VERAZ NETWORKS, INC. SERIES D PREFERRED STOCK PURCHASE AGREEMENT FIRST CLOSING: DECEMBER 19, 2006 SECOND CLOSING: JANUARY 11, 2007
Exhibit 10.37
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
FIRST CLOSING: DECEMBER 19, 2006
SECOND
CLOSING: JANUARY 11, 2007
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
This Series d Preferred Stock Purchase Agreement (the “Agreement”) is made and
entered into as of December 19, 2006, by and among Veraz Networks, Inc., a Delaware
corporation (the “Company”), and each of those persons and entities, severally and not jointly,
whose names are set forth on the Schedule of Purchasers attached hereto as Exhibit A-1
(which persons and entities are hereinafter collectively referred to as “Purchasers” and each
individually as a “Purchaser”).
Recitals
Whereas, the Company has authorized the sale and issuance of an aggregate of four
million seven hundred thousand (4,700,000) shares of its Series D Preferred Stock (the “Shares”);
Whereas, Purchasers desire to purchase the Shares on the terms and conditions set
forth herein; and
Whereas, the Company desires to issue and sell the Shares to Purchasers on the terms
and conditions set forth herein.
Agreement
Now, Therefore, in consideration of the foregoing recitals and the mutual promises,
representations, warranties, and covenants hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Agreement To Sell And Purchase.
1.1 Authorization of Shares. The Company has authorized (a) the sale and issuance of the
Shares to the Purchasers and (b) the issuance of the shares of Common Stock to be issued upon
conversion of the Shares (the “Conversion Shares”). The Shares and the Conversion Shares will have
the rights, preferences, privileges and restrictions set forth in the Amended and Restated
Certificate of Incorporation of the Company, in the form attached hereto as Exhibit B (the
“Restated Charter”).
1.2 Sale and Purchase. Subject to the terms and conditions hereof, at the Closing (as
hereinafter defined) the Company hereby agrees to issue and sell to each Purchaser, severally and
not jointly, and each
Purchaser agrees to purchase from the Company, severally and not jointly, the number of Shares
set forth opposite such Purchaser’s name on Exhibit A-1, at a purchase price of three
dollars and twenty-seven cents ($3.27) per share.
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2. Closing, Delivery And Payment.
2.1 Closing. The closing of the sale and purchase of the Shares under this Agreement (the
“Closing”) shall take place at 1:00 p.m. on the date hereof, at the offices of Cooley Godward
Kronish llp, 0000 Xxxxxxx Xxxxxx, Xxxx Xxxx, XX, 00000 or at such other time or place as
the Company and Purchasers may mutually agree (such date is hereinafter referred to as the “Closing
Date”).
2.2 Delivery. At the Closing, subject to the terms and conditions hereof, the Company will
deliver to each Purchaser a certificate representing the number of Shares to be purchased at the
Closing by such Purchaser, against payment of the purchase price therefor by check or wire transfer
made payable to the order of the Company.
2.3 Subsequent Sales of Shares. At any time on or before the earlier of (i) the 90th day
following the Closing or at such later time as the Company and the holders of a majority of the
Shares purchased at the Closing (pursuant to Section 2.1) may mutually agree or (ii) the date of
the Call Closing (as defined below), the Company may sell up to the balance of the authorized
shares of Series D Preferred Stock not sold at the Closing to such persons as may be approved by
the Company (the “Additional Purchasers”). All such sales made at any additional closings (each an
“Additional Closing”), shall be made on the terms and conditions set forth in this Agreement, and
(i) the representations and warranties of the Company set forth in Section 3 hereof (and the
Schedule of Exceptions) shall speak as of the Closing and the Company shall have no obligation to
update any such disclosure, and (ii) the representations and warranties of the Additional
Purchasers in Section 4 hereof shall speak as of such Additional Closing. The Schedule of
Purchasers may be amended by the Company without the consent of the Purchasers to include any
Additional Purchasers upon the execution by such Additional Purchasers of a counterpart signature
page hereto. Any shares of Series D Preferred Stock sold pursuant to this Section 2.3 shall be
deemed to be “Shares” for all purposes under this Agreement and any Additional Purchasers thereof
shall be deemed to be “Purchasers” for all purposes under this Agreement.
2.4 Call Closing.
(a) Grant of Call. Each of the Purchasers, severally and not jointly, hereby irrevocably
grants to the Company the right to require (the “Call”) each Purchaser to purchase up to the
maximum number of Shares as set forth next to each Purchaser’s name on Exhibit A-2 hereto
(the “Call Shares”) for the aggregate purchase price set forth on Exhibit A-2 at any time
after the date hereof until the earlier of (i) a Qualified IPO (as defined in the Restated
Charter), (ii) an Acquisition or Asset Transfer (as such terms are defined in the Restated
Charter), or (iii) the date one (1) year from the date hereof.
(b) Exercise of Call. Unless this Section 2.4 expires pursuant to Section 2.4(e) below, the
Call shall be exercised by the Company, at its sole discretion, by delivery to each of the
Purchasers of a written notice (the “Call Notice”), specifying the aggregate amount being called
(the “Call Amount”) and, if less than the full amount, each Purchaser’s pro rata portion of the
Call Shares and the intended closing date (the “Call Closing”). The Call Closing shall occur no
earlier than ten (10) days and no later than thirty (30)
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days after delivery of the Call Notice.
At the Call Closing, the Company shall deliver to each Purchaser a certificate representing the
Call Shares purchased by the Purchaser and the Purchaser shall deliver payment in full, by check or
wire transfer, for an amount equal to the Purchaser’s portion of the Call Amount. Except as set
forth herein, the terms and conditions of the Call Shares shall be consistent with the terms and
conditions of the Closing, the representations and warranties of the Company set forth in Section 3
hereof (and the Schedule of Exceptions) shall speak as of the Closing and the Company shall have no
obligation to update any such disclosure, and the representations and warranties of the Purchasers
in Section 4 hereof shall speak as of such Call Closing.
(c) Call Amount. The Call Amount for each Investor shall be equal to the amount set forth on
Exhibit A-2 hereto; provided that the Company shall amend Exhibit A-2 from
time to time as necessary to reflect each Purchaser’s required pro rata portion after accounting
for any transfer or sale of Shares among the Purchasers and shall provided notice to the Purchasers
of such amendment. The aggregate Call Amount shall not exceed five million ($5,000,000) dollars.
For purposes of this Agreement, the pro rata portion of each Purchaser shall mean the amount equal
to the ratio of (a) the number of Shares held by such Purchaser immediately prior to the Call
Closing, to (b) the total number of shares of the Company’s Series D Preferred Stock outstanding
immediately prior to Call Closing.
