Exhibit 4.4
NOTE AND WARRANT PURCHASE AGREEMENT
This Note and Warrant Purchase Agreement (this "Agreement") is entered
into as of July 11, 2000 by and among MarketFirst Software, Inc., a Delaware
corporation (the "Company"), and the persons listed on Schedule 1 hereto
(collectively, the "Lenders").
R E C I T A L S
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A. The Company desires to borrow from the Lenders up to $10,000,000
in order to meet its needs for working capital pending the closing of the
proposed sale of shares of its capital stock in a Qualified Equity Financing (as
defined below) or an Acquisition (as defined below).
B. Subject to the terms and conditions set forth below, each of the
Lenders desires to make loans in the Total Commitment Amount set forth opposite
its name on Schedule 1 hereto in exchange for convertible promissory notes
("Notes") to be issued by the Company in substantially the form of Exhibit A
hereto in the principal amount of each of such Lender's loans, which Notes shall
be convertible into shares of the Company's capital stock on the terms and
conditions set forth below.
C. In consideration of the making of the loans by the Lenders, the
Company desires to sell and issue to the Lenders warrants ("Warrants") in
substantially the form of Exhibit B hereto entitling the holder to purchase
shares of the Company's capital stock.
AGREEMENT
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In consideration of the foregoing recitals and the mutual promises and
covenants contained in this Agreement, the parties to this Agreement agree as
follows:
1. Bridge Loans.
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(a) Subject to the terms and conditions of this Agreement, each
of the Lenders hereby agrees and commits, severally and not jointly, to lend to
the Company in advances from time to time during the period from the date hereof
until December 31, 2000 an amount not to exceed the Total Commitment Amount
shown for such Lender on Schedule 1. Each Lender hereby agrees to lend to the
Company on the date hereof the Initial Commitment Amount set forth opposite such
Lender's name on Schedule 1. Each subsequent advance (each a "Subsequent
Funding") will be made upon receipt by the Lenders from the Company of a request
in writing substantially in the form of Exhibit C hereto ("Funding Request")
five (5) business days prior to the date of the proposed borrowing; provided,
however, each subsequent Funding Request shall be for $2,500,000; provided
further, however, the first Subsequent Funding shall not be required to be made
until August 1, 2000, and the second Subsequent Funding shall not be required to
be made until September 1, 2000. Each Lender will be required to advance to the
Company that portion of the total amount to be advanced by all Lenders in a
Subsequent Funding equal to such Lender's Commitment Percentage as set forth on
Schedule 1.
(b) Notwithstanding anything herein to the contrary, in the event
a Qualified Equity Financing is closed prior to the Lenders' funding of their
Total Commitment Amounts, each Lender hereby agrees to purchase from the
Company, and the Company hereby agrees to sell and issue to such Lender, that
number of shares of Conversion Stock (as defined below) equal to the amount of
such Lender's Total Commitment Amount that has not yet been advanced to the
Company divided by the Conversion Price (as defined below); provided, however,
if the Qualified Equity Financing is a Qualified Public Offering (as defined
below), each Lender's remaining loan commitment shall expire automatically upon
the closing of the Qualified Public Offering.
(c) For purposes of this Agreement, the following terms shall
have the following meanings:
(i) "Acquisition" shall mean any sale of substantially all
of the Company's assets or any reorganization, consolidation or merger of the
Company in which the holders of the Company's Common Stock (assuming all of the
Company's Preferred Stock had been converted into Common Stock at the then
conversion rates) prior to the transaction hold less than fifty percent (50%) of
the surviving entity after the transaction.
(ii) "Coverage Percentage" shall mean twenty percent (20%),
provided that if as of the date which is three months from the date hereof (the
"Subject Date") the Company shall have consummated neither a Qualified Equity
Financing nor an Acquisition, then the Coverage Percentage shall increase by an
amount equal to five percent (5%) on the Subject Date and on the end of each
succeeding thirty (30) day period thereafter until the closing of either a
Qualified Equity Financing or an Acquisition.
(iii) "Conversion Price" shall mean (A) with respect to a
Qualified Equity Financing, the purchase price per share of the Conversion Stock
issued and sold in the Qualified Equity Financing; provided, however, if the
Qualified Equity Financing is a Qualified Public Offering, the Conversion Price
shall mean the price per share equal to seventy-five percent (75%) of the mid-
range of the filing range of the Qualified Public Offering, and (B) with respect
to an Acquisition, seventy-five percent (75%) of the fair market value of the
consideration received by the holders of the Company's Common Stock for each
share therefor in connection with the Acquisition.
(iv) "Conversion Stock" shall mean (A) with respect to a
Qualified Equity Financing, the Company's capital stock issued in the Qualified
Equity Financing, and (B) with respect to an Acquisition, the Company's Common
Stock.
(v) "Qualified Equity Financing" shall mean a Qualified
Public Offering or a private equity financing in which the Company receives at
least $10,000,000 in gross proceeds.
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(vi) "Qualified Public Offering" shall mean an underwritten
public offering of the type which triggers automatic conversion of the Company's
Preferred Stock.
2. Promissory Note. The Company will execute and deliver a Note to
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each Lender concurrently herewith and with each Subsequent Funding. Each Note
shall (i) bear interest at the rate equal to nine percent (9%) per annum, (ii)
have a stated maturity date of June 30, 2001, at which time all principal and
accrued interest shall be payable; and (iii) be automatically converted into
Conversion Stock in the event of a Qualified Equity Financing or an Acquisition
as provided below.
