Document:

exv10w13

 

Exhibit 10.13

VERAZ NETWORKS, INC.

AMENDED AND RESTATED VOTING AGREEMENT

     This Amended and Restated Voting Agreement (the “Agreement”) is made and entered
into as of this 19th day of December, 2006, by and among Veraz Networks, Inc., a Delaware
corporation (the “Company”), those certain holders of the Company’s Common Stock listed on Exhibit
A hereto (the “Key Holders”) and the persons and entities listed on Exhibit B hereto (the
“Investors”).

Witnesseth

     Whereas, the Key Holders are the beneficial owners of an aggregate of six hundred
ninety-eight thousand six hundred twenty-four (698,624) shares of the common stock of the Company
(the “Common Stock”);

     Whereas, certain Investors hold shares of Common Stock and Series C Preferred Stock
(the “Series C Preferred”) and certain Investors are purchasing shares of the Company’s Series D
Preferred Stock (the “Series D Preferred” and together with the Series C Preferred, the “Series
Preferred”), pursuant to that certain Series D Preferred Stock Purchase Agreement (the “Purchase
Agreement”) of even date herewith (the “Financing”);

     Whereas, the Key Holders, certain Investors and the Company are parties to that
certain Voting Agreement dated October 30, 2002 (the “Prior Agreement”);

     Whereas, the parties to such Prior Agreement desire to amend and restate the Prior
Agreement and to accept the rights and covenants hereof in lieu of their rights and covenants under
the Prior Agreement; and

     Whereas, in connection with the consummation of the Financing, the Company, the Key
Holders and the Investors have agreed to provide for the future voting of their shares of the
Company’s capital stock as set forth below.

     Now, Therefore, in consideration of these premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

AGREEMENT

1. Voting.

     1.1 Key Holder Shares; Investor Shares.

          (a) The Key Holders each agree to hold all shares of voting capital stock of the Company
registered in their respective names or beneficially owned by them as of the date hereof and any
and all other securities of the Company legally or beneficially acquired by each

- 1 -

 

of the Key Holders after the date hereof (hereinafter collectively referred to as the “Key Holder Shares”) subject to,
and to vote the Key Holder Shares in accordance with, the provisions of this Agreement.

          (b) The Investors each agree to hold all shares of voting capital stock of the Company
(including but not limited to all shares of Common Stock issued upon conversion of the Series
Preferred) registered in their respective names or beneficially owned by them as of the date hereof
and any and all other securities of the Company legally or beneficially acquired by each of the
Investors after the date hereof (hereinafter collectively referred to as the “Investor Shares”)
subject to, and to vote the Investor Shares in accordance with, the provisions of this Agreement.

     1.2 Election of Directors. On all matters relating to the election of directors of the
Company, the Key Holders and the Investors agree to vote all Key Holder Shares and Investor Shares
held by them (or the holders thereof shall consent pursuant to an action by written consent of the
holders of capital stock of the Company) so as to elect members of the Company’s Board of Directors
as follows:

          (a) At each election of directors, the Investors shall vote all of their respective Investor
Shares so as to elect: (i) one representative of Levensohn Venture Partners so long as it holds
not less than one million (1,000,000) shares of Series Preferred (as adjusted for stock splits,
dividends and the like), which individual shall initially be Pascal Levensohn; (ii) one
representative of Norwest Venture Capital so long as it holds not less than one million (1,000,000)
shares of Series Preferred (as adjusted for stock splits, dividends and the like), which individual
shall initially be Promod Haque; (iii) one representative of Battery Ventures so long as it holds
not less than one million (1,000,000) shares of Series Preferred (as adjusted for stock splits,
dividends and the like), which individual shall initially be Morgan Jones; and (iv) either: (x)
three representatives of ECI Telecom Ltd. (“ECI”) so long as it holds not less than two million
(2,000,000) shares of Series Preferred (as adjusted for stock splits, dividends and the like), (y)
two representatives of ECI so long as it holds not less than one million two hundred fifty thousand
(1,250,000) shares of Series Preferred (as adjusted for stock splits, dividends and the like), or
(z) one representative of ECI so long as it holds not less than one million (1,000,000) shares of
Series Preferred (as adjusted for stock splits, dividends and the like) two of which individuals
shall initially be Giora Bitan and Dror Nahumi, provided however, that so long as ECI is entitled
to designate more than one director, at least one of such designees shall, at all times during the
term of this Agreement, be neither an officer nor a director of ECI or any of its affiliates. Any
vote taken to remove any director elected pursuant to this Section 1.2(a), or to fill any vacancy
created by the resignation, removal or death of a director elected pursuant to this Section 1.2(a),
shall also be subject to the provisions of this Section 1.2(a).

          (b) At each election of directors in which the holders of Common Stock, voting as a separate
class, are entitled to elect directors of the Company, the Key Holders and Investors shall vote all
of their respective Key Holder Shares and Investor Shares so as to elect: (i) the person serving
as Chief Executive Officer of the Company, which individual shall initially be Doug Sabella, and
(ii) a Key Holder designated by a majority of the directors elected pursuant to Sections 1.2(a)(i),
1.2(a)(ii), and 1.2(a)(iii), which individual shall initially be Bob L. Corey. Any vote taken to
remove any director elected pursuant to this Section 1.2(b), or to fill any

- 2 -

 

vacancy created by the resignation, removal or death of a director elected pursuant to this Section 1.2(b), shall also be
subject to the provisions of this Section 1.2(b).

          (c) At each election of directors in which the holders of Common Stock and holders of Series
Preferred, voting together as a single class, are entitled to elect directors of the Company, the
Key Holders and Investors shall vote all of their respective Key Holder Shares and Investor Shares
so as to elect one nominee who shall be an industry representative not affiliated with the Company
or any Investor that is acceptable to the other members of the Company’s Board of Directors. Any
vote taken to remove any director elected pursuant to this Section 1.2(c), or to fill any vacancy
created by the resignation, removal or death of a director elected pursuant to this Section 1.2(c),
shall also be subject to the provisions of this Section 1.2(c).

     1.3 No Liability for Election of Recommended Director. None of the parties hereto and no
officer, director, stockholder, partner, employee or agent of any party makes any representation or
warranty as to the fitness or competence of the nominee of any party hereunder to serve on the
Board of Directors by virtue of such party’s execution of this Agreement or by the act of such
party in voting for such nominee pursuant to this Agreement.

     1.4 Legend.

          (a) Concurrently with the execution of this Agreement, there shall be imprinted or otherwise
placed, on certificates representing the Key Holder Shares and the Investor Shares the following
restrictive legend (the “Legend”):

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A VOTING AGREEMENT WHICH PLACES CERTAIN RESTRICTIONS ON THE
VOTING OF THE SHARES REPRESENTED HEREBY. ANY PERSON ACCEPTING ANY INTEREST
IN SUCH SHARES SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE
PROVISIONS OF SUCH AGREEMENT. A COPY OF SUCH VOTING AGREEMENT WILL BE
FURNISHED TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON
WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS.”

          (b) The Company agrees that, during the term of this Agreement, it will not remove, and will
not permit to be removed (upon registration of transfer, reissuance or otherwise), the Legend from
any such certificate and will place or cause to be placed the Legend on any new certificate issued
to represent Key Holder Shares or Investor Shares theretofore represented by a certificate carrying
the Legend.

     1.5 Successors. The provisions of this Agreement shall be binding upon the successors in
interest to any of the Key Holder Shares or Investor Shares. The Company shall not permit the
transfer of any of the Key Holder Shares or Investor Shares on its books or issue a new certificate
representing any of the Key Holder Shares or Investor Shares unless and until the

- 3 -

 

person to whom such security is to be transferred shall have executed a written agreement, substantially in the
form of this Agreement, pursuant to which such person becomes a party to this Agreement and agrees
to be bound by all the provisions hereof as if such person were a Key Holder or Investor, as
applicable.

     1.6 Other Rights. Except as provided by this Agreement or any other agreement entered into in
connection with the Financing, each Key Holder and Investor shall exercise the full rights of a
holder of capital stock of the Company with respect to the Key Holder Shares and the Investor
Shares, respectively.

	2.	 	Termination.

     2.1 This Agreement shall continue in full force and effect from the date hereof through the
earliest of the following dates, on which date it shall terminate in its entirety:

          (a) the date of the closing of a firmly underwritten public offering of the Common Stock
pursuant to a registration statement filed with the Securities and Exchange Commission, and
declared effective under the Securities Act of 1933, as amended which results in the Preferred
Stock being converted into Common Stock;

          (b) ten (10) years from the date of this Agreement;

          (c) the date of the closing of a sale, lease, or other disposition of all or substantially all
of the Company’s assets or the Company’s merger into or consolidation with any other corporation or
other entity, or any other corporate reorganization, in which the holders of the Company’s
outstanding voting stock immediately prior to such transaction own, immediately after such
transaction, securities representing less than fifty percent (50%) of the voting power of the
corporation or other entity surviving such transaction, provided that this Section 2.1(d) shall not
apply to a merger effected exclusively for the purpose of changing the domicile of the Company; or

          (d) the date as of which the parties hereto terminate this Agreement by written consent of a
majority in interest of the holders of Series Preferred, a majority in interest of the Key Holders
then providing services to the Company as officers, employees or consultants, and the written
consent of each party entitled to designate a seat pursuant to Section 1.2(a).

	3.	 	Miscellaneous.

     3.1 Ownership. Each Key Holder represents and warrants to the Investors and the Company that
(a) such Key Holder now owns the Key Holder Shares, free and clear of liens or encumbrances, and
has not, prior to or on the date of this Agreement, executed or delivered any proxy or entered into
any other voting agreement or similar arrangement other than one which has expired or terminated
prior to the date hereof, and (b) such Key Holder has full power and capacity to execute, deliver
and perform this Agreement, which has been duly executed and delivered by, and evidences the valid
and binding obligation of, such Key Holder enforceable in accordance with its terms. Each Investor
represents and warrants to the Investors and the Company that (a) such Investor now owns, or will
own upon the Closing (as defined in the Purchase Agreement), the Investor Shares, free and clear of
liens or encumbrances, and has not,

- 4 -

 

prior to or on the date of this Agreement, executed or
delivered any proxy or entered into any other voting agreement or similar arrangement other than
one which has expired or terminated prior to the date hereof, and (b) such Investor has full power
and capacity to execute, deliver and perform this Agreement, which has been duly executed and
delivered by, and evidences the valid and binding obligation of, such Investor enforceable in
accordance with its terms.

