Document:

Increasing the Number of Shares of Preferred Stock

 Exhibit 4.9.2 
  
 CERTIFICATE OF 
  
 OCCAM NETWORKS, INC. 
  
 INCREASING NUMBER OF SHARES OF PREFERRED STOCK 
  
 DESIGNATED AS 
  
 SERIES A-2 CONVERTIBLE PREFERRED STOCK 
  

  
 Pursuant to Section 151 of the General 
 Corporation Law of the State of Delaware 
  

  
 I, Howard M. Bailey, do hereby certify:

  
 1. That I am the duly elected and acting Chief Financial
Officer and Secretary of Occam Networks, Inc., a Delaware corporation (the “Company”). 
  
 2. On November 18, 2003, the Board of Directors of the Company approved resolutions designating as “Series A-2 Convertible Preferred Stock” (the
“Series A-2 Preferred”) an aggregate of 3,000,000 of the shares of Preferred Stock that the Company is authorized to issue pursuant to its Amended and Restated Certificate of Incorporation (the “Certificate of
Incorporation”), all as set forth in the Certificate of Designation of Series A-2 Convertible Preferred Stock of Occam Networks, Inc. filed with the Secretary of State of the State of Delaware on November 19, 2003 (the
“Certificate of Designation”). 
  
 3. On
August 24, 2004, the Board of Directors of the Company approved resolutions with the effect of increasing the number of shares of Series A-2 Preferred designated pursuant to the Certificate of Designation from 3,000,000 to 3,250,000, all as set
forth in the Certificate of Occam Networks, Inc. Increasing Number of Shares of Preferred Stock Designated as Series A-2 Convertible Preferred Stock, filed with the Secretary of State of the State of Delaware on November 12, 2004 (the
“Amendment” and together with the Certificate of Designation, the “Amended Certificate of Designation”). 
  
 4. Pursuant to Section 151(g) of the General Corporation Law of the State of Delaware (the “DGCL”), the Company may by resolution
or resolutions adopted by the Company’s Board of Directors increase the number of shares of its authorized Preferred Stock designated as Series A-2 Preferred (but not above the total number of authorized shares of such class). 
  
 5. In accordance with Section 141(c)(2)of the DGCL, the Board of Directors
formed a Special Committee of the Board of Directors, which on January 4, 2005, adopted and approved the following resolutions, with the effect of increasing the number of shares of Series A-2 Preferred designated pursuant to the Amended Certificate
of Designation from 3,250,000 to 4,300,000: 
  
 RESOLVED: That in order to accommodate the issuance of additional shares of Series A-2 Preferred in a proposed offering, the Committee hereby approves an amendment to the Certificate of Designation relating to the Series A-2
Preferred (the “Certificate of Designation”) to increase the number of shares of the Company’s Preferred Stock designated as Series A-2 Preferred from 3,250,000 to 4,300,000; 
  
 RESOLVED FURTHER: That the appropriate officers of the Company
are hereby authorized and directed to take such action as may be necessary and appropriate, in consultation with legal counsel, to file a certificate of amendment to the Certificate of Designation to effect the foregoing increase in the number of
shares of the Company’s Preferred Stock so designated, and such certificate, in the form so prepared and filed with the Secretary of State of Delaware, is hereby ratified and approved. 

 IN WITNESS WHEREOF, Occam Networks, Inc. has caused this Certificate Increasing Number of Shares of
Preferred Stock Designated as Series A-2 Convertible Preferred Stock to be executed by Howard M. Bailey, its Chief Financial Officer and Secretary, this 7th day of January 2005. 
  

	
	 OCCAM NETWORKS, INC.

	
	 /s/ Howard M. Bailey

	 Howard M. Bailey, CFO & Secretary

  

 -2-Series A-2 Preferred Stock Purchase Agreement

 Exhibit 10.61 
  

  
 OCCAM NETWORKS, INC. 
  
 SERIES A-2 PREFERRED
STOCK PURCHASE AGREEMENT 
  
 First Closing: 

 
 January 7, 2005 
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

	SECTION 1 Authorization and Sale of Series A-2 Preferred Stock	  	1
			
	 	  	 1.1        Authorization
	  	1
	 	  	 1.2        Sale and Issuance of Shares
	  	1
		
	SECTION 2 Initial Closing Date; Subsequent Closings; Delivery	  	1
			
	 	  	 2.1        Closing
	  	1
	 	  	 2.2        Delivery
	  	4
		
	SECTION 3 Representations and Warranties of the Company	  	4
			
	 	  	 3.1        Organization and Standing
	  	4
	 	  	 3.2        Corporate Power
	  	5
	 	  	 3.3        Capitalization
	  	5
	 	  	 3.4        Authorization
	  	6
	 	  	 3.5        Reports with the Securities and Exchange Commission
	  	6
	 	  	 3.6        Financial Statements
	  	6
	 	  	 3.7        No Material Adverse Change
	  	7
	 	  	 3.8        Compliance with Other Instruments
	  	7
	 	  	 3.9        Governmental Consent
	  	7
	 	  	 3.10      Litigation
	  	8
	 	  	 3.11      Offering
	  	8
	 	  	 3.12      Brokers or Finders
	  	8
	 	  	 3.13      Registration Rights; Voting Agreements
	  	8
	 	  	 3.14      Status of Proprietary Assets; No Breach
	  	8
	 	  	 3.15      Environmental Matters
	  	9
	 	  	 3.16      No Prior Transactions
	  	9
	 	  	 3.17      Tax Returns, Payments and Elections
	  	9
		
	SECTION 4 Representations and Warranties of the Investors	  	10
			
	 	  	 4.1        Investment Intent
	  	10
	 	  	 4.2        Speculative Nature of Investment
	  	10
	 	  	 4.3        Access to Data
	  	10
	 	  	 4.4        Accredited Investor and Investment Experience
	  	10
	 	  	 4.5        Residency
	  	11
	 	  	 4.6        Restriction on Resales
	  	11
	 	  	 4.7        Rule 144
	  	11
	 	  	 4.8        Authorization
	  	11
	 	  	 4.9        Brokers or Finders
	  	12
	 	  	 4.10      Investor Counsel
	  	12
	 	  	 4.11      Tax Advisors
	  	12
	 	  	 4.12      Legends
	  	12
	 	  	 4.13      No Prior Transactions
	  	12

  

 -i- 

 TABLE OF CONTENTS 
 (Continued) 
  

					
	 	  	 	  	Page

	SECTION 5 Conditions to Investors’ Obligations to Close	  	13
			
	 	  	 5.1        Representations and Warranties
	  	13
	 	  	 5.2        Covenants
	  	13
	 	  	 5.3        Closing Certificate
	  	13
	 	  	 5.4        Proceedings and Documents
	  	13
	 	  	 5.5        Amendment to Certificate of Designation
	  	13
	 	  	 5.6        Rights Agreement
	  	13
	 	  	 5.7        Opinion of Company Counsel
	  	13
	 	  	 5.8        Qualifications
	  	13
		