3. Issue and Sale of Warrants.
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(a) Upon the closing of a Qualified Equity Financing or an
Acquisition, whichever occurs first, the Company shall issue to each Lender a
Warrant representing the right to purchase, for a price (the "Exercise Price")
of $0.01 per share, the number of shares of Conversion Stock equal to the
product of (i) the Coverage Percentage multiplied by (ii) the aggregate
principal amount of Notes held by such Lender divided by the Conversion Price,
rounded upward to the next whole share in the case of any fractional share.
4. Automatic Conversion of Notes.
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(a) Subject to Section 4(b) below, upon the closing of a
Qualified Equity Financing or an Acquisition, the principal amount of each of
the Notes shall be converted into shares of Conversion Stock at the Conversion
Price.
(b) Notwithstanding Section 4(a) above, if the Qualified Equity
Financing is a Qualified Public Offering, at the election of each Lender, the
principal amount of its Note(s) shall be repaid in cash by the Company.
(c) Upon the closing of either a Qualified Equity Financing or an
Acquisition, at the option of each Lender, all accrued but unpaid interest on
such Lender's Note (or Notes) at the date of conversion shall be either (i)
converted into shares of Conversion Stock at the Conversion Price, or (ii) paid
in cash to the Lender.
(d) At the closing of either a Qualified Equity Financing or an
Acquisition, each Lender shall surrender its Notes in exchange for the shares of
Conversion Stock into which its Notes are being converted (or for cash if the
Lender so elects in the event the Qualified Equity Financing is a Qualified
Public Offering).
(e) The Lenders shall also have the other rights (e.g.,
registration rights) provided to the purchasers in the Qualified Equity
Financing; provided, however, the Lenders will not obtain a board seat as a
result of the conversion of their Notes even if the lead investor in a private
offering receives such a right.
5. Representations and Warranties of the Company. The Company hereby
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represents and warrants to the Lenders as follows:
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(a) Organization. The Company (i) is a corporation duly
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organized, validly existing and in good standing under the laws of the State of
Delaware, and (ii) has all requisite power and authority to carry on its
business, to own and hold its properties and assets, to enter into and perform
this Agreement and to issue and carry out the provisions of the Notes and the
Warrants.
(b) Authorization. The execution, delivery and performance by
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the Company of this Agreement, the Notes and the Warrants have been duly and
validly authorized by the Company, and no authorization or approval of the
Company's stockholders is required in connection therewith. This Agreement
constitutes, and upon execution by the Company the Notes and the Warrants will
constitute, the legal, valid and binding obligations of the Company and each is
enforceable against the Company in accordance with its respective terms, except
as such enforcement may be limited by bankruptcy, insolvency and other similar
laws affecting the enforcement of creditors' rights generally.
(c) No Conflict. The execution, delivery and performance by the
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Company of this Agreement and the issuance of the Notes and Warrants: (i) will
not conflict with, result in a breach of or constitute a default under any
contract, agreement, indenture, loan or credit agreement, deed of trust,
mortgage, lease, security agreement or other arrangement to which the Company is
a party or by which the Company or any of its properties or assets is bound or
affected; (ii) will not cause the Company to violate or contravene any provision
of its Amended and Restated Certificate of Incorporation or Bylaws; or (iii)
require any authorization, consent, approval, permit, exemption or other action
by or notice to any court or administrative or governmental body pursuant to any
law, statute, rule or regulation to which the Company is subject or any
agreement, instrument, order, judgment or decree to which the Company is
subject.
(d) Capitalization. Parent's authorized capital stock consists
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solely of (i) 85,000,000 shares of Parent Common Stock, of which 5,330,128
shares are issued and outstanding, and (ii) 44,640,000 shares of Parent
Preferred Stock of which 2,140,000 shares are designated as Series A Preferred
of which 2,040,000 shares are issued and outstanding, 3,000,000 shares are
designated as Series B Preferred, of which 2,200,000 shares are issued and
outstanding, 21,500,000 shares are designated as Series C Preferred, of which
19,882,358 shares are issued and outstanding and 18,000,000 shares are
designated as Series D Preferred, of which 15,407,936 are issued and
outstanding. All outstanding shares of Parent capital stock were issued in
compliance with applicable federal and state securities laws.
(e) Financial Statements. The Company has previously delivered
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to the Lenders the Company's unaudited balance sheet as of May 31, 2000 and the
unaudited statement of changes in financial position and shareholders' equity
for the period ended March 31, 2000. These financial statements (the "Financial
Statements") (i) are in accordance with the books and records of the Company,
(ii) present fairly the financial condition of the Company at the respective
dates thereof and the results of its operations for the periods therein
specified, and (iii) have been prepared in accordance with generally accepted
accounting principles applied on a basis consistent with prior accounting
periods. Except as has otherwise been disclosed to the Lenders, since May 31,
2000, there has been no change in the assets, liabilities or financial condition
of the Company, other than changes which have occurred in the
4
ordinary course of business, none of which has either by itself or in
conjunction with all such other changes been materially adverse to the Company.
(f) Litigation. There are no: (i) actions, proceedings or
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investigations pending or, to Company's knowledge, threatened, or verdicts or
judgments entered against Company, its officers or directors before any court or
before any administrative agency or officer that might result in any material
adverse change in the business, properties or conditions, financial or
otherwise, of the Company; or (ii) violations by the Company of any foreign,
federal, state or local laws, regulations or orders, the violation of which
would have a material adverse effect on the business or assets of the Company
and the Company has received no correspondence or communications with respect to
any possible violation or investigation of the same.
