NOTE AND WARRANT PURCHASE AGREEMENT
This Note and Warrant Purchase Agreement, dated as of October 8, 1998 (this
"Agreement"), is entered into by and among (i) NetObjects, Inc., a Delaware
corporation (the "Company"), and (ii) International Business Machines
Corporation ("IBM"), and Perseus Capital, L.L.C. ("Perseus Capital") (each a
"Purchaser," and collectively, the "Purchasers").
RECITALS
A. To provide the Company with additional resources to conduct its
business, the Purchasers are willing, severally and not jointly, to purchase
from the Company, and the Company is willing to issue and sell to each
Purchaser, on the terms and subject to the conditions set forth herein, at a
closing to be held on the date hereof (the "Initial Closing"), an aggregate of
5,950 units (the "Units"), each consisting of (i) a Senior Subordinated Secured
Convertible Promissory Note of the Company with a principal amount of $1,000 (a
"Note"), and (ii) a warrant (a "Warrant") to acquire 90.036 shares of Series E-2
Preferred Stock, par value $0.00000001 per share, of the Company (the "Series
E-2 Preferred Stock"). The number of Units to be purchased by each Purchaser at
the Initial Closing is set forth in Schedule A hereto.
B. In addition, the Purchasers are willing to grant to the Company
an option to cause the Purchasers to purchase, on the terms and subject to the
conditions set forth herein, up to an aggregate of 4,960 additional Units at a
closing to be held on January 10, 1999 (or on such other date as the parties may
agree) (the "Option Closing"). The Units to be purchased at the Option Closing
shall be allocated among the Purchasers in the same proportion as the Units
purchased by them at the Initial Closing.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, and the representations,
warranties, covenants and conditions set forth below, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. PURCHASE AND SALE OF NOTES AND WARRANTS
(a) INITIAL CLOSING. In reliance upon the representations,
warranties and covenants of the parties set forth herein, and subject to
satisfaction of the conditions set forth in Section 1(f) hereof, the Company
agrees to issue, sell and deliver to the Purchasers, and the Purchasers,
severally and not jointly, agree to purchase from the Company, at the Initial
Closing, the number of Units specified in Schedule A hereto at a purchase price
(the "Purchase Price") equal to $1,008.40 per Unit, of which $1,000 shall be for
the Note and $8.40 shall be for the Warrant included in each such Unit. The
parties hereto hereby agree that the allocation of the Unit Purchase Price
between the Note and Warrant is fair and reasonable and accurately reflects the
respective value of such securities.
(b) GRANT OF OPTION. The Purchasers hereby grant to the Company the
option to require the Purchasers to purchase up to an additional 4,960 Units at
the Option Closing at the Purchase Price per Unit specified above. Such option
shall be exercisable by the Company by no later than December 1, 1998 by the
delivery to each Purchaser of a written notice specifying the aggregate number
of Units (not to exceed 4,960 Units) to be sold at the Option Closing. Such
number of Units shall be allocated among the Purchasers in the same proportion
as the Units purchased by them at the Initial Closing.
(c) DELIVERY OF NOTES AND WARRANTS; PAYMENT OF PURCHASE PRICE. At the
Initial Closing and any Option Closing, the Company shall deliver to each
Purchaser the Notes and Warrants purchased by such Purchaser at such Closing,
and each Purchaser shall pay the Purchase Price therefor by wire transfer of
immediately available funds to an account designated by the Company in writing
at least three Business Days prior to such Closing.
(d) TERMS OF THE NOTES AND WARRANTS. The terms and conditions of the
Notes are set forth in the form of Note attached as EXHIBIT A hereto. The terms
and conditions of the Warrants are set forth in the form of Warrant attached as
EXHIBIT B hereto.
(e) REPAYMENT OF THE NOTES. In the event of any repayment by the
Company of the Notes issued hereunder, such repayment must be applied
proportionately to the Notes held by all the Purchasers based on the aggregate
principal amount of Notes purchased by each such Purchaser, provided that any
Purchaser may waive this right to proportional repayment, in which case such
repayment shall be applied proportionately only among those Purchasers who do
not waive this right to proportional repayment.