	SECTION 6 Conditions to Company’s Obligation to Close	  	14
			
	 	  	 6.1        Representations and Warranties
	  	14
	 	  	 6.2        Covenants
	  	14
	 	  	 6.3        Compliance with Securities Laws
	  	14
	 	  	 6.4        Amendment to Certificate of Designation
	  	14
	 	  	 6.5        Rights Agreement
	  	14
		
	SECTION 7 Miscellaneous	  	14
			
	 	  	 7.1        Amendment
	  	14
	 	  	 7.2        Notices
	  	15
	 	  	 7.3        Expenses
	  	15
	 	  	 7.4        Survival
	  	15
	 	  	 7.5        Successors and Assigns
	  	15
	 	  	 7.6        Entire Agreement
	  	16
	 	  	 7.7        Delays or Omissions
	  	16
	 	  	 7.8        Severability
	  	16
	 	  	 7.9        Counterparts
	  	16
	 	  	 7.10      Telecopy Execution and Delivery
	  	16
	 	  	 7.11      Governing Law, Jurisdiction and Venue
	  	17
	 	  	 7.12      Waiver of Potential Conflicts of Interest
	  	17

  

 -ii- 

 EXHIBITS 
  

			
	 A-1
	  	Schedule of Investors – Initial Closing
	 A-2
	  	Schedule of Investors – Subsequent Closing
	 B
	  	Form of Certificate of Designation, as amended to date
	 C
	  	Form of Fourth Amended and Restated Investor Rights Agreement

  

 -iii- 

 OCCAM NETWORKS, INC. 
  
 SERIES A-2 PREFERRED STOCK PURCHASE AGREEMENT 
  
 This Series A-2 Preferred Stock Purchase Agreement (this “Agreement”) is made as of January 7, 2005,
by and among Occam Networks, Inc., a Delaware corporation (the “Company”), and the persons and entities (each, an “Investor” and collectively, the “Investors”) listed on the Schedule of
Investors attached as Exhibit A. 
  
 SECTION 1

  
 Authorization and Sale of Series A-2 Preferred
Stock 
  
 1.1 Authorization. The Company
will, prior to the Initial Closing (as defined below), authorize the sale and issuance of up to 1,300,000 shares (the “Shares”) of the Company’s Series A-2 Convertible Preferred Stock, par value $0.001 per share (the
“Series A-2 Preferred”), having the rights, privileges, preferences and restrictions set forth in the Certificate of Designation of Series A-2 Preferred Stock, as amended to date, of the Company, and attached as Exhibit B (the
“Certificate of Designation”). 
  
 1.2
Sale and Issuance of Shares. Subject to the terms and conditions of this Agreement, each of the Investors severally, and not jointly, agrees to purchase, and the Company severally agrees to sell and issue to each Investor, the number of
Shares set forth in the column designated “Number of Series A-2 Shares” opposite such Investor’s name on the appropriate schedule of Exhibit A as described in Section 2 for the Closing at which such Investor is purchasing Shares, at a
purchase price of $10.00 per share. The Company’s agreement with each Investor is a separate agreement, and the sale of the Shares to each Investor is a separate sale. 
  
 SECTION 2 
  
 Initial Closing Date; Subsequent Closings; Delivery 
  

2.1 Closing. 
  
 (a) The initial purchase, sale and issuance of the Shares (the “Initial Closing”) shall take place contemporaneously with the execution
and delivery of this Agreement. At the Initial Closing, venture capital funds affiliated with Alta Partners (“Alta”), U.S. Venture Partners (“USVP”), Norwest Venture Partners (“Norwest”), and New
Enterprise Associates (“NEA”) will purchase, and the Company will sell and issue, an aggregate of 527,500 of the Shares, all as set forth in greater detail on Exhibit A-1 to this Agreement. The venture capital funds so
affiliated with Alta, USVP, Norwest, and NEA and identified on Exhibit A-1 are sometimes referred to herein as the “Initial Closing Investors.” 

 (b) At the Initial Closing and at any time and from time to time during the ninety (90) day period
immediately thereafter (the “Additional Closing Period”), the Company may sell and issue the balance of the Shares not sold to the Initial Closing Investors as follows: 
  
 (i) to holders of the Company’s presently outstanding shares of Series A-2 Preferred Stock; and 
  
 (ii) to such other persons or entities who shall be reasonably acceptable to
a majority-in-interest of the Initial Closing Investors (based on the number of Shares purchased by such Initial Closing Investors at the Initial Closing). 
  
 During the Additional Closing Period, the Company shall use commercially reasonable efforts, consistent in all respects with applicable laws and
regulations, including the availability of an exemption from the registration requirements of the Securities Act of 1933, as available, and applicable state securities laws, to sell and issue the Shares not sold at the Initial Closing pursuant to,
and on the terms and conditions set forth in, this Agreement. 
  
 Any closing of the sale and issuance of Shares pursuant to this Section 2.1(b) is referred to herein as a “Subsequent Closing” and any Investor purchasing Shares at a Subsequent Closing is referred to herein as a
“Subsequent Closing Investor.” 
  
 (c) The
Initial Closing Investors shall have the right and obligation to purchase, and the Company shall have the right and obligation to sell, additional Shares after the Initial Closing, as follows: 
  
 (i) Each of the Initial Closing Investors agrees to purchase from the
Company, and the Company agrees to sell and issue to the Initial Closing Investors, that number of additional Shares as determined in Section 2(c)(ii) below, on or before the earlier to occur of (A) the last business day of the Additional Closing
Period and (B) the date five business days after any Subsequent Closing at which the Company has sold an aggregate of 1,000,000 Shares pursuant to this Agreement (including shares sold at the Initial Closing) (such earlier date being referred to
herein as the “Option Termination Date”). 
  
 (ii) The maximum number of Shares each Initial Closing Investor shall have the right and/or obligation to purchase pursuant to this Section 2.1(c) shall equal the difference between the number of Shares purchased by such Initial Closing
Investor at the Initial Closing and the aggregate purchase commitment of such Initial Closing Investor, determined as follows: 
  
 (A) with respect to investment entities affiliated with Alta, 200,000 Shares; 
  
 (B) with respect to investment entities affiliated with USVP, 200,000 Shares; 
  
 (C) with respect to investment entities affiliated with Norwest, 300,000
Shares; and 
  

 -2- 

 (D) with respect to investment entities affiliated with NEA, 120,000 Shares. 
  
