EXHIBIT 10.26
LOAN AND SECURITY AGREEMENT
Dated as of July 31, 1996
between
COMDISCO, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
as Lender
and
CORSAIR COMMUNICATIONS, INC.
a Delaware corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
as Borrower
CREDIT AMOUNT: $2,000,000
Treasury Note Maturity: 42 months
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Loan Margin: 805 basis points
---
Commitment Termination Date: July 31, 1996
The defined terms and information set forth on this cover page are a part
of the Loan and Security Agreement, dated as of the date first written above
(this "Agreement"), entered into by and between COMDISCO, INC. ("Lender") and
the borrower ("Borrower") set forth above. The terms and conditions of this
Agreement agreed to between Lender and Borrower are as follows:
ARTICLE I
INTERPRETATION
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1.01. Certain Definitions. Unless otherwise indicated in this Agreement or any
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other Operative Document, the following terms, when used in this Agreement or
any other Operative Document, shall have the following respective meanings:
"Borrower's Home State" shall mean the state in which Borrower's
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principal place of business is located.
"Business Day" shall mean any day other than a Saturday, Sunday or public
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holiday under the laws of California, Illinois or Borrower's Home State or other
day on which banking institutions are authorized or obligated to close in
California, Illinois or Borrower's Home State.
"Cash Equivalents" shall mean (i) cash, (ii) marketable direct
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obligations issued or unconditionally guaranteed by the United States or any
agency thereof maturing within one year from the date of the acquisition
thereof, (iii) commercial paper currently having a rating of at least "Al" or
"P1" by a national credit rating agency and maturing not more than one (1) year
from the creation thereof, and (iv) certificates of deposit, maturing not more
than one year from the date of creation thereof, issued by commercial banks
incorporated under the laws of the United States or a state thereof having
combined capital and surplus of not less than $200,000,000.
"Change of Control" shall mean the occurrence of any of the following (i)
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the acquisition by any person or group of persons acting together of 50% or more
of the outstanding voting securities of Borrower, (ii) the sale or all or
substantially all of the assets of Borrower, or (iii) a merger or consolidation
in which the shareholders of Borrower immediately prior to the consummation of
such merger or consolidation do not own at least 50% of the outstanding voting
securities of the surviving corporation immediately after such merger or
consolidation.
"Claim" has the meaning given to that term in Section 10.03.
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"Collateral" has the meaning given to that term Section 5.01(a).
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"Commitment Fee" has the meaning given to that term in Section 2.04.
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"Commitment Termination Date" shall mean the date specified on the cover
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page of this Agreement.
"Credit Amount" shall mean the maximum amount that Lender is committed to
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lend (if the conditions specified in Schedule 3 are satisfied), which amount is
set forth following such term on the cover page of this Agreement.
"Current Assets" shall mean the aggregate amount of all of the
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consolidated assets of Borrower and its Subsidiaries that would, in accordance
with GAAP, be classified on a balance sheet as current assets.
"Current Liabilities" shall mean the aggregate amount of all of the
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consolidated liabilities of Borrower and its Subsidiaries that would, in
accordance with GAAP, be classified on a balance sheet as current liabilities.
"Debt" shall mean, with respect to Borrower or any Subsidiary, the
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aggregate amount of, without duplication, (a) all obligations of such Person for
borrowed money, (b) all
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obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (c) all obligations of such Person to pay the deferred
purchase price of property or services (excluding trade payables of less than
180 days), (d) all capital lease obligations of such Person, (e) all obligations
or liabilities of others secured by a lien on any asset of such Person, whether
or not such obligation or liability is assumed, and (f) all obligations or
liabilities of others guaranteed by such Person. Unless otherwise indicated,
the term "Debt" shall include all Debt of Borrower and its Subsidiaries.
----
"Default" shall mean any event which with the passing of time or the
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giving of notice or both would become an Event of Default hereunder.
"Default Rate" shall mean the per annum rate of interest equal to the
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higher of (i) 18% or (ii) the Prime Rate plus 6%, but such rate shall in no
event be more than the highest rate permitted by applicable law.
"Disclosure Schedule" has the meaning set forth in the definition of the
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term "Permitted Liens."
"Environmental Law" shall mean the Resource Conservation and Recovery Act
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of 1987, the Comprehensive Environmental Response, Compensation and Liability
Act, and any other federal, state or local statute, law, ordinance, code, rule,
regulation, order or decree (in each case having the force of law) regulating or
imposing liability or standards of conduct concerning any Hazardous Material, as
now or at any time hereafter in effect.
"Equipment" has the meaning given to that term in Section 5.01(a).
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"Equity Securities" of any Person shall mean (a) all common stock,
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preferred stock, participations, shares, partnership interests or other equity
interests in and of such Person (regardless of how designated and whether or not
voting or non-voting) and (b) all warrants, options and other rights to acquire
any of the foregoing.
"Event of Default" has the meaning given to that term in Section 9.01.
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"Event of Loss" has the meaning given to that term in Section 6.01(e).
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"Funding Date" shall mean any date on which the Loan is made to or on
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account of Borrower under this Agreement.
"GAAP" shall mean generally accepted accounting principles and practices
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as in effect in the United States of America from time to time, consistently
applied.
"Hazardous Material" means any hazardous, dangerous or toxic constituent
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material, pollutant, waste or other substance, whether solid, liquid or gaseous,
which is regulated by any federal, state or local governmental authority.
"Initial Public Offering" means the closing of the initial public
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offering of Borrower's Common Stock effected pursuant to a registration
statement on Form S-1 (or its successor) filed under the Securities Act of 1933,
as amended.
"Intellectual Property" shall mean all of Borrower's right, title and
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interest in and to patents, patent rights (and applications therefor),
trademarks and service marks (and
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applications and registrations therefor), inventions, copyrights, mask works
(and applications and registrations therefor), trade names, trade styles,
software and computer programs, trade secrets, methods, processes, know how,
drawings, specifications, descriptions, and all memoranda, notes, and records
with respect to any research and development, all whether now owned or
subsequently acquired or developed by Borrower and whether in tangible or
intangible form or contained on magnetic media readable by machine together with
all such magnetic media.
"Landlord Consent" shall mean a consent in the form of Exhibit C or such
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other form as Lender may agree to accept.
"Lien" shall mean any pledge, bailment, lease, mortgage, hypothecation,
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conditional sales and title retention agreements, charge, claim, encumbrance or
other lien in favor of any Person.
"Loan" shall mean the advance by Lender to Borrower under this Agreement.
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"Loan Margin" shall mean the number of basis points set forth following
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such term on the cover page of this Agreement.
"Loan Rate" shall mean, with respect to the Loan, the per annum rate of
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interest (based on a year of 360 days and actual days elapsed) equal to the sum
of (a) the U.S. Treasury note rate of a term equal to the Treasury Note Maturity
as quoted in The Wall Street Journal on the date two (2) Business Days prior to
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the requested Funding Date of the Loan plus (b) the Loan Margin.
"Make-Whole Premium" shall mean an amount equal to the greater of (i)
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zero and (ii) the excess of (x) the sum of the present values, at the date of
prepayment of the amount of each remaining scheduled payment of interest on and
principal on the Loan, or portion of such payment, which will not be required to
be made as a result of such prepayment (each such payment an "Amount Payable")
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(each such Amount Payable discounted separately at the Treasury Rate, determined
on the date three (3) Business Days before the date of prepayment, compounded
monthly, from the date such Amount Payable would be due), over (y) the principal
amount of such Note to be prepaid. The "Treasury Rate" shall be, prior to
Borrower's Initial Public Offering, the yield (as quoted in The Wall Street
Journal on the date which is three (3) Business Days prior to the date of
prepayment) on U.S. Treasury securities adjusted to a constant maturity equal to
the then remaining number of full months to maturity of the Note. After
Borrower's Initial Public Offering, the "Treasury Rate" shall be the rate
determined pursuant to the previous sentence plus 200 basis points.
"Note" or "Notes" shall mean the secured promissory note or notes, as
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applicable, of Borrower substantially in the form of Exhibit A.
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"Obligations" has the meaning given to that term Section 5.01.
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"Operative Documents" shall mean this Agreement, the Note, the Warrant,
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the Landlord Waiver and Consent(s) and all other documents, instruments and
agreements executed and delivered in connection herewith or therewith or in
respect of the closing of the transactions contemplated hereby or thereby.
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"Payment Date" means the last day of each calendar month.
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"Permitted Liens" shall mean (a) the Lien created by this Agreement, (b)
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Liens for fees, taxes, levies, imposts, duties or other governmental charges of
any kind which are not yet delinquent or which are being contested in good faith
by appropriate proceedings which suspend the collection thereof (provided,
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however, that such proceedings do not involve any substantial danger of the
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sale, forfeiture or loss of any item of Equipment and that Borrower has
adequately bonded such Lien or reserves sufficient to discharge such Lien have
been provided on the books of Borrower), (c) Liens identified on the disclosure
schedule attached hereto as Schedule 2 ("Disclosure Schedule"), (d) Liens to
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secure payment of worker's compensation, employment insurance, old age pensions
or other social security obligations of Borrower in the ordinary course of
business of Borrower, (e) Liens upon any equipment or other personal property
acquired by Borrower after the date hereof to secure (i) the purchase price of
such equipment or other personal property or (ii) lease obligations or
indebtedness incurred solely for the purpose of financing the acquisition of
such equipment or other personal property; provided that (A) such Liens are
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confined solely to the equipment or other personal property so acquired, and (B)
no such Lien shall be created, incurred, assumed or suffered to exist in favor
of Borrower's officers, directors or shareholders holding five percent (5%) or
more of Borrower's Equity Securities, (f) non-exclusive licenses of Intellectual
Property entered into in the ordinary course of business and licenses, Liens or
similar arrangements entered into in connection with joint ventures and
corporate collaborations, and (g) Liens referred to in and to which Lender has
agreed to be subordinated pursuant to Section 5.05.
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"Person" shall mean and include an individual, a partnership, a
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corporation, a business trust, a joint stock company, a limited liability
company, an unincorporated association or other entity and any domestic or
foreign national, state or local government, any political subdivision thereof,
and any department, agency, authority or bureau of any of the foregoing.
"Prime Rate" shall mean the interest rate per annum publicly announced
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from time to time by Bank of America NT & SA (or its successor) as its reference
rate, but such rate shall in no event be more than the highest interest rate
permitted by applicable law.
"Qualified Financing" shall mean the closing of the sale of the Equity
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Securities of Borrower having net proceeds to Borrower of not less than
$10,000,000.
"Subsidiary" shall mean any corporation of which a majority of the
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outstanding capital stock entitled to vote for the election of directors
(otherwise than as the result of a default) is owned by Borrower directly or
indirectly through Subsidiaries.
"Tangible Net Worth" shall mean Borrower's consolidated assets as
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determined in accordance with GAAP minus (a) consolidated liabilities, as
determined in accordance with GAAP, (b) all intangible assets of Borrower,
including, but not limited to, all assets which should be classified as
intangible assets, such as goodwill, patents, trademarks, copyrights,
franchises, treasury stock and deferred charges (including unamortized debt
discount and research and development costs), (c) cash held in a sinking or
other similar fund established for the purpose of redemption or other retirement
of capital stock, (d) to the extent not already deducted from total assets,
reserves for depreciation, depletion, obsolescence or amortization of properties
and other reserves or appropriations of retained earnings which
5
have been or should be established in connection with the business conducted by
Borrower, and (e) unless approved by Borrower's auditors, any revaluation or
other write-up in book value of assets subsequent to Borrower's fiscal year last
ended at the date of this Agreement.
"Term" shall mean the period from and after the date hereof until the
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payment or satisfaction in full of all Obligations under this Agreement and the
other Operative Documents.
"Treasury Note Maturity" shall mean the period of months set forth
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following such term on the cover page of this Agreement.
"Warrant" shall mean a warrant to purchase securities of Borrower
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substantially in the form of Exhibit C.
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1.02. Headings. Headings in this Agreement and each of the other
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Operative Documents are for convenience of reference only and are not part of
the substance hereof or thereof.
1.03. Plural Terms. All terms defined in this Agreement or any other
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Operative Document in the singular form shall have comparable meanings when used
in the plural form and vice versa.
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1.04. Construction. This Agreement is the result of negotiations among,
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and has been reviewed by, Borrower and Lender and their respective counsel.
Accordingly, this Agreement shall be deemed to be the product of all parties
hereto, and no ambiguity shall be construed in favor of or against Borrower or
Lender.
1.05. Entire Agreement. This Agreement, together with the terms set
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forth in each of the other Operative Documents, taken together, constitute and,
contain the entire agreement of Borrower and Lender and, with regard to their
respective subject matters, supersede any and all prior agreements, term sheets,
negotiations, correspondence, understandings and communications among the
parties, whether written or oral, with respect to their respective subject
matters.
1.06. Other Interpretive Provisions. References in this Agreement to
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"Articles," "Sections," "Exhibits," "Schedules" and "Annexes" are to recitals,
articles, sections, exhibits, schedules and annexes herein and hereto unless
otherwise indicated. References in this Agreement and each of the other
Operative Documents to any document, instrument or agreement shall include (a)
all exhibits, schedules, annexes and other attachments thereto, (b) all
documents, instruments or agreements issued or executed in replacement thereof,
and (c) such document, instrument or agreement, or replacement or predecessor
thereto, as amended, modified and supplemented from time to time and in effect
at any given time. The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement or any other Operative Document shall
refer to this Agreement or such other Operative Document, as the case may be, as
a whole and not to any particular provision of this Agreement or such other
Operative Document, as the case may be. The words "include" and "including" and
words of similar import when used in this Agreement or any other Operative
Document shall not be construed to be limiting or exclusive. Unless otherwise
indicated in this Agreement or any other Operative Document, all accounting
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terms used in this Agreement or any other Operative Document shall be construed,
and all accounting and financial computations hereunder or thereunder shall be
computed, in accordance with generally accepted accounting principles as in
effect in the United States of America from time to time.
ARTICLE II
THE CREDIT
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2.01. Credit Facility.
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(a) Commitment. On the terms and subject to the conditions hereof and
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relying upon the representations and warranties herein set forth as and when
made or deemed to be made, Lender agrees to lend to Borrower a Loan in the
aggregate principal amount of Two Million Dollars ($2,000,000).
(b) Loan Interest Rate. Borrower shall pay interest on the unpaid
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principal amount of the Loan from the date of the Loan until the Loan is paid in
full, at a per annum rate of interest equal to the Loan Rate determined in
accordance with the definition of Loan Rate. The Loan Rate applicable to the
Loan shall not be subject to change in the absence of manifest error. All
computations of interest on the Loan shall be based on a year of 360 days and
actual days elapsed. If Borrower pays interest on the Loan which is determined
to be in excess of the then legal maximum rate, then that portion of each
interest payment representing an amount in excess of the then legal maximum rate
shall be deemed a payment of principal and applied against the principal of the
Loan.
(c) Payments of Principal and Interest. Borrower shall make payments of
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accrued interest only on the aggregate outstanding principal amount of the Loan
on each Payment Date through and including January 31, 1996. Thereafter, on
each Payment Date, commencing on February 28, 1997, Borrower shall make thirty-
six (36) payments of principal equal to 2.7778% of the original principal amount
of the Loan, plus accrued interest on the unpaid principal balance of the Loan,
until the Loan is paid in full with the last payment to occur, unless the Loan
is earlier prepaid, on January 31, 2000. The Loan may not be prepaid except as
set forth in Section 2.02(f).
2.02. Use of Proceeds; the Loans and the Note; Disbursement.
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(a) Use of Proceeds. The proceeds of the Loan shall be used solely for
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working capital or general corporate purposes of Borrower.
(b) The Loan and the Note. The obligation of Borrower to repay the
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aggregate unpaid principal amount of and interest on the Loan shall be evidenced
by the Note. Lender may, and is hereby authorized by Borrower to, endorse on a
grid annexed to the Note appropriate notations regarding the Loan; provided,
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however, that the failure to make, or an error in making, any such notation
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shall not limit or otherwise affect the obligations of Borrower hereunder or
under the Note.
(d) Disbursement. Subject to the satisfaction of the conditions set forth
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in this Agreement, Lender shall disburse the Loan by wire transfer to Borrower
in same day immediately available funds unless otherwise directed in writing by
Borrower.
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(e) Termination of Commitment to Lend. Notwithstanding anything to the
---------------------------------
contrary in the Operative Documents, Lender's obligation to lend to Borrower
hereunder shall terminate on the earlier of (i) the occurrence of any Event of
Default hereunder, and (ii) the Commitment Termination Date.
(f) Optional Payment with Premium. At any time after the first
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anniversary date hereof, upon three (3) Business Days' prior written notice to
Lender, Borrower may, at its option, at any time, prepay the Loan, either in
whole or from time to time in any part of the principal amount thereof equal to
$500,000 or more, at a prepayment price equal to the principal amount of the
Loan so to be prepaid, plus interest accrued thereon through and including the
date of such prepayment, plus a premium equal to the Make-Whole Premium.
(g) Mandatory Prepayment. Prior to any contemplated Change of Control,
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Borrower shall give Lender written notice of thereof together with a description
of the proposed transaction and financial information concerning the surviving
or acquiring entity or such entity's parent if applicable (and will deliver
additional information upon Lender's reasonable request). Lender shall notify
Borrower within thirty (30) days of receipt of such notice whether or not it
will consent (such consent not to be unreasonably withheld) to the assignment to
and the assumption by such surviving or acquiring entity or the continuation of
the Loan with the Borrower if the Borrower has become a Subsidiary of any such
entity. If Lender does not so consent (and such consent shall not be
unreasonably withheld), then prior to the closing of the Change of Control,
Borrower shall prepay the principal, accrued interest and other amounts due with
respect to the Loan, plus a premium equal to the Make-Whole Premium.
2.03. Other Payment Terms.
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(a) Place and Manner. Borrower shall make all payments due to Lender in
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lawful money of the United States, in immediately available funds, at the
address for payments and in the manner specified in Section 10.05(b).
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(b) Date. Whenever any payment due hereunder shall fall due on a day
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other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall be included in the computation of
interest or fees, as the case may be.
(c) Default Rate. If either (i) any amounts required to be paid by
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Borrower under this Agreement or the other Operative Documents (including
principal or interest payable on the Loan, any fees or other amounts) remain
unpaid for five (5) days after such amounts are due, or (ii) an Event of Default
has occurred and is continuing, Borrower shall pay interest on the aggregate,
outstanding principal balance hereunder from the date due or from the date of
the Event of Default, as applicable, until such past due amounts are paid in
full or until all Events of Defaults are cured, as applicable, at a per annum
rate equal to the Default Rate, such rate to change from time to time as the
Prime Rate shall change. All computations of such interest at the Default Rate
shall be based on a year of 360 days and actual days elapsed.
2.04. Commitment Fee. Lender has received a commitment fee from Borrower
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in the amount of $5,000 (the "Commitment Fee"). Any portion of the Commitment
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Fee not utilized to pay Lender's expenses in connection with the negotiation,
documentation and
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funding of the Loan (such expenses not to exceed $2,500) will be applied by
Lender to amounts due under the Note in the order in which such amounts are due.
If the Loan is not made, any remaining balance of the Contingent Fee shall be
retained by Lender.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
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3.01. Representations and Warranties. Except as set forth in the
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Disclosure Schedule, Borrower makes the following representations and warranties
to Lender as of the date hereof and again on each Funding Date:
(a) Organization and Qualification. Borrower is a corporation duly
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organized, validly existing and in good standing under the laws of its state of
incorporation and is duly qualified to do business in Borrower's Home State.
Borrower has no Subsidiaries.
(b) Authority. Borrower has all necessary corporate power, authority and
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legal right and has obtained all approvals and consents and has given all
notices necessary to execute and deliver this Agreement and the other Operative
Documents and to perform the terms hereof and thereof. Borrower has all
requisite corporate power and authority to own and operate its properties and to
carry on its businesses as now conducted.
(c) Conflict with Other Instruments, etc. Neither the execution and
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delivery of any Operative Document to which Borrower is a party nor the
consummation of the transactions therein contemplated nor compliance with the
terms, conditions and provisions thereof will conflict with or result in a
breach of any of the terms, conditions or provisions of the charter or the
bylaws of Borrower or, to its knowledge, any law or any regulation, order, writ,
injunction or decree of any court or governmental instrumentality or any
material agreement or instrument to which Borrower is a party or by which it or
any of its properties is bound or to which it or any of its properties is
subject, or constitute a default thereunder or result in the creation or
imposition of any Lien, other than Permitted Liens.
(d) Title to Properties. Borrower has good and marketable title to the
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Collateral, free and clear of all Liens, other than Permitted Liens. Borrower
has title and ownership of, or is licensed under, all Intellectual Property,
with no known infringement of the rights of others. Borrower has not received
any communications alleging that Borrower has violated, or by conducting its
business as proposed, would violate any proprietary rights of any other Person.
Borrower has no knowledge of any infringement or violation by it of the
intellectual property rights of any third party and has no knowledge of any
violation or infringement by a third party of any of its Intellectual Property.
The Collateral and the Intellectual Property constitute substantially all of the
assets and property of Borrower. Borrower does not own any right, title or
interest in or to any real property or motor vehicles, other than motor vehicles
leased to executives as part of a benefit arrangement.
(e) Authorization, Governmental Approvals, etc. The execution and
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delivery by Borrower of each Operative Document, the granting of the security
interest in the Collateral, the issuance of the Warrant, the issuance of the
securities into which the Warrant is exercisable, the issuance of any securities
into which the securities issuable upon exercise of the Warrant are convertible,
and the performance of the obligations herein and therein contemplated have each
been duly authorized by all necessary action on the part of
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Borrower. No authorization, consent, approval, license or exemption of, and no
registration, qualification, designation, declaration or filing with, or notice
to, any Person is, was or will be necessary to (i) the valid execution and
delivery of any Operative Document to which Borrower is a party, (ii) the
performance of Borrower's obligations under any Operative Document, or (iii) the
granting of the security interest in the Collateral, except for filings in
connection with the perfection of the security interest in any of the Collateral
or the issuance of the Warrant. The Operative Documents have been or will be
duly executed and delivered and constitute or will constitute legal, valid and
binding obligations of Borrower, enforceable in accordance with their respective
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency or other similar laws of general application relating to or affecting
the enforcement of creditors' rights or by general principles of equity.
(f) Litigation. There are no actions, suits, proceedings or
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investigations pending or, to the knowledge of Borrower, threatened against or
affecting Borrower, or the business or any property or asset owned by it, before
any court or governmental department, agency or instrumentality which, if
adversely determined, could reasonably be expected to have a material adverse
effect on the financial condition, business or operations of Borrower.
(g) Disclosure. Neither any Operative Document nor any other agreement,
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document or certificate furnished by Borrower to Lender, including, without
limitation, historical financial statements, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein not misleading. There is no fact known
to Borrower which materially adversely affects, or which could reasonably be
expected in the future to materially adversely affect, its ability to perform
its obligations under the Operative Documents to which it is a party.
(h) Security Interest. Assuming the proper filing of one or more
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financing statement(s) identifying the Collateral with the proper state and/or
local authorities, the security interests in the Collateral granted to Lender
pursuant to this Agreement (i) constitute and will continue to constitute first
priority security interests (except to the extent any other Permitted Lien
existing on the date of this Agreement may create any priority to Lender's Lien
under this Agreement) and (ii) are and will continue to be superior and prior to
the rights in the Collateral of all other creditors of Borrower (except to the
extent of such Permitted Liens).
(i) Executive Offices. The principal place of business and chief
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executive office of Borrower, and the office where Borrower will keep all
records and files regarding the Collateral, is set forth on the cover page of
this Agreement.
ARTICLE IV
REPORTING REQUIREMENTS
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4.01. Furnishing Reports. Borrower shall furnish to Lender:
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(a) Financial Statements. So long as Borrower is not subject to the
--------------------
reporting requirements of Section 12 or Section 15 of the Securities and
Exchange Act of 1934, as amended, promptly as they are available, unaudited
monthly and audited annual financial statements of Borrower and such other
financial information as Lender may reasonably request from time to time. From
and after such time as Borrower becomes a publicly reporting company, promptly
as they are available and in any event: (i) at the time of filing
10
of Borrower's Form 10-K with the Securities and Exchange Commission after the
end of each fiscal year of Borrower, the financial statements of Borrower filed
with such Form 10-K; and (ii) at the time of filing of Borrower's Form 10-Q with
the Securities and Exchange Commission after the end of each of the first three
fiscal quarters of Borrower, the financial statements of Borrower filed with
such Form 10-Q.
(b) Compliance Statements. Promptly as they are available and in any
---------------------
event within (30) days of the end of each fiscal quarter of Borrower a
certificate of Borrower's Chief Financial Officer or other senior officer
stating that he or she has reviewed the provisions of this Agreement and that
Borrower is not in default in the observance or performance of any of the
provisions hereof, or if Borrower shall be so in default, specifying all such
defaults and events of which he or she may have knowledge and setting forth the
calculation of compliance or noncompliance with the financial covenant set forth
in Section 7.02.
(b) Notice of Defaults. As soon as possible, and in any event within five
------------------
(5) Business Days after the discovery of a Default or Event of Default provide
Lender with an Officer's Certificate of Borrower setting forth the facts
relating to or giving rise to such Default or Event of Default and the action
which Borrower proposes to take with respect thereto.
(c) Miscellaneous. Such other information as Lender may reasonably
-------------
request from time to time.
ARTICLE V
GRANT OF SECURITY INTEREST
GENERAL PROVISIONS CONCERNING SECURITY
--------------------------------------
5.01. Grant of Security Interest. Borrower, in order to secure the
--------------------------
payment of the principal and interest with respect to the Loan made pursuant to
this Agreement, all other sums due under and in respect hereof and of the other
Operative Documents, including fees, charges, expenses and attorneys' fees and
costs and the performance and observance by Borrower of all other terms,
conditions, covenants and agreements herein and in the other Operative Documents
(all such amounts and obligations being herein sometimes called the
"Obligations"), does hereby grant to Lender and its successors and assigns, a
security interest in and to the following property (collectively, the
"Collateral"): All right, title, interest, claims and demands of Borrower in and
----------
to:
(a) All goods and equipment now owned or hereafter acquired, including,
without limitation, all laboratory equipment, computer equipment, office
equipment, machinery, fixtures, vehicles (including motor vehicles and
trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;
(b) All inventory now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Borrower's custody or possession or in
transit and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above, and
Borrower's books relating to any of the foregoing;
11
(c) All contract rights and general intangibles, including Intellectual
Property, now owned or hereafter acquired, including, without limitation,
goodwill, license agreements, franchise agreements, blueprints, drawings,
purchase orders, customer lists, route lists, infringements, claims, computer
programs, computer disks, computer tapes, literature, reports, catalogs, design
rights, income tax refunds, payments of insurance and rights to payment of any
kind;
(d) All now existing and hereafter arising accounts, royalties, license
rights and all other forms of obligations owing to Borrower arising out of the
sale or lease of goods, the licensing of technology or the rendering of services
by Borrower (subject, in each case, to the contractual rights of third parties
to require funds received by Borrower to be expended in a particular manner),
whether or not earned by performance, and any and all credit insurance,
guaranties, and other security therefor, as well as all merchandise returned to
or reclaimed by Borrower and Borrower's books relating to any of the foregoing;
(e) All documents, cash, deposit accounts, securities, letters of credit,
certificates of deposit, instruments and chattel paper now owned or hereafter
acquired and Borrower's books relating to the foregoing; and
(f) Any and all claims, rights and interests in any of the above and all
substitutions for, additions and accessions to and proceeds thereof, including,
without limitation, insurance, condemnation, requisition or similar payments and
proceeds of the sale or licensing of Intellectual Property to the extent such
proceeds no longer constitute Intellectual Property.
5.02 Duration of Security Interest. Subject to Section 5.06, Lender's
----------------------------- ------------
security interest in the Collateral shall continue until the payment in full and
the satisfaction of all Obligations, whereupon such security interest shall
terminate. Lender, upon payment in full and the satisfaction of the
Obligations, shall promptly execute such further documents and take such further
actions as may be necessary to effect the release and/or termination
contemplated by this Section 5.02, including duly executing and delivering
------------
termination statements for filing in all relevant jurisdictions.
5.03 Possession of Collateral. Except as set forth in Section 5.04, so
------------------------
long as no Event of Default has occurred and is continuing, Borrower shall
remain in full possession, enjoyment and control of the Collateral (except only
as may be otherwise required by Lender for perfection of its security interest
therein) and to manage, operate and use the same and each part thereof with the
rights and franchises appertaining thereto; provided, however, that the
-------- -------
possession, enjoyment, control and use of the Collateral shall at all times be
subject to the observance and performance of the terms of this Agreement.
