EXHIBIT 10.02
VERISIGN, INC.
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
____________________
February 20, 1996
TABLE OF CONTENTS
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Page
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1. Purchase and Sale of Stock............................................ 1
1.1 Sale and Issuance of Series B Preferred Stock.................. 1
1.2 Closing........................................................ 1
2. Representations and Warranties of the Company......................... 2
2.1 Organization; Good Standing; Qualification..................... 2
2.2 Authorization.................................................. 2
2.3 Valid Issuance of Preferred and Common Stock................... 3
2.4 Governmental Consents.......................................... 3
2.5 Capitalization and Voting Rights............................... 3
2.6 Subsidiaries................................................... 4
2.7 Agreements; Action............................................. 4
2.8 Related-Party Transactions..................................... 5
2.9 Registration Rights............................................ 5
2.10 Permits........................................................ 5
2.11 Compliance with Other Instruments.............................. 6
2.12 Litigation..................................................... 6
2.13 Returns and Complaints......................................... 6
2.14 Disclosure..................................................... 7
2.15 Offering....................................................... 7
2.16 Title to Property and Assets; Leases........................... 7
2.17 Financial Statements........................................... 7
2.18 Changes........................................................ 8
2.19 Patents and Trademarks......................................... 9
2.20 Manufacturing and Marketing Rights............................. 10
2.21 Labor Agreements and Actions................................... 10
2.22 Proprietary Information and Inventions Agreements.............. 10
2.23 Tax Returns, Payments, and Elections........................... 10
2.24 Insurance...................................................... 11
2.25 Environmental and Safety Laws.................................. 11
2.26 Forfeiture..................................................... 11
2.27 Minute Books................................................... 11
3. Representations, Warranties and Covenants of the Investors............ 12
3.1 Representations and Warranties................................. 12
3.2 Covenants...................................................... 13
4. California Commissioner of Corporations............................... 14
4.1 Corporate Securities Law....................................... 14
5. Conditions of Investor's Obligations at Closing....................... 15
5.1 Representations and Warranties................................. 15
5.2 Performance.................................................... 15
5.3 Compliance Certificate......................................... 15
5.4 Qualifications................................................. 15
5.5 Proceedings and Documents...................................... 15
5.6 Board of Directors............................................. 15
5.7 Opinion of Company Counsel..................................... 15
5.8 Investors' Rights Agreement.................................... 16
i.
5.9 Co-Sale Agreement.............................................. 16
5.10 Amendment No. 1 to Stockholders' Agreement..................... 16
5.11 Additional Agreement........................................... 16
5.12 Indemnification................................................ 16
6. Conditions of the Company's Obligations at Closing.................... 16
6.1 Representations and Warranties................................. 16
6.2 Payment of Purchase Price...................................... 16
6.3 Qualifications................................................. 16
7. Miscellaneous......................................................... 16
7.1 Entire Agreement............................................... 16
7.2 Survival of Warranties......................................... 17
7.3 Successors and Assigns......................................... 17
7.4 Governing Law.................................................. 17
7.5 Counterparts................................................... 17
7.6 Titles and Subtitles........................................... 17
7.7 Notices........................................................ 17
7.8 Finder's Fee................................................... 17
7.9 Expenses....................................................... 18
7.10 Attorneys' Fees................................................ 18
7.11 Amendments and Waivers......................................... 18
7.12 Severability................................................... 18
7.13 Aggregation of Stock........................................... 18
SCHEDULE A - Schedule of Investors
EXHIBIT A - Amended and Restated Certificate of Incorporation
EXHIBIT B - Investors' Rights Agreement
EXHIBIT C - Co-Sale Agreement
EXHIBIT D - Schedule of Stockholders
EXHIBIT E - Amendment No. 1 to Stockholders' Agreement
EXHIBIT F - Form of Indemnification Agreement
EXHIBIT G - Additional Agreement
Schedule of Exceptions
ii.
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
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THIS SERIES B PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is
made as of the 20th day of February, 1996, by and between VeriSign, Inc., a
Delaware corporation (the "Company"), and each of the persons listed on Schedule
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A hereto, each of which is herein referred to as an "Investor."
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THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
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1.1 Sale and Issuance of Series B Preferred Stock.
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(a) The Company shall adopt and file with the Secretary of
State of Delaware on or before the Closing (as defined below) an Amended and
Restated Certificate of Incorporation in the form attached hereto as Exhibit A
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(the "Restated Certificate").
(b) Subject to the terms and conditions of this Agreement,
each Investor agrees, severally and not jointly, to purchase at the Closing and
the Company agrees to sell and issue to each Investor, severally and not
jointly, at the Closing that number of shares of the Company's Series B
Preferred Stock set forth opposite each Investor's name on Schedule A hereto
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at a price of $2.45 per share.
1.2 Closing. The purchase and sale of the Series B Preferred
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Stock shall take place at the offices of Brobeck, Phleger & Harrison LLP, Two
Embarcadero Place, 2200 Geng Road, Palo Alto, California, at 11:00 a.m., on
January __, 1996, or at such other time and place as the Company and Investors
acquiring in the aggregate more than half the shares of Series B Preferred Stock
sold pursuant hereto shall mutually agree in writing (which time and place are
designated as the "Closing"). At the Closing, the Company shall deliver to each
Investor a certificate representing the shares of Series B Preferred Stock that
such Investor is purchasing against payment of the purchase price therefor by
check, wire transfer, cancellation of indebtedness, or such other form of
payment as shall be mutually agreed upon by such Investor and the Company. In
the event that payment by an Investor is made, in whole or in part, by
cancellation of indebtedness, then such Investor shall surrender to the Company
for cancellation at the Closing any evidence of such indebtedness or shall
execute an instrument of cancellation in form and substance acceptable to the
Company. In addition, the Company at the Closing shall deliver to any Investor
choosing to pay any part of the purchase price of the Stock by cancellation of
indebtedness, a check in the amount of any interest accrued on such indebtedness
through the Closing.
