EXHIBIT 10.16
SUBORDINATED
LOAN AND SECURITY AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of December 3, 1998, is entered
into by and between Vignette Corporation, a Delaware corporation, with its chief
executive office, and principal place of business located at 0000 Xxx Xxxx
Xxxx., Xxxxx 000, Xxxxxx, XX, 00000 (the "Borrower") and Comdisco, Inc., a
Delaware corporation, with its principal place of business located at 0000 Xxxxx
Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000 (the "Lender" or sometimes, "Comdisco").
In consideration of the mutual agreements contained herein, the parties hereto
agree as follows:
RECITALS
WHEREAS, Borrower has requested Lender to make available to Borrower a loan
in the aggregate principal amount of FIVE MILLION DOLLARS ($5,000,000) in 5
installments of ONE MILLION DOLLARS ($1,000,000) each (as the same may from time
to time be amended, modified, supplemented or revised, the "Loan"), which would
be evidenced by Subordinated Promissory Note(s) executed by Borrower
substantially in the form of Exhibit A hereto (as the same may from time to time
be amended, modified, supplemented or restated the "Note(s)").
WHEREAS, Lender is willing to make the Loan on the terms and conditions set
forth in this Agreement, and
WHEREAS, Lender and Borrower agree any Loan hereunder shall be subordinate
to Senior Debt (as defined herein) to the extent set forth in the Subordination
Agreement (as defined herein).
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein, Borrower and Lender hereby agree as follows:
SECTION 1. DEFINITIONS
Unless otherwise defined herein, the following capitalized terms shall have
the following meanings (such meanings being equally applicable to both the
singular and plural form of the terms defined);
1.1 "ACCOUNT" means any "account," as such term is defined in Section
9106 of the UCC, now owned or hereafter acquired by Borrower or in which
Borrower now holds or hereafter acquires any interest and, in any event, shall
include, without limitation, all accounts receivable, book debts and other forms
of obligations (other than forms of obligations evidenced by Chattel Paper,
Documents or Instruments) now owned or hereafter received or acquired by or
belonging or owing to Borrower (including, without limitation, under any trade
name, style or division thereof) whether arising out of goods sold or services
rendered by Borrower or from any other transaction, whether or not the same
involves the sale of goods or services by Borrower (including, without
limitation, any such obligation which may be characterized as an account or
contract right under the UCC) and all of Borrower's rights in, to and under all
purchase orders or receipts now owned or hereafter acquired by it for goods or
services, and all of Borrower's rights to any goods represented by any of the
foregoing (including, without limitation, unpaid seller's rights of rescission,
replevin, reclamation and
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stoppage in transit and rights to returned, reclaimed or repossessed goods), and
all monies due or to become due to Borrower under all purchase orders and
contracts for the sale of goods or the performance of services or both by
Borrower (whether or not yet earned by performance on the part of Borrower or in
connection with any other transaction), now in existence or hereafter occurring,
including, without limitation, the right to receive the proceeds of said
purchase orders and contracts, and all collateral security and guarantees of any
kind given by any Person with respect to any of the foregoing.
1.2 "ACCOUNT DEBTOR" means any "account debtor," as such term is defined
in Section 9105(1)(a) of the UCC.
1.3 "ADVANCE" means each installment made by the Lender to Borrower
pursuant to the Loan to be evidenced by the Note(s) secured by the Collateral.
1.4 "ADVANCE DATE" means the funding date of any Advance of the Loan.
1.5. "ADVANCE REQUEST" means the request by Borrower for an Advance under
the Loan, each to be substantially in the form of Exhibit C attached hereto, as
submitted by Borrower to Lender from time to time.
1.6 "CHATTEL PAPER" means any "chattel paper," as such term is defined in
Section 9105(1)(b) of the UCC, now owned or hereafter acquired by Borrower or in
which Borrower now holds or hereafter acquires any interest.
1.7 "CLOSING DATE" means the date hereof.
1.8 "COLLATERAL" shall have the meaning assigned to such term in Section
3 of this Agreement.
1.9 "CONTRACTS" means all contracts, undertakings, franchise agreements
or other agreements (other than rights evidenced by Chattel Paper, Documents or
Instruments) in or under which Borrower may now or hereafter have any right,
title or interest, including, without limitation, with respect to an Account,
any agreement relating to the terms of payment or the terms of performance
thereof.
