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David M. Stoll
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Chief Financial Officer and
Vice President of Finance
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(Principal Financial and Accounting Officer)
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EXHIBIT INDEX
Exhibit Number Description
4.1 Common Stock Purchase Agreement dated January 24, 2000
4.2 Form of Investor Rights Agreement
PURCHASE AGREEMENT
8x8, Inc.
Common Stock Purchase
Agreement
January 24, 2000
TABLE OF CONTENTS
Page
1. Purchase and Sale of Stock *
1.1 Sale and Issuance of Common Stock *
1.2 Closings and Deliveries *
2. Representations and Warranties of the Company *
2.1 Organization and Standing *
2.2 Corporate Power; Authorization *
2.3 Issuance and Delivery of the Shares *
2.4 SEC Documents; Financial Statements *
2.5 Government Consents *
2.6 No Material Adverse Change *
2.7 Authorized Capital Stock *
2.8 No Dividends *
2.9 Litigation and Compliance with Laws *
2.10 Intellectual Property *
2.11 Taxes *
2.12 Title to Property and Assets *
2.13 Material Contracts *
3. Representations, Warranties and Covenants of the
Investor *
3.1 Authorization *
3.2 Independent Investment Decision *
3.3 Investment Intent *
3.4 Registration or Exemption Requirements *
3.5 Legends *
4. Conditions of Investor's Obligations at Closing *
4.1 Representations and Warranties *
4.2 Covenants *
4.3 Qualifications *
4.4 Execution of Investor Rights Agreement *
4.5 License Agreement and Development Agreement *
4.6 Board of Directors *
4.7 Closing Deliveries *
5. Conditions of the Company's Obligations at
Closing *
5.1 Representations and Warranties *
5.2 Covenants *
5.3 Qualifications *
6. Covenants of the Investor and of the Company *
6.1 HSR Clearance *
6.2 Conduct of Business of the Company *
6.3 Use of Proceeds *
7. Right of First Refusal *
7.1 Company's Right of First Refusal *
7.2 Notice of Proposed Transfer *
7.3 Exercise of Right of First Refusal *
7.4 Purchase Price *
7.5 Payment *
7.6 Right to Transfer *
8. Restrictions on Transfer *
9. Standstill Agreement *
10. Lock-up Agreement *
11. Termination *
11.1 Mutual Consent *
11.2 Investor Termination *
11.3 Company Termination *
11.4 Termination Due to Governmental Action *
12. Indemnification *
12.1 Survival of Representations and Warranties *
12.2 Indemnification by the Company *
12.3 Termination of Indemnification *
13. Miscellaneous *
13.1 Transaction Expenses *
13.2 Successors and Assigns; No Third-Party Beneficiary
Status *
13.3 Governing Law *
13.4 Counterparts *
13.5 Titles and Subtitles *
13.6 Notices *
13.7 Finder's Fee *
13.8 Amendments and Waivers *
13.9 Severability *
13.10 Construction *
13.11 Entire Agreement *
13.12 Press Releases *
8x8, INC.
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (the
"Agreement") is made as of January 24, 2000, by and between 8x8,
Inc. a Delaware corporation (the "Company"), and STMicroelectronics NV, a
company organized under the laws of the Netherlands, having an office at ICC
Bloc A, Route Pre-bois, 1215 Geneve, Switzerland (the
"Investor").
RECITALS
A. The Investor wishes to purchase from the Company
3,700,000 shares of the common stock of the Company, par value $0.001 per share
(the "Common Stock"), and the Company wishes to issue and sell such
Common Stock to the Investor, on the terms set forth in this Agreement at the
Closing (as defined herein).
B. Effective as of the Closing, the Investor and the
Company shall execute an Investor Rights Agreement ("Rights Agreement"),
substantially in the forms attached hereto as Exhibit A, to promote
their mutual interests by providing for certain rights and imposing certain
restrictions on the rights, privileges and preferences of the Investor as a
holder of the capital stock of the Company.
C. STMicroelectronics, Inc. and the Company have executed
a license agreement (the "License Agreement") and a development agreement
(the "Development Agreement"), respectively, which shall become effective
upon the Closing, to promote this mutual interest by providing for the licensing
and co-development of certain technology by the Investor and the Company. The
Agreement, the Rights Agreement, and the License Agreement and Development
Agreement are collectively hereafter referred to as the "Transactional
Agreements."
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises
and covenants herein, each of the Investors and the Company, intending to be
legally bound, agree as follows:
- Purchase and Sale of Stock
- Sale and
Issuance of Common Stock
Subject to the terms and conditions of this
Agreement, the Investor agrees to purchase at the Closing (as defined herein)
and the Company agrees to sell, issue and deliver to the Investor at the
Closing, 3,700,000 shares of the Company's Common Stock (the "Shares") at
a purchase price of $7.50 per share, or the aggregate purchase price of
$27,750,000 (the "Aggregate Purchase Price").
- Closings and Deliveries
- The Closing. The purchase and sale of the
Shares shall take place at a closing (the "Closing") at the offices of
Wilson Sonsini Goodrich & Rosati, P.C., 650 Page Mill Road, Palo Alto,
California, at 10:00 a.m., on the third business day following (i) the
expiration or early termination of the applicable waiting period under the Hart-
Scott-Rodino Antitrust Improvement Act of 1976, as amended (the "HSR
Act"), or other receipt of clearance under the HSR Act and
(ii) satisfaction or waiver of all other conditions to the obligations of
the parties set forth in Articles 4 and 5, or at such other time and place
as the Company and the Investor mutually agree upon orally or in writing (the
date of the Closing being the "Closing Date").
- Deliveries. At the Closing, the Company shall
deliver to the Investor (i) a certificate representing the Common Stock
that the Investor is purchasing against payment of the purchase price therefor
by wire transfer, as directed by the Company and (ii) any other documents
and agreements required hereunder to be delivered by the Company. In the event
that payment by the Investor is made, in whole or in part, by cancellation of
indebtedness, then such Investor shall surrender to the Company for cancellation
at the Closing any evidence of such indebtedness or shall execute an instrument
of cancellation in form and substance acceptable to the Company.
- Representations and Warranties of the
Company
The Company hereby represents and warrants to the
Investor as follows, except as set forth in written disclosure to the Investor
which specifically identifies the relevant subsection hereof:
- Organization and
Standing
The Company is a corporation duly organized and validly
existing under, and by virtue of, the laws of the State of Delaware and is in
good standing as a domestic corporation under the laws of said state. The
Company has all requisite corporate power and authority to carry on its business
as now conducted and as proposed to be conducted. The Company is duly qualified
as a foreign corporation to transact business and is in good standing in each
jurisdiction in which the nature of its business or the location of its
properties requires such qualification and in which the failure to so qualify
would have a material adverse effect on its business or properties. The Company
has provided Investor with correct and complete copies of its Certificate of
Incorporation and Bylaws, each as in effect on the date hereof and as will be in
effect on the Closing Date. The Company is not in violation or default of any
provisions of its Certificate of Incorporation or Bylaws. Except as set forth
in written disclosure to the Investor, the Company does not own, of record or
beneficially, any direct or indirect equity or other interest, or any right
(contingent or otherwise) to acquire the same, in any corporation, partnership,
joint venture, association or other entity and the Company is not a member of
(nor is any part of the Company's business conducted through) any partnership,
nor is the Company a participant in any joint venture or similar
arrangement.