5.04 Location of Collateral. The Collateral is and shall remain in the
----------------------
possession of Borrower at Borrower's address stated on the cover page of this
Agreement.
5.05 Lien Subordination. Lender agrees that the Liens granted to it
------------------
hereunder shall be subordinate to the Liens of existing and future lenders
providing working capital financing; provided that such Liens are confined
--------
solely to inventory, accounts receivable (and instruments and general
intangibles related specifically to such inventory and accounts receivable) and
the proceeds thereof; and provided, further, that the Obligations hereunder
-------- -------
shall not be subordinate in right of payment to any obligations to working
capital lenders and Lender's rights and remedies hereunder shall not in any way
be subordinate to the
12
rights and remedies of any such working capital lenders. Lender agrees to
execute and deliver such agreements and documents as may be reasonably requested
by Borrower from time to time which set forth the lien subordination described
in this Section 5.05 and are reasonably acceptable to Lender. Lender shall have
------------
no obligation to execute any agreement or document which would impose
obligations, restrictions or lien priority on Lender which are less favorable
than those described in this Section 5.05. In particular, so long as no Event
------------
of Default has occurred and is continuing, Lender agrees that it will execute
and deliver an Intercreditor Agreement with Silicon Valley Bank in the form
attached hereto as Exhibit E.
---------
5.06 Partial Release of Collateral. Upon receipt of evidence of the
-----------------------------
occurrence of a Qualified Financing, Lender shall release its security interest
in all of the items set forth in Section 5.01(c) which constitute Intellectual
---------------
Property.
5.07 Additional Covenants.
--------------------
(a) Landlord Waiver. In connection with the execution and delivery of
---------------
this Agreement, Borrower has caused to be delivered to Lender a Sublessor's
Waiver and Consent from Syntex Corp. which is the sublessor of Borrower's
facility. Borrower agrees that within 30 days of the earlier of its expiration
of its sublease with Syntex Corp. or its entering into a new lease for its
current or another facility, it will obtain a Landlord Consent from the owner of
the premises which it is then occupying.
(b) Copyright Filings. Borrower agrees that in the event that it
-----------------
registers the copyrights to its software with the United States Copyright
Office, it will promptly notify Borrower of such registration and will at its
expense execute and cause to be filed with the United States Copyright Office
such instruments or documents as Lender may reasonably request to perfect and
maintain Lender's security interest in such copyrights.
ARTICLE VI
AFFIRMATIVE COVENANTS
---------------------
6.01. Affirmative Covenants.
---------------------
(a) Payment of Taxes. etc. Borrower shall pay and discharge all taxes,
----------------------
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims which, if unpaid, might
become a Lien upon any of its properties; provided that there shall be no
---------
requirement to pay any such tax, assessment, charge, levy or claim (i) which is
being contested in good faith and by appropriate proceedings or which presents
no risk of seizure, forfeiture, levy or other event which could jeopardize any
Collateral or (ii) for which payment in full is bonded or reserved in Borrower's
financial statements.
(b) Inspection Rights. Borrower shall, at any reasonable time and from
-----------------
time to time, permit Lender or any of its agents or representatives to inspect
the Collateral, to examine and make copies of and abstracts from the records and
books of account of, and visit the properties of, Borrower and to discuss the
affairs, finances and accounts of Borrower with any of its officers or directors
relating in each case to Lender's capacity as lender and secured party hereunder
and with respect to the Collateral.
13
(c) Maintenance of Equipment and Similar Assets. Borrower shall keep and
--------------------------------------------
maintain all items of equipment and other similar types of personal property
that form any significant portion or portions of the Collateral in good
operating condition and repair and shall make all necessary replacements thereof
and renewals thereto so that the value and operating efficiency thereof shall at
all times be maintained and preserved. Borrower shall not permit any such
material item of Collateral to become a fixture to real estate or an accession
to other personal property, without the prior written consent of Lender.
Borrower shall not permit any such material item of Collateral to be operated or
maintained in violation of any applicable law, statute, rule or regulation.
With respect to items of leased equipment (to the extent Lender has any security
interest in any residual Borrower's interest in such equipment under the lease),
Borrower shall keep, maintain, repair, replace and operate such leased equipment
in accordance with the terms of the applicable lease.
(d) Insurance.
---------
(i) Borrower shall, obtain and maintain for the Term, at its own
expense, (x) "all risk" insurance against loss or damage to the Collateral, (y)
commercial general liability insurance (including contractual liability,
products liability and completed operations coverages) reasonably satisfactory
to Lender, and (z) such other insurance against such other risks of loss and
with such terms, as shall in each case be reasonably satisfactory to or
reasonably required by Lender (as to carriers, amounts and otherwise).
Borrower's insurance which has been reviewed and approved by Lender prior to the
making of the Loan hereunder shall be deemed to satisfy the requirements of this
Section 6.01(d).
(ii) The deductible with respect to "all-risk" insurance required by
clause (x) above and product liability insurance required by clause (y) above
shall not exceed $25,000; otherwise the deductible with respect to any insurance
required to be maintained hereunder shall not exceed $5,000. The amount of
commercial general liability insurance (other than products liability coverage
and completed operations insurance) required by clause (y) above shall be at
least $5,000,000 per occurrence. The amount of the products liability and
completed operations insurance required by clause (y) above shall be at least
$5,000,000 per occurrence. Each "all risk" policy shall: (x) name Lender as loss
payee, (y) provide for each insurer's waiver of its right of subrogation against
Lender, and (z) provide that such insurance (A) shall not be invalidated by any
action of, or breach of warranty by, Borrower of a provision of any of its
insurance policies, and (B) shall waive set-off, counterclaim or offset against
Lender. Each liability policy shall (w) name Lender as an additional insured and
(x) provide that such insurance shall have cross-liability and severability of
interest endorsements (which shall not increase the aggregate policy limits of
Borrowers insurance). All insurance policies shall (y) provide that Borrower's
insurance shall be primary without a right of contribution of Lender's
insurance, if any, or any obligation on the part of Lender to pay premiums of
Borrower, and (z) shall contain a clause requiring the insurer to give Lender at
least 30 days' prior written notice of its cancellation (other than cancellation
for nonpayment for which 10 days' notice shall be sufficient). Borrower shall on
or prior to the first Funding Date and prior to each policy renewal, furnish to
Lender certificates of insurance or other evidence satisfactory to Lender that
such insurance coverage is in effect.
14
ARTICLE VII
NEGATIVE AND FINANCIAL COVENANTS
--------------------------------
7.01. Negative Covenants. So long as the Obligations remain outstanding,
------------------
Borrower shall not:
(a) Name: Location of Chief Executive Office and Collateral. Without
-------------------------------------------------------
thirty (30) days prior written notice to Lender, change its chief executive
office or principal place of business or remove or cause to be removed from the
location set forth on the cover page hereof or move any Collateral to a location
other than that set forth on the cover page hereof.
(b) Liens on Collateral. Create, incur, assume or suffer to exist any
-------------------
Lien of any kind upon any Collateral, whether now owned or hereafter acquired,
except Permitted Liens.
(c) Negative Pledge Regarding Intellectual Property. Create, incur,
-----------------------------------------------
assume or suffer to exist any Lien of any kind upon any Intellectual Property,
whether now owned or hereafter acquired, except Permitted Liens.
(d) Dispositions of Collateral or Intellectual Property. Convey, sell,
---------------------------------------------------
offer to sell, lease, transfer, exchange or otherwise dispose of (collectively,
a "Transfer") all or any part of the Collateral to any Person, other than: (i)
--------
transfers of inventory in the ordinary course of business; (ii) transfers of
non-exclusive licenses and similar arrangements for the use of the property of
Borrower in the ordinary course of business; or (iii) transfers of worn-out or
obsolete Equipment. It is expressly agreed and understood that the ordinary
course of Borrower's business includes entering into agreements and arrangements
with third parties for research, development, distribution, manufacturing, sale
or marketing of products and the licensing of Intellectual Property in
connection with such agreements and arrangements.
(e) Distributions. (i) Pay any dividends or make any distributions on
-------------
its Equity Securities; (ii) purchase, redeem, retire, defease or otherwise
acquire for value any of its Equity Securities (other than pursuant to the terms
of employee stock purchase plans, employee restricted stock agreements or
similar arrangements in an aggregate amount not to exceed $100,000); (iii)
return any capital to any holder of its Equity Securities as such; (iv) make any
distribution of assets, Equity Securities, obligations or securities to any
holder of its Equity Securities as such; or (v) set apart any sum for any such
purpose; provided, however, that Borrower may pay dividends payable solely in
Common Stock.
(f) Mergers or Acquisitions. Except with Lender's prior written
-----------------------
consent as set forth in Section 2.02(g), merge or consolidate with or into any
---------------
other Person or acquire all or substantially all of the capital stock or assets
of another Person.
(i) Transactions With Affiliates. Enter into any contractual
----------------------------
obligation with any affiliate or engage in any other transaction with any
affiliate except upon terms at least as favorable to Borrower or such Subsidiary
as an arms-length transaction with unaffiliated Persons.
(j) Maintenance of Accounts. Borrower shall not maintain any deposit
-----------------------
accounts or accounts holding securities owned by Borrower except (i) accounts
located at Silicon Valley Bank and (ii) other accounts with respect to which
Lender takes such action as it deems necessary to obtain a perfected security
interest in such account.
15
(k) Indebtedness. Prior to the closing of a Qualified Financing,
------------
Borrower shall not incur any Debt except Debt subordinated to the Obligations on
terms and conditions satisfactory to Lender.
7.02 Financial Covenant. From and after the occurrence of a Qualified
------------------
Financing, as of the last day of each calendar month, Borrower shall maintain a
ratio of Debt to Tangible Net Worth of not greater than 1.5:1.00.
ARTICLE VIII
CONDITIONS PRECEDENT
--------------------
8.01. Closing. At the time of execution and delivery of this Agreement,
-------
Borrower shall have duly executed and/or delivered to Lender the items set forth
in Part I of Schedule 3.
--------------------
8.02. Other Conditions. The obligation of Lender to make the Loan
----------------
shall be subject to the execution and/or delivery to Lender of each of the items
set forth in Part I of Schedule 3 and the satisfaction of by Borrower of each
--------------------
condition set forth in Part II of Schedule 3.
---------------------
8.03. Covenant to Deliver. Borrower agrees (not as a condition but as
-------------------
a covenant) to deliver to Lender each item required to be delivered to Lender as
a condition to the Loan, if the Loan is advanced. Borrower expressly agrees
that the extension of the Loan prior to the receipt by Lender of any such item
shall not constitute a waiver by Lender of Borrower's obligation to deliver such
item.
ARTICLE IX
DEFAULT AND REMEDIES
--------------------
9.01. Events of Default. An "Event of Default" shall mean the
-----------------
occurrence of one or more of the following described events:
(a) Borrower shall (i) default in the payment of principal of or
interest on the Loan for five (5) days after the same is due, or (ii) default in
the payment of any expense or other amount payable hereunder or thereunder for
ten (10) days after receipt of written notice from Lender that the same is due;
or
(b) Borrower shall breach any provision of Section 7.01, Section 7.02 or
------------ ------------
Section 6.01(d); or
(c) Borrower shall default in the performance of any covenant,
agreement or obligation (other than a covenant, agreement or obligation referred
to in Section 9.01(a) or Section 9.01(b)) contained in any Operative Document
--------------- ----------------
and Borrower shall fail to cure within thirty (30) days after receipt of written
notice from Lender any default in the performance of any such covenant,
agreement or obligation contained therein; or
(d) Any representation or warranty made herein or on a Funding Date by
Borrower in any Operative Document, or any certificate or financial statement
furnished pursuant to
16
the provisions of any Operative Document, shall prove to have been false or
misleading in any material respect as of the time made or furnished; or
(e) Borrower shall assert that any Operative Document is not, a legal,
valid and binding obligation of Borrower enforceable in accordance with its
terms; or
(f) A default shall exist under any agreement with (i) any third party
or parties resulting in a right by such third party or parties, whether or not
exercised, to accelerate the maturity of any indebtedness or other obligations
of Borrower in an amount in excess of $250,000, or (ii) Lender, resulting in a
right by Lender, whether or not exercised, to accelerate the maturity of any
indebtedness or other obligations of Borrower, or (iii) MMC/GATX Partnership No.
I. resulting in a right by MMC/GATX Partnership No. I., whether or not
exercised, to accelerate the maturity of any indebtedness; or
(g) A proceeding shall have been instituted in a court of competent
jurisdiction seeking a decree or order for relief in respect of Borrower in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or for the appointment of a receiver,
liquidator, assignee, custodian, trustee (or similar official) of Borrower or
for any substantial part of its property, or for the winding-up or liquidation
of its affairs, and such proceeding shall remain undismissed or unstayed and in
effect for a period of thirty (30) consecutive days or such court shall enter a
decree or order granting the relief sought in such proceeding; or
(h) Borrower shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, shall
consent to the entry of an order for relief in an involuntary case under any
such law, or shall consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian (or other similar official)
of Borrower or for any substantial part of its property, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any corporate action in furtherance of
any of the foregoing.
9.02. Consequences of Event of Default. (a) If an Event of Default
--------------------------------
specified under clauses (a) through (f) of Section 9.01 shall occur and be
----------------------- ------------
continuing, Lender may (i) declare the Loan, together with interest thereon,
plus the Make-Whole Premium and all other liabilities of Borrower hereunder and
under the other Operative Documents to be immediately due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived, and (ii) terminate its commitment to make the Loan and
terminate any commitment to advance money or extend credit to or for the benefit
of Borrower pursuant to any other agreement or commitment extended by Lender to
Borrower.
(b) If an Event of Default specified under clause (g) or (h) of
--------------------
Section 9.01 shall occur, then immediately and without notice (i) the Loan,
------------
together with interest thereon, plus premium, and all other liabilities of
Borrower hereunder and under the other Operative Documents shall automatically
become due and payable, without presentment, demand, protest or notice of any
kind, all of which are hereby expressly waived, and (ii) Lender's commitment
hereunder to make the Loan and any other commitment of Lender to Borrower to
advance money or extend credit pursuant to any other agreement or commitment
shall be terminated.
17
9.03. Rights Regarding Collateral. Borrower agrees that when any Event
---------------------------
of Default has occurred and is continuing, Lender shall have the rights,
options, duties and remedies of a secured party as permitted by law and, in
addition to and without limiting the foregoing, Lender may exercise any one or
more or all, and in any order, of the remedies herein set forth, including the
following:
(a) Lender, personally or by agents or attorneys, shall have the right
(subject to compliance with any applicable mandatory legal requirements) to
require Borrower to assemble the Collateral and make it available to Lender at a
place to be designated by Lender or to take immediate possession of the
Collateral, or any portion thereof, and for that purpose may pursue the same
wherever it may be found, and may enter any of premises of Borrower, with or
without notice, demand, process of law or legal procedure, to the extent
permitted by applicable law, and search for, take possession of, remove, keep
and store the same, or use and operate or lease the same until sold. In
furtherance of Lender's rights hereunder, Borrower hereby grants to Lender an
irrevocable, non-exclusive license (exercisable without royalty or other payment
by Lender) to use, license or sublicense any patent, trademark, trade name,
copyright or other intellectual property in which Borrower now or hereafter has
any right, title or interest together with the right of access to all media in
which any of the foregoing may be recorded or stored; provided, however, that
such license shall only be exercisable in connection with the disposition of
Collateral upon Lender's exercise of its remedies hereunder.
(b) Lender may, if at the time such action may be lawful and always
subject to compliance with any mandatory legal requirements, either with or
without taking possession and either before or after taking possession, without
instituting any legal proceedings whatsoever, having first given notice of such
sale by registered or certified mail to Borrower once at least ten (l0) days
prior to the date of such sale, and having first given any other notice which
may be required by law, sell and dispose of the Collateral, or any part thereof,
at a private sale or at public auction, to the highest bidder, in one lot as an
entirety or in separate lots, and either for cash or on credit and on such terms
as Lender may determine, and at any place (whether or not it be the location of
the Collateral or any part thereof) designated in the notice referred to above.
To the extent permitted by applicable law, any such sale or sales may be
adjourned from time to time by announcement at the time and place appointed for
such sale or sales, or for any such adjourned sale or sales, without further
published notice, and Borrower, Lender or the holder or holders of the Note, or
of any interest therein, may bid and become the purchaser at any such sale.
(c) Lender may proceed to protect and enforce this Agreement and the
other Operative Documents by suit or suits or proceedings in equity, at law or
in bankruptcy, and whether for the specific performance of any covenant or
agreement herein contained or in execution or aid of any power herein granted;
or for foreclosure hereunder, or for the appointment of a receiver or receivers
for any real property security or any part thereof, or for the recovery of
judgment for the Obligations or for the enforcement of any other proper, legal
or equitable remedy available under applicable law.
9.05. Effect of Sale. Any commercially reasonably sale, whether under
--------------
any power of sale available to Lender or by virtue of judicial proceedings,
shall operate to divest all right, title, interest, claim and demand whatsoever,
either at law or in equity, of Borrower in and to the property sold, and shall
be a perpetual bar, both at law and in equity, against Borrower, its successors
and assigns, and against any and all persons claiming the property sold or any
part thereof under, by or through Borrower, its successors or assigns.
18
9.06. Application of Collateral Proceeds. The proceeds and/or avails
----------------------------------
of the Collateral, or any part thereof, and the proceeds and the avails of any
remedy hereunder (as well as any other amounts of any kind held by Lender at the
time of, or received by Lender after, the occurrence of an Event of Default
hereunder) shall be paid to and applied as follows:
(a) First, to the payment of reasonable costs and expenses, including
-----
all amounts expended to preserve the value of the Collateral, of foreclosure or
suit, if any, and of such sale and the exercise of any other rights or remedies,
and of all proper fees, expenses, liability and advances, including reasonable
legal expenses and attorneys' fees, incurred or made hereunder by Lender;
(b) Second, to the payment to Lender of the amount then owing or unpaid
------
on the Note, and in case such proceeds shall be insufficient to pay in full the
whole amount so due, owing or unpaid upon the Note, then first, to the unpaid
interest thereon, second, to unpaid principal thereof and third to the remaining
-----
balance of the Obligations under the Note; such application to be made upon
presentation of the Note, and the notation thereon of the payment, if partially
paid, or the surrender and cancellation thereof, if fully paid;
(c) Third, to the payment of other amounts then payable to Lender under
-----
any of the Operative Documents; and
(d) Fourth, to the payment of the surplus, if any, to Borrower, its
------
successors and assigns, or to whomsoever may be lawfully entitled to receive the
same.
9.07. Reinstatement of Rights. If Lender shall have proceeded to
-----------------------
enforce any right under this Agreement or any other Operative Document by
foreclosure, sale, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely, then and in every such case (unless otherwise ordered by a court of
competent jurisdiction), Lender shall be restored to its former position and
rights hereunder with respect to the property subject to the security interest
created under this Agreement.
ARTICLE X
MISCELLANEOUS
-------------
10.01. Modifications, Amendments or Waivers. The provisions of any
------------------------------------
Operative Document may be modified, amended or waived only by a written
instrument signed by the parties thereto.
10.02. No Implied Waivers; Cumulative Remedies; Writing Required. No
---------------------------------------------------------
delay or failure of Lender in exercising any right, power or remedy hereunder
shall affect or operate as a waiver thereof; nor shall any single or partial
exercise thereof or any abandonment or discontinuance of steps to enforce such a
right, power or remedy preclude any further exercise thereof or of any other
right, power or remedy. The rights and remedies hereunder of Lender are
cumulative and not exclusive of any rights or remedies which it would otherwise
have. Any waiver, permit, consent or approval of any kind or character on the
part of Lender of any breach or default under this Agreement or any such waiver
of any provision or condition of this Agreement must be in writing and shall be
effective only in the specified instance and to the extent specifically set
forth in such writing.
19
10.03. Expenses; Indemnification. Borrower agrees upon demand to pay
-------------------------
or reimburse Lender for all liabilities, obligations and out-of-pocket expenses,
including reasonable fees and expenses of counsel for Lender, from time to time
arising in connection the enforcement or collection of sums due under the
Operative Documents. Borrower shall indemnify, reimburse and hold Lender, each
of Lender's partners, and each of their respective successors, assigns, agents,
officers, directors, shareholders, servants, agents and employees harmless from
and against all liabilities, losses, damages, actions, suits, demands, claims of
any kind and nature (including claims relating to environmental discharge,
cleanup or compliance), all costs and expenses whatsoever to the extent they may
be incurred or suffered by such indemnified party in connection therewith
(including reasonable attorneys' fees and expenses), fines, penalties (and other
charges of applicable governmental authorities), licensing fees relating to any
item of Collateral, damage to or loss of use of property (including
consequential or special damages to third parties or damages to Borrower's
property), or bodily injury to or death of any person (including any agent or
employee of Borrower) (each, a "Claim"), directly or indirectly relating to or
arising out of the use of the proceeds of the Loan or otherwise, the falsity of
any representation or warranty of Borrower or Borrower's failure to comply with
the terms of this Agreement or any other Operative Document during the Term.
The foregoing indemnity shall cover, without limitation, (i) any Claim in
connection with a design or other defect (latent or patent) in any item of
equipment included in the Collateral, (ii) any Claim for infringement of any
patent, copyright, trademark or other intellectual property right, (iii) any
Claim resulting from the presence on or under or the escape, seepage, leakage,
spillage, discharge, emission or release of any Hazardous Materials on the
premises of Borrower, including any Claims asserted or arising under any
Environmental Law, or (iv) any Claim for negligence or strict or absolute
liability in tort; provided, however, that Borrower shall not indemnify Lender
-----------------
for any liability incurred by Lender as a direct and sole result of Lender's
gross negligence or willful misconduct. Such indemnities shall continue in full
force and effect, notwithstanding the expiration or termination of this
Agreement. Upon Lender's written demand, Borrower shall assume and diligently
conduct, at its sole cost and expense, the entire defense of Lender, each of its
partners, and each of their respective, agents, employees, directors, officers,
shareholders, successors and assigns against any indemnified Claim described in
this Section 10.03. Borrower shall not settle or compromise any Claim against or
-------------
involving Lender without first obtaining Lender's written consent thereto, which
consent shall not be unreasonably withheld.
10.04. Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN
-------
THIS AGREEMENT OR ANYWHERE ELSE, BORROWER AGREES THAT IT SHALL NOT SEEK FROM
LENDER UNDER ANY THEORY OF LIABILITY (INCLUDING ANY THEORY IN TORTS), ANY
SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES.
10.05. Notices; Payments. (a) All notices and other communications given
-----------------
to or made upon any party hereto in connection with this Agreement shall be in
writing (including telexed, telecopied or telegraphic communication) and mailed
(by certified or registered mail), telexed, telegraphed, telecopied or delivered
to the respective parties, as follows:
Borrower: At the address set forth on the cover page of this Agreement.
20
Lender: COMDISCO, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Venture Lease
with a copy to:
COMDISCO, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: General Counsel
or in accordance with any subsequent written direction from either party to the
other. All such notices and other communications shall, except as otherwise
expressly herein provided, be effective when received; or in the case of
delivery by messenger or overnight delivery service, when left at the
appropriate address.
(b) Unless Lender specifies otherwise in writing, all payments shall be
made to:
COMDISCO, INC.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇
10.06. Termination. This Agreement shall terminate at the end of the
-----------
Term; provided, however, that the termination of this Agreement shall not affect
-------- -------
any of the rights and remedies of either party hereunder, it being understood
and agreed that all such rights and remedies shall continue in full force and
effect until payment of all amounts owed to Lender under or in connection with
the Operative Documents, whether on account of principal, interest, fees or
otherwise.
10.07. Severability. If any provision of any Operative Document is held
------------
invalid or unenforceable to any extent or in any application, the remainder of
such Operative Document and all other Operative Documents, or the application of
such provision to different Persons or circumstances or in different
jurisdictions, shall not be affected thereby.
10.08. Survival. All representations, warranties, covenants and
--------
agreements of the parties contained herein or made in writing in connection
herewith shall survive the execution and delivery of the Operative Documents,
the making of Loan hereunder, the granting of security and the issuance of the
Note.
10.09. Governing Law. THIS AGREEMENT, THE OTHER OPERATIVE DOCUMENTS AND
-------------
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO AND THERETO SHALL BE GOVERNED
BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA. ANY ACTION TO ENFORCE THIS AGREEMENT MAY BE BROUGHT IN CALIFORNIA
OR, WITH REGARD TO COLLATERAL, MAY ALSO BE BROUGHT WHEREVER SUCH COLLATERAL IS
LOCATED.
21
10.10. Successors and Assigns. This Agreement and the other Operative
----------------------
Documents shall be binding upon and inure to the benefit of Lender, all future
holders of the Note, Borrower and their respective successors and permitted
assigns, except that Borrower may not assign or transfer its rights hereunder or
any interest herein without the prior written consent of Lender. Lender may sell
to any other financial entity (a "Participant") participation interests in
-----------
Lender's rights under this Agreement and the other Operative Documents; provided
that notwithstanding the sale of participations, Lender shall remain solely
responsible for the performance of its obligations under this Agreement, Lender
shall remain the holder of the Note for all purposes under this Agreement and
Borrower shall continue to deal solely and directly with Lender in connection
with this Agreement and the other Loan Documents; and provided, further, that
Lender may not sell any participation interest to any entity which might be a
competitor of Borrower without Borrower's prior written consent. Lender may
disclose the Operative Documents and any other financial or other information
relating to Borrower or any Subsidiary to any potential Participant, provided
that such Participant agrees to protect the confidentiality of such documents
and information using the same measures that it uses to protect its own
confidential information.
10.11. Counterparts. This Agreement may be executed in any number of
------------
counterparts and by different parties hereto on separate counterparts, each of
which, when so executed and delivered, shall be an original, but all such
counterparts shall together constitute one and the same instrument.
10.12. Further Assurances. Borrower will, at its own expense, from
------------------
time to time do, execute, acknowledge and deliver all further acts, deeds,
conveyances, transfers and assurances, and all financing and continuation
statements and similar notices, reasonably necessary or proper for the
perfection of the security interest being herein provided for in the Collateral,
whether now owned or hereafter acquired.
10.13. Power of Attorney in Respect of the Collateral. Borrower does
----------------------------------------------
hereby irrevocably appoint Lender (which appointment is coupled with an
interest), the true and lawful attorney-in-fact of Borrower with full power of
substitution, for it and in its name (a) to perform (but Lender shall not be
obligated to and shall incur no liability to Borrower or any third party for
failure to perform) any act which Borrower is obligated by this Agreement to
perform, (b) to ask, demand, collect, receive, receipt for, ▇▇▇ for, compound
and give acquittance for any and all rents, issues, profits, avails,
distributions, income, payment draws and other sums in which a security interest
is granted under Section 5.01 with full power to settle, adjust or compromise
------------
any claim thereunder as fully as if Lender were Borrower itself, (c) to receive
payment of and to endorse the name of Borrower to any items of Collateral
(including checks, drafts and other orders for the payment of money) that come
into Lender's possession or under Lender's control, (d) to make all demands,
consents and waivers, or take any other action with respect to, the Collateral,
(e) in Lender's discretion, to file any claim or take any other action or
institute proceedings, either in its own name or in the name of Borrower or
otherwise, which Lender may reasonably deem necessary or appropriate to protect
and preserve the right, title and interest of Lender in and to the Collateral,
and (f) to otherwise act with respect thereto as though Lender were the outright
owner of the Collateral; provided, however, that the power of attorney herein
-------- -------
granted shall be exercisable only upon the occurrence and during the
continuation of an Event of Default. Borrower agrees to reimburse Lender upon
demand for all reasonable costs and expenses, including attorneys' fees and
expenses, which Lender may incur while acting as Borrower's attorney in fact
hereunder, all of which costs and expenses are included within the Obligations.
