Attached files
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10-K - FORM 10-K - ASTROTECH Corp | c05408e10vk.htm |
EX-32.1 - EXHIBIT 32.1 - ASTROTECH Corp | c05408exv32w1.htm |
EX-31.2 - EXHIBIT 31.2 - ASTROTECH Corp | c05408exv31w2.htm |
EX-32.2 - EXHIBIT 32.2 - ASTROTECH Corp | c05408exv32w2.htm |
EX-23.1 - EXHIBIT 23.1 - ASTROTECH Corp | c05408exv23w1.htm |
EX-10.55 - EXHIBIT 10.55 - ASTROTECH Corp | c05408exv10w55.htm |
EX-10.58 - EXHIBIT 10.58 - ASTROTECH Corp | c05408exv10w58.htm |
EX-10.57 - EXHIBIT 10.57 - ASTROTECH Corp | c05408exv10w57.htm |
EX-10.60 - EXHIBIT 10.60 - ASTROTECH Corp | c05408exv10w60.htm |
EX-10.56 - EXHIBIT 10.56 - ASTROTECH Corp | c05408exv10w56.htm |
EX-10.59 - EXHIBIT 10.59 - ASTROTECH Corp | c05408exv10w59.htm |
EX-31.1 - EXHIBIT 31.1 - ASTROTECH Corp | c05408exv31w1.htm |
EX-10.63 - EXHIBIT 10.63 - ASTROTECH Corp | c05408exv10w63.htm |
Exhibit 10.61
Execution Copy
NEITHER THIS INVESTMENT UNIT NOR THE PROMISSORY NOTE UNDER ARTICLE I OF THIS INVESTMENT UNIT OR THE
EQUITY SECURITIES ISSUABLE UPON EXERCISE OF THE RIGHT TO PURCHASE UNDER ARTICLE II OF THIS
INVESTMENT UNIT (COLLECTIVELY, THE SECURITIES REPRESENTED HEREBY) HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE ACT) OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY
STATE. THE SECURITIES REPRESENTED HEREBY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, TOGETHER WITH
QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAW, OR AN OPINION OF COUNSEL OR OTHER EVIDENCE
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT
REQUIRED.
1st DETECT CORPORATION
INVESTMENT UNIT
, 2010
This Investment Unit (this Unit) has been issued by the undersigned, ,
Inc., a Delaware corporation (the Company), in connection with that certain Texas
Emerging Technology Fund Award and Security Agreement (the Fund Agreement), effective as
of the date hereof (the Effective Date), by and between the Company and the State of
Texas, acting by and through the Office of Governor Economic Development and Tourism, together with
its nominees or assigns (the OOGEDT), pursuant to which the Company is receiving from the
OOGEDT an award of funding under the Emerging Technology Fund subject to conditions which could,
upon satisfaction, require repayment. This Unit is subject to all of the terms and provisions of
the Fund Agreement.
This Unit consists of a promissory note (the Note) and a right to purchase equity
securities (the Right to Purchase).
ARTICLE I
NOTE
Section 1.1 Promissory Note. This Article I consists of the Note.
Section 1.2 Promise to Pay. FOR VALUE RECEIVED, the Company hereby promises to pay to
the order of the OOGEDT the principal sum equal to the full amount of all disbursements of the
Award (as defined in the Fund Agreement) that are made prior to the First Qualifying Financing
Transaction (as hereinafter defined) from time to time under the Fund Agreement (collectively, the
Principal) together with interest thereon at a rate of eight percent (8%) simple interest
per annum accruing daily from the date such amounts are disbursed under the Fund Agreement and
calculated on the basis of a 365 or 366 day year, as the case may be (Interest), as
hereinafter set forth in this Article I.
Section 1.3 General Payment Terms. Principal and Interest due hereunder shall be paid
in the lawful currency of the United States of America at such address as the OOGEDT may designate.
Section 1.4 Mandatory Repayment. The Principal, together with all accrued and unpaid
Interest on the Principal balance, shall be due and payable upon demand by the OOGEDT upon the
occurrence of an Event of Default (as hereinafter defined) in accordance with the terms hereinafter
set forth and the terms of the Fund Agreement. In the event of any conflict between the terms
hereof and the terms of the Fund Agreement with respect to mandatory repayment, the terms of the
Fund Agreement shall control.
Section 1.5 Optional Prepayment. The Company may pay, at its option, all sums of
unpaid Principal and accrued but unpaid Interest at any time on or after eighteen (18) months
following the Effective Date if the Company elects to terminate the Fund Agreement in accordance
with Section 2.13 of the Fund Agreement.
Section 1.6 Cancellation of Note. This Note shall be canceled, the Principal and
Interest evidenced hereby shall be forgiven in its entirety and the Company shall be released of
all covenants, liabilities and obligations under this Article I on and after the earlier of
(a) the date ten (10) years after the Effective Date and (b) the consummation of a Qualifying
Liquidation Event (as hereinafter defined).
Section 1.7 Qualifying Liquidation Event. Qualifying Liquidation Event
means (a) the sale, conveyance, or other disposition of all or substantially all of the assets of
the Company and its subsidiaries (taken as a whole) to persons who are not then Company Associates
(as hereinafter defined) or Company Affiliates, or (b) the sale of the Companys then-outstanding
equity securities by the Companys stockholders or the Companys merger into or consolidation with
any other entity, in each such case, in which more than fifty percent (50%) of the voting power of
the Company is transferred to persons who are not then Company Associates or Company Affiliates.