(f) CONDITIONS. The obligations of the Purchasers under this Section
1 to be performed at each Closing shall be subject to satisfaction of the
following conditions:
(i) The representations and warranties of the Company
contained in this Agreement shall be true and correct, in all material respects,
at and as of such Closing, and the Company shall have performed and complied
with all the covenants and agreements and satisfied all the conditions required
by this Agreement to be performed or compiled with or satisfied by the Company
at or prior to such Closing. Each Purchaser shall have received a certificate
dated as of the date of such Closing and signed by the president of the Company
stating that, to the best of his knowledge after due inquiry, the conditions
specified in this Section 1(f)(i) have been satisfied.
(ii) Each Purchaser shall have received an opinion of counsel
to the Company, in form and substance reasonably satisfactory to the Purchasers,
addressing the matters set forth in Exhibit C hereto.
(iii) Each other Purchaser shall have performed all of its
obligations required to be performed at such Closing and, in the case of the
Option Closing, at the Initial Closing.
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(iv) The Company shall have received all consents and
approvals of third parties necessary for the Company to consummate the
transactions contemplated hereby and by the Notes and the Warrants.
(v) Each Purchaser shall have received from the Company such
other documents confirming the accuracy and completeness of the representations
and warranties of the Company as the Purchasers may reasonably request.
(g) REGISTRATION RIGHTS. The Purchasers shall have the registration
rights specified in the Amended and Restated Registration Rights Agreement dated
as of October 8, 1998 set forth in Exhibit D hereto.
(h) SENIOR INDEBTEDNESS. Without the prior written consent of
Perseus Capital, and except for the Senior Debt (as defined in the Notes), after
the date hereof, the Company shall not incur any indebtedness for borrowed
money, guarantee any such indebtedness or incur any obligation that for
financial reporting purposes is required to be carried as an indebtedness of the
Company unless (i) such indebtedness, guaranty or obligation is expressly
subordinated to the repayment in full of all principal, interest and other
amounts due under the Notes or (ii) the proceeds of such Senior Debt are used to
retire in full all amounts then due under the Notes.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Purchasers that, except as set forth in the
Company's Disclosure Schedule attached to this Agreement as Exhibit E (the
"Disclosure Schedule"), the statements contained in the following paragraphs of
this Section 2 are all true and correct:
(a) ORGANIZATION AND GOOD STANDING: CERTIFICATE OF INCORPORATION AND
BYLAWS. Each of the Company and each of its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to carry on its business as now conducted and proposed to be
conducted. Each of the Company and each of its subsidiaries is duly qualified
to conduct business as a foreign corporation and is in good standing as a
foreign corporation in all jurisdictions where the properties owned, leased or
operated by it are located or where its business is conducted, except where the
failure to so qualify or be in good standing is not reasonably likely to have a
material adverse effect on the Company's consolidated business, financial
condition, results of operations, assets, liabilities or prospects (a "Material
Adverse Effect"). The Company has previously delivered to each of the
Purchasers a true and complete copy of the Certificate of Incorporation and
Bylaws of the Company as in effect on the date hereof.
(b) CORPORATE POWER. The Company has all requisite legal and
corporate power to enter into, execute, deliver and perform its obligations
under this Agreement, the Notes and the Warrants. This Agreement is, and upon
their issuance, the Notes and Warrants will be, valid and binding obligations of
the Company, enforceable in accordance with their terms, except as enforcement
may be limited by bankruptcy laws or other laws affecting creditors' remedies
generally or by equitable principles.
3
(c) AUTHORIZATION, ETC.
(i) CORPORATE ACTION. All corporate and legal action on the
part of the Company, its officers, directors and stockholders necessary for the
execution and delivery of this Agreement, the Notes and Warrants, the sale and
issuance of the Notes and Warrants, and the performance of the Company's
obligations hereunder and thereunder, has been taken.