2. Representations and Warranties of the Company. The Company hereby
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represents and warrants to each Investor that, except as set forth on the
Schedule of Exceptions attached hereto, specifically identifying the relevant
subparagraph(s) hereof, which exceptions shall be deemed to be representations
and warranties as if made hereunder:
2.1 Organization; Good Standing; Qualification. The Company is a
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corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware, has all requisite corporate power and authority
to own and operate its properties and assets and to carry on its business as now
conducted and as proposed to be conducted, to execute
and deliver this Agreement, that certain Investors' Rights Agreement dated as of
even date herewith the form of which is attached hereto as Exhibit B (the
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"Investors' Rights Agreement"), that certain Co-Sale Agreement dated as of even
date herewith the form of which is attached hereto as Exhibit C (the "Co-Sale
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Agreement"), that certain Amendment No. 1 to Stockholders' Agreement dated as of
even date herewith the form of which is attached hereto as Exhibit E (the
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"Stockholders' Agreement") and any other agreement to which the Company is a
party the execution and delivery of which is contemplated hereby (the "Ancillary
Agreements"), to issue and sell the Series B Preferred Stock and the Common
Stock issuable upon conversion thereof, and to carry out the provisions of this
Agreement, the Investors' Rights Agreement, the Co-Sale Agreement, the
Stockholders' Agreement, the Restated Certificate and any Ancillary Agreements.
The Company is duly qualified to transact business and is in good standing in
each jurisdiction in which the failure so to qualify would have a material
adverse effect on its business, properties, prospects or financial condition.
2.2 Authorization. All corporate action on the part of the
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Company, its officers, directors, and stockholders necessary for the
authorization, execution and delivery of this Agreement the Investors' Rights
Agreement, the Co-Sale Agreement, the Stockholders' Agreement and any Ancillary
Agreements, the performance of all obligations of the Company hereunder and
thereunder at the Closing and the authorization, issuance (or reservation for
issuance), sale, and delivery of the Series B Preferred Stock being sold
hereunder and the Common Stock issuable upon conversion thereof has been taken
or will be taken prior to the Closing, and this Agreement, the Investors' Rights
Agreement, the Co-Sale Agreement, the Stockholders' Agreement and any Ancillary
Agreements constitute valid and legally binding obligations of the Company,
enforceable in accordance with their respective terms except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors' rights generally (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies, and (iii) to the extent the indemnification
provisions contained in the Investors' Rights Agreement may be limited by
applicable federal or state securities law.
2.3 Valid Issuance of Preferred and Common Stock. The Series B
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Preferred Stock that is being purchased by the Investors hereunder, when issued,
sold and delivered in accordance with the terms of this Agreement for the
consideration expressed herein, will be duly and validly issued, fully paid, and
nonassessable, and will be free of restrictions on transfer other than
restrictions on transfer under this Agreement, the Investors' Rights Agreement
and the Co-Sale Agreement, the Stockholders' Agreement and under applicable
state and federal securities laws. The Common Stock issuable upon conversion of
the Series B Preferred Stock purchased under this Agreement has been duly and
validly reserved for issuance and, upon issuance in accordance with the terms
of the Restated Certificate, will be duly and validly issued, fully paid, and
nonassessable and will be free of restrictions on transfer other than
restrictions on transfer under this Agreement, the Investors' Rights Agreement,
the Co-Sale Agreement and the Stockholders' Agreement and under applicable state
and federal securities laws.
2.4 Governmental Consents. No consent, approval, qualification, order
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or authorization of, or filing with, any local, state, or federal governmental
authority is required on the part of the Company in connection with the
Company's valid execution, delivery, or performance of this Agreement, the
offer, sale or issuance of the Series B Preferred Stock by the Company or the
issuance of Common Stock upon conversion of the Series B Preferred Stock, except
(i) the filing of the Restated Certificate with the Secretary of State of the
State of Delaware, and (ii) such filings as have been made prior to the Closing,
except that any notices of sale required to be filed with the Securities and
Exchange Commission (the "SEC") under
2.
Regulation D of the Securities Act of 1933, as amended (the "1933 Act"), or such
post-closing filings as may be required under applicable state securities laws,
which will be timely filed within the applicable periods therefor.
2.5 Capitalization and Voting Rights. The authorized capital of
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the Company consists, or will consist prior to the Closing, of:
(i) Preferred Stock. 6,407,883 shares of Preferred Stock,
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par value $0.001 (the "Preferred Stock"), of which 4,306,883 shares have been
designated Series A Convertible Preferred Stock ("Series A Preferred Stock"),
all of which are issued and outstanding, and 2,101,000 shares have been
designated Series B Convertible Preferred Stock ("Series B Preferred Stock"), up
to all of which will be sold pursuant to this Agreement. The rights, privileges
and preferences of the Series A and Series B Preferred Stock will be as stated
in the Restated Certificate.
(ii) Common Stock. 15,592,117 shares of common stock
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("Common Stock"), par value $0.001 of which 4,688,333 shares are issued and
outstanding.
(iii) The outstanding shares of Series A Preferred Stock
and Common Stock are owned by the stockholders and in the numbers specified in
Exhibit D hereto.
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(iv) The outstanding shares of Series A Preferred Stock
and Common Stock have been issued in accordance with the registration or
qualification provisions of the 1933 Act and any relevant state securities laws
or pursuant to valid exemptions therefrom.
(v) Except for (A) the conversion privileges of the
Series A and Series B Preferred Stock, (B) the rights provided in Section 2.4 of
the Investors' Rights Agreement, and (C) currently outstanding options to
purchase 1,615,750 shares of Common Stock granted to employees pursuant to the
Company's 1995 Stock Option Plan (the "Option Plan"), there are not outstanding
any options, warrants, rights (including conversion or preemptive rights and
rights of first refusal) or agreements for the purchase or acquisition from the
Company of any shares of its capital stock. In addition to the aforementioned
options, the Company has reserved an additional 529,250 shares of its Common
Stock for purchase upon exercise of options to be granted in the future under
the Option Plan. The Company is not a party or subject to any agreement or
understanding, and, to the best of the Company's knowledge, there is no
agreement or understanding between any persons that affects or relates to the
voting or giving of written consents with respect to any security or the voting
by a director of the Company.