6. Covenants of the Company. The Company makes the following
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convenants to the Lenders, upon which the Lenders are relying in entering into
this Agreement and which, unless otherwise indicated, shall terminate upon
repayment in full or conversion of the Notes.
(a) Indebtedness. Prior to repayment in full or conversion of
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the Notes, the Company shall not incur any new indebtedness without the consent
of the holders of a majority in principal amount of the outstanding Notes,
except for (i) purchase money indebtedness incurred in the ordinary course of
business up to $100,000 in principal amount; (ii) unsecured obligations
incurred, currently payable and paid by the Company in the ordinary course of
business; (iii) indebtedness to banks or other financial institutions; and (iv)
indebtedness subordinated to the Notes; (v) indebtedness with respect to
equipment financing; and (vi) indebtedness of up to $800,000 in connection with
the replacement of an existing line of credit of Times Direct Marketing, Inc.
("TDMI") upon the Company's acquisition of TDMI.
(b) Reports. Prior to repayment in full or conversion of the
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Notes, the Company shall provide each Lender with (i) unaudited financial
statements within forty-five (45) days of the end of each of the Company's first
three fiscal quarters and (ii) audited financial statements within ninety (90)
days of the end of the Company's fiscal year or, if no audited financial
statements are available, unaudited financial statements within that same time
period.
(c) Compliance with Laws. The Company shall comply in all
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material respects with all applicable statutes, rules, regulations and orders of
and all applicable restrictions imposed by all governmental authorities related
to the conduct of its business and the ownership of its property (including,
without limitation, applicable statutes, rules, regulations, orders and
restrictions relating to environmental, safety and other similar standards or
controls) unless the failure to so comply would not have a material adverse
effect on the business or condition (financial or otherwise) of the Company.
(d) Insurance. The Company shall maintain, with financially
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sound and reputable insurers, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by
owners of established reputation engaged in
5
the same or similar business and similarly situated, in such amounts and by such
methods as shall be customary for such owners and deemed adequate by the
Company.
(e) Litigation. The Company shall promptly notify the Lender of
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any material litigation or legal proceedings initiated against the Company or
any violation or potential violation of any representation, warranty or covenant
under this Agreement or the Notes. For the purpose of this Section 5(e)
materiality shall be any contingent liability in excess of $100,000.
(f) The Company shall pay and discharge all taxes, assessments
and governmental charges or levies imposed upon it or upon its income and
profits, or upon any properties belonging to it before the same shall be in
default; provided, however, that the Company shall not be required to pay any
such tax, assessment, charge or levy that is being contested in good faith by
proper proceedings and for which adequate reserves for the same are maintained
if required by generally accepted accounting principles.
(g) The Company shall preserve its corporate existence and
continue to engage in business of the same general type as conducted as of the
date hereof.
(h) The Company shall use the proceeds of the Notes solely to
provide the cash payments required in connection with the Company's acquisition
of TDMI (including the possible repayment of the line of credit referenced in
Section 6(a)(vi)) and to finance its working capital and other general capital
purposes; no portion of the proceeds of the Notes may be used to repay
indebtedness of any kind or any interest or other amounts due thereon (except in
the ordinary course of business or as discussed above) or in respect thereof, to
make any loans or advances to any other Person (defined below) or to redeem,
retire, defease, repurchase or otherwise acquire any equity or debt security or
option thereon issued by the Company, any subsidiary of the Company or any
affiliated person of the foregoing.
(i) Except for the planned guaranty of the current lease for
TDMI's headquarters or other guaranties with respect to obligations of the
Company's subsidiaries, the Company shall not assume, guaranty or endorse or
otherwise become directly or contingently liable for any liability of any other
individual, corporate, partnership, joint venture, trust or unincorporated
organization, joint stock company or other similar organization, government or
any political subdivision thereof, court, or any other legal entity (all such
entities being hereinafter referred to as a "Person"), whether acting in an
individual, fiduciary or other capacity, except those in existence on the date
hereof; provided, however, that the foregoing shall not prohibit the endorsement
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of negotiable instruments for deposit or collection and similar transactions in
the ordinary course of business. For the purposes hereof, "guaranty" shall
include any agreement, whether such agreement is on a contingency or otherwise,
to purchase, repurchase or otherwise acquire any obligation or liability of any
other Person, or to purchase, sell or lease, as lessee or lessor, property or
services, in any such case primarily for the purpose of enabling another Person
to make payment of any such debt or liability, or to make any payment (whether
as an advance, capital contribution, purchase of any equity interest or
otherwise) to assure a minimum equity, asset base, working capital or other
balance sheet or financial condition, in connection with debt or liability of
another Person, or to supply funds to or in any manner invest in another Person
in connection with such Person's debt or liability.
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(j) The Company shall not dispose of, exchange, pledge or suffer
any lien, encumbrance or security interest or permit the filing of any financing
statement (collectively, "Liens") on any of its property or assets, except for
those Liens existing on the date hereof or incurred after the date hereof in the
ordinary course of business or in connection with indebtedness referenced in
Section 6(a)(i), (iii), (v) and (vi) above.
(k) The Company shall not declare or pay any dividends or make
any other payments or distributions on or in respect of any shares of capital
stock issued by it.
(l) The Company shall not issue any security, debt or equity, of
any kind or any option thereon (other than in connection with the indebtedness
referenced in Section 6(a) above or pursuant to a stock option plan in effect on
the date hereof or pursuant to any contractual arrangement entered into prior to
the date hereof and disclosed to the Lenders in writing), or redeem, retire,
defease, repurchase, exchange or otherwise acquire for value any debt or equity
security or option thereon issued by the Borrower (except pursuant to a stock
option plan in effect on the date hereof or contractual arrangement entered into
prior to the date hereof and disclosed to the Lenders in writing).