Company Affiliate means a person who or that directly, or indirectly through one or more
intermediaries, controls the Company or is controlled by, or is under Common control with, such a
person.
Section 1.8 Events of Default.
(a) The occurrence or existence of any Event of Default under Section 2.07(B) of the
Fund Agreement shall constitute an Event of Default hereunder.
(b) Upon the occurrence of any Event of Default, the OOGEDT shall have the right to (i)
declare all sums of unpaid Principal and accrued but unpaid Interest and all other amounts properly
payable under the Note immediately due and payable and (ii) unless otherwise limited hereunder or
under the Fund Agreement, exercise any and all other rights available to it hereunder or under the
Fund Agreement or at law or in equity, all of which rights and powers may be exercised cumulatively
and not alternatively. Notwithstanding the foregoing, in the event that the OOGEDT shall receive
any amounts of compensatory damages as a result of a claim of an event of default under the Fund
Agreement, such amounts (Damage Payments) shall be
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deemed to reduce the amount of Principal then
outstanding under the Note on a dollar for dollar basis. In the event that, following any Event of Default hereunder, the OOGEDT
receives a Damage Payment or payment of any sum of then unpaid Principal and accrued but unpaid
Interest on the Note, the OOGEDT hereby irrevocably elects to convert that number of shares of
Series B Preferred Stock then held by the OOGEDT into shares of Common Stock of the Company in an
amount equal to (1) the total number of the shares of Series B Preferred Stock then held by the
OOGEDT multiplied by (2) the quotient obtained by dividing the amount of (A) any such Damage
Payment or (B) any such repayment by the Company of Principal and interest on the Note, as the case
may be, by the aggregate amount of Principal and interest outstanding and unpaid under the Note
immediately prior to the receipt by the OOGEDT of such Damage Payment or Principal and interest
repayment, as the case may be.
Section 1.9 Usury. Notwithstanding any provision to the contrary contained herein,
the Fund Agreement or any other agreement entered into in connection with this Note or as security
therefor or otherwise, it is expressly provided that in no case or event shall the aggregate of (a)
all Interest on the unpaid balance of Principal, accrued or paid from the date hereof and (b) the
aggregate of any other amounts accrued or paid pursuant hereto, which under applicable laws are or
may be deemed to constitute interest upon the indebtedness evidenced hereby from the date hereof,
ever exceed the Ceiling Rate (as hereinafter defined). In this connection, the Company and the
OOGEDT stipulate and agree that it is their common and overriding intent to contract in strict
compliance with applicable usury laws. In furtherance thereof, none of the terms hereof shall ever
be construed to create a contract to pay, as consideration for the use, forbearance or detention of
money, interest at a rate in excess of the Ceiling Rate. The Company or other parties now or
hereafter becoming liable for payment of the indebtedness evidenced by the Note shall never be
liable for interest in excess of the Ceiling Rate. If, for any reason whatever, the interest paid
or received on the Note during its full term produces a rate which exceeds the Ceiling Rate, the
OOGEDT shall credit against the principal of this Note (or, if such indebtedness shall have been
paid in full, shall refund to the payor of such interest) such portion of said interest as shall be
necessary to cause the interest paid on this Note to produce a rate equal to the Ceiling Rate. All
sums contracted for, charged or received by the OOGEDT or the holder of this Note for the use,
forbearance or detention of the indebtedness evidenced hereby shall, to the extent required to
avoid or minimize usury and to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full stated term of this Note so that the interest rate does
not exceed the Ceiling Rate. The provisions of this Section 1.9 shall control all
agreements, whether now or hereafter existing and whether written or oral, between the Company and
any holder of this Note. As used herein, the term Ceiling Rate means, on any day, the
maximum nonusurious rate of interest permitted for that day by whichever of applicable federal or
Texas laws permits the higher interest rate, stated as a rate per annum.
Section 1.10 Cost of Collection. If the OOGEDT retains an attorney in connection with
any Event of Default or to collect, enforce or defend this Note or any papers intended to secure or
guarantee it in any lawsuit or in any probate, reorganization, bankruptcy or other proceeding, or
if the Company sues the OOGEDT in connection herewith or any such papers and does not prevail, then
the Company agrees to pay to the OOGEDT, in addition to the Principal and Interest, all reasonable
costs and expenses incurred by the OOGEDT in trying to collect this Note or in any such suit or
proceeding, including reasonable attorneys fees.
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Section 1.11 Waivers. Except for any notices that are specifically required by
another provision hereof, the Company and any and all endorsers, guarantors and sureties severally
waive notice (including, but not limited to, notice of intent to accelerate and notice of
acceleration, notice of protest and notice of dishonor), demand, presentment for payment, protest,
diligence in collecting and the filing of suit for the purpose of fixing liability and consent that
the time of payment hereof may be extended and re-extended from time to time without notice to any
of them. Each such person agrees that his, her or its liability on or with respect to this Note
shall not be affected by any release of or change in any guaranty or security at any time existing
or by any failure to perfect or maintain perfection of any lien against or security interest in any
such security or the partial or complete unenforceability of any guaranty or other surety
obligation, in each case in whole or in part, with or without notice and before or after the term
hereof.