 (iii) Notwithstanding the foregoing, the obligation (but not the right) of
any Initial Closing Investor to purchase Shares pursuant to this Section 2.1(c) shall, at the sole and exclusive election of such Initial Closing Investor, be reduced proportionately (on a pro rata basis based on the aggregate investment commitments
specified in Section 2.1(c)(ii) above), to the extent the aggregate number of Shares sold and issued at Closings held pursuant to Section 2.1(a) and Section 2.1(b) exceeds $10,000,000. In no event shall the foregoing be deemed to limit the right of
each Initial Closing Investor to purchase the maximum number of Shares specified in Section 2.1(c)(ii) above, subject only to Section 2.1(c)(iv) below. Each of the Initial Closing Investors acknowledges and agrees that the right to buy additional
Shares pursuant to this Section 2.1(c) (and the corresponding obligation of the Company to sell additional Shares) shall terminate to the extent not exercised by the Initial Closing Investors, and the sale and issuance thereof closed, on or prior to
the Option Termination Date (provided that the Company shall have provided each Initial Closing Investor at least five days’ prior notice of any Subsequent Closing that would result in an acceleration of the Option Termination Date to a date
prior to the end of the Additional Closing Period). 
  
 In the
event that the sale and issuance of additional Shares pursuant to Section 2.1(c) would result in the aggregate number of Shares issued hereunder exceeding the number authorized pursuant to Section 1.1, then (i) each Investor agrees that such number
of authorized Shares shall be automatically increased to accommodate such issuance (without any requirement of amendment or waiver under this Agreement) and (ii) the Company agrees to use its commercially reasonable best efforts to obtain all
required consents and authorizations (including those of the Special Financing Committee of its Board of Directors) to permit the issuance of such additional Shares in accordance herewith. 
  
 Any closing of the sale and issuance of Shares pursuant to this Section
2.1(c) is referred to herein as an “Option Closing.” The Initial Closing, any Subsequent Closing, and any Option Closing may be referred to individually herein as a “Closing” or collectively as the
“Closings.” 
  
 (d) At any Subsequent Closing,
each Investor (other than an Initial Closing Investor) will execute a counterpart signature page to this Agreement, and will, upon delivery to the Company of such signature page, become a party to, and bound by, this Agreement. Each of the Initial
Closing Investors will remain a party to, and bound by, this Agreement with respect to the Shares purchased at an Option Closing. Immediately after each Closing (other than the Initial Closing), Exhibit A-2 will be amended to list the
Investors purchasing shares of Series A-2 Preferred hereunder and the number of shares of Series A-2 Preferred purchased by each Investor under this Agreement at such Closing. The Company will furnish to each Investor copies of the amendments to
Exhibit A-2 referred to in the preceding sentence. 
  
 (e)
Any shares of Series A-2 Preferred sold and issued at the Second Closing shall be deemed to be “Shares” for all purposes under this Agreement, and any purchasers thereof shall be deemed to be “Investors” for all purposes under
this Agreement. 
  

 -3- 

 (f) Each Closing shall be held at the offices of Wilson Sonsini Goodrich & Rosati, P.C., 650 Page
Mill Road, Palo Alto, California, at 2:00 p.m. local time, on each Closing Date, or at such other time and place upon which the Company and the Investors participating in such Closing shall agree. 
  
 (g) Notwithstanding the foregoing, each Investor understands and agrees (i)
that the Company proposes to sell and issue additional shares of Series A-2 Preferred pursuant to rights to be granted to existing stockholders (the “Rights Offering”), such rights and Series A-2 Preferred to be issued pursuant to a
registration statement filed with and declared effective by the U.S. Securities and Exchange Commission (the “SEC”); (ii) that such rights may be granted, and such shares of Series A-2 Preferred may be issued and sold, without
regard to any limitations on the sale and issuance of additional shares of Series A-2 Preferred set forth herein and may be sold pursuant to such agreements and documentation as the Company, in consultation with legal counsel, may determine to be
appropriate for the Rights Offering (such that shares of Series A-2 Preferred sold pursuant to the Rights Offering shall not be “Shares” hereunder and purchasers in the “Rights Offering” shall not be “Investors”
hereunder); and (iii) that the Rights Offering will not apply to any Investor, each of whom hereby waives on its behalf and on behalf of any affiliate of such Investor, any right to participate in the Rights Offering (notwithstanding that such
Investor or affiliate may be a stockholder of record on the record date to be set for determining the stockholders entitled to participate in the Rights Offering). 
  
 2.2 Delivery. At each Closing, the Company will deliver to each Investor purchasing shares at such Closing a
certificate registered in such Investor’s name representing the number of Shares that such Investor is purchasing in such Closing against payment of the purchase price therefor as set forth in the column designated “Purchase Price”
opposite such Investor’s name on Exhibit A, by (i) check payable to the Company; (ii) wire transfer in accordance with the Company’s instructions; or (iii) any combination of the foregoing. 
  
 SECTION 3 
  
 Representations and Warranties of the Company 
  
 Except as set forth in a schedule prepared by the Company and delivered to
the Investors in connection with this Agreement (the “Schedule of Exceptions”), which Schedule of Exceptions may be amended and supplemented at each Closing, the Company represents and warrants to the Initial Closing Investors as of
the date of this Agreement with respect to the Shares sold at the Initial Closing (and to Investors purchasing Shares at any Subsequent Closing or Option Closing, as of the date of such Closing) with respect to such Shares as follows: 
  
 3.1 Organization and Standing. The Company is a corporation
duly organized and existing under, and by virtue of, the laws of the State of Delaware and is in good standing under such laws. The Company has the requisite corporate power and authority to own and operate its properties and assets, and to carry on
its business as presently conducted. The Company is presently qualified to do business as a foreign corporation in each jurisdiction where the failure to be so qualified could reasonably be expected to have a material adverse effect on the
Company’s business as now conducted or proposed to be conducted, assets (including intangible assets), capitalization, 
  

 -4- 

 operations, financial condition or results of operations (a “Material Adverse Effect”). Section 3.1 of
the Schedule of Exceptions sets forth all subsidiaries of the Company. Each of the Company’s subsidiaries is duly organized and existing under the laws of its jurisdiction of organization and, where applicable, is in good standing under such
laws. 
  
 3.2 Corporate Power. The Company has all
requisite legal and corporate power and authority to execute and deliver this Agreement and the Rights Agreement and will have, upon the filing of a certificate increasing the number of shares of the Company’s preferred stock designated as
Series A-2 Preferred pursuant to the Certificate of Incorporation (the “Amendment”) (which will take place prior to the Initial Closing), all requisite legal and corporate power to sell and issue the Shares issuable pursuant to this
Agreement and to carry and perform its obligations under the terms of this Agreement and the Rights Agreement (collectively, the “Agreements”). 
  

3.3 Capitalization. 
  
 (a) As of the date hereof, the authorized capital stock of the Company consists of 750,000,000 shares of Common Stock (the “Common
Stock”), of which 268,569,669 shares are issued and outstanding as of the date of this Agreement, and 5,000,000 shares of Preferred Stock, 2,224,110 of which are issued and outstanding as of the date of this Agreement. Upon filing of the
Amendment, 4,300,000 shares of the authorized shares of Preferred Stock will have been designated as Series A-2 Preferred Stock. 
  