     3.2 Further Action. If and whenever the Key Holder Shares are sold, the Key Holders or the
personal representative of the Key Holders shall do all things and execute and deliver all
documents and make all transfers, and cause any transferee of the Key Holder Shares to do all
things and execute and deliver all documents, as may be necessary to consummate such sale
consistent with this Agreement.

     3.3 Specific Performance. The parties hereto hereby declare that it is impossible to measure
in money the damages which will accrue to a party hereto or to their heirs, personal
representatives, or assigns by reason of a failure to perform any of the obligations under this
Agreement and agree that the terms of this Agreement shall be specifically enforceable. If any
party hereto or his heirs, personal representatives, or assigns institutes any action or proceeding
to specifically enforce the provisions hereof, any person against whom such action or proceeding is
brought hereby waives the claim or defense therein that such party or such personal representative
has an adequate remedy at law, and such person shall not offer in any such action or proceeding the
claim or defense that such remedy at law exists.

     3.4 Governing Law. This Agreement, and the rights of the parties hereto, shall be governed by
and construed in accordance with the laws of the State of California as such laws apply to
agreements among California residents made and to be performed entirely within the State of
California.

     3.5 Amendment or Waiver. This Agreement may be amended (or provisions of this Agreement
waived) only by an instrument in writing signed by (i) the Company, (ii) a majority in interest of
the Investors and (iii) a majority in interest of the Key Holders then providing services to the
Company as officers, employees or consultants. Any amendment or waiver so effected shall be
binding upon the Company, each of the parties hereto and any assignee of any such party provided,
however, that notwithstanding the foregoing, Section 1.2(a) of this Agreement shall not be amended
or waived without the written consent of each of the parties entitled to designate a seat pursuant
to Section 1.2(a). Notwithstanding the foregoing, Section 1.2 of this Agreement may be amended to
add obligations of holders of additional series of the Company’s Preferred Stock by an instrument
in writing signed by the Company and the holders of such series.

     3.6 Severability. In the event one or more of the provisions of this Agreement should, for
any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this Agreement, and this
Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been
contained herein.

- 5 -

 

     3.7 Successors. This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective heirs, successors, assigns, administrators, executors and other legal
representatives.

     3.8 Additional Shares. In the event that subsequent to the date of this Agreement any shares
or other securities are issued on, or in exchange for, any of the Key Holder Shares or Investor
Shares by reason of any stock dividend, stock split, combination of shares, reclassification or the
like, such shares or securities shall be deemed to be Key Holder Shares or Investor Shares, as the
case may be, for purposes of this Agreement.

     3.9 Addition of Investors. Notwithstanding anything to the contrary contained herein, if the
Company shall issue additional shares of its Series D Preferred pursuant to the Purchase Agreement,
any purchaser of such shares of Series D Preferred shall become a party to this Agreement by
executing and delivering an additional counterpart signature page to this Agreement and shall be
deemed an “Investor” hereunder.

     3.10 Counterparts. This Agreement may be executed in one or more counterparts, each of which
will be deemed an original but all of which together shall constitute one and the same agreement.

     3.11 Waiver. No waivers of any breach of this Agreement extended by any party hereto to any
other party shall be construed as a waiver of any rights or remedies of any other party hereto or
with respect to any subsequent breach.

     3.12 Attorney’s Fees. In the event that any suit or action is instituted to enforce any
provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from
the losing party all fees, costs and expenses of enforcing any right of such prevailing party under
or with respect to this Agreement, including without limitation, such reasonable fees and expenses
of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses
of appeals.

     3.13 Notices. Any notices required in connection with this Agreement shall be in writing and
shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii)
when sent by confirmed electronic mail or facsimile if sent during normal business hours of the
recipient; if not, then on the next business day, (iii) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after
deposit with a nationally recognized overnight courier, specifying next day delivery, with written
notification of receipt. All notices shall be addressed to the holder appearing on the books of
the Company or at such address as such party may designate by ten (10) days advance written notice
to the other parties hereto.

     3.14 Entire Agreement. This Agreement and the Exhibits hereto, along with the Purchase
Agreement and each of the Exhibits thereto, constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof and no party shall be
liable or bound to any other in any manner by any representations, warranties, covenants and
agreements except as specifically set forth herein and therein. Upon the effective date of this

- 6 -

 

Agreement as set forth in Section 3.15 below, the Prior Agreement is hereby amended and restated in
its entirety as set forth herein and shall be of no further force or effect.

     3.15 Effective Date of Agreement. This Agreement and the rights and obligations contained
herein shall be effective immediately upon and simultaneously with the Closing as defined in the
Purchase Agreement. Prior to such Closing, this Agreement shall be of no force or effect.

     3.16 Aggregation of Stock. All shares of Series Preferred held or acquired by affiliated
entities or persons or persons or entities under common management or control shall be aggregated
together for the purpose of determining the availability of any rights under this Agreement.

[THIS SPACE INTENTIONALLY LEFT BLANK]

- 7 -

 

     In Witness Whereof, the parties hereto have executed this Amended and Restated
Voting Agreement as of the date first above written.

	 	 	 	 	 
	COMPANY:	 	 
	 
	 	 	 	 
	Veraz Networks, Inc.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Doug Sabella	 	 
	 

	 	 	 	 
	 

	 	Doug Sabella, Chief Executive Officer	 	 
	 
	 	 	 	 
	Address: 926 Rock Ave., Suite 20

           San Jose, CA 95131	 	 
	 
	 	 	 	 
	KEY HOLDERS:	 	 
	 
	 	 	 	 
	/s/ Amit Chawla	 	 
	 	 	 
	Amit Chawla	 	 
	 
	 	 	 	 
	/s/ Vijay Nadkarni	 	 
	 	 	 
	Vijay Nadkarni	 	 
	 
	 	 	 	 
	 	 	 
	Gursharan Sidhu	 	 
	 
	 	 	 	 
	/s/ Paul Singh	 	 
	 	 	 
	Paul Singh	 	 

AMENDED AND RESTATED VOTING AGREEMENT

SIGNATURE PAGE

 

 

     In Witness Whereof, the parties hereto have executed this Amended and Restated
Voting Agreement as of the date first above written.

	 	 	 	 	 	 	 
	 	 	ECI Telecom Ltd.	 	 
	 
	 	 	 	 	 	 
	 

	 	Signature:
	 	/s/ Giora Bitan	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Print Name:
	 	Giora Bitan	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Title: Executive Vice President and Chief

          Financial Officer	 	 

AMENDED AND RESTATED VOTING AGREEMENT

SIGNATURE PAGE

 

 

     In Witness Whereof, the parties hereto have executed this Amended and Restated
Voting Agreement as of the date first above written.

	 	 	 	 	 	 	 
	 	 	STAR BAY TECHNOLOGY VENTURES IV, L.P.	 	 
	 
	 	 	 	 	 	 
	 	 	By Levensohn Capital Partners II LLC,	 	 
	 	 	its General Partner	 	 
	 	 	By Levensohn Venture Partners LLC	 	 
	 	 	its Managing Member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Pascal N. Levensohn	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Pascal N. Levensohn, President	 	 
	 
	 	 	 	 	 	 
	 	 	STAR BAY PARTNERS, L.P. (ROLLOVER FUND)	 	 
	 
	 	 	 	 	 	 
	 	 	By APH Capital Management LLC,	 	 
	 	 	its General Partner	 	 
	 	 	By Levensohn Venture Partners LLC	 	 
	 	 	its Managing Member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Pascal N. Levensohn	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Pascal N. Levensohn, President	 	 
	 
	 	 	 	 	 	 
	 	 	STAR BAY ENTREPRENEURS FUND, L.P.	 	 
	 
	 	 	 	 	 	 
	 	 	By Levensohn Venture Partners LLC	 	 
	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Pascal N. Levensohn	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Pascal N. Levensohn, President	 	 
	 
	 	 	 	 	 	 
	 	 	STAR BAY ASSOCIATES FUND, L.P.	 	 
	 
	 	 	 	 	 	 
	 	 	By Levensohn Venture Partners LLC	 	 
	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Pascal N. Levensohn	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Pascal N. Levensohn, President	 	 

AMENDED AND RESTATED VOTING AGREEMENT

SIGNATURE PAGE

 

 

     In Witness Whereof, the parties hereto have executed this Amended and Restated
Voting Agreement as of the date first above written.

	 	 	 	 	 	 	 
	 	 	Comdisco Ventures Fund A, LLC

Successor in Interest to Comdisco, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	Signature:
	 	/s/ John W. Bullock	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Print Name:
	 	John W. Bullock	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Title: Manager	 	 

AMENDED AND RESTATED VOTING AGREEMENT

SIGNATURE PAGE

 

 

     In Witness Whereof, the parties hereto have executed this Amended and Restated
Voting Agreement as of the date first above written.

	 	 	 	 	 	 	 
	 	 	Battery Ventures V, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Battery Partners V, LLC

General Partner	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Morgan M. Jones	 	 
	 	 	 	 	 
	 	 	Name:

Title: Member Manager	 	 
	 
	 	 	 	 	 	 
	 	 	Battery Ventures Convergence Fund, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Battery Convergence Partners, LLC

General Partner	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Morgan M. Jones	 	 
	 	 	 	 	 
	 	 	Name:

Title: Member Manager	 	 
	 
	 	 	 	 	 	 
	 	 	Battery Investment Partners V, LLC	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Morgan M. Jones	 	 
	 	 	 	 	 
	 	 	Name:

Title: Member Manager	 	 

AMENDED AND RESTATED VOTING AGREEMENT

SIGNATURE PAGE

 

 

     In Witness Whereof, the parties hereto have executed this Amended and Restated
Voting Agreement as of the date first above written.

