INFORMATION ADVANTAGE, INC.
LOAN AND WARRANT PURCHASE AGREEMENT
DECEMBER 4, 1997
TABLE OF CONTENTS
Page
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1. Amount and Terms of the Notes; Terms of Warrants. . . . . . . . . . . . 1
1.1 Revolving Convertible Notes. . . . . . . . . . . . . . . . . . . . 1
1.2 Initial Warrants . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Loan Advance Warrants. . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Representations and Warranties of the Company . . . . . . . . . . . . . 2
2.1 Organization, Good Standing, and Qualification . . . . . . . . . . 2
2.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Valid Issuance of Warrants . . . . . . . . . . . . . . . . . . . . 3
3. Representations and Warranties of the Lenders . . . . . . . . . . . . . 3
3.1 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.2 Purchase Entirely for Own Account. . . . . . . . . . . . . . . . . 3
3.3 Disclosure of Information. . . . . . . . . . . . . . . . . . . . . 3
3.4 Investment Experience. . . . . . . . . . . . . . . . . . . . . . . 4
3.5 Accredited Investor. . . . . . . . . . . . . . . . . . . . . . . . 4
3.6 Restricted Securities. . . . . . . . . . . . . . . . . . . . . . . 4
3.7 Further Limitations on Disposition . . . . . . . . . . . . . . . . 4
3.8 Legends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. Corporate Securities Law. . . . . . . . . . . . . . . . . . . . . . . . 5
5. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.1 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . 5
5.2 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.3 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.4 Titles and Subtitles . . . . . . . . . . . . . . . . . . . . . . . 5
5.5 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.6 Finder's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.7 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.8 Entire Agreement; Amendments and Waivers . . . . . . . . . . . . . 7
5.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
EXHIBIT A SCHEDULE OF ADVANCES AND REPAYMENTS
EXHIBIT B REVOLVING CONVERTIBLE NOTE
EXHIBIT C FORM OF INITIAL WARRANT
EXHIBIT D FORM OF LOAN ADVANCE WARRANT
LOAN AND WARRANT PURCHASE AGREEMENT
THIS LOAN AND WARRANT PURCHASE AGREEMENT (this "Agreement") is made as
of the 4th day of December, 1997, by and among Information Advantage, Inc.,
a Delaware corporation (the "Company"), and the investors named on the
Schedule of Lenders attached hereto (individually a "Lender" and collectively
the "Lenders").
WHEREAS, Lenders have agreed to provide loans to the Company from time
to time, upon the Company's request, in the aggregate amounts identified on
the Schedule of Lenders attached hereto; and
WHEREAS, in return for such revolving loans, the parties intend for the
Company to issue revolving, convertible notes and warrants to purchase shares
of the Company's capital stock; and
WHEREAS, the parties hereto wish to provide for the terms of the
revolving loan and the sale and issuance of such notes and warrants in return
for such periodic advances to the Company.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. AMOUNT AND TERMS OF THE NOTES; TERMS OF WARRANTS.
1.1 REVOLVING CONVERTIBLE NOTES. Each Lender severally agrees to
lend to the Company from time to time, within five (5) days of Company's
written request, such Lender's proportionate share of a loan amount
requested by the Company (each, a "Loan Advance") as indicated by the
percentage set forth opposite such Lender's name on the Schedule of
Lenders (the "Ownership Percentage"). In no event shall any Loan
Advance be less than an aggregate of One Million Dollars ($1,000,000.00),
nor shall the aggregate outstanding Loan Advances exceed three million
dollars ($3,000,000). In addition, in no event shall any Lender's
cumulative participation in all outstanding and unpaid Loan Advances
exceed the amount provided in such Lender's Revolving Convertible Note.
The Company shall amend and replace Exhibit A (Schedule of Advances and
Repayments) from time to time, upon completion of a Loan Advance or a
repayment, and shall promptly distribute such amended Exhibit A to the
Lenders. The Ownership Percentage of each Loan Advance made by a Lender
to Company shall be evidenced by, and be repayable with interest in
accordance with the terms of a Revolving Convertible Note in the form of
Exhibit B attached hereto (the "Note"). The obligation of each Lender to
lend up to their Ownership Percentage of each Loan Advance shall be
irrevocable for the term of the Note. Each Revolving Convertible Note
shall automatically convert into Series D convertible redeemable preferred
stock of the Company ("Series D Preferred Stock") (or the Common Stock
that would have been issuable upon conversion of Series D Preferred Stock
if the Note is converted following the Company's initial public offering
of its securities pursuant to an effective registration statement (the
"IPO") (such Common Stock being referred to herein as the
"Conversion Stock")), pursuant to the terms of such Note, if not repaid
by Company at maturity.
1.2 INITIAL WARRANTS. In return for providing this revolving loan,
the Company shall sell and issue to Lender a warrant to purchase the
number of shares of Series D Preferred Stock or Conversion Stock set forth
opposite such Lender's name on the Schedule of Lenders (the "Initial
Warrant Share"), pursuant to the terms of the Series D Preferred Stock
Warrant as substantially set forth as Exhibit C (the "Initial Warrant").
