EXHIBIT 2
EVOLVE SOFTWARE, INC.
SERIES A
PREFERRED STOCK PURCHASE AGREEMENT
dated as of
September 23, 2001
TABLE OF CONTENTS
Page
SECTION 1 Authorization and Sale of Preferred Stock...........................1
1.1 Authorization 1
1.2 Sale of Series A Preferred Stock and Common Stock
Warrants............................................................1
SECTION 2 Closing Date; Delivery..............................................2
2.1 Closing Date........................................................2
2.2 Delivery............................................................2
2.3 Subsequent Closings.................................................2
SECTION 3 Representations and Warranties of the Company.......................2
3.1 Organization of the Company.........................................2
3.2 Authority for Agreement.............................................3
3.3 Shares, Warrants and Conversion Shares Issued.......................3
3.4 Governmental Authorization..........................................3
3.5 Noncontravention....................................................3
3.6 SEC Documents.......................................................4
3.7 Financial Statements................................................4
3.8 No Material Adverse Change..........................................4
3.9 Consent.............................................................6
3.10 Capitalization......................................................6
3.11 Subsidiaries........................................................7
3.12 Intellectual Property...............................................7
3.13 Litigation, etc.....................................................9
3.14 Compliance with Laws...............................................10
3.15 Material Contracts.................................................10
3.16 Offering of Securities.............................................11
3.17 Environmental Compliance...........................................11
3.18 Employment Matters; ERISA..........................................12
3.19 Taxes..............................................................13
3.20 Regulatory Matters.................................................13
3.21 Property...........................................................14
3.22 Proxy Materials....................................................14
3.23 State Takeover Statutes............................................14
3.24 Broker's and Finder's Fees.........................................15
SECTION 4 Representations and Warranties of the Purchasers...................15
4.1 Investment for Own Account.........................................15
4.2 Accredited Investor................................................15
4.3 Registration Exemption.............................................15
4.4 Disposition of Shares..............................................15
4.5 Experience; Risks..................................................15
4.6 Transfer Restrictions..............................................16
4.7 Rule 144...........................................................16
4.8 Disclosure of Information..........................................16
SECTION 5 Additional Agreements..............................................16
5.1 Public Announcements...............................................16
5.2 Nasdaq Listing.....................................................17
5.3 Proxy Materials and Annual Meeting.................................17
5.4 Conduct of the Company.............................................18
5.5 No Solicitation....................................................18
5.6 Notices of Certain Events..........................................20
5.7 HSR Filing Fees and Expenses.......................................21
5.8 Access to Information..............................................21
5.9 Reasonable Best Efforts; Further Assurances........................21
5.10 Board Observer Rights..............................................21
5.11 Chief Executive Officer............................................21
SECTION 6 Conditions to the Closing of All Parties...........................22
6.1 Conditions to Obligations of Each Party to Effect the
Financing..........................................................22
SECTION 7 Conditions to Closing of the Purchasers............................23
7.1 Representations and Warranties Correct.............................23
7.2 Opinion of Company Counsel.........................................23
7.3 Election of Series A Directors.....................................23
7.4 Bank Agreement.....................................................23
7.5 Auditors' Opinion..................................................23
SECTION 8 Conditions to Closing of Company...................................24
8.1 Representations and Warranties Correct.............................24
8.2 Covenants..........................................................24
SECTION 9 Termination........................................................24
9.1 Termination........................................................24
9.2 Effect of Termination..............................................25
SECTION 10 Miscellaneous.....................................................25
10.1 Governing Law......................................................25
10.2 Survival...........................................................25
10.3 Successors and Assigns.............................................25
10.4 Entire Agreement; Amendment........................................25
10.5 Notices, etc.......................................................25
10.6 Delays or Omissions................................................26
10.7 California Corporate Securities Law................................26
10.8 Waiver of Conflict.................................................26
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10.9 Expenses...........................................................26
10.10 Counterparts......................................................27
10.11 Severability......................................................27
10.12 Gender............................................................27
10.13 Exculpation Among Purchasers......................................27
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EXHIBITS
A Certificate of Designation of Series A Preferred Stock
B-1 Form A Subscription Warrant
B-2 Form B Subscription Warrant
C Form of Investment Warrant
D Exceptions to Representations and Warranties of the Company
E Form of Registration Rights Agreement
F Form of Preemptive Rights Agreement
G Opinion of Counsel
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EVOLVE SOFTWARE, INC.
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
This Agreement is made as of September 23, 2001, among Evolve Software,
Inc., a Delaware corporation (the "Company"), with its principal office at ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and the entities whose names
appear on the Schedule of Purchasers attached hereto (the "Purchasers," and
each a "Purchaser").
SECTION 1
Authorization and Sale of Preferred Stock
1.1 Authorization. The Company has authorized the sale and issuance of up
to 1,400,000 shares of its Series A Preferred Stock ("Series A Preferred"),
having the rights, restrictions, privileges and preferences as set forth in the
Company's Certificate of Designation of Series A Preferred Stock attached to
this Agreement as Exhibit A (the "Certificate of Designation"), the issuance of
warrants to purchase up to 1,400,000 additional shares of Series A Preferred
Stock and the issuance of warrants to purchase up to 7,000,000 shares of Common
Stock (plus warrants to purchase an equal number of shares of Common Stock in
connection with the exercise of the aforementioned warrants to purchase Series
A Preferred Stock), all in accordance with the terms and conditions set forth
herein.
1.2 Sale of Series A Preferred Stock and Common Stock Warrants. Subject to
the terms and conditions hereof, at the Closing (as defined below) the Company
will issue and sell to each Purchaser, and each Purchaser will buy from the
Company, the number of shares of Series A Preferred set forth opposite such
Purchaser's name on the Schedule of Purchasers hereto, for a purchase price of
$10.00 per share, payable by check or wire transfer in the amount set forth
opposite such Purchaser's name in the Schedule of Purchasers (the "Financing").
The shares of Series A Preferred issued hereunder are hereafter referred to as
the "Shares." The Company shall further issue to each Purchaser a warrant in
the form attached hereto as Exhibit B-1 and a warrant in the form attached
hereto as Exhibit B-2 (together, the "Subscription Warrants") to purchase the
aggregate number of additional shares of Series A Preferred set forth on the
Schedule of Purchasers. In addition, the Company shall issue to each Purchaser
a warrant in the form attached hereto as Exhibit C (the "Investment Warrants,"
and together with the Subscription Warrants, the "Warrants") to purchase up to
the number of shares of Common Stock of the Company ("Common Stock") set forth
on the Schedule of Purchasers, that number being equal to twenty-five percent
(25%) of the number of shares of Common Stock issuable upon conversion of the
Series A Preferred purchased at the Closing. In addition, upon each exercise of
the Subscription Warrants, the Company shall issue to each Purchaser exercising
any Subscription Warrant additional Investment Warrants to purchase up to the
number of shares of Common Stock equal to twenty-five percent (25%) of the
number of shares of Common Stock issuable upon conversion of the Series A
Preferred purchased at the time of such exercise. The Company's agreement with
each Purchaser is a separate agreement, and the sale to each Purchaser is a
separate sale.
SECTION 2
Closing Date; Delivery
2.1 Closing Date. The closing of the purchase and sale of the Series A
Preferred and the Warrants hereunder (the "Closing") shall be held within two
(2) business days of the satisfaction or waiver of all of the conditions set
forth in Sections 6, 7 and 8 hereof or on such later date or dates as the
Company and the Purchasers may mutually agree (the date of such Closing being
referred to as the "Closing Date"). The place of the Closing shall be at the
offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other place as the Purchasers and the Company may
mutually agree.
2.2 Delivery. At the Closing, the Company will deliver to each Purchaser a
certificate representing shares of the Series A Preferred to be purchased by
such Purchaser at such Closing and the Warrants to be purchased by such
Purchaser at such Closing against payment of the consideration therefor,
specified in Section 1.2 hereof.
2.3 Subsequent Closings. Any Shares not sold on the Closing Date may be
sold at a subsequent Closing to be held at a time and place to be agreed upon
by the Company and a majority-in-interest of the Purchasers purchasing Shares
at such closing (a "Subsequent Closing"), but no later than thirty (30) days
after the Closing Date. Notwithstanding the foregoing sentence, no more than
1,400,000 Shares may be sold in the aggregate at the Closing and any Subsequent
Closings. At each Subsequent Closing, the Company shall deliver to each
Purchaser participating in such Subsequent Closing the certificates
representing the Shares which such Purchaser is purchasing and the Warrants
such Purchaser is purchasing against payment of the consideration therefor, as
specified on the Schedule of Purchasers.