	 	 	 	 	 	 	 
	 	 	Norwest Venture Partners VII, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Itasca VC Partners VII, LLP	 	 
	 

	 	Its:
	 	General Partner	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Kurt L. Betcher	 	 
	 	 	 	 	 
	 	 	Name: Kurt L. Betcher

Title:  Administrative Partner & CFO	 	 
	 
	 	 	 	 	 	 
	 	 	Norwest Venture Partners IX, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Genesis VC Partners IX, LLC	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Kurt L. Betcher	 	 
	 	 	 	 	 
	 	 	Name: Kurt L. Betcher

Title: Administrative Partner & CFO	 	 
	 
	 	 	 	 	 	 
	 	 	NVP Entrepreneurs Fund IX, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Genesis VC Partners IX, LLC	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Kurt L. Betcher	 	 
	 	 	 	 	 
	 	 	Name: Kurt L. Betcher

Title: Administrative Partner & CFO	 	 

AMENDED AND RESTATED VOTING AGREEMENT

SIGNATURE PAGE

 

 

     In Witness Whereof, the parties hereto have executed this Amended and Restated
Voting Agreement as of the date first above written.

	 	 	 	 	 	 	 
	 	 	Norwest Venture Partners VII-A, LP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Itasca VC Partners VII-A, LLC, General Partner	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Kurt L. Betcher	 	 
	 	 	 	 	 
	 	 	Name: Kurt L. Betcher

Title:  Administrative Partner & CFO	 	 

AMENDED AND RESTATED VOTING AGREEMENT

SIGNATURE PAGE

 

 

     In Witness Whereof, the parties hereto have executed this Amended and Restated
Voting Agreement as of the date first above written.

	 	 	 	 	 	 
	 	 	Dominion Capital Management L.L.C.	 
	 
	 

	 	Signature:
	 	/s/ Robert Molke	 
	 

	 	 	 	 	 
	 
	 	 	 	 	 
	 

	 	Print Name:
	 	Robert Molke	 
	 

	 	 	 	 	 
	 
	 	 	 	 	 
	 	 	Title: Manager	 

AMENDED AND RESTATED VOTING AGREEMENT

SIGNATURE PAGE

 

 

     In Witness Whereof, the parties hereto have executed this Amended and Restated
Voting Agreement as of the date first above written.

	 	 	 	 	 	 	 
	 	 	Comerica Bank, successor by merger to

Comerica Bank-California, a Michigan

Banking Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	Signature:
	 	/s/ Kenneth W. Lepest	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Print Name:
	 	Kenneth W. Lepest	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Title: FVP-TLS Division	 	 

AMENDED AND RESTATED VOTING AGREEMENT

SIGNATURE PAGE

 

 

     In Witness Whereof, the parties hereto have executed this Amended and Restated
Voting Agreement as of the date first above written.

	 	 	 	 	 	 	 
	 	 	LMIA Coinvestment LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	Signature:
	 	/s/ Ronald D. Ulich	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Print Name:
	 	Ronald D. Ulich	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Title: Vice President	 	 

AMENDED AND RESTATED VOTING AGREEMENT

SIGNATURE PAGE

 

 

     In Witness Whereof, the parties hereto have executed this Amended and Restated
Voting Agreement as of the date first above written.

	 	 	 	 	 	 	 
	 	 	Argonaut Holdings	 	 
	 
	 	 	 	 	 	 
	 	 	By: Argonaut Private Equity LLC, its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	Signature:
	 	/s/ Jason Martin	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Print Name:
	 	Jason Martin	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Title: Managing Director	 	 

AMENDED AND RESTATED VOTING AGREEMENT

SIGNATURE PAGE

 

 

Exhibit A

LIST OF KEY HOLDERS

Amit Chawla

Gursharan Sidhu

Vijay Nadkarni

Paul Singh

 

 

Exhibit B

LIST OF INVESTORS

ECI Telecom Ltd.

Star Bay Technology Ventures IV, L.P.

Star Bay Partners, L.P. (Rollover Fund)

Star Bay Entrepreneurs Fund, L.P.

Star Bay Associates Fund, L.P.

Comdisco, Inc.

GATX Ventures, Inc., a Delaware Corporation

Battery Ventures V, L.P.

Battery Ventures Convergence Fund, L. P.

Battery Investment Partners V, LLC

Norwest Venture Partners VII, L.P.

Norwest Venture Partners IX, L.P.

NVP Entrepreneurs Fund IX, L.P

KPCB Holdings, Inc., as Nominee

Dominion Capital Management L.L.C.

Comerica
Bank, successor by merger to Comerica Bank-California, a Michigan Banking Corporation

Liberty Mutual Insurance Company

Argonaut Holdings

LMIA Coinvestment LLC

Norwest Venture Partners VII-A, LPexv10w37

 

Exhibit 10.37

VERAZ NETWORKS, INC.

SERIES D PREFERRED STOCK PURCHASE AGREEMENT

FIRST CLOSING: DECEMBER 19, 2006

SECOND
CLOSING: JANUARY 11, 2007

 

 

VERAZ NETWORKS, INC.

SERIES D PREFERRED STOCK PURCHASE AGREEMENT

     This Series d Preferred Stock Purchase Agreement (the “Agreement”) is made and
entered into as of December 19, 2006, by and among Veraz Networks, Inc., a Delaware
corporation (the “Company”), and each of those persons and entities, severally and not jointly,
whose names are set forth on the Schedule of Purchasers attached hereto as Exhibit A-1
(which persons and entities are hereinafter collectively referred to as “Purchasers” and each
individually as a “Purchaser”).

Recitals

     Whereas, the Company has authorized the sale and issuance of an aggregate of four
million seven hundred thousand (4,700,000) shares of its Series D Preferred Stock (the “Shares”);

     Whereas, Purchasers desire to purchase the Shares on the terms and conditions set
forth herein; and

     Whereas, the Company desires to issue and sell the Shares to Purchasers on the terms
and conditions set forth herein.

Agreement

     Now, Therefore, in consideration of the foregoing recitals and the mutual promises,
representations, warranties, and covenants hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

     1. Agreement To Sell And Purchase.

          1.1 Authorization of Shares. The Company has authorized (a) the sale and issuance of the
Shares to the Purchasers and (b) the issuance of the shares of Common Stock to be issued upon
conversion of the Shares (the “Conversion Shares”). The Shares and the Conversion Shares will have
the rights, preferences, privileges and restrictions set forth in the Amended and Restated
Certificate of Incorporation of the Company, in the form attached hereto as Exhibit B (the
“Restated Charter”).

          1.2 Sale and Purchase. Subject to the terms and conditions hereof, at the Closing (as
hereinafter defined) the Company hereby agrees to issue and sell to each Purchaser, severally and
not jointly, and each
Purchaser agrees to purchase from the Company, severally and not jointly, the number of Shares
set forth opposite such Purchaser’s name on Exhibit A-1, at a purchase price of three
dollars and twenty-seven cents ($3.27) per share.

-1-

 

     2. Closing, Delivery And Payment.

          2.1 Closing. The closing of the sale and purchase of the Shares under this Agreement (the
“Closing”) shall take place at 1:00 p.m. on the date hereof, at the offices of Cooley Godward
Kronish llp, 3175 Hanover Street, Palo Alto, CA, 94304 or at such other time or place as
the Company and Purchasers may mutually agree (such date is hereinafter referred to as the “Closing
Date”).

          2.2 Delivery. At the Closing, subject to the terms and conditions hereof, the Company will
deliver to each Purchaser a certificate representing the number of Shares to be purchased at the
Closing by such Purchaser, against payment of the purchase price therefor by check or wire transfer
made payable to the order of the Company.

          2.3 Subsequent Sales of Shares. At any time on or before the earlier of (i) the 90th day
following the Closing or at such later time as the Company and the holders of a majority of the
Shares purchased at the Closing (pursuant to Section 2.1) may mutually agree or (ii) the date of
the Call Closing (as defined below), the Company may sell up to the balance of the authorized
shares of Series D Preferred Stock not sold at the Closing to such persons as may be approved by
the Company (the “Additional Purchasers”). All such sales made at any additional closings (each an
“Additional Closing”), shall be made on the terms and conditions set forth in this Agreement, and
(i) the representations and warranties of the Company set forth in Section 3 hereof (and the
Schedule of Exceptions) shall speak as of the Closing and the Company shall have no obligation to
update any such disclosure, and (ii) the representations and warranties of the Additional
Purchasers in Section 4 hereof shall speak as of such Additional Closing. The Schedule of
Purchasers may be amended by the Company without the consent of the Purchasers to include any
Additional Purchasers upon the execution by such Additional Purchasers of a counterpart signature
page hereto. Any shares of Series D Preferred Stock sold pursuant to this Section 2.3 shall be
deemed to be “Shares” for all purposes under this Agreement and any Additional Purchasers thereof
shall be deemed to be “Purchasers” for all purposes under this Agreement.

          2.4 Call Closing.

               (a) Grant of Call. Each of the Purchasers, severally and not jointly, hereby irrevocably
grants to the Company the right to require (the “Call”) each Purchaser to purchase up to the
maximum number of Shares as set forth next to each Purchaser’s name on Exhibit A-2 hereto
(the “Call Shares”) for the aggregate purchase price set forth on Exhibit A-2 at any time
after the date hereof until the earlier of (i) a Qualified IPO (as defined in the Restated
Charter), (ii) an Acquisition or Asset Transfer (as such terms are defined in the Restated
Charter), or (iii) the date one (1) year from the date hereof.

               (b) Exercise of Call. Unless this Section 2.4 expires pursuant to Section 2.4(e) below, the
Call shall be exercised by the Company, at its sole discretion, by delivery to each of the
Purchasers of a written notice (the “Call Notice”), specifying the aggregate amount being called
(the “Call Amount”) and, if less than the full amount, each Purchaser’s pro rata portion of the
Call Shares and the intended closing date (the “Call Closing”). The Call Closing shall occur no
earlier than ten (10) days and no later than thirty (30)

-2-

 

days after delivery of the Call Notice.
At the Call Closing, the Company shall deliver to each Purchaser a certificate representing the
Call Shares purchased by the Purchaser and the Purchaser shall deliver payment in full, by check or
wire transfer, for an amount equal to the Purchaser’s portion of the Call Amount. Except as set
forth herein, the terms and conditions of the Call Shares shall be consistent with the terms and
conditions of the Closing, the representations and warranties of the Company set forth in Section 3
hereof (and the Schedule of Exceptions) shall speak as of the Closing and the Company shall have no
obligation to update any such disclosure, and the representations and warranties of the Purchasers
in Section 4 hereof shall speak as of such Call Closing.