Section 1.12 Federal Tax Classification. It is expressly provided that the promise to
pay to the order of the OOGEDT that is evidenced by this Note is not intended to be classified as
indebtedness for U.S. federal income purposes unless and until an Event of Default occurs and the
OOGEDT declares payable all sums of unpaid Principal. The Company and any and all endorsers,
guarantors and sureties agree to report the Note consistent with this Section 1.12 for all
U.S. federal income tax purposes except as otherwise required by law.
ARTICLE II
RIGHT TO PURCHASE
Section 2.1 Right to Purchase. This Article II consists of the Right to
Purchase, which certifies that, for the value received, the OOGEDT is entitled to purchase from the
Company up to the number of shares set forth in Section 2.3 below (subject to adjustment in
accordance with the provisions hereof) of either (a) shares of common stock of the Company, $0.001
par value per share (Common Stock), or (b) shares (Next Financing Shares) of
the same class of capital stock or series of preferred stock as shall be issued in the First
Qualifying Financing Transaction (as hereinafter defined).
Section 2.2 Purchase Price. The price per share (the Purchase Price) of
Common Stock or Next Financing Shares, as the case may be, purchased hereunder shall be $0.001 per
share.
Section 2.3 Number of Shares.
(a) The number of shares of Common Stock or Next Financing Shares (in the case of Sections
2.3(a)(ii)(A) and (B) below) to be issued upon the OOGEDTs exercise of this Right to Purchase
shall be equal to the quotient obtained by dividing:
(i) The total amount of the Award disbursed as of the date of the exercise, by
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(ii) Either:
(A) if the First Qualifying Financing Transaction is closed and consummated on or
before ninety (90) days after the Effective Date, then the Stock Price (as hereinafter
defined) of such First Qualifying Financing Transaction; or
(B) if the First Qualifying Financing Transaction is closed and consummated after
ninety (90) days following the Effective Date and on or prior to the date eighteen (18)
months after the Effective Date, then eight-tenths (0.80) multiplied by the Stock Price of
such First Qualifying Financing Transaction; or
(C) if no First Qualifying Financing Transaction is closed and consummated on or before
the date eighteen (18) months after the Effective Date or the OOGEDT exercises its Right to
Purchase prior to the closing and consummation of a First Qualifying Financing Transaction,
then $100.00.
(b) No fractional shares shall be issued upon the exercise of this Right to Purchase. Instead
of any fractional share that would otherwise be issuable upon a conversion hereunder, the Company
shall pay the OOGEDT a cash amount in respect of such fractional share based upon the applicable
Stock Price of the whole shares of Common Stock or Next Financing Shares, as the case may be,
issuable to the OOGEDT upon such exercise.
(c) The Company shall (i) notify the OOGEDT in writing of the terms of the First Qualifying
Financing Transaction as soon as practicable prior to the anticipated closing of such transaction;
(ii) deliver all material closing documentation regarding the First Qualifying Financing
Transaction to the OOGEDT so that the OOGEDT actually receives such documentation within three (3)
business days of the closing of the First Qualifying Financing Transaction; and (iii) and provide
promptly such additional information to the OOGEDT as the OOGEDT may reasonably request.
(d) Stock Price means, as applicable:
(i) With respect to Common Stock, (A) if Common Stock is sold in the First Qualifying
Financing Transaction, the price per share at which such Common Stock is sold in the First
Qualifying Financing Transaction; (B) if Common Stock is not sold in the First Qualifying
Financing Transaction, the price per share of capital stock that is sold in the First
Qualifying Financing Transaction as determined by dividing (1) the total amount received by
the Company as consideration for the sale of such capital stock, plus the minimum aggregate
amount of additional consideration payable to the Company upon the conversion or exchange of
all such capital stock into Common Stock, if any, by (2) the total maximum number of shares
of Common Stock issuable upon the conversion or exchange of such capital stock; or (C) if
there has been no First Qualifying Financing Transactions, then $100.00 per share; and
(ii) With respect to Next Financing Shares, the lesser of (i) the average price per
share of Next Financing Shares, if any, that are sold to Company Associates and/or Company
Affiliates in the First Qualifying Financing Transaction and (ii) the average price per
share of Next Financing Shares that are sold to investors other than
Company Associates and/or Company Affiliates in the First Qualifying Financing
Transaction.
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(e) Company Associates means, as of any particular date, the shareholders of the
Company (including the holders of Common Stock, preferred stock, or other capital stock of the
Company), debtholders of the Company, and holders of convertible securities or holders of any right
to purchase or acquire any capital stock of the Company.
(f) Company Affiliate means a person who or that directly, or indirectly through one
or more intermediaries, controls the Company or is controlled by, or is under common control with,
such a person.
(g) Associate Debt means debt of the Company outstanding on the date of the First
Qualifying Financing Transaction (regardless of whether such debt is evidenced by a promissory
note, a convertible promissory note or any other form or instrument) that is owed to any Company
Affiliate or any person (or any affiliate of such person) that is purchasing capital stock from the
Company in the First Qualifying Financing Transaction.
(h) Stock Acquisition means the sale by the Companys shareholders of all of the
issued and outstanding shares of capital stock of the Company to an acquiring person or entity.