 (b) The Company has presently reserved 61,284,021 shares of its Common Stock for issuance to employees, consultants, or directors under the following
equity incentive Plans: the 2000 Stock Incentive Plan, 2000 Employee Stock Purchase Plan, the 1997 Stock Option / Stock Issuance Plan, and the 1999 Stock Plan, each as amended to date (collectively, the “Stock Plans”). Options are
currently outstanding under the Stock Plans to acquire 60,069,582 shares of the Company’s Common Stock. The Company’s 2000 Employee Stock Purchase Plan is currently suspended, and the Company has no current plans to reinstate such plan.
The Company has outstanding warrants to acquire 3,411,977 shares of the Company’s Common Stock and outstanding warrants to acquire 241,800 shares of the Company’s Series A-2 Preferred. Except as set forth in this Agreement (including the
Schedule of Exceptions), no options, warrants, subscriptions, or purchase rights of any nature (including any conversion or preemptive rights) to acquire from the Company shares of its capital stock or other securities are authorized, issued, or
outstanding, nor is the Company obligated under its charter documents or under any agreement by which the Company is bound to issue shares of its capital stock or other securities except as contemplated by this Agreement. Apart from the exceptions
noted herein or in the Schedule of Exceptions, and except for rights of first refusal held by the Company to purchase, at the applicable original purchase price, shares of its stock issued under the Stock Plans or shares of its stock issued to
employees or consultants, no shares of the Company’s outstanding capital stock, or issuable upon exercise or exchange of any outstanding options, warrants or rights, or other stock issuable by the Company, including the Shares, are subject to
any preemptive rights, rights of first refusal or other rights to purchase such stock (whether in favor of the Company or any other person), pursuant to any agreement or commitment of the Company. All outstanding shares of the Company’s capital
stock have been duly authorized and validly issued and are fully paid and nonassessable and were issued in accordance with the registration or qualification provisions of the Securities Act and any relevant state securities laws, or pursuant to
valid exemptions therefrom. 
  

 -5- 

 3.4 Authorization. 
  
 (a) All corporate action on the part of the Company, its directors and its stockholders necessary for the authorization,
execution, delivery and performance of the Agreements by the Company, the authorization, sale, issuance and delivery of the Shares and the Common Stock issuable upon conversion of the Shares, and the performance of all of the Company’s
obligations under the Agreements has been taken. The Agreements, when executed and delivered by the Company, shall constitute valid and binding obligations of the Company, enforceable in accordance with their terms. 
  
 (b) The Shares, when issued in compliance with the provisions of this
Agreement, the Company’s Amended and Restated Certificate of Incorporation, as amended to date (the “Restated Certificate”), and the Certificate of Designation, (i) will be validly issued, fully paid, and nonassessable,
(ii) will have the rights, preferences, and privileges described in the Restated Certificate and the Certificate of Designation, and (iii) will be free of any liens or encumbrances, other than any liens or encumbrances created by or imposed upon the
Investors and provided that the Shares (and the Common Stock issuable upon conversion thereof) will be subject to restrictions on transfer under applicable state and/or federal securities laws. The Common Stock issuable upon conversion of the Shares
has been duly and validly authorized and reserved and such Common Stock, when issued in compliance with the Restated Certificate and the Certificate of Designation, will be validly issued, fully paid and nonassessable and will be free of any liens
or encumbrances, other than liens or encumbrances created by the holder thereof, and provided that such shares of Common Stock will be subject to restrictions on transfer under applicable state and/or federal securities laws. 
  
 3.5 Reports with the Securities and Exchange Commission. Since
September 30, 2004, the Company has timely filed all reports, materials and definitive proxy statements (the “SEC Documents”) required to be filed by it with the SEC under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). As of the time it was filed with the SEC (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing): (i) each of the SEC Documents complied in all material
respects with the applicable requirements of the Exchange Act; and (ii) none of the SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading. 
  
 3.6 Financial Statements. The consolidated financial statements of the Company contained in the SEC Documents (the “Financial
Statements”): (i) complied as to form in all material respects with the published rules and regulations of the SEC applicable thereto; (ii) were prepared in accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods covered, except as may be indicated in the notes to such financial statements and (in the case of unaudited statements) as permitted by Form 10-Q of the SEC subject to normal, recurring year-end audit adjustments; and
(iii) fairly present the consolidated financial position of 
  

 -6- 

 the Company and its subsidiaries as of the respective dates thereof and the consolidated results of operations of the
Company and its subsidiaries for the periods covered thereby. The Company has no material debt, liability or obligation of any nature, whether accrued, absolute, contingent or otherwise, and whether due or to become due, that is not reflected or
reserved against in the Financial Statements, except for those described in the Current Report on Form 8-K filed December 20, 2004 and those that may have been incurred after the date of the Financial Statements in the ordinary course of its
business, consistent with past practice and that are not material in amount either individually or collectively. Except as disclosed in the Financial Statements, the Company is not a guarantor or indemnitor of any indebtedness of any other person,
firm or corporation. 
  
 3.7 No Material Adverse
Change. Since September 30, 2004, the Company has conducted its business in the ordinary course, consistent with past practice (except as may be otherwise disclosed in the SEC Documents), and there has not occurred (i) any material adverse
change in the business, financial condition, or result of operations of the Company or any of its subsidiaries or (ii) any damage to, destruction or loss of any assets of the Company or any of its subsidiaries (whether or not covered by insurance)
that could reasonably be expected to have a Material Adverse Effect. Notwithstanding the foregoing, the Company is not profitable and does not generate positive cash-flows from operations, has continued to use cash to fund its operations since
September 30, 2004, and expects to continue to use cash to fund its operations through the date of the Initial Closing and thereafter. There has been no material change in the Company’s accounting policies except as described in the SEC
Documents. 
  
 3.8 Compliance with Other
Instruments. The Company is not in violation of (i) any term of its Restated Certificate or Bylaws, each as amended to date, or (ii) any term or provision of any mortgage, indebtedness, indenture, contract, agreement, instrument, judgment,
order or decree to which it is party or by which it is bound, where such violation would reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its subsidiaries is in violation of any applicable federal or state
statute, rule or regulation, where such violation would reasonably be expected to have a Material Adverse Effect. The execution, delivery and performance of and compliance with the Agreements, and the issuance of the Shares, will not result in any
violation of, or conflict with, or constitute a default under (i) the Restated Certificate or Bylaws or (ii) any agreements to which the Company or any of its subsidiaries is a party or any applicable statute, rule, regulation, order, or restriction
of any federal or state governmental entity or agency thereof, where such violation, conflict or default would reasonably be expected to have a Material Adverse Effect, nor (iii) result in the creation of any mortgage, pledge, lien, encumbrance, or
charge upon any of the properties or assets of the Company or any of its subsidiaries that could reasonably be expected to have a Material Adverse Effect. 
  