1.3 LOAN ADVANCE WARRANTS. In addition to the Initial Warrants
described in Section 1.2 above, the Company shall sell and issue to each
Lender a warrant in return for each new Loan Advance (a "Loan Advance
Warrant"); provided, however, that Loan Advance Warrants shall only be
issued in connection with Loan Advances which when added to the aggregate
then outstanding Loan Advance balance exceeds the highest aggregate Loan
Advance balance at any one time outstanding pursuant to the terms of this
Agreement. Each Loan Advance Warrant shall be exercisable for that number
of shares of Series D Preferred Stock or Conversion Stock determined in
accordance with the terms of the Loan Advance Warrants (the "Loan Advance
Warrant Shares," together with the Initial Warrant Shares, the "Warrant
Shares"). Each Loan Advance Warrant shall be in substantially the form
attached hereto as Exhibit D. The Initial Warrants and Loan Advance
Warrants shall be collectively referred to as the "Warrants."
1.4 CLOSING. The closing (the "Closing") of this Loan and Warrant
Purchase Agreement shall take place at the offices of Xxxxxx and Xxxxxx,
Professional Association, 2400 IDS Center, 00 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx on December 4, 1997, or at such other time and
place as the Company and a majority in interest of the Lenders agree upon
orally or in writing. At the Closing, the Company shall deliver to each
Lender a Convertible Revolving Note and Initial Warrant against delivery to
the Company by the Lender of an executed copy of this Agreement.
2.. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. In connection with the
transactions provided for herein, the Company hereby represents and warrants to
the Lenders that:
2.1 ORGANIZATION, GOOD STANDING, AND QUALIFICATION. The Company is a
corporation duly organized, validly existing, and in good standing under
the laws of the State of Delaware and has all requisite corporate power
and authority to carry on its business as now conducted. The Company is
duly qualified to transact business and is in good standing in each
jurisdiction in which the failure so to qualify would have a material
adverse effect on its business or properties.
2.2 AUTHORIZATION. All corporate action on the part of the Company,
its officers, directors and shareholders necessary for the authorization,
execution and
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delivery of this Agreement, the performance of all obligations of
the Company hereunder, and the authorization, issuance and delivery of
the Notes and the Warrants has been taken or will be taken prior to the
Closing. All corporate action on the part of the Company, its officers,
directors and shareholders necessary for the authorization, issuance (or
reservation for issuance) and delivery of the Warrant Shares to be issued
upon exercise of the Warrants and the Series D Preferred Stock or
Conversion Stock to be issued upon conversion of the Convertible Revolving
Notes, will be taken prior to the exercise of the Warrants and the
conversion of the Notes, as applicable.
2.3 VALID ISSUANCE OF WARRANTS. The Warrant Shares, when issued,
sold and delivered in accordance with the terms of the Warrants, will be
duly and validly issued, fully paid and nonassessable and, based in part
upon the representations of the Lenders in this Agreement, will be issued
in compliance with all applicable federal and state securities laws. The
Series D Preferred Stock or Conversion Stock, when issued, sold and
delivered upon conversion of the Notes in accordance with their terms,
will be fully paid and nonassessable and, based in part upon the
representations of the Lenders in this Agreement, will be issued in
compliance with all applicable federal and state securities laws.
3. REPRESENTATIONS AND WARRANTIES OF THE LENDERS. In connection with
the transactions provided for herein, each Lender hereby represents and
warrants to the Company that:
3.1 AUTHORIZATION. This Agreement constitutes such Lender's valid
and legally binding obligation, enforceable in accordance with its terms.
3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. Lender acknowledges that
this Agreement is made with Lender in reliance upon Lender's
representation to the Company that the Note, Warrants, Warrant Shares,
Series D Preferred Stock and Conversion Stock, and the Common Stock
issuable upon conversion of the Series D Preferred Stock (collectively,
the "Securities"), will be acquired for investment for Lender's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that Lender has no present intention
of selling, granting any participation in or otherwise distributing the
same. By executing this Agreement, Lender further represents that Lender
does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to such person or to any
third person, with respect to the Securities. Lender represents that it
has full power and authority to enter into this Agreement.
3.3 DISCLOSURE OF INFORMATION. Lender acknowledges that it has
received all the information it considers necessary or appropriate for
deciding whether to acquire the Securities. Lender 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
Securities.
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3.4 INVESTMENT EXPERIENCE. Lender is an investor in securities of
companies in the development stage and acknowledges that it is able to
fend for itself, can bear the economic risk of its investment, and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the
Securities. If other than an individual, Lender also represents it has
not been organized solely for the purpose of acquiring the Securities.
3.5 ACCREDITED INVESTOR. Lender is an "accredited investor" within
the meaning of Rule 501 of Regulation D of the Securities and Exchange
Commission (the "SEC"), as presently in effect.
3.6 RESTRICTED SECURITIES. Lender understands that the Securities
are characterized as "restricted securities" under the federal securities
laws inasmuch as they are being acquired from the Company in a transaction
not involving a public offering and that under such laws and applicable
regulations such securities may be resold without registration under the
Securities Act of 1933, as amended (the "Act"), only in certain limited
circumstances. In this connection, Lender represents that it is familiar
with SEC Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and by the Act.