2.6 Subsidiaries. The Company does not own or control, directly
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or indirectly, any interest in any other corporation, association, or other
business entity. The Company is not a participant in any joint venture,
partnership, or similar arrangement.
2.7 Agreements; Action.
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(a) Except for agreements explicitly contemplated hereby,
by the Investors' Rights Agreement, the Co-Sale Agreement, the Stockholders'
Agreement, any Ancillary Agreements and that certain Stockholders' Agreement
dated April 18, 1995 among the Company, the Series A Preferred Stockholders and
the other parties named therein, there are no agreements, understandings or
proposed transactions between the Company and any of its officers, directors,
affiliates, or any affiliate thereof.
3.
(b) The Company does not have any contract, agreement,
lease, commitment or proposed transaction, written or oral, absolute or
contingent, other than (i) contracts for the purchase of supplies and services
that were entered into in the ordinary course of business and that do not
involve more than $50,000, and do not extend for more than one (1) year beyond
the date hereof, (ii) sales contracts entered into in the ordinary course of
business, and (iii) contracts terminable at will by the Company on no more than
thirty (30) days notice without cost or liability to the Company and that do not
involve any employment or consulting arrangement and are not material to the
conduct of the Company's business. For the purpose of this Section, employment
and consulting contracts and contracts with labor unions, and license agreements
and any other agreements relating to the acquisition or disposition of the
Company's technology, shall not be considered to be contracts entered into in
the ordinary course of business.
(c) The Company has not (i) declared or paid any dividends,
or authorized or made any distribution upon or with respect to any class or
series of its capital stock, (ii) incurred any indebtedness for money borrowed
or any other liabilities individually in excess of $50,000 or, in the case of
indebtedness and/or liabilities individually less than $50,000, in excess of
$150,000 in the aggregate, (iii) made any loans or advances to any person, other
than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise
disposed of any of its assets or rights, other than the sale of its inventory in
the ordinary course of business.
(d) For the purposes of subsections (b) and (c) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.
2.8 Related-Party Transactions. No employee, officer, or
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director of the Company or member of his or her immediate family thereof is
indebted to the Company, nor is the Company indebted (or committed to make loans
or extend or guarantee credit) to any of them. To the best of the Company's
knowledge, none of such persons has any direct or indirect ownership interest in
any firm or corporation with which the Company is affiliated or with which the
Company has a business relationship, or any firm or corporation that competes
with the Company, except that employees, officers or directors of the Company
and members of their immediate families may own stock in publicly traded
companies that may compete with the Company. To the best of the Company's
knowledge, no officer or director or any member of their immediate families is,
directly or indirectly, interested in any material contract with the Company.
2.9 Registration Rights. Except as provided in the Investors'
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Rights Agreement, the Company is not obligated to register under the 1933 Act
any of its presently outstanding securities or any of its securities that may
subsequently be issued.
2.10 Permits. The Company has all franchises, permits, licenses,
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and any similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which could materially and adversely affect the
business, properties, prospects or financial condition of the Company and
believes it can obtain, without undue burden or expense, any similar authority
for the conduct of its business as planned to be conducted. The Company is not
in default in any material respect under any of such franchises, permits,
licenses or other
4.
similar authority.
2.11 Compliance with Other Instruments. The Company is not in
---------------------------------
violation or default in any material respect of any provision of its Restated
Certificate or Bylaws or in any material respect of any provision of any
mortgage, indenture, agreement, instrument or contract to which it is a party or
by which it is bound or, to the best of its knowledge, of any federal or state
judgment, order, writ, decree, statute, rule or regulation applicable to the
Company. The execution, delivery and performance by the Company of this
Agreement, the Investors' Rights Agreement, the Co-Sale Agreement, the
Stockholders' Agreement and any Ancillary Agreements, and the consummation of
the transactions contemplated hereby and thereby will not result in any such
violation or be in material conflict with or constitute, with or without the
passage of time or giving of notice, either a material default under any such
provision or an event that results in the creation of any material lien, charge
or encumbrance upon any assets of the Company or the suspension, revocation,
impairment, forfeiture, or nonrenewal of any material permit, license,
authorization, or approval applicable to the Company, its business or
operations, or any of its assets or properties.
2.12 Litigation. There is no action, suit, proceeding or
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investigation pending or currently threatened against the Company that questions
the validity of this Agreement, the Investors' Rights Agreement, the Co-Sale
Agreement, the Stockholders' Agreement or any Ancillary Agreements or the right
of the Company to enter into such agreements, or to consummate the transactions
contemplated hereby or thereby, or that might result, either individually or in
the aggregate, in any material adverse change in the assets, business
properties, prospects or financial condition of the Company, or in any material
change in the current equity ownership of the Company. The foregoing includes,
without limitation, any action, suit, proceeding, or investigation pending or
currently threatened involving the prior employment of any of the Company's
employees, their use in connection with the Company's business of any
information or techniques allegedly proprietary to any of their former
employers, their obligations under any agreements with prior employers, or
negotiations by the Company with potential backers of, or investors in, the
Company or its proposed business. The Company is not a party to, or to the best
of its knowledge, named in any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality. There is no action, suit or
proceeding by the Company currently pending or that the Company currently
intends to initiate.
2.13 Returns and Complaints. The Company has received no customer
----------------------
complaints concerning alleged defects in the design of its products that, if
true, would materially adversely affect the operations or financial condition of
the Company.
2.14 Disclosure. The Company has provided each Investor with all
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the information reasonably available to it without undue expense that such
Investor has requested for deciding whether to purchase the Series B Preferred
Stock and all information which the Company believes is reasonably necessary to
enable such Investor to make such decision. To the best of the Company's
knowledge after reasonable investigation, neither this Agreement nor any other
written statements or certificates made or delivered in connection herewith
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements herein or therein not misleading.