 3.9 Governmental Consent. No consent, approval or authorization of or designation, declaration or filing with any governmental authority on
the part of the Company is required in connection with the valid execution and delivery of the Agreements, or the offer, sale or issuance of the Shares and the Common Stock issuable upon conversion of the Shares, or the consummation of any other
transaction contemplated by this Agreement, except (i) filing of the Amendment with the office of the Secretary of State of the State of Delaware; (ii) compliance with any applicable filing 
  

 -7- 

 requirements of the Securities Act or the Exchange Act; (iii) qualification (or taking such action as may be necessary to
secure an exemption from qualification, if available) of the offer and sale of the Shares and the Common Stock issuable upon conversion of the Shares, under applicable U.S. federal and state securities laws; and (iv) other filings, notifications,
and consents that are immaterial to the consummation of the transactions contemplated hereby. 
  
 3.10 Litigation. Except as disclosed in the SEC Documents, there is no action, suit, or proceeding of any nature pending or, to the Company’s knowledge, threatened, which would reasonably be
expected to have a Material Adverse Effect. The Company does not know of any investigation currently pending or threatened. 
  
 3.11 Offering. Subject to the accuracy of the Investors’ representations and warranties in Section 4, the offer, sale and issuance of
the Shares to be issued in conformity with the terms of this Agreement and the issuance of the Common Stock to be issued upon conversion of the Shares and the filing of the Amendment as specified in Section 5.5 hereof, constitute transactions exempt
from the registration requirements of Section 5 of the Securities Act and from the qualification requirements of the California Corporate Securities Law of 1968, as amended, and from the registration and qualification requirements of all other
applicable states as represented to the Company by the Investors in Section 4.5. 
  
 3.12 Brokers or Finders. The Company has not engaged any brokers, finders or agents, and the Investors have not incurred, and will not incur, directly or indirectly, as a result of any action taken by
the Company, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with the Agreements. 
  
 3.13 Registration Rights; Voting Agreements. Except as provided in the Rights Agreement, the Company is not under any obligation to register
under the Securities Act any of its currently outstanding securities or any securities issuable upon exercise or conversion of its currently outstanding securities nor is the Company obligated to register or qualify any such securities under any
state securities or blue sky laws. Neither the Company, nor, to the Company’s knowledge, any stockholder of the Company is party to any agreement relating to the voting of the Company’s stock. 
  
 3.14 Status of Proprietary Assets; No Breach. The Company has
full title and ownership of, or is duly licensed under or otherwise authorized to use, all patents, trademarks, service marks, trade names, copyrights, trade secrets, confidential and proprietary information and proprietary rights (all of the
foregoing collectively hereinafter referred to as the “Proprietary Assets”), necessary to enable it to carry on its business as now conducted without any conflict with or infringement upon the rights of others. To the Company’s
knowledge, no third party has any ownership right, title, interest, claim in or lien on any of the Company’s Proprietary Assets and the Company has taken all steps reasonably necessary to preserve its legal rights in, and the secrecy of, all
its Proprietary Assets, except those for which disclosure is required for legitimate business or legal reasons. The Company has not breached, nor does the Company have any knowledge of any claim or threat that the Company has breached, any material
term or condition of any agreement, contract, lease, license, instrument, or commitment to which the Company is a party relating to any Proprietary Assets of the Company or any third party. The Company has not received any 
  

 -8- 

 communications alleging that the Company has violated or, by conducting its business as proposed, would violate any of
the patents, trademarks, service marks, trade names, copyrights or trade secrets or other proprietary rights of any other person or entity and the Company is not aware of any reasonable bias for such an allegation. 
  
 3.15 Environmental Matters. The Company knows of no violation
or violations by the Company, its employees or agents of any environmental or safety statute, law or regulation that in the aggregate would have a Material Adverse Effect and to its knowledge, no material expenditures are or will be required in
order to comply with any such existing statute, law or regulation. No action, proceeding, permit revocation, writ, injunction or claim is pending or, to the Company’s knowledge, threatened concerning the Company’s facilities and the
Company is not aware of any fact or circumstance which could involve the Company in any environmental litigation or impose any material environmental liability upon the Company. No Hazardous Material (as defined below) is present on any Company
facility and, to the Company’s knowledge, no reasonable likelihood exists that any Hazardous Material present on other property will come to be present on a Company facility. There are no underground storage tanks, asbestos or PCBs present on
any Company facility. For the purposes of this section, the term “Hazardous Material” shall mean any material or substance that is prohibited or regulated by any environmental law or that has been designated by any governmental authority
to be radioactive, toxic, hazardous or otherwise a danger to health, reproduction or the environment. 
  
 3.16 No Prior Transactions. Neither the Company nor any of its officers, directors or subsidiaries (nor to the Company’s knowledge any
of the affiliates or any investment banker, attorney or other advisor or representative retained by the Company or its subsidiaries) have during the 30 day period prior to execution and delivery of this Agreement, directly or indirectly, purchased,
sold, offered to purchase or sell, contracted to purchase or sell (including, without limitation, any short sale), granted any option to purchase (other than options granted to employees, directors or consultants under the Stock Plans in the
ordinary course of the Company’s business) or option to sell, pledged, loaned, or otherwise acquired or disposed of any securities of the Company, or encouraged any other person to do any of the foregoing. 
  
 3.17 Tax Returns, Payments and Elections. The Company has filed
all material tax returns and reports (including information returns and reports) as required by law. These returns and reports are true and correct in all material respects except to the extent that a reserve has been reflected on the Financial
Statements in accordance with generally accepted accounting principles. The Company has paid all taxes and other assessments due, except those contested by it in good faith that are listed in the Schedule of Exceptions and except to the extent that
a reserve has been reflected on the Financial Statements in accordance with generally accepted accounting principles. The Company does not currently have any tax deficiency proposed or assessed against it and has not executed any outstanding waiver
of any statute of limitations on the assessment or collection of any tax or governmental charge. None of the Company’s federal income tax returns and none of its state income or franchise tax or sales or use tax returns is currently being
audited by governmental authorities. Since September 30, 2004, the Company has not incurred any taxes, assessments or governmental charges other than in the ordinary course of business and the Company has made adequate provisions on its books of
account in accordance with generally accepted accounting 
  

 -9- 

 principles for all taxes, assessments and governmental charges with respect to its business, properties and operations
for such period. The Company has withheld or collected from each payment made to each of its employees, the amount of all taxes (including, but not limited to, federal income taxes, Federal Insurance Contribution Act taxes and Federal Unemployment
Tax Act taxes) required to be withheld or collected therefrom, and has paid the same to the proper tax receiving officers or authorized depositories. 
  