(i) First Qualifying Financing Transaction means the earlier of (i) a Qualifying
Liquidation Event and (ii) the first issuance and sale of Common Stock of the Company or other
classes or series of authorized capital stock of the Company (excluding, however, (A) any
securities of the Company, other than capital stock, that are convertible into or exchangeable or
exercisable for capital stock of the Company, such as warrants, options, or convertible debt, and
(B) any capital stock issued in exchange for the retirement or partial retirement of any Associate
Debt, including without limitation any capital stock issued in exchange for any future promise to
retire or partially retire any Associate Debt) to occur following the Effective Date in a public
offering or private placement, for an aggregate amount of cash consideration received by the
Company from persons other than Company Associates or Company Affiliates equal to or greater than
Five Hundred Thousand Dollars ($500,000); provided, however, that, with respect to
clause (ii) above, the cash proceeds received as consideration by the Company in the First
Qualifying Financing Transaction shall not be directly used in any single transaction or any series
of related transactions to make payments on any Associate Debt (unless the Company receives cash
proceeds in the First Qualifying Financing Transaction in excess of Five Hundred Thousand Dollars
($500,000), in which case such excess amount may be used to make payments on Associate Debt).
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Section 2.4 Purchase Procedure.
(a) The purchase rights represented by this Right to Purchase are exercisable by the OOGEDT or
its assignee, in whole or in part, at any time on or after the Vesting Date (as hereinafter
defined) and on or before the earlier of ninety (90) days after (a) the First Qualifying Financing
Transaction and (b) the date thirty (30) months after the Effective Date, by delivering to the
principal office of the Company, or at such other office or agency as the Company may
designate by notice in writing to the OOGEDT, a duly executed Notice of Purchase in the form
attached hereto as Exhibit A and, upon payment of the per share Purchase Price multiplied
by the total number of shares thereby purchased (the Aggregate Purchase Price) (at the
sole option of the OOGEDT, to be paid by cash or by check or bank draft payable to the order of the
Company, by cashless exercise as described below or by cancellation of indebtedness of the Company
to the OOGEDT), whereupon the OOGEDT shall be entitled to receive a certificate for the number of
shares of Common Stock or Next Financing Shares, as the case may be, so purchased. The OOGEDT, in
its sole discretion, shall elect whether to purchase Common Stock or Next Financing Shares upon its
exercise of the purchase rights hereunder.
(b) Vesting Date means the earlier of (i) the date eighteen (18) months after the
Effective Date; (ii) the date on which the First Qualifying Financing Transaction is closed and
consummated; or (iii) the date on which any of the following events occur: (A) any capital
reorganization or any reclassification of the capital stock of the Company; (B) any consolidation
or merger of the Company; (C) the disposition or transfer of assets of the Company other than in
the ordinary course of the Companys business; (D) any dividend or other distribution to the
holders of capital stock of the Company in the form of any asset, including without limitation
securities of the Company; or (E) the dissolution, liquidation or winding up of the Company; or
(iv) the date of a Stock Acquisition.
Section 2.5 Cashless Exercise. In lieu of paying the Purchase Price, the OOGEDT may
exercise its purchase rights hereunder by cashless exercise, which shall be effected by converting
the Right to Purchase (the Conversion Right) into shares of Common Stock or Next
Financing Shares, as the case may be, as follows. Upon exercise of the Conversion Right with
respect to a particular number of shares of Common Stock or Next Financing Shares, as the case may
be (the Converted Right), the Company shall deliver to the OOGEDT (without payment by the
OOGEDT of any cash, cancellation of indebtedness or delivery of any other consideration) that
number of shares of Common Stock or Next Financing Shares, as the case may be, equal to the
quotient obtained by dividing (a) the difference between (i) the product of the Stock Price of a
share of Common Stock or Next Financing Shares, as the case may be, and the number of such shares
into which the Converted Right could have been exercised hereunder and (ii) the Aggregate Purchase
Price that would have been payable upon such exercise of the Converted Right, by (b) the applicable
Stock Price.
Section 2.6 Issuance of Shares. The issuance of Next Financing Shares upon exercise
of the purchase rights under this Right to Purchase shall be upon and subject to the same terms and
conditions (other than price and timing) applicable to the First Qualifying Financing Transaction
and, subject to Section 3.4 below, the OOGEDT shall be entitled to all the same rights and
preferences with respect to each share of Next Financing Shares held by the OOGEDT to which all
other holders of shares of the same class and series of stock are entitled. All shares of Common
Stock or Next Financing Shares, as the case may be, issued to the OOGEDT upon a purchase hereunder
shall be validly issued, fully paid, non-assessable and free from all taxes, liens and charges. In
case the OOGEDT shall exercise this Right to Purchase with respect to less than all of the shares
that may be purchased hereunder, or if future disbursements of the Award are made under the Fund
Agreement following any exercise hereof, this Right to Purchase shall thereafter represent the
right to purchase the balance of such shares and any additional shares represented by such
additional Award disbursement. The issuance of certificates for shares upon
exercise of this Right to Purchase shall be made without charge to the holder thereof for any
issuance tax in respect thereof or other cost incurred by the Company in connection with such
exercise and the related issuance of the shares. Notwithstanding anything to the contrary provided
herein, the OOGEDT shall not be required to execute, join or become a party to any other agreement,
including any shareholders agreement, in connection with the issuance to the OOGEDT of Next
Financing Shares or Common Stock.