2.15 Offering. Subject in part to the truth and accuracy of each
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Investor's representations set forth in this Agreement, the offer, sale and
issuance of the Series B Preferred Stock and Common Stock issuable upon the
conversion thereof as contemplated by this Agreement are exempt from the
registration requirements of the 1933 Act, and neither the
5.
Company nor any authorized agent acting on its behalf will take any action
hereafter that would cause the loss of such exemption.
2.16 Title to Property and Assets; Leases. Except (a) as
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reflected in the Financial Statements (defined in Section 2.17), (b) for liens
for current taxes not yet delinquent, (c) for liens imposed by law and incurred
in the ordinary course of business for obligations not past due to carriers,
warehousemen, laborers, materialmen and the like, (d) for liens in respect of
pledges or deposits under workers' compensation laws or similar legislation, or
(e) for minor defects in title, none of which, individually or in the aggregate
materially interferes with the use of such property, the Company owns its
property and assets free and clear of all mortgages, liens, claims and
encumbrances. With respect to the property and assets it leases, the Company is
in compliance with such leases and, to the best of its knowledge, holds a valid
leasehold interest free of any liens, claims or encumbrances, subject to clauses
(a)-(e) above.
2.17 Financial Statements. The Company has delivered to each
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Investor its unaudited financial statements (balance sheet and profit and loss
statement, statement of shareholders' equity and statement of changes in
financial position, at December 31, 1995 and for the fiscal year then ended (the
"Financial Statements"). The Financial Statements have been prepared in
accordance with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods indicated and with each other, except
that they may not contain all footnotes required by GAAP. The Financial
Statements fairly present the financial condition and operating results of the
Company as of the dates, and for the periods, indicated therein, subject to
normal year-end audit adjustments which are neither individually nor in the
aggregate material. Except as set forth in the Financial Statements, the Company
has no material liabilities, contingent or otherwise, other than (i) liabilities
incurred in the ordinary course of business subsequent to December 31, 1995 and
(ii) obligations under contracts and commitments incurred in the ordinary course
of business and not required under GAAP to be reflected in the Financial
Statements, which, in both cases, individually or in the aggregate, are not
material to the financial condition or operating results of the Company. Except
as disclosed in the Financial Statements, the Company is not a guarantor or
indemnitor of any indebtedness of any other person, firm or corporation. The
Company maintains and will continue to maintain a standard system of accounting
established and administered in accordance with GAAP.
2.18 Changes. To the best of the Company's knowledge, since
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December 31, 1995, there has not been:
(a) Any change in the assets, liabilities, financial
condition or operating results of the Company from that reflected in the
Financial Statements, except changes in the ordinary course of business that
have not been, in the aggregate, materially adverse;
(b) any damage, destruction or loss, whether or not covered
by insurance, materially and adversely affecting the business, properties,
prospects or financial condition of the Company (as such business is presently
conducted and as it is proposed to be conducted);
(c) any waiver or compromise by the Company of a valuable
right or of a material debt owed to it;
(d) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company, except in the ordinary
course of business and which is not material to the business, properties,
prospects or financial condition of
6.
the Company (as such business is presently conducted and as it is proposed to be
conducted);
(e) any material change to a material contract or
arrangement by which the Company or any of its assets is bound or subject,
except any such change made in the ordinary course of business;
(f) any material change in any compensation arrangement or
agreement with any employee, officer, director, or stockholder;
(g) any sale, assignment or transfer of any patents,
trademarks, copyrights, trade secrets or other intangible assets;
(h) any resignation or termination of employment of any key
officer of the Company; and the Company, to the best of its knowledge, does not
know of the impending resignation or termination of employment of any such
officer;
(i) receipt of notice that there has been a loss of, or
material order cancellation by, any major customer of the Company;
(j) any mortgage, pledge, transfer of a security interest
in, or lien, created by the Company, with respect to any of its material
properties or assets, except liens for taxes not yet due or payable;
(k) any loans or guarantees made by the Company to or for
the benefit of its employees, officers or directors, or any members of their
immediate families, other than travel advances and other advances made in the
ordinary course of its business;
(l) any declaration, setting aside or payment or other
distribution in respect of any of the Company's capital stock, or any direct or
indirect redemption, purchase or other acquisition of any of such stock by the
Company;
(m) to the best of the Company's knowledge, any other event
or condition of any character that might materially and adversely affect the
business, properties, prospects or financial condition of the Company (as such
business is presently conducted and as it is proposed to be conducted); or
(n) any agreement or commitment by the Company to do any of
the things described in this Section 2.18.
2.19 Patents and Trademarks. To the best of its knowledge (but
----------------------
without having conducted any special investigation or patent search) the Company
owns or possesses sufficient legal rights to all patents, trademarks,
servicemarks, trade names, copyrights, trade secrets, licenses, information,
proprietary rights and processes necessary for its business as now conducted and
as proposed to be conducted without any conflict with or infringement of the
rights of others. The Schedule of Exceptions contains a complete list of patents
and pending patent applications of the Company. Except for agreements with its
own employees or consultants, substantially in the form referenced in Section
2.22 below, there are no outstanding options, licenses, or agreements of any
kind relating to the foregoing, nor is the Company bound by or a party to any
options, licenses or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information, proprietary rights and processes of any other person or entity. The
Company has not received
7.
any communications alleging that the Company has violated or, by conducting its
business as proposed, would violate any of the patents, trademarks, service
marks, trade names, copyrights, trade secrets or other proprietary rights of any
other person or entity. The Company is not aware that any of it employees is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with the use of such
employee's best efforts to promote the interests of the Company or that would
conflict with the Company's business as proposed to be conducted. Neither the
execution nor delivery of this Agreement, nor the carrying on of the Company's
business by the employees of the Company, nor the conduct of the Company's
business as proposed, will, to the best of the Company's knowledge, conflict
with or result in a breach of the terms, conditions or provisions of, or
constitute a default under, any contract, covenant or instrument under which any
of such employees is now obligated. The Company does not believe it is or will
be necessary to use any inventions of any of its employees (or persons it
currently intends to hire) made prior to their employment by the Company.