(ii) VALID ISSUANCE. The Notes, the Warrants, any shares of
Series E-2 Preferred Stock issued upon conversion of the Notes or exercise or
conversion of the Warrants and any shares of Common Stock issued upon conversion
of such Series E-2 Preferred Stock, when issued in compliance with the
provisions of this Agreement, the Notes, the Warrants or the terms of the Series
E-2 Preferred Stock, as the case may be, will be validly issued and, in the case
of any such shares of Series E-2 Preferred Stock or Common Stock, will be
fully-paid and nonassessable.
(iii) NO PREEMPTIVE RIGHTS. No person has any right of first
refusal or any preemptive or similar rights in connection with the issuance of
the Notes or Warrants, the issuance of shares of Series E-2 Preferred Stock upon
conversion of the Notes or exercise or conversion of the Warrants, the issuance
of any shares of Common Stock issued upon conversion of such Series E-2
Preferred Stock or the issuance of any other securities by the Company.
(iv) SECURITY INTEREST. Section 5 of each Note will create,
upon execution and delivery of such Note by the Company, a valid security
interest in the Collateral (as defined in the Notes) securing repayment by the
Company of the Obligations (as defined in the Notes) thereunder.
(d) NONCONTRAVENTION. The execution, delivery and performance of and
compliance with this Agreement, the Notes, the Warrants, the issuance and sale
of the Series E-2 Preferred Stock upon conversion of the Notes or exercise or
conversion of the Warrants and the issuance of Common Stock upon conversion of
such Series E-2 Preferred Stock will not result in nor constitute any breach,
default or violation of (i) any agreement, contract, lease, license, instrument
or commitment (oral or written) to which the Company or any of its subsidiaries
is a party or is bound or (ii) any law, rule, regulation, statute or order
applicable to the Company, any of its subsidiaries or their respective
properties, nor result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of the Company or any
of its subsidiaries, any of which breach, default or violation under clause (i)
or (ii), preceding, would have a Material Adverse Effect.
(e) CONSENTS, ETC. No consent, approval, order or authorization of,
or designation, registration, declaration or filing with, any federal, state,
local or provincial or other governmental authority or other person on the part
of the Company is required in connection with the valid execution and delivery
of this Agreement, the Notes and the Warrants, or the offer, sale or issuance of
the Notes, the Warrants, the Series E-2 Preferred Stock to be issued upon
conversion of the Notes or exercise or conversion of the Warrants or any Common
Stock issued upon conversion of such Series X-0 Xxxxxxxxx
0
Xxxxx, xxxxx than, if required, filings or qualifications under applicable state
securities laws, which filings or qualifications, if required, will be timely
filed or obtained by the Company.
(f) OFFERING. In reliance, in part, on the representations and
warranties of the Purchasers in Section 3 hereof, neither the offer, sale nor
issuance of the Notes and the Warrants in conformity with the terms of this
Agreement or the shares of Series E-2 Preferred Stock issued upon conversion of
the Notes or exercise or conversion of the Warrants or any Common Stock issued
upon conversion of such Series E-2 Preferred Stock will result in a violation of
the requirements of Section 5 of the Securities Act of 1933, as amended, (the
"Securities Act") or the qualification or registration requirements of any
applicable state securities laws.
(g) CAPITALIZATION. The capitalization of the Company consists of
the following, and all of the issued and outstanding shares as hereinafter set
forth have been duly authorized and validly issued, are fully paid and
nonassessable and have been offered, issued, sold and delivered by the Company
in compliance with all applicable federal and state securities laws:
(i) PREFERRED STOCK. A total of 136,898,000 authorized
shares of Preferred Stock, with $0.00000001 par value per share (the "Company
Preferred Stock"), consisting of 4,500,000 shares designated as Series A
Preferred Stock, of which 3,911,670 shares are issued and outstanding; 198,000
shares designated as Series B Preferred Stock, of which none are issued and
outstanding; 17,000,000 shares designated as Series C Preferred Stock, of which
none are issued and outstanding; 90,200,000 shares designated as Series E
Preferred Stock, of which 65,549,953 are issued and outstanding; and 5,500,000
shares designated as Series F Preferred Stock, of which none are issued and
outstanding. No other series of Company Preferred Stock has been designated.
