Holders hereunder or which would interfere in any respect with
the exercise by the Holders of their rights hereunder.
15. TRANSFER OF REGISTRATION RIGHTS. The registration rights of
any Investor (and of any permitted transferee of any Investor or its permitted
transferees) under this Agreement with respect to any shares of Registrable
Securities may be Transferred to any transferee who acquires (otherwise than in
a registered public offering) such shares of Registrable Securities, provided,
however, that the Corporation is given written notice by the Holder at the time
of such transfer stating the name and address of the transferee and identifying
the securities with respect to which the rights under this Agreement are being
assigned and the transferee agrees to be bound by and executes a counterpart of
this Agreement.
16. MERGERS, ETC. The Corporation shall not, directly or
indirectly enter into any merger, consolidation or reorganization in
which the Corporation shall not be the surviving corporation unless the
proposed surviving corporation shall, prior to such merger, consolidation or
reorganization, agree in writing to assume the obligations of the Corporation
under this Agreement, and for that purpose references hereunder to "Registrable
Securities" shall be deemed to be references to the securities which the
Holders would be entitled to receive in exchange for Registrable Securities
under any such merger, consolidation or reorganization; provided, however, that
the provisions of this Agreement shall not apply in the event of any merger,
consolidation or reorganization in which the Corporation is not the surviving
corporation if the Holders of Registrable Securities are entitled to receive in
exchange therefor (i) cash, (ii) securities of the acquiring corporation which
may be immediately sold to the public without registration under the Act! or
(iii) securities of the acquiring corporation which the acquiring corporation
has agreed to register within ninety (90) days of the completion of the
transaction for resale to the public pursuant to the Act.
-12-
50
17. STAND-OFF AGREEMENT. Each Holder, if requested by the
Corporation and the managing underwriter of an offering by the Corporation of
Common Stock or other securities of the Corporation pursuant to a registration
statement, shall agree not to sell publicly or otherwise transfer or dispose of
any Registrable Securities or other securities of the Corporation held by such
Holder for a specified period of time (not to exceed 90 days) following the
effective date of such registration statement; PROVIDED that:
(a) such agreement shall only apply to the first
registration statement covering Common Stock to be sold on the Corporation's
behalf to the public in an underwritten offering; and
(b) all holders holding not less than the number of shares
of Common Stock held by such Holder (including shares of Common Stock issuable
upon the conversion of Preferred Stock, or other convertible securities, or
upon the exercise of options, warrants or rights) and all officers and
directors of the Corporation enter into similar agreements.
18. MISCELLANEOUS.
(a) This Agreement states the entire agreement of the
parties concerning the subject matter hereof, and supersedes all prior
agreements, written or oral, between or among them concerning such subject
matter.
(b) This Agreement may be amended, and compliance with any
provision of this Agreement may be omitted or waived, only by the written
agreement of the Holders of at least eighty percent (80%) in voting power of
the then- outstanding Registrable Securities to be bound thereby.
(c) This Agreement shall be governed by, and construed and
enforced in accordance with, the substantive laws of the State of California
without regard to its principles of conflicts of laws.
(d) All notices hereunder shall be given in accordance with
Section 17 of the Purchase Agreement.
IN WITNESS WHEREOF, the parties hereto have duly exe-
-13-
51
cuted and delivered this Registration Rights Agreement under seal as of the
date first above written.
UNITECH TELECOM, INC.
By: /s/
-----------------------------
Its President
TECHNOLOGY FUNDING VENTURE TECHNOLOGY FUNDING VENTURE
PARTNERS IV, AN AGGRESSIVE PARTNERS V, AN AGGRESSIVE
GROWTH FUND, L.P. GROWTH FUND, L.P.
By: TECHNOLOGY FUNDING, INC., By: TECHNOLOGY FUNDING, INC.
Its Managing General Its Managing General
Partner Partner
By: /s/ By: /s/
---------------------- -----------------------
Its Investment Officer Its Investment Officer
By: /s/ By: /s/
---------------------- -----------------------
Its Vice President Its Vice President
TELCO SYSTEMS, INC.
By:
--------------------------- ---------------------------
Its Pehong Chen
VARIAMAT RESOURCES SDN. BHD.
By:
--------------------------- ---------------------------
Its William Wittmeyer
MALAYSIAN TECHNOLOGY
DEVELOPMENT CORP.
By:
- --------------------------- ---------------------------
Ding Cho Hee Its
-14-
52
waived, only by the written agreement of the Holders of at least eighty percent
(80%) in voting power of the then-outstanding Registrable Securities to be
bound thereby.
(c) This Agreement shall be governed by, and construed and
enforced in accordance with, the substantive laws of the State of California
without regard to its principles of conflicts of laws.
(d) All notices hereunder shall be given in accordance
with Section 17 of the-Purchase Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Registration Rights Agreement under seal as of the date first
above written.
UNITECH TELECOM, INC.