(d) Remedies. In the event any Purchaser fails to deliver its Call Amount in accordance with
the terms of this Agreement (a “Non-Contributing Investor”), the Purchasers hereby agree that such
Non Contributing Investor’s shares of Series D Preferred Stock shall automatically be converted to
Common Stock at a 3-to-1 ratio (for purposes of illustration, each three (3) shares of such
Non-Contributing Investor’s Series D Preferred Stock would be converted into one (1) share of
Common Stock) pursuant to that certain Special Mandatory Conversion (as set forth in Article
IV(D)(4)(r) of the Restated Charter (the “Special Mandatory Conversion”)). If any legal
proceedings relating to a Non-Contributing Investor’s contesting or challenging the Special
Mandatory Conversion, such Non-Contributing Investor shall pay all reasonable costs and expenses
incurred by the Company, including attorneys’ fees, in connection with such proceedings; provided
however, that if such Non-Contributing Investor prevails in such a legal proceeding, then each
party shall bear its own fees and costs. Each Purchaser hereby consents to the Special Mandatory
Conversion if such Purchaser does not comply with all covenants and obligations as set forth in
this Section 2.4.
(e) Termination. This Section 2.4, together with the rights and obligations of the parties
thereunder, shall expire and terminate in full force and effect upon the earlier of (i) a Qualified
IPO (as defined in the Restated Charter), (ii) an Acquisition or Asset
Transfer (as such terms are defined in the Restated Charter), or (iii) upon the date one (1)
year from the date hereof.
3. Representations And Warranties Of The Company.
Except as set forth on a Schedule of Exceptions attached hereto as Exhibit C,
delivered by the Company to Purchasers before the date of this Agreement, the Company hereby
represents and warrants as of the date of this Agreement to each Purchaser as set forth below.
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3.1 Organization, Good Standing and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware. The
Company has all requisite corporate power and authority to own and operate its properties and
assets, to execute and deliver this Agreement, the Amended and Restated Investor Rights Agreement
in the form attached hereto as Exhibit D (the “Investor Rights Agreement”) and the Amended
and Restated Voting Agreement in the form attached hereto as Exhibit E (the “Voting
Agreement”) (collectively, the “Related Agreements”), to issue and sell the Shares and the
Conversion Shares, and to carry out the provisions of this Agreement, the Related Agreements and
the Restated Charter and to carry on its business as presently conducted and as presently proposed
to be conducted. The Company is duly qualified and is authorized to do business and is in good
standing as a foreign corporation in all jurisdictions in which the nature of its activities and of
its properties (both owned and leased) makes such qualification necessary, except for those
jurisdictions in which failure to do so would not have a material adverse effect on the Company or
its business.
3.2 Subsidiaries. The Company does not own or control any equity security or other interest
of any other corporation, limited partnership or other business entity. The Company is not a
participant in any joint venture, partnership or similar arrangement. Since its inception, the
Company has not consolidated or merged with, acquired all or substantially all of the assets of, or
acquired the stock or any interest in any corporation, partnership, association, or other business
entity.
3.3 Capitalization; Voting Rights
(a) The authorized capital stock of the Company, immediately prior to the Closing, will
consist of (i) one hundred million (100,000,000) shares of Common Stock, par value $0.001 per
share, twenty-seven million five hundred seventy-eight thousand six hundred one (27,578,601) shares
of which will be issued and outstanding, and (ii) fifty-five million forty-nine (59,000,049) shares
of Preferred Stock, par value $0.001 per share, five million forty-eight (5,000,048) shares of
which will be designated Series A-1 Preferred Stock, par value $0.001 per share, all of which will
be issued and outstanding; one (1) share of which will be designated Series A-2 Preferred Stock,
par value $0.001 per share, one (1) of which will be issued and outstanding; nine million
(9,000,000) shares of which will be designated Series B-1 Preferred Stock, par value $0.001 per
share, all of which will be issued and outstanding; and thirty-six million (36,000,000) shares of
which will be designated Series C Preferred Stock, par value
$0.001 per share, thirty-five million sixty-five thousand four (35,065,004) of which will be
issued and outstanding; and five million (5,000,000) shares of which will be designated Series D
Preferred Stock, par value $0.001 per share, none of which will be issued and outstanding.
(b) As of the date hereof, under the Company’s 2001 Equity Incentive Plan (the “Plan”), (i)
four million one hundred thirty thousand fifty-seven (4,130,057) shares of Common Stock have been
issued pursuant to restricted stock purchase agreements and/or the exercise of outstanding options,
(ii) options to purchase sixteen million three hundred sixty-four thousand nine hundred fifteen
(16,364,915) shares of Common Stock have been granted and are currently outstanding, and (iii) six
hundred forty-seven thousand one hundred seventeen (647,117) shares of Common Stock remain
available for future issuance to officers, directors, employees and consultants of the Company.
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(c) Other than (i) thirty-two thousand four hundred fifty (32,450) shares of Series C
Preferred Stock reserved for issuance pursuant to outstanding warrants; and (ii) options to
purchase one hundred twenty thousand (120,000) shares of Common Stock issued outside of the Plan,
(iii) the shares reserved for issuance under the Plan, and (iv) except as may be granted pursuant
to this Agreement and the Related Agreements, there are no outstanding options, warrants, rights
(including conversion or preemptive rights and rights of first refusal), proxy or stockholder
agreements, or agreements of any kind for the purchase or acquisition from the Company of any of
its securities. At the Closing, all such preemptive rights will have been properly waived or
complied with respect to all prior issuances of capital stock and with respect to the issuance of
the Shares and Conversion Shares.
(d) All issued and outstanding shares of the Company’s Common Stock and Preferred Stock (i)
have been duly authorized and validly issued and are fully paid and nonassessable, and (ii) were
issued in compliance with all applicable state and federal laws concerning the issuance of
securities.
(e) As of the Closing, the rights, preferences, privileges and restrictions of the Shares will
be as stated in the Restated Charter. Each share of Series D Preferred Stock will be convertible
into Common Stock on a one-for-one basis as of the Closing. The Conversion Shares have been duly
and validly reserved for issuance. When issued in compliance with the provisions of this Agreement
and the Restated Charter, the Shares and the Conversion Shares will be validly issued, fully paid
and nonassessable, and will be free of any liens or encumbrances other than liens and encumbrances
created by or imposed upon Purchasers; provided, however, that the Shares and the Conversion Shares
may be subject to restrictions on transfer under state and/or federal securities laws as set forth
herein or as otherwise required by such laws at the time a transfer is proposed.