               (c) Call Amount. The Call Amount for each Investor shall be equal to the amount set forth on
Exhibit A-2 hereto; provided that the Company shall amend Exhibit A-2 from
time to time as necessary to reflect each Purchaser’s required pro rata portion after accounting
for any transfer or sale of Shares among the Purchasers and shall provided notice to the Purchasers
of such amendment. The aggregate Call Amount shall not exceed five million ($5,000,000) dollars.
For purposes of this Agreement, the pro rata portion of each Purchaser shall mean the amount equal
to the ratio of (a) the number of Shares held by such Purchaser immediately prior to the Call
Closing, to (b) the total number of shares of the Company’s Series D Preferred Stock outstanding
immediately prior to Call Closing.

               (d) Remedies. In the event any Purchaser fails to deliver its Call Amount in accordance with
the terms of this Agreement (a “Non-Contributing Investor”), the Purchasers hereby agree that such
Non Contributing Investor’s shares of Series D Preferred Stock shall automatically be converted to
Common Stock at a 3-to-1 ratio (for purposes of illustration, each three (3) shares of such
Non-Contributing Investor’s Series D Preferred Stock would be converted into one (1) share of
Common Stock) pursuant to that certain Special Mandatory Conversion (as set forth in Article
IV(D)(4)(r) of the Restated Charter (the “Special Mandatory Conversion”)). If any legal
proceedings relating to a Non-Contributing Investor’s contesting or challenging the Special
Mandatory Conversion, such Non-Contributing Investor shall pay all reasonable costs and expenses
incurred by the Company, including attorneys’ fees, in connection with such proceedings; provided
however, that if such Non-Contributing Investor prevails in such a legal proceeding, then each
party shall bear its own fees and costs. Each Purchaser hereby consents to the Special Mandatory
Conversion if such Purchaser does not comply with all covenants and obligations as set forth in
this Section 2.4.

               (e) Termination. This Section 2.4, together with the rights and obligations of the parties
thereunder, shall expire and terminate in full force and effect upon the earlier of (i) a Qualified
IPO (as defined in the Restated Charter), (ii) an Acquisition or Asset
Transfer (as such terms are defined in the Restated Charter), or (iii) upon the date one (1)
year from the date hereof.

     3. Representations And Warranties Of The Company.

          Except as set forth on a Schedule of Exceptions attached hereto as Exhibit C,
delivered by the Company to Purchasers before the date of this Agreement, the Company hereby
represents and warrants as of the date of this Agreement to each Purchaser as set forth below.

-3-

 

          3.1 Organization, Good Standing and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware. The
Company has all requisite corporate power and authority to own and operate its properties and
assets, to execute and deliver this Agreement, the Amended and Restated Investor Rights Agreement
in the form attached hereto as Exhibit D (the “Investor Rights Agreement”) and the Amended
and Restated Voting Agreement in the form attached hereto as Exhibit E (the “Voting
Agreement”) (collectively, the “Related Agreements”), to issue and sell the Shares and the
Conversion Shares, and to carry out the provisions of this Agreement, the Related Agreements and
the Restated Charter and to carry on its business as presently conducted and as presently proposed
to be conducted. The Company is duly qualified and is authorized to do business and is in good
standing as a foreign corporation in all jurisdictions in which the nature of its activities and of
its properties (both owned and leased) makes such qualification necessary, except for those
jurisdictions in which failure to do so would not have a material adverse effect on the Company or
its business.

          3.2 Subsidiaries. The Company does not own or control any equity security or other interest
of any other corporation, limited partnership or other business entity. The Company is not a
participant in any joint venture, partnership or similar arrangement. Since its inception, the
Company has not consolidated or merged with, acquired all or substantially all of the assets of, or
acquired the stock or any interest in any corporation, partnership, association, or other business
entity.

          3.3 Capitalization; Voting Rights

               (a) The authorized capital stock of the Company, immediately prior to the Closing, will
consist of (i) one hundred million (100,000,000) shares of Common Stock, par value $0.001 per
share, twenty-seven million five hundred seventy-eight thousand six hundred one (27,578,601) shares
of which will be issued and outstanding, and (ii) fifty-five million forty-nine (59,000,049) shares
of Preferred Stock, par value $0.001 per share, five million forty-eight (5,000,048) shares of
which will be designated Series A-1 Preferred Stock, par value $0.001 per share, all of which will
be issued and outstanding; one (1) share of which will be designated Series A-2 Preferred Stock,
par value $0.001 per share, one (1) of which will be issued and outstanding; nine million
(9,000,000) shares of which will be designated Series B-1 Preferred Stock, par value $0.001 per
share, all of which will be issued and outstanding; and thirty-six million (36,000,000) shares of
which will be designated Series C Preferred Stock, par value
$0.001 per share, thirty-five million sixty-five thousand four (35,065,004) of which will be
issued and outstanding; and five million (5,000,000) shares of which will be designated Series D
Preferred Stock, par value $0.001 per share, none of which will be issued and outstanding.

               (b) As of the date hereof, under the Company’s 2001 Equity Incentive Plan (the “Plan”), (i)
four million one hundred thirty thousand fifty-seven (4,130,057) shares of Common Stock have been
issued pursuant to restricted stock purchase agreements and/or the exercise of outstanding options,
(ii) options to purchase sixteen million three hundred sixty-four thousand nine hundred fifteen
(16,364,915) shares of Common Stock have been granted and are currently outstanding, and (iii) six
hundred forty-seven thousand one hundred seventeen (647,117) shares of Common Stock remain
available for future issuance to officers, directors, employees and consultants of the Company.

-4-

 

               (c) Other than (i) thirty-two thousand four hundred fifty (32,450) shares of Series C
Preferred Stock reserved for issuance pursuant to outstanding warrants; and (ii) options to
purchase one hundred twenty thousand (120,000) shares of Common Stock issued outside of the Plan,
(iii) the shares reserved for issuance under the Plan, and (iv) except as may be granted pursuant
to this Agreement and the Related Agreements, there are no outstanding options, warrants, rights
(including conversion or preemptive rights and rights of first refusal), proxy or stockholder
agreements, or agreements of any kind for the purchase or acquisition from the Company of any of
its securities. At the Closing, all such preemptive rights will have been properly waived or
complied with respect to all prior issuances of capital stock and with respect to the issuance of
the Shares and Conversion Shares.

               (d) All issued and outstanding shares of the Company’s Common Stock and Preferred Stock (i)
have been duly authorized and validly issued and are fully paid and nonassessable, and (ii) were
issued in compliance with all applicable state and federal laws concerning the issuance of
securities.

               (e) As of the Closing, the rights, preferences, privileges and restrictions of the Shares will
be as stated in the Restated Charter. Each share of Series D Preferred Stock will be convertible
into Common Stock on a one-for-one basis as of the Closing. The Conversion Shares have been duly
and validly reserved for issuance. When issued in compliance with the provisions of this Agreement
and the Restated Charter, the Shares and the Conversion Shares will be validly issued, fully paid
and nonassessable, and will be free of any liens or encumbrances other than liens and encumbrances
created by or imposed upon Purchasers; provided, however, that the Shares and the Conversion Shares
may be subject to restrictions on transfer under state and/or federal securities laws as set forth
herein or as otherwise required by such laws at the time a transfer is proposed.

          3.4 Authorization; Binding Obligations. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for the authorization of this Agreement and the
Related Agreements, the performance of all obligations of the Company hereunder and thereunder and
the authorization, sale, issuance and delivery of the Shares pursuant hereto and the Conversion
Shares pursuant to the Restated Charter has been taken, including valid approval of the Restated
Charter. This Agreement and
the Related Agreements, when executed and delivered, will be valid and binding obligations of
the Company enforceable in accordance with their terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting
enforcement of creditors’ rights, (b) general principles of equity that restrict the availability
of equitable remedies, and (c) to the extent that the enforceability of the indemnification
provisions in the Investor Rights Agreement may be limited by applicable laws. The sale of the
Shares and the subsequent conversion of the Shares into Conversion Shares are not and will not be
subject to any preemptive rights or rights of first refusal that have not been properly waived or
complied with.

          3.5 Financial Statements. The Company has made available to each Purchaser (a) its unaudited
balance sheet as at September 30, 2006 and unaudited statement of income and cash flows for the
period from the Company’s inception to September 30, 2006 (the “Statement Date”) and unaudited
consolidated statement of income and cash flows for the three

-5-

 

month period ending on the Statement
Date (collectively, the “Financial Statements”). The Financial Statements, together with the notes
thereto, have been prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods indicated, except as disclosed therein, and present
fairly the financial condition and position of the Company as of the Statement Date; provided,
however, that the unaudited financial statements are subject to normal recurring year-end audit
adjustments (which are not expected to be material either individually or in the aggregate), and do
not contain all footnotes required under generally accepted accounting principles.

          3.6 Liabilities. Other than as set forth in the Financial Statements, the Company has no
material liabilities and, to the best of its knowledge, has no material contingent liabilities,
except current liabilities incurred in the ordinary course of business which have not been, either
in any individual case or in the aggregate, materially adverse.

          3.7 Agreements; Action.

               (a) Except for agreements explicitly contemplated hereby and agreements between the Company
and its employees with respect to the sale of the Company’s Common Stock pursuant to the Plan,
there are no agreements, understandings or proposed transactions between the Company and any of its
officers, directors, employees, affiliates or any affiliate thereof.