3.7 FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting
the representations set forth above, Lender further agrees not to make any
disposition of all or any portion of the Securities unless and until:
(a) There is then in effect a registration statement under
the Act covering such proposed disposition and such disposition is
made in accordance with such registration statement; or
(b)(i) Lender shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition
and the transferee shall have agreed in writing for the benefit of
the Company to be bound by this Section 3, and (ii) if reasonably
requested by the Company, Lender shall have furnished the Company
with an opinion of counsel, reasonably satisfactory to the Company,
that such disposition will not require registration of such shares
under the Act.
3.8 LEGENDS. It is understood that the Securities may bear one or
all of the following legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
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1933 OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT
TO RULE 144 UNDER SUCH ACT."
(b) Any legend required by the securities laws of the States of
Minnesota and California or other states, including any legend
requirements by such states.
4. CALIFORNIA COMMISSIONER OF CORPORATIONS.
4.1 CORPORATE SECURITIES LAW. THE SALE OF THE SECURITIES WHICH ARE
THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER
OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR
SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR
25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES
TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING
OBTAINED, UNLESS THE SALE IS SO EXEMPT.
5. MISCELLANEOUS.
5.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon
any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations or liabilities under or by
reason of this Agreement, except as expressly provided in this Agreement.
5.2 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of Minnesota as applied to
agreements among Minnesota residents, made and to be performed entirely
within the State of Minnesota.
5.3 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.4 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
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5.5 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be
deemed effectively given upon personal delivery to the party to be
notified or upon deposit with the United States Post Office, by registered
or certified mail, postage prepaid and addressed to, or at such other
address as such party may designate by ten (10) days' advance written
notice to the other parties.
If to the Company:
Information Advantage, Inc.
0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxx X. Xxxx, President
With a copy to:
Xxxxx X. Xxxxxx, Esq.
Xxxxxx and Xxxxxx, P.A.
0000 XXX Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
and
Xxx X. Xxxxxxxxx, Esq.
Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx & Xxxxxxxxx, LLP
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
If to Lenders:
At the addresses shown on the Schedule of Lenders.
5.6 FINDER'S FEE. Each party represents that it neither is or will
be obligated for any finders' fee or commission in connection with this
transaction. Lender agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and expenses of defending against such
liability or asserted liability) for which Lender or any of its officers,
partners, employees, or representatives is responsible. The Company
agrees to indemnify and hold harmless Lender from any liability for any
commission or compensation in the nature of a finders' fee (and the costs
and expenses of defending against such liability or asserted liability)
for which the Company or any of its officers, employees or representatives
is responsible.
5.7 EXPENSES. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party
shall be entitled to
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reasonable attorney's fees, costs and necessary disbursements in addition
to any other relief to which such party may be entitled.
5.8 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This Agreement 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. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the holders
of a majority in principal amount of the Notes issued hereunder. Any
waiver or amendment effected in accordance with this Section 5.8 shall
be binding upon each holder of any securities purchased under this
Agreement at the time outstanding (including securities into which such
securities have been converted), each future holder of all such
securities and the Company.
5.9 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable
in accordance with its terms.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
INFORMATION ADVANTAGE, INC.
By: /s/ Xxxxx X. Xxxx
--------------------------------------------
Xxxxx X. Xxxx, President and Chief Executive
Officer
LENDER:
NORWEST EQUITY PARTNERS V, A MINNESOTA LIMITED
PARTNERSHIP
By: Itasca Partners V, L.L.P.
Its General Partner
By: /s/ Xxxxxx Xxxxx
------------------------------------------
Name: Xxxxxx Xxxxx
----------------------------------------
Title: Partner
---------------------------------------
ST. XXXX VENTURE CAPITAL IV, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
----------------------------------------
Title: General Partner
---------------------------------------
8
PATHFINDER VENTURE CAPITAL FUND III, A LIMITED
PARTNERSHIP
By: Pathfinder Partners III, a Limited
Partnership Its General Partner
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxx
----------------------------------------
Title: General Partner
---------------------------------------
XXXXX, XXXX & XXXXX VENTURE ASSOCIATES III, L.P.
By: WPG Venture Partners III, L.P.
Its General Partner
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
----------------------------------------
Title: General Partner
---------------------------------------
XXXXXX HILL VENTURES, A CALIFORNIA LIMITED
PARTNERSHIP
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
----------------------------------------
Title: General Partner
---------------------------------------
MENLO VENTURES VI, L.P.
By: MV Management VI, L.P.
Its General Partner
By: /s/ Xxxxx X. Xxxx
------------------------------------------
Name: Xxxxx X. Xxxx
----------------------------------------
Title: General Partner
---------------------------------------
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SCHEDULE OF LENDERS
Maximum
Amount of
Ownership Initial Revolving
Name and Address Percentage Warrant Shares Convertible Note
---------------- ---------- -------------- ----------------
Norwest Equity Partners V, A 35.00% 10,500 $1,050,000.00
Minnesota Limited Partnership
St. Xxxx Venture Capital IV, 28.35% 8,505 $850,500.00
L.L.C.