3.4 Authorization; Binding Obligations. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for the authorization of this Agreement and the
Related Agreements, the performance of all obligations of the Company hereunder and thereunder and
the authorization, sale, issuance and delivery of the Shares pursuant hereto and the Conversion
Shares pursuant to the Restated Charter has been taken, including valid approval of the Restated
Charter. This Agreement and
the Related Agreements, when executed and delivered, will be valid and binding obligations of
the Company enforceable in accordance with their terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting
enforcement of creditors’ rights, (b) general principles of equity that restrict the availability
of equitable remedies, and (c) to the extent that the enforceability of the indemnification
provisions in the Investor Rights Agreement may be limited by applicable laws. The sale of the
Shares and the subsequent conversion of the Shares into Conversion Shares are not and will not be
subject to any preemptive rights or rights of first refusal that have not been properly waived or
complied with.
3.5 Financial Statements. The Company has made available to each Purchaser (a) its unaudited
balance sheet as at September 30, 2006 and unaudited statement of income and cash flows for the
period from the Company’s inception to September 30, 2006 (the “Statement Date”) and unaudited
consolidated statement of income and cash flows for the three
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month period ending on the Statement
Date (collectively, the “Financial Statements”). The Financial Statements, together with the notes
thereto, have been prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods indicated, except as disclosed therein, and present
fairly the financial condition and position of the Company as of the Statement Date; provided,
however, that the unaudited financial statements are subject to normal recurring year-end audit
adjustments (which are not expected to be material either individually or in the aggregate), and do
not contain all footnotes required under generally accepted accounting principles.
3.6 Liabilities. Other than as set forth in the Financial Statements, the Company has no
material liabilities and, to the best of its knowledge, has no material contingent liabilities,
except current liabilities incurred in the ordinary course of business which have not been, either
in any individual case or in the aggregate, materially adverse.
3.7 Agreements; Action.
(a) Except for agreements explicitly contemplated hereby and agreements between the Company
and its employees with respect to the sale of the Company’s Common Stock pursuant to the Plan,
there are no agreements, understandings or proposed transactions between the Company and any of its
officers, directors, employees, affiliates or any affiliate thereof.
(b) There are no agreements, understandings, instruments, contracts, proposed transactions,
judgments, orders, writs or decrees to which the Company is a party or to its knowledge by which it
is bound which may involve (i) future obligations (contingent or otherwise) of, or payments to, the
Company in excess of $100,000 (other than obligations of, or payments to, the Company arising from
purchase or sale agreements entered into in the ordinary course of business), or (ii) the transfer
or license of any patent, copyright, trade secret or other proprietary right to or from the Company
(other than licenses by the Company of “off the shelf”
or other standard products), or (iii) indemnifications by the Company, including with respect
to infringements of proprietary rights (other than indemnification obligations arising from
purchase, sale or license agreements entered into in the ordinary course of business).
(c) The Company has not (i) declared or paid any dividends, or authorized or made any
distribution upon or with respect to any class or series of its capital stock, (ii) incurred or
guaranteed any indebtedness for money borrowed or any other liabilities (other than with respect to
dividend obligations, distributions, indebtedness and other obligations incurred in the ordinary
course of business) individually in excess of $100,000 or, in the case of indebtedness and/or
liabilities individually less than $100,000, in excess of $200,000 in the aggregate, (iii) made any
loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold,
exchanged or otherwise disposed of any of its assets or rights, other than the sale of its
inventory in the ordinary course of business.
(d) For the purposes of subsections (b) and (c) above, all indebtedness, liabilities,
agreements, understandings, instruments, contracts and proposed transactions involving the same
person or entity (including persons or entities the Company has reason to
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believe are affiliated
therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.
3.8 Obligations to Related Parties. There are no obligations of the Company to officers,
directors, stockholders, or employees of the Company other than (a) for payment of salary for
services rendered, (b) reimbursement for reasonable expenses incurred on behalf of the Company and
(c) for other standard employee benefits made generally available to all employees (including stock
option agreements outstanding under any stock option plan approved by the Board of Directors of the
Company). None of the officers, directors or, to the best of the Company’s knowledge, key
employees or stockholders of the Company or any members of their immediate families, is indebted to
the Company or has any direct or indirect ownership interest in any firm or corporation with which
the Company is affiliated or with which the Company has a business relationship, or any firm or
corporation which competes with the Company, other than passive investments in publicly traded
companies (representing less than 1% of such company) which may compete with the Company. No
officer, director or stockholder, or any member of their immediate families, is, directly or
indirectly, interested in any material contract with the Company (other than such contracts as
relate to any such person’s ownership of capital stock or other securities of the Company).
3.9 Changes. Since the Statement Date, there has not been:
(a) Any change in the assets, liabilities, financial condition or operations of the Company
from that reflected in the Financial Statements, other than changes in the ordinary course of
business, none of which individually or in the aggregate has had a material adverse effect on such
assets, liabilities, financial condition or operations of the Company;
(b) Any resignation or termination of any officer, key employee or group of employees of the
Company;
(c) Any material change in the contingent obligations of the Company by way of guaranty,
endorsement, indemnity, warranty or otherwise;
(d) Any damage, destruction or loss, whether or not covered by insurance, materially and
adversely affecting the properties, business or prospects or financial condition of the Company;
(e) Any waiver by the Company of a valuable right or of a material debt owed to it;
(f) Any material change in any compensation arrangement or agreement with any employee,
officer, director or stockholder;
(g) Any labor organization activity related to the Company;
(h) Any sale, assignment or transfer of any patents, trademarks, copyrights, trade secrets or
other intangible assets;
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(i) Any change in any agreement to which the Company is a party or by which it is bound which
materially and adversely affects the business, assets, liabilities, financial condition, operations
or prospects of the Company;
(j) Any other event or condition of any character that, either individually or cumulatively,
has materially and adversely affected the business, assets, liabilities, financial condition or
operations of the Company; or
(k) Any arrangement or commitment by the Company to do any of the acts described in subsection
(a) through (j) above.
3.10 Title to Properties and Assets; Liens, Etc. The Company has good and marketable title to
its properties and assets, and good title to its leasehold estates, in each case subject to no
mortgage, pledge, lien, lease, encumbrance or charge, other than (a) those resulting from taxes
which have not yet become delinquent, (b) minor liens and encumbrances which do not materially
detract from the value of the property subject thereto or materially impair the operations of the
Company, and (c) those that have otherwise arisen in the ordinary course of business. The Company
is in compliance with all material terms of each lease to which it is a party or is otherwise
bound.
3.11 Intellectual Property.
(a) General. The Company owns or possesses sufficient legal rights to all patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights
and processes (“Proprietary Rights”) necessary for its business as now conducted and as presently
proposed to be conducted. Section 3.11(a) of the Schedule of Exceptions sets forth with respect to
the Proprietary Rights of the Company: (i) each trademark, trade name or service xxxx, whether or
not registered, (ii) each copyright for which registration has been sought, whether or not
registered, including the number and date of registration for each country in which a copyright has
been registered, (iii) for each patent which has been issued or invention for which a patent
application has been filed, whether or not issued, the number and date of the application for each
country in which a patent application has been made or a patent has been issued, and (iv) for each
mask work (if any), whether or not registered, the date of first commercial exploitation and if
registered, the registration number and date of registration. True and correct copies of all
Proprietary Rights (including all pending applications, application related documents and materials
and written materials relating to trade secrets) owned, controlled or used by or on behalf of the
Company or in which the Company has any interest whatsoever have been provided to the Investors.