22
10.14 Confidentiality. All information (other than periodic reports
---------------
filed by Borrower with the Securities and Exchange Commission) disclosed by
Borrower to Lender in writing or through inspection pursuant to this Agreement
shall be considered confidential. Lender agrees to use the same degree of care
to safeguard and prevent disclosure of such confidential information as Lender
uses with its own confidential information, but in any event no less than a
reasonable degree of care. Lender shall not disclose such information to any
third party (other than Lender's or Lender's partner's attorneys and auditors
subject to the same confidentiality obligation set forth herein) and shall use
such information only for purposes of evaluation of its investment in Borrower
and the exercise of Lender's rights and the enforcement of its remedies under
this Agreement and the other Operative Agreements. The obligations of
confidentiality shall not apply to any information that Lender can demonstrate
(a) was known to the public prior to disclosure by Borrower under this
Agreement, (b) becomes known to the public through no fault of Lender, (c) is
disclosed to Lender by a third party' having a legal right to make such
disclosure, or (d) is independently developed by Lender.
23
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this Agreement as of the day and year first above
written .
CORSAIR COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. Silver
------------------------------------
Name: ▇▇▇▇▇▇ ▇. Silver
----------------------------------
Title: CFO
--------------------------------
COMDISCO, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Title: President Venture Lease Division
----------------------------------
24
SCHEDULES
1 Funding Certificate
2 Disclosure Schedule
3 Conditions Precedent
EXHIBITS
A Form of Secured Promissory Note
B Form of Landlord Consent
C Form of Warrant
D Form of Opinion of Counsel
E Form of Intercreditor Agreement
25
SCHEDULE 1
FUNDING CERTIFICATE
The undersigned ▇▇▇▇▇▇ ▇. Silver, being the duly elected and acting of
CORSAIR COMMUNICATIONS, INC., a Delaware corporation ("Borrower"), does hereby
certify to COMDISCO, INC. in connection with that certain Loan and Security
Agreement dated as of July 31, 1996 (the "Loan Agreement") with other
capitalized terms used below having the meanings ascribed thereto in the Loan
Agreement) that:
1. The representations and warranties made by Borrower in Article III of
-----------
the Loan Agreement and in the other Operative Documents are true and
correct as of the date hereof.
2. No event or condition has occurred and is continuing that would
constitute a Default or an Event of Default under the Loan Agreement
or any other Operative Document.
3. Borrower is in compliance with the covenants and requirements
contained in Articles IV, VI and VII of the Loan Agreement.
-----------------------
4. All conditions referred to in Article VIII of the Loan Agreement to
------------
the making of the Loan to be made on or about the date hereof been
satisfied.
5. No material adverse change in the general affairs, management, results
of operations, condition (financial or otherwise or prospects of
borrower, whether or not arising from transactions in the ordinary
course of business, has occurred.
Dated: July 31, 1996
CORSAIR COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. Silver
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. Silver
---------------------------------
Title: CFO
--------------------------------
26
SCHEDULE 2
DISCLOSURE SCHEDULE
27
DISCLOSURE SCHEDULE
-------------------
The following matters are exceptions to the representations and warranties
of Corsair Communications, Inc., a Delaware corporation (the "Company") as set
forth in Article III of the Loan and Security Agreement dated July 31, 1996
between the Company and Comdisco, Inc. (the "Agreement"). The section numbers
in this Disclosure Schedule correspond to the section numbers in the Agreement;
however, any information disclosed herein under any section number shall be
deemed to be disclosed and incorporated into any other section number under the
Agreement where such disclosure would otherwise be appropriate. Where the terms
of a contract or other disclosure item have been summarized or described in this
Disclosure Schedule, such summary or description does not purport to be a
complete statement of the material terms of such contract or other item. Any
terms defined in the Agreement shall have the same meaning when used in this
Disclosure Schedule as when used in the Agreement unless the context otherwise
requires.
Section 3.01(d) Title to Properties.
--------------- -------------------
Pursuant to a Loan and Security Agreement dated August 31, 1995 between the
Company and Comdisco ("Comdisco"), the Company borrowed $1,000,000 from Comdisco
and has granted to Comdisco a first priority security interest in and to the
following property: (i) the equipment and other property (the "Equipment")
described in Exhibit A attached hereto; and (ii) all proceeds, products,
replacements, additions to, substitutions for and accessions to any and all
Equipment including, without limitation, the proceeds applicable to insurance
covering the Equipment.
Pursuant to a Loan and Security Agreement of even date herewith between the
Company and MMC/GATX Partnership No. I ("MMC/GATX"), the Company borrowed
$3,000,000 from MMC/GATX, and has granted to MMC/GATX a security interest in the
same collateral as covered by the Agreement.
Section 3.01(f) Litigation.
--------------- ----------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ (collectively, the
"Plaintiffs") have filed a lawsuit in the superior court of the state of
California, county of San Francisco naming TRW, Inc., ESL Incorporated and the
Company as defendants. The claims contained in the Plaintiffs' complaint relate
to their dismissal on or about the time at which Corsair purchased the
PhonePrint assets from ESL Incorporated. Only two of the seven Plaintiffs were
ever employed by Corsair, and Corsair is seeking indemnification from TRW, Inc.
with regard to this matter.
Section 3.01(h) Security Interest.
--------------- -----------------
See Section 3.01(d) above.
28
EXHIBIT A
MAKE MODEL DESCRIPTION ACQUIRE ASSET # SERIAL # TYPE PURCHASE ACC DEPT
DATE PRICE 30-NOV-94
ASSETS GOING WITH PHONEPRINT
HP 7550A 231 CMPTR PLOTTER GRPH 86/01/21 C0012235 2520A20644 1
APPLE MACPLUS 686 COMPUTER PERSONAL 87-03-16 C0014120 F7101K2M00 1 2,294.63 2,294.63
APPLE MACPLUS 551 COMPUTER PERSONAL 87-4-28 C0014342 F6050CM0200 1 1,837.45 1,837.45
APPLE MACPL US COMPUTER PERSONAL 87-6-15 C0014542 F7232M2M00 1 1,508.13 1,508.13
452
APPLE MAC PLUS 745 COMPUTER PERSONAL 87-5-10 C0016103 F819350M00 1 1,460.17 1,460.17
AST PREMIUM 286 COMPUTER PERSONAL -- C0017172 38521 1 0.00
APPLE MAC II 459 COMPUTER PERSONAL 87-7-26 C0017215 F926DEM56 1 3,827.87 3,827.87
APPLE ? CMPTR MONITOR COLOR ? C0017806 1 0.00 0.00
APPLE MAC II 547 COMPUTER PERSONAL 91-9-5 C0019273 F51245N576 1 4,560.80 3,624.93
APPLE M0402 189 CMPTR MONITOR, MONO 91-9-05 C0019285 PH1238K35M 1 1,561.19 1,240.84
APPLE M0402 188 CMPTR MONITOR, MONO 91-8-20 C0019290 PH1239USA1 1 1,561.74 1,255.54
APPLE MAC II 505 COMPUTER PERSONAL 91-8-20 C0019291 F51270UG76 1 4,208.20 3,376.66
APPLE MAC II 408 COMPUTER PERSONAL 91-11-11 C0019589 F113881XC5 1 3,403.30 2,653.23
RADIUS 168 218 CMPTR, MONITOR 91-11-19 C0019590 DCH1410A00 1 1,395.30 1,068.23
APPLE MAC II ? MAC 11C1 W/EXT KYBD ? C0019941 F11441A1716 1 4,327.13 3,285.73
RADIUS TPD/19 CMPTR MONITOR 92-4-1 C0020185 DCH2040A01 1 1,305.13 341.43
245
APPLE MACII 11044 COMPUTER, PERSONAL 92-5-7 C0020195 F12176F971 1 4,353.50 3,085.11
RADIUS TPD/19 COMPTR MONITOR 92-12-14 C0021173 DCH26/ 1 1,109.13 687.66
2DA04
APPLE CENTRIS 1342 COMPUTER PERSONAL 93-4-5 C0021600 F1311CLDOC 1 4,194.11 2,246.18
DELL 1351 COMPUTER COMPUTER PERSONAL 93-6-16 C0021988 2KY12 1 4,221.88 2,082.79
S466/M
DELL 1351 COMPUTER COMPUTER PERSONAL 93-6-16 C0021989 2KY16 1 4,221.88 2,082.79
S466/M
APPLE CENTRIS COMPUTER PERSONAL 93-6-8 C0021990 F1305DAYOC 1 6,040.86 2,940.16
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ COMPUTER PERSONAL 93-6-8 C0021991 F13050QYOC 1 6,040.88 2,940.17
1933
RADIUS CMPTR MONITOR, COLOR 93-7-13 C0021992 WTB324A105 1 2,247.53 1,061.33
719 350
RADIUS CMPTR MONITOR, COLOR 93-7-13 C0021993 WTB324A100 1 2,247.56 1,0051.34
719 350
TEXAS INSTR ▇▇▇ ▇▇▇▇▇▇▇ CMPTR PRINTER LASER 93-6-15 C0021994 321030674 1 1,660.56 819.21
APPLE QUADRA 449 CENTRIS 650 C0022026 CK327000CG7 1 4,263.01 1,914.06
APPLE CENTRIS 1243 COMPUTER PERSONAL 93-6-24 C0022035 F1321D3550C 1 3,884.73 1,916.44
APPLE CENTRIS 1243 COMPUTER PERSONAL 93-6-24 C0022037 F1321DN90C 1 3,884.73 1,916.44
APPLE CENTRIS 473 COMPUTER PERSONAL 93-8-4 C0022137 F23075WSCN 1 3,281.96 1,480.93
APPLE CENTRIS 473 COMPUTER PERSONAL 93-8-4 C0022138 F23075WWCN 1 3,281.96 1,480.53
APPLE CENTRIS (610) COMUTER PERSONAL 93-8-4 C0022139 F2331HXMCN 1 3,281.96 1,480.51
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ (610) COMPUTER PERSONAL 93-8-4 C0022140 F2307KB3CN 1 1,780.56 807.74
290
APPLE CENTRIS (610) COMPUTER PERSONAL 93-8-4 C0022141 F2307W66CN 1 1,780.56 807.74
290
APPLE CENTRIS (610) COMPUTER PERSONAL 93-8-4 C0022142 F2307KB5CN 1 1,780.56 807.74
290
APPLE CENTRIS (610) COMPUTER PERSONAL 93-8-4 C0022143 F23075NRCN 1 1,790.56 807.74
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ 573 COMPUTER PERSONAL 93-8-4 C0022145 F23073WUCN 1 1,790.56 807.74
RADIUS 770 348 CMPTR MONITOR COLOR 93-5-4 C0022145 HNC7190ADI 1 2,405.36 1,064.34
RADIUS 779 348 21" COLOR MONITOR 93-5-15 C0022146 HNC190ADI00A 1 2,463.40 1,099.15
APPLE PRO 630 814 CMPTR PTINER LASER 93-11-19 C0022147 F132614010 1 2,344.56 1,147.23
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ DISK 94-3-11 C0022151 G9360753 1 1,406.17 634.32
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇-▇-▇ ▇▇▇▇▇▇▇▇ G93658772 1,234.67 584.04
APPLE 504 QUADRA COMPUTER PERSONAL 93-11-21 C0022479 C03905VIC 1 3,236.95 1,255.22
(610)
APPLE 504 QUADRA COMPUTER PERSONAL 93-11-9 C0022480 CX3905VFI 1 3,236.95 1,255.22
(610)
APPLE 504 QUADRA COMPUTER PERSONAL 93-11-9 C0022481 CX371U8ZIC 1 3,236.95 1,255.22
(610)
APPLE 504 QUADRA COMPUTER PERSONAL 93-11-9 C0022482 CX337UZ1C 1 3,236.95 1,255.22
(610)
APPLE 504 QUADRA COMPUTER PERSONAL 93-11-9 C0022483 CX33725I1C 1 2,083.94 808.11
(610)
APPLE 504 QUADRA COMPUTER PERSONAL/21" CLR 93-11-9 C0022484 CX3371V21C 1 2,083.94 808.11
(610) MONITOR
RADIUS 448 381 CMPTR MONITOR COLOR 93-10-8 C0022485 SSG33ZA103 1 2,961.19 1,210.84
Page 1 of 10
EXHIBIT A
MAKE MODEL DESCRIPTION ACQUIRE ASSET # SERIAL # TYPE PURCHASE ACC DEPT
DATE PRICE 30-NOV-94
RADIUS 948 381 CMPTR MONITOR COLOR 93-10-5 C0022486 SSG33ZA103 1 2,961.19 1,210.84
DELL 1,269 COMPUTER COMPUTER PERSONAL 93-10-8 C0022528 30MW5 1 3,933.48 1,608.36
S466M
DELL 1,259 COMPUTER COMPUTER PERSONAL 93-10-8 C0022529 30MW6 1 3,933.50 1,606.37
S466M
CHAPLET SYS 1,627 COMPUTER PERSONAL LLPTR 2/OK C0022619 71263M347 1 5,068.67 1,872.50
NBD486T
SUN MICROSYS 10GXN-407 457 WORKSTATION 94-10-6 C0023073 35054623 1 14,621.40 4,873.50
SUN MICROSYS 10GXN-407,579 WORKSTATION 94-10-6 C0023074 35054632 1 14,469.30 4,795.38
SUN MICROSYS 4/1 5EC-32 177 WORKSTATION 94-10-6 C0023075 351F1078 1 5,656.06 1,385.36
SUN MICROSYS 4/1 5EC-32 177 WORKSTATION 94-1-6 C0023076 351F1068 1 5,656.06 1,385.36
SUN MICROSYS 4/10EC-8 199 WORKSTATION 94-10-6 C0023077 351F2559 1 2,837.55 975.38
SUN ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ DISK 94-10-6 C0023078 35183300 1 4,439.00 1,476.53
SUN MICROSYS ▇▇▇▇▇-▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ DISK 94-10-6 C0023079 351U3356 1 2,961.53 1,416.53
Page 2 of 10
EXHIBIT B
MAKE MODEL DESCRIPTION ACQUIRE ASSET # SERIAL # TYPE PURCHASE ACC DEPT
DATE PRICE 30-NOV-94
APPLE 990 POWERBOOK COMPUTER PERSONAL LPTP 93-12-22 C0023101 PC3480MU44 1 3,094.63 1,134.70
APPLE 990 POWERBOOK COMPUTER PERSONAL LPTP 93-12-22 C0023102 PC347D0744 1 3,094.63 1,134.70
APPLE 990 POWERBOOK COMPUTER PERSONAL LPTP 93-12-72 C0023103 PC348DB444 1 3,094.63 1,134.70
APPLE 940 QUADRA COMPUTER PERSONAL 93-12-21 C0023104 PC3465LTIC 1 2,952.33 1,082.52
APPLE 940 POWERBOOK COMPUTER PERSONAL 93-12-21 C0023105 PC3490QHIC 1 2,952.33 1,082.52
/OU
APPLE 445 POWERBOOK COMPUTER PERSONAL 93-12-21 C0023106 PC3495C41C 1 2,952.33 1,082.52
/OU
APPLE 945 POWERBOOK COMPUTER PERSONAL 93-12-21 C0023107 PC3495561C 1 2,952.33 1,082.52
/OU
APPLE 945 POWERBOOK COMPUTER PERSONAL 93-12-21 C0023108 PC3490031C 1 2,952.33 1,082.52
/OU
APPLE 945 POWERBOOK COMPUTER PERSONAL 93-12-21 C0023109 PC465NX1C 1 2,952.33 1,082.52
/OU
APPLE 945 POWERBOOK COMPUTER PERSONAL 93-12-21 C0023110 PC49080IC 1 2,952.33 1,082.52
/OU
APPLE 945 QUADRA COMPUTER PERSONAL 93-12-21 C0023111 FC4504TIC 1 2,952.34 1,082.52
(610)
MICRONET SS-D16000 COMPUTER DRIVE TAPE DATE ? C0023115 5301768 1 1,749.32 734.72
486 COMPUTER - C0023197 1 2,919.93 724.73
HP 7550A 231 CMPTR, PLOTTER, GRPH - C0023308 2631A36846 1 2,080.04 534.68
DELL 1800 COMPUTER COMPUTER PERSONAL 94-3-4 C0023309 3DYPS 1 3,530.99 941.60
S486D
DELL 1800 COMPUTER COMPUTER PERSONAL 94-3-4 C0023310 3DYFM 1 3,530.99 941.60
S486D
DELL 1800 COMPUTER COMPUTER PERSONAL 94-3-4 C0023311 3DYRD 1 3,530.99 941.60
S486D
FR SYSTEMS COM-120A CMPTR, MONITOR 94-3-22 CC0023404 1686 1 13,201.89 3,520.50
6,733
IBM 800 425SX/SI COMPUTER PERSONAL 94-4-11 C0023529 FS02323KKP 1 1,367.70 365.80
IBM 744 425SX/SI COMPUTER PERSONAL 94-4-11 C0023530 PS02323KKI 1 1,457.46 351.95
APPLE 676 QUADRA COMPUTER PERSONAL 94-4-11 C0023531 PC3490E41C 1 5,949.25 1,224.36
APPLE 227 QUADRA COMPUTER PERSONAL 94-3-30 C0023532 PC406015U 1 2,404.99 641.33
APPLE ? QUADRA COMPUTER PERSONAL 94-3-30 C0023533 PC406006U 1 2,404.99 641.33
APPLE QUADRA COMPUTER PERSONAL --? C0023534 PC4060CXU 1 2,295.70 993.52
APPLE 1135 QUADRA COMPUTER PERSONAL 94-3-30 C0023535 PC40600HU 1 2,225.69 593.52
APPLE 1,135 QUADRA COMPUTER PERSONAL 94-3-30 C0023536 PC40600UU 1 2,225.70 593.52
APPLE 2,428 POWER MAC COMPUTER PERSONAL 94-4-14 C0023537 XB412CCNZQ 1 3,617.27 813.46
APPLE 2,428 POWER MAC COMPUTER PERSONAL 94-4-13 C0023538 XB412VDNZQ 1 3,617.28 815.46
APPLE 1,349 POWERBOOK COMPUTER PERSONAL LPTP 94-4-21 C0023605 PC406SYI44 1 2,645.13 617.20
APPLE 1349 POWERBOOK COMPUTER PERSONAL LPTP 94-4-21 C0023605 PC4065VY44 1 2,645.13 617.20
APPLE 1349 POWERMAC COMPUTER PERSONAL 94-4-21 C0023621 XB407LWP19 1 3,232.23 754.19
APPLE 1349 POWERBOOK COMPUTER PERSONAL LPTP 94-4-28 C0023634 PC40458B44 1 2,938.53 676.17
APPLE 1349 POWERBOOK COMPUTER PERSONAL LPTP 94-4-28 C0003635 PC404TBY4 1 2,938.51 676.17
APPLE 1227 QUADRA COMPUTER PERSONAL 94-4-18 C0023647 PC404074U 1 2,404.99 641.33
APPLE 1227 QUADRA COMPUTER PERSONAL 94-4-18 C0023648 PC40603UU 1 2,404.99 641.33
APPLE 1227 QUADRA COMPUTER PERSONAL 94-4-18 C0023649 PC40413RU 1 2,404.99 641.33
APPLE 504 QUADRA610 COMPTR-PERSON 94-6-10 C0023782 DCL4100A01 1 2,774.56 462.43
PERSONAL COMPUTER C0023783 1 5,164.32 660.75
APPLE 2,229 PB DUO POWERBOOK DUO 280c w17" DISP - C0023903 PC429HNT230 1 5,096.67 509.67
280/280C
1224 POWERBOOK DUO 280c w17" DISP - C0023904 1 5,096.67 509.67
APPLE 1,751 M3077 COMPUTER PERSONAL 94-8-14 C0023906 PC4230602Q 1 3,434.08 343.41
(POWERm)
? 17 COLOR MONITOR - C0023907 1 1,017.55 101.76
APPLE M2017 179 CMPTR PERSONAL 94-9-8 C0023908 PC4131861U 1 351.18 23.41
APPLE M2612 1043 CMPTR MONITOR, COLOR 20 94-8-18 C0023909 114130091X 1 2,045.93 204.50
- ? POWERBOOK 180 - C0023924 1 2,960.76 288.75
- ? POWERBOOK 180 - C0023925 1 2,960.76 288.75
APPLE 1,239 6100 CMPTR PERSONAL 94-9-6 C0023926 XB432IR217 1 3,257.81 223.86
(POWERMAC)
APPLE 1,239 6100 CMPTR PERSONAL 94-9-6 C0023927 XB43225A17 1 3,357.81 223.86
(POWERMAC)
APPLE 670 M2464 MONITOR-CMPTR 94-9-6 C0023935 PC41316598 1 3,291.03 219.40
POWERMAC
APPLE 1,049 C0-890 MONITOR,COLOR (20) 94-9-6 C0023936 544290841XY 1 2,055.92 137.05
APPLE 1,678 M2464 MONITOR CMPTR 94-7-96 C0023937 PC4112YIU 1 3,291.06 219.40
(POWERPC)
APPLE 1049 C0890 MONOTIR, COLOR 94-9-6 C0023938 S44S98MIXY 1 2,055.92 137.06
APPLE 4128 8100 CMPTR PERSONAL 94-9-6 C0023939 XB42UYP50 1 2,094.18 539.62
Page 3 of 10
EXHIBIT B
MAKE MODEL DESCRIPTION ACQUIRE ASSET # SERIAL # TYPE PURCHASE ACC DEPT
DATE PRICE ▇▇-▇▇▇-▇▇
▇▇▇▇▇ ▇▇▇▇ - ▇▇▇▇▇▇▇▇ 1 1,103.83 0.00
5 GB TAPE - C0023965 1 1,250.29 0.00
SUN MICROS ▇▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ 94-10-10 C0023869 441F1232 1 1,577.59 119.25
SUN MICROS 415FC2-2359 WORKSTATION,CLASSIC 94-10-20 30023970 440F1652 1 4,624.53 154.15
RADIUS C0507 MONITOR, COLOR 17" - C0023971 SS1428A162 1 1,095.00 36.50
APPLE 418 QUADRA 605 CMPTR PERSONAL 94-10-10 C0023972 XB43502K2D 1 2,393.28 79.78
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ COMPUTER PERSONAL 94-10-10 C0029273 XB43500D 1 2,393.28 79.78
SPORTSTER NA 1,172 CMPTR. PERSONAL 94-10-19 C0023974 N/A 1 2,295.85 276.61
APPLE 3125 M2332 POWERBOOK 94-10-20 C0023991 PC433HB823 1 6,127.52 204.25
APPLE 3125 M2332 POWERBOOK 94-20-20 C0023992 PC438HR023 1 6,127.52 20.25
INTEL 486 DXL 486 COMPUTER CO023995 1 4,1588 138.20
APPLE 7100 PERSONAL COMPUTER C0023996 1 4,912.14 163.74
APPLE 7100 PERSONAL COMPUTER C0023997 1 4,912.14 163.74
COMPAQ PROLINEA FOR PAYROLL C0024046 1 2,336.54 0.00
APPLE POWERBOOK 520 FOR FINANCE C0024047 1 3,089.08 0.00
APPLE POWERBOOK 520 FOR FINANCE C0024048 1 3,029.08 0.00
APPLE 7100 PERSONAL COMPUTER C0024049 FC4410CR3YK 1 4,420.45 0.00
APPLE 7100 PERSONAL COMPUTER C0024050 FC4410DW3YK 1 4,420.46 0.00
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1 4,600.62 0.00
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1 4,600.62 0.00
1932 POWERBOOK 123 C0024113 1 3,086.21 0.00
TEXTRONIX 7A18N SCOPE PN, DUAL 74-5-2 C0004026 B054254 2 531.20 525.89
TEXTRONIX 7A18N SCOPE PN, DUAL CH 74-5-2 C0004028 B054271 2 531.20 525.89
TEXTRONIX 7704 SCOPE GP, MF 75-9-22 C0004208 B143141 2 3,211.80 3,179.68
HP 6267B PWR SUPP. DC 75-9-1 C0004227 1512A02235 2 750.87 743.36
TEXTRONIX 475DM43 SCOPEPORTABLE 75-8-26 C0004280 252551 2 3,421.74 3,387.52
POWER DESIG TP325 POWER SUPPLY, TRIPLE 76-4-1 C0004357 602113 2 430.00 425.70
TEXTRONIX 7A26 SCOPE PN, DUAL CH 76-4-14 C000440 B129107 2 1,220.20 1,208.00
TEXTRONIX 7B80 SCOPE PN, TIME BASES 77-3-1 C0004649 B041473 2 794.74 786.79
TEXTRONIX 7B53A SCOPE PN DUAL 77-7-1 C0004879 B124703 2 1,039.80 1,029.40
HP 6002A PWR SUPP. DC 78-5-28 C0005290 1802A01049 2 1,251.43 1,238.92
TEXTRONIX 7B53A SCOPE PN, TIME BASE 78-5-30 C0005319 B189223 2 1,134.91 1,121.56
▇▇▇▇▇-▇▇▇▇ 3202R FILTER, TUNABLE 78-6-13 C0005370 3396 2 1,071.23 1,060.62
HP 3964A RCRDR INSTRUMENT 78-7-15 C0005438 1821A0701 2 7,116.18 7,045.02
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇ DUAL CH 78-7-28 C0005452 B189524 2 1,412.59 1,394.47
TEXTRONIX 7B85 SCOPE PN TIME BASE 78-12-13 C0005598 B064025 2 1,093.22 1,062.29
SD TIME CODE READER 8132 C0005825 2
HP 436A METER, POWER, MW 19-10-5 C0006519 1930A05680 2 2,350.21 2,326.71
HP 8656A GEN SIGNAL 82-1-29 C0007157 2142A01924 2 7,203.40 7,203.40
HP 197B CAMERA SCOPE 83-3-15 C0007573 1905A04498 2 1,544.41 1,544.41
HP 8970A METER NOISE 83-4-12 C0007647 2221A01029 2 9,948.28 9,948.28
TEXTRONIX 485 SCOPE PORTABLE 83-5-4 C0007725 B191464 2 8,196.25 8,196.25
HP 5335A COUNTER ELEC C0007925 2321A04740 2 4,081.58 4,081.58
BSG PROJ 5110 MODULE AMPL BIAS C00116025 2321A04740 2 4,081.58 4,081.58
TEXTRONIX 2445 SCOPE PORTABLE C0011887 2 2
TEXTRONIX 2465CTS O'SCOPE SNB052750 C0012315 BCG0280 2 4,140.80 4,140.80
HP 160G LOGIC ANALYZER C0012426 2 15,070.21 15,070.21
HP 6024A POWER SUPPLY C0012969 2526A04501 2 1,335.36 1,335.16
IBM 6180-002 CMP FTR PLOTTER CLR 87-2-6 C0013809 11448 2
HP 3335A GEN SYNTHESIZER 87-2-24 C0014059 2516A04099 2 11,401.92 11,401.92
HP 5385A COUNTER ELEC 91-8-9 C0017628 2710A04821 2 2,054,05 2,016.58
HP HP 6632A PWR SUPP. DC 91-5-14 C0019030 2708A00130 2 1,244.82 932.48
FLUKE MFG 6080A GEN SIGNAL 91-7-19 C0019122 53115701 2 21,309.88 17,261.02
HP 6632A PWR SUPP DC 91-6-14 C0019126 3002A0439 2 1,760.15 1,439.11
HP 6632A PWR SUPP DC 91-6-14 C0019128 ▇▇▇▇▇▇▇▇▇ 2 1,760.15 1,439.11
HP 5087A AMPL DISTR 93-3-10 C0021441 2208A0474 2 2,929.02 1,630.49
IFR SYSTEMS COM120A MONITOR COMMUNCATION 93-3-16 C0021580 485001182 2 12,870.00 7,207.20
IFR SYSTEMS 120A RECEIVER COMM 93-7-23 C0021984 485001135 2 13,949.08 6,587.07
NCA PERIPHERAL CMPTR DRIVE DISK 93-6-2 C0021985 G93657270 2 1,526.33 752.99
MXT
NCA PERIPHERAL CMPTR DRIVE DISK 93-6-2 C021986 G93657272 2 1,526.32 752.99
MXT
II INC 2PB36A-006 CCADSP 93-6-18 C0022048 97273 2 1,618.34 809.14
▇▇▇▇-▇▇▇▇▇ 2PB1007-001 CONVERTER A/D 93-6-18 C0022049 98777 2 6,489.39 3,244,79
NCA ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ DISK 94-3-11 C0022150 G93660752 2 1,406.17 634.32
DIGITAL EQ 400090 SYSTEM VAC 94-3-1 C0022191 930169345 2 30,255.88 12,171.25
MAXTOR KOOCHOHE 1.2 GBYTE DISK DRIVES C0022197 2 1,294.67 584.04
MAXTOR KOOCHOHE 1.2 GBYTE DISK DRIVES C0022198 2 1,294.67 584.04
STANFORD RE SR620 COUNTER UNIVERSAL 93-12-17 C0023118 1383 2 4,871.25 1,623.76
STANFORD RE FS700 FREQ STD ▇▇▇▇▇ 93-12-17 C0023119 405 2 5,737.25 1,912.42
Page 4 of 10
EXHIBIT B
MAKE MODEL DESCRIPTION ACQUIRE ASSET # SERIAL # TYPE PURCHASE ACC DEPT
DATE PRICE 30-NOV-94
LOW PHASE NOISE OSCL C0023196 2 3,412.95 1,023.75
PANASONIC KX-B8520 PRINT BOARD ELECTRONIC 9-4-11 C0023375 0733221A07 2 1,417.56 383.36
COMPBINET CB-400 BRIDGE ETHERNET 94-3-24 C0023433 A3-3127 2 2,319.91 611.65
NOISE COLM UFX7109 GEN NOISE PROGRAMMABLE 94-4-8 C0023434 2022 2 8,478.50 1,978.22
4MM TAPE DRIVE C0023551 2 1,369.96 319.66
HP 8560E ANAL SPECTRUM 94-7-26 C0023814 3425A01019 2 27,199.93 1,621.32
AUTOCAD SYSTEM C0023823 2 6,392.16 852.29
17 MONITOR C0023824 2 1,515.50 202.07
LASER PRINTER C0023825 2 4,912.02 654.93
2GB HD SCSI-II CABLE C0023963 2 1,216.73 81.12
4.2 GB MUL C0023966 2 3,196.77 0.00
4.2 GB MUL C0023967 2 3,196.77 0.00
4.2 GB MUL C0023963 2 3,196.77 0.00
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ 94-10-10 C0023975 828315 2 1,093.30 36.44
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ 94-10-10 C0023976 829405 2 1,093.30 36.44
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ 94-10-10 C0023977 S91428A1E2 2 1,093.30 36.44
2 GB SCSI C0023978 2 1,093.30 36.44
2 GB SCSI C0023979 2 1,093.30 36.44
2 GB SCSI C0023980 2 1,093.30 36.44
2 GB SCSI C0023981 2 1,093.30 36.44
2 GB SCSI C0023982 2 1,093.30 36.44
2 GB SCSI C0023983 2 1,093.30 36.44
CSC 1924EXT DRIVE DISK SCSI C0023985 2 1,093.30 36.44
2 GB SCSI C0023986 2 1,093.30 36.44
▇▇-▇ ▇▇ ▇▇ & ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ C0023987 2 1,093.30 36.44
2 GB SCSI C0023988 2 1,093.30 36.44
XYPLEX SERVER C0023999 2 2,209.19 0.00
SUN WORK STATION C0024096 2 7,035.93 0.00
PHONEMAID SIGNAL GENERATORS Self-Corrected 2 72,950.00 0.00
(2)
POWER DESIGN 3610ORF PWR SUPPLY DC 70-9-1 C0001464 810016 3
TEXTRONIX 2335 SCOPE PORTABLE 83-3-18 C0007583 8012536 3 2,715.75 2,715.79
TEXTRONIX 495P ANAL SPECT 83-6-23 C0007792 B010488 3 30,354.49 30,854.49
HP 6653A POWER SUPPLY 94-4-7 C0022979 3347A01177 3 3,076.98 717.57
HP 6653A POWER SUPPLY 94-4-7 C0022980 3347A01585 3 2,976.63 694.54
HP 6653A POWER SUPPLY 94-4-7 C0022981 3347A01182 3 2,976.62 694.56
HP 6653A POWER SUPPLY 94-4-15 C0022982 3345A00408 3 1,828.07 457.49
HP 6543A POWER SUPPLY 94-3-12 C0022983 3218400175 3 4,601.51 1,227.07
HP 6543A POWER SUPPLY 94-3-12 C0022984 3218A00139 3 1,828.07 4487.49
HP 6543A POWER SUPPLY 94-3-12 C0022985 3218A00172 3 1,828.07 487.49
HP 6543A POWER SUPPLY 94-3-12 C0022986 3218A00176 3 1,828.08 487.49
TEXTRONIX TA5475 SCOPE PORTABLE 94-3-22 C0023312 B011081 3 2,614.04 697.08
TEXTRONIX 2232 SCOPE PORTABLE 94-3-22 C0023314 B032127 3 6,748.34 1,789.56
HP 856B8 ANALSPECT 94-3-1 C0023405 2601A82551 3 19,903.88 4,641.24
HP 8482B SENSOR POWER 94-3-1 C0023406 2149A02159 3 18,943.75 5,681.16
HP 8657B GEN SIGNAL 94-3-12 C0023407 3133002203 3 16,957.72 4,522.66
HP 437B METER POWER MW 94-3-15 C0023408 3125U10460 3 2,898.80 869.64
HP 5385A COUNTER ELEC 94-6-6 C0023473 3242A07945 3 2,992.81 988.08
POWER SUPPLY 94-6-6 C0023574 3 4,001.51 613.53
HP 5385A COUNTER ELEC 94-5-27 C00235704 2730406273 3 2,130.88 355.15
DRIVE CONTROL C0023784 3 5,358.38 893.07
DSP32C BOARD C0023874 3 3,085.13 0.00
1924EXT DRIVE DISK SCSI C0023984 87898 3 1,093.30 36.44
MACRONI SIGNAL GENERATOR C0024035 3 24,023.92 0.00
RUGGED COMPUTERS C0024109 3 4,054.25 135.14
RUGGED COMPUTERS C0024110 3 3,907.83 781.57
IBM SEL III TYPEWRITER C0006472 4555133 4
APPLE PRO 630 LASERWRITER PRO 630 C0022148 F132614H108 4 2,544.57 1,147.89
HP FAX 950 FAX-EXPENSED C0023902 IPA4403940 4
HP 451MX LASERJET PRINTER C0024045 USGD517900 4 4,364.48 0.00
HP 8591E ANALSPECT PORTABLE 94-7-21 C0023831 3412A0597 5 12,052.43 1,740.32
SUN MYCROSY X8522A STORAGE PACKAGE 94-9-30 C0023954 43804220 5 1,254.29 83.62
SUN MYCROSY X569A DRIVE DISK 420B 94-9-30 C0023955 43603607 5 2,146.95 209.36
SUN MYCROSY X569A DRIVE DISK 4.2GB 94-9-30 C0023956 43631603 5 3,147.80 209.86
SUN MYCROSY X569A DRIVE DISK 4.2GB 94-930 C0023957 43603341 5 3,147.82 2209.86
XYPLEX SERVER C0023958 5 2,288.19 0.00
1 SUN 4.2GB DISK PACKS C0024122 5 2,857.20 0.00
1 SUN 4.2GB DISK PACKS C0024123 5 2,857.20 0.00
1 SUN 4.2GB DISK PACKS C0024124 5 2,857.80 0.00
1 SUN 4.2GB DISK PACKS C0024125 5 2,857.80 0.00
Page 5 of 10
EXHIBIT B
MAKE MODEL DESCRIPTION ACQUIRE ASSET # SERIAL # TYPE PURCHASE ACC DEP
DATE PRICE 30-NOV-94
1 SUN 4.2GB DISK PACKS C0024126 5 2,257.20 0.00
XPLEX SERVER C0024127 5 2,972.73 0.00
XPLEX SERVER C0024128 5 2,972.73 0.00
ENGINEE XB024-10 PLATFORM LIFTER C0023120 62834-02 6 1,254.08 376.22
ENGINEE XB024-10 PLATFORM LIFTER C0023121 62818-01 6 1,254.08 376.22
ENGINEE XB024-10 PLATFROM TRUCK/LIFT C0023160 63956.02 6 1,503.25 400.87
ENGINEE XB024-10 PLATFORM TRUCK/LIFT C0023161 67966-03 6 1,503.25 400.87
ENGINEE XB024-10 PLATFORM TRUCK/LIFT C0023162 63966-04 6 1,503.25 400.87
ENGINEE XB024-10 PLATFORM TRUCK/LIFT C0023163 63956-01 6 1,503.25 400.87
ENGINEE XB024-10 PLATFORM TRUCK/LIFT C0023164 63956-05 6 1,503.24 400.87
WORK BENCHES C0023539 6 4,799.63 959.93
WIRE SHELF CARTS C0023540 6 1,679.62 3335.93
FLOOR SCALE C0024036 6 2,803.68 0.00
INSTAPAK MODEL 750 PACKGING C0024129 6 3197.00 0.00
STOCKROOM SECURITY ENCODERS C0022850
HP 3100 C0023841 37,253.97 2,423.08
* Does Not Include HP3100 Computer. Disposition of this unit is not yet
decided.