               (b) There are no agreements, understandings, instruments, contracts, proposed transactions,
judgments, orders, writs or decrees to which the Company is a party or to its knowledge by which it
is bound which may involve (i) future obligations (contingent or otherwise) of, or payments to, the
Company in excess of $100,000 (other than obligations of, or payments to, the Company arising from
purchase or sale agreements entered into in the ordinary course of business), or (ii) the transfer
or license of any patent, copyright, trade secret or other proprietary right to or from the Company
(other than licenses by the Company of “off the shelf”
or other standard products), or (iii) indemnifications by the Company, including with respect
to infringements of proprietary rights (other than indemnification obligations arising from
purchase, sale or license agreements entered into in the ordinary course of business).

               (c) The Company has not (i) declared or paid any dividends, or authorized or made any
distribution upon or with respect to any class or series of its capital stock, (ii) incurred or
guaranteed any indebtedness for money borrowed or any other liabilities (other than with respect to
dividend obligations, distributions, indebtedness and other obligations incurred in the ordinary
course of business) individually in excess of $100,000 or, in the case of indebtedness and/or
liabilities individually less than $100,000, in excess of $200,000 in the aggregate, (iii) made any
loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold,
exchanged or otherwise disposed of any of its assets or rights, other than the sale of its
inventory in the ordinary course of business.

               (d) For the purposes of subsections (b) and (c) above, all indebtedness, liabilities,
agreements, understandings, instruments, contracts and proposed transactions involving the same
person or entity (including persons or entities the Company has reason to

-6-

 

believe are affiliated
therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.

          3.8 Obligations to Related Parties. There are no obligations of the Company to officers,
directors, stockholders, or employees of the Company other than (a) for payment of salary for
services rendered, (b) reimbursement for reasonable expenses incurred on behalf of the Company and
(c) for other standard employee benefits made generally available to all employees (including stock
option agreements outstanding under any stock option plan approved by the Board of Directors of the
Company). None of the officers, directors or, to the best of the Company’s knowledge, key
employees or stockholders of the Company or any members of their immediate families, is indebted to
the Company or has any direct or indirect ownership interest in any firm or corporation with which
the Company is affiliated or with which the Company has a business relationship, or any firm or
corporation which competes with the Company, other than passive investments in publicly traded
companies (representing less than 1% of such company) which may compete with the Company. No
officer, director or stockholder, or any member of their immediate families, is, directly or
indirectly, interested in any material contract with the Company (other than such contracts as
relate to any such person’s ownership of capital stock or other securities of the Company).

          3.9 Changes. Since the Statement Date, there has not been:

               (a) Any change in the assets, liabilities, financial condition or operations of the Company
from that reflected in the Financial Statements, other than changes in the ordinary course of
business, none of which individually or in the aggregate has had a material adverse effect on such
assets, liabilities, financial condition or operations of the Company;

               (b) Any resignation or termination of any officer, key employee or group of employees of the
Company;

               (c) Any material change in the contingent obligations of the Company by way of guaranty,
endorsement, indemnity, warranty or otherwise;

               (d) Any damage, destruction or loss, whether or not covered by insurance, materially and
adversely affecting the properties, business or prospects or financial condition of the Company;

               (e) Any waiver by the Company of a valuable right or of a material debt owed to it;

               (f) Any material change in any compensation arrangement or agreement with any employee,
officer, director or stockholder;

               (g) Any labor organization activity related to the Company;

               (h) Any sale, assignment or transfer of any patents, trademarks, copyrights, trade secrets or
other intangible assets;

-7-

 

               (i) Any change in any agreement to which the Company is a party or by which it is bound which
materially and adversely affects the business, assets, liabilities, financial condition, operations
or prospects of the Company;

               (j) Any other event or condition of any character that, either individually or cumulatively,
has materially and adversely affected the business, assets, liabilities, financial condition or
operations of the Company; or

               (k) Any arrangement or commitment by the Company to do any of the acts described in subsection
(a) through (j) above.

          3.10 Title to Properties and Assets; Liens, Etc. The Company has good and marketable title to
its properties and assets, and good title to its leasehold estates, in each case subject to no
mortgage, pledge, lien, lease, encumbrance or charge, other than (a) those resulting from taxes
which have not yet become delinquent, (b) minor liens and encumbrances which do not materially
detract from the value of the property subject thereto or materially impair the operations of the
Company, and (c) those that have otherwise arisen in the ordinary course of business. The Company
is in compliance with all material terms of each lease to which it is a party or is otherwise
bound.

          3.11 Intellectual Property.

               (a) General. The Company owns or possesses sufficient legal rights to all patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights
and processes (“Proprietary Rights”) necessary for its business as now conducted and as presently
proposed to be conducted. Section 3.11(a) of the Schedule of Exceptions sets forth with respect to
the Proprietary Rights of the Company: (i) each trademark, trade name or service mark, whether or
not registered, (ii) each copyright for which registration has been sought, whether or not
registered, including the number and date of registration for each country in which a copyright has
been registered, (iii) for each patent which has been issued or invention for which a patent
application has been filed, whether or not issued, the number and date of the application for each
country in which a patent application has been made or a patent has been issued, and (iv) for each
mask work (if any), whether or not registered, the date of first commercial exploitation and if
registered, the registration number and date of registration. True and correct copies of all
Proprietary Rights (including all pending applications, application related documents and materials
and written materials relating to trade secrets) owned, controlled or used by or on behalf of the
Company or in which the Company has any interest whatsoever have been provided to the Investors.

               (b) Adequacy. The Proprietary Rights of the Company are all those necessary for the normal
conduct of the business of the Company as presently conducted and as presently contemplated,
including the design, manufacture, development and sale of all products currently under
development, planned for development or in production.

               (c) Royalties and Licenses. Except as set forth in Section 3.11(c) of the Schedule of
Exceptions, the Company has no obligation to compensate any person for the use of any of its
Proprietary Rights, the Company is not subject to any license of Proprietary Rights

-8-

 

other than shrink-wrap licenses nor has the Company granted to any Person any license, option or other rights
to use in any manner any of its Proprietary Rights, whether requiring the payment of royalties or
not.

               (d) Ownership. The Company has a valid right to use or owns free and clear of any encumbrance
its Proprietary Rights, and such Proprietary Rights will not cease to be valid rights of the
Company by reason of the execution, delivery and performance of this Agreement or the Related
Agreements or the consummation of the transactions contemplated hereby or thereby.

               (e) Absence of Claims. The Company (A) has not received any notice alleging, or otherwise has
knowledge of facts that might give rise to, invalidity with respect to any of the Proprietary
Rights of the Company and (B) has not received any notice of alleged infringement of any rights of
others due to any activity by the Company. To the knowledge of the Company, the Company’s use of
its Proprietary Rights in its past, current and planned products do not and would not infringe upon
or otherwise violate the valid rights of any third party anywhere in the world. No other Person
(i) has notified the Company that it is claiming
any ownership of or right to use any of the Company’s Proprietary Rights or (ii) to the
knowledge of the Company, is infringing upon any such Proprietary Rights in any way.

          3.12 Protection of Proprietary Rights. All of the pending applications for the Company’s
Proprietary Rights have been duly filed and all other customary actions to protect such Proprietary
Rights have been taken. The Company has taken reasonable steps necessary or appropriate
(including, entering into appropriate confidentiality and nondisclosure agreements with officers,
directors, subcontractors, employees, licensees and customers) to safeguard and maintain the
secrecy and confidentiality of, and the proprietary rights in, the Proprietary Rights. The Company
is not aware of any breach of any such confidentiality or nondisclosure agreement by any party
thereto.

          3.13 Compliance with Other Instruments. The Company is not in violation or default of any
term of its certificate of incorporation or Bylaws, as currently in effect, or Restated Charter or
of any provision of any mortgage, indenture, contract, agreement, instrument or contract to which
it is party or by which it is bound or of any judgment, decree, order or writ. The execution,
delivery, and performance of and compliance with this Agreement, and the Related Agreements, and
the issuance and sale of the Shares pursuant hereto and of the Conversion Shares pursuant to the
Restated Charter, will not, with or without the passage of time or giving of notice, result in any
such violation, or be in conflict with or constitute a default under any such term, or result in
the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any
permit, license, authorization or approval applicable to the Company, its business or operations or
any of its assets or properties. The Company has avoided every condition, and has not performed
any act, the occurrence of which would result in the Company’s loss of any right granted under any
license, distribution agreement or other agreement required to be disclosed on the Schedule of
Exceptions.

          3.14 Litigation. There is no action, suit, proceeding or investigation pending or, to the
Company’s knowledge, currently threatened against the Company, nor is the Company

-9-

 

aware that there
is any basis for any of the foregoing. The foregoing includes, without limitation, actions pending
or, to the Company’s knowledge, threatened involving the prior employment of any of the Company’s
employees, their use in connection with the Company’s business of any information or techniques
allegedly proprietary to any of their former employers, or their obligations under any agreements
with prior employers. The Company is not a party or to its knowledge subject to the provisions of
any order, writ, injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the Company currently
pending or which the Company intends to initiate.

          3.15 Employees. The Company has no collective bargaining agreements with any of its
employees. There is no labor union organizing activity pending or, to the Company’s knowledge,
threatened
with respect to the Company. The Company is not a party to or bound by any currently
effective employment contract, deferred compensation arrangement, bonus plan, incentive plan,
profit sharing plan, retirement agreement or other employee compensation plan or agreement. To the
Company’s knowledge, no employee of the Company, nor any consultant with whom the Company has
contracted, is in violation of any term of any employment contract, proprietary information
agreement or any other agreement relating to the right of any such individual to be employed by, or
to contract with, the Company; and to the Company’s knowledge the continued employment by the
Company of its present employees, and the performance of the Company’s contracts with its
independent contractors, will not result in any such violation. The Company has not received any
notice alleging that any such violation has occurred. No employee of the Company has been granted
the right to continued employment by the Company or to any material compensation following
termination of employment with the Company. The Company is not aware that any officer, key
employee or group of employees intends to terminate his, her or their employment with the Company,
nor does the Company have a present intention to terminate the employment of any officer, key
employee or group of employees. Each former employee of the Company has entered into an agreement
with the Company providing for the full release of any claims against the Company or any related
party arising out of such employment. There are no actions pending, or to the Company’s knowledge,
currently threatened, by any former or current employee concerning such person’s employment by the
Company.