- Corporate Power;
Authorization
The Company has all requisite legal and corporate power
to execute and deliver this Agreement and the other Transactional Agreements, to
sell and issue the Shares and to carry out and perform all of its obligations
under this Agreement and the other Transactional Agreements. The execution and
delivery by the Company of this Agreement and the other Transactional Agreements
and the performance by the Company of its obligations hereunder and thereunder,
including, without limitation, the issuance and delivery of the Shares, have
been duly authorized by all requisite action on the part of the Company and its
directors, officers and stockholders. The Board of Directors of the Company has
approved the transactions contemplated by this Agreement. No approval of
stockholders of the Company is required in connection with the execution and
delivery of this Agreement and the other Transactional Agreements or the
consummation of the transactions contemplated hereby or thereby. This Agreement
has been, and the other Transactional Agreements will be, duly executed and
delivered by the Company. This Agreement constitutes, and upon their execution
and delivery the other Transactional Agreements will constitute, legal, valid
and binding obligations of the Company, enforceable in accordance with their
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the enforcement of
creditors' rights generally and (ii) as limited by equitable principles
generally. The execution and delivery of this Agreement and the other
Transactional Agreements do not, and the performance of this Agreement and the
other Transactional Agreements and the compliance with the provisions hereof and
thereof and the issuance, sale and delivery of the Shares by the Company will
not, (i) conflict with, or result in a breach or violation of the terms,
conditions or provisions of, or constitute a default under (with or without the
passage of time or giving of notice), or result in the creation or imposition of
any material lien pursuant to the terms of, the Certificate of Incorporation or
Bylaws of the Company or to the Company's knowledge, any statute, law, rule or
regulation or any state or federal order, judgment or decree or
(ii) materially conflict with, or result in a material breach or violation
of the terms, conditions or provisions of, or constitute a material default
under (with or without the passage of time or giving of notice), or result in
the creation or imposition of any material lien pursuant to the terms of, any
indenture, mortgage, lease or other material agreement or instrument to which
the Company or any of its properties is subject.
- Issuance and Delivery of the
Shares
The Shares, when issued and paid for in accordance with
the provisions of this Agreement, will be validly issued and outstanding, fully
paid and nonassessable. The issuance and delivery of the Shares is not subject
to preemptive or any other similar rights of the stockholders of the Company or
any liens or encumbrances. Assuming the accuracy of the representations of the
Investor in this Agreement, the Shares will be issued in compliance with all
applicable federal and state securities laws. The Shares shall be free of any
liens or encumbrances; provided, however, that the Shares may be
subject to restrictions on transfer under state and/or federal securities laws
or in this Agreement or the Rights Agreement. Neither the offer nor the
issuance or sale of the Shares constitutes or will constitute an event under any
capital stock or convertible security or any anti-dilution or similar provision
of any agreement or instrument to which the Company is a party or by which it is
bound or affected, which shall either increase the number of shares of capital
stock issuable upon conversion of any securities or upon exercise of any warrant
or right to subscribe to or purchase any stock or similar security, or decrease
the consideration per share of capital stock to be received by the Company upon
such conversion or exercise.
- SEC Documents; Financial
Statements
The Company has delivered to the Investor its Annual
Report on Form 10-K for the year ended March 31, 1999 (the "10-K"), and
its Quarterly Reports on Form 10-Q for the periods ended June 30, 1999 and
September 30, 1999 (the "10-Qs"). The Company has filed in a timely
manner all documents that the Company was required to file with the SEC under
Sections 13, 14(a) and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), since December 31, 1998. As of their
respective filing dates, all documents filed by the Company with the Securities
and Exchange Commission (the "SEC" or the "Commission") since
March 31, 1999 (the "SEC Documents") complied in all material respects
with the requirements of the Exchange Act or the Securities Act of 1933, amended
(the "Securities Act"), as applicable. None of the SEC Documents as of
their respective dates contained any untrue statement of material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they
were made, not misleading. The financial statements of the Company included in
the SEC Documents (the "Financial Statements") comply as to form in all
material respects with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto. The Financial Statements
have been prepared in accordance with generally accepted accounting principles
consistently applied and fairly present the consolidated financial position of
the Company and any subsidiaries at the dates thereof and the consolidated
results of their operations and consolidated cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal, recurring
adjustments, the absence of footnote disclosure and the condensed presentation
of such statements).
- Government
Consents
To the Company's knowledge, no consent, approval, order
or authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state, or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement and the other Transactional Agreements except for
(a) clearance under the HSR Act, (b) such filings as have been made prior to the
Closing or such post-closing filings as may be required under applicable state
securities laws, which will be timely filed within the applicable periods
therefor, and (c) the filing of the Nasdaq National Market Notification Form
with the Nasdaq National Market.
- No Material Adverse
Change
Except as otherwise disclosed herein or in filings with
the SEC prior to the date of this Agreement or as set forth in written
disclosure to the Investor since March 31, 1999, there have not been any
changes in the assets, liabilities, financial condition, business prospects or
operations of the Company which, in the aggregate are materially adverse to the
Company taken as a whole.
- Authorized Capital
Stock
The authorized capital stock of the Company consists of
40,000,000 shares of Common Stock and 5,000,000 shares of preferred stock, par
value $0.001 per share ("Preferred Stock"). As of January 20, 2000, 18,687,179
shares of Common Stock were issued and outstanding, all of which are validly
issued, fully paid and nonassessable, and no shares of Preferred Stock were
outstanding. Except as set forth in written disclosure to the Investor, and
except for the grant of options to purchase a total of 4,200,612 shares of
Common Stock, as of January 20, 2000, there are no outstanding options, warrants
or other securities exercisable for, or convertible into, or commitments to
issue securities exercisable for or convertible into, capital stock of the
Company, or other commitments to issue any capital stock of the Company. None
of the issued and outstanding shares of capital stock of the Company was issued
in violation of any preemptive rights. There are no voting trusts, stockholder
agreements, proxies or other agreements in effect with respect to the voting or
transfer of shares of Common Stock. Since January 20, 2000, the Company has not
issued or agreed to issue, or granted options to purchase, more than 40,000
shares of Common Stock in the aggregate.
- No Dividends
The Company has not declared or paid any dividends, or
authorized or made any distribution or established any record date for the
issuance of any dividend or other distribution upon or with respect to any class
or series of its capital stock.
- Litigation and Compliance with
Laws
There is no litigation, suit, claim, action, proceeding
or investigation pending or, to the knowledge of the Company, threatened against
the Company, or any property or asset of the Company, before any court,
arbitrator or governmental entity, domestic or foreign. Neither the Company nor
any property or asset of the Company is subject to any continuing order of,
consent decree, settlement agreement or other similar written agreement with,
or, to the knowledge of the Company, continuing investigation by, any
governmental entity or any order, writ, judgment, injunction, decree,
determination or award of any governmental entity or arbitrator. The Company is
conducting, and has conducted, its business in compliance in all material
respects with all applicable laws and regulations.