(ii) COMMON STOCK. A total of 170,000,000 authorized shares
of Common Stock, of which 11,933,884 shares are issued and outstanding.
(iii) OPTIONS, WARRANTS, RESERVED SHARES. Except for (A) the
conversion privileges of the Series A Preferred Stock, the Series C Preferred
Stock, the Series E Preferred Stock and the Series F Preferred Stock, (B) a
total of 19,200,000 shares of Common Stock reserved for issuance under the
Company's 1997 Stock Option Plan and 1997 Special Stock Option Plan to officers,
directors and employees of, and consultants rendering bona fide services to the
Company, and (C) 13,503,001 shares of Series C Preferred Stock, 20,897,029
shares of Series E Preferred Stock, 5,500,000 shares of Series F Preferred Stock
and the foregoing shares of Common Stock reserved for issuance upon the exercise
or conversion of warrants issued by the Company, there are no outstanding
options, warrants, rights (including conversion or preemptive rights) or
agreements for the purchase or acquisition from the Company of any shares of the
Company's capital stock or any securities convertible into or ultimately
exchangeable or exercisable for any shares of the Company's capital stock, nor
is the Company obligated in any manner to issue any shares of its capital stock
or any other securities.
5
(h) FINANCIAL STATEMENTS AND RELATED MATTERS. The Company's balance
sheets as of September 30, 1997 and June 30, 1998 and the Company's statements
of operations, cash flows and changes in stockholders' equity for the each of
the years ended September 30, 1996 and 1997 and for the six months ended June
30, 1998 (collectively, the "Financial Statements"), all of which have been made
available to the Purchasers prior to the date hereof, have been prepared in
accordance with generally accepted accounting standards consistently applied
(except as may be noted therein). Furthermore, the Financial Statements are
complete and correct in all material respects and accurately set out and
describe in all material respects the financial condition, results of
operations, cash flows or changes in stockholders' equity of the Company as of
the date or for the period indicated. There has been no material change in the
Company's accounting policies except as described in the notes to the Financial
Statements. Except as set forth in the Financial Statements, neither the
Company nor any of its subsidiaries has any indebtedness, obligation or
liability (contingent or otherwise) that, either alone or when combined with all
similar obligations or liabilities, would be material to the Company on a
consolidated basis, and there does not exist a set of circumstances that, to the
knowledge of the Company, could reasonably be expected to result in any such
material indebtedness, obligation or liability. Since September 30, 1997, there
has been no material adverse change in the business, financial condition,
results of operations, assets, liabilities or prospects of the Company, which is
not disclosed on the Financial Statements or financial information as of a later
date set forth in the Disclosure Schedule.
(i) COMPLIANCE WITH LAWS. Neither the Company nor any of its
subsidiaries is (i) subject to the terms or provisions of any material judgment,
decree, order, writ or injunction or (ii) in violation of any terms or
provisions of any laws, rules, or regulations, except where such violations do
not and are not likely to have a Material Adverse Effect.
(j) TITLE TO PROPERTY AND ASSETS. Each of the Company and each of
its subsidiaries owns and possesses its properties and assets (other than
Proprietary Assets, which are covered in subsection (k) below) free and clear of
all mortgages, deeds of trust, liens, encumbrances, security interests and
claims except as reflected in the Financial Statements and except for statutory
liens for the payment of current taxes that are not yet delinquent and liens,
encumbrances and security interests which arise in the ordinary course of
business and which do not affect material properties and assets of the Company
and its subsidiaries. With respect to the property and assets it leases, each
of the Company and each of its subsidiaries is in compliance with such leases in
all material respects.
(k) PROPRIETARY ASSETS.