2.20 Manufacturing and Marketing Rights. The Company has
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not granted rights to manufacture, produce, assemble, license, market, or sell
its products to any other person and is not bound by any agreement that affects
the Company's exclusive right to develop, manufacture, assemble, distribute,
market, or sell its products.
2.21 Labor Agreements and Actions. To the best knowledge
----------------------------
of the Company, there is no strike, or labor dispute or union organization
activities pending or threatened between it and its employees. To the best
knowledge of the Company, none of the Company's employees belongs to any union
or collective bargaining unit. To the best of its knowledge, the Company has
complied in all material respects with all applicable state and federal equal
employment opportunity and other laws related to employment. To the best of the
Company's knowledge, no employee of the Company is or will be in violation of
any judgment, decree or order, or any term of any employment contract, patent
disclosure agreement or other contract or agreement relating to the relationship
of any such employee with the Company or any other party because of the nature
of the business conducted or to be conducted by the Company or to the
utilization by the employee of his best efforts with respect to such business.
The Company is not party to or bound by any currently effective employment
contract, deferred compensation agreement, bonus plan, incentive plan, profit
sharing plan, retirement agreement, or other employee compensation agreement.
The Company is not aware that any officer or key employee, or that any group of
key employees, intends to terminate their employment with the Company, nor does
the Company have a present intention to terminate the employment of any of the
foregoing. Subject to general principles related to wrongful termination of
employees, the employment of each officer and employee of the Company is
terminable at the will of the Company.
2.22 Proprietary Information and Inventions Agreements.
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Each employee and officer of the Company has executed a Proprietary Information
and Inventions Agreement substantially in the form or forms that have been
delivered to special counsel for the Investors.
2.23 Tax Returns, Payments, and Elections. The Company has
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filed all tax returns and reports as required by law. These returns and reports
are true and correct in all material respects. The Company has paid all taxes
and other assessments due, except those contested by it in good faith. The
provision for taxes of the Company as shown in the Financial Statements is
adequate for taxes due or accrued as of the date thereof. The Company has not
elected pursuant to the Internal Revenue Code of 1986, as amended (the "Code"),
to be treated as
8.
an S corporation or a collapsible corporation pursuant to Section 341(f) of
Section 1362(a) of the Code, nor has it made any other elections pursuant to the
Code (other than elections which relate solely to methods of accounting,
depreciation or amortization) which would have a material effect on the
business, properties, prospects or financial condition of the Company. The
Company has never had any tax deficiency proposed or assessed against it and has
not executed any waiver of any statute of limitations on the assessment or
collection of any tax or governmental charge. None of the Company's federal
income tax returns and none of its state income or franchise tax or sales or use
tax returns has ever been audited by governmental authorities. Since the date of
the Financial Statements, the Company has made adequate provisions on its books
of account for all taxes, assessments and governmental charges with respect to
its business, properties and operations for such period. The Company has
withheld or collected from each payment made to each of its employees, the
amount of all taxes (including, but not limited to, federal income taxes,
Federal Insurance Contribution Act taxes and Federal Unemployment Tax Act taxes)
required to be withheld or collected therefrom, and has paid the same to the
proper tax receiving officers or authorized depositaries.
2.24 Insurance. The Company has in full force and effect
---------
fire and casualty insurance policies, with extended coverage, sufficient in
amount (subject to reasonable deductibles) to allow it to replace any of its
properties that might be damaged or destroyed. The Company has in full force and
effect term life insurance, payable to the Company, on the lives of Mr. D. James
Bidzos and Mr. Stratton Sclavos in the amount of $1,000,000 each. The Company
has in full force and effect products liability insurance in amounts customary
for companies similarly situated.
2.25 Environmental and Safety Laws. To the best of its
-----------------------------
knowledge, the Company is not in violation of any applicable statute, law, or
regulation relating to the environment or occupational health and safety, and to
the best of its knowledge, no material expenditures are or will be required in
order to comply with any such existing statute, law, or regulation.
2.26 Forfeiture. No shareholders of the Company have
----------
purchased any shares of the Company's capital stock subject to a risk of
forfeiture.
2.27 Minute Books. The copy of the minute books of the
------------
Company provided to the Investor's special counsel contain minutes of all
meetings of directors and stockholders and all actions by written consent
without a meeting by the directors and stockholders since the time of
incorporation and reflect all actions by the directors (and any committee of
directors) and stockholders with respect to all transactions referred to in such
minutes accurately in all material respects.
3. Representations, Warranties and Covenants of the Investors.
----------------------------------------------------------
3.1 Representations and Warranties. Each Investor hereby
------------------------------
severally and not jointly represents and warrants to the Company, with respect
to such Investor's purchase of Series B Preferred Stock that:
(a) Authorization. It has full power and authority
-------------
to enter into this Agreement and that this Agreement constitutes a valid and
legally binding obligation of such Investor.
9.
(b) Purchase Entirely for Own Account. This Agreement
---------------------------------
is made with each Investor in reliance upon such Investor's representation to
the Company, which by such Investor's execution of this Agreement such Investor
hereby confirms, that the Series B Preferred Stock to be purchased by such
Investor and the Common Stock issuable upon conversion thereof (collectively,
the "Stock") will be acquired for investment for such Investor's own account,
not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof, and that such Investor has no present intention of selling,
granting any participation in, or otherwise distributing the same. By executing
this Agreement, each Investor further represents that such Investor does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participations to such person or to any third person,
with respect to any of the Stock.
(c) Reliance Upon Investors' Representations. It
----------------------------------------
understands that the Series B Preferred Stock is not, and any Common Stock
acquired on conversion thereof at the time of issuance may not be, registered
under the 1933 Act on the ground that the sale provided for in this Agreement
and the issuance of securities hereunder is exempt from registration under the
1933 Act pursuant to section 4(2) thereof, and that the Company's reliance on
such exemption is predicated on the Investors' representations set forth herein.
