EXHIBIT 10.19
CORSAIR COMMUNICATIONS, INC.
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
_____________________
October 31, 1995
TABLE OF CONTENTS
Page
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1. Purchase and Sale of Stock............................................ 1
1.1 Sale and Issuance of Series B Preferred Stock................... 1
1.2 Closing......................................................... 1
1.3 Subsequent Sale of Series A Preferred Stock..................... 1
2. Representations and Warranties of the Company......................... 2
2.1 Organization, Good Standing and Qualification................... 2
2.2 Capitalization and Voting Rights................................ 2
2.3 Subsidiaries.................................................... 3
2.4 Authorization................................................... 3
2.5 Valid Issuance of Preferred and Common Stock.................... 3
2.6 Governmental Consents........................................... 3
2.7 Litigation...................................................... 3
2.8 Compliance with Other Instruments............................... 4
2.9 Agreements; Action.............................................. 4
2.10 Related-Party Transactions...................................... 5
2.11 Permits......................................................... 5
2.12 Disclosure...................................................... 5
2.13 Minute Books.................................................... 5
2.14 Labor Agreements and Actions.................................... 6
2.15 Registration Rights............................................. 6
2.16 Returns and Complaints.......................................... 6
2.17 Offering........................................................ 6
2.18 Title to Property and Assets; Leases............................ 6
2.19 Financial Statements............................................ 7
2.20 Changes......................................................... 7
2.21 Patents and Trademarks.......................................... 8
2.22 Manufacturing and Marketing Rights.............................. 9
2.23 Proprietary Information and Inventions Agreements............... 9
2.24 Tax Returns, Payments, and Elections............................ 9
2.25 Insurance....................................................... 10
2.26 Environmental and Safety Laws................................... 10
2.27 Section 83(b) Elections......................................... 10
3. Representations and Warranties of the Investor........................ 10
3.1 Authorization................................................... 10
3.2 Purchase Entirely for Own Account............................... 10
3.3 Disclosure of Information....................................... 10
3.4 Investment Experience........................................... 11
3.5 Accredited Investor............................................. 11
3.6 Restricted Securities........................................... 11
(i)
3.7 Further Limitations on Disposition................................ 11
3.8 Legends........................................................... 12
4. California Commissioner of Corporations................................. 12
4.1 Corporate Securities Law.......................................... 12
5. Conditions of Investor's Obligations at Closing......................... 12
5.1 Representations and Warranties.................................... 12
5.2 Performance....................................................... 13
5.3 Compliance Certificate............................................ 13
5.4 Qualifications.................................................... 13
5.5 Proceedings and Documents......................................... 13
5.6 Opinion of Company Counsel........................................ 13
5.7 Investors' Rights Agreement....................................... 13
6. Conditions of the Company's Obligations at Closing...................... 13
6.1 Representations and Warranties.................................... 13
6.2 Payment of Purchase Price......................................... 13
6.3 Qualifications.................................................... 13
7. Miscellaneous........................................................... 14
7.1 Survival of Warranties............................................ 14
7.2 Successors and Assigns............................................ 14
7.3 Governing Law..................................................... 14
7.4 Counterparts...................................................... 14
7.5 Titles and Subtitles.............................................. 14
7.6 Notices........................................................... 14
7.7 Finder's Fee...................................................... 14
7.8 Expenses.......................................................... 15
7.9 Amendments and Waivers............................................ 15
7.10 Severability...................................................... 15
7.11 Aggregation of Stock.............................................. 15
7.12 Entire Agreement.................................................. 15
SCHEDULE A - Schedule of Investors
EXHIBIT A - Certificate of Incorporation
EXHIBIT B - Investors' Rights Agreement
Schedule of Exceptions
(ii)
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
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THIS SERIES B PREFERRED STOCK PURCHASE AGREEMENT is made as of the 31st day
of October, 1995, by and between Corsair Communications, Inc., a Delaware
corporation (the "Company") and the investors listed on Schedule A hereto, each
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of which is herein referred to as an "Investor."
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
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1.1 Sale and Issuance of Series B Preferred Stock.
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(a) The Company shall adopt and file with the Secretary of State
of Delaware on or before the Closing (as defined below) the Amended and Restated
Certificate of Incorporation in the form attached hereto as Exhibit A.
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(b) Subject to the terms and conditions of this Agreement, each
Investor agrees, severally, to purchase at the Closing and the Company agrees to
sell and issue to each Investor at the Closing, that number of shares of the
Company's Series B Preferred Stock set forth opposite each Investor's name on
Schedule A hereto for the purchase price set forth thereon. Such purchase shall
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be payable by Investor by delivery to Company by Investor of a check in the
amount of the purchase price set forth opposite such Investor's name on Schedule
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A payable to the Company's order or by wire transfer of funds in such amount to
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the Company's designated bank account.
1.2 Closing. The purchase and sale of the Series B Preferred Stock
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shall take place at the offices of Xxxxxxx, Xxxxxxx & Xxxxxxxx, 000 Xxxx "X"
Xxxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx at 11:00 A.M., on October 27, 1995, or
at such other time and place as the Company and Investors acquiring in the
aggregate more than half the shares of Series B Preferred Stock sold pursuant
hereto mutually agree upon orally or in writing (which time and place are
designated as the "Closing"). At the Closing the Company shall deliver to each
Investor a certificate representing the Series B Preferred Stock which such
Investor is purchasing against delivery to the Company by such Investor of the
purchase price in the form as set forth above in Section 1.1(b).
1.3 Subsequent Sale of Series B Preferred Stock. The Company may sell
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up to 56,434 additional shares of Series B Preferred Stock at a price not less
than $4.43 per share to such other purchaser(s) as the Company's Board of
Directors shall select. Any purchaser in a subsequent closing occurring within
sixty (60) days following the Closing shall execute a counterpart signature page
to this Agreement and Amendment No. 2 to the Investors' Rights Agreement (as
defined below) and any additional sales of Series B Preferred Stock shall be
deemed to be made hereunder. The sale of any additional shares of Series B
Preferred Stock under this Section 1.3
occurring within sixty (60) days following the Closing shall not be subject to
the Investor's right of first offer contained in Section 2.4 of the Investor
Rights Agreement, as amended.
2. Representations and Warranties of the Company. The Company hereby
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represents and warrants to each Investor that, except as set forth on a Schedule
of Exceptions attached hereto, which exceptions shall be deemed to be
representations and warranties as if made hereunder:
2.1 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 and has all requisite corporate power and authority to
carry on its business as now conducted. The Company is duly qualified to
transact business and is in good standing in each jurisdiction in which the
failure so to qualify would have a material adverse effect on its business or
properties.
2.2 Capitalization and Voting Rights. The authorized capital of the
--------------------------------
Company consists, or will consist prior to the Closing, of:
(i) Preferred Stock. 10,247,410 shares of Preferred Stock (the
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"Preferred Stock"), of which 8,120,000 shares have been designated Series A
Preferred Stock and all of which are issued and outstanding and 2,127,410 shares
of which have been designated Series B Preferred Stock, up to 2,050,000 of which
will be sold pursuant to this Agreement. The rights, privileges and preferences
of the Series B Preferred Stock will be as stated in the Company's Amended and
Restated Certificate of Incorporation attached hereto as Exhibit A.
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(ii) Common Stock. 18,000,000 shares of common stock ("Common
------------
Stock") 76,125 of which are currently issued and outstanding.
(iii) Except for (A) the conversion privileges of the Series A
Preferred Stock and the Series B Preferred Stock to be issued under this
Agreement, (B) the rights provided in Section 2.4 of the Investors' Rights
Agreement dated December 10, 1994 by and among the Company and certain investors
in the Company's Series A Preferred Stock (the "Investors' Rights Agreement"),
as amended, and (C) a warrant to purchase up to 80,000 shares of Series B
Preferred Stock dated August 31, 1995, there are not outstanding any options,
warrants, rights (including conversion or preemptive rights) or agreements for
the purchase or acquisition from the Company of any shares of its capital stock;
provided that the Company has reserved 2,030,000 shares for issuance to
employees, consultants or directors of the Company pursuant to equity incentive
agreements approved by the Board of Directors. The Company is not a party or
subject to any agreement or understanding, and, to the Company's knowledge,
there is no agreement or understanding between any persons and/or entities,
which affects or relates to the voting or giving of written consents with
respect to any security or by a director of the Company.
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2.3 Subsidiaries. The Company does not presently own or control,
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directly or indirectly, any interest in any other corporation, association, or
other business entity. The Company is not a participant in any joint venture,
partnership, or similar arrangement.
2.4 Authorization. All corporate action on the part of the Company,
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its officers, directors and shareholders necessary for the authorization,
execution and delivery of this Agreement, Amendment No. 2 to the Investors'
Rights Agreement, Amendment No. 1 to First Refusal Agreement dated December 14,
1994 by and among the Company and certain investors in the Company's Series A
Preferred Stock (the "First Refusal Agreement") and any other agreement to which
the Company is a party, the execution and delivery of which is contemplated
hereby (the "Ancillary Agreements"), the performance of all obligations of the
Company hereunder and thereunder and the authorization, issuance (or reservation
for issuance) and delivery of the Series B Preferred Stock being sold hereunder
and the Common Stock issuable upon conversion of the Series B Preferred Stock
has been taken or will be taken prior to the Closing, and this Agreement, the
Investors' Rights Agreement, as amended, and any Ancillary Agreements constitute
valid and legally binding obligations of the Company, enforceable in accordance
with their respective terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors' rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies, and (iii) to the extent the indemnification provisions
contained in the Investors' Rights Agreement, as amended, may be limited by
applicable federal or state securities laws.
2.5 Valid Issuance of Preferred and Common Stock. The Series B
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Preferred Stock which is being purchased by the Investors hereunder, when
issued, sold and delivered in accordance with the terms hereof for the
consideration expressed herein, will be duly and validly issued, fully paid and
nonassessable and, based in part upon the representations of the Investors in
this Agreement, will be issued in compliance with all applicable federal and
state securities laws. The Common Stock issuable upon conversion of the Series
B Preferred Stock purchased under this Agreement has been duly and validly
reserved for issuance and, upon issuance in accordance with the terms of the
Amended and Restated Certificate of Incorporation, shall be duly and validly
issued, fully paid and nonassessable, and issued in compliance with all
applicable securities laws, as presently in effect, of the United States and
each of the states whose securities laws govern the issuance of any of the
Series B Preferred Stock hereunder.