- Intellectual
Property
Except as disclosed in written disclosure to the
Investor, to the knowledge, of the Company, the Company owns or possesses
adequate licenses or other valid rights to use all patents, patent rights,
trademarks, trademark rights, trade names, trade dress, trade name rights,
copyrights, service marks, trade secrets, applications for trademarks and for
service marks, know-how and other proprietary rights and information used or
held for use in connection with the business of the Company as currently
conducted and as proposed to be conducted, and the Company has no knowledge of
any assertion or claim challenging the validity of any of the foregoing. To the
knowledge of the Company the conduct of the business of the Company as currently
conducted does not infringe upon any valid intellectual property rights of other
persons. To the knowledge of the Company, no other persons are materially
infringing upon any material proprietary rights owned by or licensed by or to
the Company.
- Taxes
The Company has timely filed or will timely file all
returns and reports required to be filed by them with any taxing authority with
respect to taxes. All taxes shown to be payable on such returns or reports have
been paid or will be paid.
- Title to Property and
Assets
The Company has good and marketable title to its property
and assets, free and clear of all mortgages, liens, loans and encumbrances,
except such encumbrances and liens that arise in the ordinary course of business
and do not materially impair the Company's ownership or use of such property or
assets. With respect to the property and assets that it leases, the Company is
in compliance with such leases and, to the knowledge of the Company, holds a
valid leasehold interest free of any liens, claims or encumbrances.
- Material
Contracts
The Company is not in material default under any material
contract or agreement, nor has the Company received notice that any third party
does not intend to renew any material contract it currently has with the
Company, or that any third party intends to terminate any material contract
currently in place with the Company. To the knowledge of the Company, no other
party to any material contract is in material default thereunder.
- Representations, Warranties
and Covenants of the Investor
The Investor hereby represents and warrants to the
Company and agrees in favor of the Company, as follows:
- Authorization
The Investor represents and warrants to the Company that:
(i) the Investor has been duly formed and is validly existing under the
laws of the jurisdiction of its formation; (ii) the Investor has all
requisite legal and corporate or other power and capacity and has taken all
requisite corporate or other action to execute and deliver this Agreement, to
purchase the Shares to be purchased by it and to carry out and perform all of
its obligations under this Agreement; and (iii) this Agreement constitutes
the legal, valid and binding obligation of the Investor, enforceable in
accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, or similar laws relating to or affecting the
enforcement of creditors' rights generally and (b) as limited by equitable
principles generally.
- Independent Investment
Decision
The Investor understands that no United States federal
or state agency has passed on, reviewed or made any recommendation or
endorsement of the Shares. In making the decision to purchase the Shares in
accordance with this Agreement, the Investor has relied solely upon independent
investigations made by it and not upon any representations made by the Company
other than those made pursuant to this Agreement.
- Investment Intent
The Investor is purchasing the Shares for its own
account, for investment purposes only, and not with a view to a distribution
thereof. The Investor further understands that its acquisition of the Shares
has not been registered under the Securities Act or registered or qualified
under any state securities law in reliance on specific exemptions therefrom,
which exemptions may depend upon, among other things, the bona fide nature of
the Investors' investment intent as expressed herein.
- Registration or Exemption
Requirements
The Investor further acknowledges and understands that
the Shares have not been registered under the Securities Act and may not be
resold or otherwise transferred except in a transaction registered under the
Securities Act or unless an exemption from such registration is available.
- Legends
To the extent applicable, each certificate or other
document evidencing any of the Shares shall be endorsed with the legends set
forth in Sections 3.5(a) and (b) below and the Purchaser covenants that,
except to the extent such restrictions are waived by the Company, the Purchaser
shall not transfer the shares represented by any such certificate without
complying with the restrictions on transfer described in the legends endorsed on
such certificate:
- "THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN
ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO OR IN CONNECTION
WITH THE SALE THEREOF. SUCH SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER THE APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED, OR ASSIGNED IN
THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION, WITHOUT AN OPINION OF COUNSEL
FOR THE HOLDER, CONCURRED IN BY COUNSEL FOR THE COMPANY, STATING THAT SUCH SALE,
TRANSFER, OR ASSIGNMENT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF SAID
ACT. THIS CERTIFICATE MUST BE SURRENDERED TO THE CORPORATION OR ITS TRANSFER
AGENT AS A CONDITION PRECEDENT TO THE TRANSFER OF ANY INTEREST IN THE SECURITIES
REPRESENTED BY THIS CERTIFICATE."
- Any other additional legends required by Delaware law or
other applicable state blue sky laws.
The Company need not register a transfer of any Shares, and
may also instruct its transfer agent not to register the transfer of such
shares, unless the conditions specified in this Agreement are satisfied.
- Conditions of Investor's Obligations at
Closing
The obligations of the Investor to purchase the Shares is
subject to the satisfaction or waiver on or before the Closing of each of the
following conditions:
- Representations and
Warranties
The representations and warranties of the Company
contained in Section 2 shall be true on and as of the date hereof and shall
be true and correct on and as of the Closing Date except as would not be in the
aggregate materially adverse to the Company taken as a whole.
- Covenants
The Company shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing
Date.
- Qualifications
All authorizations, approvals, or permits, if any, of any
governmental authority or regulatory body of the United States or of any state
that are required as of the Closing in connection with the lawful issuance and
sale of the Shares pursuant to this Agreement shall have been duly obtained and
shall be effective as of the date hereof, including expiration or termination of
the waiting period under the HSR Act.
- Execution of Investor Rights
Agreement
The Company and the Investor have executed the Investors'
Rights Agreement, attached as Exhibit A.
- License Agreement and
Development Agreement
The License Agreement and the Development Agreement shall
not have been terminated.
- Board of
Directors
On nominee of the Investor shall have been appointed to
the Board of Directors of the Company effective as of the Closing, provided that
Investor has proposed a nominee reasonably acceptable to the Company prior to
the Closing.
- Closing
Deliveries
The Investor shall have received (i) a certificate
of the President of the Company dated the Closing Date certifying that the
conditions specified in Sections 4.1 and 4.2 have been fulfilled,
(ii) a certificate of the Secretary of the Company dated the Closing Date
attaching correct and complete copies of (A) the Certificate of
Incorporation and Bylaws of the Company as in effect as of the Closing, and
(B) the resolutions adopted by the Board of Directors of the Company in
connection with the transactions contemplated by this Agreement and the other
Transactional Agreements and (iii) an opinion dated the Closing Date of
Wilson Sonsini Goodrich & Rosati in a form reasonably satisfactory to
the parties hereto.
- Conditions of the Company's Obligations at
Closing
The obligations of the Company to sell the Shares to the
Investor is subject to the satisfaction or waiver on or before the Closing of
each of the following conditions:
- Representations and
Warranties
The representations and warranties of the Investor
contained in Section 3 shall be true on and as of the date hereof and shall
be true and correct in all material respects on and as of the Closing Date.
- Covenants
The Investor shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by the Investor on or before the
Closing Date.
- Qualifications
All authorizations, approvals, or permits, if any, of any
governmental authority or regulatory body of the United States or of any state
that are required as of the Closing Date in connection with the lawful issuance
and sale of the Shares pursuant to this Agreement shall have been duly obtained
and shall be effective as of the Closing Date, including termination of the
waiting period under the HSR Act.