7. Restrictions on Transfer and Lender Representations. In
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acquiring the Notes, any Warrants, any shares of Conversion Stock issuable upon
conversion of the Notes, and any shares of Conversion Stock issuable upon
exercise of the Warrants (collectively, the "Securities"), each Lender makes the
following representations, warranties and agreements:
(a) Such Lender understands that the Securities will be issued by
the Company without registration under the Securities Act of 1933, as amended
("Act"), and without qualification and/or registration under applicable state
securities laws pursuant to specific exemptions from registration and/or
qualification contained in the Act and in applicable state securities laws. Such
Lender understands that the foregoing exemptions depend upon, among other
things, the bona fide nature of such Lender's investment intent as expressed
herein.
(b) Such Lender agrees that none of the Securities, nor any
interest in the Securities, will be sold, transferred, or otherwise disposed of
by it without registration and/or qualification under the Act or applicable
state securities laws unless such Lender first demonstrates to the satisfaction
of the Company that specific exemptions from such registration and qualification
requirements are available with respect to such resale or disposition or
provides the Company an opinion of counsel satisfactory to the Company that a
contemplated transfer may be made without violation of the Act or applicable
state securities laws.
(c) Such Lender represents and warrants to the Company the
following:
(i) Such Lender is acquiring the Securities for investment
purposes only, for such Lender's own account, and not as nominee or agent for
any other person, and not with a view to, or for resale in connection with, any
distribution thereof within the meaning of the Act.
(ii) Such Lender has received all the information it
considers necessary or appropriate to evaluate the risks and merits of an
investment in the Notes, and has
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had an opportunity to discuss the Company's business, management, financial
affairs and prospects with the Company's management.
(iii) Such Lender is a "qualified institutional buyer"
within the meaning of Rule 144A promulgated under the Act.
(iv) Such Lender is able to bear the economic risks related
to a purchase of the Securities. Such Lender either has a pre-existing personal
or business relationship with the Company or any of its officers, directors of
controlling persons, or by reason of such Lender's business or financial
experience has the capacity to protect its own interests in connection with the
subject transactions.
(d) Such Lender acknowledges that the Securities to be issued to
it will contain a legend which prohibits an offer to transfer or a transfer of
all or any portion of the Securities unless the Securities are registered under
the Act or unless an exemption from registration is available with respect to
such resale or disposition.
8. Severability. In the event any provision of this Agreement shall
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finally be determined to be unlawful, such provision shall be deemed to be
severed from this Agreement and every other provision of this Agreement shall
remain in full force and effect.
9. Attorneys' Fees. In the event any action in law or equity,
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arbitration or other proceeding is brought for the enforcement of this Agreement
or in connection with any of the provisions of this Agreement, the prevailing
party or parties shall be entitled to its attorneys' fees and other costs
reasonably incurred in such action or proceeding.
10. Notices. Any notice to be given hereunder shall be given
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(except as otherwise expressly set forth herein) by registered or certified
mail, postage prepaid, by cable, telex or facsimile, or may be delivered by hand
or by messenger and shall be deemed to have been received as follows: if given
by registered or certified mail, two business days after posting; if given by
cable, two business days after dispatch; if given by telex or facsimile, one
business day after dispatch; and if delivered by hand or by messenger and
receipted for by or on behalf of the party to whom the notice is directed, at
the time of such delivery. Any notice shall be sent to the address given in the
signature blocks of this Agreement or to such other address as the relevant
party may notify to the other.
11. Entire Agreement. This Agreement and the exhibits hereto
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contain all of the agreements between the parties with respect to the matters
contained herein and supersedes all prior written or oral and all
contemporaneous oral agreements or understandings between the parties pertaining
to any such matters. No provision of this Agreement may be amended or added to
except by an agreement in writing signed by the parties to this Agreement or
their respective successors in interest and expressly stating that it is an
amendment of this Agreement.
12. Controlling Law. This Agreement shall be governed by
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interpreted under, and construed and enforced in accordance with the laws of the
State of California applicable to agreements made and to be performed wholly
within the State of California.
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13. Counterparts. This Agreement may be executed in counterparts,
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each of which shall be an original but all of which shall constitute one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
"COMPANY"
MARKETFIRST SOFTWARE, INC., a Delaware
corporation
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, Vice President of
Finance and Administration
Address: 0000 Xxxxxxxx Xxxxx
Xxxxxxxx Xxxx, XX 00000
Fax No.: (000) 000-0000
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Signature Page to Note and Warrant Purchase Agreement
dated July 11, 2000, among MarketFirst Software, Inc. and the various lenders
executing counterparts of this signature page.
By executing this Signature Page, the undersigned Lender agrees to
become a party to and be bound by the terms and conditions of the above-
referenced Agreement.
Name of Lender:
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Authorized Signature:
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Printed Name:
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Title:
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Address:
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Fax No.:
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SCHEDULE 1
AMOUNT OF COMMITMENT
Total Initial
Commitment Commitment Commitment
Lenders Percentage Amount Amount
------------- ---------- ------------ ----------
DLJ Capital Corporation......... 5.08372% 508,372 254,186
Sprout Capital VIII, L.P........ 18.20186% 1,820,186 910,093
Sprout Venture Capital, L.P..... 1.09212% 109,212 54,606
Sprout Capital VII, L.P......... 22.62230% 2,262,230 1,131,115
--------- ----------- ----------
Sprout Total.................. 47.00000% $ 4,700,000 $2,350,000
Enterprise Partners IV, L.P..... 21.62000% 2,162,000 1,081,000
Enterprise Partners IV 1.88000% 188,000 94,000
Associates, L.P................ --------- ----------- ----------
Enterprise Total.............. 23.50000% $ 2,350,000 $1,175,000
Excelsior Private Equity Fund, 17.00000% $ 1,700,000 $ 850,000
II, Inc........................