Each Investor realizes that the basis for the exemption may not be present if,
notwithstanding such representations, such Investor has in mind merely acquiring
shares of the Stock for a fixed or determinable period in the future, or for a
market rise, or for sale if the market does not rise. No Investor has any such
intention.
(d) Receipt of Information. It believes it has
----------------------
received all the information it considers necessary or appropriate for deciding
whether to purchase the Series B Preferred Stock. Each Investor further
represents that it has had an opportunity to ask questions and receive answers
from the Company regarding the terms and conditions of the offering of the
Series B Preferred Stock and the business, properties, prospects and financial
condition of the Company and to obtain additional information (to the extent the
Company possessed such information or could acquire it without unreasonable
effort or expense) necessary to verify the accuracy of any information furnished
to it or to which it had access. The foregoing, however, does not limit or
modify the representations and warranties of the Company in Section 2 of this
Agreement or the right of the Investors to rely thereon.
(e) Investment Experience. Each Investor is an
---------------------
investor in securities of companies in the development stage and acknowledges
that it is able to fend for itself, can bear the economic risk of its
investment, and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Series B Preferred Stock. If other than an individual, Investor also
represents it has not been organized for the purpose of acquiring the Series B
Preferred Stock.
(f) Accredited Investor. Each Investor (other than
-------------------
Bessemer Venture Partners DCI) is an "accredited investor" within the meaning of
SEC Rule 501 of Regulation D, as presently in effect.
(g) Restricted Securities. It understands that the
---------------------
shares of Series B Preferred Stock it is purchasing are characterized as
"restricted securities" under the federal securities laws inasmuch as they are
being acquired from the Company in a transaction not involving a public offering
and that under such laws and applicable regulations such securities may be
resold without registration under the 1933 Act, only in certain limited
10.
circumstances. In this connection, each Investor represents that it is familiar
with SEC Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and by the Act.
3.2 Covenants. Each Investor hereby covenants as follows:
---------
(a) Legends. To the extent applicable, each
-------
certificate or other document evidencing any of the Series B Preferred Stock or
any Common Stock issued upon conversion thereof shall be endorsed with the
legends set forth below, and each Investor covenants that, except to the extent
such restrictions are waived by the Company, such Investor shall not transfer
the shares represented by any such certificate without complying with the
restrictions on transfer described in the legends endorsed on such certificate:
(i) "The shares represented hereby have not been
registered under the Securities Act of 1933, as amended, and may not be sold,
transferred, assigned, pledged, or hypothecated absent an effective registration
thereof under such Act or compliance with Rule 144 promulgated under such Act,
or unless the Company has received an opinion of counsel, satisfactory to the
Company and its counsel, that such registration is not required."
(ii) Any legend required by the laws of the State
of California, including any legend required by the California Department of
Corporations and Sections 417 and 418 of the California Corporations Code.
(b) Further Limitations on Disposition. Without in
----------------------------------
any way limiting the representations set forth above, each Investor further
agrees not to make any disposition of all or any portion of the Series B
Preferred Stock or any Common Stock issuable upon the conversion thereof unless
and until the transferee has agreed in writing for the benefit of the Company to
be bound by this Section 3.2(b), provided and to the extent such section is then
applicable, the Investors' Rights Agreement, the Co-Sale Agreement, the
Stockholders' Agreement and any applicable Ancillary Agreements and:
(i) There is then in effect a Registration
Statement under the Act covering such proposed disposition and such disposition
is made in accordance with such Registration Statement; or
(ii) A. Such Investor shall have notified the
Company of the proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed disposition,
and B. if reasonably requested by the Company, such Investor shall have
furnished the Company with an opinion of counsel, reasonably satisfactory to the
Company, that such disposition will not require registration of such shares
under the Act. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.
(iii) Notwithstanding the provisions of paragraphs
(i) and (ii) above, no such registration statement or opinion of counsel shall
be necessary for a transfer by an Investor which is a partnership to a partner
of such partnership or a retired partner of such partnership who retires after
the date hereof, or to the estate of any such partner or retired partner or the
transfer by gift, will or intestate succession of any partner to his spouse or
to the siblings, lineal descendants or ancestors of such partner or his spouse,
if the transferee agrees in writing to be subject to the terms hereof to the
same extent as if he were an original Investor hereunder.
11.
(iv) Nothing in this Agreement prohibits a party
from selling, assigning, transferring or pledging shares of Series B Preferred
Stock or Common Stock to an affiliate of such party whether foreign, domestic or
otherwise, provided that Section 3.2(b) is satisfied.
4. California Commissioner of Corporations.
---------------------------------------
4.1 Corporate Securities Law. THE SALE OF THE SECURITIES
------------------------
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH
SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF
SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE
CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS
SO EXEMPT.
5. Conditions of Investor's Obligations at Closing. The
-----------------------------------------------
obligations of each Investor under subsection 1.1(b) of this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions, the waiver of which shall not be effective against any Investor who
does not consent in writing thereto:
5.1 Representations and Warranties. The representations
------------------------------
and warranties of the Company contained in Section 2 shall be true on and as of
the Closing with the same effect as though such representations and warranties
had been made on and as of the date of such Closing.
5.2 Performance. The Company shall have performed and
-----------
complied with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing.
5.3 Compliance Certificate. The President of the Company
----------------------
shall deliver to each Investor at the Closing a certificate certifying that the
conditions specified in Sections 5.1 and 5.2 have been fulfilled and stating
that there shall have been no adverse change in the business, affairs,
operations, properties, assets or condition of the Company since the date of its
Financial Statements.
5.4 Qualifications. All authorizations, approvals, or
--------------
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the lawful issuance
and sale of the Stock pursuant to this Agreement shall be duly obtained and
effective as of the Closing.
5.5 Proceedings and Documents. All corporate and other
-------------------------
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to the Investors' special counsel, which shall have received all such
counterpart original and certified or other copies of such documents as it may
reasonably request.