- Covenants of the Investor and
of the Company
- HSR Clearance
Each of the Company and the Investor hereby covenants
to prepare and file, as soon as practicable hereafter, a notification and Report
Form for Mergers and Acquisitions as required under the HSR Act, in connection
with the purchase and sale of Common Stock under this Agreement. Each party will
use commercially reasonable efforts to obtain early termination of the waiting
period under the HSR Act and any other requisite governmental clearance in
connection with the transactions contemplated by this Agreement.
- Conduct of Business of the Company
During the period from the date of this Agreement and
continuing until the earlier of the termination of this Agreement or the Closing
Date, the Company agrees (except to the extent that the Investor shall otherwise
consent in writing), to carry on its business in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted. The Company
shall promptly notify the Investor of any event or occurrence not in the
ordinary course of business of the Company which could have a material adverse
effect on the Company. Without limiting the generality of the foregoing and
with the exceptions as set forth in written disclosure to the Investor, without
the prior written consent of the Investor, the Company will not during the
period from the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Closing Date:
- redeem any of the capital stock of the Company or
declare, make or pay any dividends or distributions (whether in cash, securities
or other property) to the holders of capital stock of the Company or
otherwise;
- merge or consolidate with or acquire an interest of five
percent (5%) or more in any person or entity or acquire a substantial portion of
the assets or business of any person or entity or any division of line of
business thereof, or otherwise acquire any material assets other than in the
ordinary course of business consistent with past practice;
- sell, transfer, lease, sublease, license or otherwise
dispose of any properties or assets, other than in the ordinary course of
business consistent with past practice;
- issue or sell any capital stock, notes, bonds or other
securities, or any option, warrant or other right to acquire the same, of, or
any other interest in, the Company except in the ordinary course of
business;
- incur any indebtedness for borrowed money in excess of
$500,000;
- make any change in any method of accounting or accounting
practice or policy used by the Company, other than such changes required by U.S.
generally accepted accounting principles;
- amend, modify or consent to the termination of any
material contract of the Company or the Company's rights thereunder; or
- amend or restate the Certificate of Incorporation or the
Bylaws of the Company.
- Use of
Proceeds
The Company shall use a portion of the proceeds of
the sale of the Shares to fund its obligations under the Development
Agreement.
- Right of First
Refusal
- Company's Right of First
Refusal
Before any voting rights or value of the Common Stock may
be sold or otherwise transferred by the Investor, the Company shall have a right
of first refusal (the "Right of First Refusal") to purchase such shares
(the "Offered Securities").
- Notice of Proposed
Transfer
Before any transfer of any Offered Securities, the
Investor shall deliver to the Company a written notice (the "Transfer
Notice") stating: (i) the Investor's bona fide intention to sell or
otherwise transfer such Offered Securities; (ii) the name of each proposed
purchaser or other transferee (a "Proposed Transferee"); (iii) the
number of Offered Securities to be transferred to each Proposed Transferee; and
(iv) the bona fide cash price or other consideration for which the Investor
proposes to transfer the Offered Securities (the "Offered Price").
- Exercise of Right of First
Refusal
At any time within 20 days after receipt of the Transfer
Notice (the "Offer Period"), the Company may, by giving written notice to
the Investor, elect to purchase all, or such lesser amount as desired, of the
Offered Securities proposed to be transferred to any one or more of the Proposed
Transferees, at the purchase price determined in accordance with
subsection 7.4 below. Failure of the Company to give such a notice within
such time period will be deemed an election by it not to exercise its
option.
- Purchase Price
The purchase price for the Offered Securities so
purchased by the Company shall be the Offered Price, or such other amount agreed
to in writing by the Company and the Investor (the "Company Purchase
Price").
- Payment
Payment of the Company Purchase Price shall be made by
wire transfer (or such other form of consideration mutually agreed to by the
Company and the Investor) within 20 days after such Company Purchase Price is
agreed upon between the Company and the Investor.
- Right to
Transfer
If all of the Offered Securities proposed in the Transfer
Notice to be transferred are not purchased by the Company, then the Investor may
sell or otherwise transfer all Offered Securities originally covered in the
Transfer Notice to the Proposed Transferee(s) at the Offered Price or at a
higher price, provided that such sale or other transfer is consummated within
50 days after the date of the Transfer Notice and provided further that any
such sale or other transfer is effected in accordance with any applicable
securities laws and the Investor agrees in writing that the provisions of this
Section 7 shall continue to apply to the Offered Securities that are transferred
to such Proposed Transferee. If the Offered Securities described in the
Transfer Notice are not transferred to the Proposed Transferee(s) within such
50-day period, the Investor will not transfer any Offered Securities unless such
securities are first re-offered to the Company in accordance herewith.
- Restrictions on
Transfer
In no event shall the Investor transfer any shares of
Common Stock except:
- through a sale pursuant to Rule 144 under the
Securities Act, provided that such sale complies with the manner of sale
provisions under paragraph (f) of Rule 144 or is of securities representing
5% or less of the Company's outstanding voting stock (on an as converted basis)
and is not made to any person or group which has theretofore filed a
Schedule 13D reflecting ownership in excess of 5% of the Company's
outstanding voting stock (including shares issuable upon conversion of
convertible securities) or any person or group that has announced or commenced
an unsolicited offer for the Company voting stock or proxy contest with respect
to the Company;
- pursuant to a bona fide underwritten public offering
registered under the Securities Act;
- pursuant to any private sale exempt from the registration
requirements of the Securities Act, provided that such sale would not result in
a transferee having beneficial ownership in the Company in excess of 5% of the
Company's outstanding voting stock (including shares issuable upon conversion of
convertible securities) unless such transferee is a financial institution
holding exclusively for investment purposes in which case such five percent (5%)
threshold shall be ten percent (10%);
- to a wholly owned subsidiary of Investor (provided such
entity agrees to take such securities subject to the restrictions set forth
herein);
- pursuant to a merger, exchange offer or tender offer or
other change of control transaction;
- as a bona fide pledge to an institutional lender or
lenders to secure a loan, credit facility or other indebtedness of Investor,
with the Company's prior consent (which shall not be unreasonably withheld or
delayed), provided that each such lender agrees to take such securities subject
to the restrictions set forth below in Sections 9 and 10; or
- with the Company's prior consent.
- Standstill
Agreement
The Investor agrees not to acquire any voting stock of
the Company, through market purchases or otherwise, except that (i) until
the first anniversary of the Closing, but not thereafter, Investor may acquire
shares of voting stock through market purchases, provided that (a) at no
time shall Investor's aggregate ownership of voting stock of the Company exceed
19.9% of the outstanding voting stock of the Company, and (b) the
acquisition of such additional shares shall be in compliance with applicable
laws, including the HSR Act, (ii) Investor may at any time acquire shares
of voting stock pursuant to a stock split, dividend or similar event,
(iii) Investor may at any time acquire shares of voting stock pursuant to
preemptive rights and (iv) in the event the company authorizes the offer or sale
of any shares of Common Stock pursuant to a public offering in which Investor is
denied preemptive rights pursuant to the terms of Section 3.2 of the Investor
Rights Agreement, Investor may acquire, through market purchases, additional
shares of Common Stock until its ownership percentage of the outstanding shares
of Common Stock is equal to its ownership percentage prior to such
offering.