SECTION 3
Representations and Warranties of the Company
Except as set forth on Exhibit D attached hereto the Company hereby
represents and warrants to the Purchasers as follows:
3.1 Organization of the Company. The Company is duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation and has all corporate power and all material governmental
licenses, authorizations, permits, consents and approvals required to carry on
its business as now conducted. The Company is duly qualified to do business as
a foreign corporation and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where failure to be
so qualified or in good standing would not have, individually or in the
aggregate, a Material Adverse Effect. For the purposes of this Agreement, a
"Material Adverse Effect" means, with respect to the Company, a current or
reasonably anticipated material adverse effect on the business, assets,
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financial condition or results of operations of the Company and its
Subsidiaries taken as a whole. For the purposes of this Agreement, "Subsidiary"
means any entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions are at any time directly or indirectly
owned by the Company. The Company has heretofore made available to the
Purchasers or their counsel true and complete copies of the certificate of
incorporation and bylaws of the Company as currently in effect.
3.2 Authority for Agreement. The Company has all requisite corporate power
and authority to enter into this Agreement, the Warrants, the Registration
Rights Agreement in substantially the form as attached hereto as Exhibit E (the
"Registration Rights Agreement"), and the Preemptive Rights Agreement in
substantially the form as attached hereto as Exhibit F (the "Preemptive Rights
Agreement", and together with this Agreement, the Warrants and the Registration
Rights Agreement, the "Agreements") and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of the Agreements
and the consummation of the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action on the part of the
Company. The Agreements, when duly executed and delivered by the Company, will
constitute the valid and binding obligations of the Company, enforceable in
accordance with their terms.
3.3 Shares, Warrants and Conversion Shares Issued. The Shares, the
Warrants and the Conversion Shares, when issued in accordance with the terms of
this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable. For purposes of the Agreement, "Conversion Shares" shall mean
the shares of the Company's Common Stock issuable (i) upon conversion of the
Shares; (ii) upon conversion of the Series A Preferred Stock issuable upon
conversion or exercise of the Subscription Warrants; and (iii) upon conversion
or exercise of the Investment Warrants.
3.4 Governmental Authorization. The execution, delivery and performance by
the Company of the Agreements and the consummation by the Company of the
transactions contemplated hereby and thereby require no consent, approval,
authorization or other action by or in respect of any governmental authority or
other party except (i) compliance with any applicable filing requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and state
securities laws and regulations, (ii) the filing of the Certificate of
Designation in accordance with the law of the State of Delaware, and (iii)
other filings, notifications and consents that are immaterial to the
consummation of the transactions contemplated hereby.
3.5 Noncontravention. Neither the execution and the delivery of the
Agreements, nor the consummation of the transactions contemplated hereby and
thereby, will (i) violate any provision of the charter or bylaws of the Company
or any Subsidiary, (ii) assuming compliance with the matters referred to in
Section 3.4, violate any applicable law nor conflict with any judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to the Company
or its properties or assets, (iii) conflict with, require any consent under or
result in the loss of any right under (a) any agreement, contract, lease,
license, instrument, or other arrangement to which the Company is a party or by
which it is bound or to which any of its assets is subject or (b) any judgment,
order,
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decree, statute, law, ordinance, rule or regulation applicable to the Company
or its properties or assets, except for such Conflicts which would not, either
individually or in the aggregate, be material to the Company or interfere with
the Company's ability to consummate the transactions contemplated hereby, or
(iv) result in the creation or imposition of any lien on any material asset of
the Company or any Subsidiary.
3.6 SEC Documents. The Company has furnished Purchasers with a true and
complete copies of its filings with the Securities and Exchange Commission (the
"SEC") of (i) its final prospectus dated August 9, 2000 relating to its initial
public offering, (ii) its reports on Form 10-Q for the fiscal quarters ended
September 30, 2000, December 31, 2000, and March 31, 2001, and (iii) all
current reports on Form 8-K (collectively, the "SEC Documents"). As of their
respective filing dates, the SEC Documents complied in all material respects
with the requirements of the Securities Act of 1933, as amended (the
"Securities Act") and the Exchange Act, as applicable, and none of the SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were made,
not misleading, except to the extent corrected by a document subsequently filed
with the SEC.
3.7 Financial Statements. The Company has delivered to the Purchasers its
audited balance sheet, statement of operations and statement of cash flows as
of and for the years ended June 30, 2001, June 30, 2000 and June 30, 1999 (the
"Financial Statements"). The Financial Statements are complete and correct in
all material respects and have been prepared in accordance with generally
accepted accounting principles. The Financial Statements fairly present the
financial condition and operating results of the Company as of the dates, and
during the periods, indicated therein. Except as set forth in the Financial
Statements, the Company has no liabilities of any kind, whether accrued,
contingent absolute, determined or determinable, and there is not existing any
condition, situation or set of circumstances which could reasonably be
expected, individually or in the aggregate, to result in such a liability,
other than (i) liabilities incurred since June 30, 2001 in the ordinary course
of business consistent with past practices and (ii) obligations under contracts
and commitments incurred in the ordinary course of business and not required
under generally accepted accounting principles to be reflected in the Financial
Statements, and which are not material to the financial condition or operating
results of the Company.
3.8 No Material Adverse Change. Since the date of the most recent balance
sheet included in the Financial Statements, the Company has conducted its
business in the ordinary course and, except for the execution and delivery of
the Agreements and the consummation of the transactions contemplated thereby,
there has not occurred:
(a) any event which has had or is reasonably expected to have a
Material Adverse Effect;
(b) any amendment or change in the Certificate of Incorporation or
Bylaws of the Company;
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(c) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of the Company
or its Subsidiaries, or any repurchase, redemption or other acquisition by the
Company or any Subsidiaries of any outstanding shares of capital stock or other
securities of, or other ownership interests in, the Company or its
Subsidiaries;
(d) any amendment of any material term of any outstanding security of
the Company or its Subsidiaries;
(e) any incurrence, assumption or guarantee by the Company or its
Subsidiaries of any indebtedness for borrowed money other than in the ordinary
course of business and in amounts and on terms consistent with past practices;
(f) any creation or other incurrence by the Company or its
Subsidiaries of any lien on any material asset other than in the ordinary
course of business consistent with past practices;
(g) any making of any material loan, advance or capital contribution
to or investment in any individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or intermediary thereof (a
"Person") other than loans, advances or capital contributions to or investments
in any of the Company's Subsidiaries in the ordinary course of business
consistent with past practices;
(h) any damage, destruction or other casualty loss (whether or not
covered by insurance) material to the business or assets of the Company or its
Subsidiaries;
(i) any transaction or commitment made, or any contract or agreement
entered into, by the Company or its Subsidiaries relating to its assets or
business (including the acquisition or disposition of any assets) or any
relinquishment by the Company or its Subsidiaries of any contract or other
right, in either case, material to the Company and its Subsidiaries, taken as a
whole, other than transactions and commitments in the ordinary course of
business consistent with past practices and those contemplated by this
Agreement;
(j) any change in any method of accounting, method of tax accounting
or accounting principles or practice by the Company or its Subsidiaries, except
for any such change required by reason of a concurrent change in GAAP or
Regulation S-X under the 1934 Act;
(k) any (i) grant of any severance or termination pay to (or
amendment to any existing arrangement with) any director, executive officer or
employee of the Company or its Subsidiaries, (ii) increase in benefits payable
under any existing severance or termination pay policies or employment
agreements, (iii) entering into any employment, deferred compensation or other
similar agreement (or any amendment to any such existing agreement) with any
director, executive officer or employee of the Company or its Subsidiaries,
(iv) establishment, adoption or amendment (except as required by applicable
law) of any collective bargaining, bonus, profit-sharing, thrift, pension,
retirement, deferred compensation, compensation, stock option, restricted stock
or other benefit plan or arrangement covering any director, executive officer
or employee of
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Company or any Subsidiary, (v) increase in compensation, bonus or other
benefits payable to any director, executive officer or employee of the Company
or its Subsidiaries, other than in the ordinary course of business consistent
with past practice or (vi) any termination, change of position or hiring of any
key employee or executive officer;
(l) any material tax election made or changed, any annual tax
accounting period changed, any method of tax accounting adopted or changed, any
material amended tax returns or claims for material tax refunds filed, any
material closing agreement entered into, any material tax claim, audit or
assessment settled, or any right to claim a material tax refund, offset or
other reduction in tax liability surrendered; or
(m) any revaluation by the Company or its Subsidiaries of any of its
assets, including, without limitation, writing down the value of capitalized
inventory or writing off notes or accounts receivable other than in the
ordinary course of business.
3.9 Consent. No Consent of any governmental entity or any third party is
required by or with respect to the Company in connection with the execution and
delivery of the Agreements or the consummation of the transactions contemplated
hereby and thereby other than any such consents the absence of which would not
cause a material adverse effect on the Company or on the Company's ability to
consummate the transactions contemplated hereby.
3.10 Capitalization. As of the date hereof, the authorized capital stock
of the Company consists of 110,000,000 shares of Common Stock, of which
40,166,616 shares were issued and outstanding as of August 31, 2001, and
10,000,000 shares of Preferred Stock, of which none are issued and outstanding.