 SECTION 4 
  
 Representations and Warranties of the Investors 
  
 Each Investor severally represents and warrants to the Company with respect to the purchase of the Shares and the underlying Common Stock as follows:

  
 4.1 Investment Intent. The Investor understands
that the Shares, and the underlying Common Stock, have not been registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things,
the bona fide nature of the investment intent and the accuracy of the Investor’s representations as expressed herein or otherwise made pursuant hereto. The Investor is acquiring the Shares, and the Common Stock to be issued upon conversion of
the Shares, for investment for its own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution thereof. 
  

4.2 Speculative Nature of Investment. The Investor acknowledges that its investment in the Company is highly speculative and entails a
substantial degree of risk and the Investor is in a position to lose the entire amount of such investment, and the Investor has full cognizance of and understands all of the risks related to such Investor’s purchase of the Shares, including,
but not limited to, those risk factors set forth in the Company’s SEC Documents. The Investor understands (i) that the Company’s Common Stock is traded on the over-the-counter bulletin board and not on any established securities exchange
or dealer quotation system and (ii) that a sizeable liquid market does not exist for any of the Company’s securities. 
  
 4.3 Access to Data. Each Investor has requested, received, reviewed and considered all information such Investor deems relevant in making an
informed decision to purchase the Shares. Each Investor has had an opportunity to discuss the Company’s business, management and financial affairs with its management and also had an opportunity to ask questions of officers of the Company that
were answered to such Investor’s satisfaction. Each Investor understands that such discussions, as well as any written information issued by the Company, were intended to describe certain aspects of the Company’s business and prospects but
were not a thorough or exhaustive description. 
  
 4.4
Accredited Investor and Investment Experience. The Investor is an “accredited investor” within the meaning of Regulation D, Rule 501(a), promulgated by the Securities and Exchange Commission. The Investor has substantial
experience in evaluating and investing in private placement transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its
own interests. 

	

  

 -10- 

 4.5 Residency. The residency of the Investor (or, in the case of a partnership or
corporation, such entity’s principal place of business) is correctly set forth on Exhibit A. 
  
 4.6 Restriction on Resales. Subject to the Company’s obligations under the Rights Agreement, the Investor acknowledges that the Shares,
and the underlying Common Stock, must be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from such registration is available. The Investor understands that there is no assurance that any exemption
from registration under the Securities Act will be available for any such resale or, that even if available, that such exemption will allow Investor to dispose of or otherwise transfer any or all of the Shares, or the underlying Common Stock under
the circumstances, in the amounts or at the times the Investor might propose. 
  
 4.7 Rule 144. The Investor is aware of the provisions of Rule 144 promulgated under the Securities Act which permit limited resale of shares purchased in a private placement subject to the satisfaction
of certain conditions, including among other things, the existence of a public market for the shares, the availability of certain current public information about the Company, the resale occurring not less than one year after a party has purchased
and paid for the security to be sold, the sales being effected through a “broker’s transaction” or in transactions directly with a “market maker” and the number of shares being sold during any three-month period not
exceeding specified limitations. The Investor acknowledges and understands that notwithstanding any obligation under the Rights Agreement, the Company may not be satisfying the current public information requirement of Rule 144 at the time the
Investor wishes to sell the Shares or the underlying Common Stock, and that, in such event, the Investor may be precluded from selling such securities under Rule 144, even if the other requirements of Rule 144 have been satisfied. The Investor
acknowledges that, in the event all of the requirements of Rule 144 are not met, registration under the Securities Act or an exemption from registration will be required for any disposition of the Shares or the underlying Common Stock. The Investor
understands that, although Rule 144 is not exclusive, the Securities and Exchange Commission has expressed its opinion that persons proposing to sell restricted securities received in a private offering other than in a registered offering or
pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales and that such persons and the brokers who participate in the transactions do so at their own risk.

  
 4.8 Authorization. 
  
 (a) The Investor has all requisite power and authority to execute and
deliver the Agreements, to purchase the Shares hereunder and to carry out and perform its obligations under the terms of the Agreements. All action on the part of the Investor necessary for the authorization, execution, delivery and performance of
the Agreements, and the performance of all of the Investor’s obligations under the Agreements, has been taken or will be taken prior to the Closing. 
  

 -11- 

 (b) The Agreements, when executed and delivered by the Investor, will constitute valid and legally
binding obligations of the Investor, enforceable in accordance with their terms. 
  
 (c) No consent, approval, authorization, order, filing, registration or qualification of or with any court, governmental authority or third person is required to be obtained by the Investor in connection with the
execution and delivery of the Agreements or the performance of the Investor’s obligations hereunder or thereunder. 
  
 4.9 Brokers or Finders. The Investor has not engaged any brokers, finders or agents, and neither the Company nor any other Investor has, nor
will, incur, directly or indirectly, as a result of any action taken by the Investor, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with the Agreements. 
  
 4.10 Investor Counsel. The Investor acknowledges that it has
had the opportunity to review the Agreements, the exhibits and schedules attached hereto and thereto and the transactions contemplated by the Agreements with its own legal counsel. Each Investor is relying solely on such counsel and not on any
statements or representations of the Company or its agents for legal advice with respect to this investment or the transactions contemplated by the Agreements. 
  

4.11 Tax Advisors. The Investor has reviewed with its own tax advisors the U.S. federal, state, local and foreign tax consequences of
this investment and the transactions contemplated by the Agreements. With respect to such matters, the Investor relies solely on such advisors and not on any statements or representations of the Company or any of its agents, written or oral. The
Investor understands that it (and not the Company) shall be responsible for its own tax liability that may arise as a result of this investment or the transactions contemplated by the Agreements. 
  
 4.12 Legends. Such Investor understands and agrees that the
certificates evidencing the Shares or any Common Stock issuable upon conversion thereof, or any other securities issued in respect of the Shares or any Common Stock issuable upon conversion thereof upon any stock split, stock dividend,
recapitalization, merger, consolidation or similar event, shall bear the legends required by the Rights Agreement, including legends relating to restrictions on transfer under federal and state securities laws and legends required under applicable
state securities laws. 
  
 4.13 No Prior
Transactions. Such Investor has not, during the 30-day period prior to execution and delivery of this Agreement, purchased or sold, directly or indirectly, any securities of the Company and has not otherwise engaged in any transaction in the
Company’s securities. Without limiting the foregoing, the Investor has not, directly or indirectly, purchased, sold, offered to purchase or sell, contracted to purchase or sell (including, without limitation, any short sale), granted any option
to purchase or sell, pledged, loaned, or otherwise acquired or disposed of any securities of the Company, or encouraged any other person to do any of the foregoing. 
  

 -12- 

 SECTION 5 
  

Conditions to Investors’ Obligations to Close 
  
 An Investor’s obligation to purchase the Shares at a Closing is subject to the fulfillment on or before the Closing of
each of the following conditions, unless waived by the applicable Investor purchasing the Shares in such Closing: 
  
 5.1 Representations and Warranties. Except as set forth on the Schedule of Exceptions (as may be amended from time to time prior to each
Closing), the representations and warranties made by the Company in Section 3 shall be true and correct as of each Closing. 
  