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Section 2.7 Reservation of Shares. The Company shall at all times reserve and keep
available out of its authorized but unissued Common Stock, and once designated, Next Financing
Shares, solely for the purpose of issuance upon the exercise of this Right to Purchase, the maximum
number of shares issuable upon the exercise of this Right to Purchase. If at any time the number
of authorized but unissued shares shall not be sufficient to permit exercise of this Right to
Purchase, the Company shall take such corporate action as may be necessary to increase its
authorized but unissued shares of Common Stock and Next Financing Shares to such number of shares
as shall be sufficient for such purpose.
Section 2.8 Certain Adjustments. The number of shares of Common Stock or Next
Financing Shares, as the case may be, purchasable hereunder and the Purchase Price shall be subject
to adjustment from time to time as hereinafter provided.
(a) In case of (i) any capital reorganization or any reclassification of the capital stock of
the Company, (ii) any consolidation or merger of the Company, (iii) the disposition or transfer of
assets of the Company other than in the ordinary course of the Companys business, (iv) any
dividend or other distribution to the holders of capital stock of the Company in the form of
additional shares of capital stock of the Company or its subsidiaries, property of the Company or
its subsidiaries (other than cash) or rights, options or warrants to purchase or otherwise acquire
shares of capital stock of the Company or its subsidiaries, or (v) the dissolution, liquidation or
winding up of the Company, this Right to Purchase shall thereafter be exercisable for and the
OOGEDT shall thereafter be entitled to purchase (and it shall be a condition to the consummation of
any such transaction or event that appropriate provision shall be made so that the OOGEDT shall
thereafter be entitled to purchase) the kind and amount of shares of stock and other securities and
property receivable in such transaction by a holder of the number of shares of Common Stock or Next
Financing Shares, as the case may be, for which this Right to Purchase entitled the OOGEDT to
purchase immediately prior to such capital reorganization, reclassification of capital stock,
non-surviving combination or disposition or other transaction; and in any such case appropriate
adjustments shall be made in the application of the provisions of this paragraph with respect to
rights and interests thereafter purchasable upon the exercise of this Right to Purchase and the
Purchase Price. In the case of a capital reorganization or reclassification, the number of shares
that the OOGEDT is entitled to purchase hereunder shall be proportionately increased in the case of
a split or subdivision or proportionately decreased in the case of a combination and the Purchase
Price shall be proportionately decreased in the case of a split or subdivision or proportionately
increased in the case of a combination.
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(b) In the case of any cash dividends declared or paid on the Common Stock or the Next
Financing Shares, as the case may be, of the Company prior to the exercise of this Right to
Purchase, the OOGEDT shall be entitled, upon exercise of this Right to Purchase, to
receive the value of any such dividends to the full extent as if the OOGEDT had exercised this
Right to Purchase as of the date of declaration or payment of any such dividend. The OOGEDT, in
its sole discretion, shall elect one of the two following methods for the Company to pay the value
of such dividends to the OOGEDT: (i) in cash or (ii) by adjusting this Right to Purchase to
represent the right to acquire, in addition to the number of shares receivable upon exercise
hereof, and without payment of any additional consideration therefor, the amount of such other
shares of Common Stock or the Next Financing Shares, as the case may be, of the Company that such
holder could have purchased with such cash dividend at the Stock Price on the date of such exercise
had it received such cash dividends on the date of their distribution and had thereafter retained
such shares and/or all other additional stock available by it as aforesaid during such period,
giving effect to all adjustments called for during such period by the provisions hereof.
(c) Notice of Adjustments or Dividends. Upon any event that has the effect of causing
an adjustment of shares of securities purchasable (or payment of dividends) upon exercise of this
Right to Purchase, a certificate, signed by (i) an authorized officer of the Company or (ii) an
independent firm of certified public accountants selected by the Company at its own expense,
setting forth in reasonable detail the events requiring the adjustment and the method by which such
adjustment was calculated, shall promptly be mailed to the OOGEDT and shall specify the adjusted
Purchase Price and the number of shares of securities (and payment of dividends) purchasable upon
exercise of this Right to Purchase after giving effect to the adjustment.
Section 2.9 Stock Certificate Legend. Each certificate representing shares of Common
Stock or Next Financing Shares issued pursuant to this Right to Purchase shall be imprinted with a
legend in substantially the following form:
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
ACT), AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF UNLESS AND UNTIL REGISTERED UNDER THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS, OR UNLESS SUCH OFFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION, TRANSFER OR OTHER DISPOSITION IS EXEMPT FROM REGISTRATION OR IS
OTHERWISE IN COMPLIANCE WITH THE ACT AND SUCH LAWS, AS THE SAME MAY BE AMENDED FROM
TIME TO TIME.
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF AN INVESTMENT
UNIT AND AN EMERGING TECHNOLOGY FUND SECURITY AND AWARD AGREEMENT, EACH DATED AS OF
, , BY AND BETWEEN THE COMPANY AND THE STATE OF TEXAS, ACTING BY
AND THROUGH THE OFFICE OF GOVERNOR ECONOMIC DEVELOPMENT AND TOURISM, WHICH
INVESTMENT UNIT AND AGREEMENT CONTAIN, AMONG OTHER PROVISIONS, RESTRICTIONS ON THE
TRANSFER, SALE, OR OTHER DISPOSITION OF THE SHARES EVIDENCED BY THIS
CERTIFICATE. A COPY OF SUCH INVESTMENT UNIT AND AGREEMENT HAS BEEN FILED, AND IS
AVAILABLE FOR REVIEW BY THE RECORD HOLDER OF THIS CERTIFICATE, AT THE PRINCIPAL
OFFICE OF THE COMPANY.