5.6 Board of Directors. Immediately prior to the Closing,
------------------
Kevin
12.
Compton shall have been elected as member of the Company's Board of Directors.
5.7 Opinion of Company Counsel. Each Investor shall have
--------------------------
received from Tomlinson Zisko Morosoli & Maser LLP, counsel for the Company, an
opinion, dated the date of the Closing, in form and substance satisfactory to
special counsel to Kleiner Perkins Caufield & Byers.
5.8 Investors' Rights Agreement. The Company and each
---------------------------
Investor shall have entered into the Investors' Rights Agreement in the form
attached hereto as Exhibit B.
---------
5.9 Co-Sale Agreement. The Company, each Investor and RSA
-----------------
Data Security, Inc. shall each have entered into a Co-Sale Agreement in the form
attached hereto as Exhibit C.
---------
5.10 Amendment No. 1 to Stockholders' Agreement. The
------------------------------------------
Company, each Investor and two-thirds (2/3) in interest of the signatories to
that certain Stockholders' Agreement dated April 18, 1995 shall have entered
into an Amendment No. 1 to Stockholders' Agreement in the form attached hereto
as Exhibit E.
---------
5.11 Additional Agreement. The Company and Ameritech
--------------------
Development Corp. shall have entered into an Agreement containing substantially
the same terms as set forth in Exhibit G attached hereto.
---------
5.12 Indemnification. The Company and Kevin Compton shall
---------------
have entered into an Indemnification Agreement in the form hereto attached
hereto as Exhibit F.
---------
6. Conditions of the Company's Obligations at Closing. The
--------------------------------------------------
obligations of the Company to each Investor under this Agreement are subject to
the fulfillment on or before the Closing of each of the following conditions by
such Investor:
6.1 Representations and Warranties. The representations
------------------------------
and warranties of the Investor contained in Section 3 shall be true on and as of
the Closing with the same effect as though such representations and warranties
had been made on and as of the Closing.
6.2 Payment of Purchase Price. Each Investor shall have
-------------------------
delivered the purchase price specified in Section 1.2.
6.3 Qualifications. All authorizations, approvals, or
--------------
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the lawful issuance
and sale of the Series B Preferred Stock pursuant to this Agreement shall be
duly obtained and effective as of the Closing.
7. Miscellaneous.
-------------
7.1 Entire Agreement. This Agreement and the documents
----------------
referred to herein constitute the entire agreement among the parties and no
party shall be liable or bound to any other party in any manner by any
warranties, representations, or covenants except as specifically set forth
herein or therein.
7.2 Survival of Warranties. The warranties,
----------------------
representations and
13.
covenants of the Company and Investors contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing.
7.3 Successors and Assigns. Except as otherwise provided
----------------------
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties
(including permitted transferees of any shares of Series B Preferred Stock sold
hereunder or any Common Stock issued upon conversion thereof). Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
7.4 Governing Law. This Agreement shall be governed by
-------------
and construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.
7.5 Counterparts. This Agreement may be executed in two
------------
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
7.6 Titles and Subtitles. The titles and subtitles used
--------------------
in this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.7 Notices. Unless otherwise provided, any notice
-------
required or permitted under this Agreement shall be given in writing and shall
be deemed effectively given upon personal delivery to the party to be notified
by hand or professional courier service or five (5) days after deposit with the
United States Post Office, by registered or certified mail, postage prepaid and
addressed to the party to be notified at the address indicated for such party on
the signature page hereof, or at such other address as such party may designate
by ten (10) days' advance written notice to the other parties.
7.8 Finder's Fee. Each party represents that it neither
------------
is nor will be obligated for any finder's fee or commission in connection with
this transaction. Each Investor severally and not jointly agrees to indemnify
and to hold harmless the Company from any liability for any commission or
compensation in the nature of a finder's fee (and the costs and expenses of
defending against such liability or asserted liability) for which the Investor
or any of its officers, partners, employees, or representatives is responsible.
The Company agrees to indemnify and hold harmless each Investor from any
liability for any commission or compensation in the nature of a finder's fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees or
representatives is responsible.
7.9 Expenses. Irrespective of whether the Closing is
--------
effected, the Company shall pay all costs and expenses that it incurs with
respect to the negotiation, execution, delivery and performance of this
Agreement. If the Closing is effected, the Company shall, at the Closing,
reimburse the reasonable fees of special counsel for the Investors not to exceed
$20,000 and shall, upon receipt of a bill therefor, reimburse the out of pocket
expenses of such counsel.
7.10 Attorneys' Fees. If any action at law or in equity is
---------------
necessary to enforce or interpret the terms of this Agreement, the Investors'
Rights Agreement, the Co-Sale
14.
Agreement, the Stockholders' Agreement or the Restated Certificate, the
prevailing party shall be entitled to reasonable attorney's fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.
7.11 Amendments and Waivers. Any term of this Agreement
----------------------
may be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
more than 50% of the Common Stock (that has not been sold to the public) issued
or issuable upon conversion of the Series B Preferred Stock. Any amendment or
waiver effected in accordance with this Section shall be binding upon each
holder of any securities purchased under this Agreement at the time outstanding
(including securities into which such securities have been converted), each
future holder of all such securities, and the Company.
7.12 Severability. If one or more provisions of this
------------
Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
7.13 Aggregation of Stock. All shares of the Series B
--------------------
Preferred Stock held or acquired by affiliated entities or persons shall be
aggregated together for the purpose of determining the availability of any
rights under this Agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
15.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
COMPANY:
VERISIGN, INC., a Delaware corporation
By: /s/ Stratton Sclavos
------------------------------------
Stratton Sclavos, President
Address: 2593 Coast Ave
-----------------------------------------
Mountain View, CA 94043
-----------------------------------------
INVESTORS:
KLEINER PERKINS CAUFIELD & BYERS VII
By: /s/ Kevin R. Compton
------------------------------------
Its: General Partner
------------------------------------
Address: 2750 Sand Hill Road
Menlo Park, CA 94025
KPCB VII FOUNDERS FUND
By: /s/ Kevin R. Compton
------------------------------------
Its: General Partner
------------------------------------
Address: 2750 Sand Hill Road
Menlo Park, CA 94025
KPCB INFORMATION SCIENCE ZAIBATSU FUND II
By: /s/ Kevin R. Compton
------------------------------------
[SIGNATURE PAGE TO SERIES B PREFERRED
STOCK PURCHASE AGREEMENT]
Its: General Partner
------------------------------------
Address: 2750 Sand Hill Road
Menlo Park, CA 94025
RSA DATA SECURITY, INC.