Xxxxxxxx Investment 3.55032% 355,032 177,516
Oppor-tunities (Master)
Fund-NTV Portfolio.............
Xxxxxxxx New Technologies Fund, 5.44968% 544,968 272,484
Inc............................ --------- ----------- ----------
Xxxxxxxx Total................ 9.00000% $ 900,000 $ 450,000
Xxxxxxxx Partners II, L.P....... 3.50000% $ 350,000 $ 175,000
-------------------------------- --------- ----------- ----------
TOTAL 100.00000% $10,000,000 $5,000,000
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EXHIBIT A
FORM OF PROMISSORY NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND HAS BEEN
TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO THE DISTRIBUTION
THEREOF, AND THIS NOTE MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING IT OR THE COMPANY
RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY STATING THAT SUCH
SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SUCH ACT.
CONVERTIBLE BRIDGE PROMISSORY NOTE
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Payee Address:
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Principal Amount:
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FOR VALUE RECEIVED, MarketFirst Software, Inc., a Delaware
corporation ("Maker"), hereby promises to pay on or before the Maturity Date (as
defined below) to payee above named, or order (the "Payee"), at the address set
forth above, or such other place(s) as the Payee of this Note shall from time to
time designate, the principal sum set forth above; plus simple interest from the
date hereof at the rate of nine percent (9%) per annum. This Note is issued
pursuant to that certain Note and Warrant Purchase Agreement dated as of July
11, 2000 (the "Agreement") by and among Maker and the persons listed on Schedule
1 thereto and is subject to and entitled to the benefits of the Agreement. All
capitalized terms not otherwise defined herein shall have the meanings set forth
in the Agreement.
Subject to the terms and conditions of the Agreement, all
principal and interest on this Note shall be due and payable upon June 30, 2001
(the "Maturity Date"). Payment of principal and interest shall be made in lawful
money of the United States of America. Payments shall be applied first against
the accrued interest and then against outstanding principal. All principal and
interest on this Note are convertible into shares of Conversion Stock upon the
terms and conditions provided in the Agreement.
Notwithstanding anything in this Note to the contrary, the entire
unpaid principal amount of this Note, together with all accrued but unpaid
interest thereon, will become immediately all due and payable without further
notice at the option of Payee upon any of the following: (i) Maker fails to
timely make any payment hereunder when such payment becomes first due; (ii) if
default shall be made in the due and punctual performance or observance of any
A-1
material non-payment term, condition or covenant contained in the Agreement or
this Note and such default continues unremedied for a period of twenty (20) days
after written notice to the Maker by the Payee; (iii) if default shall be made
in the due and punctual payment, after applicable cure periods, of in excess of
$50,000 under any material note, loan agreement or security agreement entered
into by the Maker; (iv) Maker ceases to carry on business on a regular basis;
(v) upon the occurrence and continuance of any condition which has a material
adverse effect on the business operations or financial condition of the Maker;
or (vi) Maker makes any assignment for the benefit of its creditors, makes an
election to wind up or dissolve or becomes unable to pay its debts as they
mature, becomes insolvent or subject to any proceeding under any bankruptcy,
insolvency or debtor's relief law, including without limitation any bankruptcy
proceeding.
In the event that legal proceedings are instituted to collect any
amount due under this Note, Maker agrees to pay all costs of collection thereof,
including reasonable attorney's fees, whether or not suit or action is commenced
to enforce payment of this Note. Presentment for payment, demand, notice or
dishonor and protest and notice of protest and non-payment are hereby waived by
Maker.
This Note will be interpreted in accordance with the laws of the
State of California, including all matters of construction, validity,
performance and enforcement, without giving effect to the principles of conflict
of laws. Any dispute, action, litigation or other proceeding concerning this
Note will be resolved exclusively in Santa Xxxxx County, California for such
purposes. All rights, remedies, and undertakings, obligations, options,
covenants, conditions and agreements contained in this Note and the Agreement
are cumulative and no one of them will be exclusive of any other. Any notice to
any party concerning this Note will be delivered as set forth in the Agreement.
The Note may not be changed, modified, amended or terminated orally.
In the event that this Note shall require the payment of interest
in excess of the maximum amount permissible under applicable law, Maker's
obligations hereunder shall automatically and retroactively be deemed reduced to
the highest maximum amount permissible under applicable law. In the event Payee
receives as interest an amount that would exceed such maximum applicable rate,
the amount of any excess interest shall not be applied to the payment of
interest hereunder, but shall automatically and retroactively be applied to the
reduction of the unpaid principal balance due hereunder. In the event and to the
extent such excess amount of interest exceeds the outstanding unpaid principal
balance hereunder, any such excess amount shall be immediately returned to Maker
by Payee.
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"MAKER"
MARKETFIRST SOFTWARE, INC., a
Delaware corporation
By:
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Xxxxxx X. Xxxxx
Vice President of Finance and
Administration
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EXHIBIT B
FORM OF WARRANT
NEITHER THIS WARRANT NOR THE SHARES OF WARRANT STOCK ISSUABLE UPON EXERCISE OF
THE WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("ACT"), OR UNDER ANY STATE SECURITIES LAWS, AND THIS WARRANT CANNOT BE SOLD OR
TRANSFERRED AND THE SHARES OF WARRANT STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT CANNOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY ISSUING THIS WARRANT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
ACT AND APPLICABLE STATE SECURITIES LAWS.