2.6 Governmental Consents. No consent, approval, order or
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authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state, local or provincial governmental authority on
the part of the Company is required in connection with the consummation of the
transactions contemplated by this Agreement, except for the filing pursuant to
Section 25102(f) of the California Corporate Securities Law of 1968, as amended,
and the rules thereunder, which filing will be effected within 15 days of the
sale of the Series B Preferred Stock hereunder.
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2.7 Litigation. There is no action, suit, proceeding or
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investigation pending or currently threatened against the Company which
questions the validity of this Agreement, the Investors' Rights Agreement, as
amended, or any Ancillary Agreements, or the right of the Company to enter into
any of them, or to consummate the transactions contemplated hereby or thereby,
or which might result, either individually or in the aggregate, in any material
adverse changes in the assets, condition, affairs or prospects of the Company,
financially or otherwise, or any change in the current equity ownership of the
Company, nor is the Company aware that there is any basis for the foregoing.
The Company is not a party or 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.
2.8 Compliance with Other Instruments. The Company is not in
---------------------------------
violation or default of any provisions of its Amended and Restated Certificate
of Incorporation or Bylaws or of any instrument, judgment, order, writ, decree
or contract to which it is a party or by which it is bound or, to its knowledge,
of any provision of federal or state statute, rule or regulation applicable to
the Company. The execution, delivery and performance of this Agreement,
Amendment No. 2 to the Investors' Rights Agreement or any Ancillary Agreements
and the consummation of the transactions contemplated hereby and thereby will
not result in any such violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, either a default under any
such provision, instrument, judgment, order, writ, decree or contract or an
event which results in the creation of any lien, charge or encumbrance upon any
assets of the Company or the suspension, revocation, impairment, forfeiture, or
nonrenewal of any material permit, license, authorization, or approval
applicable to the Company, its business or operations or any of its assets or
properties.
2.9 Agreements; Action.
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(a) Except for agreements explicitly contemplated hereby and by
the Investors' Rights Agreement, as amended, and any Ancillary Agreements, there
are no agreements, understandings or proposed transactions between the Company
and any of its officers, directors, affiliates, or any affiliate thereof.
(b) The Company is not a party to any contract, agreement, lease,
commitment or proposed transaction, written or oral, absolute or contingent,
other than (i) contracts for the purchase of supplies and services that were
entered into in the ordinary course of business and that do not involve more
than $50,000, and do not extend for more than one (1) year beyond the date
hereof, (ii) sales contracts entered into in the ordinary course of business,
and (iii) contracts terminable at will by the Company on no more than thirty
(30) days notice without cost or liability to the Company and that do not
involve any employment or consulting arrangement and are not material to the
conduct of the Company's business. For the purpose of this paragraph,
employment and consulting contracts and contracts with labor unions, and license
agreements and any other agreements relating to the acquisition or disposition
of
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the Company's technology, shall not be considered to be contracts 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 any indebtedness for money borrowed or any
other liabilities individually in excess of $50,000 or, in the case of
indebtedness and/or liabilities individually less than $50,000, in excess of
$150,000 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 believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.
2.10 Related-Party Transactions. No employee, officer, or director of
--------------------------
the Company or member of his or her immediate family is indebted to the Company,
nor is the Company indebted (or committed to make loans or extend or guarantee
credit) to any of them. To the best of the Company's knowledge, none of such
persons 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 that competes with the Company, except
that employees, officers, or directors of the Company and members of their
immediate families may own stock in publicly traded companies that may compete
with the Company. No member of the immediate family of any officer or director
of the Company is directly or indirectly interested in any material contract
with the Company.
2.11 Permits. The Company has all franchises, permits, licenses, and
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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. The Company is not
in default in any material respect under any of such franchises, permits,
licenses, or other similar authority.
2.12 Disclosure. The Company has fully provided each Investor with
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all the information which such Investor has requested for deciding whether to
purchase the Series B Preferred Stock and all information which the Company
believes is reasonably necessary to enable such Investor to make such decision.
Neither this Agreement, Amendment No. 2 to the Investors' Rights Agreement and
any Ancillary Agreements, nor any other statements, certificates or documents
made or delivered in connection herewith or therewith contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements herein or therein not misleading.
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2.13 Minute Books. The minute books of the Company provided to the
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Investors contain a complete summary of all meetings of directors and
stockholders since the time of incorporation and reflect all transactions
referred to in such minutes accurately in all material respects.
2.14 Labor Agreements and Actions. The Company is not bound by or
----------------------------
subject to (and none of its assets or properties is bound by or subject to) any
written or oral, express or implied, contract, commitment or arrangement with
any labor union, and no labor union has requested or, to the knowledge of the
Company, has sought to represent any of the employees, representatives or agents
of the Company. There is no strike or other labor dispute involving the Company
pending, or to the knowledge of the Company threatened, which could have a
material adverse effect on the assets, properties, financial condition,
operating results, or business of the Company (as such business is presently
conducted and as it is proposed to be conducted), nor is the Company aware of
any labor organization activity involving its employees. The Company is not
aware that any officer or key employee, or that any group of key employees,
intends to terminate their employment with the Company, nor does the Company
have a present intention to terminate the employment of any of the foregoing.
Subject to general principles related to wrongful termination of employees, the
employment of each officer and employee of the Company is terminable at the will
of the Company.
2.15 Registration Rights. Except as provided in the Investors' Rights
-------------------
Agreement, as amended, the Company is not obligated to register under the
Securities Act of 1933 ("Securities Act") any of its presently outstanding
securities or any of its securities that may subsequently be issued.
2.16 Returns and Complaints. The Company has received no customer
----------------------
complaints concerning alleged defects in the design of its products that, if
true, would materially adversely affect the operations or financial condition of
the Company.
2.17 Offering. Subject in part to the truth and accuracy of each
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Investor's representations set forth in this Agreement, the offer, sale and
issuance of the Series B Preferred Stock as contemplated by this Agreement is
exempt from the registration requirements of the Securities Act, and neither the
Company nor any authorized agent acting on its behalf will take any action
hereafter that would cause the loss of such exemption.
2.18 Title to Property and Assets; Leases. Except (a) as reflected in
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the Financial Statements (defined in paragraph 2.19), (b) for liens for current
taxes not yet delinquent, (c) for liens imposed by law and incurred in the
ordinary course of business for obligations not past due to carriers,
warehousemen, laborers, materialmen and the like, (d) for liens in respect of
pledges or deposits under workers' compensation laws or similar legislation, or
(e) for minor defects in title, none of which, individually or in the aggregate
materially interferes with the use of such property, the Company owns its
property and assets free and clear of all mortgages, liens, claims and
encumbrances. With respect to the property and assets it leases, the Company is
in compliance with
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such leases and, to the best of its knowledge, holds a valid leasehold interest
free of any liens, claims or encumbrances, subject to clauses (a)-(e) above.
2.19 Financial Statements. The Company has delivered to each Investor
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its unaudited financial statements (balance sheet and profit and loss statement
including notes thereto) as at and for the nine-month period ended September 30,
1995 (the "Financial Statements"). The Financial Statements have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods indicated and with each other, except
that the Financial Statements may not contain all footnotes required by
generally accepted accounting principles. The Financial Statements fairly
present the financial condition and operating results of the Company as of the
dates, and for the periods, indicated therein, subject to normal year-end audit
adjustments. Except as set forth in the Financial Statements, the Company has
no material liabilities, contingent or otherwise, other than (i) liabilities
incurred in the ordinary course of business subsequent to September 30, 1995 and
(ii) obligations under contracts and commitments incurred in the ordinary course
of business and not required under generally accepted accounting principles to
be reflected in the Financial Statements, which, in both cases, individually or
in the aggregate, are not material to the financial condition or operating
results of the Company. 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. The Company maintains and will continue to
maintain a standard system of accounting established and administered in
accordance with generally accepted accounting principles.
2.20 Changes. To the best of the Company's knowledge, since September
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30, 1995, there has not been:
(a) Any change in the assets, liabilities, financial condition
or operating results of the Company from that reflected in the Financial
Statements, except changes in the ordinary course of business that have not
been, in the aggregate, materially adverse.
(b) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the business, properties,
prospects or financial condition of the Company (as such business is presently
conducted and as it is proposed to be conducted);
(c) any waiver or compromise by the Company of a valuable right
or of a material debt owed to it;
(d) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company, except in the ordinary
course of business and which is not material to the business, properties,
prospects or financial condition of the Company (as such business is presently
conducted and as it is proposed to be conducted);
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(e) any material change to a material contract or arrangement by
which the Company or any of its assets is bound or subject;
(f) any material change in any compensation arrangement or
agreement with any employee, officer, director, or stockholder;
(g) any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets;
(h) any resignation or termination of employment of any key
officer of the Company; and the Company, to its knowledge, does not know of the
impending resignation or termination of employment of any such officer;
(i) receipt of notice that there has been a loss of, or material
order cancellation by, any major customer of the Company;
(j) any mortgage, pledge, transfer of a security interest in, or
lien, created by the Company, with respect to any of its material properties or
assets, except liens for taxes not yet due or payable;
(k) any loans or guarantees made by the Company to or for the
benefit of its employees, officers or directors, or any members of their
immediate families, other than travel advances and other advances made in the
ordinary course of its business;
(l) any declaration, setting aside or payment or other
distribution in respect of any of the Company's capital stock, or any direct or
indirect redemption, purchase or other acquisition of any of such stock by the
Company;
(m) any other event or condition of any character that might
materially and adversely affect the business, properties, prospects or financial
condition of the Company (as such business is presently conducted and as it is
proposed to be conducted); or
(n) any agreement or commitment by the Company to do any of the
things described in this Section 2.20.