** Does not include rack units in cage (warehousing units) which may or may
not be removed when building is vacated. Disposition of this unit is not
yet decided.
Page 6 of 10
CORSAIR 1995 FIXED ASSET PURCHASES THROUGH 6/30/95
====================================================================================================================================
MAKE/VENDOR MODEL DESCRIPTION CORSAIR PURCHASE PURCHASE
CHECK # PRICE DATE
------------------------------------------------------------------------------------------------------------------------------------
Computer Equipment (1600)
-------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Acropolis 950606002, 950606001, 6017 AS171-42801 SCSI disk pedestal w/kit 3954 $ 10,207.98 5/26/95
------------------------------------------------------------------------------------------------------------------------------------
Arcom 3C509B 3COM Ethink III 16bit 20 pack 3959 $ 1,643.19 6/8/95
------------------------------------------------------------------------------------------------------------------------------------
Arcom 000655-0 USROBO Total Control 6Slot Hub 4289 $ 15,550.58 6/26/95
------------------------------------------------------------------------------------------------------------------------------------
Aroma Tech - SNM30254569 M586-90/100 SIS 586 90/100MHz 3477 $ 3,145.22 4/11/95
------------------------------------------------------------------------------------------------------------------------------------
Cabletron ▇▇▇▇-24 Stack ethernet hub intel 24p 3680 $ 6,716.41 5/5/95
------------------------------------------------------------------------------------------------------------------------------------
Cabletron SEH-24 Stackable ethernet hub-24 3680 $ 3,029.47 5/9/95
------------------------------------------------------------------------------------------------------------------------------------
Cabletron ▇▇▇▇-24 Stack ethernet hub intel 24p 4220 $ 2,693.75 5/30/95
------------------------------------------------------------------------------------------------------------------------------------
Cablerock CR5-85 Spare 5 System w/kit 3335 $ 5,732.92 3/21/95
------------------------------------------------------------------------------------------------------------------------------------
Central Design - S519F01YC SSFX185322P46 17"C 32MB 1GB TGX 85 3972 $ 8,640.63 5/22/95
------------------------------------------------------------------------------------------------------------------------------------
Central Design S20FX16132P46 17"C TGX 61 32MB 1GB 3735 $ 35,140.10 6/8/95
------------------------------------------------------------------------------------------------------------------------------------
Central Design - S513F04, S513F04WD, S4C7032P44 S4 ▇▇ ▇▇▇ ▇▇" ▇▇▇▇▇▇▇▇ 3792 $ 31,485.41 6/16/95
S513F04KY, S513F031W
------------------------------------------------------------------------------------------------------------------------------------
Central Design - 6016869 EXAXEXB-8505 8MM Tape Drive 3869 $ 1,472.89 6/23/95
------------------------------------------------------------------------------------------------------------------------------------
Central Design model 70,110 CD-SS4-70, Sun 1, CD-SS5-85, Sun 5 4182 $ 21,259.88 6/28/95
------------------------------------------------------------------------------------------------------------------------------------
Ceram 64MB Simm for SS20 3769 $ 7,902.00 5/9/95
------------------------------------------------------------------------------------------------------------------------------------
Computerland HPCD-E2039 Laserjet 4M plus toner 3388 $ 2,089.24 3/29/95
------------------------------------------------------------------------------------------------------------------------------------
Page 7 of 10
CORSAIR 1995 FIXED ASSET PURCHASES THROUGH 6/30/95
====================================================================================================================================
MAKE/VENDOR MODEL DESCRIPTION CORSAIR PURCHASE PURCHASE
CHECK # PRICE DATE
-----------------------------------------------------------------------------------------------------------------------------------
Computer Equipment (1600) cont'd
--------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Computerland 755-C IBM Thinkpad 3603 $ 3,657.37 4/25/95
-----------------------------------------------------------------------------------------------------------------------------------
Computerland - XB5160N93YX APPL-A0848 PowerMac 8100/110C 16MB 2GB CD 3663 $ 6,768.51 5/2/95
-----------------------------------------------------------------------------------------------------------------------------------
Computerland - FC517361-446, APPL-A3642 Apple PowerMac 7100/80 16/700/cd 3975 $ 25,581.75 5/12/95
FC5173K2446,
FC5173P0446,FC5173LM446,
C5173KB446, FC51740T44H,
JPGK14205
-----------------------------------------------------------------------------------------------------------------------------------
Computerland - FC512HJ223L APPL-A0864 Powerbook 280C 4/320 w/monit. & pack 3740 4,758.19 5/12/95
-----------------------------------------------------------------------------------------------------------------------------------
Computerland - TF513DDT1Y5 APPL-H1485 Powerbook duo dock w/HD 3846 $ 825.40 5/16/95
-----------------------------------------------------------------------------------------------------------------------------------
Computerland 400012544503291, Patriot 2-Laptop 486/dx 3846 $ 5,314.75 5/26/95
40003244473172
-----------------------------------------------------------------------------------------------------------------------------------
Computerland RADI-C0504 Two page display / 20GS 3892 $ 3,523.17 6/23/95
DCL5090A0179
DCL5080A0048
DCL5090A0133
DCL5090A0173
-----------------------------------------------------------------------------------------------------------------------------------
Computerland King-B2320 20 MB module P/PB Duo 250 3975 $ 838.75 6/8/95
-----------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, APPL-A3642 PowerMac w/keyboard 3975 $ 33,743.60 6/12/95
XB5200WU5P0, XB5212EK5P0,
XB5212EX5P0, SB5212BJ5P0
-----------------------------------------------------------------------------------------------------------------------------------
Computerland APPL-A4273 (5) PowerMacs w/monit. & keybds. 4080 $ 14,873.82 6/21/95
-----------------------------------------------------------------------------------------------------------------------------------
DEL 90C/XPS Dimension Pentium-Mini tower base 3797 $ 3,245.41 6/16/95
-----------------------------------------------------------------------------------------------------------------------------------
ENS - SN25095490 CSCO-2501 Router package w/software 3033 $ 4,023.81 1/25/95
-----------------------------------------------------------------------------------------------------------------------------------
Page 8 of 10
CORSAIR 1995 FIXED ASSET PURCHASES THROUGH 6/30/95
====================================================================================================================================
MAKE/VENDOR MODEL DESCRIPTION CORSAIR PURCHASE PURCHASE
CHECK # PRICE DATE
------------------------------------------------------------------------------------------------------------------------------------
Computer Equipment (1600) cont'd
--------------------------------
------------------------------------------------------------------------------------------------------------------------------------
ENS USROB-000826-0 Analog modem w/fax 3033 $ 6,021.31 1/30/95
------------------------------------------------------------------------------------------------------------------------------------
ENS - SN50004214 CSCO-7010 Cisco 7010 router package 3445 $ 27,202.20 4/3/95
------------------------------------------------------------------------------------------------------------------------------------
HDS Pentium 586 computer system 3034 $ 4,281.29 1/5/95
------------------------------------------------------------------------------------------------------------------------------------
HDS Pentium 586 computer system 3034 $ 4,281.29 1/10/95
------------------------------------------------------------------------------------------------------------------------------------
HDS HD Victoria System 3850 $ 6,249.50 5/20/95
------------------------------------------------------------------------------------------------------------------------------------
NCA - SN454505410766, 2100S Quantum Empire 2100s hard disk 3311 $ 1,960.41 3/9/95
SNBDOE5021LNY, SN 4360015888,
SN466504640442
------------------------------------------------------------------------------------------------------------------------------------
▇▇▇ ▇▇▇ ▇-▇▇▇ ▇▇ ▇▇▇▇▇ 3311 $ 1,059.77 3/16/95
------------------------------------------------------------------------------------------------------------------------------------
Network Assoc. Asante ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ $ 1,179.90 3/21/95
------------------------------------------------------------------------------------------------------------------------------------
PDC X827A/S-XBT-4TS 4MM Autoloader 4006 $ 3,831.20 6/13/95
------------------------------------------------------------------------------------------------------------------------------------
Seque Sys. 90 Pentium System 4119 $ 3,755.00 6/23/95
------------------------------------------------------------------------------------------------------------------------------------
TEL-LAN MX-1600-002 Multi-access remote server 3042 $ 7,028.95 1/24/95
------------------------------------------------------------------------------------------------------------------------------------
UUNET Tech. - 25130134-3092 Cisco-2501 Router & CSU/DSU 3721 $ 1,922.00 5/4/95
------------------------------------------------------------------------------------------------------------------------------------
Vanstar - SN SFC439MT61XN APPL-A2805 Powerbook 520 4/160 3044 $ 2,970.76 1/5/95
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
TOTAL $335,607.58
===========
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Page 9 of 10
CORSAIR 1995 FIXED ASSET PURCHASERS THROUGH 6/30/95
====================================================================================================================================
MAKE/VENDOR MODEL DESCRIPTION CORSAIR CHECK # PURCHASE PRICE PURCHASE DATE
------------------------------------------------------------------------------------------------------------------------------------
Furniture Equipment (1640)
--------------------------
------------------------------------------------------------------------------------------------------------------------------------
Arcom PM2E-10 ▇▇▇▇▇▇▇▇▇▇ portmaster w/rack kit 4069 $ 2,507.86 6/14/95
------------------------------------------------------------------------------------------------------------------------------------
Arcom PM2E-10 ▇▇▇▇▇▇▇▇▇▇ portmaster w/rack kits 3783 $ 5,794.24 6/16/95
------------------------------------------------------------------------------------------------------------------------------------
Arcom PM2E-10 ▇▇▇▇▇▇▇▇▇▇ portmaster w/kit 41277 $ 3,090.05 6/21/95
------------------------------------------------------------------------------------------------------------------------------------
Arcom PM2E-10 ▇▇▇▇▇▇▇▇▇▇ portmaster w/rack kit 3891 $ 8,336.62 6/23/95
------------------------------------------------------------------------------------------------------------------------------------
Art & Display Co. 1531 Legend kit w/LPCO3 capsule counter 3773 $ 4,595.54 6/15/95
------------------------------------------------------------------------------------------------------------------------------------
Audio Graphic Sys. B 70x70 MW DALITE 3960 $ 118.53 5/30/95
------------------------------------------------------------------------------------------------------------------------------------
Audio Graphic Sys. ▇▇▇▇▇-▇ ▇▇▇▇▇▇▇▇ big base 44" cart 3960 $ 210.12 6/13/95
------------------------------------------------------------------------------------------------------------------------------------
Cabletron EPIM-X Enet port int. mod. dual in. w/kit 3791 $ 373.90 5/19/95
------------------------------------------------------------------------------------------------------------------------------------
Cabletron 9300044-15 Assy. Cbl, XCVR, 802.3 28 AWG 3791 $ 282.74 5/23/95
------------------------------------------------------------------------------------------------------------------------------------
COG/▇▇▇▇▇ Bus Furnish. 7488 Paramount desk chair; #61 pewter 4181 $ 318.94 6/1/95
------------------------------------------------------------------------------------------------------------------------------------
COG/▇▇▇▇▇ Bus. Furnish. 7488 Office master chair 3418 $ 8,510.00 4/28/95
------------------------------------------------------------------------------------------------------------------------------------
COG/▇▇▇▇▇ Bus. Furnish. 15WAL-BL VERSA Stacking chair 3470 $ 13,410.00 5/9/95
------------------------------------------------------------------------------------------------------------------------------------
COG/▇▇▇▇▇ Bus. Furnish. 7488 Paramount desk chairs: #61 pewter 3693 $ 27,849.16 6/6/95
------------------------------------------------------------------------------------------------------------------------------------
COG/▇▇▇▇▇ Bus. Furnish. M211-1142 23 Office chairs; MB Sync, pneu, poly 4243 $ 8,624.31 6/26/95
shell
------------------------------------------------------------------------------------------------------------------------------------
Lightwave Comm. 5000 Serverswitch w/cables 4194 $ 6,583.50 6/30/95
------------------------------------------------------------------------------------------------------------------------------------
Lindsay-Ferrari Tackable acoust. panels, worksurfaces 3576 $ 64,323.00 5/17/95
------------------------------------------------------------------------------------------------------------------------------------
Lindsay-Ferrari Lindelve File-lateral, rec hdwd., 2drwr 3854 $ 1,082.89 5/23/95
------------------------------------------------------------------------------------------------------------------------------------
Perimeter Install. of card render on lobby door 4136 $ 595.00 6/29/95
------------------------------------------------------------------------------------------------------------------------------------
Perimeter Install. of sec. system 4156 $ 34,555.00 6/29/95
------------------------------------------------------------------------------------------------------------------------------------
Pure Valley Water HTT-45RO Hydrotech w/tank & dispenser 4011 $ 1,403.61 6/27/95
------------------------------------------------------------------------------------------------------------------------------------
Voice Pro SRX Phone system - Deliv. pymt. 4028 $ 17,443.06 6/29/95
------------------------------------------------------------------------------------------------------------------------------------
VoicePro SRX/VMX 200S Telephone, call processing system 3426 $ 17,433.06 5/1/95
------------------------------------------------------------------------------------------------------------------------------------
VoicePro SRX Phone system - Deliv. pymt. 4028 $ 52,042.79 6/30/95
------------------------------------------------------------------------------------------------------------------------------------
VoicePro SRX Phone system -n Deliv. pymt. 4028 $ 12,887.93 6/30/95
------------------------------------------------------------------------------------------------------------------------------------
TOTAL $292,371.85
====================================================================================================================================
Page 10 of 10
SCHEDULE 3
CONDITIONS PRECEDENT
PART I:
------
At the time of execution and delivery of this Agreement, there shall also have
been duly executed and delivered to Lender:
(a) The Warrant to purchase the aggregate number of shares set forth in
Exhibit C hereto;
(b) A Sublessor's Waiver and Consent, executed by Syntex Corp., in form
and substance reasonably acceptable to Lender;
(c) A favorable opinion of counsel for Borrower, dated as of the closing
date, in the form attached hereto as Exhibit D;
---------
(d) Copies, certified by the Secretary, Assistant Secretary or Chief
Financial Officer of Borrower as of the closing date of Borrower's
charter documents and bylaws and of all documents evidencing corporate
action taken by Borrower authorizing the execution, delivery and
performance of the Operative Documents to which Borrower is a party,
in form and substance satisfactory to Lender and its counsel;
(e) Good standing certificate from Borrower's state of incorporation and
the state in which Borrower's principal place of business is located,
together with certificates of the applicable governmental authorities
that Borrower is in compliance with the franchise tax laws of each
such state, each dated as of a recent date;
(f) Evidence of the insurance coverage required by Section 6.01(d) of this
---------------
Agreement;
(g) All necessary consents of shareholders and other third parties with
respect to the execution, delivery and performance of this Agreement,
the Warrant, the Note and the other Operative Documents; and
(h) Form UCC-1 Financing Statements, duly executed by Borrower, or other
documents, and Borrower shall have taken such actions, if any, as
Lender shall reasonably determine are necessary or desirable to
perfect and protect its security interest in the Collateral;
(i) Grants of Security Interest in Intellectual Property in the forms
provided by Lender;
28
(j) Notices of Security Interest to Depository Banks in the forms provided
by Lender;
and
(i) All other documents as Lender shall have reasonably requested.
PART II
-------
On or prior to the Funding Date of the Loan, each of the items set forth in
Part I of this Schedule 3 shall have been delivered to Lender and the following
-------------------------
conditions shall have been satisfied or waived by Lender:
(a) Borrower shall have provided to Lender such documents, instruments and
agreements as Lender shall reasonably request to evidence the
perfection and priority of the security interests granted to Lender
pursuant to Article V;
---------
(b) No Event of Default or Default shall have occurred and be continuing;
(c) Borrower shall have duly executed and delivered to Lender a Note
prepared by Lender with respect to the Loan;
(d) In Lender's sole discretion, there shall not have occurred any
material adverse change in the general affairs, management, results of
operations, condition (financial or otherwise) or prospects of
Borrower, where or not arising from transactions in the ordinary
course of business, and there shall not have occurred since the date
first written on the cover page of this Agreement any material adverse
deviation by Borrower from the Fiscal 1996 Operating Plan of Borrower
presented to Lender;
(e) The representations and warranties contained in this Agreement and the
other Operative Documents to which Borrower is a party shall be true
and correct in all material respects as if made on such Funding Date;
(f) Each of the Operative Documents remains in full force and effect;
(g) The Funding Date of the requested Loan shall not be later than the
Commitment Termination Date; and
(h) Lender shall have received the Note, duly executed by Borrower.
29
EXHIBIT A
SECURED PROMISSORY NOTE
$2,000,000 Dated: July 31, 1996
FOR VALUE RECEIVED, the undersigned, CORSAIR COMMUNICATIONS, INC.
("Borrower"), a Delaware corporation, HEREBY PROMISES TO PAY to the order of
--------
COMDISCO, INC., a Delaware corporation ("Lender") the principal amount of Two
------
Million Dollars ($2,000,000) or such lesser amount as shall equal the aggregate
outstanding principal balance of the Loan made by Lender to Borrower pursuant to
the Loan and Security Agreement referred to below (the "Loan Agreement"), and to
--------------
pay all other amounts due with respect to the Loan on the dates and in the
amounts set forth in the Loan Agreement.
The principal amount of this Note shall be payable in 36 consecutive monthly
installments of 2.778% of the original principal amount of this Note per month
on the last day of each calendar month commencing on February 28, 1997. All
unpaid principal and interest shall, in any event, be payable no later than
January 31, 2000.
Interest on the unpaid principal amount of this Note from the date of this
Note until such principal amount is paid in full shall accrue at the Loan Rate
or, if applicable, the Default Rate. The Loan Rate for this Note is 14.55% per
annum (based on a year of 360 days and actual days elapsed). All accrued
interest shall be payable on the last day of each calendar month, commencing
July 31, 1996.
Whenever any payment due hereunder shall fall on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day, and such
extension of time shall be included in the computation of interest or fees, as
the case may be.
Principal, interest and all other amounts due with respect to the Loan, are
payable in lawful money of the United States of America to Lender as follows:
COMDISCO, INC., ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in immediately
available funds. The Loan made by Lender to Borrower and the interest rate
applicable thereto, and all payments made with respect thereto, shall be
recorded by Lender and, prior to any transfer hereof, endorsed on the grid
attached hereto which is part of this Note.
This Note is the Note referred to in, and is entitled to the benefits of, the
Loan and Security Agreement, dated as of JulyE31, 1996, between Borrower and
Lender (the "Loan Agreement"). The Loan Agreement, among other things
(a) provides for the making of a secured Loan by Lender to Borrower from time to
time in an aggregate principal amount not to exceed at any time outstanding the
amount first above mentioned, the indebtedness of Borrower resulting from the
Loan being evidenced by a Note; and (b) contains provisions for acceleration of
the maturity hereof upon the happening of certain stated events.
Prior to the first anniversary of the date hereof, there shall be no
prepayment of the Loan evidenced by this Note in whole or in part. Borrower
may, at its option, at any time on or after the first anniversary of the date
hereof, prepay the Loan evidenced by this Note, either in whole or from time to
time in any part of the principal amount thereof equal to $500,000
30
or more, at a prepayment price equal to the principal amount of the Loan so to
be prepaid, plus interest accrued thereon through and including the date of such
prepayment, plus the Make-Whole Premium (as defined in the Loan Agreement). If
the maturity of this Note and the Loan evidenced thereby is accelerated under
the Loan Agreement, Borrower shall pay to Lender, in addition to principal,
interest and all other amounts due with respect to this Note, as liquidated
damages for loss of Lender's benefit of the bargain and not as a penalty, an
amount equal to the Make-Whole Premium (as defined in the Loan Agreement).
This Note and the obligation of Borrower to repay the unpaid principal amount
of the Loan, interest on the Loan and all other amounts due Lender under the
Loan Agreement is secured under the Loan Agreement.
Presentment for payment, demand, notice of protest and all other demands and
notices of any kind in connection with the execution, delivery, performance and
enforcement of this Note are hereby waived.
Borrower shall pay all reasonable fees and expenses, including, without
limitation, reasonable attorneys' fees and costs, incurred by Lender in the
enforcement or attempt to enforce any of Borrower's obligations hereunder not
performed when due. This Note shall be governed by, and construed and
interpreted in accordance with, the laws of the State of California.
IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed by one
of its officers thereunto duly authorized on the date hereof.
CORSAIR COMMUNICATIONS, INC.
By:________________________________
Name:______________________________
Title:_____________________________
31
Sheet 1
--------------------------------------------------------------------------
CORSAIR COMMUNICATIONS
--------------------------------------------------------------------------
SUBORDINATED PROMISSORY NOTE
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Loan Amount: 2,000,000
===========
--------------------------------------------------------------------------
Interest rate: 14.550%
===========
--------------------------------------------------------------------------
Payment Amount see below
===========
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
MENT NUM DATE PRINCIPAL INTEREST PAYMENT BALANCE
--------------------------------------------------------------------------
--------------------------------------------------------------------------
2,000,000.00
--------------------------------------------------------------------------
0 07/31/96 2,000,000.00
--------------------------------------------------------------------------
1 08/31/96 0.00 24,250.00 24,250.00 2,000,000.00
--------------------------------------------------------------------------
2 09/30/96 0.00 24,250.00 24,250.00 2,000,000.00
--------------------------------------------------------------------------
3 10/31/96 0.00 24,250.00 24,250.00 2,000,000.00
--------------------------------------------------------------------------
4 11/30/96 0.00 24,250.00 24,250.00 2,000,000.00
--------------------------------------------------------------------------
5 12/31/96 0.00 24,250.00 24,250.00 2,000,000.00
--------------------------------------------------------------------------
6 01/31/97 0.00 24,250.00 24,250.00 2,000,000.00
--------------------------------------------------------------------------
7 02/28/97 55,556.00 24,250.00 79,806.00 1,944,444.00
--------------------------------------------------------------------------
8 03/31/97 55,556.00 23,576.38 79,132.38 1,888,888.00
--------------------------------------------------------------------------
9 04/30/97 55,556.00 22,902.77 78,458.77 1,833,332.00
--------------------------------------------------------------------------
10 05/31/97 55,556.00 22,229.15 77,785.15 1,777,776.00
--------------------------------------------------------------------------
11 06/30/97 55,556.00 21,555.53 77,111.53 1,722,220.00
--------------------------------------------------------------------------
12 07/31/97 55,556.00 20,881.92 76,437.92 1,666,664.00
--------------------------------------------------------------------------
13 08/31/97 55,556.00 20,208.30 75,764.30 1,611,108.00
--------------------------------------------------------------------------
14 09/30/97 55,556.00 19,534.68 75,090.68 1,555,552.00
--------------------------------------------------------------------------
15 10/31/97 55,556.00 18,861.07 74,417.07 1,499,996.00
--------------------------------------------------------------------------
16 11/30/97 55,556.00 18,187.45 73,743.45 1,444,440.00
--------------------------------------------------------------------------
17 12/31/97 55,556.00 17,513.84 73,069.84 1,388,884.00
--------------------------------------------------------------------------
18 01/31/98 55,556.00 16,840.22 72,396.22 1,333,328.00
--------------------------------------------------------------------------
19 02/28/98 55,556.00 16,166.60 71,722.60 1,277,772.00
--------------------------------------------------------------------------
20 03/31/98 55,556.00 15,492.99 71,048.99 1,222,216.00
--------------------------------------------------------------------------
21 04/30/98 55,556.00 14,819.37 70,375.37 1,166,660.00
--------------------------------------------------------------------------
22 05/31/98 55,556.00 14,145.75 69,701.75 1,111,104.00
--------------------------------------------------------------------------
23 06/30/98 55,556.00 13,472.14 69,028.14 1,055,548.00
--------------------------------------------------------------------------
24 07/31/98 55,556.00 12,798.52 68,354.52 999,992.00
--------------------------------------------------------------------------
25 08/31/98 55,556.00 12,124.90 67,680.90 944,436.00
--------------------------------------------------------------------------
26 09/30/98 55,556.00 11,451.29 67,007.29 888,880.00
--------------------------------------------------------------------------
27 10/31/98 55,556.00 10,777.67 66,333.67 833,324.00
--------------------------------------------------------------------------
28 11/30/98 55,556.00 10,104.05 65,660.05 777,768.00
--------------------------------------------------------------------------
Page 1
Sheet 1
--------------------------------------------------------------------------
29 12/31/98 55,556.00 9,430.44 64,986.44 722,212.00
--------------------------------------------------------------------------
30 01/31/99 55,556.00 8,756.82 64,312.82 666,656.00
--------------------------------------------------------------------------
31 02/28/99 55,556.00 8,083.20 63,639.20 611,100.00
--------------------------------------------------------------------------
32 03/31/99 55,556.00 7,409.59 62,965.59 555,544.00
--------------------------------------------------------------------------
33 04/30/99 55,556.00 6,735.97 62,291.97 499,988.00
--------------------------------------------------------------------------
34 05/31/99 55,556.00 6,062.35 61,618.35 444,432.00
--------------------------------------------------------------------------
35 06/30/99 55,556.00 5,388.74 60,944.74 388,876.00
--------------------------------------------------------------------------
36 07/31/99 55,556.00 4,715.12 60,271.12 333,320.00
--------------------------------------------------------------------------
37 08/31/99 55,556.00 4,041.51 59,597.51 277,764.00
--------------------------------------------------------------------------
38 09/30/99 55,556.00 3,367.89 58,923.89 222,208.00
--------------------------------------------------------------------------
39 10/31/99 55,556.00 2,694.27 58,250.27 166,652.00
--------------------------------------------------------------------------
40 11/30/99 55,556.00 2,020.66 57,576.66 111,096.00
--------------------------------------------------------------------------
41 12/31/99 55,556.00 1,347.04 56,903.04 55,540.00
--------------------------------------------------------------------------
42 01/31/00 55,540.00 673.42 56,213.42 0.00
--------------------------------------------------------------------------
Page 2
EXHIBIT B
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
COMDISCO, INC.
c/o Comdisco Ventures
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
________________________________________________________________________________
SUBLESSOR'S WAIVER AND CONSENT
THIS SUBLESSOR'S WAIVER AND CONSENT (this "Waiver"), dated as of July
31, 1996, is executed by and between SYNTEX (U.S.A.) Inc., a Delaware
Corporation ("Sublessor") and COMDISCO, INC. a Delaware corporation ("Lender").
RECITALS
--------
A. Sublessor and CORSAIR COMMUNICATIONS, INC. ("Tenant") are parties
to a Sublease Agreement, dated as of March 31, 1995 (together with any other
agreement between Sublessor and Tenant relating to the Premises, as defined
below, all as amended from time to time, to be referred to herein collectively
as the "Lease"), pursuant to which Sublessor has leased to Tenant a portion of
that certain real property commonly known as ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, and more particularly described in Exhibit A hereto (the
---------
"Premises").
B. Tenant and Lender intend to or have entered into a Loan and
Security Agreement dated as of JulyE31, 1996 (the "Loan Agreement") pursuant to
which Lender has agreed or will agree to make loans to Tenant from time to time
secured by certain assets (the "Assets") which will be located on the Premises.
The Assets consist of personal property, business equipment, inventory and
machinery which are now, or in the future may be, located upon and/or affixed to
the Premises.
AGREEMENT
---------
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Sublessor and Lender hereby agree as follows:
1. Waiver and Consent. Sublessor hereby does subordinate any
------------------
interest of Sublessor in the Assets to Lender's interests therein, whether
Sublessor's interest arises by common law, statute or consensually (under the
Lease or otherwise) and whether now in existence or hereafter created. This
subordination shall survive the termination of the Lease. Sublessor further
agrees that (a) neither the Assets nor any item thereof shall become part of or
otherwise be or become a fixture attached to, the Premises, notwithstanding the
manner of the Assets' annexation, the Assets' adaptability to the uses and
purposes for which the Premises are used, and the intentions of the party making
the annexation; (b) the Assets (or any item thereof) may be repossessed by
Lender; (c) in connection with such repossession or otherwise, Lender, and any
of its agents and employees, may enter upon the Premises for the purposes of
preparing for transport, disassembling, dismantling, loading and/or removing the
Assets (or any item thereof); and (d) the right of Lender to enter the Premises
and the other rights granted to Lender in this Waiver shall not terminate until
up to thirty (30) days after Lender receives written notice from Sublessor of
the termination of the Lease; provided, that if Lender exercises its rights
hereunder, for any such period after the termination of the Lease, Lender shall
pay to Sublessor a rental payment (at the last monthly rate payable by Tenant)
for the period from (a) the later of (i) receipt of notice of termination of the
Lease or (ii) the actual termination of the Lease, until (b) the date the Assets
are removed. Notwithstanding the foregoing, a representative of the Lender may
examine the assets to determine their value without assuming any liability for
rent hereunder so long as the examination takes place promptly after notice of
the termination of the Lease.
2. Costs. Lender agrees to indemnify, defend, protect and hold the
-----
Sublessor harmless from any claim, cost, liability or expense which is asserted
against or incurred by Landlord which arises in connection with the exercise of
Lender's rights under clauses (b) or (c) of Paragraph 1 above.
3. Lease Defaults. Sublessor further agrees to provide Lender with
--------------
telephonic confirmation of any default or event of default under the Lease upon
inquiry by Lender.
4. Sublessor's Representations and Warranties. Sublessor hereby
------------------------------------------
warrants and represents to Lender that (a) Sublessor is the lessor under the
Lease; (b) there are no other agreements between the parties affecting or
relating to the Premises; (c) Sublessor has all requisite power and authority to
execute and deliver this Waiver and no consents from any third party are
required to do so; (d) no event of default (nor any event which with the passage
of time would constitute an event of default) has occurred under the Lease;
(e) there exists no litigation affecting title to the Premises or any adverse
claim with respect to the Premises of which Sublessor has received notice; and
(f) there is no condemnation proceeding pending with respect to any part of the
Premises, nor any threat thereof, of which the Sublessor has received notice.
5. Miscellaneous. This Waiver and all rights hereby granted to
-------------
Lender hereunder shall remain in effect so long as there are any obligations
owing by Tenant under the Loan Agreement or any present or future agreement
between Tenant and Lender which involves the Assets. All the terms and
provisions of this Waiver shall be binding on and inure to the benefit of the
respective successors and assigns of Sublessor and Lender. The rights and
benefits of this Waiver may be assigned or transferred by Lender or to third
parties who may become the lender, directly or indirectly, to Tenant. Lender
shall provide subsequent written notice to Sublessor and Tenant of the
assignment or transfer. Headings in this Waiver are for convenience of
reference only and are not part of the substance hereof. This Waiver shall be
governed by and construed in accordance with the laws of the State of
California.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-2-
IN WITNESS WHEREOF, Sublessor and Lender have executed this Waiver as
of the date and year first written above.
SUBLESSOR:
SYNTEX (U.S.A.) INC.
By:___________________________
Name:_________________________
Title:________________________
LENDER:
COMDISCO, INC.
By:___________________________
Name:_________________________
Title:________________________
-3-
EXHIBIT A
ALL THAT certain real property situate in the City of Palo Alto, County of
Santa ▇▇▇▇▇, State of California described as follows:
COMMENCING at the Northeasterly corner of ▇▇▇ ▇ ▇▇ ▇▇▇▇▇ #▇▇▇▇ entitled
"Stanford Industrial Park" as filed in the Office of the Recorder of Santa ▇▇▇▇▇
County on November 13, 1969 in Book 261 of maps at Pages 40 and 41. Said
Northeasterly corner lying on the Westerly line of Hillview Avenue (80 feet in
width); thence from said point of commencement along said Westerly line of
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇'▇▇" ▇▇▇▇ 720.00 feet to the TRUE POINT OF
BEGINNING of the Parcel to be described; thence from said TRUE POINT OF
BEGINNING and leaving said Westerly line of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇'▇▇" ▇▇▇▇ 685.00 feet to a point on the Easterly line of Parcel C as
said Parcel is shown upon that certain parcel map filed in the Office of the
Recorder of Santa ▇▇▇▇▇ County on May 22, 1969 in Book 254 of Parcel Maps at
Page 1; thence along said Easterly line of Parcel C North 15degrees27'55" West
360.37 feet; thence leaving said Easterly line North 74degrees32'05" East 685.00
feet to a point on the aforementioned Westerly line of Hillview Avenue; thence
along said Westerly line South 15degrees27'55" East 360.37 feet to the TRUE
POINT OF BEGINNING.
CONTAINING 5.667 Acres of land more or less
EXCEPTING therefrom an easement in favor of the Purissima Hills County Water
District for water line purposes 5.00 feet in width being the Easterly 5.00 feet
of the above described parcel and being more fully described in Volume 7952 of
Official Records of Santa ▇▇▇▇▇ County at Page 197.
EXHIBIT A
State of California )
)
County of Santa ▇▇▇▇▇ )
On July 30, 1996, before me, the undersigned, personally appeared
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted executed the instrument.
WITNESS my hand and official seal
[NOTARY SEAL]
Signature_______________________________(Seal)
State of ______________________ )
)
County of _____________________ )
On ____________________, 199__ before me, the undersigned, personally
appeared ________________________________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature_____________________ (Seal)
EXHIBIT C
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE
EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO,
(ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO
THE COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED, (iii) RECEIPT OF NO-
ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv)
OTHERWISE COMPLYING WITH THE PROVISIONS OF SECTION 7 OF THIS WARRANT.
CORSAIR COMMUNICATIONS
----------------------
WARRANT TO PURCHASE 75,000 SHARES
OF SERIES B PREFERRED STOCK
THIS CERTIFIES THAT, for value received, Comdisco, Inc. and its assignees
are entitled to subscribe for and purchase [an aggregate of 75,000] shares of
the fully paid and nonassessable Series B Preferred Stock (as adjusted pursuant
to Section 4 hereof the "Shares") of CORSAIR COMMUNICATIONS, INC., a Delaware
corporation (the "Company"), subject to the provisions and upon the terms and
conditions hereinafter set forth; provided, however, that in the event that at
-------- -------
the time of exercise of this Warrant there are insufficient authorized shares of
the Company's Series B Preferred Stock to allow issuance of the Shares, then
this Warrant shall be exercisable for the same number of shares of the Company's
Common Stock. The price per Share at which this Warrant is exercisable shall be
the lower of (i) $4.43 or (ii) the price per share at which the next sale of
equity securities of Borrower is made (such price and such other price as shall
result, from time to time, from the adjustments specified in Section 4 hereof is
herein referred to as the "Warrant Price"). As used herein, (a) the term
"Series Preferred" shall mean the Company's presently authorized Series B
Preferred Stock, and any stock into or for which such Series B Preferred Stock
may hereafter be converted or exchanged, (b) the term "Date of Grant" shall mean
July 31, 1996, and (c) the term "Other Warrants" shall mean any other warrants
issued by the Company in connection with the transaction with respect to which
this Warrant was issued, and any warrant issued upon transfer or partial
exercise of this Warrant. The term "Warrant" as used herein shall be deemed to
include Other Warrants unless the context clearly requires otherwise.
1. Term. The purchase right represented by this Warrant is exercisable,
----
in whole or in part, at any time and from time to time from the Date of Grant
through the later of (i) ten (10) years after the Date of Grant or (ii) five (5)
years after the closing of the Company's initial public offering of its Common
Stock effected pursuant to a Registration Statement on Form S-1 (or its
successor) filed under the Securities Act of 1933, as amended (the "Act").
2 Method of Exercise; Payment; Issuance of New Warrant. Subject to
----------------------------------------------------
Section 1 hereof, the purchase right represented by this Warrant may be
exercised by the holder hereof, in whole or in part and from time to time, at
the election of the holder hereof, by (a) the surrender of this Warrant (with
the notice of exercise substantially in the form attached hereto as Exhibit A
duly completed and executed) at the principal office of the
Company and by the payment to the Company, by certified or bank check, or by
wire transfer to an account designated by the Company (a "Wire Transfer") of an
amount equal to the then applicable Warrant Price multiplied by the number of
Shares then being purchased, or (b) exercise of the right provided for in
Section 10.3 hereof. The person or persons in whose name(s) any certificate(s)
representing shares of Series Preferred shall be issuable upon exercise of this
Warrant shall be deemed to have become the holder(s) of record of, and shall be
treated for all purposes as the record holder(s) of, the shares represented
thereby (and such shares shall be deemed to have been issued) immediately prior
to the close of business on the date or dates upon which this Warrant is
exercised. In the event of any exercise of the rights represented by this
Warrant, certificates for the shares of stock so purchased shall be delivered to
the holder hereof as soon as possible and in any event within thirty (30) days
after such exercise and, unless this Warrant has been fully exercised or
expired, a new Warrant representing the portion of the Shares, if any, with
respect to which this Warrant shall not then have been exercised shall also be
issued to the holder hereof as soon as possible and in any event within such
thirty-day period.
3. Stock Fully Paid: Reservation of Shares. All Shares that may be
---------------------------------------
issued upon the exercise of the rights represented by this Warrant, upon
issuance pursuant to the terms and conditions herein and upon payment of the
Warrant Price multiplied by the number of shares to be issued either in cash or
pursuant to the terms of Section 10.3 hereof, will be fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issue thereof. The Company agrees that prior to December 31, 1996, it will take
such actions as are necessary, including obtaining stockholder consent, to
authorize the issuance of a sufficient number of shares of Series B Preferred
Stock to allow the full exercise of this Warrant. During the period within
which the rights represented by this Warrant may be exercised, the Company will
at all times have authorized, and reserved for the purpose of the issue upon
exercise of the purchase rights evidenced by this Warrant, a sufficient number
of shares of its Series Preferred or Common Stock to provide for the exercise of
the rights represented by this Warrant and, if applicable, a sufficient number
of shares of its Common Stock to provide for the conversion of the Series
Preferred into Common Stock.
4. Adjustment of Warrant Price and Number of Shares. The number and kind
------------------------------------------------
of securities purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the occurrence of
certain events, as follows:
(a) Reclassification or Merger. In case of any reclassification or
--------------------------
change of securities of the class issuable upon exercise of this Warrant (other
than a change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination), or in of
any merger of the Company with or into another corporation (other than a merger
with another corporation in which the Company is the acquiring and the surviving
corporation and which does not result in any reclassification or change of
outstanding securities issuable upon exercise of this Warrant), or in case of
any sale of all or substantially all of the assets of the Company, the Company,
or such successor or purchasing corporation, as the case may be, shall duly
execute and deliver to the holder of this Warrant a new Warrant (in form and
substance reasonably satisfactory to the holder of this Warrant), so that the
holder of this Warrant shall have the right to receive, at a total purchase
price not to exceed that payable upon the exercise of the unexercised portion of
this Warrant, and in lieu of the shares of Series Preferred theretofore issuable
upon exercise
of this Warrant, the kind and amount of shares of stock, other securities, money
and property receivable upon such reclassification, change or merger by a holder
of the number of shares of Series Preferred then purchasable under this Warrant.
Such new Warrant shall provide for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
4 and, in the case of a new Warrant issuable after conversion of the authorized
shares of the Series Preferred into shares of Common Stock or after the
amendment of the terms of the antidilution protection of the Series Preferred,
shall provide for antidilution protection that shall be as nearly equivalent as
may be practicable to the antidilution provisions applicable to the Series
Preferred on the Date of Grant. The provisions of this subparagraph (a) shall
similarly apply to successive reclassifications, changes, mergers and transfers.
(b) Subdivision or Combination of Shares. If the Company at any time
------------------------------------
while this Warrant remains outstanding and unexpired shall subdivide or combine
its outstanding shares of Series Preferred, the Warrant Price shall be
proportionately decreased in the case of a subdivision or increased in the case
of a combination, effective at the close of business on the date the subdivision
or combination becomes effective.
(c) Stock Dividends and Other Distributions. If the Company at any
---------------------------------------
time while this Warrant is outstanding and unexpired shall (i) pay a dividend
with respect to Series Preferred payable in Series Preferred, or (ii) make any
other distribution with respect to Series Preferred (except any distribution
specifically provided for in Sections 4(a) and 4(b)), of Series Preferred, then
the Warrant Price shall be adjusted, from and after the date of determination of
shareholders entitled to receive such dividend or distribution, to that price
determined by multiplying the Warrant Price in effect immediately prior to such
date of determination by a fraction (i) the numerator of which shall be the
total number of shares of Series Preferred outstanding immediately prior to such
dividend or distribution, and (ii) the denominator of which shall be the total
number of shares of Series Preferred outstanding immediately after such dividend
or distribution.
(d) Adjustment of Number of Shares. Upon each adjustment in the
------------------------------
Warrant Price pursuant to Sections 4.01(b) or 4.01(c), the number of Shares of
Series Preferred purchasable hereunder shall be adjusted, to the nearest whole
share, to the product obtained by multiplying the number of Shares purchasable
immediately prior to such adjustment in the Warrant Price by a fraction, the
numerator of which shall be the Warrant Price immediately prior to such
adjustment and the denominator of which shall be the Warrant Price immediately
thereafter.
(e) Antidilution Rights. The other antidilution rights applicable to
-------------------
the Shares of Series Preferred purchasable hereunder are set forth in the
Company's Certificate of Incorporation, as amended through the Date of Grant, a
true and complete copy of which is attached hereto as Exhibit B (the "Charter").
The Company shall promptly provide the holder hereof with any restatement,
amendment, modification or waiver of the Charter promptly after the same has
been made.
5. Notice of Adjustments. Whenever the Warrant Price or the number of
---------------------
Shares purchasable hereunder shall be adjusted pursuant to Section 4 hereof, the
Company shall make a certificate signed by its chief financial officer setting
forth, in reasonable detail, the
event requiring the adjustment the amount of the adjustment, the method by which
such adjustment was calculated, and the Warrant Price and the number of Shares
purchasable hereunder after giving effect to such adjustment, and shall cause
copies of such certificate to be mailed (without regard to Section 13 hereof, by
first class mail, postage prepaid) to the holder of this Warrant. In addition,
whenever the conversion price or conversion ratio of the Series Preferred shall
be adjusted, the Company shall make a certificate signed by its chief financial
officer setting forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment was
calculated, and the conversion price or ratio of the Series Preferred after
giving effect to such adjustment, and shall cause copies of such certificate to
be mailed (without regard to Section 13 hereof, by first class mail, postage
prepaid) to the holder of this Warrant.
6. Fractional Shares. No fractional shares of Series Preferred will be
-----------------
issued in connection with any exercise hereunder, but in lieu of such fractional
shares the Company shall make a cash payment therefor based on the fair market
value of the Series Preferred on the date of exercise as reasonably determined
in good faith by the Company's Board of Directors.
7. Compliance with Act; Disposition of Warrant or Shares of Series
---------------------------------------------------------------
Preferred.
---------
(a) Compliance with Act. The holder of this Warrant, by acceptance
-------------------
hereof, agrees that this Warrant, and the shares of Series Preferred to be
issued upon exercise hereof and any Common Stock issued upon conversion thereof
are being acquired for investment and not with a view to the sale or
distribution of any part thereof and the holder of this Warrant has no present
intention of selling or engaging in any public distribution of this Warrant, and
that such holder will not offer, sell or otherwise dispose of this Warrant or
any shares of Series Preferred to be issued upon exercise hereof or any Common
Stock issued upon conversion thereof except under circumstances which will not
result in a violation of the Act or any applicable state securities laws. Upon
exercise of this Warrant, unless the Shares being acquired are registered under
the Act and any applicable state securities laws or an exemption from such
registration is available, the holder hereof shall confirm in writing that the
shares of Series Preferred so purchased (and any shares of Common Stock issued
upon conversion thereof) are being acquired for investment and not with a view
toward distribution or resale in violation of the Act and shall confirm such
other matters related thereto as may be reasonably requested by the Company.
This Warrant and all shares of Series Preferred issued upon exercise of this
Warrant and all shares of Common Stock issued upon conversion thereof (unless
registered under the Act and any applicable state securities laws) shall be
stamped or imprinted with a legend in substantially the following form:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION
MAY BE EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO,
(ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED, (iii) RECEIPT OF NO-ACTION
LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE
COMPLYING WITH THE
PROVISIONS OF SECTION 7 OF THE WARRANT UNDER WHICH THESE SECURITIES WERE ISSUED,
DIRECTLY OR INDIRECTLY."
Said legend shall be removed by the Company, upon the request of a holder,
at such time as the restrictions on the transfer of the applicable security
shall have terminated. In addition, in connection with the issuance of this
Warrant, the holder specifically represents to the Company by acceptance of this
Warrant as follows:
(1) The holder is aware of the Company's business affairs and financial
condition, and has acquired information about the Company sufficient to reach an
informed and knowledgeable decision to acquire this Warrant. The holder is
acquiring this Warrant for its own account for investment purposes only and not
with a view to, or for the resale in connection with, any "distribution" thereof
in violation of the Act.
(2) The holder understands that this Warrant has not been registered under
the Act in reliance upon a specific exemption therefrom, which exemption depends
upon, among other things, the bona fide nature of the holder's investment intent
as expressed herein.
(3) The holder further understands that this Warrant must be held
indefinitely unless subsequently registered under the Act and qualified under
any applicable state securities laws, or unless exemptions from registration and
qualification are otherwise available. The holder is aware of the provisions of
Rule 144, promulgated under the Act.
(4) The holder has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of its investment
and has the ability to bear the economic risks of its investment.
(5) The holder is an "accredited investor" within the meaning of Rule 501
of Regulation D promulgated under the Act, as presently in effect.
(b) Disposition of Warrant or Shares. With respect to any offer, sale
--------------------------------
or other disposition of this Warrant or any shares of Series Preferred acquired
pursuant to the exercise of this Warrant prior to registration of such Warrant
or shares, the holder hereof agrees to give written notice to the Company prior
thereto, describing briefly the manner thereof, together with a written opinion
of such holder's counsel, or other evidence, if reasonably requested by the
Company, to the effect that such offer, sale or other disposition may be
effected without registration or qualification (under the Act as then in effect
or any federal or state securities law then in effect) of this Warrant or such
shares of Series Preferred or Common Stock and indicating whether or not under
the Act certificates for this Warrant or such shares of Series Preferred to be
sold or otherwise disposed of require any restrictive legend as to applicable
restrictions on transferability in order to ensure compliance with such law.
Promptly upon receiving such written notice and reasonably satisfactory opinion
or other evidence, if so requested, the Company, as promptly as practicable but
no later than fifteen (15) days after receipt of the written notice, opinion or
other evidence, shall notify such holder that such holder may sell or otherwise
dispose of this Warrant or such shares of Series Preferred or Common Stock, all
in accordance with the terms of the notice delivered to the Company. If a
determination has been made pursuant to this Section 7(b) that the opinion of
counsel for the holder or other evidence is not reasonably satisfactory to the
Company, the Company shall so notify the holder
promptly with details thereof after such determination has been made.
Notwithstanding the foregoing, this Warrant or such shares of Series Preferred
or Common Stock may, as to such federal laws, be offered, sold or otherwise
disposed of in accordance with Rule 144 or 144A under the Act, provided that the
Company shall have been furnished with such information as the Company may
reasonably request to provide a reasonable assurance that the provisions of Rule
144 or 144A have been satisfied. Each certificate representing this Warrant or
the shares of Series Preferred thus transferred (except a transfer pursuant to
Rule 144 or 144A) shall bear a legend as to the applicable restrictions on
transferability in order to ensure compliance with such laws, unless in the
aforesaid opinion of counsel for the holder, such legend is not required in
order to ensure compliance with such laws. The Company may issue stop transfer
instructions to its transfer agent in connection with such restrictions.
(c) Applicability of Restrictions. Neither any restrictions of any
-----------------------------
legend described in this Warrant nor the requirements of Section 7(b) above
shall apply to any transfer of, or grant of a security interest in, this Warrant
(or the Series Preferred or Common Stock obtainable upon exercise thereof) or
any part hereof (i) to a partner of the holder if the holder is a partnership,
(ii) to a partnership of which the holder is a partner, or (iii) to any
affiliate of the holder if the holder is a corporation; provided, however, in
-------- -------
any such transfer, if applicable, the transferee shall on the Company's request
agree in writing to be bound by the terms of this Warrant as if an original
signatory hereto.