By: /s/
----------------------
Its President
TECHNOLOGY FUNDING VENTURE TECHNOLOGY FUNDING VENTURE
PARTNERS IV, AN AGGRESSIVE PARTNERS V, AN AGGRESSIVE
GROWTH FUND, L.P. GROWTH FUND, L.P.
By: TECHNOLOGY FUNDING INC., By: TECHNOLOGY FUNDING INC.
Its Managing General Its Managing General
Partner Partner
By: /s/ By: /s/
---------------------- -----------------------
Its Its
TELCO SYSTEMS, INC.
By:
--------------------------- --------------------------------
Its Pehong Chen
VARIAMAT RESOURCES SDN. BHD.
By: /s/
---------------------------
Its
-14-
53
cuted and delivered this Registration Rights Agreement under seal as of -the
date first above written.
UNITECH TELECOM, INC.
By:
----------------------------
Its President
TECHNOLOGY FUNDING VENTURE TECHNOLOGY FUNDING VENTURE
PARTNERS IV, AN AGGRESSIVE PARTNERS V, AN AGGRESSIVE
GROWTH FUND, L.P. GROWTH FUND, L.P.
By: TECHNOLOGY FUNDING INC., By: TECHNOLOGY FUNDING INC.
Its Managing General Its Managing General
Partner Partner
By: By:
---------------------- -----------------------
Its Its
TELCO SYSTEMS, INC.
By: /s/ Pehong Chen
--------------------------- --------------------------------
Its Pehong Chen
VARIAMAT RESOURCES SDN. BHD.
By:
--------------------------- --------------------------------
Its William Wittmeyer
MALAYSIAN TECHNOLOGY
DEVELOPMENT CORP.
By:
- --------------------------- -----------------------------
Ding Cho Hee Its
-14-
54
cuted and delivered this Registration Rights Agreement under seal as of the
date first above written.
UNITECH TELECOM, INC.
By:
----------------------------
Its President
TECHNOLOGY FUNDING VENTURE TECHNOLOGY FUNDING VENTURE
PARTNERS IV, AN AGGRESSIVE PARTNERS V, AN AGGRESSIVE
GROWTH FUND, L.P. GROWTH FUND, L.P.
By: TECHNOLOGY FUNDING INC., By: TECHNOLOGY FUNDING INC.
Its Managing General Its Managing General
Partner Partner
By: By:
---------------------- -----------------------
Its Investment Officer Its Investment Officer
TELCO SYSTEMS, INC.
By: /s/
--------------------------- -------------------------------
Its Pehong Chen
VARIAMAT RESOURCES SDN. BHD.
By:
--------------------------- -------------------------------
Its William Wittmeyer
MALAYSIAN TECHNOLOGY
DEVELOPMENT CORP.
By:
- ------------------------------ ---------------------------
Ding Cho Hee Its
-14-
55
cuted and delivered this Registration Rights Agreement under seal as of the
date first above written.
UNITECH TELECOM, INC.
By:
----------------------------
Its President
TECHNOLOGY FUNDING VENTURE TECHNOLOGY FUNDING VENTURE
PARTNERS IV, AN AGGRESSIVE PARTNERS V, AN AGGRESSIVE
GROWTH FUND, L.P. GROWTH FUND, L.P.
By: TECHNOLOGY FUNDING INC., By: TECHNOLOGY FUNDING INC.
Its Managing General Its Managing General
Partner Partner
By: By:
---------------------- -----------------------
Its Investment Officer Its Investment Officer
TELCO SYSTEMS, INC.
By:
--------------------------- -------------------------------
Its Pehong Chen
VARIAMAT RESOURCES SDN. BHD.
By: /s/ William Wittmeyer
--------------------------- -------------------------------
Its William Wittmeyer
MALAYSIAN TECHNOLOGY
DEVELOPMENT CORP.
By:
- --------------------------- ---------------------------
Ding Cho Hee Its
-14-
56
cuted and delivered this Registration Rights Agreement under seal as of the
date first above written.
UNITECH TELECOM, INC.
By:
----------------------------
Its President
TECHNOLOGY FUNDING VENTURE TECHNOLOGY FUNDING VENTURE
PARTNERS IV, AN AGGRESSIVE PARTNERS V, AN AGGRESSIVE
GROWTH FUND, L.P. GROWTH FUND, L.P.
By: TECHNOLOGY FUNDING INC., By: TECHNOLOGY FUNDING INC.
Its Managing General Its Managing General
Partner Partner
By: By:
---------------------- -----------------------
Its Investment Officer Its Investment Officer
TELCO SYSTEMS, INC.
By:
--------------------------- -------------------------------
Its Pehong Chen
VARIAMAT RESOURCES SDN. BHD.
By:
--------------------------- --------------------------------
Its William Wittmeyer
MALAYSIAN TECHNOLOGY
DEVELOPMENT CORP.
/s/ Ding Cho Hee By: /s/
- --------------------------- ---------------------------
Ding Cho Hee Its