By: /s/ D. James Bidzos
----------------------------------
Title: CEO
----------------------------------
Address: 100 Marine Parkway, Suite 500
Redwood City, CA 94065
KAIRDOS L.L.C.
By: /s/ D. James Bidzos
----------------------------------
Title: Manager
----------------------------------
Address: c/o D. James Bidzos
RSA Data Security, Inc.
100 Marine Parkway, Suite 500
Redwood City, CA 94065
TZM INVESTMENT FUND
By: /s/ Timothy Tomlinson
----------------------------------
Title: General Partner
----------------------------------
Address: c/o Tomlinson Zisko Morosoli & Maser
200 Page Mill Road, Second Floor
Palo Alto, CA 94306
[SIGNATURE PAGE TO SERIES B PREFERRED
STOCK PURCHASE AGREEMENT]
BESSEMER VENTURE PARTNERS DCI
By: Bessemer Venture Partners III, L.P.,
Its Managing General Partner
By: Deer III & Co.,
Its Partner
By: /s/ Bessemer Venture Partners DCI
----------------------------------
Address: 1025 Old Country Road, Suite 205
Westbury, NY 11590
MITSUBISHI CORPORATION
By: /s/ Mitsubishi Corporation
---------------------------------------
Title: ____________________________________
Address: 6-3, Marunouchi 2-Chome
Chiyoda-ku, Tokyo 100-86
Japan
SECURITY DYNAMICS TECHNOLOGIES, INC.
By: /s/ Charles R. Stuckey Jr.
---------------------------------------
Title: President and CEO
------------------------------------
Address: One Alewife Center
Cambridge, MA 02140-2312
[SIGNATURE PAGE TO SERIES B PREFERRED
STOCK PURCHASE AGREEMENT]
INTEL CORPORATION
By: /s/ Arvind Sodhani
---------------------------------------
Title: Vice President and Treasurer
------------------------------------
Address: 2200 Mission College Boulevard
Santa Clara, CA 95052
AMERITECH DEVELOPMENT CORPORATION
By: /s/ Thomas Touton
---------------------------------------
Title: VP. Venture Capital
------------------------------------
Address: 30 South Wacker Drive, 37th Floor
Chicago, IL 60606
GC&H INVESTMENTS
By: /s/ James C. Kitch
---------------------------------------
Title: Executive Partner
------------------------------------
Address: 3000 Sand Hill Road
Building 3, Suite 230
Menlo Park, CA 94025
[SIGNATURE PAGE TO SERIES B PREFERRED
STOCK PURCHASE AGREEMENT]
VISA INTERNATIONAL SERVICE ASSOCIATION
By: /s/ William L. Chevenich
---------------------------------------
Title: Group EVP
-------------------------------------
Address: c/o Andrew Konstantaras
Legal Department
VISA
900 Metro Center Boulevard
Foster City, CA 94404
FISCHER SECURITY CORPORATION L.L.C.
By: /s/ Addison M. Fischer
---------------------------------------
Title: Managing Director
-------------------------------------
Address: 4073 Mercantile Avenue
Naples, FL 33942
FIRST TZMM INVESTMENT PARTNERSHIP
By: /s/ Timothy Tomlinson
---------------------------------------
Title: General Partner
-------------------------------------
Address: c/o Tomlinson Zisko Morosoli & Maser
200 Page Mill Road, Second Floor
Palo Alto, CA 94306
[SIGNATURE PAGE TO SERIES B PREFERRED
STOCK PURCHASE AGREEMENT]
SCHEDULE A
----------
Schedule of Investors
---------------------
Number Purchase
Name of Shares Price
- --------------------------------------------------- ------------------ --------------------
Kleiner Perkins Caufield & Byers VII 1,153,207 $2,825,357.15
KPCB VII Founders Fund 125,947 $ 308,570.15
KPCB Information Science Zaibatsu Fund II 32,799 $ 80,357.55
Bessemer Venture Partners DCI 187,819 $ 460,156.55
Mitsubishi Corporation 72,026 $ 176,463.70
Security Dynamics Technologies,Inc. 72,026 $ 176,463.70
Intel Corporation 144,052 $ 352,927.40
Ameritech Development Corporation 72,026 $ 176,463.70
GC&H Investments 5,589 $ 13,693.05
Visa International Service Association 144,052 $ 352,927.40
Fischer Security Corporation L.L.C. 72,026 $ 176,463.70
First TZMM Investment Partnership 17,554 $ 43,007.30
--------- -------------
TOTAL: 2,099,123 $5,142,851.35
EXHIBIT D
---------
Schedule of Stockholders
------------------------
Series A Preferred Stockholders No. of Shares
- ------------------------------- -------------
Ameritech Development Corporation 425,000
Bessemer Venture Partners DCI 850,000
First TZMM Investment Partnership 23,550
Fischer Security Corporation 425,000
GC&H Investments 33,333
Intel Corporation 850,000
Mitsubishi Corporation 425,000
Security Dynamics Technologies,Inc. 425,000
Visa International Service Association 850,000
---------
TOTAL: 4,306,883
Common Stockholders No. of Shares
- ------------------- -------------
Bessemer Venture Partners DCI 258,333
D. James Bidzos 125,000
Kairdos L.L.C. 100,000
RSA Data Security, Inc. 4,000,000
Ronald Rivest 125,000
TZM Investment Fund 80,000
---------
TOTAL: 4,688,333
D-1