(b) Adequacy. The Proprietary Rights of the Company are all those necessary for the normal
conduct of the business of the Company as presently conducted and as presently contemplated,
including the design, manufacture, development and sale of all products currently under
development, planned for development or in production.
(c) Royalties and Licenses. Except as set forth in Section 3.11(c) of the Schedule of
Exceptions, the Company has no obligation to compensate any person for the use of any of its
Proprietary Rights, the Company is not subject to any license of Proprietary Rights
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other than shrink-wrap licenses nor has the Company granted to any Person any license, option or other rights
to use in any manner any of its Proprietary Rights, whether requiring the payment of royalties or
not.
(d) Ownership. The Company has a valid right to use or owns free and clear of any encumbrance
its Proprietary Rights, and such Proprietary Rights will not cease to be valid rights of the
Company by reason of the execution, delivery and performance of this Agreement or the Related
Agreements or the consummation of the transactions contemplated hereby or thereby.
(e) Absence of Claims. The Company (A) has not received any notice alleging, or otherwise has
knowledge of facts that might give rise to, invalidity with respect to any of the Proprietary
Rights of the Company and (B) has not received any notice of alleged infringement of any rights of
others due to any activity by the Company. To the knowledge of the Company, the Company’s use of
its Proprietary Rights in its past, current and planned products do not and would not infringe upon
or otherwise violate the valid rights of any third party anywhere in the world. No other Person
(i) has notified the Company that it is claiming
any ownership of or right to use any of the Company’s Proprietary Rights or (ii) to the
knowledge of the Company, is infringing upon any such Proprietary Rights in any way.
3.12 Protection of Proprietary Rights. All of the pending applications for the Company’s
Proprietary Rights have been duly filed and all other customary actions to protect such Proprietary
Rights have been taken. The Company has taken reasonable steps necessary or appropriate
(including, entering into appropriate confidentiality and nondisclosure agreements with officers,
directors, subcontractors, employees, licensees and customers) to safeguard and maintain the
secrecy and confidentiality of, and the proprietary rights in, the Proprietary Rights. The Company
is not aware of any breach of any such confidentiality or nondisclosure agreement by any party
thereto.
3.13 Compliance with Other Instruments. The Company is not in violation or default of any
term of its certificate of incorporation or Bylaws, as currently in effect, or Restated Charter or
of any provision of any mortgage, indenture, contract, agreement, instrument or contract to which
it is party or by which it is bound or of any judgment, decree, order or writ. The execution,
delivery, and performance of and compliance with this Agreement, and the Related Agreements, and
the issuance and sale of the Shares pursuant hereto and of the Conversion Shares pursuant to the
Restated Charter, will not, with or without the passage of time or giving of notice, result in any
such violation, or be in conflict with or constitute a default under any such term, or result in
the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any
permit, license, authorization or approval applicable to the Company, its business or operations or
any of its assets or properties. The Company has avoided every condition, and has not performed
any act, the occurrence of which would result in the Company’s loss of any right granted under any
license, distribution agreement or other agreement required to be disclosed on the Schedule of
Exceptions.
3.14 Litigation. There is no action, suit, proceeding or investigation pending or, to the
Company’s knowledge, currently threatened against the Company, nor is the Company
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aware that there
is any basis for any of the foregoing. The foregoing includes, without limitation, actions pending
or, to the Company’s knowledge, threatened involving the prior employment of any of the Company’s
employees, their use in connection with the Company’s business of any information or techniques
allegedly proprietary to any of their former employers, or their obligations under any agreements
with prior employers. The Company is not a party or to its knowledge subject to the provisions of
any order, writ, injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the Company currently
pending or which the Company intends to initiate.
3.15 Employees. The Company has no collective bargaining agreements with any of its
employees. There is no labor union organizing activity pending or, to the Company’s knowledge,
threatened
with respect to the Company. The Company is not a party to or bound by any currently
effective employment contract, deferred compensation arrangement, bonus plan, incentive plan,
profit sharing plan, retirement agreement or other employee compensation plan or agreement. To the
Company’s knowledge, no employee of the Company, nor any consultant with whom the Company has
contracted, is in violation of any term of any employment contract, proprietary information
agreement or any other agreement relating to the right of any such individual to be employed by, or
to contract with, the Company; and to the Company’s knowledge the continued employment by the
Company of its present employees, and the performance of the Company’s contracts with its
independent contractors, will not result in any such violation. The Company has not received any
notice alleging that any such violation has occurred. No employee of the Company has been granted
the right to continued employment by the Company or to any material compensation following
termination of employment with the Company. The Company is not aware that any officer, key
employee or group of employees intends to terminate his, her or their employment with the Company,
nor does the Company have a present intention to terminate the employment of any officer, key
employee or group of employees. Each former employee of the Company has entered into an agreement
with the Company providing for the full release of any claims against the Company or any related
party arising out of such employment. There are no actions pending, or to the Company’s knowledge,
currently threatened, by any former or current employee concerning such person’s employment by the
Company.
3.16 Obligations of Management. Each officer and key employee of the Company is currently
devoting substantially all of his or her business time to the conduct of the business of the
Company. The Company is not aware that any officer or key employee of the Company is planning to
work less than full time at the Company in the future. No officer or key employee is currently
working or, to the Company’s knowledge, plans to work for a competitive enterprise, whether or not
such officer or key employee is or will be compensated by such enterprise.
3.17 Registration Rights and Voting Rights. Except as required pursuant to the Investor
Rights Agreement, the Company is presently not under any obligation, and has not granted any
rights, to register (as defined in Section 1.1 of the Investor Rights Agreement) any of the
Company’s presently outstanding securities or any of its securities that may hereafter be issued.
To the Company’s knowledge, except as contemplated in the Voting Agreement, no stockholder of the
Company has entered into any agreement with respect to the voting of equity securities of the
Company.