- the acquisition by any person or entity, or group of
persons or entities, of beneficial ownership of voting securities of the Company
representing ten percent (10%) or more of the then outstanding voting securities
of the Company;
- the announcement or commencement by any person or entity,
or group of persons or entities, of a tender or exchange offer to acquire voting
securities of the Company which, if successful, would result in such person or
entity, or group of persons or entities, owning, when combined with any other
voting securities of the Company owned by such person or entity, or group of
persons or entities, ten percent (10%) or more of the then outstanding voting
securities of the Company; or
- the Company enters into, or otherwise determines to seek
to enter into, any merger, sale or other business combination transaction
pursuant to which the outstanding shares of Common Stock would be converted into
cash or securities of another person or entity, or group of persons or entities,
or fifty percent (50%) or more of the then outstanding shares of Common Stock
would be owned by persons or entities other than the then current holders of
Common Stock, or which would result in a substantial portion of the Company's
assets being sold to any person or entity, or group of persons or
entities.
- Lock-up Agreement
The Investor agrees in connection with any underwritten
offering of the Company's securities, not to sell, make any short sale of, loan,
grant any option for the purchase of, or otherwise dispose of any of its Shares
(other than those included in the registration) without the prior written
consent of the Company or such underwriter, as the case may be, for such period
of time (not to exceed one hundred eighty (180) days) (the "Lockup
Period") during the effectiveness of such registration statement relating to
such offering, provided that such agreement shall not apply to Shares included
in the registration statement. In order to enforce the provisions of this
Section 10, the Company may impose stop-transfer instructions with respect
to the securities of the Company held by the Investor not included in the
registration statement until the end of the Lockup Period.
- Termination
The parties hereto shall be entitled to terminate this
Agreement as follows, provided that no such termination shall limit or terminate
any liability of one party to another for any breach hereof:
- Mutual Consent
The parties hereto may terminate this Agreement by mutual
written consent at any time.
- Investor
Termination
Investor may terminate this Agreement by written notice
to the Company on or prior to the Closing Date if (A) the Company shall
have breached in any material respect any representation, warranty or covenant
contained in this Agreement and failed to cure the same within ten (10) days
after written notice thereof from the Investor; or (b) the consummation of
the transactions contemplated hereby has not occurred within ninety (90) days of
the date hereof due to the failure of any condition set forth in Section 4
above to have been satisfied on or before such date.
- Company
Termination
The Company may terminate this Agreement by written
notice to the Investor on or prior to the Closing Date if (A) the Investor shall
have breached in any material respect any representation, warranty or covenant
contained in this Agreement and failed to cure the same within ten (10) days
after written notice thereof from the Investor; or (B) the consummation of the
transactions contemplated hereby has not occurred within ninety (90) days of the
date hereof, due to the failure of any condition set forth in Section 5
above to have been satisfied on or before such date.
- Termination Due to
Governmental Action
Any party may terminate this Agreement by written notice
to the other parties hereto on or prior to the Closing Date if any court or
other governmental instrumentality of competent jurisdiction shall have issued
an order, decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement.
- Indemnification
- Survival of Representations and
Warranties
The representations, warranties, covenants and agreements
of the Company and the Investor contained in this Agreement shall survive the
execution and delivery of this Agreement and the Closing, subject to the
limitations set forth in Section 12.2 below, and shall in no way be affected by
any investigation of the subject matter thereof made by or on behalf of the
Investor or the Company.
- Indemnification by the
Company
Without prejudice to any other rights or remedies that
Investor may have, the Company shall indemnify and hold the Investor, its
directors, officers, employees and agents (collectively, the "Investor
Indemnified Parties") harmless from and against, and agree promptly to defend
any such Investor Indemnified Party from and reimburse any such Investor
Indemnified Party for, any and all material losses, costs, expenses, damages,
diminution in value, taxes, penalties, fines, charges, demands, liabilities,
obligations and claims of any kind (including interest, penalties and reasonably
attorney's fees, expenses and disbursements) ("Losses") which any Investor
Indemnified Party may suffer or incur, or become subject to, arising out of or
resulting from, without duplication: (i) any material breach or inaccuracy of
any of the representations or warranties made by the Company in this Agreement,
or (ii) any material failure of the Company to carry out, perform, satisfy or
discharge any of its respective covenants, agreements, undertakings, liabilities
or obligations under this Agreement. Any reimbursement for such Losses shall be
offset by any recovery by Investor under any federal, state or local securities
laws for the same cause of action. Reimbursement under this Section 12.2 shall
be limited to $10,000,000.
- Termination of
Indemnification
Rights to make claims for indemnification under Section
12.2(i) above shall terminate one (1) year from the Closing Date. Rights to
make claims for indemnification under Section 12.2(ii) shall terminate seven (7)
years from the Closing Date.
- Miscellaneous
- Transaction Expenses
- Irrespective of whether the Closing is effected, each
party to this Agreement shall pay all costs and expenses that it incurs with
respect to the negotiation, execution, delivery and performance of this
Agreement and the Transactional Agreements.
- Each of the Company and the Investor shall pay one-half
of the $45,000 filing fee under the HSR Act.
- Successors and Assigns; No Third-Party Beneficiary
Status
- Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties (including transferees of
any Shares).
- Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
- Governing Law
This Agreement is to be construed in accordance with and
governed by the laws of the State of California, without giving effect to any
choice of law rule that would cause the application of the laws of any
jurisdiction other than the State of California to the rights and duties of the
parties.
- Counterparts
This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
- Titles
and Subtitles
The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Agreement.
- Notices
Any notice or other communication required or permitted
to be delivered to any party under this Agreement shall be in writing and shall
be deemed properly delivered, given and received when delivered (by hand, by
registered mail, by courier or express delivery service or by facsimile during
business hours) to the address or telecopier number for each party set forth on
the signature page hereof (or to such other address or telecopier number as such
party shall have specified in a written notice given to the other parties
hereto).
- Finder's Fee
Each party represents that it neither is nor will be
obligated for any finders' fee or commission in connection with this
transaction. The Investor agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and expenses of defending against such liability or
asserted liability) for which the Investor or any of its officers, partners,
employees, or representatives is responsible.
The Company agrees to indemnify and hold harmless the
Investor from any liability for any commission or compensation in the nature of
a finders' fee (and the costs and expenses of defending against such liability
or asserted liability) for which the Company or any of its officers, employees
or representatives is responsible.
- Amendments and Waivers
Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the holders of a majority of the Common Stock
issued pursuant to this Agreement that have not subsequently been sold in the
public market. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon each holder of any securities purchased under
this Agreement at the time outstanding (including securities into which such
securities are convertible) each future holder of all such securities and the
Company.
- Severability
If one or more provisions of this Agreement are held to
be unenforceable under applicable law, so long as the economic or legal
substance of the transactions contemplated hereby are not affected in any manner
materially adverse to any party such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
- Construction
For purposes of this Agreement, whenever the context
requires: the singular number shall include the plural, and vice versa; the
masculine gender shall include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter genders; and the neuter gender
shall include the masculine and feminine genders.
- Entire
Agreement
This Agreement and the Transactional Agreements
constitute the entire agreement among the parties with regard to the subject
matter hereof and thereof, and supercede any and all prior negotiations,
correspondence, understandings and agreements between the parties regarding the
subject matter hereof and thereof. No party shall be liable or bound to any
other party in any manner by any warranties, representations or covenants,
except as specifically set forth in this Agreement or the Transactional
Agreements.