 5.2 Covenants. All covenants, agreements and conditions contained in the Agreements to be performed by the Company on or prior to the
Closing Date shall have been performed or complied with as of the Closing Date. 
  
 5.3 Closing Certificate. The Company shall have delivered to each Investor at the Closing a certificate signed on its behalf by its President, Chief Executive Officer, or Chief Financial Officer
certifying that the conditions specified in Sections 5.1 and 5.2 have been fulfilled and stating that there shall have been no Material Adverse Effect with respect to the Company not previously disclosed to the Investors in writing. 
  
 5.4 Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to each Investor and to the Investors’ counsel. At each Closing, the Company
shall have delivered to each Investor a certificate signed on its behalf by its Secretary attaching and certifying to the truth and correctness of (1) the Restated Certificate, (2) the bylaws of the Company and (3) the board resolutions adopted in
connection with the transactions contemplated by this Agreement and (4) good standing certificates of the Company from each jurisdiction where the Company is authorized to do business. 
  
 5.5 Amendment to Certificate of Designation. The Amendment
shall have been duly authorized, executed and filed with and accepted by the Secretary of State of the State of Delaware. 
  
 5.6 Rights Agreement. The Company and the Investors shall have executed and delivered the Rights Agreement in substantially the form
attached as Exhibit C. 
  
 5.7 Opinion of Company
Counsel. Each Investor shall have received an opinion from Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel for the Company, dated as of the Closing, in a form reasonably satisfactory to the counsel to
the lead Investor. 
  
 5.8 Qualifications. Any
filing required to comply with the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended, and except for such as may be properly filed subsequent to Closing, required in connection with the lawful issuance and sale of the Shares and the
Common Stock issuable upon conversion of the Shares pursuant to this Agreement, shall be obtained and effective as of the Closing. 
  

 -13- 

 SECTION 6 
  

Conditions to Company’s Obligation to Close 
  

The Company’s obligation to sell and issue the Shares at a Closing is subject to the fulfillment on or before the Closing of the following
conditions, unless waived by the Company: 
  
 6.1
Representations and Warranties. The representations and warranties made by the Investors in Section 4 shall have been true and correct when made. 
  
 6.2 Covenants. All covenants, agreements and conditions contained in the Agreements to be performed by Investors on or prior to the Closing
Date shall have been performed or complied with as of the Closing Date. 
  
 6.3 Compliance with Securities Laws. The Company shall be satisfied that the offer and sale of the Shares and the underlying Common Stock shall be qualified or exempt from registration or qualification under all applicable
federal and state securities laws. 
  
 6.4 Amendment to
Certificate of Designation. The Amendment shall have been duly authorized, executed and filed with and accepted by the Secretary of State of the State of Delaware. 
  
 6.5 Rights Agreement. The Company and the Investors shall have executed and delivered the Rights Agreement in
substantially the form attached as Exhibit C. 
  
 SECTION 7

  
 Miscellaneous 
  
 7.1 Amendment. 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 referencing this Agreement and signed by the Company and the Investors holding 85% in interest of the Common Stock issued or
issuable upon conversion of the Shares issued pursuant to this Agreement (excluding any of such shares that have been sold to the public or pursuant to Rule 144); provided, however, that Investors purchasing shares in any Subsequent
Closing may become parties to this Agreement in accordance with Section 2.1 without any amendment of this Agreement pursuant to this paragraph or any consent or approval of any other Investor. Any such amendment, waiver, discharge or termination
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 have been converted or exchanged or for which such
securities have been exercised) and each future holder of all such securities, provided, however, that if such amendment adversely affects one or more Investors, but does not so affect all Investors, then the 
  

 -14- 

 adversely affected Investors must agree to be bound by such amendment. Each Investor acknowledges that by the operation
of this paragraph, the holders of 85% of the Common Stock issued or issuable upon conversion of the Shares issued pursuant to this Agreement (excluding any of such shares that have been sold to the public or pursuant to Rule 144) will have the right
and power to diminish or eliminate all rights of such Investor under this Agreement. 
  
 7.2 Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, sent by facsimile, or otherwise
delivered by hand or by messenger addressed: 
  
 (a) if to an
Investor, at the Investor’s address or facsimile number as shown on Exhibit A; 
  
 (b) if to any other holder of any Shares or the underlying Common Stock, to such address as such holder have furnished the Company in writing, or until such holder has furnished an address to the Company, then to the
last address of the last holder of such shares who has so furnished an address to the Company; or 
  
 (c) if to the Company, one copy should be sent to its address at 77 Robin Hill Road, Santa Barbara, California 93117 or facsimile number at (805) 692-2999
and addressed to the attention of the President, or at such other address or facsimile number as the Company shall have furnished to the Investors; with a copy to Wilson Sonsini Goodrich & Rosati, Professional Corporation at 650 Page Mill Road,
Palo Alto, California 94304-1050 and addressed to the attention to Thomas C. DeFilipps and Robert F. Kornegay. 
  
 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 or, if sent by facsimile,
upon confirmation of facsimile transfer. Any party may amend its address for receipt of notice by delivering written instructions to the other parties in accordance with this Section 7.2. 
  
 7.3 Expenses. The Company and the Investors shall each pay their own expenses in connection with the
transactions contemplated by this Agreement; provided, however, that the Company shall reimburse the reasonable, documented fees and expenses of Morrison & Foerster LLP, as counsel to the Investors, in connection with this
Agreement and any Closing hereunder. 
  
 7.4
Survival. The representations, warranties, covenants and agreements made in this Agreement shall survive any investigation made by any party hereto and the closing of the transactions contemplated hereby for six months from the date of
the Initial Closing. 
  
 7.5 Successors and Assigns.
This Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by any Investor without the prior written consent of the Company. Any attempt by an Investor without such
permission to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under 
  

 -15- 

 this Agreement shall be void. Subject to the foregoing and except as otherwise provided herein, the provisions of this
Agreement shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors, assigns, heirs, executors and administrators any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 
  
 7.6 Entire Agreement. This Agreement, the other Agreements and
the exhibits and schedules thereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof, and no party shall be liable or bound to any other party in any manner with regard to
the subjects hereof or thereof by any warranties, representations or covenants except as specifically set forth herein or therein. 
  
 7.7 Delays or Omissions. Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any
party to this Agreement upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective
only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party to this Agreement, shall be cumulative and not alternative. 
  
 7.8 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, and the parties agree to negotiate, in good faith, a legal and
enforceable substitute provision which most nearly effects the parties’ intent in entering into this Agreement. Notwithstanding the foregoing, no such severability shall be effective if it materially changes the economic benefit of this
Agreement to any party. 
  
 7.9 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. 
  
 7.10 Telecopy Execution and Delivery. A facsimile, telecopy or
other reproduction of this Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement may be delivered by one or more parties hereto by facsimile or similar electronic transmission device pursuant to which the
signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute an original of this
Agreement as well as any facsimile, telecopy or other reproduction hereof. 
  