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3.18 Compliance with Laws; Permits. To its knowledge, the Company is not in violation of any
applicable statute, rule, regulation, order or restriction of any domestic or foreign government or
any instrumentality or agency thereof in respect of the conduct of its business or the ownership of
its properties which violation would materially and adversely affect the business, assets,
liabilities, financial condition, operations or prospects of the Company. No domestic governmental
orders, permissions, consents, approvals or authorizations are required to be obtained and no
registrations or declarations are required to be filed in connection with the execution and
delivery of this Agreement or the issuance of the Shares or the Conversion Shares, except such as
have been duly and validly obtained or filed, or with respect to any filings that must be made
after the Closing, as will be filed in a timely manner. The Company has all franchises, permits,
licenses and any similar authority necessary for the conduct of its business as now being conducted
by it, the lack of which could materially and adversely affect the business, properties, prospects
or financial condition of the Company and believes it can obtain, without undue burden or expense,
any similar authority for the conduct of its business as planned to be conducted.
3.19 Offering Valid. Assuming the accuracy of the representations and warranties of
Purchasers contained in Section 4.2 hereof, the offer, sale and issuance of the Shares and the
Conversion Shares will be exempt from the registration requirements of the Securities Act of 1933,
as amended (the “Securities Act”), and will have been registered or qualified (or are exempt from
registration and qualification) under the registration, permit or qualification requirements of all
applicable state securities laws. Neither the Company nor any agent on its behalf has solicited or
will solicit any offers to sell or has offered to sell or will offer to sell all or any part of the
Shares to any person or persons so as to bring the sale of such Shares by the Company within the
registration provisions of the Securities Act or any state securities laws.
3.20 Full Disclosure. The Company has provided each Purchaser with all information requested
by each Purchaser in connection with its decision to purchase the Shares. This Agreement,
including the schedules and exhibits hereto, does not contain any untrue statement of a material
fact nor omit to state a material fact necessary in order to make the statements contained herein
not misleading.
3.21 Minute Books. The minute books of the Company made available to Purchasers contain a
complete summary of all meetings of directors and stockholders since the time of incorporation.
3.22 Real Property Holding Corporation. The Company is not a real property holding
corporation within the meaning of Code Section 897(c)(2) and any regulations promulgated
thereunder.
3.23 Insurance. The Company has general commercial, product liability, fire and casualty
insurance policies with coverage customary for companies similarly situated to the Company.
-11-
4. Representations And Warranties Of Purchasers.
Each Purchaser hereby represents and warrants to the Company, severally and not jointly, as
follows (provided that such representations and warranties do not lessen or obviate the
representations and warranties of the Company set forth in this Agreement):
4.1 Requisite Power and Authority. Purchaser has all necessary power and authority to execute
and deliver this Agreement and the Related Agreements and to carry out their provisions. All
action on Purchaser’s part required for the lawful execution and delivery of this Agreement and the
Related Agreements has been taken. Upon their execution and delivery, this Agreement and the
Related Agreements will be valid and binding obligations of Purchaser, enforceable in accordance
with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of creditors’ rights, (b) as
limited by general principles of equity that restrict the availability of equitable remedies, and
(c) to the extent that the enforceability of the indemnification provisions of the Investor Rights
Agreement may be limited by applicable laws.
4.2 Investment Representations. Purchaser understands that neither the Shares nor the
Conversion Shares have been registered under the Securities Act. Purchaser also understands that
the Shares are being offered and sold pursuant to an exemption from registration contained in the
Securities Act based in part upon Purchaser’s representations contained in this Agreement.
Purchaser hereby represents and warrants as follows:
(a) Purchaser Bears Economic Risk. Purchaser 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. Purchaser must bear the economic risk of this investment
indefinitely unless the Shares (or the Conversion Shares) are registered pursuant to the Securities
Act, or an exemption from registration is available. Purchaser understands that the Company has no
present intention of registering the Shares, the Conversion Shares or any shares of its Common
Stock. Purchaser also understands that there is no assurance that any exemption from registration
under the Securities Act will be available and that, even if available, such exemption may not
allow Purchaser to transfer all or any portion of the Shares or the Conversion Shares under the
circumstances, in the amounts or at the times Purchaser might propose.
(b) Acquisition for Own Account. Purchaser is acquiring the Shares and the Conversion Shares
for Purchaser’s own account for investment only, and not with a view towards their distribution.
(c) Purchaser Can Protect Its Interest. Purchaser represents that by reason of its, or of its
management’s, business or financial experience, Purchaser has the capacity to protect its own
interests in connection with the
transactions contemplated in this Agreement, and the Related Agreements. Further, Purchaser
is aware of no publication of any advertisement in connection with the transactions contemplated in
this Agreement.
-12-
(d) Accredited Investor. Purchaser represents that it is an accredited investor within the
meaning of Regulation D under the Securities Act.
(e) Company Information. Purchaser has had an opportunity to discuss the Company’s business,
management and financial affairs with directors, officers and management of the Company and has had
the opportunity to review the Company’s operations and facilities. Purchaser has also had the
opportunity to ask questions of and receive answers from, the Company and its management regarding
the terms and conditions of this investment.
(f) Rule 144. Purchaser acknowledges and agrees that the Shares, and, if issued, the
Conversion Shares are “restricted securities” as defined in Rule 144 promulgated under the
Securities Act as in effect from time to time and must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such registration is
available. Purchaser has been advised or is aware of the provisions of Rule 144, which permits
limited resale of shares purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things: the availability of certain current public information
about the Company, the resale occurring following the required holding period under Rule 144 and
the number of shares being sold during any three-month period not exceeding specified limitations.
(g) Residence. If Purchaser is an individual, then Purchaser resides in the state or province
identified in the address of Purchaser set forth on Exhibit A; if Purchaser is a
partnership, corporation, limited liability company or other entity, then the office or offices of
Purchaser in which its investment decision was made is located at the address or addresses of
Purchaser set forth on Exhibit A.
(h) Foreign Investors. If Purchaser is not a United States person (as defined by Section
7701(a)(30) of the Internal Revenue Code of 1986, as amended), Purchaser hereby represents that it
has satisfied itself as to the full observance of the laws of its jurisdiction in connection with
any invitation to subscribe for the Shares or any use of this Agreement, including (i) the legal
requirements within its jurisdiction for the purchase of the Shares, (ii) any foreign exchange
restrictions applicable to such purchase, (iii) any government or other consents that may need to
be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to
the purchase, holding, redemption, sale or transfer of the Shares. Purchaser’s subscription and
payment for and continued beneficial ownership of the Shares will not violate any applicable
securities or other laws of Purchaser’s jurisdiction.
4.3 Transfer Restrictions. Each Purchaser acknowledges and agrees that the Shares and, if
issued, the Conversion Shares are subject to restrictions on transfer as set forth in the Investor
Rights Agreement.
5. Conditions To Closing.
5.1 Conditions to Purchasers’ Obligations at the Closing. Purchasers’ obligations to purchase
the Shares at the Closing are subject to the satisfaction, at or prior to the Closing Date, of the
following conditions:
-13-
(a) Representations and Warranties True; Performance of Obligations. The representations and
warranties made by the Company in Section 3 hereof are true and correct in all material respects
(except for representations and warranties subject to “materiality” qualifiers, which shall be
true, complete and correct in all respects) as of the date hereof, and the Company shall have
performed all obligations and conditions herein required to be performed or observed by it on or
prior to the Closing Date.