- Press
Releases
The parties shall cooperate as to the timing and contents
of any press release or public announcement relating to this Agreement or the
transactions contemplated hereby. Notwithstanding the foregoing, the parties
may make any filings with governmental agencies relating to this Agreement or
the transactions contemplated hereby, as required by law.
IN WITNESS WHEREOF, the parties have executed this Common
Stock Purchase Agreement as of the date first above written.
The Company 8x8,
Inc.
a
Delaware corporation
2445 Mission College Blvd. Santa
Clara, CA 95054
Facsimile: (408) 933-0234
By:
Paul Voois
Chairman and CEO
The Investor STMicroelectronics NV
Technoparc du pays de Gex
165 Rue Edouard Branly
B.P. 11201637
St. Genis Pouilly Cedex (France)
Attention: General Counsel
By:
Its: President
8x8, Inc.
Common Stock Purchase Agreement
Index of Exhibits
|
Exhibit A |
Form of Investor's Rights Agreement |
EXHIBIT A
FORM OF INVESTOR'S RIGHTS AGREEMENT
RIGHTS
TABLE OF CONTENTS
Page
SECTION 1 Definitions *
1.1 Certain Definitions *
SECTION 2 Registration Rights *
2.1 Company Registration *
2.2 Registration on Form S-3 *
2.3 Expenses of Registration *
2.4 Indemnification *
2.5 Termination of Registration Rights *
2.6 Information by Holder *
2.7 Rule 144 Reporting *
2.8 Transfer of Registration Rights *
2.9 Obligations of the Company *
SECTION 3 Other Rights *
3.1 Board Representation *
3.2 Preemptive Rights *
3.3 Nasdaq Listing *
SECTION 4 Miscellaneous *
4.1 Governing Law *
4.2 Entire Agreement; Amendment *
4.3 Notices, etc *
4.4 Severability *
4.5 Titles and Subtitles *
4.6 Counterparts *
INVESTOR RIGHTS AGREEMENT
This Investor Rights Agreement (this "Agreement") is made
as of ______, 2000, by and between 8x8, Inc., a Delaware corporation (the
"Company"), and STMicroelectronics NV, a company organized under the laws of The
Netherlands, having an office at ICC Bloc A, 20 Route Pre-bois, 1215 Geneve,
Switzerland ("the Investor").
Recitals
WHEREAS, the Company desires to sell to the Investor
shares of the Company's Common Stock (the "Shares") pursuant to a certain Common
Stock Purchase Agreement dated January 24, 2000 by and between the Company and
the Investor (the "Stock Purchase Agreement"); and
WHEREAS, the Company desires to grant the Investor certain
rights, in order to induce the Investor to purchase the Shares;
NOW, THEREFORE, in consideration of the above and of the
mutual promises set forth herein, the parties hereto agree that, subject to the
closing of the purchase of the Shares by the Investor pursuant to the Stock
Purchase Agreement, the Company hereby grants to the Investor the rights set
forth below:
Definitions
- Certain
Definitions
Hereafter, in this Agreement the following terms
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
"Registrable Securities" means shares of Common Stock
of the Company held by the Investor which are purchased pursuant to the Stock
Purchase Agreement provided that the Shares have not be sold, assigned,
transferred or pledged by the Investor to any third party (other than affiliates
of the Investor).
The terms "register," "registered" and
"registration" refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses, other
than Selling Expenses, incurred by the Company in complying with Section 2
hereof, including, without limitation, all registration, qualification and
filing fees, printing expenses, escrow fees, fees and disbursements of counsel
for the Company, NASD fees and expenses, and the expense of any special audits
incident to or required by any such registration.
"Securities Act" shall mean the Securities Act of
1933, as amended, or any similar federal statute and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the
time.
"Selling Expenses" shall mean all underwriting
discounts, selling commissions and stock transfer taxes applicable to the
securities registered by the Investor and all reasonable fees and disbursements
of counsel for the Investor.
Unless otherwise defined in this Agreement or unless the
context requires otherwise, capitalized terms used herein shall have the same
meaning as in the Stock Purchase Agreement.
Registration Rights
- Company
Registration
- Notice of Registration. If at any time after six
months following the Closing Date the Company shall determine to register any of
its securities, either for its own account or the account of a security holder
or the Investor, other than (i) a registration relating solely to an
acquisition, (ii) a registration relating solely to employee benefit plans,
or (iii) a registration relating solely to a Commission Rule 145
transaction, the Company will:
- promptly, and in any event at least 30 days prior to the
filing of any such registration statement, give to the Investor written notice
thereof; and
- include in such registration and in any underwriting
involved therein, all the Registrable Securities specified in a written request
by the Investor, made within 20 days after receipt of such written notice from
the Company.
- Underwriting. If the registration of which the
Company gives notice is for a registered public offering involving an
underwriting, the Company shall so advise the Investor as a part of the written
notice given pursuant to Section 2.1(a)(i). In such event the right of the
Investor to registration pursuant to Section 2.1 shall be conditioned upon
the Investor's participation in such underwriting and the inclusion of
Registrable Securities in the underwriting to the extent provided herein. The
Investor shall (together with the Company and the other shareholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the managing underwriter selected
for such underwriting by the Company. Notwithstanding any other provision of
this Section 2.1, if the managing underwriter determines that marketing
factors require a limitation of the number of shares to be underwritten, the
managing underwriter may limit the Registrable Securities to be included in such
registration. The Company shall so advise the Investor and other shareholders
entitled to include their securities in the registration and the number of
shares of Registrable Securities that may be included in the registration and
underwriting shall be allocated, (i) first, to the Company, and (ii) second,
among the Investor and such other shareholders entitled to include their
securities in the registration in proportion, as nearly as practicable, to the
respective amounts of shares of Common Stock held the Investor and such other
shareholders at the time of filing the registration statement. To facilitate
the allocation of shares in accordance with the above provisions, the Company
may round the number of shares allocated to any holder of shares of Common Stock
to the nearest 100 shares. If the Investor disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written notice to the
Company and the managing underwriter. Any securities excluded or withdrawn from
such underwriting shall be withdrawn from such registration, and shall not be
transferred in a public distribution prior to 90 days after the effective date
of the registration statement relating thereto, or such other shorter period of
time as the underwriters may require.
- Right to Terminate Registration. The Company
shall have the right to terminate or withdraw any registration initiated by it
under this Section 2.1 prior to the effectiveness of such registration
whether or not the Investor has elected to include securities in such
registration.
- Registration on Form S-
3
- If the Investor requests that the Company file a
registration statement on Form S-3 (or any successor form to Form S-3)
under the Securities Act with respect to shares of the Registrable Securities,
and at the time of such request the Company is a registrant entitled to use
Form S-3 to register the Registrable Securities for such an offering, the
Company shall use its best efforts to cause such Registrable Securities to be
registered for the offering on such form, and (i) thereafter cause the
registration statement to be declared effective by the Commission as to resales
by the Investor; (ii) cause the registration statement to remain effective
for the period ending on the earlier of (i) the date all shares of
Registrable Securities have been sold pursuant thereto or
(ii) 12:00 a.m. EST on the last day of the third calendar year after
the date of effectiveness of the registration statement. The Company shall not
be required to effect such a registration prior to the first anniversary of this
Agreement.