Warrant No. 2000-___ _______________
WARRANT TO PURCHASE CAPITAL STOCK
OF MARKETFIRST SOFTWARE, INC.
This certifies that, for value received, ________________________
("Warrantholder") is entitled to subscribe for and purchase from MarketFirst
Software, Inc., a Delaware corporation ("Company"), __________ shares of the
Conversion Stock ("Warrant Stock"), prior to the Expiration Date (as such term
is defined below), at the Exercise Price (as such term is defined below),
subject to the terms and conditions stated herein. This Warrant is issued
pursuant to that certain Note and Warrant Purchase Agreement (the "Agreement")
dated July __, 2000, by and among the Company and the persons listed on Schedule
1 thereto and is subject to and entitled to the benefits of the Agreement. All
capitalized terms not otherwise defined herein shall have the meanings set forth
in the Agreement.
1. Exercise Price. The "Exercise Price" shall be equal to One Cent
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($0.01) per share.
2. Exercise of Warrant.
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2.1 Manner of Exercise.
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(a) The rights represented by this Warrant may be exercised
in whole or in part by the holder hereof by the surrender of this Warrant and
delivery of an executed Subscription Agreement in the form attached hereto as
Exhibit A to the Company at its principal executive office, or such other place
as the Company shall designate in writing, at any time or times prior to the
Expiration Date, accompanied by payment for the Warrant Stock so subscribed for
in cash or certified bank or cashier's checks.
(b) Notwithstanding the provisions of Section 2.1(a)
requiring payment by cash or check, the Warrantholder may elect to make payment
of the Exercise Price, or any portion thereof, by delivering for cancellation
securities of the Company (including the
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unexercised portion of this Warrant as provided below) outstanding prior to the
exercise of this Warrant, with such securities to be credited toward the
Exercise Price at the fair market value (as determined below) of the securities,
in which event the certificates evidencing the securities delivered shall
accompany the notice of exercise and shall be duly endorsed or accompanied by
duly executed stock powers to transfer the same to the Company; provided,
however, that such payment in securities instead of cash or check shall not be
effective and shall be rejected by the Company if the Company is then prohibited
by applicable law from purchasing or acquiring the tendered securities. With
respect to use of the Warrant as the Exercise Price therefor, without any cash
payment made by the Warrantholder, the Warrantholder shall receive the number of
shares of Warrant Stock by net exercise, in lieu of shares for which exercise is
otherwise made, as determined as follows:
A = B(C-D)
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C
Where,
A = The net exercise number of shares of Warrant Stock to be issued
to the Warrantholder.
B = The number of shares of Warrant Stock otherwise desired by
Warrantholder to be purchased by such exercise of this Warrant.
C = The fair market value of one share of the Warrant Stock (at the
date of such calculation), as determined in good faith by the
Board of Directors of the Company.
D = Exercise Price (as adjusted to the date of such calculation).
If the Company rejects the payment in securities because the Company is then
prohibited by applicable law from purchasing or acquiring the tendered
securities, the tendered notice of exercise shall not be effective hereunder
unless promptly after being notified of such rejection the Warrantholder pays
the purchase price in cash.
2.2 Exercise Period. This Warrant shall become exercisable at
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any time on and after the date hereof, provided that this Warrant must be
exercised, if at all, before 5:00 p.m. Pacific Time on the date which is five
(5) years from the date of the Agreement (the "Expiration Date").
3. Representations and Warranties of Warrantholder. The
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Warrantholder by accepting this Warrant represents and warrants as follows:
3.1 Investment Representation. The Warrant is acquired for
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Warrantholder's own account for investment purposes and not with a view to any
offering or
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distribution and Warrantholder has no present intention of selling or otherwise
disposing of the Warrant or the underlying shares of Warrant Stock in violation
of applicable securities laws. Upon exercise, Warrantholder will confirm, in
respect of securities obtained upon such exercise, that Warrantholder is
acquiring such securities for Warrantholder's own account and not with a view to
any offering or distribution in violation of applicable securities laws.
Warrantholder acknowledges that shares of Warrant Stock issued upon exercise of
this Warrant have not been registered under the Act and are "restricted
securities" as that term is defined in Rule 144 promulgated under the Act and
must be held indefinitely unless they are subsequently registered under the Act
or an exemption from such registration is available. Warrantholder further
acknowledges that the certificate(s) representing the Warrant Stock issued upon
exercise of this Warrant shall be endorsed with a legend similar to the legend
set forth on this Warrant and all other legends, if any, required by applicable
federal and state securities laws to be placed on the certificate(s).
3.2 Tax Matters. Warrantholder understands that the acceptance
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and exercise of this Warrant has implications under the Internal Revenue Code,
and Warrantholder will consult its own tax counsel with respect thereto.
4. Validity of Warrant Stock. The Company warrants and agrees that
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all shares of Warrant Stock which may be issued upon the exercise of this
Warrant will, upon issuance, be validly issued, fully paid and nonassessable and
free from all taxes, liens and charges with respect to the issue thereof.