(b) Corporate Documents. The Company shall have delivered to Purchasers or their counsel,
copies of all corporate documents of the Company as Purchasers shall reasonably request.
(c) Investor Rights Agreement. The Investor Rights Agreement substantially in the form
attached hereto as Exhibit D shall have been executed and delivered by the parties thereto.
(d) Voting Agreement. The Voting Agreement substantially in the form attached hereto as
Exhibit E shall have been executed and delivered by the Purchasers and certain other
parties thereto.
(e) Reservation of Conversion Shares. The Conversion Shares issuable upon conversion of the
Shares shall have been duly authorized and reserved for issuance upon such conversion.
(f) Proceedings and Documents. All corporate and other proceedings in connection with the
transactions contemplated as of the execution of this Agreement and all documents and instruments
incident to such execution shall be reasonably satisfactory in substance and form to Purchasers and
their special
counsel, and Purchasers and their special counsel shall have received all such counterpart
originals or certified or other copies of such documents as they may reasonably request.
(g) Proprietary Information and Inventions Agreement. The Company and each of its employees
shall have entered into the Company’s standard form of Proprietary Information and Inventions
Agreement, in substantially the form delivered to counsel for the Purchasers.
(h) Filing of Restated Charter. The Restated Charter as filed with the Secretary of State of
the State of Delaware shall continue to be in full force and effect on the Closing Date.
(i) Consents, Permits, and Waivers. The Company shall have obtained any and all consents,
permits and waivers necessary or appropriate for consummation of the transactions contemplated by
this Agreement and the Related Agreements (including any filing required to comply with the Xxxx
Xxxxx Xxxxxx Antitrust Improvements Act of 1976, and except for such as may be properly obtained
subsequent to the Closing).
(j) Legal Opinion. Legal counsel to the Company shall have delivered an opinion
addressed to the Purchasers, dated as of the Closing Date, in substantially the form attached
hereto as Exhibit F.
-14-
(k) Compliance Certificate. A Compliance Certificate, executed by the Chief Executive
Officer of the Company, dated the Closing Date, to the effect that the conditions specified in
subsections (a), (e), (h) and (i) of this Section 5.1 have been satisfied.
(l) Secretary’s Certificate. A certificate from the Company’s Secretary, a having
attached thereto (i) the Company’s Restated Charter as in effect at the time of the Closing, (ii)
the Company’s Bylaws as in effect at the time of the Closing, (iii) resolutions approved by the
Board of Directors authorizing the transactions contemplated hereby, (iv) resolutions approved by
the Company’s stockholders authorizing the filing of the Restated Charter, and (v) good standing
certificates (including tax good standing) with respect to the Company from the applicable
authority(ies) in Delaware and any other jurisdiction in which the Company is qualified to do
business, dated a recent date before the Closing.
5.2 Conditions to Obligations of the Company. The Company’s obligation to issue and sell the
Shares at each Closing is subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:
(a) Representations and Warranties True. The representations and warranties in Section 4 made
by those Purchasers acquiring Shares hereunder are true and correct in all material respects at the
Closing Date.
(b) Performance of Obligations. Such Purchasers shall have performed and complied with all
agreements and conditions herein required to be performed or complied with by such Purchasers on or
before the Closing Date.
(c) Investor Rights Agreement. The Investor Rights Agreement substantially in the form
attached hereto as Exhibit D shall have been executed and delivered by the parties thereto.
(d) Voting Agreement. The Voting Agreement substantially in the form attached hereto as
Exhibit E shall have been executed and delivered by the parties thereto.
(e) Filing of Restated Charter. The Restated Charter shall have been accepted for filing by
the Secretary of State of the State of Delaware.
(f) Consents,
Permits, and Waivers. The Company shall have obtained of any and all
consents, permits and waivers necessary or appropriate for consummation of the transactions
contemplated by this Agreement and the Related Agreements (including any filing required to comply
with the Xxxx Xxxxx Xxxxxx Antitrust Improvements Act of 1976, and except for such as may be
properly obtained subsequent to the Closing).
6. Miscellaneous.
6.1 Governing Law. This Agreement shall be governed in all respects by the laws of the State
of California as such laws are applied to agreements between California residents entered into and
performed entirely in California.
-15-
6.2 Survival. The representations, warranties, covenants and agreements made herein shall
survive any investigation made by any Purchaser and the closing of the transactions contemplated
hereby. All statements as to factual matters contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the Company hereunder
solely as of the date of such certificate or instrument.
6.3 Successors and Assigns. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto and shall inure to the benefit of and be
enforceable by each person who shall be a holder of the Shares from time to time.
6.4 Entire Agreement. This Agreement, the exhibits and schedules hereto, the Related
Agreements and the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects hereof and no party
shall be liable or bound to any other in any manner by any representations, warranties, covenants
and agreements except as specifically set forth herein and therein.
6.5 Severability. In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
6.6 Amendment and Waiver.
(a) This Agreement may be amended or modified only upon the written consent of the Company and
holders of at least a majority of the then outstanding Shares (treated as if converted and
including any Conversion Shares into which the then outstanding Shares have been converted that
have not been sold to the public).
(b) The obligations of the Company and the rights of the holders of the Shares and the
Conversion Shares under this Agreement may be waived only with the written consent of the holders
of at least a majority of the then outstanding Shares (treated as if converted and including any
Conversion Shares into which the then outstanding Shares have been converted that have not been
sold to the public).
6.7 Delays or Omissions. It is agreed that no delay or omission to exercise any right, power
or remedy accruing to any party, upon any breach, default or noncompliance by another party under
this Agreement, the Related Agreements or the Restated Charter, shall impair any such right, power
or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance,
or any acquiescence therein, or of or in any similar breach, default or noncompliance thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of any kind or
character on any Purchaser’s part of any breach, default or noncompliance under this
Agreement, the Related Agreements or under the Restated Charter or any waiver on such party’s part
of any provisions or conditions of this Agreement, the Related Agreements, or the Restated Charter
must be in writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement, the Related
-16-
Agreements, the Restated Charter,
by law, or otherwise afforded to any party, shall be cumulative and not alternative.