8. Rights as Shareholders; Information. No holder of this Warrant, as
-----------------------------------
such, shall be entitled to vote or receive dividends or be deemed the holder of
Series Preferred or any other securities of the Company which may at any time be
issuable on the exercise hereof for any purpose, nor shall anything contained
herein be construed to confer upon the holder of this Warrant, as such, any of
the rights of a shareholder of the Company or any right to vote for the election
of directors or upon any matter submitted to shareholders at any meeting
thereof, or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until this Warrant shall have been exercised
and the Shares purchasable upon the exercise hereof shall have become
deliverable, as provided herein. Notwithstanding the foregoing, the Company
will transmit to the holder of this Warrant such information, documents and
reports as are generally distributed to the holders of any class or series of
the securities of the Company concurrently with the distribution thereof to the
shareholders.
9. Registration Rights. The Company grants registration rights to the
-------------------
holder of this Warrant for any Common Stock of the Company obtained upon
conversion of the Series Preferred, comparable to the registration rights
granted to the investors in that certain Investor Rights Agreement, dated as of
December 10, 1996, as amended, as of December 14, 1994 and October 31, 1995 (the
"Registration Rights Agreement"), with the following exceptions and
clarifications:
(1) The holder will have no demand registration rights pursuant to
Section 1.2 of the Registration Rights Agreement.
(2) The holder will be subject to the same provisions regarding
indemnification as contained in the Registration Rights
Agreement.
(3) The registration rights are freely assignable by the holder of
this Warrant.
10. Additional Rights.
-----------------
10.1 Secondary Sales. The Company agrees that it will not interfere with
---------------
the holder of this Warrant in obtaining liquidity if opportunities to make
secondary sales of the Company's securities become available so long as such
sales are in accordance with all applicable state and federal securities laws.
10.2 Mergers. The Company shall provide the holder of this Warrant with at
-------
least twenty (20) days' notice of the terms and conditions of any of the
following potential transactions: (i) the sale, lease, exchange, conveyance or
other disposition of all or substantially all of the Company's property or
business, or (ii) its merger into or consolidation with any other corporation
(other than a wholly-owned subsidiary of the Company), or any transaction
(including a merger or other reorganization) or series of related transactions,
in which more than 50% of the voting power of the Company is disposed of.
10.3 Right to Convert Warrant into Stock: Net Issuance.
-------------------------------------------------
(a) Right to Convert. In addition to and without limiting the rights
----------------
of the holder under the terms of this Warrant, the holder shall have the right
to convert this Warrant or any portion thereof (the "Conversion Right") into
shares of Series Preferred (or Common Stock if the Series Preferred has been
automatically converted into Common Stock) as provided in this Section 10.3 at
any time or from time to time during the term of this Warrant. Upon exercise of
the Conversion Right with respect to a particular number of shares subject to
this Warrant (the "Converted Warrant Shares"), the Company shall deliver to the
holder (without payment by the holder of any exercise price or any cash or other
consideration) (X) that number of shares of fully paid and nonassessable Series
Preferred (or Common Stock if the Series Preferred has been automatically
converted into Common Stock) equal to the quotient obtained by dividing the
value of this Warrant (or the specified portion hereof) on the Conversion Date
(as defined in subsection (b) hereof), which value shall be determined by
subtracting (A) the aggregate Warrant Price of the Converted Warrant Shares
immediately prior to the exercise of the Conversion Right from (B) the aggregate
fair market value of the Converted Warrant Shares issuable upon exercise of this
Warrant (or the specified portion hereof) on the Conversion Date (as herein
defined) by (Y) the fair market value of one share of Series Preferred (or
Common Stock if the Series Preferred has been automatically converted into
Common Stock) on the Conversion Date (as herein defined).
Expressed as a formula, such conversion (assuming the Series Preferred has
been automatically converted into Common Stock) shall be computed as follows:
X= B - A
-----
Y
Where: X = the number of shares of Common Stock that may
be issued to holder
Y = the fair market value of one share of
Common Stock
A = the aggregate Warrant Price (i.e., Converted
Warrant Shares x Warrant Price)
B = the aggregate fair market value (i.e., fair market value x
Converted Warrant Shares)
No fractional shares shall be issuable upon exercise of the Conversion
Right, and, if the number of shares to be issued determined in accordance with
the foregoing formula is other than a whole number, the Company shall pay to the
holder an amount in cash equal to the fair market value of the resulting
fractional share on the Conversion Date (as hereinafter defined). For purposes
of Section 9 of this Warrant, shares issued pursuant to the Conversion Right
shall be treated as if they were issued upon the exercise of this Warrant.
(b) Method of Exercise. The Conversion Right may be exercised by the
------------------
holder by the surrender of this Warrant at the principal office of the Company
together with a written statement specifying that the holder thereby intends to
exercise the Conversion Right and indicating the number of shares subject to
this Warrant which are being surrendered (referred to in Section 10.3(a) hereof
as the Converted Warrant Shares) in exercise of the Conversion Right. Such
conversion shall be effective upon receipt by the Company of this Warrant
together with the aforesaid written statement, or on such later date as is
specified therein (the "Conversion Date"), and, at the election of the holder
hereof, may be made contingent upon the closing of the sale of the Company's
Common Stock to the public in a public offering pursuant to a Registration
Statement under the Act (a "Public Offering"). Certificates for the shares
issuable upon exercise of the Conversion Right and, if applicable, a new warrant
evidencing the balance of the shares remaining subject to this Warrant, shall be
issued as of the Conversion Date and shall be delivered to the holder within
(30) days following the Conversion Date. Any conversion from Series Preferred
to Common Stock shall be in the ratio of one (1) share of Common Stock for each
share of Series Preferred (as adjusted herein and in the Charter). On the Date
of Grant, each share of the Series Preferred represented by this Warrant is
convertible into one share of Common Stock.
(c) Determination of Fair Market Value. For purposes of this Section
----------------------------------
10.3, "fair market value" of a share of Series Preferred (or Con=on Stock if the
Series Preferred has been automatically converted into Common Stock) as of a
particular date (the "Determination Date") shall mean:
(i) If the Conversion Right is exercised in connection with and
contingent upon a Public Offering, and if the Company's Registration Statement
relating to such Public Offering ("Registration Statement") has been declared
effective by the SEC, then the initial "Price to Public" specified in the final
prospectus with respect to such offering.
(ii) If the Conversion Right is not exercised in connection with
and contingent upon a Public Offering, then as follows:
(A) If traded on a securities exchange, the fair market value of the
Common Stock shall be deemed to be the average of the closing prices of the
Common Stock on such exchange over the 30-day period ending five business
days prior to the Determination Date, and the fair market value of the
Series Preferred shall be deemed to be such fair market value of the Common
Stock multiplied by the number of shares of Common Stock into which each
share of Series Preferred is then convertible;
(B) If traded over-the-counter, the fair market value of the Common
Stock shall be deemed to be the average of the closing bid prices of the
Common Stock over the 30-day period ending five business days prior to the
Determination Date, and the fair market value of the Series Preferred shall
be deemed to be such fair market value of the Common Stock multiplied by
the number of shares of Common Stock into which each share of Series
Preferred is then convertible; and
(C) If there is no public market for the Common Stock, then fair
market value shall be determined in good faith by the Company's Board of
Directors.
10.4 Exercise Prior to Expiration. To the extent this Warrant is not
----------------------------
previously exercised as to all of the Shares subject hereto, and if the fair
market value of one share of the Series Preferred is greater than the Warrant
Price then in effect, this Warrant shall be deemed automatically exercised
pursuant to Section 10.3 above (even if not surrendered) immediately before its
expiration. For purposes of such automatic exercise, the fair market value of
one share of the Series Preferred upon such expiration shall be determined
pursuant to Section 10.3(c). To the extent this Warrant or any portion thereof
is deemed automatically exercised pursuant to this Section 10.4, the Company
agrees to promptly notify the holder hereof of the number of Shares, if any, the
holder hereof is to receive by reason of such automatic exercise.
11. Representations and Warranties. The Company represents and warrants
------------------------------
to the holder of this Warrant as follows:
(a) This Warrant has been duly authorized and executed by the Company
and is a valid and binding obligation of the Company enforceable in accordance
with its terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and the rules of law or principles at
equity governing specific performance, injunctive relief and other equitable
remedies;
(b) The Shares have been or will be duly authorized and reserved for
issuance by the Company and, when issued in accordance with the terms hereof,
will be validly issued, fully paid and non-assessable;
(c) The rights, preferences, privileges and restrictions granted to
or imposed upon the Series Preferred and the holders thereof are as set forth in
the Charter, as
amended to the Date of the Grant, a true and complete copy of which has been
delivered to the original holder of this Warrant and is attached hereto as
Exhibit B;
(d) The shares of Common Stock issuable upon conversion of the Shares
have been duly authorized and reserved for issuance by the Company and, when
issued in accordance with the terms of the Charter will be validly issued, fully
paid and nonassessable;
(e) The execution and delivery of this Warrant are not, and the
issuance of the Shares upon exercise of this Warrant in accordance with the
terms hereof will not be, inconsistent with the Company's Charter or by-laws, do
not and will not contravene any law, governmental rule or regulation, judgment
or order applicable to the Company, and do not and will not conflict with or
contravene any provision of, or constitute a default under, any indenture,
mortgage, contract or other instrument of which the Company is a party or by
which it is bound or require the consent or approval of, the giving of notice
to, the registration or filing with or the taking of any action in respect of or
by, any Federal, state or local government authority or agency or other person,
except for the filing of any notices required pursuant to federal and state
securities laws, which filings will be effected by the time required thereby;
and
(f) There are no actions, suits, audits, investigations or
proceedings pending or to the knowledge of the Company, threatened against the
Company in any court or before any governmental commission, board or authority
which, if adversely determined, will have a material adverse effect on the
ability of the Company to perform its obligations under this Warrant.
12. Modification and Waiver. This Warrant and any provision hereof may be
-----------------------
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
13. Notices. Any notice, request communication or other document required
-------
or permitted to be given or delivered to the holder hereof or the Company shall
be delivered, or shall be sent by U.S. mail, postage prepaid, or recognized
overnight courier service to each such holder at its address as shown on the
books of the Company or to the Company at the address indicated therefor on the
signature page of this Warrant.
14. Binding Effect on Successors. This Warrant shall be binding upon any
----------------------------
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets, and all of the obligations of
the Company relating to the Series Preferred issuable upon the exercise or
conversion of this Warrant shall survive the exercise, conversion and
termination of this Warrant and all of the covenants and agreements of the
Company shall inure to the benefit of the successors and assigns of the holder
hereof. The Company will, at the time of the exercise or conversion of this
Warrant, in whole or in part, upon request of the holder hereof but at the
Company's expense, acknowledge in writing its continuing obligation to the
holder hereof in respect of any rights (including, without limitation any right
to registration of the Shares) to which the holder hereof shall continue to be
entitled after such exercise or conversion in accordance with this Warrant;
provided, that the failure of the holder hereof to make any such request shall
--------
not
affect the continuing obligation of the Company to the holder hereof in respect
of such rights.
15. Lost Warrants or Stock Certificates. The Company covenants to the
-----------------------------------
holder hereof upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant or any stock
certificate and, in the case of any such loss, theft or destruction, upon
receipt of an indemnity reasonably satisfactory to the Company, or in the case
of any such mutilation upon surrender and cancellation of such Warrant or stock
certificate, the Company will make and deliver a new Warrant or stock
certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated
Warrant or stock certificate.
16. Descriptive Headings. The descriptive headings of the several
--------------------
paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant. The language in this Warrant shall be
construed as to its fair meaning without regard to which party drafted this
Warrant.
17. Governing Law. This Warrant shall be construed and enforced in
-------------
accordance with, and the rights of the parties shall be governed by, the laws of
the State of California, without regard to principles of conflicts of laws.
18. Survival of Representations, Warranties and Agreements. All
------------------------------------------------------
representations and warranties of the Company and the holder hereof contained
herein shall survive the Date of Grant, the exercise or conversion of this
Warrant (or any part hereof) or the termination or expiration of rights
hereunder. All agreements of the Company and the holder hereof contained herein
shall survive indefinitely until, by their respective terms, they are no longer
operative.
19. Remedies. In case any one or more of the covenants and agreements
--------
contained in this Warrant shall have been breached, the holders hereof (in the
case of a breach by the Company), or the Company (in the case of a breach by a
holder), may proceed to protect and enforce their or its rights either by suit
in equity and/or by action at law, including, but not limited to, an action for
damages as a result of any such breach and/or an action for specific performance
of any such covenant or agreement contained in this Warrant.
20. No Impairment of Rights. The Company will not, by amendment of its
-----------------------
Charter or through any other means, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant.
21. Severability. The invalidity or unenforceability of any provision of
------------
this Warrant in any jurisdiction shall not affect the validity or enforceability
of such provision in any other jurisdiction, or affect any other provision of
this Warrant, which shall remain in full force and effect.
22. Recovery of Litigation Costs. If any legal action or other proceeding
----------------------------
is brought for the enforcement of this Warrant, or because of an alleged
dispute, breach,
default, or misrepresentation in connection with any of the provisions of this
Warrant, the successful or prevailing party or parties shall be entitled to
recover reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be entitled.
23. Entire Agreement; Modification. This Warrant constitutes the entire
------------------------------
agreement between the parties pertaining to the subject matter contained in it
and supersedes all prior and contemporaneous agreements, representations, and
undertakings of the parties, whether oral or written, with respect to such
subject matter.
CORSAIR COMMUNICATIONS, INC.
By:___________________________________
Title:________________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT A
NOTICE OF EXERCISE
To: CORSAIR COMMUNICATIONS, INC.
1. The undersigned hereby:
G elects to purchase ___ shares of Series __ Preferred Stock of
CORSAIR COMMUNICATIONS, INC. pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase
price of such shares in full, or
G elects to exercise its net issuance rights pursuant to Section
10.3 of the attached Warrant with respect to ___ Shares of Series
__ Preferred Stock.
2. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name or names as are specified
below:
(Name)
(Address)
3. The undersigned represents that the aforesaid shares are being acquired
for the account of the undersigned for investment and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has
no present intention of distributing or reselling such shares, all except as in
compliance with applicable securities laws.
________________________________________________________________________________
(Signature)
(Date)
EXHIBIT A-1
NOTICE OF EXERCISE
To: CORSAIR COMMUNICATIONS, INC. (the "Company")
1. Contingent upon and effective immediately prior to the closing (the
"Closing") of the Company's public offering contemplated by the Registration
Statement on Form S____, filed __________, 19__, the undersigned hereby:
G elects to purchase ___ shares of Series __ Preferred Stock of the
Company (or such lesser number of shares as may be sold on behalf
of the undersigned at the Closing) pursuant to the terms of the
attached Warrant, or
G elects to exercise its net issuance rights pursuant to Section
10.3 of the attached Warrant with respect to ___ Shares of Series
__ Preferred Stock.
2. Please deliver to the custodian for the selling shareholders a stock
certificate representing such _________ shares.
________________________________________________________________________________
(Signature)
(Date)
EXHIBIT B
CHARTER
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF CORSAIR COMMUNICATIONS, INC.,
a Delaware corporation
Corsair Communications, Inc., a corporation organized and existing under
the laws of the State of Delaware, hereby certifies as follows:
1. The name of the corporation is Corsair Communications, Inc. The
original Certificate of Incorporation of the corporation was filed with the
Secretary of State of the State of Delaware on December 5, 1994 and was amended
pursuant to a Certificate of Amendment of Certificate of Incorporation of the
Corporation filed with the Secretary of State of the State of Delaware on
January 25, 1995.
2. Pursuant to Sections 242 and 245 of the General Corporation Law of the
State of Delaware, the Amended and Restated Certificate of Incorporation was
adopted by the corporation's Board of Directors and stockholders, the
stockholders of the corporation having approved the Amended and Restated
Certificate of Incorporation by the written consent of the holders of a majority
of the outstanding shares in accordance with Section 228 thereof, and written
notice having been given in accordance with the requirements of such Section.
The Amended and Restated Certificate of Incorporation restates, integrates and
amends the provisions of the Certificate of Incorporation of this corporation.
3. The Certificate of Incorporation of the corporation is hereby amended
and restated in its entirety as follows:
ARTICLE I
The name of this corporation is Corsair Communications, Inc..
ARTICLE II
The address of this corporation's registered office in the State of
Delaware is ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ of Kent 19901. The name
of its registered agent at such address is Incorporating Services, Ltd.
ARTICLE III
The purpose of this corporation is to engage in any lawful act or activity
for which a corporation may now or hereafter be organized under the Delaware
General Corporation Law.
ARTICLE IV
A. Classes of Stock. This corporation is authorized to issue two classes
----------------
of stock to be designated, respectively, "Common Stock" and "Preferred Stock."
The total number of shares which the corporation is authorized to issue is
Twenty-Eight Million Two Hundred Forty-Seven Thousand Four Hundred and Ten
(28,247,410) shares. Eighteen Million (18,000,000) shares shall be Common
Stock, $.001 par value per share, and Ten Million Two Hundred Forty-Seven
Thousand Four Hundred and Ten (10,247,410) shares shall be Preferred Stock,
$.001 par value per share, of which Eight Million One Hundred Twenty Thousand
(8,120,000) shares shall be Series A Preferred Stock and Two Million One Hundred
Twenty-Seven Thousand Four Hundred and Ten (2,127,410) shares shall be Series B
Preferred Stock.
B. Rights, Preferences and Restrictions of Preferred Stock. The rights,
-------------------------------------------------------
preferences, restrictions and other matters relating to the Preferred Stock are
as follows:
1. Dividend Provisions.
-------------------
a. The holders of shares of Series A Preferred Stock and Series
B Preferred Stock shall be entitled to receive dividends, out of any assets
legally available therefor, prior and in preference to any declaration or
payment of any dividend (payable other than in Common Stock or other securities
and rights convertible into or entitling the holder thereof to receive, directly
or indirectly, additional shares of Common Stock of this corporation) on the
Common Stock of this corporation, at the rate of $0.10 per share of Series A
Preferred Stock per annum and $0.22 per share of Series B Preferred Stock per
annum (subject to appropriate adjustments for stock splits, stock dividends,
combinations or other recapitalizations) payable when, as and if declared by the
Board of Directors. Such dividends shall not be cumulative. No cash dividend
shall be declared or paid with respect to the Series A Preferred Stock or Series
B Preferred Stock unless at the same time a like proportionate cash dividend for
the same dividend period, ratably in proportion to the respective annual
dividend rates set forth above, is declared and paid with respect to the Series
A Preferred Stock and the Series B Preferred Stock.
b. In the event this corporation shall declare a distribution
payable in securities of other persons, evidences of indebtedness issued by this
corporation or other persons, assets (excluding cash dividends) or options or
rights to purchase any such securities or evidences of indebtedness, then, in
each case the holders of Series A Preferred Stock and Series B Preferred Stock
shall be entitled to a proportionate share of any such distribution as though
the holders of the Series A Preferred Stock and Series B Preferred Stock were
the holders of the number of shares of Common Stock of this corporation into
which their respective shares of Series A Preferred Stock and Series B Preferred
Stock are convertible as of the record date fixed for the determination of the
holders of Common Stock of this corporation entitled to receive such
distribution.
-2-
2. Liquidation Preference.
----------------------
a. In the event of any liquidation, dissolution or winding up
of this corporation, either voluntary or involuntary, the holders of Series A
Preferred Stock and Series B Preferred Stock shall be entitled to receive, prior
and in preference to any distribution of any of the assets of this corporation
to the holders of Common Stock by reason of their ownership thereof, an amount
per share equal to the sum of (i) $2.00 for each outstanding share of Series A
Preferred Stock, (subject to appropriate adjustments for stock splits, stock
dividends, combinations or other recapitalizations and hereafter referred to as
the "Original Series A Issue Price"), (ii) $4.43 for each outstanding share of
Series B Preferred Stock (subject to appropriate adjustments for stock splits,
stock dividends, combinations or other recapitalizations and hereafter referred
to as the "Original Series B Issue Price"), and (iii) an amount equal to
declared but unpaid dividends on such share of Series A Preferred Stock or
Series B Preferred Stock, as applicable. If upon the occurrence of such event,
the assets and funds thus distributed among the holders of the Series A
Preferred Stock and the Series B Preferred Stock shall be insufficient to permit
the payment to such holders of the full aforesaid preferential amounts, then,
the entire assets and funds of the corporation legally available for
distribution shall be distributed ratably among the holders of the Series A
Preferred Stock and the Series B Preferred Stock in proportion to the aggregate
liquidation preferences of the respective series, and ratably among the holders
of that series in proportion to the amount of such stock owned by each such
holder.
b. After the distributions described in subsection (a) above
have been paid, the remaining assets of the corporation available for
distribution to stockholders shall be distributed among the holders of Series A
Preferred Stock, Series B Preferred Stock and Common Stock pro rata based on the
number of shares of Common Stock held by each (assuming conversion of all such
Series A Preferred Stock and Series B Preferred Stock).
c. A consolidation or merger of this corporation with or into
any other corporation or corporations, or a sale, conveyance or disposition of
all or substantially all of the assets of this corporation or the effectuation
by the corporation of a transaction or series of related transactions in which
more than 50% of the voting power of the corporation is disposed of (excluding
the issuance of shares of Series A Preferred Stock pursuant to the Series A
Preferred Stock Purchase Agreement and the issuance of Series B Preferred Stock
pursuant to the Series B Preferred Stock Purchase Agreement), shall be deemed to
be a liquidation, dissolution or winding up within the meaning of this Section
2.
3. Conversion. The holders of the Series A Preferred Stock and
----------
Series B Preferred Stock shall have conversion rights as follows (the
"Conversion Rights"):
a. Right to Convert.
----------------
(i) Subject to subsection (c), each share of Series A
Preferred Stock and Series B Preferred Stock shall be convertible, at the option
of the holder thereof, at any time after the date of issuance of such share, at
the office of this corporation or any transfer agent for the particular series
of Preferred Stock, into such number of fully paid and
-3-
nonassessable shares of Common Stock as is determined by dividing (A) the
Original Series A Issue Price for each share of Series A Preferred Stock and (B)
the Original Series B Issue Price for each share of Series B Preferred Stock,
plus all declared but unpaid dividends thereon for each share of Series A
Preferred Stock or Series B Preferred Stock, by the Conversion Price at the time
in effect for such share. The initial Conversion Price per share for shares of
Series A Preferred Stock shall be the Original Series A Issue Price and the
initial Conversion Price per share for shares of Series B Preferred Stock shall
be the Original Series B Issue Price; provided, however, that the Conversion
Price for the Series A Preferred Stock and Series B Preferred Stock shall be
subject to adjustment as set forth in subsection 3(c).
(ii) Each share of Series A Preferred Stock and Series B
Preferred Stock shall automatically be converted into shares of Common Stock at
the Conversion Price at the time in effect for such shares immediately upon the
earlier of (A) the consummation of the corporation's sale of its Common Stock in
a bona fide, firm commitment underwriting pursuant to a registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), the public
offering price of which was not less than $10.00 per share (subject to
appropriate adjustments for stock splits, stock dividends, combinations or other
recapitalizations) and $7,500,000 in the aggregate or (B) the date upon which
the corporation obtains the consent of the holders of a majority of the then
outstanding shares of Series A Preferred Stock and Series B Preferred Stock,
voting together as a single class on an as converted basis.
b. Mechanics of Conversion. Before any holder of Series A Preferred
-----------------------
Stock or Series B Preferred Stock shall be entitled to convert the same into
shares of Common Stock, he shall surrender the certificate or certificates
therefor, duly endorsed, at the office of this corporation or of any transfer
agent for the particular series of Preferred Stock, and shall give written
notice by mail, postage prepaid, to this corporation at its principal corporate
office, of the election to convert the same and shall state therein the name or
names in which the certificate or certificates for shares of Common Stock are to
be issued. This corporation shall, as soon as practicable thereafter, issue and
deliver at such office to such holder of Series A Preferred Stock and/or Series
B Preferred Stock, or to the nominee or nominees of such holder, a certificate
or certificates for the number of shares of Common Stock to which such holder
shall be entitled as aforesaid. Such conversion shall be deemed to have been
made immediately prior to the close of business on the date of such surrender of
the shares of Series A Preferred Stock and/or Series B Preferred Stock to be
converted, and the person or persons entitled to receive the shares of Common
Stock issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock as of such date. If the
conversion is in connection with an underwritten offer of securities registered
pursuant to the Securities Act, the conversion may, at the option of any holder
tendering Series A Preferred Stock and/or Series B Preferred Stock for
conversion, be conditioned upon the closing with the underwriter of the sale of
securities pursuant to such offering, in which event the person(s) entitled to
receive the Common Stock issuable upon such conversion of the Series A Preferred
Stock and/or Series B Preferred Stock shall not be deemed to have converted
-4-
such Series A Preferred Stock and/or Series B Preferred Stock until immediately
prior to the closing of such sale of securities.
c. Conversion Price Adjustments of Preferred Stock. The Conversion
-----------------------------------------------
Prices of the Series A Preferred Stock and Series B Preferred Stock shall be
subject to adjustment from time to time as follows:
(i) A. If the corporation shall issue any Additional Stock (as
defined below) without consideration or for a consideration per share less than
the Conversion Price for the Series A Preferred Stock or the Conversion Price
for the Series B Preferred Stock in effect immediately prior to the issuance of
such Additional Stock, the Conversion Price for the Series A Preferred Stock or
Series B Preferred Stock, as the case may be, in effect immediately prior to
each such issuance shall forthwith (except as otherwise provided in this clause
(i)) be adjusted to a price equal to the quotient obtained by dividing the total
computed under clause (x) below by the total computed under clause (y) below as
follows:
(x) an amount equal to the sum of
(1) the aggregate purchase price of the
shares of the Series A Preferred Stock or Series B Preferred Stock
sold pursuant to the applicable agreements pursuant to which such
shares of Series A Preferred Stock or Series B Preferred Stock, as the
case may be, are first issued (the "Stock Purchase Agreements"), plus
(2) the aggregate consideration, if any,
received by the corporation for all Additional Stock issued on or
after the dates of the applicable Stock Purchase Agreements (the
"Purchase Date") other than shares of Common Stock issued or issuable
with respect to the Series A Preferred Stock or Series B Preferred
Stock;
(y) an amount equal to the sum of
(1) the aggregate purchase price of the
shares of Series A Preferred Stock or Series B Preferred Stock sold
pursuant to the applicable Stock Purchase Agreements divided by the
applicable Conversion Price for such shares in effect at the
applicable Purchase Date (or such higher or lower Conversion Price for
such series as results from the application of subsections 3(c)(iii)
and (iv) and assuming that this Certificate was in effect as of the
applicable Purchase Date) plus
(2) the number of shares of Additional Stock
issued since the applicable Purchase Date (increased or decreased to
the extent that the number of such shares of Additional Stock shall
have been increased or decreased as the result of the application of
subsections 3(c)(iii) and (iv)).
-5-
B. No adjustment of the Conversion Price for the Series A
Preferred Stock or Series B Preferred Stock shall be made in an amount less than
one cent per share, provided that any adjustments which are not required to be
made by reason of this sentence shall be carried forward and shall be either
taken into account in any subsequent adjustment made prior to 3 years from the
date of the event giving rise to the adjustment being carried forward, or shall
be made at the end of 3 years from the date of the event giving rise to the
adjustment being carried forward. Except to the limited extent provided for in
subsections (E)(3) and (E)(4), no adjustment of such Conversion Price pursuant
to this subsection 3(c)(i) shall have the effect of increasing the Conversion
Price above the Conversion Price in effect immediately prior to such adjustment.
C. In the case of the issuance of Common Stock for cash,
the consideration shall be deemed to be the amount of cash paid therefor before
deducting any reasonable discounts, commissions or other expenses allowed, paid
or incurred by this corporation for any underwriting or otherwise in connection
with the issuance and sale thereof.
D. In the case of the issuance of the Common Stock for a
consideration in whole or in part other than cash, the consideration other than
cash shall be deemed to be the fair value thereof as determined by the Board of
Directors irrespective of any accounting treatment.
E. In the case of the issuance (whether before, on or after
the applicable Purchase Date) of options to purchase or rights to subscribe for
Common Stock, securities by their terms convertible into or exchangeable for
Common Stock or options to purchase or rights to subscribe for such convertible
or exchangeable securities, the following provisions shall apply for all
purposes of this subsection 3(c)(i) and subsection 3(c)(ii):
1. The aggregate maximum number of shares of Common
Stock deliverable upon exercise of such options to purchase or rights
to subscribe for Common Stock shall be deemed to have been issued at
the time such options or rights were issued and for a consideration
equal to the consideration (determined in the manner provided in
subsections 3(c)(i)(C) and (c)(i)(D)), if any, received by the
corporation upon the issuance of such options or rights plus the
minimum exercise price provided in such options or rights (without
taking into account potential antidilution adjustments) for the Common
Stock covered thereby.