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Section 2.10 No Impairment. So long as this Right to Purchase is outstanding and
unexercised, the Company shall not, by amendment of its certificate of formation (or other
formation document) or bylaws or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action avoid or seek to
avoid the observance or performance of any of the terms to be observed or performed hereunder by
the Company, but shall at all times in good faith assist in the carrying out of all the provisions
of this section and in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the OOGEDT hereunder against impairment.
ARTICLE III
MISCELLANEOUS
Section 3.1 Representations and Covenants of the Company.
(a) The Company shall comply with the Act, all applicable state securities laws, and all other
applicable laws and regulations in respect of the issuance of this Unit and the issuance of any
securities issued or issuable under Article II hereof, and shall timely make all required
filings and reports under such laws and regulations.
(b) The Company represents that it has the power to issue this Unit and to carry out the
obligations hereunder, and the execution, delivery and performance by the Company of this Unit has
been duly authorized by all necessary corporate action.
(c) The Company shall maintain or cause to be maintained books, records, documents and other
evidence pertaining to compliance with the requirements contained in this Unit, and during all such
time when the OOGEDT is holding this Unit or any securities issued upon the exercise of the Right
to Purchase under Article II hereof, upon request shall allow or cause the entity which is
maintaining such items to allow the OOGEDT, or auditors for the OOGEDT, including the State Auditor
for the State of Texas, to inspect, audit, copy, or abstract, all of its books, records, papers, or
other documents relevant to this Unit and the securities issued or issuable upon exercise of the
Right to Purchase under Article II hereof. The Company shall use or cause the entity that
is maintaining such books and records to use generally accepted accounting principles in the
maintenance of such books and records, and shall retain or cause to be retained all of such books,
records, documents and other evidence for a period of seven (7) years from and after the later of
(i) the date that the Fund Agreement is terminated or the Fund Agreements term expires and (ii)
unless the Right to Purchase hereunder expires without having been exercised, the date on which the
OOGEDT fully divested all rights and ownership of all stock that was issued upon the OOGEDTs
exercise of its Right to Purchase under Article II hereof.
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Section 3.2 Representations and Covenants of the OOGEDT. The OOGEDT, by acceptance of
this Right to Purchase, agrees that the right to purchase shares of Common Stock, Next Financing
Shares or other securities to be issued upon exercise hereof are being acquired for the OOGEDTs
own account to be held on behalf of the State of Texas pursuant to the provisions of Chapter 490 of
the Texas Government Code and that the OOGEDT shall not offer, sell or otherwise dispose of this
Right to Purchase or any shares issuable hereunder except under circumstances that will not result
in a violation of the Act or any securities laws of any state. Otherwise, the OOGEDT is permitted
at any time and without limitation to offer, sell or otherwise dispose of this Right to Purchase
and any securities issued hereunder in a manner that is in compliance with the Act and any
applicable state securities laws of, including making such offers, sales or dispositions under Rule
144 of the Act. Prior to any offer, sale, or other disposition of this Right to Purchase and any
securities issued hereunder, the OOGEDT shall provide the Company with fifteen (15) days written
notice thereof.
Section 3.3 Notices. Any notice, request or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been duly given if personally delivered
or mailed by registered or certified mail, postage prepaid, or by recognized overnight courier or
personal delivery at the respective addresses of the parties as set forth herein or on the register
maintained by Company. The Company and the OOGEDT may by notice so given change the OOGEDTs and
Companys respective address for future notice hereunder. Notice shall conclusively be deemed to
have been given when received. The current addresses for notice are as follows:
To OOGEDT: | Financial Services | |||
ETF Compliance | ||||
PO Box 12878 | ||||
Austin, TX 78711-2878 | ||||
Email: ETF.Compliance@governor.state.tx.us | ||||
with a concurrent copy to: | ||||
ATTN: Emerging Technology Fund Award Program | ||||
General Counsel | ||||
Office of the Governor | ||||
P.O Box 12428 | ||||
Austin, Texas 78711 | ||||
Phone: 512-463-1788 | ||||
Fax: 512-463-1932 | ||||
To Company: | John Porter | |||
Chief Executive Officer | ||||
First Detect | ||||
401 Congress Avenue, Suite 1650 | ||||
Austin, Texas 78701 | ||||
Phone: (512) 485-9530 | ||||
Fax: (512) 485-9531 |
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Section 3.4 No Rights as Shareholder. Nothing in the Unit shall be construed as
conferring on the OOGEDT or any other person any voting rights or other rights as a shareholder of
the Company. Further, from and after any exercise of the Right to Purchase under Article
II hereof, so long as the OOGEDT holds such capital stock, the OOGEDT shall grant a revocable
proxy (the Proxy) of all its voting rights to the then-current Chief Executive Officer
(or, if no Chief Executive Officer is then serving, President) of the Company with respect to each
matter that is presented for a vote to holders of capital stock held by the OOGEDT, substantially
in the form attached hereto as Exhibit B (which form shall provide, among other things,
that such Proxy shall be voted in proportionate accordance to the votes of such other holders
(holding shares of the same class and series of stock as the OOGEDT) on the matter). It is the
general intent of the OOGEDT not to revoke the Proxy unless the OOGEDTs rights and interests would
be adversely and disproportionately effected in connection with a matter on which the OOGEDT
otherwise would have the right to vote, and any such determination regarding whether any such
matter has or would have an adverse or disproportionate effect on the OOGEDTs rights and interests
shall be made in the sole discretion of the OOGEDT. Notwithstanding anything to the contrary
herein, in the Fund Agreement or in connection with the OOGEDTs grant of the Proxy, upon exercise
of the Right to Purchase hereunder, the OOGEDT shall become the record holder of the Common Stock
or Next Financing Shares, as the case may be, and shall have all legal and beneficial ownership
rights thereto at all times (except as is specifically set forth in the Proxy). In addition,
notwithstanding the OOGEDTs grant of the Proxy, the Company shall provide the OOGEDT with all
notices to which holders of Common Stock or Next Financing Shares, as the case may be, are
entitled, including without limitation all notices of shareholders meetings and all notices of any
votes upon any matters submitted for a vote of the holders of Common Stock or the Next Financing
Shares, as the case may be, which notices shall be delivered by the Company to the OOGEDT on or
before such date as shall provide the OOGEDT with adequate time to revoke the Proxy prior to such
meeting or vote if the OOGEDT so chooses.