6.8 Waiver of Conflicts. Each party to this Agreement acknowledges that Xxxxxx Godward
Kronish LLP (“Xxxxxx Godward”), outside general counsel to the Company, has in the past performed
and is or may now or in the future represent one or more Purchasers or their affiliates in matters
unrelated to the transactions contemplated by this Agreement (the “Financing”), including
representation of such Purchasers or their affiliates in matters of a similar nature to the
Financing. The applicable rules of professional conduct require that Xxxxxx Godward inform the
parties hereunder of this representation and obtain their consent. Cooley has served as outside
general counsel to the Company and has negotiated the terms of the Financing solely on behalf of
the Company. It is the belief of Cooley Godward that these terms and conditions represent an arm’s
length transaction between the Company and Purchasers. Purchasers have been represented by
independent legal counsel regarding the terms of the Financing. The Company and each Purchaser
hereby (a) acknowledge that they have had an opportunity to ask for and have obtained information
relevant to such representation, including disclosure of the reasonably foreseeable adverse
consequences of such representation; (b) acknowledge that with respect to the Financing, Xxxxxx
Godward has represented solely the Company, and not any Purchaser or any stockholder, director or
employee of the Company or any Purchaser; and (c) gives its informed consent to Cooley Godward’s
representation of the Company in the Financing.
6.9 Notices. All notices required or permitted hereunder shall be in writing and shall be
deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by
confirmed electronic mail, telex or facsimile if sent during normal business hours of the
recipient, if not, then on the next business day, (c) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after
deposit with a nationally recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the Company at the address as set
forth on the signature page hereof and to Purchaser at the address set forth on Exhibit A,
attached hereto or at such other address or electronic mail address as the Company or Purchaser may
designate by ten (10) days advance written notice to the other parties hereto.
6.10 Expenses. Each party shall bear all costs and expenses that it incurs with respect to
the negotiation, execution, delivery and performance of this Agreement; provided, however, that the
Company shall, at the Closing, reimburse the reasonable fees of and expenses of one special counsel
for Purchasers, not to exceed twenty-five thousand dollars ($25,000).
6.11 Attorneys’ Fees. In the event that any suit or action is instituted to enforce any
provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from
the losing party all fees, costs and expenses of enforcing any right of such prevailing party under
or with respect to this Agreement, including without limitation, such reasonable fees and expenses
of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses
of appeals.
-17-
6.12 Titles and Subtitles. The titles of the sections and subsections of this Agreement are
for convenience of reference only and are not to be considered in construing this Agreement.
6.13 Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one instrument.
6.14 Broker’s Fees. Each party hereto represents and warrants that no agent, broker,
investment banker, person or firm acting on behalf of or under the authority of such party hereto
is or will be entitled to any broker’s or finder’s fee or any other commission directly or
indirectly in connection with the transactions contemplated herein. Each party hereto further
agrees to indemnify each other party for any claims, losses or expenses incurred by such other
party as a result of the representation in this Section 6.14 being untrue.
6.15 Exculpation Among Purchasers. Each Purchaser acknowledges that it is not relying upon
any person, firm, or corporation, other than the Company and its officers and directors, in making
its investment or decision to invest in the Company. Each Purchaser agrees that no Purchaser nor
the respective controlling persons, officers, directors, partners, agents, or employees of any
Purchaser shall be liable to any other Purchaser for any action heretofore or hereafter taken or
omitted to be taken by any of them in connection with the Shares and Conversion Shares.
6.16 Pronouns. All pronouns contained herein, and any variations thereof, shall be deemed to
refer to the masculine, feminine or neutral, singular or plural, as to the identity of the parties
hereto may require.
6.17 California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF
THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE OF AN EXEMPTION FROM SUCH
QUALIFICATION IS UNLAWFUL. PRIOR TO ACCEPTANCE OF SUCH CONSIDERATION BY THE COMPANY, THE RIGHTS OF
ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR
AN EXEMPTION FROM SUCH QUALIFICATION BEING AVAILABLE..
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-18-
In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.
| COMPANY: | ||||
| Veraz Networks, Inc. | ||||
By:
|
/s/ Xxxx Xxxxxxx | |||
Address:
|
000 Xxxx Xxx., Xxxxx 00 | |
| Xxx Xxxx, XX 00000 |
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
SIGNATURE PAGE
In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.
| ECI Telecom Ltd. | ||||
| Signature: | /s/ Xxxxx Xxxxx | |||
| Print Name: Xxxxx Xxxxx | ||||
| Title: | Executive Vice President and Chief Financial Officer | |||
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
SIGNATURE PAGE
In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.
| STAR BAY TECHNOLOGY VENTURES IV, L.P. | ||||
| By Levensohn Capital Partners II LLC, | ||||
| its General Partner | ||||
| By Levensohn Venture Partners LLC | ||||
| its Managing Member | ||||
| By: | /s/ Xxxxxx Xxxxxxxxx | |||
| Print Name: Xxxxxx Xxxxxxxxx | ||||
| Title: Managing Member | ||||
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
SIGNATURE PAGE
In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.
| Battery Ventures V, L.P. | ||||
| By: | Battery Partners V, LLC | |||
| General Partner | ||||
| /s/ Xxxxxx X. Xxxxx | ||||
| Name: | ||||
| Title: Member Manager | ||||
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
SIGNATURE PAGE
In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.
| Norwest Venture Partners VII-A, LP | ||||
| By: Itasca VC Partners VII-A, LLC, General Partner | ||||
| By | /s/ Xxxx Xxxxxxx | |||
| , CFO | ||||
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
SIGNATURE PAGE
In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.
| LMIA Coinvestment LLC | ||||
| Signature: | /s/ Xxxxxx X. Xxxxx | |||
| Print Name: Xxxxxx X. Xxxxx | ||||
| Title: Vice President | ||||
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
SIGNATURE PAGE
In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.