Pathfinder Venture Capital Fund 14.40% 4,320 $432,000.00
III, a Limited Partnership
Xxxxx, Xxxx & Xxxxx Venture 8.45% 2,535 $253,500.00
Associates III, X.X.
Xxxxxx Hill Ventures, a California 13.80% 4,140 $414,000.00
Limited Partnership
TOTAL 100.00% 30,000 $3,000,000.00
-------- ------- --------------
-------- ------- --------------
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EXHIBIT A
SCHEDULE OF ADVANCES AND REPAYMENTS
EXHIBIT B
THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION
IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH
ACT.
REVOLVING CONVERTIBLE NOTE
$__________ [Date]
FOR VALUE RECEIVED, Information Advantage, Inc., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of ________________
(the "Lender") the principal amount of ______________________ Dollars
($___________) or such lesser amount as shall then constitute Lender's pro
rata share of the aggregate outstanding Loan Advances as described in the
Purchase Agreement (as defined below), together with interest at the rate of
eight percent (8%) per annum compounded annually. The entire unpaid
principal balance and accrued and unpaid interest thereon shall be due and
payable at maturity, if not sooner paid, as hereinafter set forth.
This Revolving Convertible Note (the "Note") is one of a series of
Revolving Convertible Notes (collectively the "Notes") issued pursuant to
that certain Loan and Warrant Purchase Agreement dated ________________, 1997
(the "Purchase Agreement") and defined terms used herein shall have the
meaning set forth in the Purchase Agreement. Loan Advances shall be made in
accordance with the terms of the Purchase Agreement.
Unless otherwise repaid or automatically converted as provided herein,
this Note will mature and be due and payable upon the earlier of (i) the ten
(10) business days following the closing of the issuance and sale of shares
of Common Stock of the Borrower in the Borrower's first underwritten public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended (the "IPO"), or (ii) May 20, 1998.
The Company may at any time prepay the principal balance of this Note,
plus accrued interest to date of payment, in whole or in One Million Dollar
($1,000,000.00) increments applied to the prepayment of the Notes in the
aggregate without penalty.
If not paid at maturity, this Note shall automatically convert into
fully paid and nonassessable shares of the Borrower's Series D Preferred
Stock (or the Common Stock that would be issuable upon conversion thereof in
the event such automatic conversion occurs following the Company's IPO, such
shares of Common Stock, the "Conversion Stock") in accordance with the
following formula:
The number of shares to be issued shall be equal to the quotient
obtained by dividing (a) the unpaid principal amount of this Note
together with accrued interest thereon by (b) $5.00 (adjusted to
reflect any stock splits, reverse stock splits, recapitalization and
the like).
If there is an insufficient number of authorized shares of Series D
Preferred Stock or Common Stock to permit conversion of this Note in full,
the Borrower will use its best efforts to take all corporate action necessary
to authorize a sufficient number of such shares to permit the conversion in
full.
No fractional shares will be issued upon conversion of this Note. In
lieu of any fractional share to which the Lender would otherwise be entitled,
the Borrower will pay to the Lender in cash that amount of the unconverted
principal balance of this Note.
Upon conversion of this Note, the Lender shall surrender this Note, duly
endorsed, at the principal offices of the Borrower or any transfer agent for
the Borrower. At its expense, the Borrower will, as soon as practicable
thereafter, issue and deliver to the Lender at such principal office, a
certificate or certificates for the number of shares of Series D Preferred
Stock or Common Stock to which the Lender is entitled upon such conversion,
and any other securities and property to which the Lender is entitled upon
such conversion under the terms of this Note.
Upon conversion of this Note, the Borrower will be forever released from
all its obligations and liabilities under this Note with regard to the entire
principal and accrued interest of this Note, including without limitation the
obligation to pay such principal amount and accrued interest.
The holders of a majority in interest of the Revolving Convertible Notes
issued by the Borrower as of the date hereof may collectively amend or waive
the observance of any provision of the outstanding Revolving Convertible
Notes, with the consent of the Company, but without the consent of the holder
of this Note.
This Note shall be governed by and construed in accordance with the laws
of the State of Minnesota as applied to agreements among Minnesota residents
entered into and to be performed entirely within Minnesota.
The Borrower hereby expressly waives presentment, demand for payment,
dishonor, notice of dishonor, protest, notice of protest and any other
formality.
INFORMATION ADVANTAGE, INC.
By:_________________________
Xxxxx X. Xxxx, President
and Chief Executive
Officer
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EXHIBIT C
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION
IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH
ACT.
INITIAL WARRANT
Void after
Warrant No. ____________ __________________
INFORMATION ADVANTAGE, INC.