2. The aggregate maximum number of shares of Common
Stock deliverable upon conversion of or in exchange for any such
convertible or exchangeable securities or upon the exercise of options
to purchase or rights to subscribe for such convertible or
exchangeable securities and subsequent conversion or exchange thereof
shall be deemed to have been issued at the time such securities were
issued or such options or rights were issued and for a consideration
equal to the consideration, if any, received by
-6-
the corporation for any such securities and related options or rights
(excluding any cash received on account of accrued interest or accrued
dividends), plus the minimum additional consideration, if any, to be
received by the corporation (without taking into account potential
antidilution adjustments) upon the conversion or exchange of such
securities or the exercise of any related options or rights (the
consideration in each case to be determined in the manner provided in
subsections 3(c)(i)(C) and (c)(i)(D)).
3. In the event of any change in the number of shares
of Common Stock deliverable or in the consideration payable to this
corporation upon exercise of such options or rights or upon conversion
of or in exchange for such convertible or exchangeable securities,
including, but not limited to, a change resulting from the
antidilution provisions thereof, the applicable Conversion Price of
the Series A Preferred Stock and Series B Preferred Stock, as
applicable, and to the extent in any way affected by or computed using
such options, rights or securities, shall be recomputed to reflect
such change, but no further adjustment shall be made for the actual
issuance of Common Stock or any payment of such consideration upon the
exercise of any such options or rights or the conversion or exchange
of such securities.
4. Upon the expiration of any such options or rights,
the termination of any such rights to convert or exchange or the
expiration of any options or rights related to such convertible or
exchangeable securities, the applicable Conversion Price of the Series
A Preferred Stock and Series B Preferred Stock, as applicable, to the
extent in any way affected by or computed using such options, rights
or securities or options or rights related to such securities, shall
be recomputed to reflect the issuance of only the number of shares of
Common Stock (and convertible or exchangeable securities which remain
in effect) actually issued upon the exercise of such options or
rights, upon the conversion or exchange of such securities or upon the
exercise of the options or rights related to such securities.
5. The number of shares of Common Stock deemed issued
and the consideration deemed paid therefor pursuant to subsections
3(c)(i)(E)(1) and (2) shall be appropriately adjusted to reflect any
change, termination or expiration of the type described in either
subsection 3(c)(i)(E)(3) or (4).
(ii) "Additional Stock" shall mean any shares of Common Stock
issued (or deemed to have been issued pursuant to subsection 3(c)(i)(E)) by this
corporation before, on or after the applicable Purchase Date other than
A. shares of Common Stock issued pursuant to a transaction
described in subsection 3(c)(iii) hereof,
-7-
B. shares of Common Stock issued upon conversion of
shares of Series A Preferred Stock or Series B Preferred Stock,
C. shares of Common Stock issuable or issued to
employees, consultants, or directors of this corporation directly or
pursuant to a stock option plan or agreement or restricted stock plan
or agreement approved by the Board of Directors of this corporation,
D. shares of Common Stock issued or issuable (I) in a
public offering before or in connection with which all outstanding
shares of Series A Preferred Stock and Series B Preferred Stock will
be converted to Common Stock or (II) upon exercise of warrants or
rights granted to underwriters in connection with such a public
offering, or
E. shares of Series B Preferred Stock issued or
issuable to Comdisco, Inc. pursuant to a Warrant dated August 31,
1995.
(iii) In the event the corporation should at any time or from
time to time after the applicable Purchase Date fix a record date for the
effectuation of a split or subdivision of the outstanding shares of Common Stock
or the determination of holders of Common Stock entitled to receive a dividend
or other distribution payable in additional shares of Common Stock or other
securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock (hereinafter
referred to as "Common Stock Equivalents") without payment of any consideration
by such holder for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of
such dividend distribution, split or subdivision if no record date is fixed),
the applicable Conversion Price of the Series A Preferred Stock and Series B
Preferred Stock then in effect shall be appropriately decreased so that the
number of shares of Common Stock issuable on conversion of each share of such
series shall be increased in proportion to such increase of the aggregate of
shares of Common Stock outstanding and those issuable with respect to such
Common Stock Equivalents.
(iv) If the number of shares of Common Stock outstanding at any
time after the applicable Purchase Date is decreased by a combination of the
outstanding shares of Common Stock, then, following the record date of such
combination, the applicable Conversion Price for the Series A Preferred Stock
and Series B Preferred Stock then in effect shall be appropriately increased so
that the number of shares of Common Stock issuable on conversion of each share
of such series shall be decreased in proportion to such decrease in outstanding
shares.
d. Other Distributions. In the event this corporation shall
-------------------
declare a distribution payable in securities of other persons, evidences of
indebtedness issued by this corporation or other persons, assets (excluding cash
dividends) or options or rights not referred to in subsection 3(c)(iii), then,
in each such case for the purpose of this subsection
-8-
3(d), the holders of the Series A Preferred Stock and Series B Preferred Stock
shall be entitled to a proportionate share of any such distribution as though
they were the holders of the number of shares of Common Stock of the corporation
into which their shares of Series A Preferred Stock and Series B Preferred Stock
are convertible as of the record date fixed for the determination of the holders
of Common Stock of the corporation entitled to receive such distribution.
e. Recapitalizations. If at any time or from time to time
-----------------
there shall be a recapitalization of the Common Stock (other than a subdivision,
combination or merger or sale of assets transaction provided for elsewhere in
this Section 3) provision shall be made so that the holders of the Series A
Preferred Stock and Series B Preferred Stock shall thereafter be entitled to
receive upon conversion of the Series A Preferred Stock and Series B Preferred
Stock, respectively, the number of shares of stock or other securities or
property of the Company or otherwise, to which a holder of Common Stock
deliverable upon conversion would have been entitled on such recapitalization.
In any such case, appropriate adjustment shall be made in the application of the
provisions of this Section 3 with respect to the rights of the holders of the
Series A Preferred Stock and Series B Preferred Stock after the recapitalization
to the end that the provisions of this Section 3 (including adjustment of the
Conversion Price then in effect and the number of shares purchasable upon
conversion of the Series A Preferred Stock and Series B Preferred Stock) shall
be applicable after that event as nearly equivalent as may be practicable.
f. No Impairment. This corporation will not, by amendment of
-------------
its Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by this corporation, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 3 and in the taking of all
such action as may be necessary or appropriate in order to protect the
Conversion Rights of the holders of the Series A Preferred Stock and Series B
Preferred Stock against impairment.
g. No Fractional Shares and Certificate as to Adjustments.
------------------------------------------------------
(i) No fractional shares shall be issued upon conversion of
the Series A Preferred Stock and Series B Preferred Stock, and the number of
shares of Common Stock to be issued shall be rounded up to the nearest whole
share. Whether or not fractional shares are issuable upon such conversion shall
be determined on the basis of the total number of shares of Series A Preferred
Stock and Series B Preferred Stock the holder is at the time converting into
Common Stock and the number of shares of Common Stock issuable upon such
aggregate conversion.
(ii) Upon the occurrence of each adjustment or readjustment
of the Conversion Price of Series A Preferred Stock and Series B Preferred Stock
pursuant to this Section 3, this corporation, at its expense, shall promptly
compute such adjustment or readjustment in accordance with the terms hereof and
prepare and furnish to each holder
-9-
of Series A Preferred Stock and Series B Preferred Stock a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based. This corporation shall, upon the
written request at any time of any holder of Series A Preferred Stock or Series
B Preferred Stock, furnish or cause to be furnished to such holder a like
certificate setting forth (A) such adjustment and readjustment, (B) the
Conversion Price at the time in effect, and (C) the number of shares of Common
Stock and the amount, if any, of other property which at the time would be
received upon the conversion of a share of Series A Preferred Stock or Series B
Preferred Stock.
h. Notices of Record Date. In the event of any taking by this
----------------------
corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, this
corporation shall mail to each holder of Series A Preferred Stock and Series B
Preferred Stock at least 20 days prior to the date specified therein, a notice
specifying the date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right.
i. Reservation of Stock Issuable Upon Conversion. This
---------------------------------------------
corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock solely for the purpose of effecting the
conversion of the shares of the Series A Preferred Stock and Series B Preferred
Stock such number of its shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of the Series A
Preferred Stock and Series B Preferred Stock; and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all then outstanding shares of the Series A Preferred Stock
and Series B Preferred Stock, in addition to such other remedies as shall be
available to the holder of such Series A Preferred Stock or Series B Preferred
Stock, this corporation will take such corporate action as may, in the opinion
of its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purposes.
j. Notices. Any notice required by the provisions of this
-------
Section 3 to be given to the holders of shares of Series A Preferred Stock or
Series B Preferred Stock shall be deemed given if deposited in the United States
mail, postage prepaid, and addressed to each holder of record at his address
appearing on the books of this corporation.
4. Voting Rights.
-------------
a. General Voting Rights. The holder of each share of Series A
---------------------
Preferred Stock and Series B Preferred Stock shall have the right to one vote
for each share of Common Stock into which such Series A Preferred Stock and
Series B Preferred Stock could then be converted (with any fractional share
determined on an aggregate conversion
-10-
basis being rounded to the nearest whole share), and with respect to such vote,
such holder shall have full voting rights and powers equal to the voting rights
and powers of the holders of Common Stock, and shall be entitled,
notwithstanding any provision hereof, to notice of any stockholders' meeting in
accordance with the Bylaws of this corporation, and shall be entitled to vote,
together as a single class with holders of Common Stock, with respect to any
question upon which holders of Common Stock have the right to vote; except for
the election of directors.
b. Election of Directors. The authorized number of directors
---------------------
of this Corporation shall be five (5). Notwithstanding 5(a) above, the holders
of Series A Preferred Stock, voting as a separate class, shall be entitled to
elect four (4) directors of the corporation; and the holders of the Series A
Preferred Stock, Series B Preferred Stock and Common Stock, voting together as a
single class on an as converted basis, shall be entitled to elect one (1)
director of the corporation. At any meeting held for the purpose of electing
directors, the presence in person or by proxy of the holders of a majority of
the Series A Preferred Stock then outstanding shall constitute a quorum of the
Series A Preferred Stock for the election of directors to be elected solely by
the holders of Series A Preferred Stock. At any meeting held for the purpose of
electing directors, the presence in person or by proxy of the holders of a
majority of the Series A Preferred Stock, Series B Preferred Stock and Common
Stock then outstanding, on an as converted basis, shall constitute a quorum of
the Series A Preferred Stock, Series B Preferred Stock and Common Stock for the
election of directors to be elected solely by the holders of the Series A
Preferred Stock, Series B Preferred Stock and Common Stock, voting together as a
single class on an as converted basis. A vacancy in any directorship elected by
the holders of Series A Preferred Stock shall be filled only by vote of the
holders of Series A Preferred Stock; and a vacancy in any directorship elected
by the holders of Series A Preferred Stock, Series B Preferred Stock and Common
Stock voting together shall be filled only by the vote of the holders of Series
A Preferred Stock, Series B Preferred Stock and Common Stock voting together as
provided above.
5. Protective Provisions. So long as shares of Series A Preferred
---------------------
Stock and/or Series B Preferred Stock are outstanding, this corporation shall
not without first obtaining the approval (by vote or written consent, as
provided by law) of the holders of a majority of the then outstanding shares of
Series A Preferred Stock and Series B Preferred Stock, voting together as a
single class on an as converted basis:
a. sell, convey, or otherwise dispose of or encumber all or
substantially all of its property or business or merge into or consolidate with
any other corporation (other than a wholly owned subsidiary corporation) or
effect any transaction or series of related transactions in which more than 50%
of the voting power of the corporation is disposed of;
b. alter or change the rights, preferences or privileges of the
shares of Series A Preferred Stock or Series B Preferred Stock so as to affect
adversely the shares;
-11-
c. increase the authorized number of shares of Series A
Preferred Stock, Series B Preferred Stock or Common Stock;
d. create any new class or series of stock or any other
securities convertible into equity securities of the corporation (i) having a
preference over, or being on a parity with, the Series A Preferred Stock or
Series B Preferred Stock with respect to voting, dividends, conversion rights or
upon liquidation, or (ii) having rights similar to any of the rights of the
Series A Preferred Stock and Series B Preferred Stock under this Section 5; or
e. change authorized number of directors from five (5).
C. Common Stock.
------------
1. Dividend Rights. Subject to the prior rights of holders of all
---------------
classes of stock at the time outstanding having prior rights as to dividends,
the holders of the Common Stock shall be entitled to receive, when and as
declared by the Board of Directors, out of any assets of the corporation legally
available therefor, such dividends as may be declared from time to time by the
Board of Directors.
2. Liquidation Rights. Upon the liquidation, dissolution or winding
------------------
up of the corporation, the assets of the corporation shall be distributed as
provided in Section 2 of Division (B) of this Article IV hereof.
3. Redemption. The Common Stock is not redeemable.
----------
4. Voting Rights. The holder of each share of Common Stock shall
-------------
have the right to one vote, and shall be entitled to notice of any shareholders'
meeting in accordance with the Bylaws of this corporation, and shall be entitled
to vote upon such matters and in such manner as may be provided by law.
ARTICLE V
A. Exculpation. A director of the Corporation shall not be personally
-----------
liable to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director derived any
improper personal benefit. If the Delaware General Corporation Law is hereafter
amended to further reduce or to authorize, with the approval of the
Corporation's stockholders, further reductions in the liability of the
Corporation's directors for breach of fiduciary duty, then a director of the
Corporation shall not be liable for any such breach to the fullest extent
permitted by the Delaware General Corporation Law as so amended.
-12-
B. Indemnification. To the extent permitted by applicable law, this
---------------
Corporation is also authorized to provide indemnification of (and advancement of
expenses to) such agents (and any other persons to which Delaware law permits
this Corporation to provide indemnification) through bylaw provisions,
agreements with such agents or other persons, vote of stockholders or
disinterested directors or otherwise, in excess of the indemnification and
advancement otherwise permitted by Section 145 of the Delaware General
Corporation Law, subject only to limits created by applicable Delaware law
(statutory or non-statutory), with respect to actions for breach of duty to the
Corporation, its stockholders, and others.
C. Effect of Repeal or Modification. Any repeal or modification of any
--------------------------------
of the foregoing provisions of this Article V shall not adversely affect any
right or protection of a director, officer, agent or other person existing at
the time of, or increase the liability of any director of the Corporation with
respect to any acts or omissions of such director occurring prior to, such
repeal or modification.
ARTICLE VI
The corporation shall have a perpetual existence.
ARTICLE VII
Except as otherwise provided in this Certificate of Incorporation, in
furtherance and not in limitation of the powers conferred by statute, the Board
of Directors of this corporation is expressly authorized to make, alter, amend,
rescind or repeal the Bylaws of the corporation.
ARTICLE VIII
Elections of directors need not be by written ballot except and to the
extent provided in the Bylaws of the corporation.
ARTICLE IX
The corporation shall not be subject to the provisions of Section 203 of
the Delaware General Corporation Law.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-13-
IN WITNESS WHEREOF, the Amended and Restated Certificate of Incorporation
has been signed under the seal of this corporation as of this 24th day of
October, 1995.
CORSAIR COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
--------------------------
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, President
ATTEST:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇, Secretary
CERTIFICATE OF AMENDMENT OF AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF
CORSAIR COMMUNICATIONS, INC.
Corsair Communications, Inc., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"),
DOES HEREBY CERTIFY:
FIRST: That a resolution was duly adopted by the Board of Directors of the
Corporation setting forth a proposed amendment to the Amended and Restated
Certificate of Incorporation of the Corporation, and declaring said amendment to
be advisable and recommended for approval by the stockholders of the
Corporation. Subsection B.4.b. of Article IV of the Amended and Restated
Certificate of Incorporation is amended as follows:
"Election of Directors. The authorized number of directors
---------------------
of this Corporation shall be seven (7). Notwithstanding 5(a)
above, the holders of Series A Preferred Stock, voting as a
separate class, shall be entitled to elect four (4)
directors of the corporation; and the holders of the Series
A Preferred Stock, Series B Preferred Stock and Common
Stock, voting together as a single class on an as converted
basis, shall be entitled to elect three (3) directors of the
corporation. At any meeting held for the purpose of electing
directors, the presence in person or by proxy of the holders
of a majority of the Series A Preferred Stock then
outstanding shall constitute a quorum of the Series A
Preferred Stock for the election of directors to be elected
solely by the holders of Series A Preferred Stock. At any
meeting held for the purpose of electing directors, the
presence in person or by proxy of the holders of a majority
of the Series A Preferred Stock, Series B Preferred Stock
and Common Stock then outstanding, on an as converted basis,
shall constitute a quorum of the Series A Preferred Stock,
Series B Preferred Stock and Common Stock for the election
of directors to be elected solely by the holders of the
Series A Preferred Stock, Series B Preferred Stock and
Common Stock, voting together as a single class on an as
converted basis. A vacancy in any directorship elected by
the holders of Series A Preferred Stock shall be filled only
by vote of the holders of Series A Preferred Stock; and a
vacancy in any directorship elected by the holders of Series
A Preferred Stock, Series B Preferred
Stock and Common Stock voting together shall be filled only
by the vote of the holders of Series A Preferred Stock,
Series B Preferred Stock and Common Stock voting together as
provided above."
SECOND: That, thereafter, the stockholders approved the foregoing
amendment by written consent in accordance with Section 228 of the Delaware
General Corporation Law.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the Delaware General Corporation Law.
FOURTH: That the capital of said Corporation shall not be reduced under or
by reason of said amendment.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-2-
IN WITNESS WHEREOF, said Corsair Communications, Inc. has caused this
certificate to be signed and attested by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, its President and ▇▇▇▇▇
▇▇▇▇▇▇▇, its Secretary this 10th day of November, 1995.
By: /s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
ATTEST:
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇, Secretary
[SIGNATURE PAGE TO CERTIFICATE OF AMENDMENT]
EXHIBIT D
July 31, 1996
Comdisco, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Ladies and Gentlemen:
This opinion letter is furnished to you pursuant to Section 8.01 of
the Loan and Security Agreement of even date herewith (the "Loan Agreement"),
between Corsair Communications, Inc. as borrower (the "Company") and Comdisco,
Inc., as lender (the "Lender"). We have acted as counsel for the Company in
connection with (i) the Loan Agreement and (ii) the issuance of warrants to
purchase 75,000 shares of the Company's Series B Preferred Stock, or in certain
circumstances Common Stock (the "Warrant"). Unless otherwise defined herein,
terms used herein shall have the meanings assigned to them in the Loan
Agreement.
In connection with this opinion letter, we have examined originals, or
copies certified or otherwise identified to our satisfaction, of such documents,
corporate records, certificates, including certificates of public officials, and
other instruments as we have deemed necessary or advisable for purposes of this
opinion letter, including those relating to the authorization, execution and
delivery of the Loan Agreement and the Warrant. In addition, we have examined
the following documents (the items referred to in subclauses (i) through (iii)
below herein referred to as the "Loan Documents"):
(i) an executed copy of the Loan Agreement;
(ii) the Secured Promissory Note executed by the Company in favor
of the Lender;
(iii) an executed copy of the Warrant;
(iv) the Amended and Restated Certificate of Incorporation and the
Bylaws of the Company, each as in effect on the date hereof;
Comdisco, Inc. July 31, 1996
Page 2
(v) an executed copy of the certificate of the Chief Financial
Officer of the Company dated July 31, 1996 certifying a true copy of the
resolutions of the Board of Directors of the Company adopted on July 26,
1996, authorizing, among other things, the execution, delivery and
performance of the Loan Documents and the issuance of the Warrant.
(vi) an executed copy of the certificate (the "Officer's
Certificate") of the Chief Financial Officer of the Company, dated July 31,
1996; and
(vii) such other documents as we have deemed necessary or
appropriate as a basis for the opinions hereinafter expressed.
We have also examined photostatic copies of the agreements (the
"Material Agreements") identified in Exhibit A to the Officer's Certificate and
any consents in connection with the Material Agreements. In our examination and
review we have assumed the genuineness of all signatures, the legal capacity of
natural persons, the authenticity of the documents submitted to us as originals,
the conformity to the original documents of all documents submitted to us as
certified or photostatic copies, and the authenticity of the originals of such
copies. As to any facts material to the opinions hereinafter expressed which we
did not independently establish or verify, we have relied without investigation
upon certificates, statements and representations of representatives of the
Company. We have also assumed that the Lender has filed any required California
state franchise, income or similar tax returns and has paid any such required
state franchise, income or similar taxes and that there are no extrinsic
agreements or understandings among the parties to the Loan Documents that would
modify or interpret the terms of the Loan Documents or the respective rights or
obligations of the parties thereunder. Regarding documents executed by parties
other than the Company, we have assumed (i) that each such other party had the
power to enter into and perform all its obligations thereunder, (ii) the due
authorization of, and the due execution and delivery of, such documents by each
such party, (iii) that such documents constitute the legal, valid and binding
obligations of each such party, and (iv) that the representations and warranties
made in such documents by such parties are true and correct.
With respect to our opinion in paragraph 1 below, we are relying
solely on our review and examination of the certificates received from the
Secretary of State of the State of Delaware, without further investigation of
the corporate records of the Company.
Based upon and subject to the foregoing, and except as set forth in
the Disclosure Schedule and subject to the further assumptions, limitations,
qualifications and exceptions set forth herein, we are of the opinion that:
Comdisco, Inc. July 31, 1996
Page 2
1. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
2. The Company has the corporate power and authority to enter into
and perform the Loan Documents, and has taken all necessary corporate action to
authorize the execution, delivery and performance of the Loan Documents.
3. To our knowledge, no consents, approvals or authorizations of, or
notices to or filings with, any governmental authority or agency under the
Delaware General Corporation Law, the laws of the State of California or the
laws of the United States, as presently in effect and interpreted, are required
or necessary on the part of the Company in connection with the execution and
delivery by the Company of the Loan Documents, except for such filings as are
necessary in connection with the security interests in the Collateral granted by
the Company to the Lender and except for the filing required by Section 25102(f)
of the California Corporate Securities Law of 1968.
4. The Loan Documents are the legal, valid and binding obligations
of the Company, enforceable by the Lender against the Company in accordance with
their respective terms.
5. The execution and delivery by the Company of the Loan Documents
will not (i) violate or be in conflict with any provision of the Amended and
Restated Certifi cate of Incorporation or Bylaws of the Company, (ii) to our
knowledge, violate or be in conflict with any federal or California law having
applicability to the Company, or the Delaware General Corporation Law, as
presently in effect and interpreted, (iii) to our knowledge, violate or
contravene any judgment, decree, injunction or order of any federal or
California court, or any arbitrator or governmental agency or authority, having
jurisdiction over the Company or its properties or by which the Company may be
bound, or (iv) constitute a material breach of, or result in a material default
under, any term or provision of any of the Material Agreements.
6. The shares of Common Stock issuable upon exercise of the Warrant
(if no additional Series B Preferred Stock is authorized) have been duly and
validly reserved for issuance and, when and if issued in accordance with the
Company's Amended and Restated Certificate of Incorporation, upon receipt of the
exercise price therefor, will be validly issued, fully paid and nonassessable.
Whenever a statement herein is qualified by the expressions "known to
us," "to our knowledge," "we are not aware" or a similar phrase with respect to
our knowledge of matters of fact, it is intended to mean that our knowledge is
based upon the records, documents, instruments and certificates described above
and the current actual knowledge of the attorneys in this Firm who have devoted
substantive attention to the transactions con-
Comdisco, Inc. July 31, 1996
Page 2
templated by the Loan Documents (but not including any constructive or imputed
notice of any information) and that we have not otherwise undertaken any
independent investigations for the purpose of rendering this opinion.
This opinion is limited to the laws of the State of California, the
General Corporation Law of the State of Delaware and applicable federal laws of
the United States, and we express no opinion herein with respect to the effect
or applicability of the laws of other jurisdictions.
Our opinions in paragraph 3 above and in clause (ii) of paragraph 5
above are limited to laws and regulations normally applicable to transactions of
the type contemplated in the Loan Documents and do not extend to licenses,
permits and approvals necessary for the conduct of the Company's business. In
addition and without limiting the previous sentence, we express no opinion
herein with respect to the effect of any land use, environmental or similar law,
any state or federal antitrust law, or any local law. Further, we express no
opinion as to compliance or noncompliance by the Lender with any federal, state
or other law (i) requiring the Lender to be licensed as a bank, finance company
or other type of financial institution, (ii) pertaining to matters regulating
the assets held by the Lender on the basis of portfolio requirements or the
Lender's capitalization, such as loan limits and capital adequacy requirements,
and (iii) otherwise applicable to the Lender and relating to its legal or
regulatory status or the nature of its business.
The opinions set forth above are subject to the following
qualifications, assumptions, limitations and exceptions:
(a) The validity, binding nature and enforceability of the Company's
obligations under the Loan Documents may be subject to or limited by (i)
bankruptcy, insol vency, reorganization, arrangement, moratorium, fraudulent
transfer and other similar laws affecting the rights of creditors generally;
(ii) general principles of equity (whether relief is sought in a proceeding at
law or in equity), including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, and the discretion of any court of
competent jurisdiction in awarding specific performance or injunctive relief and
other equitable remedies; and (iii), without limiting the generality of the
foregoing, the effect of California court decisions and statutes which indicate
that
Comdisco, Inc. July 31, 1996
Page 2
provisions of the Loan Documents which permit the Lender or any other person or
entity ("Person") to take action or make determinations may be subject to a
requirement that such action be taken or such determinations be made on a
reasonable basis in good faith or that it be shown that such action is
reasonably necessary for the protection of the Lender or such other Person.
(b) Our opinions are subject to the effect of the limitations imposed
by the California Uniform Commercial Code ("CUCC") relating to or affecting the
rights and remedies available to secured creditors.
(c) We express no opinion as to:
(1) the enforceability of provisions of the Loan Documents
pursuant to which the Company agrees to make payments without set-off, defense
or counterclaim;
(2) Article IX of the Loan Agreement insofar as the CUCC does not
specify the manner of foreclosure or exercise of remedies in respect of deposit
accounts;
(3) provisions purporting to require the award or payment of
attorneys' fees, expenses or costs in any action where the Lender is not the
prevailing party, or the impact of California Civil Code ("CC") (S)1717 et seq.
-- ----
on any such provisions;
(4) under certain circumstances, provisions to the effect that
rights or remedies are not exclusive, that every right or remedy is cumulative
and may be exercised in addition to or with any other right or remedy, that the
election of some particular remedy or remedies does not preclude recourse to one
or another remedy or that failure to exercise or delay in exercising rights or
remedies will not operate as a waiver of any such right or remedy;
(5) provisions prohibiting waivers of any terms or provisions of
any of the Loan Documents other than in writing, or prohibiting oral
modifications thereof or modification by course of dealing to the extent such
provisions are inconsistent with applicable law;
(6) the enforceability under certain circumstances of provisions
indemnifying a party against, or requiring contributions toward, that party's
liability for its own wrongful or negligent acts or where such indemnification
or contribution is contrary to public policy or prohibited by law;
(7) any provision providing for the exclusive jurisdiction of a
particular court or purporting to waive rights to trial by jury, service of
process or objections
Comdisco, Inc. July 31, 1996
Page 2
to the laying of venue or to forum on the basis of forum non conveniens, in
--- ----------
connection with any litigation arising out of or pertaining to the Loan
Documents;
(8) Section 10.04 of the Loan Agreement;
(9) provisions providing for an increase in the rate of interest
or imposing a late charge or penalty in the event of delinquency or default;
(10) provisions imposing a prepayment charge, fee or penalty
based upon a percentage or fraction of the amount prepaid or the amount
outstanding under the Loan Agreement;
(11) provisions purporting to waive statutory or common law
rights, including the right to receive notice or to be allowed to cure,
reinstate or redeem in the event of default, and provisions expressly or by
implication waiving broadly or vaguely stated rights, unknown future rights and
defenses to obligations, in each case to the extent such rights or defenses are
not waivable under applicable law;
(12) provisions purporting to designate the Lender as the
Company's agent or attorney in fact;
(13) provisions purporting to waive any applicable statutes of
limitation;
(14) provisions authorizing the Lender to set off and apply any
deposits at any time held, and any other indebtedness at any time owing, by the
Lender to or for the account of the Company;
(15) provisions of the Loan Agreement purporting to limit the
standards imposed upon the Lender for the care of Collateral in the Lender's
possession to the extent such provisions are inconsistent with applicable
provisions of the CUCC;
(d) We invite the Lender's attention to the provisions of CUCC
(S)9313 providing for fixture filings with the applicable county recorder in
respect of any fixtures and to the benefits afforded to the Lender as a result
of such filing. Additionally, we note that the rights of the Lender in respect
of fixtures may be limited by CC (S)(S)1013, 1013.5 and 1019 and CUCC (S)9313
which concern fixtures and their removal except to the extent that appropriate
agreements are obtained from owners and encumbrancers of, and others claiming an
interest in, the real property on which such fixtures are located.