          3.16 Obligations of Management. Each officer and key employee of the Company is currently
devoting substantially all of his or her business time to the conduct of the business of the
Company. The Company is not aware that any officer or key employee of the Company is planning to
work less than full time at the Company in the future. No officer or key employee is currently
working or, to the Company’s knowledge, plans to work for a competitive enterprise, whether or not
such officer or key employee is or will be compensated by such enterprise.

          3.17 Registration Rights and Voting Rights. Except as required pursuant to the Investor
Rights Agreement, the Company is presently not under any obligation, and has not granted any
rights, to register (as defined in Section 1.1 of the Investor Rights Agreement) any of the
Company’s presently outstanding securities or any of its securities that may hereafter be issued.
To the Company’s knowledge, except as contemplated in the Voting Agreement, no stockholder of the
Company has entered into any agreement with respect to the voting of equity securities of the
Company.

-10-

 

          3.18 Compliance with Laws; Permits. To its knowledge, the Company is not in violation of any
applicable statute, rule, regulation, order or restriction of any domestic or foreign government or
any instrumentality or agency thereof in respect of the conduct of its business or the ownership of
its properties which violation would materially and adversely affect the business, assets,
liabilities, financial condition, operations or prospects of the Company. No domestic governmental
orders, permissions, consents, approvals or authorizations are required to be obtained and no
registrations or declarations are required to be filed in connection with the execution and
delivery of this Agreement or the issuance of the Shares or the Conversion Shares, except such as
have been duly and validly obtained or filed, or with respect to any filings that must be made
after the Closing, as will be filed in a timely manner. The Company has all franchises, permits,
licenses and any similar authority necessary for the conduct of its business as now being conducted
by it, the lack of which could materially and adversely affect the business, properties, prospects
or financial condition of the Company and believes it can obtain, without undue burden or expense,
any similar authority for the conduct of its business as planned to be conducted.

          3.19 Offering Valid. Assuming the accuracy of the representations and warranties of
Purchasers contained in Section 4.2 hereof, the offer, sale and issuance of the Shares and the
Conversion Shares will be exempt from the registration requirements of the Securities Act of 1933,
as amended (the “Securities Act”), and will have been registered or qualified (or are exempt from
registration and qualification) under the registration, permit or qualification requirements of all
applicable state securities laws. Neither the Company nor any agent on its behalf has solicited or
will solicit any offers to sell or has offered to sell or will offer to sell all or any part of the
Shares to any person or persons so as to bring the sale of such Shares by the Company within the
registration provisions of the Securities Act or any state securities laws.

          3.20 Full Disclosure. The Company has provided each Purchaser with all information requested
by each Purchaser in connection with its decision to purchase the Shares. This Agreement,
including the schedules and exhibits hereto, does not contain any untrue statement of a material
fact nor omit to state a material fact necessary in order to make the statements contained herein
not misleading.

          3.21 Minute Books. The minute books of the Company made available to Purchasers contain a
complete summary of all meetings of directors and stockholders since the time of incorporation.

          3.22 Real Property Holding Corporation. The Company is not a real property holding
corporation within the meaning of Code Section 897(c)(2) and any regulations promulgated
thereunder.

          3.23 Insurance. The Company has general commercial, product liability, fire and casualty
insurance policies with coverage customary for companies similarly situated to the Company.

-11-

 

     4. Representations And Warranties Of Purchasers.

     Each Purchaser hereby represents and warrants to the Company, severally and not jointly, as
follows (provided that such representations and warranties do not lessen or obviate the
representations and warranties of the Company set forth in this Agreement):

          4.1 Requisite Power and Authority. Purchaser has all necessary power and authority to execute
and deliver this Agreement and the Related Agreements and to carry out their provisions. All
action on Purchaser’s part required for the lawful execution and delivery of this Agreement and the
Related Agreements has been taken. Upon their execution and delivery, this Agreement and the
Related Agreements will be valid and binding obligations of Purchaser, enforceable in accordance
with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of creditors’ rights, (b) as
limited by general principles of equity that restrict the availability of equitable remedies, and
(c) to the extent that the enforceability of the indemnification provisions of the Investor Rights
Agreement may be limited by applicable laws.

          4.2 Investment Representations. Purchaser understands that neither the Shares nor the
Conversion Shares have been registered under the Securities Act. Purchaser also understands that
the Shares are being offered and sold pursuant to an exemption from registration contained in the
Securities Act based in part upon Purchaser’s representations contained in this Agreement.
Purchaser hereby represents and warrants as follows:

               (a) Purchaser Bears Economic Risk. Purchaser has substantial experience in evaluating and
investing in private placement transactions of securities in companies similar to the Company so
that it is capable of evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. Purchaser must bear the economic risk of this investment
indefinitely unless the Shares (or the Conversion Shares) are registered pursuant to the Securities
Act, or an exemption from registration is available. Purchaser understands that the Company has no
present intention of registering the Shares, the Conversion Shares or any shares of its Common
Stock. Purchaser also understands that there is no assurance that any exemption from registration
under the Securities Act will be available and that, even if available, such exemption may not
allow Purchaser to transfer all or any portion of the Shares or the Conversion Shares under the
circumstances, in the amounts or at the times Purchaser might propose.

               (b) Acquisition for Own Account. Purchaser is acquiring the Shares and the Conversion Shares
for Purchaser’s own account for investment only, and not with a view towards their distribution.

               (c) Purchaser Can Protect Its Interest. Purchaser represents that by reason of its, or of its
management’s, business or financial experience, Purchaser has the capacity to protect its own
interests in connection with the
transactions contemplated in this Agreement, and the Related Agreements. Further, Purchaser
is aware of no publication of any advertisement in connection with the transactions contemplated in
this Agreement.

-12-

 

               (d) Accredited Investor. Purchaser represents that it is an accredited investor within the
meaning of Regulation D under the Securities Act.

               (e) Company Information. Purchaser has had an opportunity to discuss the Company’s business,
management and financial affairs with directors, officers and management of the Company and has had
the opportunity to review the Company’s operations and facilities. Purchaser has also had the
opportunity to ask questions of and receive answers from, the Company and its management regarding
the terms and conditions of this investment.

               (f) Rule 144. Purchaser acknowledges and agrees that the Shares, and, if issued, the
Conversion Shares are “restricted securities” as defined in Rule 144 promulgated under the
Securities Act as in effect from time to time and must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such registration is
available. Purchaser has been advised or is aware of the provisions of Rule 144, which permits
limited resale of shares purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things: the availability of certain current public information
about the Company, the resale occurring following the required holding period under Rule 144 and
the number of shares being sold during any three-month period not exceeding specified limitations.

               (g) Residence. If Purchaser is an individual, then Purchaser resides in the state or province
identified in the address of Purchaser set forth on Exhibit A; if Purchaser is a
partnership, corporation, limited liability company or other entity, then the office or offices of
Purchaser in which its investment decision was made is located at the address or addresses of
Purchaser set forth on Exhibit A.

               (h) Foreign Investors. If Purchaser is not a United States person (as defined by Section
7701(a)(30) of the Internal Revenue Code of 1986, as amended), Purchaser hereby represents that it
has satisfied itself as to the full observance of the laws of its jurisdiction in connection with
any invitation to subscribe for the Shares or any use of this Agreement, including (i) the legal
requirements within its jurisdiction for the purchase of the Shares, (ii) any foreign exchange
restrictions applicable to such purchase, (iii) any government or other consents that may need to
be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to
the purchase, holding, redemption, sale or transfer of the Shares. Purchaser’s subscription and
payment for and continued beneficial ownership of the Shares will not violate any applicable
securities or other laws of Purchaser’s jurisdiction.

          4.3 Transfer Restrictions. Each Purchaser acknowledges and agrees that the Shares and, if
issued, the Conversion Shares are subject to restrictions on transfer as set forth in the Investor
Rights Agreement.

     5. Conditions To Closing.

          5.1 Conditions to Purchasers’ Obligations at the Closing. Purchasers’ obligations to purchase
the Shares at the Closing are subject to the satisfaction, at or prior to the Closing Date, of the
following conditions:

-13-

 

               (a) Representations and Warranties True; Performance of Obligations. The representations and
warranties made by the Company in Section 3 hereof are true and correct in all material respects
(except for representations and warranties subject to “materiality” qualifiers, which shall be
true, complete and correct in all respects) as of the date hereof, and the Company shall have
performed all obligations and conditions herein required to be performed or observed by it on or
prior to the Closing Date.

               (b) Corporate Documents. The Company shall have delivered to Purchasers or their counsel,
copies of all corporate documents of the Company as Purchasers shall reasonably request.

               (c) Investor Rights Agreement. The Investor Rights Agreement substantially in the form
attached hereto as Exhibit D shall have been executed and delivered by the parties thereto.

               (d) Voting Agreement. The Voting Agreement substantially in the form attached hereto as
Exhibit E shall have been executed and delivered by the Purchasers and certain other
parties thereto.

               (e) Reservation of Conversion Shares. The Conversion Shares issuable upon conversion of the
Shares shall have been duly authorized and reserved for issuance upon such conversion.

               (f) Proceedings and Documents. All corporate and other proceedings in connection with the
transactions contemplated as of the execution of this Agreement and all documents and instruments
incident to such execution shall be reasonably satisfactory in substance and form to Purchasers and
their special
counsel, and Purchasers and their special counsel shall have received all such counterpart
originals or certified or other copies of such documents as they may reasonably request.

               (g) Proprietary Information and Inventions Agreement. The Company and each of its employees
shall have entered into the Company’s standard form of Proprietary Information and Inventions
Agreement, in substantially the form delivered to counsel for the Purchasers.

               (h) Filing of Restated Charter. The Restated Charter as filed with the Secretary of State of
the State of Delaware shall continue to be in full force and effect on the Closing Date.

               (i) Consents, Permits, and Waivers. The Company shall have obtained any and all consents,
permits and waivers necessary or appropriate for consummation of the transactions contemplated by
this Agreement and the Related Agreements (including any filing required to comply with the Hart
Scott Rodino Antitrust Improvements Act of 1976, and except for such as may be properly obtained
subsequent to the Closing).