2.21 Patents and Trademarks. To the best of its knowledge (but
----------------------
without having conducted any special investigation or patent search) the Company
owns or possesses sufficient legal rights to all patents, trademarks,
servicemarks, trade names, copyrights, trade secrets, licenses, information,
proprietary rights and processes necessary for its business as now conducted and
as proposed to be conducted without any conflict with or infringement of the
rights of others. The Schedule of Exceptions contains a complete list of
patents and pending patent applications of the Company. Except for agreements
with its own employees or consultants, substantially in the form referenced in
paragraph 2.24 below, there are no outstanding options, licenses, or agreements
of any
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kind relating to the foregoing, nor is the Company bound by or a party to any
options, licenses or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information, proprietary rights and processes of any other person or entity.
The Company has not received any 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, trade secrets or
other proprietary rights of any other person or entity nor is the Company aware
of any basis therefor. The Company is not aware that any of it employees is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with the use of such
employee's best efforts to promote the interests of the Company or that would
conflict with the Company's business as proposed to be conducted. Neither the
execution nor delivery of this Agreement, nor the carrying on of the Company's
business by the employees of the Company, nor the conduct of the Company's
business as proposed, will, to the best of the Company's knowledge, conflict
with or result in a breach of the terms, conditions or provisions of, or
constitute a default under, any contract, covenant or instrument under which any
of such employees is now obligated. The Company does not believe it is or will
be necessary to use any inventions of any of its employees (or persons it
currently intends to hire) made prior to their employment by the Company.
2.22 Manufacturing and Marketing Rights. The Company has not granted
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rights to manufacture, produce, assemble, license, market, or sell its products
to any other person and is not bound by any agreement that affects the Company's
exclusive right to develop, manufacture, assemble, distribute, market, or sell
its products.
2.23 Proprietary Information and Inventions Agreements. Each employee
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and officer of the Company has executed a Proprietary Information and Inventions
Agreement substantially in the form or forms that have been delivered to special
counsel for the Investors.
2.24 Tax Returns, Payments, and Elections. The Company has filed all
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tax returns and reports as required by law. These returns and reports are true
and correct in all material respects. The Company has paid all taxes and other
assessments due, except those contested by it in good faith. The provision for
taxes of the Company as shown in the Financial Statements is adequate for taxes
due or accrued as of the date thereof. The Company has not elected pursuant to
the Internal Revenue Code of 1986, as amended ("Code"), to be treated as an S
corporation or a collapsible corporation pursuant to Section 341(f) of Section
1362(a) of the Code, nor has it made any other elections pursuant to the Code
(other than elections which relate solely to methods of accounting, depreciation
or amortization) which would have a material effect on the business, properties,
prospects or financial condition of the Company. The Company has never had any
tax deficiency proposed or assessed against it and has not executed any 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 has ever been
audited by
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governmental authorities. Since the date of the Financial Statements, the
Company has made adequate provisions on its books of account 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 depositaries.
2.25 Insurance. The Company has in full force and effect fire and
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casualty insurance policies, with extended coverage, sufficient in amount
(subject to reasonable deductibles) to allow it to replace any of its properties
that might be damaged or destroyed. The Company has in full force and effect
products liability insurance in amounts customary for companies similarly
situated.
2.26 Environmental and Safety Laws. To the best of its knowledge, the
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Company is not in violation of any applicable statute, law, or regulation
relating to the environment or occupational health and safety, and to the best
of its knowledge, no material expenditures are or will be required in order to
comply with any such existing statute, law, or regulation.
2.27 Section 83(b) Elections. To the best of the Company's knowledge,
-----------------------
all individuals who have purchased shares of the Company's Common Stock have
timely filed elections under Section 83(b) of the Internal Revenue Code and any
analogous provisions of applicable state tax laws.
3. Representations and Warranties of the Investor. Each Investor hereby
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represents and warrants that:
3.1 Authorization. This Agreement constitutes its valid and legally
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binding obligation, enforceable in accordance with its terms.
3.2 Purchase Entirely for Own Account. This Agreement is made with
---------------------------------
each Investor in reliance upon such Investor's representation to the Company,
which by such Investor's execution of this Agreement such Investor hereby
confirms, that the Series B Preferred Stock to be received by such Investor and
the Common Stock issuable upon conversion thereof (collectively, the
"Securities") will be acquired for investment for such Investor's own account,
not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof, and that such Investor has no present intention of selling,
granting any participation in, or otherwise distributing the same. By executing
this Agreement, each Investor further represents that such Investor does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participations to such person or to any third person,
with respect to any of the Securities. Each Investor represents that it has
full power and authority to enter into this Agreement.
-10-
3.3 Disclosure of Information. It believes it has received all the
-------------------------
information it considers necessary or appropriate for deciding whether to
purchase the Series B Preferred Stock. Each Investor further represents that it
has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Series B Preferred
Stock. The foregoing, however, does not limit or modify the representations and
warranties of the Company in Section 2 of this Agreement or the right of the
Investors to rely thereon.
3.4 Investment Experience. Each Investor is an investor in
---------------------
securities of companies in the development stage and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Series B
Preferred Stock. If other than an individual, Investor also represents it has
not been organized for the purpose of acquiring the Series B Preferred Stock.
3.5 Accredited Investor. Each Investor is an "accredited investor"
-------------------
within the meaning of SEC Rule 501 of Regulation D, as presently in effect.
3.6 Restricted Securities. It understands that the shares of Series
---------------------
B Preferred Stock it is purchasing are characterized as "restricted securities"
under the federal securities laws inasmuch as they are being acquired from the
Company in a transaction not involving a public offering and that under such
laws and applicable regulations such securities may be resold without
registration under the Act, only in certain limited circumstances. In this
connection, each Investor represents that it is familiar with SEC Rule 144, as
presently in effect, and understands the resale limitations imposed thereby and
by the Act.
3.7 Further Limitations on Disposition. Without in any way limiting
----------------------------------
the representations set forth above, each Investor further agrees not to make
any disposition of all or any portion of the Series B Preferred Stock (or the
Common Stock issuable upon the conversion thereof) unless and until the
transferee has agreed in writing for the benefit of the Company to be bound by
this Section 3.7, provided and to the extent such section is then applicable and
Investors' Rights Agreement, as amended, and any applicable Ancillary Agreement
and:
(a) There is then in effect a Registration Statement under the
Act covering such proposed disposition and such disposition is made in
accordance with such Registration Statement; or
(b) (i) Such Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
reasonably requested by the Company, such Investor shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such shares under the Act. It
is agreed that the Company will not require
-11-
opinions of counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.
(c) Notwithstanding the provisions of paragraphs (a) and (b)
above, no such registration statement or opinion of counsel shall be necessary
for a transfer by an Investor which is a partnership to a partner of such
partnership or a retired partner of such partnership who retires after the date
hereof, or to the estate of any such partner or retired partner or the transfer
by gift, will or intestate succession of any partner to his spouse or to the
siblings, lineal descendants or ancestors of such partner or his spouse, if the
transferee agrees in writing to be subject to the terms hereof to the same
extent as if he were an original Investor hereunder.
3.8 Legends. It is understood that the certificates evidencing the
-------
Series B Preferred Stock (and the Common Stock issuable upon conversion thereof)
may bear one or all of the following legends:
(a) "These securities have not been registered under the
Securities Act of 1933. They may not be sold, offered for sale, pledged or
hypothecated in the absence of a registration statement in effect with respect
to the securities under such Act or an opinion of counsel satisfactory to the
Company that such registration is not required or unless sold pursuant to Rule
144 of such Act."
(b) Any legend required by the laws of the State of Delaware or
California, including any legend required by the California Department of
Corporations and Sections 417 and 418 of the Code.
4. California Commissioner of Corporations.
---------------------------------------
4.1 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 FOR SUCH SECURITIES
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO
EXEMPT.
5. Conditions of Investor's Obligations at Closing. The obligations of
-----------------------------------------------
each Investor under subsection 1.1(b) of this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions, the
waiver of which shall not be effective against any Investor who does not consent
in writing thereto:
-12-
5.1 Representations and Warranties. The representations and
------------------------------
warranties of the Company contained in Section 2 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the date of such Closing.
5.2 Performance. The Company shall have performed and complied with
-----------
all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
5.3 Compliance Certificate. The Chairman of the Board of the Company
----------------------
shall deliver to each Investor at the Closing a certificate certifying that the
conditions specified in Sections 5.1 and 5.2 have been fulfilled and stating
that there shall have been no adverse change in the business, affairs,
prospects, operations, properties, assets or condition of the Company since the
date of the Business Plan.
5.4 Qualifications. The Commissioner of Corporations of the State of
--------------
California shall have issued a permit qualifying the offer and sale of the
Series B Preferred Stock and the underlying Common Stock to the Investors
pursuant to this Agreement, or such offer and sale shall be exempt from such
qualification.
5.5 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 Investors' special counsel, and they shall have received all such
counterpart original and certified or other copies of such documents as they may
reasonably request.
5.6 Opinion of Company Counsel. Each Investor shall have received
--------------------------
from Xxxxxxx, Xxxxxxx & Xxxxxxxx, counsel for the Company, an opinion, dated as
of the Closing, in form and substance satisfactory to special counsel to the
Investors.
5.7 Investors' Rights Agreement. The Company and each Investor shall
---------------------------
have entered into Amendment No. 2 to the Investors' Rights Agreement, in the
form attached hereto as Exhibit B.
---------
6. Conditions of the Company's Obligations at Closing. The obligations
--------------------------------------------------
of the Company to each Investor under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions by that
Investor:
6.1 Representations and Warranties. The representations and
------------------------------
warranties of the Investor contained in Section 3 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the Closing.
6.2 Payment of Purchase Price. The Investor shall have delivered the
-------------------------
purchase price specified in Section 1.2.
-13-
6.3 Qualifications. The Commissioner of Corporations of the State of
--------------
California shall have issued a permit qualifying the offer and sale to the
Investor of the Series B Preferred Stock and the Common Stock issuable upon the
conversion thereof or such offer and sale shall be exempt from such
qualification.
7. Miscellaneous.
-------------
7.1 Survival of Warranties. The warranties, representations and
----------------------
covenants of the Company and Investors contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Investors or the Company.
7.2 Successors and Assigns. Except as otherwise provided herein, the
----------------------
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any shares of Series B Preferred Stock sold hereunder or any
Common Stock issued upon conversion thereof). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
7.3 Governing Law. This Agreement shall be governed by and construed
-------------
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.