5. Adjustments. The number of shares of Warrant Stock for which
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Warrantholder is entitled to subscribe and purchase from the Company pursuant to
this Warrant and the Exercise Price for such shares shall be subject to
adjustment from time to time only as follows:
5.1 Adjustments for Stock Splits and Combinations. If the Company
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at any time or from time to time after the date hereof effects a subdivision of
the outstanding Warrant Stock, the number of shares of Warrant Stock for which
Warrantholder is entitled to subscribe and purchase from the Company upon
exercise of this Warrant shall be proportionately increased and the Exercise
Price then in effect immediately before the subdivision shall be proportionately
decreased, and conversely, if the Company at any time or from time to time after
the date hereof combines the outstanding shares of Warrant Stock, the number of
shares of Warrant Stock for which Warrantholder is entitled to subscribe and
purchase from the Company shall be proportionately decreased and the Exercise
Price then in effect immediately before the subdivision shall be proportionately
increased. Any adjustment under this subsection shall become effective at the
close of business on the date the subdivision or combination becomes effective.
5.2 Adjustments for Certain Dividends and Distributions. In the
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event the Company at any time or from time to time after the date hereof makes,
or fixes a record date for the determination of holders of Warrant Stock
entitled to receive, a dividend or other distribution payable in additional
shares of Warrant Stock, then and in each such event the number of shares of
Warrant Stock for which Warrantholder is entitled to subscribe and purchase from
the Company upon exercise of this Warrant shall be proportionately increased and
the
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Exercise Price then in effect shall be proportionately decreased as of the time
of such issuance or, in the event such a record date is fixed, as of the close
of business on such record date; provided, however, that if such record date is
fixed and such dividend is not fully paid or if such distribution is not fully
made on the date fixed therefor, the number of shares of Warrant Stock for which
Warrantholder is entitled to subscribe and purchase from the Company and the
Exercise Price shall be recomputed accordingly as of the close of business on
such record date and thereafter the number of shares of Warrant Stock then
issuable on exercise of this Warrant and the Exercise Price shall be adjusted
pursuant to this subsection as of the time of actual payment of such dividends
or distributions.
5.3 Adjustment for Reclassification, Exchange and Substitution.
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If the Warrant Stock issuable upon the exercise of this Warrant is changed into
the same or a different number of shares of any class or classes of stock,
whether by reclassification, recapitalization or otherwise (other than a
subdivision or combination of shares or stock dividend or a capital
reorganization, merger, consolidation or sale of assets provided for elsewhere
in this Section 5), then and in any such event Warrantholder shall have the
right thereafter to purchase the kind and amount of stock and other securities
and property receivable upon such reclassification, recapitalization or other
change, by holders of the number of shares of Warrant Stock which might have
been purchased upon exercise of this Warrant immediately prior to such
reclassification, recapitalization or change, all subject to further adjustment
as provided herein. Such an event shall include any automatic conversion of the
outstanding or issuable securities of the Company of the same class or series as
the Warrant Stock to Common Stock pursuant to the terms of the Company's
Certificate of Incorporation upon the closing of a registered public offering of
the Company's Common Stock. The Company or its successor shall promptly issue to
Warrantholder a new Warrant for such new securities or other property. The new
Warrant shall provide for adjustments which shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section 5 including,
without limitation, adjustments to the number of securities issuable upon
exercise of the new Warrant. The provisions of this Section 5.3 shall similarly
apply to successive reclassifications, exchanges, substitutions, or other
events.
5.4 Adjustment for Reorganizations, Mergers, Consolidations or
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Sales of Assets. If at any time or from time to time there is a capital
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reorganization or any merger of the Company with or into any other corporation
or corporations or a sale of all or substantially all of the assets of the
Company to any other person or any voluntary or involuntary liquidation,
dissolution or winding up of the Company (any such transaction referred to
herein as a "Reorganization") involving the Warrant Stock then, as a part of
such Reorganization, provision shall be made so that Warrantholder shall
thereafter be entitled to receive, upon exercise of this Warrant, the number of
shares of stock or other securities or property of the Company or of the
successor corporation resulting from such Reorganization to which a holder of
Warrant Stock deliverable upon exercise of this Warrant would have been entitled
on such Reorganization. In any such case, appropriate adjustment shall be made
in the application of the provisions of this Section 5 with respect to the
rights of Warrantholder after such Reorganization to the end that the provisions
of this Section 5 (including adjustments of the Exercise Price then in effect
and number of shares of stock purchasable upon exercise of this Warrant) shall
be applicable after that event and be as nearly equivalent to the provisions
hereof as may be practicable.
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5.5 Notice of Adjustments. Upon any adjustments of the
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Exercise Price or the amount or kind of securities or other property issuable
upon exercise of this Warrant, then and in each case the Company shall give
written notice of such adjustment by first class mail, postage prepaid,
addressed to the holder of this Warrant at his address registered on the books
of the Company, which notice shall state the Exercise Price resulting from such
adjustment and the amount and kind of securities purchasable at such price upon
the exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
5.6 Notice of Record Date. In the event of (i) any taking by
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the Company of a record of the holders of any class of Warrant Stock for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, or (ii) any capital transaction that the Company
proposes to effect requiring adjustments pursuant to this Section 5 ("Capital
Transaction"), the Company shall mail to Warrantholder at least twenty (20) days
prior to the date specified therein, a notice specifying (1) the date on which
any such record is to be taken for the purpose of such dividend or distribution
and a description of such dividend or distribution, (2) the date on which any
such Capital Transaction is expected to become effective, and (3) the time, if
any, that is to be fixed, as to when the holders of record of Warrant Stock
shall be entitled to exchange their shares of Warrant Stock for securities or
other property deliverable upon such Capital Transaction.