No shares of Series A Preferred were authorized or outstanding prior to the
date of this Agreement. All such outstanding shares have been duly authorized
and validly issued, and are fully paid and nonassessable. Assuming the accuracy
and completeness of representations made by the purchasers of such outstanding
shares in connection with the issuance of such securities, all such outstanding
shares were issued in material compliance with applicable U.S. federal and
state securities laws. The Company has reserved (i) sufficient shares of Common
Stock for issuance upon conversion of the Shares and exercise of the Warrants,
(ii) 13,000,000 shares of Common Stock for issuance upon exercise of stock
options pursuant to the Company's 1995 Stock Option Plan, 2000 Stock Plan and
2000 Employee Stock Purchase Plan (collectively, the "Stock Plans") and (iii)
9,167 shares of Common Stock for issuance upon exercise of outstanding
warrants. Except as set forth above and except for outstanding options to
purchase 5,092,616 shares of Common Stock as of August 31, 2001 granted to
employees and service providers under the Stock Plans, there are no other
options, warrants, conversion privileges or other rights presently outstanding
to purchase or otherwise acquire any authorized but unissued shares of capital
stock or other securities of the Company. There are no preemptive or other
similar rights available to the existing holders of the capital stock of the
Company. There are no voting trusts, stockholder agreements, material proxies
or other agreements or understandings to which the Company or any of its
Subsidiaries is a party with respect to the voting or transfer of registration
of shares of capital stock of the Company. Neither the offer nor the issuance
or sale of the Shares constitutes or will constitute (i) an event under any
capital stock or convertible security or any anti-dilution or similar provision
of any
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agreement or instrument to which the Company is a party or by which it is bound
or affected, which shall either increase the number of shares of capital stock
issuable upon conversion of any securities or upon exercise of any warrant or
right to subscribe to or purchase any stock or similar security, or decrease
the consideration per share of capital stock to be received by the Company upon
such conversion or exercise, or (ii) an event under the vesting provisions of
any outstanding option, warrant, restricted stock purchase agreement or other
employment- related agreement of the Company which would cause such vesting
provisions to accelerate. Upon the filing of the Certificate of Designation,
the Company will have authorized 2,800,000 shares of Series A Preferred Stock
for issuance hereunder, and the Series A Preferred shares will be convertible
into Common Stock and have the rights, preferences, privileges and restrictions
set forth in the Certificate of Designation. Assuming the accuracy of the
Purchasers' representations in Section 4 below, upon issuance the Shares will
have been issued in compliance with all federal and state securities laws.
3.11 Subsidiaries.
(a) Each of the Company's Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all powers (corporate or otherwise) and
all material governmental licenses, authorizations, permits, consents and
approvals required to carry on its business as now conducted. Each such
Subsidiary of the Company is duly qualified to do business as a foreign
corporation or limited liability company and is in good standing in each
jurisdictions where such qualification is necessary, except for those
jurisdictions where failure to be so qualified or in good standing would not
have, individually or in the aggregate, a Material Adverse Effect.
(b) All of the outstanding capital stock or other voting securities or
other equity interests of each Subsidiary of the Company is owned by the
Company, directly or indirectly, free and clear of any lien and free of any
other limitation or restriction (including any restriction on the right to
vote, sell or otherwise dispose of such capital stock or other voting
securities or other equity interests). There are not outstanding (i) securities
of the Company or any Subsidiary convertible into or exchangeable for shares of
capital stock or voting securities or other equity securities of any
Subsidiary, or (ii) options or other rights to acquire from the Company or any
Subsidiary, or other obligation of the Company or any Subsidiary to issue, any
capital stock, voting securities, other equity interests or securities
convertible into or exchangeable for capital stock or voting securities or
other equity interests of any Subsidiary (the items in clauses 3.11(b)(i) and
3.11(b)(ii) being referred to collectively as the "Subsidiary Securities").
There are not outstanding obligations of the Company or any Subsidiary to
repurchase, redeem or otherwise acquire any outstanding Subsidiary Securities.
3.12 Intellectual Property. For the purposes of this Agreement, the
following terms have the following definitions:
"Intellectual Property" shall mean any or all of the following and all
rights in, arising, out of, or associated therewith: (i) all United States,
international and foreign patents and applications therefor and all reissues,
divisions, renewals, extensions, provisionals, continuations and
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continuations-in-part thereof; (ii) all inventions (whether patentable or not),
invention disclosures, improvements, trade secrets, proprietary information,
know how, technology, technical data and customer lists, and all documentation
relating to any of the foregoing; (iii) all copyrights, copyrights
registrations and applications therefor, and all other rights corresponding
thereto throughout the world; (iv) all industrial designs and any registrations
and applications therefor throughout the world; (v) all trade names, logos,
common law trademarks and service marks, trademark and service ▇▇▇▇
registrations and applications therefor throughout the world; (vi) all
databases and data collections and all rights therein throughout the world;
(vii) all moral and economic rights of authors and inventors, however
denominated, throughout the world, and (viii) any similar or equivalent rights
to any of the foregoing anywhere in the world.
"Company Intellectual Property" shall mean any Intellectual Property that
is owned by, or exclusively licensed to, the Company or its Subsidiaries.
"Registered Intellectual Property" means all United States, international
and foreign: (i) patents and patent applications (including provisional
applications); (ii) registered trademarks, applications to register trademarks,
intent-to-use applications, or other registrations or applications related to
trademarks; (iii) registered copyrights and applications for copyright
registration; and (iv) any other Intellectual Property that is the subject of
an application, certificate, filing, registration or other document issued,
filed with, or recorded by any state, government or other public legal
authority.
"Company Registered Intellectual Property" means all of the Registered
Intellectual Property owned by, or filed in the name of, the Company or its
Subsidiaries.
(a) No Company Intellectual Property or product or service of the
Company or its Subsidiaries is subject to any proceeding or outstanding decree,
order or judgment restricting in any manner the use, transfer, or licensing
thereof by the Company or its Subsidiaries, or which may affect the validity,
use or enforceability of such Company Intellectual Property (nor, to the
Company's knowledge is there any basis therefor).
(b) The Company or its Subsidiaries own and have good and exclusive
title to, or have license to use (sufficient for the conduct of its business as
currently conducted and as proposed to be conducted), each item of Company
Intellectual Property or other Intellectual Property used by the Company or its
Subsidiaries free and clear of any lien or encumbrance (excluding licenses and
related restrictions); and the Company or its Subsidiaries are the exclusive
owners of or have a valid license to use all trademarks and trade names used in
connection with the operation or conduct of the business of the Company and its
Subsidiaries, including the sale of any products or the provision of any
services by the Company and its Subsidiaries.
(c) The Company or its Subsidiaries own exclusively, and have good
title to, all copyrighted works that are the Company's or its Subsidiaries'
products or which the Company or its Subsidiaries otherwise expressly purport
to own.
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(d) To the extent that any Intellectual Property has been developed
or created by a third party for the Company or its Subsidiaries, the Company or
its Subsidiaries have a written agreement with such third party with respect
thereto and the Company or its Subsidiaries thereby either have obtained
ownership of and are the exclusive owners of, or have obtained a license
(sufficient for the conduct of its business as currently conducted and as
proposed to be conducted) to, all such third party's Intellectual Property in
such work, material or invention by operation of law or by valid assignment.
(e) Neither the Company nor any of its Subsidiaries has transferred
ownership of, or granted any exclusive license with respect to, any
Intellectual Property that is or was material Company Intellectual Property, to
any third party.
(f) The operation of the business of the Company and its Subsidiaries
as such business currently is conducted, including the Company's and its
Subsidiaries' design, development, manufacture, marketing and sale of the
products or services of the Company and its Subsidiaries (including products
currently under development), to the knowledge of the Company, has not and will
not infringe or misappropriate the Intellectual Property of any third party or,
to its knowledge, constitute unfair competition or trade practices under the
laws of any jurisdiction.
(g) Neither the Company nor any of its Subsidiaries has received
notice from any third party that the operation of the business of the Company
or its Subsidiaries or any act, product or service of the Company or its
Subsidiaries, may infringe or misappropriate the Intellectual Property of any
third party or constitutes unfair competition or trade practices under the laws
of any jurisdiction.
(h) To the knowledge of the Company, no person has or is materially
infringing or misappropriating any Company Intellectual Property.
(i) The Company and its Subsidiaries have taken reasonable steps to
protect the Company's and its Subsidiaries' rights in the Company's
confidential information and trade secrets that it wishes to protect or any
trade secrets or confidential information of third parties provided to the
Company or its Subsidiaries.
