Retix/Vertel Announces Investment Partnership in Sonoma Systems; Retix to Focus Solely on Telecommunications and Enterprise Software Markets with Vertel.WOODLAND HILLS, Calif.--(BUSINESS WIRE)--Jan. 16, 1998-- Retix(R)(Vertel(R)) (Nasdaq:RETX) Friday announced the signing of a definitive agreement for a new multimillion dollar investment in the company's broadband access See broadband and wireless broadband. equipment subsidiary, Sonoma Systems(TM). The new investor group includes several leading networking and communications industry communications industry, broadly defined, the business of conveying information. Although communication by means of symbols and gestures dates to the beginning of human history, the term generally refers to mass communications. venture capital firms Name Location Founding date Managing Partners/Directors Specialty Capital managed 5AM Ventures Menlo Park, CA; Waltham, MA 2002 John Diekman, PhD (managing partner), Scott Rocklage, PhD (managing partner), Andrew Schwab (managing partner) life sciences $200M [1] including Crosspoint Venture Partners, with more than $300 million in capital under management, and VantagePoint Venture Partners serving as co-lead investors. Retix(Vertel) will retain a minority investment in Sonoma Systems with the current CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Sonoma, Gregory Koss, continuing in that position. Sonoma will now be managed on a standalone basis as a privately held corporation Noun 1. privately held corporation - a corporation owned by a few people; shares have no public market close corporation, closed corporation, private corporation . With this investment, Retix(Vertel) will now focus solely on the telecommunications software market, the details of which were outlined in the Retix(Vertel) news release issued on Jan. 5, 1998. The new investment includes the issuance of preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. by Sonoma Systems and provides $9 million of additional cash for intended rapid expansion of their product lines and aggressive market development efforts. As a result of this external financing In the theory of capital structure, External financing is the phrase used to describe funds that firms obtain from outside of the firm. It is contrasted to internal financing which consists mainly of profits retained by the firm for investment. , Retix(Vertel)'s ownership in Sonoma Systems, after giving full effect of currently reserved or issued employee stock options, will be 19.9 percent. In addition to its equity ownership, Sonoma Systems will issue Retix(Vertel) $1 million in redeemable, non-voting, non-converting preferred stock. "This investment will allow Retix to address aggressively the TMN (Telecommunications Management Network) A set of international standards for network management from the ITU. It is used by large carriers such as Sprint, Verizon and AT&T. (telecommunications management network The Telecommunications Management Network is a protocol model defined by ITU-T for managing open systems in a communications network. It is part of the ITU-T Recommendation series M.3000 and is based on the OSI management specifications in ITU-T Recommendation series X.700. ) market opportunities at Vertel while retaining an interest and participating in the future success of Sonoma Systems," said Bruce Brown, president and chief executive officer of Retix(Vertel). "We believe the investment-to-reward relationship for the Retix shareholder is much stronger with this approach as it allows Retix to commit its resources to Vertel's pre-eminent position in telecom management software while leveraging the expertise of this new investor team to advance the business of Sonoma Systems." The investment in Sonoma Systems advances Crosspoint's interest in one of the fastest-growing markets today, ATM WAN equipment access and services. "Our investment decision was driven by several compelling aspects of Sonoma Systems' solution to provide LAN (Local Area Network) A communications network that serves users within a confined geographical area. The "clients" are the user's workstations typically running Windows, although Mac and Linux clients are also used. connectivity to ATM services with breakthrough price, performance and ease-of-use leadership," noted Bob Hoff, general partner of Crosspoint Venture Partners. "Sonoma Systems' unique application of the Pentium-based processor and PCI bus PCI bus - Peripheral Component Interconnect architecture coupled with the industry's first dynamically loading software routines provides the nucleus for an exciting multimedia broadband access product roadmap. "The product, combined with the strength of the Sonoma team, current customer base and reseller relationship with Newbridge Networks Newbridge Networks was an Ottawa, Ontario, Canada company founded by Canadian/Welsh entrepreneur Terry Matthews. It was founded in 1986 to create data and voice networking products after Matthews was forced out of his original company Mitel. places Sonoma Systems at the forefront with the opportunity to capture a leadership position in the emerging ATM access equipment market." Jeff Marshall, managing partner of VantagePoint Venture Partners said, "Companies and products that address four key elements in the high-speed access market are well-positioned to win in the next generation CLEC/ISP and access services market construction programs. "The four critical elements are: low cost, high performance, upgrade ease and installation simplicity. The new service provider networks can no longer tolerate $20,000 to $60,000 access solutions to meet their financial models for large, profitable net