7.4 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.5 Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.6 Notices. Unless otherwise provided, any notice required or
-------
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof, or at such other address
as such party may designate by ten (10) days' advance written notice to the
other parties.
7.7 Finder's Fee. Each party represents that it neither is nor will
------------
be obligated for any finders' fee or commission in connection with this
transaction. Each Investor agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and
-14-
expenses of defending against such liability or asserted liability) for which
the Investor or any of its officers, partners, employees, or representatives is
responsible. The Company agrees to indemnify and hold harmless each Investor
from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and expenses of defending against such liability or
asserted liability) for which the Company or any of its officers, employees or
representatives is responsible.
7.8 Expenses. Irrespective of whether the Closing is effected, the
--------
Company shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this Agreement. If the
Closing is effected, the Company shall, at the Closing, reimburse the reasonable
fees of special counsel for the Investors (not to exceed $15,000) and shall,
upon receipt of a xxxx therefor, reimburse the out of pocket expenses of such
counsel. If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement or the Amended and Restated Certificate of
Incorporation, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
7.9 Amendments and Waivers. Any term of this Agreement may be
----------------------
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
a majority of the Common Stock issued or issuable upon conversion of the Series
B Preferred Stock issued pursuant hereto. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each holder of any
securities purchased under this Agreement at the time outstanding (including
securities into which such securities are convertible), each future holder of
all such securities, and the Company; provided, however, that no condition set
forth in Section 5 hereof may be waived with respect to any Investor who does
not consent thereto.
7.10 Severability. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
7.11 Aggregation of Stock. All shares of the Series B Preferred Stock
--------------------
held or acquired by affiliated entities or persons shall be aggregated together
for the purpose of determining the availability of any rights under this
Agreement.
7.12 Entire Agreement. This Agreement and the documents referred to
----------------
herein constitute the entire agreement among the parties and no party shall be
liable or bound to any other party in any manner by any warranties,
representations, or covenants except as specifically set forth herein or
therein.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-15-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
CORSAIR COMMUNICATIONS, INC., a Delaware
corporation
By: /S/ Xxxx Xxx Xxxxxx
-----------------------------------
Xxxx Xxx Xxxxxx, President
Address: 0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
INVESTORS:
XXXXXXX XXXXXXX XXXXXXXX & XXXXX VII
By: /s/ Xxxxx Xxxxxxx
-----------------------------------
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
KPCB VII FOUNDERS FUND
By: /s/ Xxxxx Xxxxxxx
-----------------------------------
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
KPCB INFORMATION SCIENCES
ZAIBATSU FUND II
By: /s/ Xxxxx Xxxxxxx
-----------------------------------
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
[SIGNATURE PAGE TO
SERIES B PREFERRED STOCK PURCHASE AGREEMENT]
XXXXX XXXXX FUND IV L.P.
By: SRB Associates IV L.P.
Its: General Partner
By: /s/ illegible
----------------------------
General Partner
Address: Two Galleria Tower
00000 Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
NORWEST EQUITY PARTNERS, V,
a Minnesota Limited Liability Partnership
By: Itasca Partners V, L.L.P.
Its: General Partner
By: /s/ Xxxxxx Xxxxx, Partner
----------------------------
Address: 0000 Xxxx Xxxx Xx., Xxxx. 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
XXXXXXX CAPITAL SBIC, L.P.
By: Xxxxxxx Capital Management
Partners, L.P.
By: /s/ Xxxx Xxxxxxxxxx
----------------------------
Address: 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
[SIGNATURE PAGE TO SERIES B
PREFERRED STOCK PURCHASE AGREEMENT]
XXXXXXX EMERGING GROWTH PARTNERS
By: /s/ Xxx Xxxxxxxxxx
-----------------------------------
Address: 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
ACCEL IV L.P.
By: Accel IV Associates L.P.
Its: General Partner
By: /s/ X. Xxxxxx Sednaoui
----------------------------
General Partner
Address: c/o Accel Partners
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
ACCEL INVESTORS '95 L.P.
By: /s/ X. Xxxxxx Sednaoui
---------------------------------
General Partner
Address: c/o Accel Partners
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: X. Xxxxxx Sednaoui
[SIGNATURE PAGE TO SERIES B
PREFERRED STOCK PURCHASE AGREEMENT]
ACCEL KEIRETSU L.P.
By: Accel Partners & Co. Inc.
Its: General Partner
By: /s/ X. Xxxxxx Sednaoui
-----------------------------
Address: c/o Accel Partners
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: X. Xxxxxx Sednaoui
XXXXXXX X. XXXXXXXXX PARTNERS
By: /s/ illegible
-----------------------------------
General Partner
Address: c/o Accel Partners
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: X. Xxxxxx Sednaoui
TECHNOLOGY CROSSOVER VENTURES, L.P.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Title: Chief Financial Officer
----------------------------------
Technology Crossover Mgmt LLC
Address: 000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
[SIGNATURE PAGE TO SERIES B
PREFERRED STOCK PURCHASE AGREEMENT]
TECHNOLOGY CROSSOVER VENTURES, C.V.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Title: Chief Financial Officer
----------------------------------
Technology Crossover Mgmt, LLC
Address: 000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
INTEGRAL CAPITAL PARTNERS II, L.P.
By: Integral Capital Management II, L.P.
Its: General Partner
By: /s/ illegible
------------------------------
its General Partner
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
INTEGRAL CAPITAL PARTNERS
INTERNATIONAL II, C.V.
By: Integral Capital Management II, L.P.
Its: Investment General Partner
By: /s/ illegible
-----------------------------
its General Partner
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
/s/ Xxxxx X. Ring
-----------------------------------------
XXXXX X. RING
Address: 0000 00xx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
[SIGNATURE PAGE TO SERIES B
PREFERRED STOCK PURCHASE AGREEMENT]
UMB BANK, N.A. as Trustee for Xxxxxxx,
Phleger & Xxxxxxxx Retirement Savings
Trust F/B/O Xxxx X. Xxxxxxxxx
By: /s/ M. Xxxxx Xxxxxxx
-----------------------------------
Title: Vice President
---------------------------------
Address: UMB Bank, N.A.
P. O. Xxx 000000
Xxxxxx Xxxx, XX 00000-0000
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
XXXXXXX X. XXXXXXX
Address: 0000 Xxxxxx xxx Xxx, #000
Xx Xxxxx, XX 00000
/s/ Xxxxxxxx Xxxx Xxxxxxx
-----------------------------------------
XXXXXXXX XXXX XXXXXXX
Address: 000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
[SIGNATURE PAGE TO SERIES B
PREFERRED STOCK PURCHASE AGREEMENT]
SCHEDULE A
SCHEDULE OF INVESTORS
---------------------
Cash Purchase No. of
Name and Address Price Shares
----------------------------------------- ------------- ---------
Xxxxxxx Xxxxxxx Xxxxxxxx & Xxxxx VII $1,414,051.57 319,199
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
KPCB VII Founders Fund $ 153,450.77 34,639
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
KPCB Information Sciences Zaibatsu $ 82,499.89 18,623
Fund II
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Xxxxx Xxxxx Fund IV L.P. $ 250,002.62 56,434
Two Galleria Tower
00000 Xxxx Xxxx, Xxxxx 0000
Xxxxxx, XX 00000
Norwest Equity Partners, V $1,100,000.01 248,307
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Needham Capital SBIC, L.P. $ 125,001.31 28,217
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Needham Emerging Growth Partners $ 125,001.31 28,217
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Accel IV L.P. $3,205,999.86 723,702
c/o Accel Partners
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Accel Keiretsu L.P. $ 66,498.73 15,011
c/o Accel Partners
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Accel Investors '95 L.P. $ 150,500.39 33,973
c/o Accel Partners
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxxxx Partners $ 77,002.26 17,382
c/o Accel Partners
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Technology Crossover Ventures, L.P. $ 926,623.10 209,170
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Technology Crossover Ventures, C.V. $ 73,378.52 16,564
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Integral Capital Partners II, L.P. $ 738,303.80 166,660
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Integral Capital Partners International $ 261,697.82 59,074
II, C.V.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
UMB Bank, N.A. as Trustee for $ 10,002.94 2,258
Xxxxxxx, Xxxxxxx & Xxxxxxxx
Retirement Savings Trust F/B/O Xxxx
X. Xxxxxxxxx
UMB Bank, N.A.
X.X. Xxx 000000
Xxxxxx Xxxx, XX 00000-0000
Xxxxxxx X. Xxxxxxx $ 10,002.94 2,258
0000 Xxxxxx Xxx Xxx
Xx Xxxxx, XX 00000
Xxxxx X. Ring $ 50,001.41 11,287
0000 00xx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Xxxxxxxx Xxxx Xxxxxxx $ 5,001.47 1,129
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
CLOSING TOTALS: $8,825,020.72 1,992,104
SCHEDULE A-2
EXHIBIT A
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
-------------------------------------------------
A-1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF CORSAIR COMMUNICATIONS, INC.,
a Delaware corporation
Corsair Communications, Inc., a corporation organized and existing under
the laws of the State of Delaware, hereby certifies as follows:
1. The name of the corporation is Corsair Communications, Inc. The
original Certificate of Incorporation of the corporation was filed with the
Secretary of State of the State of Delaware on December 5, 1994 and was amended
pursuant to a Certificate of Amendment of Certificate of Incorporation of the
Corporation filed with the Secretary of State of the State of Delaware on
January 25, 1995. The original name was Phoneprint, Inc.
2. Pursuant to Sections 242 and 245 of the General Corporation Law of the
State of Delaware, the Amended and Restated Certificate of Incorporation was
adopted by the corporation's Board of Directors and stockholders, the
stockholders of the corporation having approved the Amended and Restated
Certificate of Incorporation by the written consent of the holders of a majority
of the outstanding shares in accordance with Section 228 thereof, and written
notice having been given in accordance with the requirements of such Section.
The Amended and Restated Certificate of Incorporation restates, integrates and
amends the provisions of the Certificate of Incorporation of this corporation.
3. The Certificate of Incorporation of the corporation is hereby amended
and restated in its entirety as follows:
ARTICLE I
The name of this corporation is Corsair Communications, Inc..