3.13 Litigation, etc. There are no actions, suits, proceedings or
investigations pending or, to the Company's knowledge, currently threatened
against the Company or the Subsidiaries or their respective properties before
any court, arbitrator or governmental agency (nor, to the Company's knowledge,
is there any written threat thereof or any reasonable basis therefore), that if
decided adversely to the Company would be material to the Company, or that in
any manner challenge or seek to prevent, enjoin, alter or materially delay the
transactions contemplated by the Agreements. The foregoing includes, without
limitation, actions, suits, proceedings or investigations pending or threatened
against the Company (or any basis therefor known to the Company) 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 proprietary to any
of their former employers, or their obligations under any agreements with prior
employers. The Company is not a party or subject to
-9-
the provisions of any order, writ, injunction, judgment or decree of any court
or government agency or instrumentality. There is no action, suit, proceeding
or investigation by the Company currently pending or that the Company intends
to initiate.
3.14 Compliance with Laws. Neither the Company nor any Subsidiary is in
violation of, nor has violated or been threatened to be charged with or given
notice of any violation of, nor to the knowledge of the Company, is under
investigation with respect to any applicable law, in each case other than such
violations that could not reasonably be material to the Company.
3.15 Material Contracts. Except as disclosed in the SEC Documents, neither
the Company nor any Subsidiary is a party to or is bound by:
(a) any employment or consulting agreement, contract or commitment
with any officer or director or higher level employee or member of the
Company's Board of Directors, other than those that are terminable by the
Company or any Subsidiary on no more than thirty (30) days' notice without
liability or financial obligation to the Company;
(b) any agreement or plan, including, without limitation, any stock
option plan, stock appreciation right plan or stock purchase plan, any of the
benefits of which will be increased, or the vesting of benefits of which will
be accelerated, by the occurrence of any of the transactions contemplated by
the Agreements or by a Change of Control Transaction, as defined in the
Certificate of Designation, or the value of any of the benefits of which will
be altered on the basis of any of the transactions contemplated by the
Agreements or by a Change of Control Transaction;
(c) any material agreement of indemnification or any guaranty other
than (i) any agreement of indemnification entered into in connection with the
sale or license of software products or services in the ordinary course of
business, or (ii) any indemnification obligation of the Company or any
Subsidiary to its officers or directors;
(d) any agreement, contract or commitment containing any covenant
limiting in any material respect the right of the Company or any Subsidiary to
engage in any line of business or to compete with any person or granting any
exclusive distribution rights;
(e) any agreement, contract or commitment currently in force relating
to the disposition or acquisition by the Company or any Subsidiary after the
date of this Agreement of a material amount of assets not in the ordinary
course of business or pursuant to which the Company has any material ownership
interest in any corporation, partnership, joint venture or other business
enterprise other than the Company's Subsidiaries;
(f) any dealer, distributor, joint marketing, original equipment
manufacturer, reseller or development agreement currently in force under which
the Company or any Subsidiary has continuing material obligations to jointly
market any product, technology or service and which may not be canceled without
penalty upon notice of ninety (90) days or less and, in the case of dealer,
distributor or joint marketing agreements, which involve payments by or to the
Company of
-10-
$500,000 or more, or any material agreement pursuant to which the Company or
any Subsidiary has continuing material obligations to jointly develop any
intellectual property that will not be owned, in whole or in part, by the
Company or its Subsidiaries;
(g) any agreement, contract or commitment currently in force to
provide source code to or to license or acquire source code from any third
party for any product or technology other than source code escrow agreements or
other similar arrangements entered into in the normal course of business;
(h) any agreement, contract or commitment currently in force to
license any third party to manufacture or reproduce any Company product,
service or technology or any agreement, contract or commitment currently in
force to sell or distribute any Company products, including any parts or
components thereof, service or technology except agreements with distributors
or sales representative in the normal course of business cancelable without
penalty upon notice of ninety (90) days or less;
(i) any material mortgages, indentures, guarantees, loans or credit
agreements or other agreements or instruments relating to the borrowing of
money or extension of credit;
(j) any settlement agreement entered into prior to the date of this
Agreement; or
(k) any other agreement, contract or commitment that includes
receipts or expenditures of $500,000 or more individually.
Except to the extent fully performed or terminated pursuant to its terms,
each of the agreements, contracts, leases and commitments required to be
disclosed pursuant to this section is a legal, valid and binding agreement of
the Company or a Subsidiary of the Company, as the case may be, and is in full
force and effect, and none of the Company, such Subsidiary or, to the knowledge
of the Company, any other party thereto is in default or breach, in each case
except for any such default or breach that could not be material to the
Company, and, to the knowledge of the Company, no event or circumstance has
occurred that, with notice or lapse of time or both, would constitute any event
of default thereunder, except for an event of default that could not reasonably
be expected to be material to the Company.
3.16 Offering of Securities. Neither the Company nor any Person acting on
the Company's behalf has taken or will take any action (including, without
limitation, any offering of any securities of the Company under circumstances
which would require, under the Securities Act, the integration of such offering
with the offering and sale of the Shares, the Warrants, and the Conversion
Shares) which might subject the offering, issuance or sale of the Shares to the
registration requirements of Section 5 of the Securities Act.
3.17 Environmental Compliance.
(a) The Company does not own any real property. No notice,
notification, demand, request for information, citation, summons, complaint or
order has been issued, no complaint has
-11-
been filed, no penalty has been assessed and no investigation or review is
pending, or to the Company's knowledge, threatened by any governmental or other
entity (i) with respect to any alleged violation by the Company or any of its
Subsidiaries of any environmental law, (ii) with respect to any alleged failure
by the Company or any of its Subsidiaries to have any material permit,
certificate, license, approval, registration or authorization required under
any environmental law in connection with the conduct of their businesses or
(iii) with respect to any release, as defined in 42 U.S.C. 9601(22), of any
hazardous substance that could reasonably be expected to be material to the
Company.
(b) No release, as defined in 42 U.S.C. 9601(22), of any hazardous
substance has occurred at or on any property now or previously owned or leased
by the Company or any of its Subsidiaries.
(c) To the best knowledge of the Company, there are no environmental
liabilities that could reasonably be material to the Company.
3.18 Employment Matters; ERISA.
(a) The Company has made available to the Purchasers copies of any
employee benefit plan within the meaning of Section 3(3) of ERISA or any other
material employment or employee arrangement, severance arrangement or
employment agreement, which is maintained or otherwise contributed to by any
member of the ERISA Group and covers any current or former employee of Company
(collectively the "Benefit Arrangements") and, if applicable, related trust
agreements and all amendments thereto and written interpretations thereof
together with the most recent annual report (Form 5500 including, if
applicable, schedule B thereto). Each material Benefit Arrangement that is
intended to be qualified under Section 401(a) of the Code has been determined
by the Internal Revenue Service to be so qualified if so required and, to the
knowledge of the Company, there has been no event since the date of such
determination which would reasonably be expected to adversely affect such
qualification. Each material Benefit Arrangement has been maintained in
substantial compliance with its terms and with the requirements prescribed by
and all applicable statutes, orders, rules and regulations, including but not
limited to ERISA and the Code, except to the extent that it would not have a
material adverse effect.
(b) Neither the Company nor any member of the ERISA Group maintains
or contributes to or has maintained or contributed to any plan subject to Title
IV of ERISA or any multiemployer plan within the meaning of Section 4001(a)(3)
of ERISA.
(c) The Company has no current or projected liability in respect of
post-employment or post-retirement health or medical or life insurance benefits
for its former or current employees, except for benefit coverage mandated by
applicable law or as required to avoid excise tax under Section 4980B of the
Code.
(d) No employee of the Company shall become entitled to any payments
or accelerated vesting of any awards merely as a result of this transaction.
-12-
(e) Other than as described in the SEC Documents and standard form
employment offer letters and employment, confidential information and invention
assignment agreements ("Employment Agreements") in the forms provided to
counsel to the Purchasers, there are no employment or employment related
agreements between the Company and any of its employees. All present and past
employees of the Company and its Subsidiaries have entered into Employment
Agreements with the Company, and none have taken any material exception to the
provision or assignment of inventions. Other than as described in the SEC
Documents, there are no severance arrangements of any kind in effect for any of
the Company's current employees, nor are there any arrangements in effect
relating to the increase or acceleration of any salary or benefits of any
employee in the event of any sale of the Company or substantially all of its
assets.