deployments. Next generation networks, which will handle multiple services, can only survive if they are built at the lowest possible cost with the required performance. "The new type of service provider networks will use success-based capital programs that call on the need to harness tactical, easy to use, easy to deploy, off-the-shelf technologies rather than old technology that is being revamped to attempt to address this rapidly unfolding market segment. "Sonoma Systems is an outstanding company with a product set we have found to meet the ATM access market requirements. Sonoma has mastered all the check list items for success with the Sonoma Access product line." "We were excited by the interest expressed by many venture firms in our company and pleased to be able to attract this group as the initial outside equity investors in Sonoma Systems," said Gregory Koss, president and chief executive officer of Sonoma Systems. "Our new partners provide us with extraordinary industry expertise, connections and hands-on operational experience as well as a proven track record of supporting successful, fast-growing enterprises in the networking market." About Sonoma Systems Sonoma Systems is an emerging vendor focused on the service provider and ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. market with a mission to provide complete connectivity for multimedia broadband access with price, performance and ease-of-use leadership. Sonoma Systems headquarters is in Marina del Rey Del Rey may refer to:
About Crosspoint Ventures Crosspoint's principal limited partners include the AT&T Investment Management Fund, General Motors Master Trusts, Ameritech, NYNEX NYNEX New York-New England & X for the Unknown (Telephone Company) NYNEX New York Network Exchange and John Deere Pension funds, John Hancock Venture Capital Management, Norwest Venture Partners, the endowments of the Massachusetts Institute of Technology Massachusetts Institute of Technology, at Cambridge; coeducational; chartered 1861, opened 1865 in Boston, moved 1916. It has long been recognized as an outstanding technological institute and its Sloan School of Management has notable programs in business, , Yale University, Harvard University, University of Chicago and the Hewlett Foundation, among others. Crosspoint Ventures has played an important role in funding and building several successful companies in the networking and communications industries, including PairGain Technologies, PowerWave, Xylan xylan /xy·lan/ (zi´lan) any of a group of pentosans composed of xylose residues; major structural constituents of wood, straw, and bran. Corp. and Hello Direct. Crosspoint Venture Partners is based in Irvine and Woodside, Calif. About VantagePoint Venture VantagePoint is a leading next generation network and technologies venture fund based in San Bruno, Calif., and Stamford, Conn. The three general partners combine more than 50 years of experience working with leading-edge technology companies and more than 150 new public technology companies. About Retix(Vertel) Retix(Vertel) focuses on the VERtical integration of TELecommunications software for specific TMN users. The company provides advanced telecommunications management solutions including communications infrastructure products, network management platforms and applications software for telecommunication carrier networks worldwide. In addition, Vertel serves telecommunication equipment manufacturers, computer systems OEMs and Internet access providers. The company is based in Woodland Hills and has sales offices throughout the world. Contact Retix(Vertel) on the World Wide Web at http://www.vertel.com . -0- "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statements under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Except for the historical information presented, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties, including the risks that the current invested capital of $9 million may not be sufficient to fully fund product and market development activities required to operate in the ATM access market and additional investment capital may not be available to Sonoma Systems as needed as needed prn. See prn order. or on reasonable terms, that Retix(Vertel)'s ownership position in Sonoma Systems is likely to decline if additional funding is required and Retix(Vertel) is unable or unwilling to participate, that Retix(Vertel) is a minority shareholder in Sonoma Systems and therefore will not have any significant influence over Sonoma's future direction or operations, that Sonoma may not timely and successfully deploy its new and enhanced broadband access products, that competitive products may impact Sonoma's success, that Sonoma is dependent on key partners and alliances, and the other risks detailed from time to time in Retix(Vertel)'s public disclosure filings with the U.S. Securities and Exchange Commission (SEC). Copies of the most recent Forms 10K and 10Q are available upon request from Retix(Vertel)'s investor relations Investor relations The process by which the corporation communicates with its investors. department. -0- Note to Editors: Vertel is a registered trademark of Vertel. Retix is a registered trademark of Retix. Sonoma Access is a registered trademark of Sonoma Systems. All other trademarks are owned by their respective companies. CONTACT: Retix(Vertel), Woodland Hills Jim Brill/Vicki Vaughn, 818/227-5730 (financial) investor-relations@vertel.com or Sonoma Systems, Marina del Rey John F. Mazzaferro, 310/827-8000, ext. 552 (editorial) 310/305-2525 (fax) john-mazzaferro@sonoma-systems.com http://www.sonoma-systems.com |
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