(e) Our opinions are subject to the effect of judicial decisions
which may permit the introduction of extrinsic evidence to interpret the terms
of written contracts.
Comdisco, Inc. July 31, 1996
Page 7
(f) Insofar as this opinion letter concerns the law of the State of
California limiting the rates of interest legally chargeable or collectible, we
have relied upon our understanding that the Lender is a "finance lender"
licensed under the California Finance Lenders Law (with a currently effective
license that has not been revoked or suspended) and therefore within the class
of exempt persons contemplated by California Financial Code (S)22002 and that
all amounts provided to the Company pursuant to the Loan Agreement will be made
out of the licensed office of the Lender and, as a result thereof, is exempt
from the restrictions of Section 1 of Article XV of the Constitution of the
State of California relating to rates of interest upon the loan of money. We
further assume in this regard that all Advances have been and will be made by
the Lender for its own account and without intent to circumvent otherwise
applicable interest rate limitations under California law and that there is no
present express or implied agreement or plan to sell participations or any other
interest in the Advances or the Loan Agreement to any Person other than a Person
that also qualifies for an exemption from the interest rate limitations of
California law.
(g) We wish to point out that the Lender, as holder of the Secured
Promissory Note, may be required to prove the outstanding amount thereof.
(h) We express no opinion concerning the past, present or future fair
market value of any securities.
(i) The effect of subsequent issuances of securities of the Company,
to the extent that the Company may issue so many shares of Common Stock that
there are not enough remaining authorized but unissued shares of Common Stock
for the exercise of the Warrant.
(j) We express no opinion as to the title of the Company to any
Collateral or regarding the creation, attachment, perfection or priority of any
security interests in any Collateral.
The opinions expressed herein are solely for your benefit in
connection with the above transactions, and such opinions may not be relied on
in any manner or for any purpose by any other Person. In addition, this opinion
is rendered as of the date hereof, and we do not undertake to advise you of
matters which occur subsequent to the date hereof and which affect the opinions
expressed herein.
Very truly yours,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
EXHIBIT E
INTERCREDITOR AGREEMENT
THIS INTERNATIONAL AGREEMENT is entered into as of July 31, 1996, by and
between MMC/GATX PARTNERSHIP NO. 1, a California general partnership
("Partnership") and COMDISCO, INC. ("Comdisco"). Partnership and Comdisco are
sometimes referred to herein individually as a "Lender" and, collectively, as
"Lenders."
RECITALS
A. Partnership and Comdisco have each entered into a Loan and Security
Agreement, dated as of July 31, 1996 (each, individually, a "Loan Agreement"
and, collectively, the "Loan Agreements"), with Corsair Communications
("Borrower"). The Loan Agreements are identical except for the name of the
lender, the original principal amounts thereof and the amounts of the payments
thereunder. Unless otherwise defined herein, terms capitalized herein and
defined in the Loan Agreement shall have the meanings ascribed to them in such
Loan Agreements.
B. Comdisco and borrower are parties to a (1) Master Lease Agreement,
dated as of August 31, 1995 and Equipment Schedule(s) thereto, pursuant to which
Comdisco has leased certain equipment to Borrower, and (2) a Loan and Security
Agreement, dated as of August 31, 1995 (collectively, the "Comdisco Equipment
Financings").
C. Partnership and Comdisco desire to set forth in this Agreement their
respective rights and obligations with respect to the Loan Agreements (and the
related Loan Documents and the credit to be extended thereunder, and the
exercise of rights with respect to the collateral described therein.
AGREEMENT
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION
1.1 Definitions. As used in this Agreement, the following terms shall
-----------
have the following definitions:
"Bankruptcy Code" means the federal bankruptcy law of the United
States as from time to time in effect, currently as Title 11 of the United
States Code. Section references to current sections of the Bankruptcy Code
shall refer to comparable sections of any revised version thereof if section
numbering is changed.
"Claim" means the Partnership Claim and/or the Comdisco Claim, as
applicable.
"Comdisco Claim" means any and all present and future "claims" (used
in its broadest sense, as contemplated by and defined in Section 101(5) of the
Bankruptcy Code, but without regard to whether such claim would be disallowed
under the Bankruptcy Code) of Comdisco now or hereafter arising or existing
under or relating to Comdisco's Loan Agreement and related Loan Documents,
whether joint, several, or joint and several, whether fixed or indeterminate,
due or not yet due, contingent or non-contingent, matured or unmatured,
liquidated or unliquidated, or disputed or undisputed, whether under a guaranty
or a letter of credit, and whether arising under contract, in tort, by law, or
otherwise, any interest or fees thereon (including interest or fees that accrue
after the filing of a petition by or against Borrower under the Bankruptcy Code,
irrespective of whether allowable under the Bankruptcy Code), any costs of
Enforcement Actions, including reasonable attorneys' fees and costs, and any
prepayment or termination premiums.
"Enforcement Action" means, with respect to any Lender and with
respect to any Claim of such Lender or any item of Collateral in which such
Lender has or claims a security interest, lien or right of offset, any action,
whether judicial or nonjudicial, to repossess, collect, accelerate, offset,
recoup, give notification to third parties with respect to, sell, dispose of,
foreclose upon, give notice of sale, disposition, or foreclosure with respect
to, or obtain equitable or injunctive relief with respect to, such Claim or
Collateral. The filing by any Lender of, or the joining in the filing by any
Lender of, an involuntary bankruptcy or insolvency proceeding against Borrower
also is an Enforcement Action.
"Insolvency Event" has the meaning given to such term in Section 4.4.
"Lender" or "Lenders" have the meanings given to such terms in the
introductory paragraph hereof.
"Loan Agreement(s)" has the meaning given to such term in Recital A.
"Partnership Claim" means any and all present and future "claims"
(used in its broadest sense, as contemplated by and defined in Section 101(5) of
the Bankruptcy Code, but without regard to whether such claim would be
disallowed under the Bankruptcy Code) of Partnership now or hereafter arising or
existing under or relating to the Partnership Loan Agreement and related Loan
Documents, whether joint, several, or joint and several, whether fixed or
indeterminate, due or not yet due, contingent or non-contingent, matured or
unmatured, liquidated or unliquidated, or disputed or undisputed, whether under
a guaranty or a letter of credit, and whether arising under contract, in tort,
by law, or otherwise, any interest or fees thereon (including interest or fees
that accrue after the filing of a petition by or against Borrower under the
Bankruptcy Code, irrespective of whether allowable under the Bankruptcy Code),
any costs of Enforcement Actions, including reasonable attorneys' fees and
costs, and any prepayment or termination premiums.
"Proceeds of Collection" has the meaning given to such term in Section
4.2.
1.2 Other Interpretive Provisions. References in this Agreement to
-----------------------------
"Recitals," "Sections," "Exhibits" and "Supplements" are to recitals, sections,
exhibits and supplements herein and thereto unless otherwise indicated.
References in this Agreement to any document, instrument or agreement shall
include (a) all exhibits, schedules, annexes and other attachments thereto, (b)
all documents, instruments or agreements issued or executed in replacement
thereof, and (c) such document, instrument or agreement, or replacement or
predecessor thereto, as amended, modified and supplemented from time to time and
in effect at any given time. The words "include" and "including" and words or
similar import when used in this Agreement shall not be construed to be limiting
or exclusive.
2. INTERCREDITOR ARRANGEMENTS
2.1 Proportionate Interests. Except as otherwise provided in this
-----------------------
Agreement, rights, interests and obligations of each Lender under each Lender's
Loan Agreement and related Loan Documents, including security interests in the
collateral under each Loan Agreement, shall be shared by the Lenders in the
ratio of (a) the original principal amount of such Lender's Loan to Borrower
under such Lender's Loan Agreement to (b) the aggregate original principal
amounts of both Lender's Loans to Borrower under the Loan Agreements. Any
reference in this Agreement to an allocation between or sharing by the Lenders
of any right, interest or obligation "ratably," "proportionally" or in similar
terms shall refer to this ratio. The provisions hereof shall apply irrespective
of the time or order of attachment or perfection of security interests, or the
time or order of filing or recording of financing statements.
2.2 Limitation on Further Loans. After the date hereof, neither Lender
---------------------------
may make loans to or otherwise extend credit to Borrower without notice to and
the consent of the other Lender, which consent will not be unreasonably
withheld.
-2-
2.3 Transfer of Interest in Loans.
-----------------------------
(a) Consent. Neither Lender may sell or otherwise transfer any of its
interest in its Loan Agreement, the related Loan Documents and its Loan
without the prior written consent of the other Lender, which consent shall
not be unreasonably withheld.
(b) Assumption of Obligations. The transferee shall assume all
obligations of the transferring Lender with respect to the portion of the
transferor's interest under this Agreement and the applicable Loan
Agreement.
(c) Legal Authority and Financial Ability. The transferee shall
provide to the remaining Lender evidence satisfactory to the remaining
Lender that the proposed transferee has the financial ability and legal
authority to assume and perform all obligations of the transferring Lender
under this Agreement and the applicable Loan Agreement.
(d) Voidability. Any sale or transfer of an interest in this
Agreement shall be voidable at the option of the remaining Lender unless
the provisions of this Section 2 are satisfied.
2.3 Amendments. Neither Lender may amend its Loan Agreement without the
----------
prior written consent of the other Lender, which consent shall not be
unreasonably withheld.
2.4 Possession of Collateral. If either Lender shall obtain possession of
------------------------
any Collateral, it shall hold such Collateral for itself and as agent and bailee
for the other Lender for purposes of perfecting such other Lender's security
interest therein.
3. ALLOCATION OF PAYMENTS PRIOR TO AN EVENT OF DEFAULT. All amounts received
by Lenders for the account of Borrower prior to an Event of Default (other than
scheduled payments to Comdisco on account of the Comdisco Equipment Financings),
whether by payment, set-off or otherwise shall be allocated ratably between the
Lenders. Each Lender shall promptly remit to the other Lender such sums as may
be necessary to ensure the ratable repayment of each Lender's Loan.
Notwithstanding the foregoing, a lender receiving a Scheduled Payment shall not
be responsible for determining whether the other Lender also received its
Scheduled Payment on such date; provided, however, if it is later determined
that one Lender received more than its ratable share of the Scheduled Payments
made on any date or dates, then such Lender shall remit to the other Lender such
sums as may be necessary to ensure the ratable payment of such Scheduled
Payments.
4. REMEDIES UPON AN EVENT OF DEFAULT
4.1 Decision to Exercise Remedies. Upon the occurrence of an Event of
-----------------------------
Default, Lender shall take such actions and only such actions as Lenders
mutually agree to take to enforce their rights and remedies under the Loan
Agreements; provided, however, that if after consultation, Lenders cannot
mutually agree on what action to take, then either Lender shall have the right
upon prior written notice to the other to accelerate its Loan and the other
Lender shall simultaneously accelerate its Loan. Upon such acceleration, the
Partnership shall have the right to determine and shall control the timing,
order and type of Enforcement Actions which will be taken and all other matters
in connection with any such Enforcement Actions. In taking such Enforcement
Actions pursuant to the previous sentence, the Partnership shall act reasonably
and in good faith and shall consult with and keep Comdisco informed thereof at
reasonable intervals; provided, however, that notwithstanding any such
consultations and provision of information to Comdisco, the Partnership shall
retain the right to make all determinations in the event of disagreements
between the Partnership and Comdisco. In all cases with respect to Enforcement
Actions, Partnership shall have the right to act both on its own behalf and as
agent for Comdisco with respect thereto. In addition, Comdisco shall take such
actions and execute such documents and instruments as Partnership may reasonably
request in connection with and to facilitate any such Enforcement Actions.
Notwithstanding the foregoing, in all cases, any material change in the terms of
the Lenders' Loan
-3-
Documents (including any change in the terms of principal repayment, any change
of maturity dates, any interest rate reductions, or any release of Collateral or
guarantors) or any forbearance or waiver of rights under the Loan Agreements
shall require the written consent of both Lenders.
4.2 Application of Proceeds after an Event of Default. Notwithstanding
-------------------------------------------------
anything to the contrary in the Loan Agreements, as between the Lenders, the
proceeds of the Collateral, or any part thereof, and the proceeds of any remedy
under the Loan Agreements after the occurrence and during the continuance of an
Event of Default (collectively, the "Proceeds of Collection") shall upon receipt
by either Lender be paid to and applied as follows:
(a) First, to the payment of then outstanding out-of-pocket costs and
expenses of the Lenders (in proportion to such costs and expenses
theretofore incurred by each), including all amounts expended to preserve
the value of the Collateral, of foreclosure or suit, if any, and of such
sale and the exercise of any other rights or remedies, and of all proper
fees, expenses, liability and advances, including reasonable legal expenses
and attorneys' fees, incurred or made under the Loan Agreements by the
Lenders;
(b) Second, to the Lenders ratably, in an amount up to the sum of all
accrued interest owing to the Lenders on the Loans under the Loan
Agreements;
(c) Third, to the Lenders ratably, in an amount up to the sums of the
outstanding principal and premium, if any, owing to the Lenders from
Borrower on the Loans under the Loan Agreement; and
(d) Fourth, to Borrower, its successors and assigns, or to whomsoever
may be lawfully entitled to receive the same.
4.3 Waiver of Right to Require Marshaling. Each Lender hereby expressly
-------------------------------------
waives any right that it otherwise might have to require the other Lender to
marshal assets or to resort to Collateral in any particular order or manner,
whether provided for by common law or statute. Neither Lender shall be required
to enforce any guaranty or any security interest or lien given by any obligor as
a condition precedent or concurrent to the taking of any Enforcement Action with
respect to the Collateral.
4.4 Insolvency Events. In the event of any distribution, division, or
-----------------
application, partial or complete, voluntary or involuntary, by operation of law
or otherwise, of all or any part of the property of Borrower or the proceeds
thereof to the creditors of Borrower, or the readjustment of the Partnership
Claim and the Comdisco Claim, whether by reason of liquidation, bankruptcy,
arrangement, receivership, assignment for the benefit of creditors or any other
action or proceeding involving the readjustment of all or any part of the
Partnership Claim or the Comdisco Claim, or the application of the property of
Borrower to the payment or liquidation thereof, or upon the dissolution or other
winding up of Borrower's business, or upon the sale of all or any substantial
part of Borrower's property (any of the foregoing being hereinafter referred to
as an "Insolvency Event"), then, and in any such event, (a) all payments and
distributions of any kind or character, whether in cash or property or
securities in respect the Lenders' claims shall be distributed ratably between
the Lenders; (b) each Lender shall promptly file a claim or claims, on the form
required in such proceeding, for the full outstanding amount of such Lender's
Claim, and shall use its best efforts to cause said claim or claims to be
approved; (c) each of the Lenders hereby irrevocably agrees that, to the extent
that it fails timely to do so, the other Lender may in the name of the first
Lender, or otherwise, prove up any and all claims of the first Lender relating
to the first lender's Claim; and (d) in the event that, notwithstanding the
foregoing, any payment or distribution of any kind or character, whether in
cash, properties or securities, shall be received by a Lender in excess of its
ratable share, then the portion of such payment or distribution in excess of
such Lender's ratable share shall be received by such Lender in trust for and
shall be promptly paid over to the other Lender for application to the payments
of amounts due on the other Lender's Claim.
-4-
4.5 Return of Payments. To the extent any payment for the account of
------------------
Borrower is required to be returned as a voidable transfer or otherwise, the
Lenders shall contribute to one another as is necessary to ensure that such
return of payment is on a pro rata basis.
4.6 Foreclosure.
-----------
(a) Credit Bid By Lenders. Partnership shall have the exclusive right
to enter and determine the amount of a credit bid at any foreclosure sale
or other sale of any of the Collateral on behalf of both Lenders. If
Lenders are the successful bidders at the sale, then (i) the amount to be
credited against their respective Claims shall be allocated pro rata
between the Lenders according to the balances of such Claims, and (ii)
Lenders shall take title to the Collateral so purchased together, each
holding a pro rata undivided interest in such Collateral. Partnership shall
consult with Comdisco as to the most favorable disposition of any
Collateral purchased with any such credit bid.
(b) Cash Bid for Account of One Lender. Neither Lender shall make a
cash bid at any foreclosure sale or other sale of any of the Collateral
without the prior written consent of the other Lender. If a cash bid is
made and is successful, then (i) the proceeds of the sale shall be
allocated as set forth in Section 4.2, and (ii) the Lender that entered the
successful bid shall acquire the Collateral so purchased for its own
account, and the other Lender shall have no further interest in that
Collateral upon the payment to such other Lender of the share of the
proceeds in accordance with Section 4.2.
5. EXCULPATION; DELEGATION; AND INDEMNIFICATION OF PARTNERSHIP
5.1 Exculpation. In connection with any exercise of Enforcement Actions
-----------
hereunder, neither Partnership nor any of its partners, nor any of their
respective directors, officer, employees, attorneys, accountants, or agents
shall be liable as such for any action taken or omitted by it or them, except
for its or their own gross negligence or willful misconduct with respect to its
duties under this Agreement.
5.2 Delegation of Duties. Partnership may execute any of its powers and
--------------------
perform any duties hereunder either directly or by or through agents or
attorneys-in-fact. Partnership shall be entitled to advice of counsel
concerning all matters pertaining to such powers and duties. Partnership shall
not be responsible for the negligence or misconduct of any agents or attorneys-
in-fact selected by it without gross negligence or willful misconduct.
5.3 Indemnification. To the extent not reimbursed either by Borrower or
---------------
from the application of Collateral proceeds pursuant to Section 4.2, Comdisco
agrees to reimburse and indemnify Partnership for its pro rata share of the
following items:
(a) all reasonable out-of-pocket costs and expenses of Partnership
incurred by Partnership in connection with the discharge of its activities
under this Agreement or either Loan Agreement, including reasonable legal
expenses and attorneys' fees; provided, that the Partnership shall consult
with Comdisco regarding the incurrence of such costs and expenses at
reasonable intervals (but not more often than monthly) and any such
reasonable costs and expenses shall be "Claims" hereunder notwithstanding
any disagreement by Comdisco as to their incurrence; and
(b) from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgment, suits, costs, expenses or
disbursements of any kind or nature whatever, which may be imposed on,
incurred by or asserted against Partnership in any way relating to or
arising out of this Agreement, or any action taken or omitted by
Partnership hereunder; provided that Comdisco shall not be liable for any
portion of such liabilities, obligations, losses, damages,
-5-
penalties, actions, judgments, suits, costs, expenses or disbursements, if
the same results from Partnership's gross negligence or willful misconduct.
6. EXCULPATION; DELEGATION; AND INDEMNIFICATION OF COMDISCO
6.1 Exculpation. In connection with any exercise of Enforcement Actions
-----------
hereunder, neither Comdisco nor any of its directors, officer, employees,
attorneys, accountants, or agents shall be liable as such for any action taken
or omitted by it or them, except for its or their own gross negligence or
willful misconduct with respect to its duties under this Agreement.
6.2 Delegation of Duties. Comdisco may execute any of its powers and
--------------------
perform any duties hereunder either directly or by or through agents or
attorneys-in-fact. Comdisco shall be entitled to advice of counsel concerning
all matters pertaining to such powers and duties. Comdisco shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it without gross negligence or willful misconduct.
6.3 Indemnification. To the extent not reimbursed either by Borrower or
---------------
from the application of Collateral proceeds pursuant to Section 4.2, Partnership
agrees to reimburse and indemnify Comdisco for its pro rata share of the
following items:
(a) all reasonable out-of-pocket costs and expenses of Comdisco
incurred by Comdisco in connection with the discharge of its activities
under this Agreement or either Loan Agreement, including reasonable legal
expenses and attorneys' fees; provided, that the Comdisco shall consult
with the Partnership regarding the incurrence of such costs and expenses at
reasonable intervals (but not more often than monthly) and any such
reasonable costs and expenses shall be "Claims" hereunder notwithstanding
any disagreement by the Partnership as to their incurrence; and
(b) from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgment, suits, costs, expenses or
disbursements of any kind or nature whatever, which may be imposed on,
incurred by or asserted against Comdisco in any way relating to or arising
out of this Agreement, or any action taken or omitted by Comdisco
hereunder; provided that Partnership shall not be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements, if the same results
from Comdisco's gross negligence or willful misconduct.
7. RIGHTS IN THE WARRANTS. Notwithstanding anything to the contrary herein,
any Warrants issued to either Lender by Borrower, the stock issuable thereunder,
any amounts paid thereunder, any dividends, and any other rights in connection
therewith shall not be subject to the terms and conditions of this Agreement.
Nothing herein shall affect either Lender's rights under any such Warrants or
stock to administer, manage, transfer, assign, or exercise such Warrants or
stock for its own account.
8. NO RESPONSIBILITY FOR INVESTIGATION. Each Lender agrees that it will make
its own independent investigation of the financial condition and affairs of
Borrower in connection with the making of Loans pursuant to the Loan Agreements
and has made and shall continue to make its own appraisal of the
creditworthiness of Borrower. Neither Lender shall have any duty or
responsibility either initially or on a continuing basis to make any such
investigation or any such appraisal on behalf of both Lenders or to provide the
other Lender with any credit or other information with respect thereto whether
coming into its possession before the date hereof or any time or times
thereafter and shall further have no responsibility with respect to the accuracy
of or the completeness of the information provided to Lenders by Borrower.
-6-
9. REPRESENTATIONS AND WARRANTIES
9.1 Due Organization and Qualification. Comdisco represents and warrants
----------------------------------
that it is a Delaware corporation duly existing and in good standing under the
laws of Illinois and qualified and licensed to do business in, and is in good
standing in, any state in which the conduct of its business or its ownership of
property requires that it be so qualified, except for such states as to which
any failure so to qualify would not have a material adverse effect on Comdisco.
Partnership represents and warrants that is a California general partnership and
that it and each of its general partners is duly existing and is in good
standing under the laws of its respective state of incorporation or formation
and under the laws of California and is qualified and licensed to do business
in, and is in good standing in, any state in which the conduct of its business
or its ownership of property requires that it be so qualified, except for such
states as to which any failure so to qualify would not have a material adverse
effect on Partnership.
9.2 Authority. Each Lender represents and warrants that is has all
---------
necessary power and authority to execute, deliver and perform this Agreement in
accordance with the terms hereof and that it has all requisite power and
authority to own and operate its properties and to carry on its business as now
conducted.
9.3 Authorization; Enforceability. Each Lender represents and warrants
-----------------------------
that (a) the execution and delivery of this Agreement and the consummation of
the transactions contemplated herein have each been duly authorized by all
necessary action on the part of such Lender and (b) this Agreement has been duly
executed and delivered and constitutes a legal, valid and binding obligation of
such Lender, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or other similar
laws of general application relating to or affecting the enforcement of
creditors' rights or by general principles of equity.
10. NOTICES. Unless otherwise provided in this Agreement, all notices or
demands by any party relating to this Agreement or any other agreement entered
into in connection herewith shall be in writing and (except informal documents
which may be sent by first-class mail, postage prepaid) shall be personally
delivered or sent by certified mail, postage prepaid, return receipt requested,
or by facsimile to Partnership or to Comdisco, as the case may be, at their
respective addresses or fax number set forth below:
If to Partnership: MMC/GATX Partnership No. 1
c/o GATX Capital Corporation
as General Partner and Agent
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Contracts Administration
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Company
▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇-▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Contract Administration
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
If to Comdisco: Comdisco, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Venture Lease
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
-7-
with a copy to: Comdisco, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other.
In addition, each Lender agrees (a) to notify the other Lender promptly
upon receipt of any notice from any Borrower and (b) at the other Lender's
request, to send a copy of any such notice to the other Lender.
11. NO BENEFIT TO THIRD PARTIES. The terms and provisions of this Agreement
shall be for the sole benefit of Lenders and their respective successors and
assigns, and no other Person (including Borrower) shall have any right, benefit,
priority, or interest under, or because of this Agreement.
12. GENERAL PROVISIONS.
12.1 Successors and Assigns. This Agreement shall bind and inure to the
----------------------
benefit of the respective successors and permitted assigns of each of the
parties; provided, however, that neither this Agreement nor any rights hereunder
may be assigned by Comdisco or Partnership without the other party's prior
written consent, which consent shall not be unreasonably withheld.
12.2 Time of Essence. Time is of the essence for the performance of all
---------------
obligations set forth in this Agreement.
12.3 Severability of Provisions. Each provision of this Agreement shall be
--------------------------
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
12.4 Entire Agreement; Construction; Amendments and Waivers.
------------------------------------------------------
(a) This Agreement constitutes and contains the entire agreement
between the Lenders and supersedes any and all prior agreements,
negotiations, correspondence, understandings and communications between the
parties, whether written or oral, respecting the subject matter hereof.
(b) This Agreement is the result of negotiations between and has been
reviewed by each of the Lenders executing this Agreement as of the date
hereof and their respective counsel; accordingly, this Agreement shall be
deemed to be the product of the parties hereto, and no ambiguity shall be
construed in favor of or against either Lender. Lenders agree that they
intend the literal words of this Agreement and that no parol evidence shall
be necessary or appropriate to establish any Lender's actual intentions.
(c) Any and all amendments, modifications, discharges or waivers of,
or consents to any departures from any provision of this Agreement shall
not be effective without the written consent of each Lender. Any waiver or
consent with respect to any provision of this Agreement shall be effective
only in the specific instance and for the specific purpose for which it was
given. Any amendment, modifications, waiver or consent effected in
accordance with this Section 12.4 shall be binding upon each Lender.
12.5 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Agreement.
-8-
12.6 Termination. With respect to any particular Loan Agreement and the
-----------
Loans thereunder, upon payment in full to either Lender of all amounts owing to
such Lender with respect to such Loan Agreement, this Agreement shall terminate
as to such Loan Agreement.
12.7 Reinstatement. Notwithstanding any provision of this Agreement to the
-------------
contrary, the rights and obligations of the parties hereunder with respect to
any Borrower shall be reinstated and revived if and to the extent that for any
reason any payment by or on behalf of Borrower is rescinded, or must be
otherwise restored by Lenders, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, all as though such amount had not
been paid. To the extent any payment is rescinded or restored, the Obligations
shall be revived in full force and effect without reduction or discharge for
that payment.
12.8 Survival. All covenants, representations and warranties made in this
--------
Agreement shall continue in full force and effect so long as any obligation
remain outstanding hereunder. Notwithstanding the prior termination of this
Agreement with respect to any Loan Agreement, the respective obligations of
Lenders to indemnify each other shall survive until all applicable statute of
limitations periods with respect to actions that may be brought against Lenders
have run.
13. RELATIONSHIP OF PARTIES. The relationship between Partnership and Comdisco
is, and at all times shall remain solely that of co-lenders. Lenders shall not
under any circumstances be construed to be partners or joint venturers of each
other, nor shall the Lenders under any circumstances be deemed to be in a
relationship of confidence or trust or a fiduciary relationship with each other,
or to owe any fiduciary duty to each other. Lenders do not undertake or assume
any responsibility or duty to each other to select, review, inspect, supervise,
pass judgment upon or otherwise inform each other of any matter in connection
with Borrower's property, any Collateral held by any Lender or the operations of
Borrower. Each Lender shall rely entirely on its own judgment with respect to
such matters, and any review, inspection, supervision, exercise of judgment or
supply of information undertaken or assumed by any Lender in connection with
such matters is solely for the protection of such Lender.
14. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW, EACH OF THE LENDERS HEREBY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF CALIFORNIA.
LENDERS HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF
THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
-9-
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
MMC/GATX PARTNERSHIP NO. 1
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Company,
its general partner
By:__________________________
Name:________________________
Title:_______________________
COMDISCO, INC.
By:__________________________
Name:________________________
Title:_______________________
Corsair Communications, a California corporation, the Borrower referred to
in the foregoing Intercreditor Agreement, hereby acknowledges that it has
received a copy of the Intercreditor Agreement and consent thereto, and agrees
to recognize the rights granted thereby and will take no action that is not in
accordance with the agreements set forth in the Agreement.
CORSAIR COMMUNICATIONS
By:__________________________
Name:________________________
Title:_______________________
-10-