3.19 Taxes. (a) The Company and each of its Subsidiaries has filed in
accordance with applicable law, all material tax returns, statements, reports
and forms (collectively, "Returns") required to be filed with any taxing
authority when due (taking into account any extension of a required filing
date); (b) at the time filed, such returns were true, correct and complete in
all material respects; (c) the Company and each of its Subsidiaries has timely
paid all taxes shown as due and payable on the returns that have been filed;
(d) the charges, accruals and reserves for taxes reflected in the most recent
balance sheet (excluding any provision for deferred income taxes) are adequate
under United States generally accepted accounting principles, consistently
applied, to cover the tax liabilities accruing through the date thereof; (e)
since the date of the most recent balance sheet included in the Financial
Statements, neither the Company nor any of its Subsidiaries has engaged in any
transaction, or taken any other action, other than in the ordinary course of
business, which would reasonably be expected to result in a material tax on the
Company or any of its Subsidiaries; (f) there is no action, suit, proceeding,
investigation, audit or claim pending, or, to the knowledge of the Company
threatened against or with respect to it or any of its Subsidiaries in respect
of any tax; (g) neither the Company nor any of its Subsidiaries has any
obligation under any tax sharing agreement, tax allocation agreement or tax
indemnity agreement or any other agreement or arrangement in respect of any tax
with any Person other than the Company or its Subsidiaries; (h) neither the
Company nor any of its Subsidiaries has been a member of an affiliated,
consolidated, combined or unitary group other than one of which the Company was
the common parent; (i) proper and adequate amounts have been withheld by the
Company and its Subsidiaries from their respective employees and other Persons
for all periods in compliance in all material respects with the tax, social
security and unemployment, excise and other withholding provisions of all
federal, state, local and foreign laws; (j) there is no lien in respect of any
material tax outstanding against the assets, properties or business of the
Company or any of its Subsidiaries; and (k) the Company is not now, has never
been and does not contemplate becoming a "United States Real Property Holding
Corporation" as defined in Section 897(c)(2) of the Code and Section 1.897-2(b)
of the Treasury regulations thereunder.
3.20 Regulatory Matters. The Company has all necessary franchises,
approvals, authorizations, permits, licenses, registrations, qualifications and
similar rights obtained from any federal, state or local regulatory authority
("Authorizations") to conduct and operate the businesses of the Company, except
any such Authorizations which are not material to the Company. The
Authorizations are currently in full force and effect, are not in default, and
are valid under all
-13-
applicable rules and regulations according to their terms, except as are not
material to the Company. The Company is in material compliance with the terms
and conditions of the Authorizations, including requirements for notifications,
filing, reporting, posting and maintenance of logs and records.
3.21 Property. The material properties held by the Company and its
Subsidiaries conform to the description thereof in the Company's SEC Documents.
The Company and its Subsidiaries have good and marketable title in fee simple
to any real property and good and marketable title to all personal property
owned by them which is material to the business of the Company and its
Subsidiaries, taken as a whole, in each case free and clear of all liens,
encumbrances and defects except such as are disclosed in the Company's SEC
Documents; and all material real property and buildings held under lease by the
Company and its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries.
3.22 Proxy Materials. If the Company seeks the approval of the Company's
stockholders in connection with the issuance of securities contemplated hereby,
the proxy or information statement of the Company to be filed with the
Commission in connection with the related shareholders meeting (the "Proxy
Statement") and any amendments or supplements thereto will, when filed, comply
as to form in all material respects with the applicable requirements of the
Exchange Act. At the time the Proxy Statement or any amendment or supplement
thereto is first mailed to stockholders of the Company, and at the time such
stockholders vote on approval of the issuance of securities hereunder, the
Proxy Statement, as supplemented or amended, if applicable, will not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The representations
and warranties contained in this Section 3.22 will not apply to statements or
omissions included in the Proxy Statement based upon information furnished in
writing to the Company by the Purchaser specifically for use therein.
3.23 State Takeover Statutes. The Board of Directors of the Company, at a
meeting duly called (or for which notice was duly waived by all directors of
the Company) and held on September 21, 2001, has approved the terms of this
Agreement, the Certificate of Designation, the Registration Rights Agreement
and the other documents contemplated by this Agreement, and the consummation of
the transactions contemplated hereby and thereby (including without limitation
the sale and issuance to the Purchasers of the Shares, Warrants and Conversion
Shares pursuant to this Agreement and such approval constitutes approval of
such transactions by the Board of Directors of the Company under the provisions
of Section 203 of the Delaware General Corporation Law (the "DGCL"), and
constitutes all actions necessary to ensure that the restrictions contained in
Section 203 of the DGCL will not apply to the Purchasers in connection with or
as a result of such transactions. To its knowledge, no other state takeover
statute is applicable to the transactions contemplated by this Agreement and
the other documents contemplated hereby.
-14-
3.24 Broker's and Finder's Fees. The Company has not incurred, nor will it
incur, directly or indirectly, nor will the Purchasers incur, directly or
indirectly as a result of any action of the Company, any liability for
brokerage or finder's fees or agent's commissions or any similar charges in
connection with the Agreement or any transaction contemplated thereby.
SECTION 4
Representations and Warranties of the Purchasers
Each Purchaser hereby represents and warrants, severally and not jointly,
to the Company with respect to its purchase of the Shares and the Warrants as
follows:
4.1 Investment for Own Account. This Agreement is made by the Company with
the Purchaser in reliance upon such Purchaser's representations and covenants
made in this Section 4, which by its execution of this Agreement the Purchaser
hereby confirms. The Purchaser represents that the Shares, the Warrants and the
Conversion Shares to be received will be acquired for investment for its own
account, not as a nominee or agent, and not with a view to the sale or
distribution of any part thereof, and that it has no present intention of
selling, granting any participation in or otherwise distributing the same. The
Purchaser further represents that it does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to any of the
Shares, the Warrants or the Conversion Shares.
4.2 Accredited Investor. The Purchaser represents that it is an
"Accredited Investor" within the meaning of Rule 501(a) of Regulation D,
pursuant to the Securities Act.
4.3 Registration Exemption. The Purchaser understands and acknowledges
that the offering of the Shares, the Warrants, and the Conversion Shares
pursuant to this Agreement will not be registered under the Securities Act on
the ground that the sale provided for in this Agreement and the issuance of
securities hereunder is exempt pursuant to Section 4(2) of the Securities Act
or Regulation D thereunder, and that the Company's reliance on such exemption
is predicated on the Purchasers' representations set forth herein.
4.4 Disposition of Shares. The Purchaser covenants that in no event will
it make any disposition of any of the Shares, the Warrants or the Conversion
Shares except in accordance with the provisions hereof and the provisions of
the Registration Rights Agreement.
4.5 Experience; Risks. The Purchaser represents that it is experienced in
evaluating investments in emerging high technology companies such as the
Company, is able to fend for itself in transactions such as the one
contemplated by this Agreement, has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks of
its
-15-
prospective investment in the Company, and has the ability to bear the
economic risks of the investment.
4.6 Transfer Restrictions. The Purchaser acknowledges and understands that
the Shares, the Warrants and the Conversion Shares must be held indefinitely
unless they are subsequently registered under the Securities Act or an
exemption from such registration is available, and that, except as otherwise
provided in the Registration Rights Agreement, the Company is under no
obligation to register the Shares, the Warrants or the Conversion Shares.
4.7 Rule 144. The Purchaser acknowledges that it is familiar with the
terms of Rule 144 promulgated under the Act, which permits limited public
resales of securities acquired in a non-public offering, subject to the
satisfaction of certain conditions. The Purchaser understands that before the
Shares, or any Common Stock issued upon conversion thereof, may be sold under
Rule 144, the following conditions must be fulfilled, except as otherwise
described below: (i) certain public information about the Company must be
available, (ii) the sale must occur at least one year after the later of the
date the Shares were sold by the Company or the date they were sold by an
affiliate of the Company, (iii) the sale must be made in a broker's transaction
and (iv) the number of Shares sold must not exceed certain volume limitations.
If, however, the sale occurs at least two years after the Shares were sold by
the Company or the date they were sold by an affiliate of the Company, and if
the Purchaser is not an affiliate of the Company, the foregoing conditions will
not apply. The Purchaser acknowledges that in the event the applicable
requirements of Rule 144 are not met, registration under the Securities Act or
compliance with another exemption from registration will be required for any
disposition of its stock. The Purchaser understands that although Rule 144 is
not exclusive, the Securities and Exchange Commission has expressed its opinion
that persons proposing to sell restricted securities received in a private
offering other than in a registered offering or pursuant to Rule 144 will have
a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales and that such persons and
the brokers who participate in the transactions do so at their own risk.
4.8 Disclosure of Information. The Purchaser believes it has received all
the information it considers necessary or appropriate for deciding whether to
purchase the Series A Preferred. The Purchaser 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 A Preferred
and the business, properties, prospects and financial condition of the Company.
The foregoing, however, does not limit or modify the representations and
warranties of the Company in Section 3 of this Agreement or the right of the
Purchaser to rely thereon.
SECTION 5
Additional Agreements
5.1 Public Announcements.
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(a) The Company and the Purchasers shall each receive the prior
written consent from the Company and Warburg Pincus Private Equity VIII, L.P.
("Warburg") before issuing any press release or making any public statement
with respect to this Agreement, the transactions contemplated hereby or an
Alternative Proposal and, except as may be required by applicable law or any
stock exchange rule, will not issue any such press release or make any such
public statement prior to obtaining such written consent.
(b) The parties will prepare a joint announcement for release upon
announcement of the transactions contemplated hereby.
5.2 Nasdaq Listing. The Company agrees to cause the Conversion Shares to
be authorized for listing on the Nasdaq Stock Market upon official notice of
issuance.