ARTICLE II
The address of this corporation's registered office in the State of
Delaware is 00 Xxxx Xxxxx Xxxxxx, Xxxx xx Xxxxx, Xxxxxx of Kent 19901. The name
of its registered agent at such address is Incorporating Services, Ltd.
ARTICLE III
The purpose of this corporation is to engage in any lawful act or activity
for which a corporation may now or hereafter be organized under the Delaware
General Corporation Law.
ARTICLE IV
A. Classes of Stock. This corporation is authorized to issue two classes
----------------
of stock to be designated, respectively, "Common Stock" and "Preferred Stock."
The total number of shares which the corporation is authorized to issue is
Twenty-Eight Million Two Hundred Forty-Seven Thousand Four Hundred and Ten
(28,247,410) shares. Eighteen Million (18,000,000) shares shall be Common
Stock, $.001 par value per share, and Ten Million Two Hundred Forty-Seven
Thousand Four Hundred and Ten (10,247,410) shares shall be Preferred Stock,
$.001 par value per share, of which Eight Million One Hundred Twenty Thousand
(8,120,000) shares shall be Series A Preferred Stock and Two Million One Hundred
Twenty-Seven Thousand Four Hundred and Ten (2,127,410) shares shall be Series B
Preferred Stock.
B. Rights, Preferences and Restrictions of Preferred Stock. The rights,
-------------------------------------------------------
preferences, restrictions and other matters relating to the Preferred Stock are
as follows:
1. Dividend Provisions.
-------------------
a. The holders of shares of Series A Preferred Stock and
Series B Preferred Stock shall be entitled to receive dividends, out of any
assets legally available therefor, prior and in preference to any declaration or
payment of any dividend (payable other than in Common Stock or other securities
and rights convertible into or entitling the holder thereof to receive, directly
or indirectly, additional shares of Common Stock of this corporation) on the
Common Stock of this corporation, at the rate of $0.10 per share of Series A
Preferred Stock per annum and $0.22 per share of Series B Preferred Stock per
annum (subject to appropriate adjustments for stock splits, stock dividends,
combinations or other recapitalizations) payable when, as and if declared by the
Board of Directors. Such dividends shall not be cumulative. No cash dividend
shall be declared or paid with respect to the Series A Preferred Stock or Series
B Preferred Stock unless at the same time a like proportionate cash dividend for
the same dividend period, ratably in proportion to the respective annual
dividend rates set forth above, is declared and paid with respect to the Series
A Preferred Stock and the Series B Preferred Stock.
b. In the event this corporation shall declare a distribution
payable in securities of other persons, evidences of indebtedness issued by this
corporation or other persons, assets (excluding cash dividends) or options or
rights to purchase any such securities or evidences of indebtedness, then, in
each case the holders of Series A Preferred Stock and Series B Preferred Stock
shall be entitled to a
-2-
proportionate share of any such distribution as though the holders of the Series
A Preferred Stock and Series B Preferred Stock were the holders of the number of
shares of Common Stock of this corporation into which their respective shares of
Series A Preferred Stock and Series B Preferred Stock are convertible as of the
record date fixed for the determination of the holders of Common Stock of this
corporation entitled to receive such distribution.
2. Liquidation Preference.
----------------------
a. In the event of any liquidation, dissolution or winding up
of this corporation, either voluntary or involuntary, the holders of Series A
Preferred Stock and Series B Preferred Stock shall be entitled to receive, prior
and in preference to any distribution of any of the assets of this corporation
to the holders of Common Stock by reason of their ownership thereof, an amount
per share equal to the sum of (i) $2.00 for each outstanding share of Series A
Preferred Stock, (subject to appropriate adjustments for stock splits, stock
dividends, combinations or other recapitalizations and hereafter referred to as
the "Original Series A Issue Price"), (ii) $4.43 for each outstanding share of
Series B Preferred Stock (subject to appropriate adjustments for stock splits,
stock dividends, combinations or other recapitalizations and hereafter referred
to as the "Original Series B Issue Price"), and (iii) an amount equal to
declared but unpaid dividends on such share of Series A Preferred Stock or
Series B Preferred Stock, as applicable. If upon the occurrence of such event,
the assets and funds thus distributed among the holders of the Series A
Preferred Stock and the Series B Preferred Stock shall be insufficient to permit
the payment to such holders of the full aforesaid preferential amounts, then,
the entire assets and funds of the corporation legally available for
distribution shall be distributed ratably among the holders of the Series A
Preferred Stock and the Series B Preferred Stock in proportion to the aggregate
liquidation preferences of the respective series, and ratably among the holders
of that series in proportion to the amount of such stock owned by each such
holder.
b. After the distributions described in subsection (a) above
have been paid, the remaining assets of the corporation available for
distribution to stockholders shall be distributed among the holders of Series A
Preferred Stock, Series B Preferred Stock and Common Stock pro rata based on the
number of shares of Common Stock held by each (assuming conversion of all such
Series A Preferred Stock and Series B Preferred Stock).
c. A consolidation or merger of this corporation with or into
any other corporation or corporations, or a sale, conveyance or disposition of
all or substantially all of the assets of this corporation or the effectuation
by the corporation of a transaction or series of related transactions in which
more than 50% of the voting power of the corporation is disposed of (excluding
the issuance of shares of Series A Preferred Stock pursuant to the Series A
Preferred Stock Purchase Agreement and the issuance of Series B Preferred Stock
pursuant to the Series B Preferred Stock Purchase Agreement), shall be deemed to
be a liquidation, dissolution or winding up within the meaning of this Section
2.
-3-
3. Conversion. The holders of the Series A Preferred Stock and
----------
Series B Preferred Stock shall have conversion rights as follows (the
"Conversion Rights"):
a. Right to Convert.
----------------
(i) Subject to subsection (c), each share of Series A
Preferred Stock and Series B Preferred Stock shall be convertible, at the option
of the holder thereof, at any time after the date of issuance of such share, at
the office of this corporation or any transfer agent for the particular series
of Preferred Stock, into such number of fully paid and nonassessable shares of
Common Stock as is determined by dividing (A) the Original Series A Issue Price
for each share of Series A Preferred Stock and (B) the Original Series B Issue
Price for each share of Series B Preferred Stock, plus all declared but unpaid
dividends thereon for each share of Series A Preferred Stock or Series B
Preferred Stock, by the Conversion Price at the time in effect for such share.
The initial Conversion Price per share for shares of Series A Preferred Stock
shall be the Original Series A Issue Price and the initial Conversion Price per
share for shares of Series B Preferred Stock shall be the Original Series B
Issue Price; provided, however, that the Conversion Price for the Series A
Preferred Stock and Series B Preferred Stock shall be subject to adjustment as
set forth in subsection 3(c).
(ii) Each share of Series A Preferred Stock and Series B
Preferred Stock shall automatically be converted into shares of Common Stock at
the Conversion Price at the time in effect for such shares immediately upon the
earlier of (A) the consummation of the corporation's sale of its Common Stock in
a bona fide, firm commitment underwriting pursuant to a registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), the public
offering price of which was not less than $10.00 per share (subject to
appropriate adjustments for stock splits, stock dividends, combinations or other
recapitalizations) and $7,500,000 in the aggregate or (B) the date upon which
the corporation obtains the consent of the holders of a majority of the then
outstanding shares of Series A Preferred Stock and Series B Preferred Stock,
voting together as a single class on an as converted basis.
b. Mechanics of Conversion. Before any holder of Series A
-----------------------
Preferred Stock or Series B Preferred Stock shall be entitled to convert the
same into shares of Common Stock, he shall surrender the certificate or
certificates therefor, duly endorsed, at the office of this corporation or of
any transfer agent for the particular series of Preferred Stock, and shall give
written notice by mail, postage prepaid, to this corporation at its principal
corporate office, of the election to convert the same and shall state therein
the name or names in which the certificate or certificates for shares of Common
Stock are to be issued. This corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series A
Preferred Stock and/or Series B Preferred Stock, or to the nominee or nominees
of such holder, a certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled as aforesaid. Such conversion
shall be deemed to have been made immediately prior to the close of business on
the date of such surrender of the shares of Series A Preferred Stock and/or
Series B Preferred Stock to be converted, and
-4-
the person or persons entitled to receive the shares of Common Stock issuable
upon such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock as of such date. If the conversion is in
connection with an underwritten offer of securities registered pursuant to the
Securities Act, the conversion may, at the option of any holder tendering Series
A Preferred Stock and/or Series B Preferred Stock for conversion, be conditioned
upon the closing with the underwriter of the sale of securities pursuant to such
offering, in which event the person(s) entitled to receive the Common Stock
issuable upon such conversion of the Series A Preferred Stock and/or Series B
Preferred Stock shall not be deemed to have converted such Series A Preferred
Stock and/or Series B Preferred Stock until immediately prior to the closing of
such sale of securities.
c. Conversion Price Adjustments of Preferred Stock. The
-----------------------------------------------
Conversion Prices of the Series A Preferred Stock and Series B Preferred Stock
shall be subject to adjustment from time to time as follows:
(i) A. If the corporation shall issue any Additional Stock
(as defined below) without consideration or for a consideration per share less
than the Conversion Price for the Series A Preferred Stock or the Conversion
Price for the Series B Preferred Stock in effect immediately prior to the
issuance of such Additional Stock, the Conversion Price for the Series A
Preferred Stock or Series B Preferred Stock, as the case may be, in effect
immediately prior to each such issuance shall forthwith (except as otherwise
provided in this clause (i)) be adjusted to a price equal to the quotient
obtained by dividing the total computed under clause (x) below by the total
computed under clause (y) below as follows:
(x) an amount equal to the sum of
(1) the aggregate purchase price of the
shares of the Series A Preferred Stock or Series B Preferred Stock
sold pursuant to the applicable agreements pursuant to which such
shares of Series A Preferred Stock or Series B Preferred Stock, as the
case may be, are first issued (the "Stock Purchase Agreements"), plus
(2) the aggregate consideration, if any,
received by the corporation for all Additional Stock issued on or
after the dates of the applicable Stock Purchase Agreements (the
"Purchase Date") other than shares of Common Stock issued or issuable
with respect to the Series A Preferred Stock or Series B Preferred
Stock;
(y) an amount equal to the sum of
(1) the aggregate purchase price of the
shares of Series A Preferred Stock or Series B Preferred Stock sold
pursuant to the applicable Stock Purchase Agreements divided by the
applicable Conversion Price for such shares in effect at the
applicable
-5-
Purchase Date (or such higher or lower Conversion Price for such
series as results from the application of subsections 3(c)(iii) and
(iv) and assuming that this Certificate was in effect as of the
applicable Purchase Date) plus
(2) the number of shares of Additional
Stock issued since the applicable Purchase Date (increased or
decreased to the extent that the number of such shares of Additional
Stock shall have been increased or decreased as the result of the
application of subsections 3(c)(iii) and (iv)).