WARRANT TO PURCHASE SERIES D PREFERRED STOCK
This Warrant is issued to _______________ by Information Advantage,
Inc., a Delaware corporation (the "Company"), pursuant to the terms of that
certain Loan and Warrant Purchase Agreement dated as of ___________, 1997
(the "Purchase Agreement") in connection with the Company's issuance to the
holder of this Warrant of a Revolving Convertible Note dated as of
_________________, 1997 (the "Note").
1. PURCHASE OF SHARES. Subject to the terms and conditions of the
Purchase Agreement and as hereinafter set forth, the holder of this Warrant
is entitled, upon surrender of this Warrant at the principal office of the
Company (or at such other place as the Company shall notify the holder hereof
in writing), to purchase from the Company up to __________ fully paid and
nonassessable shares of the Series D Preferred Stock of the Company or the
number of shares of Common Stock of the Company that would have been issuable
upon conversion of the Series D Preferred Stock if this Warrant is exercised
following the Company's initial public offering of its securities pursuant to
an effective registration statement (the "IPO") (such Common Stock is
referred to herein as, the "Conversion Stock"). The shares of the Series D
Preferred or Common Stock issuable pursuant to this Section 1 (collectively,
the "Shares") shall also be subject to adjustment pursuant to Section 8
hereof.
2. PURCHASE PRICE. The purchase price for the Shares shall be $5.00
per share. Such price shall be subject to adjustment pursuant to Section 8
hereof (such price, as adjusted from time to time, is herein referred to as
the "Exercise Price").
3. EXERCISE PERIOD. This Warrant shall be and remain exercisable from
the date hereof and shall remain exercisable for five (5) years thereafter.
4. METHOD OF EXERCISE. While this Warrant remains outstanding and
exercisable in accordance with Section 3 above, the holder may exercise, in
whole or in part, the purchase rights evidenced hereby. Such exercise shall
be effected by:
(a) the surrender of the Warrant, together with a duly executed copy
of the form of subscription attached hereto, to the Secretary of the
Company at its principal offices; and
(b) the payment to the Company of an amount equal to the aggregate
Exercise Price for the number of Shares being purchased.
5. NET ISSUE EXERCISE.
(a) In addition to and without limiting the rights of the holder
under the terms hereof, the holder may elect to receive Shares equal to
the value of this Warrant (or the portion thereof being cancelled) by
surrender of this Warrant at the principal office of the Company together
with notice of such election in which event the Company shall issue to
holder a number of shares of the Company's Series D Preferred Stock or
Conversion Stock computed using the following formula:
X=Y(A-B)
------
A
Where X - The number of shares of Series D Preferred Stock or
Conversion Stock to be issued to holder of this Warrant.
Y - The number of shares of Series D Preferred Stock or
Conversion Stock purchasable under this Warrant.
A - If such exercise is prior to Company's IPO, the fair market
value of one share of the Company's Common Stock issuable
on conversion of the Series D Preferred Stock; and if such
exercise occurs following the Company's IPO, the fair
market value of one share of the Company's Common Stock.
B - Exercise Price on the date of exercise.
(b) No payment of any cash or other consideration to the Company
shall be required from the holder of this warrant in connection with any
exercise of this Warrant by exchange pursuant to this Section 5. Such
exchange shall be effective upon the date of receipt by the Company of the
original Warrant surrendered for cancellation and a written request from
the holder that the exchange pursuant to this Section 5 be made, or at
such later date as may be specified in such request. No fractional shares
arising out of the above formula for determining the number of shares
issuable in such exchange shall be issued, and the Company shall in lieu
thereof make payment to the holder of cash in the amount of such fraction
multiplied
2
by the fair market value of one share of Common Stock issuable upon the
conversion of the Series D Preferred Stock on the date of the exchange.
(c) For the purposes of this Section 5, the "fair market value" of
the shares of Series D Preferred Stock shall be calculated on the basis of
(a) if the Common Stock issuable upon the conversion of the Series D
Preferred Stock is then traded on a securities exchange, the average of
the closing prices of such Common Stock on such exchange over the 30-day
period ending three (3) days prior to the date of exercise, (b) if the
Common Stock issuable upon the conversion of the Series D Preferred Stock
is then regularly traded over-the-counter, the average of the sale prices
or secondarily the closing bid of such Common Stock over the 30-day period
ending three (3) days prior to the date of exercise, or (c) if there is no
active public market for the Common Stock issuable upon the conversion of
the Series D Preferred Stock, the fair market value thereof as determined
in good faith by the Board of Directors of the Company.
6. CERTIFICATES FOR SHARES. Upon the exercise of the purchase rights
evidenced by this Warrant, one or more certificates for the number of Shares
so purchased shall be issued as soon as practicable thereafter, and in any
event within thirty (30) days of the delivery of the subscription notice.
7. AVAILABILITY OF SHARES. If there is an insufficient number of
authorized shares of Series D Preferred Stock or Conversion Stock to permit
the exercise of this Warrant in full, the Company will use its best efforts
to take all corporate action necessary to authorize a sufficient number of
such shares to permit the exercise in full. The Company covenants that such
Shares, when issued pursuant to the exercise of this Warrant, will be duly
and validly issued, fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issuance thereof.
8. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number of
and kind of securities purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as follows:
(a) SUBDIVISIONS, COMBINATIONS AND OTHER ISSUANCES. If the Company
shall at any time prior to the expiration of this Warrant subdivide the
Series D Preferred Stock, by split-up or otherwise, or combine or issue
additional shares of the Series D Preferred Stock or Common Stock as a
dividend with respect to any shares of the Series D Preferred Stock, the
number of Shares issuable on the exercise of this Warrant shall forthwith
be proportionately increased in the case of a subdivision or stock
dividend, or proportionately decreased in the case of a combination.