5.3 Proxy Materials and Annual Meeting. The Company will include, in the
Proxy Statement relating to its 2001 annual meeting of stockholders currently
scheduled for November 15, 2001 (the "Annual Meeting"), a proposal to amend the
Certificate of Incorporation of the Company to remove the prohibition on the
taking of actions by written consent of the holders of Series A Preferred Stock
in lieu of meetings and to increase the number of authorized shares of Common
Stock of the Company by 90,000,000 shares (as adjusted for any stock splits or
reverse stock splits) (the "Amendment"). In addition, if required for purposes
of maintaining the Company's listing on the Nasdaq National Market, or if the
directors of the Company elected by the Purchasers deem it to be advisable for
such purpose, the Company will include in the Proxy Statement a proposal for a
reverse split of the Company's Common Stock (the "Reverse Split"). The Company
will respond to any comments of the SEC and will cause the Proxy Statement to
be mailed to its stockholders at the earliest practicable time. As promptly as
practicable after the date of this Agreement, the Company will prepare and file
any other filings required under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the Securities Act or any other federal or state
laws relating to the Financing and the transactions contemplated by this
Agreement (the "Other Filings"). The Company will notify the Purchasers
promptly upon the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff or any other government officials for
amendments or supplements to the Proxy Statement or any Other Filing or for
additional information and will supply the Purchasers with copies of all
correspondence between the Company or any of its representatives, on the one
hand, and the SEC, or its staff or any other government officials, on the other
hand, with respect to the Proxy Statement or any Other Filing. The Proxy
Statement and any Other Filings will comply in all material respects with all
applicable requirements of law and the rules and regulations promulgated
thereunder. Whenever any event occurs which is required to be set forth in an
amendment or supplement to the Proxy Statement or any Other Filing, the Company
will promptly inform the Purchasers of such occurrence and cooperate in filing
with the SEC or its staff or any other government officials, and/or mailing to
stockholders of the Company such amendment or supplement. The Board of
Directors of the Company shall recommend approval of the Amendment and, if
applicable, the Reverse Split, and the Company shall use its reasonable best
efforts to obtain approval of the Amendment and, if applicable, the Reverse
Split, by the stockholders. In the event that the Company's stockholders do not
approve the Amendment or, if applicable, the Reverse Split, upon request of
Warburg, the Company will (a) call and hold an additional meeting or meetings
of
-17-
stockholders in accordance with the provisions of this Section for purposes
of obtaining such approvals, provided that the Company shall not be obligated
to hold more than one (1) such meeting in any three (3) month period or (b)
redeem the Warrants for which there are insufficient shares of authorized
Common Stock for the Company to satisfy its obligations. The redemption price
may be paid in the form of cash or mutually acceptable promissory note, and
shall be equal to the number of shares subject to the Warrants to be redeemed
on as-converted to Common Stock basis multiplied by the difference between the
average closing price for the Company's Common Stock for the ten (10) trading
days preceding Warburg's notice to the Company requesting such redemption minus
the exercise price per share of the stock subject to the Warrants to be
redeemed on an as-converted to Common Stock basis.
5.4 Conduct of the Company. From the date hereof until the Closing, except
with the prior written consent of Warburg, the Company and its Subsidiaries
shall conduct their business in the ordinary course consistent with past
practice and shall use their commercially-reasonable efforts to preserve intact
their business organizations and relationships with third parties and to keep
available the services of their present officers and employees. The Company
will use all reasonable efforts in the ordinary conduct of its business to
cause its representations and warranties under Section 3 hereof which are
qualified as to materiality to continue to be true (as so qualified) as of the
Closing Date and to cause such its representations and warranties under Section
3 hereof which are not so qualified to continue to be true in all material
respects as of the Closing Date (except for such representations and warranties
which speak as of a specified date). Without limiting the generality of the
foregoing, from the date hereof until the Closing without written consent of
Warburg:
(a) the Company will not permit, adopt or propose any change to its
Certificate of Incorporation or Bylaws, except as contemplated by this
Agreement;
(b) the Company will not, and will not permit any of its Subsidiaries
to, merge or consolidate with any other Person or acquire a material amount of
stock or assets of any other Person;
(c) the Company will not, and will not permit any of its Subsidiaries
to, sell, lease, license, transfer or otherwise dispose of any material
subsidiary or any material amount of assets, securities or property, tangible
or intangible, except (i) pursuant to existing contracts or commitments and
(ii) in the ordinary course consistent with past practice; and
(d) the Company will not, and will not permit any of its Subsidiaries
to, agree or commit to do any of the foregoing items (a) through (c).
5.5 No Solicitation.
(a) Neither the Company nor any of its Subsidiaries shall, nor shall
the Company or any Subsidiary authorize or permit any of its or their officers,
directors, employees, investment bankers, attorneys, accountants, consultants
or other agents or advisors to, directly or indirectly, (i) solicit, initiate
or take any action to encourage the submission of any Alternative Proposal (as
-18-
defined below), (ii) enter into or participate in any discussions or
negotiations with, furnish any non-public information relating to the Company
or any Subsidiaries or afford access to the business, properties, assets, books
or records of the Company or the Subsidiaries to, otherwise cooperate in any
way with, or knowingly assist, participate in, or encourage any effort by any
party that is seeking to make, or has made, an Alternative Proposal or (iii)
grant any waiver or release under any standstill or similar agreement with
respect to any class of equity securities of the Company or any Subsidiaries.
(b) Notwithstanding the foregoing, the Board of Directors of the
Company, directly or indirectly through advisors, agents or other
intermediaries, may (i) engage in negotiations or discussions with any party
that, subject to the Company's compliance with Section 5.5(a), has made a
Superior Proposal (as defined below) or, (ii) furnish to such party that has
made a Superior Proposal nonpublic information relating to the Company or its
Subsidiaries pursuant to a confidentiality agreement with terms no less
favorable to Company than those contained in the Confidentiality Agreement
dated as of August 13, 2001 between the Company and Warburg (the
"Confidentiality Agreement"), (iii) following receipt of such Superior
Proposal, take and disclose to its shareholders a position contemplated by Rule
14e-2(a) under the 1934 Act or otherwise recommend the Superior Proposal and
make disclosure to them, (iv) following receipt of such Superior Proposal, fail
to make, withdraw, or modify in a manner adverse to the Purchasers its
recommendation to its shareholders referred to in Section 5.3 hereof and/or (v)
take any non-appealable, final action ordered to be taken by the Company by any
court of competent jurisdiction, but in each case referred to in the foregoing
clauses (i) through (iv) only if the Board of Directors of the Company
determines in good faith by a majority vote after consultation with outside
legal counsel to the Company, that it must take such action to comply with its
fiduciary duties under applicable law.
(c) The Board of Directors of the Company shall not take any of the
actions referred to in clauses (i) through (iv) of the preceding subsection
unless the Company shall have delivered to Warburg a prior written notice
advising Warburg that it intends to take such action, and the Company shall
continue to advise Warburg after taking such action. In addition, the Company
shall notify Warburg promptly (but in no event later than 24 hours) after
receipt by the Company (or any of its advisors) of any unsolicited inquiry or
Alternative Proposal, of any indication that a third party is considering
making an Alternative Proposal or of any request for information relating to
the Company or its Subsidiaries or for access to the business, properties,
assets, books or records of the Company or its Subsidiaries by any party that
may be considering making, or has made, an Alternative Proposal. The Company
shall provide such notice orally and in writing and shall identify the party
making, and the terms and conditions of, any such Alternative Proposal,
indication or request. The Company shall keep Warburg fully informed, on a
current basis, of the status and material details of any such Alternative
Proposal, indication or request. In addition to the foregoing, the Company
shall (i) provide Warburg with at least forty-eight (48) hours prior notice (or
such lesser notice as provided to the members of the Company's Board of
Directors but in no event less than eight hours) of any meeting of the
Company's Board of Directors at which the Company's Board of Directors is
reasonably expected to consider a Superior Proposal and (ii) provide Warburg
with at least three (3) business days prior written notice of a meeting of the
Company's Board of
-19-
Directors at which the Company's Board of Directors is reasonably expected to
recommend a Superior Proposal to its shareholders and together with such notice
a description of the terms and conditions relating to such Superior Proposal.
The Company shall, and shall cause its Subsidiaries and the advisors, employees
and other agents of the Company and any of its Subsidiaries to, cease
immediately and cause to be terminated any and all existing activities,
discussions or negotiations, if any, with any party conducted prior to the date
hereof with respect to any Alternative Proposal and shall use its best efforts,
consistent with its rights under confidentiality agreements with such parties,
to cause any such party (or its agents or advisors) in possession of
confidential information about the Company that was furnished by or on behalf
of the Company to return or destroy all such information.