B. No adjustment of the Conversion Price for the
Series A Preferred Stock or Series B Preferred Stock shall be made in an amount
less than one cent per share, provided that any adjustments which are not
required to be made by reason of this sentence shall be carried forward and
shall be either taken into account in any subsequent adjustment made prior to 3
years from the date of the event giving rise to the adjustment being carried
forward, or shall be made at the end of 3 years from the date of the event
giving rise to the adjustment being carried forward. Except to the limited
extent provided for in subsections (E)(3) and (E)(4), no adjustment of such
Conversion Price pursuant to this subsection 3(c)(i) shall have the effect of
increasing the Conversion Price above the Conversion Price in effect immediately
prior to such adjustment.
C. In the case of the issuance of Common Stock
for cash, the consideration shall be deemed to be the amount of cash paid
therefor before deducting any reasonable discounts, commissions or other
expenses allowed, paid or incurred by this corporation for any underwriting or
otherwise in connection with the issuance and sale thereof.
D. In the case of the issuance of the Common
Stock for a consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair value thereof as determined by
the Board of Directors irrespective of any accounting treatment.
E. In the case of the issuance (whether before,
on or after the applicable Purchase Date) of options to purchase or rights to
subscribe for Common Stock, securities by their terms convertible into or
exchangeable for Common Stock or options to purchase or rights to subscribe for
such convertible or exchangeable securities, the following provisions shall
apply for all purposes of this subsection 3(c)(i) and subsection 3(c)(ii):
1. The aggregate maximum number of shares of
Common Stock deliverable upon exercise of such options to purchase or
rights to subscribe for Common Stock shall be deemed to have been
issued at the time such options or rights were issued and for a
consideration equal to the consideration (determined in the manner
provided in subsections 3(c)(i)(C) and (c)(i)(D)), if any, received by
the
-6-
corporation upon the issuance of such options or rights plus the
minimum exercise price provided in such options or rights (without
taking into account potential antidilution adjustments) for the Common
Stock covered thereby.
2. The aggregate maximum number of shares of
Common Stock deliverable upon conversion of or in exchange for any
such convertible or exchangeable securities or upon the exercise of
options to purchase or rights to subscribe for such convertible or
exchangeable securities and subsequent conversion or exchange thereof
shall be deemed to have been issued at the time such securities were
issued or such options or rights were issued and for a consideration
equal to the consideration, if any, received by the corporation for
any such securities and related options or rights (excluding any cash
received on account of accrued interest or accrued dividends), plus
the minimum additional consideration, if any, to be received by the
corporation (without taking into account potential antidilution
adjustments) upon the conversion or exchange of such securities or the
exercise of any related options or rights (the consideration in each
case to be determined in the manner provided in subsections 3(c)(i)(C)
and (c)(i)(D)).
3. In the event of any change in the number of
shares of Common Stock deliverable or in the consideration payable to
this corporation upon exercise of such options or rights or upon
conversion of or in exchange for such convertible or exchangeable
securities, including, but not limited to, a change resulting from the
antidilution provisions thereof, the applicable Conversion Price of
the Series A Preferred Stock and Series B Preferred Stock, as
applicable, and to the extent in any way affected by or computed using
such options, rights or securities, shall be recomputed to reflect
such change, but no further adjustment shall be made for the actual
issuance of Common Stock or any payment of such consideration upon the
exercise of any such options or rights or the conversion or exchange
of such securities.
4. Upon the expiration of any such options or
rights, the termination of any such rights to convert or exchange or
the expiration of any options or rights related to such convertible or
exchangeable securities, the applicable Conversion Price of the Series
A Preferred Stock and Series B Preferred Stock, as applicable, to the
extent in any way affected by or computed using such options, rights
or securities or options or rights related to such securities, shall
be recomputed to reflect the issuance of only the number of shares of
Common Stock (and convertible or exchangeable securities which remain
in effect) actually issued upon the exercise of such options or
rights, upon the conversion or exchange of such securities or upon the
exercise of the options or rights related to such securities.
-7-
5. The number of shares of Common Stock deemed
issued and the consideration deemed paid therefor pursuant to
subsections 3(c)(i)(E)(1) and (2) shall be appropriately adjusted to
reflect any change, termination or expiration of the type described in
either subsection 3(c)(i)(E)(3) or (4).
(ii) "Additional Stock" shall mean any shares of Common Stock
issued (or deemed to have been issued pursuant to subsection 3(c)(i)(E)) by this
corporation before, on or after the applicable Purchase Date other than
A. shares of Common Stock issued pursuant to a transaction
described in subsection 3(c)(iii) hereof,
B. shares of Common Stock issued upon conversion of shares
of Series A Preferred Stock or Series B Preferred Stock,
C. shares of Common Stock issuable or issued to employees,
consultants, or directors of this corporation directly or pursuant to
a stock option plan or agreement or restricted stock plan or agreement
approved by the Board of Directors of this corporation,
D. shares of Common Stock issued or issuable (I) in a
public offering before or in connection with which all outstanding
shares of Series A Preferred Stock and Series B Preferred Stock will
be converted to Common Stock or (II) upon exercise of warrants or
rights granted to underwriters in connection with such a public
offering, or
E. shares of Series B Preferred Stock issued or issuable to
Comdisco, Inc. pursuant to a Warrant dated August 31, 1995.
(iii) In the event the corporation should at any time or from
time to time after the applicable Purchase Date fix a record date for the
effectuation of a split or subdivision of the outstanding shares of Common Stock
or the determination of holders of Common Stock entitled to receive a dividend
or other distribution payable in additional shares of Common Stock or other
securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock (hereinafter
referred to as "Common Stock Equivalents") without payment of any consideration
by such holder for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of
such dividend distribution, split or subdivision if no record date is fixed),
the applicable Conversion Price of the Series A Preferred Stock and Series B
Preferred Stock then in effect shall be appropriately decreased so that the
number of shares of Common Stock issuable on conversion of each share of such
series shall be increased in proportion to
-8-
such increase of the aggregate of shares of Common Stock outstanding and those
issuable with respect to such Common Stock Equivalents.
(iv) If the number of shares of Common Stock outstanding at
any time after the applicable Purchase Date is decreased by a combination of the
outstanding shares of Common Stock, then, following the record date of such
combination, the applicable Conversion Price for the Series A Preferred Stock
and Series B Preferred Stock then in effect shall be appropriately increased so
that the number of shares of Common Stock issuable on conversion of each share
of such series shall be decreased in proportion to such decrease in outstanding
shares.
d. Other Distributions. In the event this corporation shall
-------------------
declare a distribution payable in securities of other persons, evidences of
indebtedness issued by this corporation or other persons, assets (excluding cash
dividends) or options or rights not referred to in subsection 3(c)(iii), then,
in each such case for the purpose of this subsection 3(d), the holders of the
Series A Preferred Stock and Series B Preferred Stock shall be entitled to a
proportionate share of any such distribution as though they were the holders of
the number of shares of Common Stock of the corporation into which their shares
of Series A Preferred Stock and Series B Preferred Stock are convertible as of
the record date fixed for the determination of the holders of Common Stock of
the corporation entitled to receive such distribution.
e. Recapitalizations. If at any time or from time to time there
-----------------
shall be a recapitalization of the Common Stock (other than a subdivision,
combination or merger or sale of assets transaction provided for elsewhere in
this Section 3) provision shall be made so that the holders of the Series A
Preferred Stock and Series B Preferred Stock shall thereafter be entitled to
receive upon conversion of the Series A Preferred Stock and Series B Preferred
Stock, respectively, the number of shares of stock or other securities or
property of the Company or otherwise, to which a holder of Common Stock
deliverable upon conversion would have been entitled on such recapitalization.
In any such case, appropriate adjustment shall be made in the application of the
provisions of this Section 3 with respect to the rights of the holders of the
Series A Preferred Stock and Series B Preferred Stock after the recapitalization
to the end that the provisions of this Section 3 (including adjustment of the
Conversion Price then in effect and the number of shares purchasable upon
conversion of the Series A Preferred Stock and Series B Preferred Stock) shall
be applicable after that event as nearly equivalent as may be practicable.
f. No Impairment. This corporation will not, by amendment
-------------
of its Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by this corporation, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 3 and in the taking of all
such action as may be necessary or appropriate in order to protect the
-9-
Conversion Rights of the holders of the Series A Preferred Stock and Series B
Preferred Stock against impairment.
g. No Fractional Shares and Certificate as to Adjustments.
------------------------------------------------------
(i) No fractional shares shall be issued upon conversion
of the Series A Preferred Stock and Series B Preferred Stock, and the number of
shares of Common Stock to be issued shall be rounded up to the nearest whole
share. Whether or not fractional shares are issuable upon such conversion shall
be determined on the basis of the total number of shares of Series A Preferred
Stock and Series B Preferred Stock the holder is at the time converting into
Common Stock and the number of shares of Common Stock issuable upon such
aggregate conversion.