Section 3.5 Right of First Offer. If the OOGEDT shall decide at any time that it
wants to sell, transfer or assign all or any portion of its Common Stock or Next Financing Shares
(as the case may be, the Offered Shares) to any person or entity that is not another
Texas state agency, the OOGEDT shall first provide the Company with a written offer to sell the
Offered Shares to the Company at a specified price per share. The Company shall then have thirty
(30) days to accept or reject such offer with respect to all but not less than all of the Offered
Shares. If the Company irrevocably accepts the offer within the applicable time period, the
Company shall have an additional thirty (30) days to complete the purchase of the Offered Shares.
The Company shall be permitted to assign its purchase right under this Section 3.5 to one
or more of its directors or executive officers, but this right shall be otherwise non-assignable by
the Company. If the Company rejects the offer or fails to accept the offer within the applicable
time period with respect to all of the Offered Shares, then the OOGEDT may sell all or a portion of
the Offered Shares that have been offered but not accepted for purchase by the Company within one
hundred eighty (180) days of such rejection or expiration of the time period for response to any
person or entity; provided, that the OOGEDT does not sell any of the Offered Shares for less than
one hundred percent (100%) of the per share price the OOGEDT offered to the Company. If the OOGEDT
does not sell the Offered Shares within the time period and for the price indicated above, it must
comply again with the provisions of this Section 3.5 before selling all or any portion of
the Offered Shares.
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Section 3.6 Unit Register. The Company shall maintain at its principal executive
office books for the registration and the registration of transfer of the Unit. The Company may
deem and treat the OOGEDT as the absolute owner hereof (notwithstanding any notation of ownership
or other writing thereon made by anyone) for all purposes, and neither the Company nor the OOGEDT
shall be affected by any notice to the contrary.
Section 3.7 Transfers. The Company shall not close its books against the transfer of
this Unit or of any shares issued or issuable upon the exercise of the Right to Purchase under
Article II hereof in any manner which interferes with the timely exercise of the Right to
Purchase.
Section 3.8 Assignment. Except as specifically set forth in Section 3.5. the
Company shall not assign this Unit or any of its rights or obligations hereunder without the prior
written consent of the OOGEDT. Except as otherwise required by Section 3.5 above, the
OOGEDT may assign this Unit and any of its rights or obligations hereunder without the consent of
the Company but must first provide the Company with fifteen (15) days written notice of such
assignment. Subject to the foregoing, this Unit and all terms, provisions and obligations set
forth herein shall be binding upon and shall inure to the benefit of the parties and their
respective successors and assigns and all other state agencies and any other agencies, departments,
divisions, governmental entities, public corporations and other entities that shall be successors
to any of the parties or that shall succeed to or become obligated to perform or become bound by
any of the covenants, agreements or obligations hereunder of any of the parties hereto.
Section 3.9 Governing Law and Venue. This Unit shall be governed by and construed in
accordance with the laws of the State of Texas and the United States of America from time to time
in effect, without regard to any otherwise applicable conflict of law rules or requirements. The
Company and all endorsers, guarantors and sureties irrevocably agree that any action, claim, suit,
litigation or other proceeding (collectively, Litigation) arising out of or in any way
relating to this Unit, or the matters referred to therein, shall be commenced exclusively in the
Travis County District Court or the United States District Court for the Western District of Texas,
Austin Division, and hereby irrevocably and unconditionally consents to the exclusive jurisdiction
of those courts for the purpose of prosecuting and/or defending such Litigation. The Company and
all endorsers, guarantors and sureties hereby waive and agree not to assert by way of motion, as a
defense, or otherwise, in any Litigation that (a) the Company is not personally subject to the
jurisdiction of the above-named courts, (b) the Litigation is brought in an inconvenient forum or
(c) the venue of the Litigation is improper.