               (j) Legal Opinion. Legal counsel to the Company shall have delivered an opinion
addressed to the Purchasers, dated as of the Closing Date, in substantially the form attached
hereto as Exhibit F.

-14-

 

               (k) Compliance Certificate. A Compliance Certificate, executed by the Chief Executive
Officer of the Company, dated the Closing Date, to the effect that the conditions specified in
subsections (a), (e), (h) and (i) of this Section 5.1 have been satisfied.

               (l) Secretary’s Certificate. A certificate from the Company’s Secretary, a having
attached thereto (i) the Company’s Restated Charter as in effect at the time of the Closing, (ii)
the Company’s Bylaws as in effect at the time of the Closing, (iii) resolutions approved by the
Board of Directors authorizing the transactions contemplated hereby, (iv) resolutions approved by
the Company’s stockholders authorizing the filing of the Restated Charter, and (v) good standing
certificates (including tax good standing) with respect to the Company from the applicable
authority(ies) in Delaware and any other jurisdiction in which the Company is qualified to do
business, dated a recent date before the Closing.

          5.2 Conditions to Obligations of the Company. The Company’s obligation to issue and sell the
Shares at each Closing is subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:

               (a) Representations and Warranties True. The representations and warranties in Section 4 made
by those Purchasers acquiring Shares hereunder are true and correct in all material respects at the
Closing Date.

               (b) Performance of Obligations. Such Purchasers shall have performed and complied with all
agreements and conditions herein required to be performed or complied with by such Purchasers on or
before the Closing Date.

               (c) Investor Rights Agreement. The Investor Rights Agreement substantially in the form
attached hereto as Exhibit D shall have been executed and delivered by the parties thereto.

               (d) Voting Agreement. The Voting Agreement substantially in the form attached hereto as
Exhibit E shall have been executed and delivered by the parties thereto.

               (e) Filing of Restated Charter. The Restated Charter shall have been accepted for filing by
the Secretary of State of the State of Delaware.

               (f) Consents,
Permits, and Waivers. The Company shall have obtained of any and all
consents, permits and waivers necessary or appropriate for consummation of the transactions
contemplated by this Agreement and the Related Agreements (including any filing required to comply
with the Hart Scott Rodino Antitrust Improvements Act of 1976, and except for such as may be
properly obtained subsequent to the Closing).

     6. Miscellaneous.

          6.1 Governing Law. This Agreement shall be governed in all respects by the laws of the State
of California as such laws are applied to agreements between California residents entered into and
performed entirely in California.

-15-

 

          6.2 Survival. The representations, warranties, covenants and agreements made herein shall
survive any investigation made by any Purchaser and the closing of the transactions contemplated
hereby. All statements as to factual matters contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the Company hereunder
solely as of the date of such certificate or instrument.

          6.3 Successors and Assigns. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto and shall inure to the benefit of and be
enforceable by each person who shall be a holder of the Shares from time to time.

          6.4 Entire Agreement. This Agreement, the exhibits and schedules hereto, the Related
Agreements and the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects hereof and no party
shall be liable or bound to any other in any manner by any representations, warranties, covenants
and agreements except as specifically set forth herein and therein.

          6.5 Severability. In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

          6.6 Amendment and Waiver.

               (a) This Agreement may be amended or modified only upon the written consent of the Company and
holders of at least a majority of the then outstanding Shares (treated as if converted and
including any Conversion Shares into which the then outstanding Shares have been converted that
have not been sold to the public).

               (b) The obligations of the Company and the rights of the holders of the Shares and the
Conversion Shares under this Agreement may be waived only with the written consent of the holders
of at least a majority of the then outstanding Shares (treated as if converted and including any
Conversion Shares into which the then outstanding Shares have been converted that have not been
sold to the public).

          6.7 Delays or Omissions. It is agreed that no delay or omission to exercise any right, power
or remedy accruing to any party, upon any breach, default or noncompliance by another party under
this Agreement, the Related Agreements or the Restated Charter, shall impair any such right, power
or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance,
or any acquiescence therein, or of or in any similar breach, default or noncompliance thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of any kind or
character on any Purchaser’s part of any breach, default or noncompliance under this
Agreement, the Related Agreements or under the Restated Charter or any waiver on such party’s part
of any provisions or conditions of this Agreement, the Related Agreements, or the Restated Charter
must be in writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement, the Related

-16-

 

Agreements, the Restated Charter,
by law, or otherwise afforded to any party, shall be cumulative and not alternative.

          6.8 Waiver of Conflicts. Each party to this Agreement acknowledges that Cooley Godward
Kronish LLP (“Cooley Godward”), outside general counsel to the Company, has in the past performed
and is or may now or in the future represent one or more Purchasers or their affiliates in matters
unrelated to the transactions contemplated by this Agreement (the “Financing”), including
representation of such Purchasers or their affiliates in matters of a similar nature to the
Financing. The applicable rules of professional conduct require that Cooley Godward inform the
parties hereunder of this representation and obtain their consent. Cooley has served as outside
general counsel to the Company and has negotiated the terms of the Financing solely on behalf of
the Company. It is the belief of Cooley Godward that these terms and conditions represent an arm’s
length transaction between the Company and Purchasers. Purchasers have been represented by
independent legal counsel regarding the terms of the Financing. The Company and each Purchaser
hereby (a) acknowledge that they have had an opportunity to ask for and have obtained information
relevant to such representation, including disclosure of the reasonably foreseeable adverse
consequences of such representation; (b) acknowledge that with respect to the Financing, Cooley
Godward has represented solely the Company, and not any Purchaser or any stockholder, director or
employee of the Company or any Purchaser; and (c) gives its informed consent to Cooley Godward’s
representation of the Company in the Financing.

          6.9 Notices. All notices required or permitted hereunder shall be in writing and shall be
deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by
confirmed electronic mail, telex or facsimile if sent during normal business hours of the
recipient, if not, then on the next business day, (c) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after
deposit with a nationally recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the Company at the address as set
forth on the signature page hereof and to Purchaser at the address set forth on Exhibit A,
attached hereto or at such other address or electronic mail address as the Company or Purchaser may
designate by ten (10) days advance written notice to the other parties hereto.

          6.10 Expenses. Each party shall bear all costs and expenses that it incurs with respect to
the negotiation, execution, delivery and performance of this Agreement; provided, however, that the
Company shall, at the Closing, reimburse the reasonable fees of and expenses of one special counsel
for Purchasers, not to exceed twenty-five thousand dollars ($25,000).

          6.11 Attorneys’ Fees. In the event that any suit or action is instituted to enforce any
provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from
the losing party all fees, costs and expenses of enforcing any right of such prevailing party under
or with respect to this Agreement, including without limitation, such reasonable fees and expenses
of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses
of appeals.

-17-

 

          6.12 Titles and Subtitles. The titles of the sections and subsections of this Agreement are
for convenience of reference only and are not to be considered in construing this Agreement.

          6.13 Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one instrument.

          6.14 Broker’s Fees. Each party hereto represents and warrants that no agent, broker,
investment banker, person or firm acting on behalf of or under the authority of such party hereto
is or will be entitled to any broker’s or finder’s fee or any other commission directly or
indirectly in connection with the transactions contemplated herein. Each party hereto further
agrees to indemnify each other party for any claims, losses or expenses incurred by such other
party as a result of the representation in this Section 6.14 being untrue.

          6.15 Exculpation Among Purchasers. Each Purchaser acknowledges that it is not relying upon
any person, firm, or corporation, other than the Company and its officers and directors, in making
its investment or decision to invest in the Company. Each Purchaser agrees that no Purchaser nor
the respective controlling persons, officers, directors, partners, agents, or employees of any
Purchaser shall be liable to any other Purchaser for any action heretofore or hereafter taken or
omitted to be taken by any of them in connection with the Shares and Conversion Shares.

          6.16 Pronouns. All pronouns contained herein, and any variations thereof, shall be deemed to
refer to the masculine, feminine or neutral, singular or plural, as to the identity of the parties
hereto may require.

          6.17 California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF
THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE OF AN EXEMPTION FROM SUCH
QUALIFICATION IS UNLAWFUL. PRIOR TO ACCEPTANCE OF SUCH CONSIDERATION BY THE COMPANY, THE RIGHTS OF
ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR
AN EXEMPTION FROM SUCH QUALIFICATION BEING AVAILABLE..

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

-18-

 

     In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.

	 	 	 	 	 
	COMPANY:	 	 
	 
	 	 	 	 
	Veraz Networks, Inc.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Doug Sabella	 	 
	 

	 	 

Doug Sabella, Chief Executive Officer
	 	 

	 	 	 
	Address:

	 	926 Rock Ave., Suite 20
	 

	 	San Jose, CA 95131

SERIES D PREFERRED STOCK PURCHASE AGREEMENT

SIGNATURE PAGE

 

 

     In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.

	 	 	 	 	 
	 	 	ECI Telecom Ltd.
	 
	 	 	 	 
	 

	 	Signature:
	 	/s/ Giora Bitan
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	Print Name: Giora Bitan
	 
	 	 	 	 
	 

	 	Title:
	 	Executive Vice President and Chief Financial Officer

SERIES D PREFERRED STOCK PURCHASE AGREEMENT

SIGNATURE PAGE

 

 

     In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.

	 	 	 	 	 
	 	 	STAR BAY TECHNOLOGY VENTURES IV, L.P.
	 
	 	 	 	 
	 	 	By Levensohn Capital Partners II LLC,
	 	 	its General Partner
	 	 	By Levensohn Venture Partners LLC
	 	 	its Managing Member
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Pascal Levensohn
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	Print Name: Pascal Levensohn
	 
	 	 	 	 
	 	 	Title: Managing Member

SERIES D PREFERRED STOCK PURCHASE AGREEMENT

SIGNATURE PAGE

 

 

     In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.