(ii) Upon the occurrence of each adjustment or
readjustment of the Conversion Price of Series A Preferred Stock and Series B
Preferred Stock pursuant to this Section 3, this corporation, at its expense,
shall promptly compute such adjustment or readjustment in accordance with the
terms hereof and prepare and furnish to each holder of Series A Preferred Stock
and Series B Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. This corporation shall, upon the written request at any
time of any holder of Series A Preferred Stock or Series B Preferred Stock,
furnish or cause to be furnished to such holder a like certificate setting forth
(A) such adjustment and readjustment, (B) the Conversion Price at the time in
effect, and (C) the number of shares of Common Stock and the amount, if any, of
other property which at the time would be received upon the conversion of a
share of Series A Preferred Stock or Series B Preferred Stock.
h. Notices of Record Date. In the event of any taking by this
----------------------
corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, this
corporation shall mail to each holder of Series A Preferred Stock and Series B
Preferred Stock at least 20 days prior to the date specified therein, a notice
specifying the date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right.
i. Reservation of Stock Issuable Upon Conversion. This
---------------------------------------------
corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock solely for the purpose of effecting the
conversion of the shares of the Series A Preferred Stock and Series B Preferred
Stock such number of its shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of the Series A
Preferred Stock and Series B Preferred Stock; and if at any time the number of
authorized but unissued shares of
-10-
Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of the Series A Preferred Stock and Series B Preferred Stock,
in addition to such other remedies as shall be available to the holder of such
Series A Preferred Stock or Series B Preferred Stock, this corporation will take
such corporate action as may, in the opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purposes.
j. Notices. Any notice required by the provisions of this
-------
Section 3 to be given to the holders of shares of Series A Preferred Stock or
Series B Preferred Stock shall be deemed given if deposited in the United States
mail, postage prepaid, and addressed to each holder of record at his address
appearing on the books of this corporation.
4. Voting Rights.
-------------
a. General Voting Rights. The holder of each share of Series A
---------------------
Preferred Stock and Series B Preferred Stock shall have the right to one vote
for each share of Common Stock into which such Series A Preferred Stock and
Series B Preferred Stock could then be converted (with any fractional share
determined on an aggregate conversion basis being rounded to the nearest whole
share), and with respect to such vote, such holder shall have full voting rights
and powers equal to the voting rights and powers of the holders of Common Stock,
and shall be entitled, notwithstanding any provision hereof, to notice of any
stockholders' meeting in accordance with the Bylaws of this corporation, and
shall be entitled to vote, together as a single class with holders of Common
Stock, with respect to any question upon which holders of Common Stock have the
right to vote; except for the election of directors.
b. Election of Directors. The authorized number of directors of
---------------------
this Corporation shall be five (5). Notwithstanding 5(a) above, the holders of
Series A Preferred Stock, voting as a separate class, shall be entitled to elect
four (4) directors of the corporation; and the holders of the Series A Preferred
Stock, Series B Preferred Stock and Common Stock, voting together as a single
class on an as converted basis, shall be entitled to elect one (1) director of
the corporation. At any meeting held for the purpose of electing directors, the
presence in person or by proxy of the holders of a majority of the Series A
Preferred Stock then outstanding shall constitute a quorum of the Series A
Preferred Stock for the election of directors to be elected solely by the
holders of Series A Preferred Stock. At any meeting held for the purpose of
electing directors, the presence in person or by proxy of the holders of a
majority of the Series A Preferred Stock, Series B Preferred Stock and Common
Stock then outstanding, on an as converted basis, shall constitute a quorum of
the Series A Preferred Stock, Series B Preferred Stock and Common Stock for the
election of directors to be elected solely by the holders of the Series A
Preferred Stock, Series B Preferred Stock and Common Stock, voting together as a
single class on an as converted basis. A vacancy in any directorship elected by
the holders of Series A Preferred Stock shall be filled only by vote of the
holders of Series A Preferred Stock; and a vacancy in any directorship elected
by the holders of Series A Preferred Stock, Series B Preferred Stock and
-11-
Common Stock voting together shall be filled only by the vote of the holders of
Series A Preferred Stock, Series B Preferred Stock and Common Stock voting
together as provided above.
5. Protective Provisions. So long as shares of Series A Preferred
---------------------
Stock and/or Series B Preferred Stock are outstanding, this corporation shall
not without first obtaining the approval (by vote or written consent, as
provided by law) of the holders of a majority of the then outstanding shares of
Series A Preferred Stock and Series B Preferred Stock, voting together as a
single class on an as converted basis:
a. sell, convey, or otherwise dispose of or encumber all or
substantially all of its property or business or merge into or consolidate with
any other corporation (other than a wholly owned subsidiary corporation) or
effect any transaction or series of related transactions in which more than 50%
of the voting power of the corporation is disposed of;
b. alter or change the rights, preferences or privileges of the
shares of Series A Preferred Stock or Series B Preferred Stock so as to affect
adversely the shares;
c. increase the authorized number of shares of Series A
Preferred Stock, Series B Preferred Stock or Common Stock;
d. create any new class or series of stock or any other
securities convertible into equity securities of the corporation (i) having a
preference over, or being on a parity with, the Series A Preferred Stock or
Series B Preferred Stock with respect to voting, dividends, conversion rights or
upon liquidation, or (ii) having rights similar to any of the rights of the
Series A Preferred Stock and Series B Preferred Stock under this Section 5; or
e. change authorized number of directors from five (5).
C. Common Stock.
------------
1. Dividend Rights. Subject to the prior rights of holders of all
---------------
classes of stock at the time outstanding having prior rights as to dividends,
the holders of the Common Stock shall be entitled to receive, when and as
declared by the Board of Directors, out of any assets of the corporation legally
available therefor, such dividends as may be declared from time to time by the
Board of Directors.
2. Liquidation Rights. Upon the liquidation, dissolution or winding
------------------
up of the corporation, the assets of the corporation shall be distributed as
provided in Section 2 of Division (B) of this Article IV hereof.
3. Redemption. The Common Stock is not redeemable.
----------
-12-
4. Voting Rights. The holder of each share of Common Stock shall
-------------
have the right to one vote, and shall be entitled to notice of any shareholders'
meeting in accordance with the Bylaws of this corporation, and shall be entitled
to vote upon such matters and in such manner as may be provided by law.
ARTICLE V
A. Exculpation. A director of the Corporation shall not be personally
-----------
liable to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director derived any
improper personal benefit. If the Delaware General Corporation Law is hereafter
amended to further reduce or to authorize, with the approval of the
Corporation's stockholders, further reductions in the liability of the
Corporation's directors for breach of fiduciary duty, then a director of the
Corporation shall not be liable for any such breach to the fullest extent
permitted by the Delaware General Corporation Law as so amended.
B. Indemnification. To the extent permitted by applicable law, this
---------------
Corporation is also authorized to provide indemnification of (and advancement of
expenses to) such agents (and any other persons to which Delaware law permits
this Corporation to provide indemnification) through bylaw provisions,
agreements with such agents or other persons, vote of stockholders or
disinterested directors or otherwise, in excess of the indemnification and
advancement otherwise permitted by Section 145 of the Delaware General
Corporation Law, subject only to limits created by applicable Delaware law
(statutory or non-statutory), with respect to actions for breach of duty to the
Corporation, its stockholders, and others.
C. Effect of Repeal or Modification. Any repeal or modification of any
--------------------------------
of the foregoing provisions of this Article V shall not adversely affect any
right or protection of a director, officer, agent or other person existing at
the time of, or increase the liability of any director of the Corporation with
respect to any acts or omissions of such director occurring prior to, such
repeal or modification.
ARTICLE VI
The corporation shall have a perpetual existence.
ARTICLE VII
-13-
Except as otherwise provided in this Certificate of Incorporation, in
furtherance and not in limitation of the powers conferred by statute, the Board
of Directors of this corporation is expressly authorized to make, alter, amend,
rescind or repeal the Bylaws of the corporation.
ARTICLE VIII
Elections of directors need not be by written ballot except and to the
extent provided in the Bylaws of the corporation.
ARTICLE IX
The corporation shall not be subject to the provisions of Section 203 of
the Delaware General Corporation Law.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-14-
IN WITNESS WHEREOF, the Amended and Restated Certificate of Incorporation
has been signed under the seal of this corporation as of this 24th day of
October, 1995.
CORSAIR COMMUNICATIONS, INC.
By:__________________________
Xxxx Xxx Xxxxxx, President
ATTEST:
_____________________________
Xxxxx Xxxxxxx, Secretary
EXHIBIT B
AMENDMENT NO. 2 TO THE INVESTORS' RIGHTS AGREEMENT
--------------------------------------------------
B-1
CORSAIR COMMUNICATIONS, INC.
AMENDMENT NO. 2 TO THE INVESTORS' RIGHTS AGREEMENT
This Amendment No. 2 ("Amendment") to the Investors' Rights Agreement dated
December 10, 1994 (the "Agreement") is made as of this 31st day of October, 1995
by and among Corsair Communications, Inc., a Delaware corporation (the
"Company"), each of the individuals and entities listed on Schedule A to the
----------
Agreement, as amended, (the "Existing Investors") and each of the individuals
and entities listed as New Investors on the signature page to this Amendment
(the "New Investors"). Capitalized terms used herein which are not defined
herein shall have the definition ascribed to them in the Agreement.
RECITALS
--------
The Company desires to sell and issue to the New Investors and the New
Investors desire to purchase from the Company, shares of the Company's Series B
Preferred Stock pursuant to that certain Series B Preferred Stock Purchase
Agreement of even date herewith (the "Series B Agreement").
The Existing Investors desire for the New Investors to invest in the
Company and, as a condition thereof and to induce such investment, the Existing
Investors and the Company are willing to enter into this Amendment to permit the
New Investors to become a party to the Agreement, as amended.
In consideration of the foregoing and the promises and covenants contained
herein and other good and valuable consideration the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. ADDITIONAL PARTIES TO THE AGREEMENT.
-----------------------------------
The New Investors hereby enter into and become parties to the
Agreement. Schedule A to the Agreement is amended to include the New Investors.
----------
2. AMENDMENTS TO AGREEMENT.
-----------------------
2.1 The New Investors and the Existing Investors are collectively
referred to as "Investors" for the purposes of the Agreement, as amended.