Appropriate adjustments shall also be made to the purchase price payable
per share, but the aggregate purchase price payable for the total number
of Shares purchasable under this Warrant (as adjusted) shall remain the
same. Any adjustment under this Section 8(a) shall become effective at the
close of business on the date the subdivision or combination becomes
effective, or as of the record date of such
3
dividend, or in the event that no record date is fixed, upon the making
of such dividend.
(b) RECLASSIFICATION, REORGANIZATION, AND CONSOLIDATION. In case of
any reclassification, capital reorganization, or change in the Series D
Preferred Stock (other than as a result of a subdivision, combination or
stock dividend provided for in Section 8(a) above), then, as a condition
of such reclassification, reorganization or change, lawful provision shall
be made, and duly executed documents evidencing the same from the Company
or its successor shall be delivered to the holder of this Warrant, so that
the holder of this Warrant shall have the right at any time prior to the
expiration of this Warrant to purchase, at a total price equal to that
payable upon the exercise of this Warrant, the kind and amount of shares
of stock and other securities and property receivable in connection with
such reclassification, reorganization or change by a holder of the same
number of shares of the Series D Preferred Stock as were purchasable by
the holder of this Warrant immediately prior to such reclassification,
reorganization or change. In any such case, appropriate provisions shall
be made with respect to the rights and interest of the holder of this
Warrant so that the provisions hereof shall thereafter be applicable with
respect to any shares of stock or other securities and property
deliverable upon exercise hereof, and appropriate adjustments shall be
made to the purchase price per share payable hereunder, provided the
aggregate purchase price shall remain the same.
(c) NOTICE OF ADJUSTMENT. When any adjustment is required to be
made in the number or kind of shares purchasable upon exercise of the
Warrant, the Company shall promptly notify the holder of such event and
of the number of shares of Series D Preferred Stock or other securities or
property thereafter purchasable upon exercise of the Warrant.
9. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant, but in lieu of such fractional shares the Company shall make a cash
payment therefor on the basis of the Exercise Price then in effect.
10. NO SHAREHOLDER RIGHTS. Prior to exercise of this Warrant, the
holder shall not be entitled to any rights of a shareholder with respect to
the Shares, including (without limitation) the right to vote such Shares,
receive dividends or other distributions thereon, exercise preemptive rights
or be notified of shareholder meetings, and such holder shall not be entitled
to any notice or other communication concerning the business or affairs of
the Company.
11. SUCCESSORS AND ASSIGNS. The terms and provisions of this Warrant
and the Purchase Agreement shall inure to the benefit of, and be binding
upon, the Company and the holders hereof and their respective successors and
assigns.
4
12. AMENDMENTS AND WAIVERS. Any term of this Warrant may be amended
and the observance of any term of this Warrant may be waived (either
generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the holders of a
majority of the Series D Preferred Stock or Conversion Stock issued or
issuable upon exercise of Warrants issued pursuant to the Purchase Agreement
that are then outstanding. Any waiver or amendment effected in accordance
with this Section 12 shall be binding upon each holder of any Shares
purchased under this Warrant at the time outstanding (including securities
into which such Shares have been converted), each future holder of all such
Shares and securities and the Company.
13. EFFECT OF AMENDMENT OR WAIVER. The holder of this Warrant
acknowledges that by the operation of Section 12 hereof, the holders of a
majority of the Warrants issued pursuant to the Purchase Agreement that are
then outstanding will have the right and power to diminish or eliminate all
rights of such holder under this Warrant or under the Purchase Agreement.
14. GOVERNING LAW. This Warrant shall be governed by the laws of the
State of Minnesota as applied to agreements among Minnesota residents made
and to be performed entirely within the State of Minnesota.
This Warrant is issued effective as of __________, 1997.
INFORMATION ADVANTAGE, INC.
_____________________________
Xxxxx X. Xxxx, President and
Chief Executive Officer
5
SUBSCRIPTION
------------
Information Advantage, Inc.
Attention: Corporate Secretary
The undersigned hereby elects to purchase, pursuant to the provisions of
the Warrant to Purchase Shares of Series D Preferred Stock issued by
Information Advantage, Inc. and held by the undersigned, ________________
shares of ____________ Stock of Information Advantage, Inc.
Payment of the exercise price per share required under such Warrant
accompanies this Subscription.
The undersigned hereby represents and warrants that the undersigned is
acquiring such shares for its own account for investment purposes only, and
not for resale or with a view to distribution of such shares or any part
thereof.
WARRANTHOLDER:
Date: __________________________ By: _____________________________
Title: _________________________
Address: ________________________
_______________________________
Name in which shares should be
registered:
________________________________
6
EXHIBIT D
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION
IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH
ACT.
LOAN ADVANCE WARRANT
Void after
Warrant No. LAW-__________ _________________
INFORMATION ADVANTAGE, INC.
WARRANT TO PURCHASE SERIES D PREFERRED STOCK
--------------------------------------------
This Warrant is issued to _________________________ by Information
Advantage, Inc., a Delaware corporation (the "Company"), pursuant to the
terms of that certain Loan and Warrant Purchase Agreement dated as of
______________ (the "Purchase Agreement") in connection with the Company's
issuance to the holder of this Warrant of a Revolving Convertible Note dated
as of _______________ (the "Note").