"Alternative Proposal" means, other than the transactions contemplated by
this Agreement, any offer or proposal for, any indication of interest in, or
any submission of inquiries from any party relating to (A) any acquisition or
purchase, direct or indirect, of 10% or more of the consolidated assets of the
Company and its Subsidiaries or over 10% of any class of equity or voting
securities of the Company or any of its Subsidiaries, (B) any tender offer
(including a self-tender offer) or exchange offer that, if consummated, would
result in such party's beneficially owning 10% or more of any class of equity
or voting securities of the Company or any of its Subsidiaries, or (C) a
merger, consolidation, share exchange, business combination, sale of
substantially all the assets, reorganization, recapitalization, liquidation,
dissolution or other similar transaction involving the Company or any of its
Subsidiaries.
"Superior Proposal" means any bona fide, unsolicited written Alternative
Proposal for any of the following transactions (i) a merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transactions involving Company pursuant to which the shareholders of Company
immediately preceding such transaction hold less than 51% of the equity
interest in the surviving or resulting entity of such transaction; (ii) a sale
or other disposition by Company of assets representing in excess of 25% of the
fair market value of Company's business immediately prior to such sale; or
(iii) the acquisition by any person or group, directly or indirectly, of
beneficial ownership or right to acquire beneficial ownership of shares
representing in excess of 25% of the voting power of the then outstanding
shares of capital stock of Company, in each case on terms that the Board of
Directors of Company determines in good faith by a majority vote, on the basis
of the advice of a financial advisor of nationally recognized reputation and
taking into account all the terms and conditions of the Alternative Proposal,
including any break-up fees, expense reimbursement provisions and timing and
conditions to consummation, are more favorable and provide greater value to
Company's shareholders than as provided hereunder and for which financing, to
the extent required, is then fully committed or reasonably determined to be
available by the Board of Directors of Company.
5.6 Notices of Certain Events. From the date hereof until the Closing the
Company shall promptly notify each Purchaser of:
(a) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement;
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(b) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to or involving or
otherwise affecting the Company or any Subsidiary that, if pending on the date
of this Agreement, would have been required to have been disclosed pursuant to
this Agreement, as the case may be, or that relate to the consummation of the
transactions contemplated by this Agreement; and consummation of the
transactions contemplated by this Agreement; and
(c) the occurrence, or failure to occur, of any event, which
occurrence or failure to occur would be reasonably likely to cause (i) any
representation or warranty of the Company contained in this Agreement to be
untrue or inaccurate in any material respect as of the Closing, or (ii) any
material failure of the Company or of any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement. Notwithstanding the
above, the delivery of any notice pursuant to this section will not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
5.7 HSR Filing Fees and Expenses. In the event any filing with the Federal
Trade Commission or Department of Justice is required under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976 in connection with the exercise or
conversion of any of the Warrants, the Company shall pay all filing fees and
the fees and expenses of counsel to Warburg in connection with such filings.
5.8 Access to Information. From the date hereof until the Closing, the
Company will (i) furnish to the Purchasers such financial and operating data
and other information relating to the Company and its Subsidiaries as such
persons may reasonably request and (ii) instruct its counsel, independent
accountants and financial advisors to cooperate with the Purchasers in their
investigation of the Company and its Subsidiaries. Any investigation pursuant
to this Section shall be conducted in a manner that does not interfere
unreasonably with the conduct of the business of the Company and its
Subsidiaries.
5.9 Reasonable Best Efforts; Further Assurances. Subject to the terms and
conditions of this Agreement, the Company and the Purchasers will use their
reasonable best efforts to take, or cause to be taken, all actions and to do,
or cause to be done, all things necessary or desirable under applicable laws
and regulations to consummate the transactions contemplated by this Agreement.
The Company and the Purchasers agree to execute and deliver such other
documents, certificates, agreements and other writings and to take such other
actions as may be necessary or desirable in order to consummate or implement
expeditiously the transactions contemplated by this Agreement.
5.10 Board Observer Rights. For so long as the holders of Series A
Preferred are entitled to elect at least one (1) director under the Certificate
of Designation, Warburg shall be entitled to designate two (2) observers to
attend meetings of the Board of Directors and to receive copies of all written
materials delivered by the Board of Directors, subject to customary exceptions
related to preservation of the attorney-client privilege and subject to
execution of a confidentiality agreement with customary terms.
5.11 Chief Executive Officer. For so long as the holders of Series A
Preferred are entitled to elect at least one (1) director under the Certificate
of Designation, the Company may not appoint a
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new Chief Executive Officer without the consent of at least a majority of such
Series A Directors present and voting.
SECTION 6
Conditions to the Closing of All Parties
6.1 Conditions to Obligations of Each Party to Effect the Financing. The
respective obligations of each party to this Agreement to effect the Financing
shall be subject to the satisfaction at or prior to the Closing Date of:
(a) Compliance with Laws and Court Orders. No provision of any
applicable law or regulation and no judgment, injunction, order or
decree shall prohibit the consummation of the transactions
contemplated hereby.
(b) Litigation. There shall not have been instituted or pending any
action or proceeding (or any investigation or other inquiry that might result
in such action or proceeding) by any government or governmental authority or
agency, domestic, foreign or supranational, before any court or governmental
authority or agency, domestic, foreign or supranational, challenging or seeking
to make illegal, to delay materially or otherwise directly or indirectly to
restrain or prohibit the consummation of the transactions contemplated hereby,
seeking to obtain material damages or otherwise directly or indirectly relating
to the transactions contemplated hereby.
(c) Certificate of Designation. The Certificate of Designation shall
have been filed with the Secretary of State of the State of Delaware.
(d) Nasdaq Confirmation. The Company shall have received confirmation
from the staff of the Nasdaq Stock Market that no vote of the stockholders of
the Company is required in connection with the issuance of the Shares and the
Warrants under Section 4350(i)(1)(D) of the Nasdaq Marketplace Rules and all
waiting or notice periods required by such confirmation shall have been
satisfied.
(e) Blue Sky. The Company shall have obtained all necessary state
securities law permits and qualifications, or secured an exemption therefrom,
required by any state for the offer and sale of the Shares, the Warrants and
the Conversion Shares.
(f) Registration Rights Agreement. The Company and the Purchasers
shall have executed and delivered the Registration Rights Agreement and the
Company shall have used its commercially reasonable efforts to cause all
holders of registration rights pursuant to the Seventh Amended and Restated
Stockholder Rights Agreement dated June 28, 2000 (the "Prior Agreement") to
execute and deliver the Registration Rights Agreement. If the Company is unable
to cause such holders to execute the Registration Rights Agreement, the Company
shall cause each Purchaser to become a party to the Prior Agreement by
executing a joinder to such Agreement (to the extent such Purchaser is not
already a party to such Agreement). In such event, the Company will also issue
a
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declaration of registration rights which shall have the effect of increasing
the number of registrations which may be initiated under Section 5 of the Prior
Agreement to four (4) such registrations.
(g) Preemptive Rights Agreement. The Company shall have executed and
delivered the Preemptive Rights Agreement.
SECTION 7
Conditions to Closing of the Purchasers
Each Purchaser's obligation to purchase the Series A Preferred
and the Warrants at the Closing is, at the option of such
Purchaser, subject to the fulfillment on or prior to the Closing
Date of the following conditions:
7.1 Representations and Warranties Correct. (i) The Company shall have
performed in all material respects all of its obligations hereunder required to
be performed by it at or prior to the Closing ; (ii) the representations and
warranties of the Company contained in this Agreement and in any certificate or
other writing delivered by the Company pursuant hereto shall be true
(disregarding each exception therein for materiality and Material Adverse
Effect) at and as of the date hereof except for (A) those representations and
warranties, that address matters only as of a particular date (which shall
remain true only as of such date) and (B) such exceptions as would not
individually or in the aggregate have a Material Adverse Effect on the Company;
and (iii) such Purchaser shall have received a certificate signed by the Chief
Executive Officer and Chief Financial Officer of Company to the foregoing
effect.
7.2 Opinion of Company Counsel. Such Purchaser shall have received from
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel to the Company, an opinion addressed
to it, dated the Closing Date, in substantially the form of Exhibit G.
7.3 Election of Series A Directors. ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇ shall have been appointed to the Board of Directors of the Company and
▇▇▇▇▇ ▇▇▇▇▇▇▇ shall have been elected Chairman of the Board.
7.4 Bank Agreement. The Company and Imperial Bank shall have executed an
agreement preserving the Company's existing borrowings under the Loan and
Security Agreement dated January 31, 2001 (the "Loan Agreement"), and such
agreement shall provide that in no event shall there be any penalty or other
material expense in the event the Company elects to prepay any amounts under
the Loan Agreement at any time.
7.5 Auditors' Opinion. The Company shall have received an unqualified
opinion, subject only to the consummation of the Closing, from its independent
auditors on the Company's financial statements as of and for the three fiscal
years ended June 30, 2001, and such opinion shall not have been withdrawn.