(i) Each of the Company and each of its subsidiaries (A) owns
or has sufficient rights to all Proprietary Assets used in or necessary for its
business as currently conducted and as proposed to be conducted, free and clear
of all material liens and other encumbrances; (B) has taken reasonable and
customary measures and precautions necessary to protect and maintain the
confidentiality and secrecy of all its Proprietary Assets (except the
Proprietary Assets whose value would be unimpaired by
6
public disclosure) and otherwise to maintain and protect the value of all its
Proprietary Assets; and (C) has not disclosed or delivered to any person, or
permitted the disclosure or delivery to any person of the source code, or any
portion or aspect of the source code, of any of the Company's products.
(ii) Except where such infringement, misappropriation or
unlawful use has not or could not reasonably be expected to have a Material
Adverse Effect, neither the Company nor any of its subsidiaries is infringing,
misappropriating or making any unlawful use of or has at any time infringed,
misappropriated or made any unlawful use of, any Proprietary Asset owned or used
by any other person; and no claims or notices (in writing or otherwise) with
respect to Proprietary Assets have been communicated to the Company or any of
its subsidiaries: (A) to the effect that the manufacture, sale, license or use
of any Proprietary Assets as now used or currently offered or proposed for use
or sale by the Company or any of its subsidiaries infringes or potentially
infringes, or constitutes a misappropriation or unlawful use of any copyright,
patent, trade secret or other intellectual property right of a third party, or
(B) challenging the ownership or validity of any of the rights of the Company or
any of its subsidiaries to or interest in such Proprietary Assets. The Company
has received no notice to the effect that any patents or registered trademarks,
service marks or registered copyrights held by the Company or any of its
subsidiaries are invalid or not subsisting except for failures to be valid and
subsisting that would not reasonably be expected to have a Material Adverse
Effect. To the Company's knowledge, no other person is infringing,
misappropriating or making any unlawful use of, and no Proprietary Asset owned
or used by any other person infringes or conflicts with, any Proprietary Asset
used in or pertaining to the business of the Company or any of its subsidiaries.
(iii) The Proprietary Assets used in or pertaining to the
business of the Company and its subsidiaries are sufficient in the Company's
reasonable judgment, to enable the Company and its subsidiaries to conduct its
business in the manner in which such business has been and is being conducted
free from liabilities or valid claims of infringement or misappropriation by
third parties. Neither the Company nor any of its subsidiaries has licensed any
of its Proprietary Assets to any person on an exclusive basis and the Company
has not entered into any covenant not to compete or contract limiting its
ability to sell the Company's products in any market or geographical area or
with any person other than restrictions in a license agreement that are typical
of those granted in the ordinary course of business in the software industry.
(iv) As used herein, "Proprietary Assets" means: (A) any
patent, patent application, trademark (whether registered or unregistered),
trademark application, trade name, fictitious business name, service xxxx
(whether registered or unregistered), service xxxx application, copyright
(whether registered or unregistered), copyright application, maskwork, maskwork
application, trade secret, know-how, customer list, franchise, system, computer
software, computer program, source code, invention, design, blueprint,
engineering drawing, proprietary product, technology, proprietary right or other
intellectual property right or intangible asset; and (B) any right to use or
exploit any of the foregoing.
7
3. REPRESENTATIONS AND WARRANTIES BY THE PURCHASERS. Each of the
Purchasers, severally and not jointly, represents, and warrants to, and
covenants with, the Company as follows:
(a) INVESTMENT INTENT: AUTHORITY. Such Purchaser is acquiring the
Notes, and the Warrants, and the shares of Series E-2 Preferred Stock issuable
upon conversion or exercise of the Notes or the Warrants for investment for such
Purchaser's own account, and not as nominee or agent for investment and not with
a view to or for resale in connection with any distribution or public offering
thereof within the meaning of the Securities Act. Such Purchaser has the full
right, power, authority and capacity to enter into and perform this Agreement
and this Agreement will constitute a valid and binding obligation upon such
Purchaser.