1. PURCHASE OF SHARES. Subject to the terms and conditions of the
Purchase Agreement (including but not limited to Section 1.3 thereof) and the
terms of this Warrant hereinafter set forth, the holder of this Warrant is
entitled, upon surrender of this Warrant at the principal office of the
Company (or at such other place as the Company shall notify the holder hereof
in writing), to purchase from the Company up to that number of fully paid and
nonassessable shares of the Series D Preferred Stock of the Company or the
number of shares of Common Stock of the Company that would have been issuable
upon conversion of the Series D Preferred Stock if this Warrant is exercised
following the Company's initial public offering of its securities pursuant to
an effective registration statement (the "IPO") (such Common Stock is
referred to herein as the "Conversion Stock") that equals four percent (4%)
of the principal amount of the Loan Advance allocated to the holder of this
Warrant. The shares of the Series D Preferred Stock and Conversion Stock
issuable pursuant to this Section 1 (collectively, the "Shares") shall also
be subject to adjustment pursuant to Section 8 hereof.
2. PURCHASE PRICE. The purchase price for the Shares shall be $5.00
per share. Such price shall be subject to adjustment pursuant to Section 8
hereof (such price, as adjusted from time to time, is herein referred to as
the "Exercise Price").
3. EXERCISE PERIOD. This Warrant shall be exercisable from the date
hereof and shall remain exercisable for five (5) years thereafter.
4. METHOD OF EXERCISE. While this Warrant remains outstanding and
exercisable in accordance with Section 3 above, the holder may exercise, in
whole or in part, the purchase rights evidenced hereby. Such exercise shall
be effected by:
(i) the surrender of the Warrant, together with a duly executed copy
of the form of subscription attached hereto, to the Secretary of
the Company at its principal offices; and
(ii) the payment to the Company of an amount equal to the aggregate
Exercise Price for the number of Shares being purchased.
5. NET ISSUE EXERCISE.
(i) In addition to and without limiting the rights of the holder
under the terms hereof, the holder may elect to receive Shares
equal to the value of this Warrant (or the portion thereof being
cancelled) by surrender of this Warrant at the principal office
of the Company together with notice of such election in which
event the Company shall issue to holder a number of shares of
the Company's Series D Preferred Stock or Conversion Stock
computed using the following formula:
X=Y(A-B)
------
A
Where X - The number of shares of Series D Preferred Stock or
Conversion Stock to be issued to holder after
exercise.
Y - The number of shares of Series D Preferred Stock or
Conversion Stock purchasable under this Warrant.
A - If such exercise is prior to Company's IPO, the fair
market value of one share of the Company's Common
Stock issuable on conversion of the Series D
Preferred Stock; and if such exercise occurs
following the Company's IPO, the fair market value
of one share of the Company's Common Stock.
B - Exercise Price on the date of exercise.
(ii) No payment of any cash or other consideration to the Company
shall be required from the holder of this Warrant in connection
with any exercise of this Warrant by exchange pursuant to this
Section 5. Such exchange shall be effective upon the date of
receipt by the Company
2
of the original Warrant surrendered for cancellation and a
written request from the holder that the exchange pursuant to
this Section 5 be made, or at such later date as may be
specified in such request. No fractional shares arising out
of the above formula for determining the number of shares
issuable in such exchange shall be issued, and the Company
shall in lieu thereof make payment to the holder of cash
in the amount of such fraction multiplied by the fair market
value of one share of Common Stock issuable upon the conversion
of the Series D Preferred Stock on the date of the exchange.
(iii) For the purposes of this Section 5, the "fair market value"
of the shares of Series D Preferred Stock shall be
calculated on the basis of (a) if the Common Stock issuable
upon the conversion of the Series D Preferred Stock is then
traded on a securities exchange, the average of the closing
prices of such Common Stock on such exchange over the 30-day
period ending three (3) days prior to the date of exercise,
(b) if the Common Stock issuable upon the conversion of the
Series D Preferred Stock is then regularly traded
over-the-counter, the average of the sale prices or
secondarily the closing bid of such Common Stock over the
30-day period ending three (3) days prior to the date of
exercise, or (c) if there is no active public market for
the Common Stock issuable upon the conversion of the Series D
Preferred Stock, the fair market value thereof as determined
in good faith by the Board of Directors of the Company.
6. CERTIFICATES FOR SHARES. Upon the exercise of the purchase rights
evidenced by this Warrant, one or more certificates for the number of Shares
so purchased shall be issued as soon as practicable thereafter, and in any
event within thirty (30) days of the delivery of the subscription notice.
7. AVAILABILITY OF SHARES. If there is an insufficient number of
authorized shares of Series D Preferred Stock or Conversion Stock to permit
the exercise of this Warrant in full, the Company will use its best efforts
to take all corporate action necessary to authorize a sufficient number of
such shares to permit the exercise in full. The Company covenants that such
Shares, when issued pursuant to the exercise of this Warrant, will be duly
and validly issued, fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issuance thereof.
8. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number of
and kind of securities purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as follows:
(a) SUBDIVISIONS, COMBINATIONS AND OTHER ISSUANCES. If the Company
shall at any time prior to the expiration of this Warrant
subdivide the Series D Preferred Stock, by split-up or otherwise,
or combine or issue additional shares of the Series D Preferred
Stock or Common Stock as
3
a dividend with respect to any shares of the Series D Preferred
Stock, the number of Shares issuable on the exercise of this
Warrant shall forthwith be proportionately increased in the case
of a subdivision or stock dividend, or proportionately decreased
in the case of a combination. Appropriate adjustments shall also
be made to the purchase price payable per share, but the
aggregate purchase price payable for the total number of Shares
purchasable under this Warrant (as adjusted) shall remain the
same. Any adjustment under this Section 8(a) shall become
effective at the close of business on the date the subdivision
or combination becomes effective, or as of the record date of
such dividend, or in the event that no record date is fixed,
upon the making of such dividend.
(b) RECLASSIFICATION, REORGANIZATION, AND CONSOLIDATION. In case of
any reclassification, capital reorganization, or change in the
Series D Preferred Stock (other than as a result of a
subdivision, combination or stock dividend provided for in
Section 8(a) above), then, as a condition of such
reclassification, reorganization or change, lawful provision
shall be made, and duly executed documents evidencing the same
from the Company or its successor shall be delivered to the
holder of this Warrant, so that the holder of this Warrant shall
have the right at any time prior to the expiration of this
Warrant to purchase, at a total price equal to that payable upon
the exercise of this Warrant, the kind and amount of shares of
stock and other securities and property receivable in connection
with such reclassification, reorganization or change by a holder
of the same number of shares of the Series D Preferred Stock as
were purchasable by the holder of this Warrant immediately prior
to such reclassification, reorganization or change. In any such
case, appropriate provisions shall be made with respect to the
rights and interest of the holder of this Warrant so that the
provisions hereof shall thereafter be applicable with respect to
any shares of stock or other securities and property deliverable
upon exercise hereof, and appropriate adjustments shall be made
to the purchase price per share payable hereunder, provided the
aggregate purchase price shall remain the same.
(c) NOTICE OF ADJUSTMENT. When any adjustment is required to be made
in the number or kind of shares purchasable upon exercise of the
Warrant, the Company shall promptly notify the holder of such
event and of the number of shares of Series D Preferred Stock or
other securities or property thereafter purchasable upon exercise
of the Warrant.
9. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant, but in lieu of such
4
fractional shares the Company shall make a cash payment therefor on the basis
of the Exercise Price then in effect.
10. NO SHAREHOLDER RIGHTS. Prior to exercise of this Warrant, the
holder shall not be entitled to any rights of a shareholder with respect to
the Shares, including (without limitation) the right to vote such Shares,
receive dividends or other distributions thereon, exercise preemptive rights
or be notified of shareholder meetings, and such holder shall not be entitled
to any notice or other communication concerning the business or affairs of
the Company.
11. SUCCESSORS AND ASSIGNS. The terms and provisions of this Warrant
and the Purchase Agreement shall inure to the benefit of, and be binding
upon, the Company and the holders hereof and their respective successors and
assigns.
12. AMENDMENTS AND WAIVERS. Any term of this Warrant may be amended
and the observance of any term of this Warrant may be waived (either
generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the holders of a
majority of the Series D Preferred Stock or Conversion Stock issued or
issuable upon exercise of Warrants issued pursuant to the Purchase Agreement
that are then outstanding. Any waiver or amendment effected in accordance
with this Section 12 shall be binding upon each holder of any Shares
purchased under this Warrant at the time outstanding (including securities
into which such Shares and securities have been converted), each future
holder of all such Shares and the Company.
13. EFFECT OF AMENDMENT OR WAIVER. The holder of this Warrant
acknowledges that by the operation of Section 12 hereof, the holders of a
majority of the Warrants issued pursuant to the Purchase Agreement that are
then outstanding will have the right and power to diminish or eliminate all
rights of such holder under this Warrant or under the Purchase Agreement.
14. GOVERNING LAW. This Warrant shall be governed by the laws of the
State of Minnesota as applied to agreements among Minnesota residents made
and to be performed entirely within the State of Minnesota.
This Warrant is issued effective as of this _____ day of _________, 1997.
INFORMATION ADVANTAGE, INC.
____________________________
Xxxxx X. Xxxx, President and
Chief Executive Officer
5
SUBSCRIPTION
Information Advantage, Inc.
Attention: Corporate Secretary
The undersigned hereby elects to purchase, pursuant to the provisions of
the Warrant to Purchase Shares of Series D Preferred Stock issued by
Information Advantage, Inc. and held by the undersigned, ___________ shares
of _______________________________ Stock of Information Advantage, Inc.
Payment of the exercise price per share required under such Warrant
accompanies this Subscription.
The undersigned hereby represents and warrants that the undersigned is
acquiring such shares for its own account for investment purposes only, and
not for resale or with a view to distribution of such shares or any part
thereof.
WARRANTHOLDER:
Date: _____________________ By: ____________________________________
Title: _________________________________
Address:________________________________
Name in which shares should be registered: _________________________________
6