	 	 	 	 	 
	 	 	Battery Ventures V, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	Battery Partners V, LLC
	 

	 	 	 	General Partner
	 
	 	 	 	 
	 	 	/s/ Morgan M. Jones
	 	 	 
	 

	 	Name:	 	 
	 	 	Title: Member Manager

SERIES D PREFERRED STOCK PURCHASE AGREEMENT

SIGNATURE PAGE

 

 

     In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.

	 	 	 	 	 
	 	 	Norwest Venture Partners VII-A, LP
	 
	 	 	 	 
	 	 	By: Itasca VC Partners VII-A, LLC, General Partner
	 
	 	 	 	 
	 

	 	By
	 	/s/ Kurt Betcher
	 

	 	 	 	 
	 	 	                                        , CFO

SERIES D PREFERRED STOCK PURCHASE AGREEMENT

SIGNATURE PAGE

 

 

     In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.

	 	 	 	 	 
	 	 	LMIA Coinvestment LLC
	 
	 	 	 	 
	 

	 	Signature:
	 	/s/ Ronald D. Ulich
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	Print Name: Ronald D. Ulich
	 
	 	 	 	 
	 	 	Title: Vice President

SERIES D PREFERRED STOCK PURCHASE AGREEMENT

SIGNATURE PAGE

 

 

     In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.

	 	 	 	 	 
	 	 	Argonaut Holdings
	 
	 	 	 	 
	 	 	By: Argonaut Private Equity LLC, its Manager
	 
	 	 	 	 
	 

	 	Signature:
	 	/s/ Jason Martin
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	Print Name: Jason Martin
	 
	 	 	 	 
	 	 	Title: Managing Director

SERIES D PREFERRED STOCK PURCHASE AGREEMENT

SIGNATURE PAGE

 

 

Table Of Contents

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	1.	 	AGREEMENT TO SELL AND PURCHASE	 	 	1	 
	 
	 
	 	1.1	 	Authorization of Shares	 	 	1	 
	 
	 	1.2	 	Sale and Purchase	 	 	1	 
	 
	2.	 	CLOSING, DELIVERY AND PAYMENT	 	 	2	 
	 
	 
	 	2.1	 	Closing	 	 	2	 
	 
	 	2.2	 	Delivery	 	 	2	 
	 
	3.	 	REPRESENTATIONS AND WARRANTIES OF THE COMPANY	 	 	3	 
	 
	 
	 	3.1	 	Organization, Good Standing and Qualification	 	 	4	 
	 
	 	3.2	 	Subsidiaries	 	 	4	 
	 
	 	3.3	 	Capitalization; Voting Rights	 	 	4	 
	 
	 	3.4	 	Authorization; Binding Obligations	 	 	5	 
	 
	 	3.5	 	Financial Statements	 	 	6	 
	 
	 	3.6	 	Liabilities	 	 	6	 
	 
	 	3.7	 	Agreements; Action	 	 	6	 
	 
	 	3.8	 	Obligations to Related Parties	 	 	7	 
	 
	 	3.9	 	Changes	 	 	7	 
	 
	 	3.10	 	Title to Properties and Assets; Liens, Etc	 	 	8	 
	 
	 	3.11	 	Intellectual Property	 	 	8	 
	 
	 	3.12	 	Protection of Proprietary Rights	 	 	9	 
	 
	 	3.13	 	Compliance with Other Instruments	 	 	9	 
	 
	 	3.14	 	Litigation	 	 	10	 
	 
	 	3.15	 	Employees	 	 	10	 
	 
	 	3.16	 	Obligations of Management	 	 	10	 
	 
	 	3.17	 	Registration Rights and Voting Rights	 	 	11	 
	 
	 	3.18	 	Compliance with Laws; Permits	 	 	11	 
	 
	 	3.19	 	Offering Valid	 	 	11	 
	 
	 	3.20	 	Full Disclosure	 	 	11	 
	 
	 	3.21	 	Minute Books	 	 	11	 
	 
	 	3.22	 	Real Property Holding Corporation	 	 	12	 
	 
	 	3.23	 	Insurance	 	 	12	 

- i -

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	4.	 	REPRESENTATIONS AND WARRANTIES OF PURCHASERS	 	 	12	 
	 
	 
	 	4.1	 	Requisite Power and Authority	 	 	12	 
	 
	 	4.2	 	Investment Representations	 	 	12	 
	 
	 	4.3	 	Transfer Restrictions	 	 	13	 
	 
	5.	 	CONDITIONS TO CLOSING	 	 	14	 
	 
	 
	 	5.1	 	Conditions to Purchasers’ Obligations at the Closing	 	 	14	 
	 
	 	5.2	 	Conditions to Obligations of the Company	 	 	15	 
	 
	6.	 	MISCELLANEOUS	 	 	16	 
	 
	 
	 	6.1	 	Governing Law	 	 	16	 
	 
	 	6.2	 	Survival	 	 	16	 
	 
	 	6.3	 	Successors and Assigns	 	 	16	 
	 
	 	6.4	 	Entire Agreement	 	 	16	 
	 
	 	6.5	 	Severability	 	 	16	 
	 
	 	6.6	 	Amendment and Waiver	 	 	16	 
	 
	 	6.7	 	Delays or Omissions	 	 	16	 
	 
	 	6.8	 	Waiver of Conflicts	 	 	17	 
	 
	 	6.9	 	Notices	 	 	17	 
	 
	 	6.10	 	Expenses	 	 	17	 
	 
	 	6.11	 	Attorneys’ Fees	 	 	18	 
	 
	 	6.12	 	Titles and Subtitles	 	 	18	 
	 
	 	6.13	 	Counterparts	 	 	18	 
	 
	 	6.14	 	Broker’s Fees	 	 	18	 
	 
	 	6.15	 	Exculpation Among Purchasers	 	 	18	 
	 
	 	6.16	 	Pronouns	 	 	18	 
	 
	 	6.17	 	California Corporate Securities Law	 	 	18	 

- ii -

 

List Of Exhibits

	 	 	 
	Schedule of Purchasers

	 	Exhibits A-1 and A-2
	 
	 	 
	Amended and Restated Certificate of Incorporation

	 	Exhibit B
	 
	 	 
	Schedule of Exceptions

	 	Exhibit C
	 
	 	 
	Investor Rights Agreement

	 	Exhibit D
	 
	 	 
	Voting Agreement

	 	Exhibit E
	 
	 	 
	Form of Legal Opinion

	 	Exhibit F

 

 

Exhibit A-1

Schedule of Purchasers

First Closing – December 19, 2006

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Aggregate	 
	Name and Address	 	Shares	 	 	Purchase Price	 
	Star Bay Technology Ventures
IV, L.P.

333 Bush, Suite 2580

San Francisco, CA 94104

Attn: Pascal Levensohn
	 	 	234,453	 	 	$	766,661.31	 
	 
	 	 	 	 	 	 	 	 
	LMIA Coinvestment LLC

Investments, 9A

175 Berkeley Street

Boston, MA 02117

Attn: Charles Farber
	 	 	316,004	 	 	$	1,033,333.08	 
	 
	 	 	 	 	 	 	 	 
	Battery Ventures V, L. P.

20 William Street, Suite 200

Wellesley, MA 02481

Attn: Morgan Jones
	 	 	413,178	 	 	$	1,351,092.06	 
	 
	 	 	 	 	 	 	 	 
	Norwest Venture Partners VII-A, LP

525 University Avenue

Suite 800

Palo Alto, CA 94301-1922

Attn: Promod Haque
	 	 	474,005	 	 	$	1,549,996.35	 
	 
	 	 	 	 	 	 	 	 
	Argonaut Holdings, LLC

6733 South Yale

Tulsa, OK 74136
	 	 	555,555	 	 	$	1,816,664.85	 
	 
	 	 	 	 	 	 	 	 
	Total:
	 	 	1,993,195	 	 	$	6,517,747.65	 
	 
	 	 	 	 	 	 

 

 

Exhibit A-1

Schedule of Purchasers

Second Closing – January 11, 2007

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Aggregate	 
	Name and Address	 	Shares	 	 	Purchase Price	 
	ECI Telecom, Ltd.

30 Hasivim Street

Petah Tikva, 49133

Israel
	 	 	1,019,368	 	 	$	3,333,333.36	 
	 
	 	 	 	 	 	 	 	 
	Battery Ventures V, L. P.

20 William Street,
Suite 200

Wellesley, MA 02481

Attn: Morgan Jones
	 	 	35,342	 	 	$	115,568.34	 
	 
	 	 	 	 	 	 	 	 
	Total:
	 	 	1,054,710	 	 	$	3,448,901.70	 
	 
	 	 	 	 	 	 

 

 

Exhibit A-2

Schedule of Purchasers

Call Closing

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Aggregate	 
	Name and Address	 	Shares	 	 	Purchase Price	 
	ECI Telecom, Ltd.

30 Hasivim Street

Petah Tikva, 49133

Israel
	 	 	509,684	 	 	$	1,666,666.68	 
	 
	 	 	 	 	 	 	 	 
	Star Bay Technology Ventures
IV, L.P.

333 Bush, Suite 2580

San Francisco, CA 94104

Attn: Pascal Levensohn
	 	 	117,226	 	 	$	383,329.02	 
	 
	 	 	 	 	 	 	 	 
	LMIA Coinvestment LLC 

Investments, 9A

175 Berkeley Street

Boston, MA 02117

Attn: Charles Farber
	 	 	158,002	 	 	$	516,666.54	 
	 
	 	 	 	 	 	 	 	 
	Battery Ventures V, L. P.

20 William Street, Suite 200

Wellesley, MA 02481

Attn: Morgan Jones
	 	 	224,260	 	 	$	733,330.20	 
	 
	 	 	 	 	 	 	 	 
	Norwest Venture Partners
VII-A, LP

525 University Avenue

Suite 800

Palo Alto, CA 94301-1922

Attn: Promod Haque
	 	 	237,002	 	 	$	774,996.54	 
	 
	 	 	 	 	 	 	 	 
	Argonaut Holdings, LLC

6733 South Yale

Tulsa, OK 74136
	 	 	277,777	 	 	$	908,330.79	 
	 
	 	 	 	 	 	 	 	 
	Total:
	 	 	1,523,951	 	 	$	4,983,319.77

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}]]