- Notwithstanding the foregoing, the Company shall not be
obligated to take any action pursuant to this Section 2.2: (i) if the
Company, within ten (10) days of the receipt of the request of the Investor,
gives notice of its bona fide intention to effect the filing of a registration
statement with the Commission within forty-five (45) days of receipt of such
request in which Registrable Securities will be included (other than with
respect to a registration statement relating to a Rule 145 transaction, an
offering solely to employees or any other registration which is not appropriate
for the registration of Registrable Securities) and the Company files such
registration statement including Registrable Securities within such 45-day
period; or (ii) during the period ending on the date six (6) months
immediately following the effective date of any registration statement
pertaining to securities of the Company in which Registrable Securities were or
could have been included (other than a registration of securities in a
Rule 145 transaction or with respect to an employee benefit plan).
- In addition, the Company shall not be required to take
any action with respect to the registration or the declaration or continuation
of effectiveness of the registration statement (i) during the Company's
customary black-out periods which start the first day of the third calendar
month of any fiscal quarter (March 1, June 1, September 1 and December 1) and
continue until the 2nd trading day following the Company's earning announcement
for the quarter, and (ii) following notice to the Investor from the
Company (a "Suspension Notice") of the existence of any state of facts or the
happening of any event (including, without limitation pending negotiations
relating to, or the consummation of, a transaction, or the occurrence of any
event which in the opinion of the Company might require additional disclosure of
material, non-public information by the Company in the registration statement as
which the Company believes it has a bona fide business purpose for preserving
confidentiality or which renders the Company unable to comply with the published
rules and regulations of the Commission promulgated under the Securities Act or
the 1934 Act, as in effect at any relevant time) which might reasonably result
in (1) the registration statement, any amendment or post-effective
amendment thereto, or any document incorporated therein by reference containing
an untrue statement of a material fact or omitting to state a material fact
required to be stated therein or necessary to make the statement therein not
misleading, or (2) the prospectus issued under the registration statement,
any prospectus supplement, or any document incorporated therein by reference
including an untrue statement of material fact or omitting to state a material
fact necessary in order to make the statement therein, in the light of the
circumstances under which they were made, not misleading (provided that for the
continuous thirty (30) day period beginning on the first trading day after the
registration statement is declared effective, no Suspension Notice shall be
issued or in effect with respect to such shares; and the Company shall not issue
a Suspension Notice for any period during which the Company's executive officers
are not similarly restrained from disposing of shares of the Company's Common
Stock). Upon receipt of a Suspension Notice from the Company, the Investor will
forthwith discontinue disposition of all such shares pursuant to the
registration statement until receipt from the Company of copies of prospectus
supplements or amendments prepared by or on behalf of the Company, together with
the notification that the Suspension Notice is no longer in effect, and, if so
directed by the Company, the Investor will deliver to the Company all copies in
their possession of the prospectus covering such shares current at the time of
receipt of any Suspension Notice.
The aggregate number of days that the Company may postpone,
prohibit or suspend any registration or sale of Registrable Securities by the
Investor pursuant to this Section 2.2(c) shall not exceed the number of
days in the Company's customary black-out periods plus thirty (30) days in any
365 day period.
- Expenses of
Registration
All Registration Expenses incurred pursuant to
Sections 2.1 and 2.2 shall be borne by the Company. All Selling Expenses
incurred in connection with securities registered on behalf of the Investor
pursuant to Sections 2.1 and 2.2 shall be borne by the Investor.
- Indemnification
- The Company will indemnify the Investor, each of its
officers and directors and partners, and each person controlling the Investor
within the meaning of Section 15 of the Securities Act, with respect to
which registration, qualification or compliance has been effected pursuant to
this Section 2, and each underwriter, if any, and each person who controls
any underwriter within the meaning of Section 15 of the Securities Act,
against all expenses, claims, losses, damages or liabilities (or actions in
respect thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, or any violation by the Company of the Securities Act or any
Rule or regulation promulgated under the Securities Act applicable to the
Company in connection with any such registration, qualification or compliance,
and the Company will reimburse the Investor, each of its officers and directors,
and each person controlling the Investor, each such underwriter and each person
who controls any such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating, preparing or defending any
such claim, loss, damage, liability or action, provided that the Company will
not be liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by the Investor, controlling person or underwriter and stated to
be specifically for use therein.
- The Investor will, if Registrable Securities held by the
Investor are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers, each underwriter, if any, of the Company's
securities covered by such a registration statement, and each person who
controls the Company or such underwriter within the meaning of Section 15
of the Securities Act, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company, such directors, officers, persons, underwriters or control persons
for any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by the Investor and stated to be
specifically for use therein. Notwithstanding the foregoing, the liability of
the Investor under this subsection (b) and subsection (d) shall be limited
in an amount equal to the net proceeds received by the Investor from sales of
Registrable Securities pursuant to such registration statement, unless such
liability arises out of or is based on willful misconduct by the
Investor.
- Each party entitled to indemnification under this
Section 2.4 (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided that counsel for
the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 2 unless the
failure to give such notice is materially prejudicial to an Indemnifying Party's
ability to defend such action and provided further, that the Indemnifying Party
shall not assume the defense for matters as to which there is a conflict of
interest or separate and different defenses. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation.
- Investor and the Company agree that if, for any reason,
the indemnification provisions contemplated by Section 2.4(a) or 2.4(b) hereof
are unavailable to or are insufficient to hold harmless and indemnified party in
respect of any all expenses, claims, losses, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such all expenses, claims, losses, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of, and benefits derived by, the indemnifying party and the indemnified
party, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact
relates to information supplied by such indemnifying party or by such
indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 2.4(d) were determined (i) by
pro rata allocation (even if the Investor or any agents for, or underwriters of,
the Registrable Securities, or all of them, were treated as one entity for such
purpose); or (ii) by any other method of allocation which does not take
account of the equitable considerations referred to in this Section 2.4(d).
The amount paid or payable by an indemnified party as a result of the expenses,
claims, losses, damages or liabilities (or actions in respect thereof) referred
to above shall be deemed to include (subject to the limitations set forth in
Section 2.4(b) hereof) any legal or other fees or expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action, proceeding or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
- Termination of Registration
Rights
The rights granted pursuant to this Agreement
shall terminate at such time as Rule 144 will permit the Investor to sell
all the shares held by it in a single 90 day period or seven (7) years after the
date of this Agreement, whichever occurs first.
- Information by
Holder
The Investor shall furnish to the Company such
information regarding the Investor, the Registrable Securities held by it and
the distribution proposed by the Investor as the Company may reasonably request
in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Section 2.
- Rule 144
Reporting
With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Registrable Securities to the public without registration, the
Company agrees to use its best efforts to:
- Make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act, at
all times;
- Use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Securities Exchange Act of 1934, as amended; and
- So long as the Investor owns any Registrable Securities
to furnish to the Investor forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of said
Rule 144, and of the Securities Act and the Securities Exchange Act of
1934, a copy of the most recent annual or quarterly report of the Company, and
such other reports and documents of the Company and other information in the
possession of or reasonably obtainable by the Company as the Investor may
reasonably request in availing itself of any Rule or regulation of the
Commission allowing a Investor to sell any such securities without
registration.