 -16- 

 7.11 Governing Law, Jurisdiction and Venue. This Agreement shall be governed in all
respects by the internal laws of the State of California, without regard to principles of conflicts of law. With respect to any disputes arising out of or related to this Agreement, the parties consent to the exclusive jurisdiction of, and venue in,
the state courts in the County of Santa Clara in the State of California (or in the event of exclusive federal jurisdiction, the courts of the Northern District of California). 
  
 7.12 Waiver of Potential Conflicts of Interest. Each of the Investors and the Company acknowledges that Wilson
Sonsini Goodrich & Rosati, Professional Corporation (“WSGR”) may have represented and may currently represent certain of the Investors. In the course of such representation, WSGR may have come into possession of confidential
information relating to such Investors. Each of the Investors and the Company acknowledges that WSGR is representing only the Company in this transaction. Each of the Investors and the Company understands that an affiliate of WSGR may also be an
Investor under this Agreement or may otherwise be an equity holder of the Company. Pursuant to Rule 3-310 of the Rules of Professional Conduct promulgated by the State Bar of California, an attorney must avoid representations in which the attorney
has or had a relationship with another party interested in the representation without the informed written consent of all parties affected. By executing this Agreement, each of the Investors and the Company hereby waives any actual or potential
conflict of interest which may arise as a result of WSGR’s representation of such persons and entities, WSGR’s possession of such confidential information and the participation by WSGR’s affiliate in the financing. Each of the
Investors and the Company represents that it has had the opportunity to consult with independent counsel concerning the giving of this waiver. 
  
 * * * * * 
  

 -17- 

 IN WITNESS WHEREOF, this Series A-2 Preferred Stock Purchase Agreement is executed as of the date first
written above. 
  

			
	“COMPANY”
	
	 OCCAM NETWORKS, INC.

	 a Delaware corporation

		
	 By:
	 	 /s/ Howard Bailey

	 Name:
	 	 Howard Bailey

	 Title:
	 	 Chief Financial Officer

  

 [Signature Page to Series A-2 Preferred Stock Purchase Agreement] 

			
	“INVESTOR”
	
	ALTA CAPITAL PARTNERS III, L.P.
	By: Alta California Management Partners III, LLC
		
	 By:
	 	 /s/ Khaled A. Nasr

	 	 	 Director

	
	ALTA EMBARCADERO PARTNERS III, LLC
		
	 By:
	 	 /s/ Hilary Strain

	 	 	 V.P. of Finance and Administration

  

 [Signature Page to Series A-2 Preferred Stock Purchase Agreement] 

			
	“INVESTOR”
	
	 U.S. Venture Partners VII, L.P.
 2180 Associates Fund VII, L.P.
 USVP Entrepreneur Partners VII-A, L.P.
 USVP Entrepreneur Partners VII-B, L.P.
 By Presidio Management Group VII, L.L.C.
 The General Partner of Each

		
	 By:
	 	 /s/ Michael P. Maher

	 Name:
	 	 Michael P. Maher

	 Title:
	 	 Attorney-In-Fact

	
	 U.S. Venture Partners V, L.P.
 USVP V International, L.P.
 2180 Associates Fund V, L.P.
 USVP V Entrepreneur Partners, L.P.
 By Presidio Management Group V, L.L.C.
 The General Partner of Each

		
	 By:
	 	 /s/ Michael P. Maher

	 Name:
	 	 Michael P. Maher

	 Title:
	 	 Attorney-In-Fact

  

 [Signature Page to Series A-2 Preferred Stock Purchase Agreement] 

			
	“INVESTOR”
	
	 Norwest Venture Partners VIII, L.P.
 By: Itasca VC Partners VIII, LLP
 Its: General Partner

		
	 By:
	 	 /s/ Promod Haque

	 Name:
	 	 Promod Haque

	 Title:
	 	 Managing Partner

	
	 NVP Entrepreneurs Fund VIII, L.P.
 By: Itasca VC Partners VIII, LLP
 Its: General Partner

		
	 By:
	 	 /s/ Promod Haque

	 Name:
	 	 Promod Haque

	 Title:
	 	 Managing Partner

  

 [Signature Page to Series A-2 Preferred Stock Purchase Agreement] 

			
	“INVESTOR”
	
	 New Enterprise Associates 9, L.P.

	 By: NEA Partners 9, L.P.

	 Its General Partner

		
	 By:
	 	 /s/ Charles W. Newhall III

		
	 Name:
	 	 Charles W. Newhall III

		
	 Title:
	 	 General Partner

  

 [Signature Page to Series A-2 Preferred Stock Purchase Agreement] 

 EXHIBIT A-1 
  
 SCHEDULE OF INVESTORS 
  
 Initial Closing 
  

						
	 Investor

	  	Number of
Series A-2 Shares

	  	Purchase Price

	 Alta California Partners III, L.P.
 Alta Embarcadero Partners III, LLC.
  
 One Embarcadero Center
 Suite 4050
 San Francisco, CA 94111
 Attention: Khaled Nasr
 Fax: (415) 362-6178
	  	120,917
4,083	  	$
$	1,209,170
40,830
			
	 U.S. Venture Partners VII, L.P.
 2180 Associates Fund VII, L.P.
 USVP Entrepreneur Partners VII-A, L.P.
 USVP Entrepreneur Partners VII-B, L.P.
 U.S. Venture Partners V, L.P.
 USVP V International, L.P.
 2180 Associates Fund V, L.P.
 USVP V Entrepreneur Partners, L.P.
  
 2735 Sand Hill Road
 Menlo Park, CA 94025
 Attention: Chief Financial Officer
 Fax: (650) 854-3018
	  	123,200
2,567
1,283
1,283
10,500
583
327
257	  	$
 
 
 
 
 
 
 	1,232,000
25,670
12,830
12,830
105,000
5,830
3,270
2,570
			
	 Norwest Venture Partners VIII, L.P.
 NVP Entrepreneurs Fund VIII, L.P.
  
 525 University Avenue,
 Suite 800
 Palo Alto, CA 94301
 Attention: Robert Abbott
 Fax: (650) 321-8010
	  	178,625
8,875	  	$
 	1,786,250
88,750
			
	 New Enterprise Associates 9, L.P.
  
 2490 Sand Hill Road
 Menlo Park, CA 94025
 Attention: Thomas C. McConnell
 Fax: (650) 854-9397
	  	75,000	  	$	750,000
	 	  	
	  	
	

	 Total
	  	527,500	  	$	5,275,000
	 	  	
	  	
	

 EXHIBIT A-2 
  
 SCHEDULE OF INVESTORS 
  

 EXHIBIT B 
  
 FORM OF CERTIFICATE OF DESIGNATION 

 EXHIBIT C 
  
 FORM OF FOURTH AMENDED AND RESTATED 
 INVESTORS’ RIGHTS AGREEMENT

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