Section 3.10 Replacement. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Unit and, in the case of any such
loss, theft or destruction, upon delivery of an indemnity agreement reasonably satisfactory to the
Company, or in the case of any such mutilation, upon surrender and cancellation of the mutilated
Unit, the Company shall execute and deliver, in lieu thereof, a new Unit of like date and tenor.
Section 3.11 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein shall be a Saturday
or a Sunday or shall be a legal holiday, then such action may be taken or such right may be
exercised on the next succeeding day not a legal holiday.
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Section 3.12 Proceeds. This Unit, the securities issuable upon exercise of the Right
to Purchase under Article II hereof, and all amounts of cash or other benefits earned or
received by the OOGEDT hereunder or by sale hereof, are held for and on behalf of the State of
Texas. Any and all cash received by the OOGEDT under or by sale of this Unit or the securities
issuable under the Right to Purchase shall be deposited into the Emerging Technology Fund in
accordance with Chapter 490 of the Texas Government Code.
Section 3.13 Severability. If any one or more of the provisions contained herein, or
the application thereof in any circumstance, is held invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
Section 3.14 Further Assurances. The Company and the OOGEDT shall execute such
documents and perform such further acts (including, without limitation, obtaining any consents,
exemptions, authorizations or other actions by, or giving any notices to, or making any filings
with, any governmental authority or any other person, and otherwise fulfilling, or causing the
fulfillment of, the various obligations made herein), as may be reasonably required or desirable to
carry out or to perform the provisions of this Unit and to consummate and make effective as
promptly as possible the transactions contemplated by this Unit.
Section 3.15 Agreement by OOGEDT. Receipt of this Unit by the OOGEDT shall constitute
acceptance of and agreement to the foregoing terms and conditions.
Section 3.16 Amendment. Any term of this Unit may be amended and the observance of
any term of this Unit 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 OOGEDT.
Section 3.17 Headings. The section headings in this Unit are inserted for purposes of
convenience only and shall have no substantive effect.
Section 3.18 Survival. The warranties, representations and covenants contained in or
made pursuant to this Unit shall survive the execution and delivery of this Unit and shall survive
any breach, expiration or termination of the Fund Agreement. Notwithstanding anything herein to
the contrary, this Unit, including without limitation the Right to Purchase under Article
II hereof, shall survive the repayment of the Note.
Section 3.19 Exhibits. The exhibits referred to herein are hereby incorporated fully
herein by this reference.
[Remainder of page intentionally left blank.]
14
IN WITNESS WHEREOF, the Company has caused this Investment Unit to be signed by its duly
authorized officers in Austin, Texas as of the date and year first written above.
1st Detect Corporation | ||||
John Porter | ||||
Chief Executive Officer |
15
EXHIBIT A
Notice of Purchase
Notice of Purchase
The undersigned, representing the State of Texas, acting by and through the Office of Governor
Economic Development and Tourism, together with its nominees or assigns (the OOGEDT),
pursuant to the provisions of the Investment Unit, dated [ ] (the Unit), issued
to the OOGEDT by 1st Detect Corporation, a Delaware corporation (the Company),
hereby agrees to subscribe for and purchase
shares of [Common Stock / Series Preferred
Stock], par value $0.001 per share, of the Company covered by the Right to Purchase (as defined in
the Unit), and makes such payment therefor in full at the Purchase Price (as defined in the Unit)
either in cash, by cashless exercise or by other method as provided by the Unit.
Signature:
|
||||
Name: |
||||
Title: |
||||
Dated: |
||||
INSTRUCTIONS FOR REGISTRATION OF STOCK:
Name |
||||
(please type or print in block letters) | ||||
Address |
||||
Address |
||||
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Exhibit B
Form of Revocable Proxy
CONTINUING REVOCABLE PROXY
The State of Texas, acting by and through the Office of the Governor Economic Development and
Tourism (the undersigned), hereby grants to the then-current Chief Executive Officer (or,
if no Chief Executive Officer is serving, President), of 1st Detect Corporation, a
Delaware corporation (the Company), a proxy with full power of substitution to vote, or
execute and deliver written consents or otherwise act with respect to the [INSERT NUMBER] shares of
Stock the undersigned owns, beneficially or of record, that were issued to the undersigned by the
Company on , 2 , in proportionate accordance to the votes on the applicable matter of
such other holders of the Companys Stock who hold shares of the same class and series as held by
the undersigned, as fully, to the same extent and with the same effect as the undersigned
might or could do under any applicable laws or regulations governing the rights and powers of
shareholders of a Texas corporation, and in connection therewith to execute any documents which are
necessary or appropriate in order to effectuate the foregoing, on any matter requiring the vote of
the holders of the Stock, or by written consent in lieu of a meeting, or otherwise, or whether such
vote is to be cast in person, or by proxy, or as otherwise permitted by law. The proxy granted
herein (x) shall be revocable at any time by the undersigned upon notice by the undersigned to the
Company and, (y) notwithstanding Section 21.368 of the Texas Business Organizations Code, Article
2.29(C) of the Texas Business Corporation Act, or any similar or successor statute, shall remain
valid and in effect from the date hereof until the date it is revoked as described in
clause(x) preceding.
Date: , 2 | THE STATE OF TEXAS | |||||||
By: | ||||||||
Title: | Chief of Staff | |||||||
Office of the Governor |
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