- Transfer of Registration
Rights
The rights to cause the Company to register
securities granted to the Investor under Sections 2.1 and 2.2 may be not be
transferred or assigned, except to any affiliate or affiliates of the Investor
in connection with the transfer or assignment of the related Registrable
Securities to such affiliate or affiliates.
- Obligations of the
Company
Whenever required under this Section 2 to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
- Prepare and file with the Commission a registration
statement with respect to such securities and use its diligent best efforts to
cause such registration statement to become effective and to keep such
registration statement effective for such period of time as otherwise specified
in this Agreement.
- Prepare and file with the Commission 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 Securities Act with respect to the disposition of all
securities covered by such registration statement.
- Furnish to the Investor such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
- Use its reasonable commercial 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
requested by the Investor, provided that the Company 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.
- In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. The Investor
shall also enter into and perform its obligations under such an
agreement.
- Notify the Investor when an amended prospectus relating
thereto is required to be delivered under the Securities Act of the happening of
any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing.
- Furnish, at the request of the Investor, on the date that
such securities are delivered to the underwriters for sale in connection with a
registration pursuant to this Section 2, if such securities are being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (i) a copy of the opinion given to
the underwriters if the registration of the Investor's securities was
underwritten and (ii) a letter dated such date, from the independent
accountants of the Company, in form and substance as is customarily given by
independent accountants to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and to the Investor requesting
registration of securities.
Other Rights
- Board
Representation
Effective as of the date of the Closing, the
Company will cause a designee of the Investor to be appointed to the Board of
Directors of the Company. For so long as the Investor owns at least ten percent
(10%) of the outstanding shares of Common Stock, the Investor shall have the
right to nominate one director to the Board of Directors of the Company at each
election of directors. Such right shall be in addition to any other voting
rights that the Investor may have, from time to time, with respect to its shares
of Common Stock. The Company shall include as a nominee for the Board of
Directors recommended by the Board of Directors the person designated by the
Investor in accordance with this section and shall nominate such person and use
its reasonable best efforts to cause the election of such person, unless the
Board of Directors, in the exercise of its fiduciary duties, reasonably shall
determine that such person is not qualified to serve on the Board of Directors.
If the Board of Directors reasonably determines that such designee is not so
qualified, the Investor shall have the opportunity to specify one additional
designee who shall be so included as a nominee subject to the qualification set
forth in the immediately preceding sentence. In the event that a vacancy is
created at any time by the death, disability, resignation or removal of a
director nominated by the Investor, the Investor shall have the right to
designate a replacement director to fill such vacancy (provided that the
Investor would be entitled at that time to nominate a director pursuant to this
section) and the Company agrees to take such actions within its control as are
necessary to implement the agreements set forth in this sentence.
- Preemptive Rights
- If the Company authorizes the offer or sale of any shares
of Common Stock ("New Shares") or of options or rights to acquire shares
of Common Stock ("New Rights"), (i) in a private placement, then the
Company shall first offer to the Investor the number of such New Shares or New
Rights equal to the product of (A) the total number of such New Shares or New
Rights and (B) a fraction, the numerator of which shall be the number of shares
of Common Stock then owned by the Investor at such time and the denominator of
which shall be the total number of shares of Common Stock issued and outstanding
at such time. The Investor shall be entitled to purchase all of a portion of
the New Shares or New Rights offered to it at the same price and on the same
terms and conditions as such New Shares or New Rights are to be offered to any
other persons or entities. The Investor must exercise its purchase rights
hereunder within 20 days after written notice from the Company describing in
reasonable detail the New Shares or New Rights being offered, the purchase price
thereof and the payment terms thereof.
- During the 90 days following the expiration of the
offering period described above, the Company shall be free to sell any New
Shares or New Rights that the Investor has not elected to purchase on terms and
conditions no more favorable to the purchasers thereof than those offered to the
Investor. If any New Shares or New Rights are not sold during such 90-day
period in accordance with this Section 3.2(b), then the provisions of this
Section 3.2 shall automatically and immediately be reinstated, and shall
automatically and immediately reapply to the offer or sale of such New Shares or
New Rights.
- With respect to public offerings of Common Stock, the
parties will cooperate to allow the Investor to purchase its pro rata portion of
the shares of Common Stock offered in such offering unless in the good faith
judgment of the Board of Directors of the Company, after consultation with their
legal advisors and the underwriters for such offering, including the Investor is
such offering would be reasonably likely to negatively affect the pricing of,
costs associated with, the timing of or the risk of consummation of such
offering. To the extent that the Investor has not been able to participate in a
public offering, the Investor shall be permitted to purchase additional shares
of Common Stock until its ownership percentage of the outstanding shares of
Common Stock is equal to its ownership percentage prior to such
offering.
- The provisions of this Section 3.2 shall not apply to the
issuance and sale of New Shares or New Rights to employees, officers or
directors of the Company pursuant to an employee benefits plan.
- The rights of the Investor under this Section 3.2 may be
waived in writing in any specific instance by the Investor.
- The rights of the Investor under this Section 3.2
shall terminate on the later of (i) such date when the amount of Common
Stock held by the Investor is less than 10% of the outstanding capital stock of
the Company, and (ii) three years from the Closing Date.
- Nasdaq
Listing
The Company agrees to make application to the
Nasdaq Stock Market National Market for the listing of the Shares.
Miscellaneous
- Governing Law
This Agreement shall be governed and construed in
all respects in accordance with the laws of the State of California as applied
to agreements made and performed in California by residents of the State of
California.
- Entire Agreement;
Amendment
This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof, and no party shall be liable or bound to any other party in any manner
by any warranties, representations or covenants except or specifically set forth
herein. Except as expressly provided herein, neither this Agreement nor any
term hereof may be amended, waived, discharged or terminated other than by a
written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought.
- Notices, etc
All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger,
addressed as follows:
- if to the Investor:
Technoparc du pays de Gex
165 Rue Edouard Branly
B.P. 112 01637
ST GENIS POUILLY CEDEX (France)
Attention: General Counsel;
with a copy to:
Michael J. Coleman, Esq.
Shearman & Sterling
555 California Street
20th Floor
San Francisco, CA 94104
- if to the Company:
Paul Voois, CEO
8x8, Inc.
2445 Mission College Blvd.
Santa Clara, CA 95054
or by facsimile to:
Paul Voois, CEO
8x8, Inc.
(408) 933-0234
with a copy to:
Blair W. Stewart, Esq.
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304
Each such notice or other communication shall for all
purposes of this Agreement be treated as effective or having been given when
delivered if delivered personally, or, if sent by mail, at the earlier of its
receipt or 72 hours after the same has been deposited in a regularly maintained
receptacle for the deposit of the United States mail, addressed and mailed as
aforesaid.
- Severability
In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any party.
- Titles and
Subtitles
The titles and subtitles used in this Agreement
are used for convenience only and are not considered in construing or
interpreting this Agreement.
- Counterparts
This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
8X8, INC.
a Delaware corporation
By:
Paul Voois, Chairman and CEO
STMICROELECTRONICS NV
a company organized under the laws
of the Netherlands, having an office at ICC Bloc A, 20 Route Pre-bois, 1215
Geneve, Switzerland
By:
8x8, Inc.
INVESTOR RIGHTS
AGREEMENT
_________ ___, 2000