| Argonaut Holdings | ||||
| By: Argonaut Private Equity LLC, its Manager | ||||
| Signature: | /s/ Xxxxx Xxxxxx | |||
| Print Name: Xxxxx Xxxxxx | ||||
| Title: Managing Director | ||||
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
SIGNATURE PAGE
Table Of Contents
| Page | ||||||||
| 1. | AGREEMENT TO SELL AND PURCHASE | 1 | ||||||
| 1.1 | Authorization of Shares | 1 | ||||||
| 1.2 | Sale and Purchase | 1 | ||||||
| 2. | CLOSING, DELIVERY AND PAYMENT | 2 | ||||||
| 2.1 | Closing | 2 | ||||||
| 2.2 | Delivery | 2 | ||||||
| 3. | REPRESENTATIONS AND WARRANTIES OF THE COMPANY | 3 | ||||||
| 3.1 | Organization, Good Standing and Qualification | 4 | ||||||
| 3.2 | Subsidiaries | 4 | ||||||
| 3.3 | Capitalization; Voting Rights | 4 | ||||||
| 3.4 | Authorization; Binding Obligations | 5 | ||||||
| 3.5 | Financial Statements | 6 | ||||||
| 3.6 | Liabilities | 6 | ||||||
| 3.7 | Agreements; Action | 6 | ||||||
| 3.8 | Obligations to Related Parties | 7 | ||||||
| 3.9 | Changes | 7 | ||||||
| 3.10 | Title to Properties and Assets; Liens, Etc | 8 | ||||||
| 3.11 | Intellectual Property | 8 | ||||||
| 3.12 | Protection of Proprietary Rights | 9 | ||||||
| 3.13 | Compliance with Other Instruments | 9 | ||||||
| 3.14 | Litigation | 10 | ||||||
| 3.15 | Employees | 10 | ||||||
| 3.16 | Obligations of Management | 10 | ||||||
| 3.17 | Registration Rights and Voting Rights | 11 | ||||||
| 3.18 | Compliance with Laws; Permits | 11 | ||||||
| 3.19 | Offering Valid | 11 | ||||||
| 3.20 | Full Disclosure | 11 | ||||||
| 3.21 | Minute Books | 11 | ||||||
| 3.22 | Real Property Holding Corporation | 12 | ||||||
| 3.23 | Insurance | 12 | ||||||
- i -
| Page | ||||||||
| 4. | REPRESENTATIONS AND WARRANTIES OF PURCHASERS | 12 | ||||||
| 4.1 | Requisite Power and Authority | 12 | ||||||
| 4.2 | Investment Representations | 12 | ||||||
| 4.3 | Transfer Restrictions | 13 | ||||||
| 5. | CONDITIONS TO CLOSING | 14 | ||||||
| 5.1 | Conditions to Purchasers’ Obligations at the Closing | 14 | ||||||
| 5.2 | Conditions to Obligations of the Company | 15 | ||||||
| 6. | MISCELLANEOUS | 16 | ||||||
| 6.1 | Governing Law | 16 | ||||||
| 6.2 | Survival | 16 | ||||||
| 6.3 | Successors and Assigns | 16 | ||||||
| 6.4 | Entire Agreement | 16 | ||||||
| 6.5 | Severability | 16 | ||||||
| 6.6 | Amendment and Waiver | 16 | ||||||
| 6.7 | Delays or Omissions | 16 | ||||||
| 6.8 | Waiver of Conflicts | 17 | ||||||
| 6.9 | Notices | 17 | ||||||
| 6.10 | Expenses | 17 | ||||||
| 6.11 | Attorneys’ Fees | 18 | ||||||
| 6.12 | Titles and Subtitles | 18 | ||||||
| 6.13 | Counterparts | 18 | ||||||
| 6.14 | Broker’s Fees | 18 | ||||||
| 6.15 | Exculpation Among Purchasers | 18 | ||||||
| 6.16 | Pronouns | 18 | ||||||
| 6.17 | California Corporate Securities Law | 18 | ||||||
- ii -
List Of Exhibits
Schedule of Purchasers
|
Exhibits A-1 and A-2 | |
Amended and Restated Certificate of Incorporation
|
Exhibit B | |
Schedule of Exceptions
|
Exhibit C | |
Investor Rights Agreement
|
Exhibit D | |
Voting Agreement
|
Exhibit E | |
Form of Legal Opinion
|
Exhibit F |
Exhibit A-1
Schedule of Purchasers
First Closing – December 19, 0000
| Xxxxxxxxx | ||||||||
| Name and Address | Shares | Purchase Price | ||||||
Star Bay Technology Ventures
IV, L.P. 000 Xxxx, Xxxxx 0000 Xxx Xxxxxxxxx, XX 00000 Attn: Xxxxxx Xxxxxxxxx |
234,453 | $ | 766,661.31 | |||||
LMIA Coinvestment LLC Investments, 9A 000 Xxxxxxxx Xxxxxx Xxxxxx, XX 00000 Attn: Xxxxxxx Xxxxxx |
316,004 | $ | 1,033,333.08 | |||||
Battery Ventures V, L. P. 00 Xxxxxxx Xxxxxx, Xxxxx 000 Xxxxxxxxx, XX 00000 Attn: Xxxxxx Xxxxx |
413,178 | $ | 1,351,092.06 | |||||
Norwest Venture Partners VII-A, LP 000 Xxxxxxxxxx Xxxxxx Xxxxx 000 Xxxx Xxxx, XX 00000-0000 Attn: Xxxxxx Xxxxx |
474,005 | $ | 1,549,996.35 | |||||
Argonaut Holdings, LLC 0000 Xxxxx Xxxx Xxxxx, XX 00000 |
555,555 | $ | 1,816,664.85 | |||||
Total: |
1,993,195 | $ | 6,517,747.65 | |||||
Exhibit A-1
Schedule of Purchasers
Second Closing – January 11, 0000
| Xxxxxxxxx | ||||||||
| Name and Address | Shares | Purchase Price | ||||||
ECI Telecom, Ltd. 00 Xxxxxxx Xxxxxx Xxxxx Xxxxx, 00000 Xxxxxx |
1,019,368 | $ | 3,333,333.36 | |||||
Battery Ventures V, L. P. 00 Xxxxxxx Xxxxxx, Xxxxx 000 Xxxxxxxxx, XX 00000 Attn: Xxxxxx Xxxxx |
35,342 | $ | 115,568.34 | |||||
Total: |
1,054,710 | $ | 3,448,901.70 | |||||
Exhibit A-2
Schedule of Purchasers
Call Closing
| Aggregate | ||||||||
| Name and Address | Shares | Purchase Price | ||||||
ECI Telecom, Ltd. 00 Xxxxxxx Xxxxxx Xxxxx Xxxxx, 00000 Xxxxxx |
509,684 | $ | 1,666,666.68 | |||||
Star Bay Technology Ventures
IV, L.P. 000 Xxxx, Xxxxx 0000 Xxx Xxxxxxxxx, XX 00000 Attn: Xxxxxx Xxxxxxxxx |
117,226 | $ | 383,329.02 | |||||
LMIA Coinvestment LLC Investments, 9A 000 Xxxxxxxx Xxxxxx Xxxxxx, XX 00000 Attn: Xxxxxxx Xxxxxx |
158,002 | $ | 516,666.54 | |||||
Battery Ventures V, L. P. 00 Xxxxxxx Xxxxxx, Xxxxx 000 Xxxxxxxxx, XX 00000 Attn: Xxxxxx Xxxxx |
224,260 | $ | 733,330.20 | |||||
Norwest Venture Partners
VII-A, LP 000 Xxxxxxxxxx Xxxxxx Xxxxx 000 Xxxx Xxxx, XX 00000-0000 Attn: Xxxxxx Xxxxx |
237,002 | $ | 774,996.54 | |||||
Argonaut Holdings, LLC 0000 Xxxxx Xxxx Xxxxx, XX 00000 |
277,777 | $ | 908,330.79 | |||||
Total: |
1,523,951 | $ | 4,983,319.77 | |||||