6. Transfer of Warrant.
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(a) This Warrant may not be assigned or transferred
without the prior written consent of the Company, which consent may be withheld
for any reason in the sole and subjective discretion of the Company.
(b) No transfer or assignment of this Warrant shall be
made without compliance with the legend set forth on the first page of this
Warrant.
(c) In order to effectuate any transfer of this
Warrant, or any rights or obligations hereunder, the current Warrantholder must
execute an assignment in form and substance acceptable to Company, the proposed
transferee must execute an acknowledgment and agreement in form and substance
acceptable to Company, and the Warrantholder and proposed transferee shall
execute all other documents, representations and warranties which Company may
request. No proposed transfer shall have any effect unless and until Company
gives its written consent to the proposed transfer and acknowledges that the
proposed transferee has become the current Warrantholder and registered owner of
this Warrant.
7. Reservation of Shares. The Company shall at all times reserve
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and keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued Warrant Stock, or its authorized and issued Warrant
Stock held in its treasury, the aggregate number of the shares of Warrant Stock
deliverable upon the exercise of all outstanding Warrants, for the purpose of
enabling it to satisfy any obligation to issue the shares of Warrant Stock upon
the due and punctual exercise of this Warrant through the Expiration Date.
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8. No Impairment. The Company shall not, by amendment of its
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certificate of incorporation or bylaws, or through reorganization,
consolidation, merger, dissolution, issuance or sale of securities, sale of
assets or any other voluntary action, willfully avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, and shall at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate in order to
protect the rights of Warrantholder under this Warrant against wrongful
impairment. Without limiting the generality of the foregoing, the Company: (i)
shall not sell or increase the par value of any shares of Warrant Stock above
the amount payable therefor upon exercise, and (ii) shall take all actions that
are necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Warrant Stock upon the exercise of
this Warrant.
9. No Liabilities as Stockholder. No provision hereof, in the absence
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of affirmative action by Warrantholder to purchase shares of Warrant Stock shall
give rise to any liability of such holder for the Exercise Price or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.
10. Miscellaneous Matters.
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(a) As used herein, the term "Warrant Stock" shall mean the
Company's presently authorized Warrant Stock and stock of any other class into
which such presently authorized Warrant Stock may hereafter have been converted.
(b) As used herein, the word "person" shall mean an individual
or entity.
(c) This Warrant and the name and address of the holder have
been registered in a Warrant Register that is kept at the principal office of
the Company, and the Company may treat the holder so registered as the owner of
this Warrant for all purposes.
(d) This Warrant shall not entitle the holder hereof to any
voting rights or other rights as a shareholder of the Company, or to any other
rights whatsoever except the rights herein expressed, and no cash dividend paid
out of earnings or surplus or interest shall be payable or accrue in respect of
this Warrant or the interest represented hereby or the shares which may be
subscribed for and purchased hereunder until and unless and except to the extent
that the rights represented by this Warrant shall be exercised.
(e) This Warrant shall be governed by and interpreted in
accordance with the internal laws, and not the law of conflicts, of the State of
California and applicable United States federal law, without giving effect to
the conflicts of law provisions thereof.
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(f) All notices under this Warrant shall be given as set forth
in the Agreement.
MARKETFIRST SOFTWARE, INC., a
Delaware corporation
By:
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Name:
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Title:
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SUBSCRIPTION AGREEMENT
_______________, 200_
To: MarketFirst Software, Inc.
The undersigned, pursuant to the provisions set forth in Warrant No.
2000-__, hereby agrees to subscribe for and purchase __________ shares of the
Warrant Stock covered by such Warrant, and makes payment herewith in full for
such Warrant Stock at the Exercise Price.
The undersigned represents and warrants to you that the undersigned is
acquiring the shares covered hereby for the undersigned's own account for
investment purposes and not with a view to any offering or distribution in
violation of applicable securities laws.
Signature:
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Printed Name and Title:
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Address:
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ASSIGNMENT
FOR VALUE RECEIVED ____________________________ hereby sells, assigns
and transfers all of the rights of the undersigned under Warrant No. 2000-__,
with respect to the number of shares of Warrant Stock covered thereby set forth
below unto:
Name of Assignee Address No. of Shares
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Dated:
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Signature:
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Printed Name and Title:
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Address:
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EXHIBIT C
FORM OF FUNDING REQUEST
TO:
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Pursuant to that certain Note and Warrant Purchase Agreement dated as
of July __, 2000 ("Agreement") by and among MarketFirst Software, Inc., a
Delaware corporation ("Company"), and certain lenders listed on Schedule 1 to
the Agreement ("Lenders"), this represents Company's request to borrow from you
("Holder") $______________ on _________, 2000, which proceeds are to be
deposited to the Company's account at ___________________ in ______________,
California.
The total principal amount of borrowings under the Notes (as defined
in the Agreement) owing Holder, including the fundings requested herein, is
$_____________. The total principal amount of borrowings on the loan owing all
Lenders, including the fundings requested of all other Lenders concurrently with
this request, is $____________.
After due investigation of such matters, the undersigned officer, to
the best of his knowledge, and the Company certify that (i) no event has
occurred which constitutes an event of default under the Agreement; and (ii) the
Company has performed all agreements and satisfied all conditions under the
Agreement provided to be performed by it on or before the date hereof. The
certification set forth in this paragraph shall be deemed to be true and correct
as of the date set forth below unless revoked prior to that time.
MARKETFIRST SOFTWARE, INC., a
Delaware corporation
By:
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Xxxxx X. Xxxxxxx, Chief Executive
Officer
Dated: ______________ , 2000
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