2.2 Section 1.1(c) of the Agreement is amended in its entirety to
read as follows:
"(c) The term "Registrable Securities" means (1) the Common Stock
issuable or issued upon conversion of the Series A Preferred Stock
and Series B Preferred Stock and (2) any Common Stock of the Company issued
as (or issuable upon the conversion or exercise of any warrant, right or
other security which is issued as) a dividend or other distribution with
respect to, or in exchange for or in replacement of, such Series A
Preferred Stock, Series B Preferred Stock or Common Stock, excluding in all
cases, however, any Registrable Securities sold by a party in a transaction
in which its rights under this Section 1 are not assigned;"
2.3 Section 2.4 of the Agreement is amended in its entirety to read
as follows:
"2.4 Right of First Offer. Subject to the terms and conditions
--------------------
specified in this Section 2.4, the Company hereby grants to each Major
Investor (as hereinafter defined) a right of first offer with respect to
future sales by the Company of its Shares (as hereinafter defined). For
purposes of this Section 2.4, a Major Investor shall mean (a) any Investor
who holds at least (i) 10% of the original investment such Investor makes
in the Company pursuant to the Series A Agreement or (ii) 10% of the
original investment such Investor makes in the Company pursuant to the
Series B Agreement, and (b) any person who acquires at least (i) 10% of the
Series A Preferred Stock (or the common stock issued upon conversion
thereof) issued pursuant to the Series A Agreement, or (ii) 10% of the
Series B Preferred Stock (or common stock issued upon conversion thereof)
issued pursuant to the Series B Agreement. For purposes of this Section
2.4, an Investor includes any general partners and affiliates of an
Investor. An Investor shall be entitled to apportion the right of first
offer hereby granted it among itself and its partners and affiliates in
such proportions as it deems appropriate.
Each time the Company proposes to offer any shares of, or securities
convertible into or exercisable for any shares of, any class of its capital
stock ("Shares"), the Company shall first make an offering of such Shares
to each Major Investor in accordance with the following provisions:
(a) The Company shall deliver a notice by certified mail
("Notice") to the Major Investors stating (i) its bona fide intention to
offer such Shares, (ii) the number of such Shares to be offered, and (iii)
the price and terms, if any, upon which it proposes to offer such Shares.
(b) Within 20 calendar days after receipt of the Notice, each
Major Investor may elect to purchase or obtain, at the price and on the
terms specified in the Notice, up to that portion of such Shares which
equals the proportion that the number of shares of common stock issued and
held, or issuable upon conversion of the Series A Preferred Stock and
Series B Preferred Stock then held, by such Major Investor bears to the
total number of shares of common stock of the Company then outstanding
-2-
(assuming full conversion and exercise of all convertible or exercisable
securities). The Company shall promptly, in writing, inform each Major
Investor which purchases all the shares available to it ("Fully-Exercising
Investor") of any other Major Investor's failure to do likewise. During
the ten-day period commencing after receipt of such information is given,
each Fully-Exercising Investor shall be entitled to obtain that portion of
the Shares not subscribed for by the Major Investors which is equal to the
proportion that the number of shares of common stock issued and held, or
issuable upon conversion of Series A Preferred Stock and Series B Preferred
Stock then held, by such Fully-Exercising Investor bears to the total
number of shares of common stock issued and held, or issuable upon
conversion of the Series A Preferred Stock and Series B Preferred Stock
then held, by all Fully-Exercising Investors who wish to purchase some of
the unsubscribed shares.
(c) If all Shares that Investors are entitled to obtain pursuant
to subsection 2.4(b) are not elected to be obtained as provided in
subsection 2.4(b) hereof, the Company may, during the 60-day period
following the expiration of the period provided in subsection 2.4(b)
hereof, offer the remaining unsubscribed portion of such Shares to any
person or persons at a price not less than, and upon terms no more
favorable to the offeree than those specified in the Notice. If the
Company does not enter into an agreement for the sale of the Shares within
such period, or if such agreement is not consummated within 60 days of the
execution thereof, the right provided hereunder shall be deemed to be
revived and such Shares shall not be offered unless first reoffered to the
Major Investors in accordance herewith.
(d) The right of first offer in this paragraph 2.4 shall not be
applicable: (i) to the issuance or sale of common stock (or options
therefor) to employees, consultants and directors, directly or pursuant to
a stock option plan or agreement or restricted stock plan or agreement
approved by the Board of Directors of this Company, provided each employee
executes an agreement containing the provisions set forth in Section 2.5(b)
hereof, (ii) to or after consummation of a bona fide, firmly underwritten
public offering of shares of common stock, registered under the Act
pursuant to a registration statement on Form S-1, at an offering price of
at least $10.00 per share (appropriately adjusted for any stock split,
dividend, combination or other recapitalization) and $7,500,000 in the
aggregate, (iii) to the issuance of securities pursuant to the conversion
or exercise of convertible or exercisable securities, (iv) to the issuance
of securities in connection with a bona fide business acquisition of or by
the Company, whether by merger, consolidation, sale of assets, sale or
exchange of stock or otherwise or (v) to the issuance of stock, warrants or
other securities or rights to persons or entities with which the Company
has
-3-
business relationships, provided such issuances are for other than
primarily equity financing purposes."
3. WAIVER AND CONSENT.
------------------
Each Existing Investor, pursuant to any rights such Existing Investor
may have under the Agreement, hereby, on behalf of himself and the other
Investors under the Agreement, (a) waives all rights under, and any notice
required by, Section 2.4 of the Agreement relating to any rights to purchase or
rights of first offer with respect to the sale of the shares of Series B
Preferred Stock, (b) consents to adding the New Investors as parties to the
Agreement, and (c) consents to the registration rights hereby provided the New
Investors, which consent is given pursuant to Section 1.14 of the Agreement.
4. EFFECT OF AMENDMENT.
-------------------
Except as amended and set forth above, the Agreement shall continue in full
force and effect.
5. COUNTERPARTS.
------------
This Amendment may be executed in any number of counterparts, each which
will be deemed an original, and all of which together shall constitute one
instrument.
6. SEVERABILITY.
------------
If one or more provisions of this Amendment are held to be
unenforceable under applicable law, such provision shall be excluded from this
Amendment and the balance of the Amendment shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
7. ENTIRE AGREEMENT.
----------------
This Amendment, together with the Agreement, constitutes the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.
8. GOVERNING LAW.
-------------
This Amendment shall be governed by and construed under the laws of
the State of California as applied to agreements among California residents
entered into and to be performed entirely within California.
-4-
This Amendment is hereby executed as of the date first above written.
CORSAIR COMMUNICATIONS, INC., a Delaware
corporation
By:_________________________________________
Xxxx Xxx Xxxxxx, President
Address:3408 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
EXISTING INVESTORS:
XXXXXXX XXXXXXX XXXXXXXX & XXXXX VII
By:_________________________________________
Address:2750 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
KPCB VII FOUNDERS FUND
By:_______________________________________________
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
XXXXX XXXXX FUND IV L.P.
By: SRB Associates IV L.P.
Its: General Partner
By:_________________________________________
General Partner
Address: Two Galleria Tower
00000 Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO THE
INVESTORS' RIGHTS AGREEMENT]
XXXXX XXXXX XXXXXXX MANAGEMENT COMPANY
By:_______________________________________________
Address: Two Galleria Tower
00000 Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
NORWEST EQUITY PARTNERS IV, a
Minnesota Limited Partnership
By: Itasca Partners
Its: General Partner
By:_________________________________________
Address: 0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Menlo Park, California 94025
XXXXXXX CAPITAL SBIC, L.P.
By: Xxxxxxx Capital Management Partners, L.P.
By:_________________________________________
Address: 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
XXXXXXX EMERGING GROWTH PARTNERS
By:_______________________________________________
Address: 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO THE
INVESTORS' RIGHTS AGREEMENT]
TRW INC.
By:_______________________________________________
Address: ___________________________________
___________________________________
NEW INVESTORS:
ACCEL IV L.P.
By: Accel IV Associates L.P.
Its: General Partner
By: _______________________________________
General Partner
Address: c/o Accel Partners
Xxx Xxxxxxxxxxx Xxxxxx,
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
ACCEL INVESTORS '95 L.P.
By: ____________________________________________
General Partner
Address: c/o Accel Partners
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: X. Xxxxxx Sednaoui
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO THE
INVESTORS' RIGHTS AGREEMENT]
ACCEL KEIRETSU L.P.
By: Accel Partners & Co. Inc.
Its: General Partner
By: _______________________________________
Address: c/o Accel Partners
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: X. Xxxxxx Sednaoui
XXXXXXX X. XXXXXXXXX PARTNERS
By: ____________________________________________
General Partner
Address: c/o Accel Partners
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: X. Xxxxxx Sednaoui
TECHNOLOGY CROSSOVER VENTURES, L.P.
By:_______________________________________________
Address: 000 Xxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
TECHNOLOGY CROSSOVER VENTURES, C.V.
By:_______________________________________________
Address: 000 Xxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO THE
INVESTORS' RIGHTS AGREEMENT]
INTEGRAL CAPITAL PARTNERS II, L.P.
By: Integral Capital Management II, L.P.
Its: General Partner
By:_________________________________________
its General Partner
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
INTEGRAL CAPITAL PARTNERS INTERNATIONAL, C.V.
By: Integral Capital Management II, L.P.
Its: Investment General Partner
By:_________________________________________
its General Partner
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
KPCB INFORMATION SCIENCES ZAIBATSU FUND II
By:_______________________________________________
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO THE
INVESTORS' RIGHTS AGREEMENT]
NORWEST EQUITY PARTNERS, V, a Minnesota Limited
Liability Partnership
By: Itasca Partners V, L.L.P.
Its: General Partner
By:_________________________________________
Address: 0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
__________________________________________________
Xxxxx X. Ring
Address: 0000 00xx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
[SIGNATURE PAGE TO AMENDMENT NO. 2 TO THE
INVESTORS' RIGHTS AGREEMENT]
SCHEDULE OF EXCEPTIONS
----------------------
The following matters are exceptions to the representations and warranties
of Corsair Communications, Inc., a Delaware corporation (the "Company") as set
forth in Section 2 of the Series B Preferred Stock Purchase Agreement (the
"Agreement"). The section numbers in this Schedule of Exceptions correspond to
the section numbers in the Agreement; however, any information disclosed herein
under any section number shall be deemed to be disclosed and incorporated into
any other section number under the Agreement where such disclosure would
otherwise be appropriate. Where the terms of a contract or other disclosure
item have been summarized or described in this Schedule of Exceptions, such
summary or description does not purport to be a complete statement of the
material terms of such contract or other item. Any terms defined in the
Agreement shall have the same meaning when used in this Schedule of Exceptions
as when used in the Agreement unless the context otherwise requires.