(b) SHARES NOT REGISTERED. Such Purchaser understands and
acknowledges that neither the Notes, the Warrants nor shares of Series E-2
Preferred Stock issuable upon conversion or exercise of the Notes or the
Warrants will be registered under the Securities Act or qualified under any
state securities laws in reliance upon one or more exemptions from registration
or qualification under the Securities Act and such state securities laws, and
that the Company's reliance upon such exemption is predicated upon such
Purchaser's representations set forth in this Agreement. Such Purchaser
understands and acknowledges that resale of the Notes, the Warrants and the
shares of Series E-2 Preferred Stock issuable upon conversion or exercise of the
Notes or the Warrants may be restricted indefinitely unless they are
subsequently registered under the Securities Act and qualified under state law
or an exemption from such registration and such qualification is available.
(c) NO TRANSFER. Such Purchaser will not dispose of any of the Notes,
the Warrants or the shares of Series E-2 Preferred Stock issuable upon
conversion or exercise of the Notes or the Warrants, other than in conjunction
with an effective registration statement or exemption from registration under
the Securities Act and other than in compliance with the applicable state
securities laws.
(d) ACCREDITED INVESTOR. Such Purchaser is an "accredited investor"
within the meaning of Securities and Exchange Commission ("SEC") Rule 501 or
Regulation D, as presently in effect.
4. MISCELLANEOUS.
(a) WAIVERS AND AMENDMENTS. Any provision of this Agreement may be
amended, waived or modified upon the written consent of the Company and the
Purchaser to be bound by such amendment, waiver or modification.
(b) GOVERNING LAW. This Agreement and all actions arising out of or
in connection with this Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflict of laws provisions of the State of New York or of any other state. In
the event of any dispute among or between any of the parties to this Agreement
arising out of the terms of this Agreement, the parties hereby consent to the
exclusive jurisdiction of the federal and state courts located in the
8
State of New York for resolution of such dispute, and agree not to contest such
exclusive jurisdiction or seek to transfer any action relating to such dispute
to any other jurisdiction.
(c) ENTIRE AGREEMENT. This Agreement together with the Notes and
Warrants constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof and thereof.
(d) EXPENSES. The Company shall pay all of the costs and expenses,
including reasonable attorneys' fees, incurred by the Purchasers in connection
with the negotiation and consummation of the transactions contemplated
hereunder.
(e) NOTICES. All notices, requests and other communications
hereunder shall be in writing and shall be deemed to have been duly given at the
time of receipt if delivered by hand or by facsimile transmission or three days
after being mailed, registered or certified mail, return receipt requested, with
postage prepaid to the applicable parties hereto at the address stated below or
if any party shall have designated a different address or facsimile number by
notice to the other party given as provided above, then to the last address or
facsimile number so designated.
If to the Company:
NetObjects, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxx LLP
000 Xxxxxx Xxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
If to IBM:
International Business Machines Corporation
Xxx Xxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xxx X. Xxxxxx
Facsimile: (000) 000-0000
with a copy to:
International Business Machines Corporation
Xxx Xxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
9
If to Perseus Capital:
Perseus Capital, L.L.C.
Suite 610
The Army and Navy Club Building
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxx
000 Xxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxx X. Xxx, Esq.
Facsimile: (000) 000-0000
(f) VALIDITY. If any provision of this Agreement, the Notes or the
Warrants shall be judicially determined to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions thereof
shall not in any way be affected or impaired thereby.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and a party's delivery of a signed counterpart by facsimile
transmission shall constitute that party's due execution of this Agreement.
(h) BUSINESS DAY. As used herein, "Business Day" means any day other
than a Saturday, Sunday or other day on which the national or state banks
located in the State of California or the State of New York are authorized to be
closed.
[Signatures begin on the following page]
10
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date and year first written above.
COMPANY:
NETOBJECTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
-------------------------------
Title: VP & CFO
------------------------------
PURCHASERS:
INTERNATIONAL BUSINESS MACHINES CORPORATION
By: /s/ Xxx X. Xxxxxx
---------------------------------
Name: Xxx X. Xxxxxx
-------------------------------
Title: Vice President, Corporate
Development and Real Estate
------------------------------
PERSEUS CAPITAL, L.L.C.
By: Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------
Title: Executive Vice President
------------------------------
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SCHEDULE A
Purchaser No. of Units
--------- -------------
IBM 5,500
Perseus Capital 450
12