-23-
SECTION 8
Conditions to Closing of Company
The Company's obligation to sell and issue the Series A Preferred and the
Warrants issuable hereunder at the Closing is, at the option of the Company,
subject to the fulfillment of the following conditions:
8.1 Representations and Warranties Correct. The representations made by
the Purchasers in Section 5 hereof shall be true and correct in all material
respects when made, and shall be true and correct in all material respects on
the Closing Date.
8.2 Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Purchasers on or prior to the Closing Date
shall have been performed or complied with.
SECTION 9
Termination
9.1 Termination. This Agreement may be terminated at any time prior to the
Closing Date:
(a) as to each Purchaser, by mutual written consent of such Purchaser
and the Company; or
(b) by either the Company or a majority in interest of the Purchasers
if the Closing shall not have occurred by October 15, 2001 (the "End Date");
provided, however, that the right to terminate this Agreement under this
Section 9.1(b) shall not be available to any party whose action or failure to
act has been a principal cause of or resulted in the failure of the Closing to
occur on or before such date and such action or failure to act constitutes a
breach of this Agreement; or
(c) by either the Company or all of the Purchasers if a governmental
entity shall have issued an order, decree or ruling or taken any other action,
in any case having the effect of permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated hereby, which order, decree
or ruling is final and nonappealable; or
(d) by the Purchasers, if:
(i) a breach of or failure to perform any representation,
warranty, covenant or agreement on the part of the Company set forth in this
Agreement shall have occurred that would cause the condition set forth in
Section 7.1 not to be satisfied, and such condition is incapable of being
satisfied by the End Date; or
-24-
(ii) the Company shall have willfully and materially
breached its obligations under Section 5.5.
The party desiring to terminate this Agreement pursuant to
this Section 9.1 (other than pursuant to Section 9.1(a)) shall give
notice of such termination to the other party.
9.2 Effect of Termination. If this Agreement is terminated pursuant to
Section 9.1, and except as provided in Section 10.9, this Agreement shall
become void and of no effect without liability of any party (or any
stockholder, director, officer, employee, agent, consultant or representative
of such party) to the other party hereto. The provisions of this Section 9.2
and Sections 10.1, 10.5 and 10.8 shall survive any termination hereof pursuant
to Section 9.1.
SECTION 10
Miscellaneous
10.1 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Delaware, without giving effect to the conflicts of
laws principals thereof.
10.2 Survival. The representations, warranties, covenants, and agreements
made herein shall survive any investigation made by the Purchasers and the
closing of the transactions contemplated hereby.
10.3 Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties
hereto, provided, however, that the rights of the Purchasers to purchase Shares
shall not be assignable without the written consent of the Company.
10.4 Entire Agreement; Amendment. The Agreements and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof.
Neither this Agreement nor any term hereof may be amended, waived, discharged,
or terminated other than by a written instrument signed by the party against
whom enforcement of any such amendment, waiver, discharge, or termination is
sought.
10.5 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon delivery to the party to be notified in person or by courier service or
five days after deposit with the United States mail, by registered or certified
mail, postage prepaid, addressed (a) if to a Purchasers, at such Purchasers'
address set forth on the Schedule of Purchasers, or at such other address as
such Purchasers shall have furnished to the Company in writing, or (b) if to
the Company, to its address set forth on the first page of this Agreement and
addressed to the attention of ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, Esq., General Counsel, or at
such other address as the Company shall have furnished to the Purchasers, with
a copy to Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq., or if by facsimile, upon receipt
of appropriate confirmation of receipt.
-25-
10.6 Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any holder of any Shares, upon any breach or
default of the Company under this Agreement, shall impair any such right, power
or remedy of such holder nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein, or of or in any similar breach
or default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any holder of any breach or default under this
Agreement, or any waiver on the part of any holder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
10.7 California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH
ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER
OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES
OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO
SUCH QUALIFICATION IS UNLAWFUL UNLESS AN EXEMPTION FROM SUCH QUALIFICATION IS
AVAILABLE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, OR SUCH EXEMPTION BEING
AVAILABLE.
10.8 Waiver of Conflict. Each party to this Agreement that has been or
continues to be represented by Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C., counsel
to the Company, hereby acknowledges that Rule 3-310 of the Rules of
Professional Conduct promulgated by the State Bar of California requires an
attorney to avoid representations in which the attorney has or had a
relationship with another party interested in the representation without the
informed written consent of all parties affected. By executing this Agreement,
each such party gives his or its informed written consent to the representation
of the Company by Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C. in connection with
this Agreement and the transactions contemplated hereby.
10.9 Expenses. The Company shall pay all reasonable out-of-pocket fees and
expenses of Warburg incurred in connection with this Agreement and the
transactions contemplated hereby (the "Purchaser Expenses") incurred through
the date of this Agreement within five (5) business days after the execution
hereof, and shall pay any additional Purchaser Expenses as may have been
incurred through the date of the Closing ("Purchaser Pre-Closing Expenses")
within five (5) business days of the Closing.
If this Agreement is terminated pursuant to Section 9.1, each party shall
bear its own expenses incurred in connection with the transactions hereby and
Warburg shall bear the Purchaser Pre- Closing Expenses, provided, that the
Company shall reimburse Warburg for the Purchaser Pre-Closing Expenses if (i)
the Agreement is terminated by Warburg pursuant to Section 9.1(d)(ii), or (ii)
the Agreement is terminated in accordance with Section 9.1(d) and on or prior
to January 31, 2002 the Company either raises in the aggregate in excess of $5
million in a public or private financing (before subtracting commissions and
offering expenses) (an "Alternative Financing") or
-26-
enters into a definitive agreement for a transaction or transactions that would
constitute a Change of Control Transaction.
10.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all of the Purchasers,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
10.11 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective
if it materially changes the economic benefit of this Agreement to any party.
10.12 Gender. The use of the neuter gender herein shall be deemed to
include the masculine and the feminine gender, if the context so requires.
10.13 Exculpation Among Purchasers. Each Purchaser acknowledges that it is
not relying upon any person, firm or corporation, other than the Company and
its officers and directors, in making its investment or decision to invest in
the Company. Each Purchaser agrees that no Purchaser nor the respective
controlling person, officers, directors, partners, agents or employees of any
Purchaser shall be liable to any other Purchaser for any action heretofore or
hereafter taken or omitted to be taken by any of them in connection with the
purchase of the Series A Preferred and the Warrants or the execution of or
performance under any of the related documents.
-27-
The foregoing Agreement is hereby executed as of the date first above
written.
"COMPANY" EVOLVE SOFTWARE, INC.
a Delaware corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President and CEO
"PURCHASERS" Warburg Pincus Private Equity VIII, L.P.
By Warburg Pincus & Co., as General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇, General Partner
Series A Shares Purchased: 1,000,000
-------------------------------------
Total Purchase Price: $10,000,000
-------------------------------------
SUNAMERICA INVESTMENTS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Title: Executive Vice President
-------------------------------------
Series A Shares Purchased: 50,000
-------------------------------------
Total Purchase Price: $500,000
-------------------------------------
-28-
INDEX VENTURES I (JERSEY) L.P.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Title: Director for the General Partner
-------------------------------------
Index Venture Associates I Limited
--------------------------------------------
Series A Shares Purchased: 82,423
------------------------------------
Total Purchase Price: $824,230
------------------------------------
INDEX VENTURES I (DELAWARE) L.P.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Title: Director for the General Partner
-------------------------------------
Index Venture Associates I Limited
--------------------------------------------
Series A Shares Purchased: 52,335
------------------------------------
Total Purchase Price: $523,350
------------------------------------
INDEX VENTURES I PARALLEL
ENTREPRENEUR FUND (JERSEY) L.P.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Title: Director for the General Partner
-------------------------------------
Index Venture Associates I Limited
--------------------------------------------
Series A Shares Purchased: 2,849
------------------------------------
Total Purchase Price: $28,490
------------------------------------
-29-
INDEX VENTURES I GMBH & CO. KG
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Title: Director for the General Partner
-------------------------------------
Index Venture Vermaltungs I GmbH
--------------------------------------------
Series A Shares Purchased: 11,493
-------------------------------------
Total Purchase Price: $114,930
-------------------------------------
INDEX VENTURE MANAGEMENT SA ON
BEHALF OF INDEX EMPLOYEE CO-
INVESTMENT PLAN
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇, /s/▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Title: Partner
-------------------------------------
Series A Shares Purchased: 900
-------------------------------------
Total Purchase Price: $9,000
------------------------------------
SIERRA VENTURES VII, L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Title: General Partner
-------------------------------------
Series A Shares Purchased: 90,934
------------------------------------
Total Purchase Price: $909,339.00
------------------------------------
-30-
SIERRA VENTURES ASSOCIATES VII, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Title: General Partner
-------------------------------------
Series A Shares Purchased: 9,066
------------------------------------
Total Purchase Price: $90,661.00
------------------------------------
-31-