1.10 "COPYRIGHTS" means all of the following now owned or hereafter
acquired by Borrower or in which Borrower now holds or hereafter acquires any
interest: (i) all copyrights, whether registered or unregistered, held pursuant
to the laws of the United States, any State thereof or of any other country;
(ii) registrations, applications and recordings in the United States Copyright
Office or in any similar office or agency of the United States, any state
thereof or any other country; (iii) any continuations, renewals or extensions
thereof; and (iv) any registrations to be issued in any pending applications.
1.11 "COPYRIGHT LICENSE" means any written agreement granting any right to
use any Copyright or Copyright registration now owned or hereafter acquired by
Borrower or in which Borrower now holds or hereafter acquires any interest.
1.12 "DOCUMENTS" means any "documents," as such term is defined in Section
9105(1)(f) of the UCC, now owned or hereafter acquired by Borrower or in which
Borrower now holds or hereafter acquires any interest.
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1.13 "EQUIPMENT" means any "equipment," as such term is defined in Section
9109(2) of the UCC, now or hereafter owned or acquired by Borrower or in which
Borrower now holds or hereafter acquires any interest and any and all additions,
substitutions and replacements of any of the foregoing, wherever located,
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto.
1.14 "EXCLUDED AGREEMENTS" means (i) any Warrant Agreement(s) executed
hereunder, and any other warrants (including without limitation, the warrant
agreement dated as of December 3, 1998) to acquire, or agreements governing the
rights of the holders of, any equity security of Borrower, (ii) any stock of the
Borrower issued or purchased pursuant to the Warrant Agreement, and (iii) the
Master Lease Agreement dated as of between Borrower, as lessee, and Lender, as
lessor, including, without limitation, any Equipment Schedules and Summary
Equipment Schedules to the Master Lease Agreement executed or delivered by
Borrower pursuant thereto and any other modifications or amendments thereof,
whereby Borrower (as lessee) leases equipment, software, or goods from Lender
(as lessor) to Borrower (as lessee).
1.15 "FACILITY FEE" means one percent 1% of the principal amount of the
installment of the Loan due at the Closing Date plus due diligence and legal
expenses of $8,000.
1.16 "FIXTURES" means any "fixtures," as such term is defined in Section
9313(1)(a) of the UCC, now or hereafter owned or acquired by Borrower or in
which Borrower now holds or hereafter acquires any interest and, now or
hereafter attached or affixed to or constituting a part of, or located in or
upon, real property wherever located, together with all right, title and
interest of Borrower in and to all extensions, improvements, betterments,
renewals, substitutes, and replacements of, and all additions and appurtenances
to any of the foregoing property, and all conversions of the security
constituted thereby, immediately upon any acquisition or release thereof or any
such conversion, as the case may be.
1.17 "GENERAL INTANGIBLES" means any "general intangibles," as such term
is defined in Section 9106 of the UCC, now owned or hereafter acquired by
Borrower or in which Borrower now holds or hereafter acquires any interest and,
in any event, shall include, without limitation, all right, title and interest
which Borrower may now or hereafter have in or under any contract, all customer
lists, Copyrights, Trademarks, Patents, rights to Intellectual Property,
interests in partnerships, joint ventures and other business associations,
Licenses, permits, trade secrets, proprietary or confidential information,
inventions (whether or not patented or patentable), technical information,
procedures, designs, knowledge, know-how, software, data bases, data, skill,
expertise, recipes, experience, processes, models, drawings, materials and
records, goodwill (including, without limitation, the goodwill associated with
any Trademark, Trademark registration or Trademark licensed under any Trademark
License), claims in or under insurance policies, including unearned premiums,
uncertificated securities, cash and other forms of money or currency, deposit
accounts (including as defined in Section 9105(e) of the UCC), rights to xxx for
past, present and future infringement of Copyrights, Trademarks and Patents,
rights to receive tax refunds and other payments and rights of indemnification.
1.18 "INSTRUMENTS" means any "instrument," as such term is defined in
Section 9105(1)(i) of the UCC, now owned or hereafter acquired by Borrower or in
which Borrower now holds or hereafter acquires any interest.
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1.19 "INTELLECTUAL PROPERTY" means all Copyrights, Trademarks, Patents,
trade secrets, source codes, customer lists, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data bases,
skill, expertise, experience, processes, models, drawings, materials and
records.
1.20 "INVENTORY " means any "inventory," as such term is defined in
Section 9109(4) of the UCC, wherever located, now or hereafter owned or acquired
by Borrower or in which Borrower now holds or hereafter acquires any interest,
and, in any event, shall include, without limitation, all inventory, goods and
other personal property which are held by or on behalf of Borrower for sale or
lease or are furnished or are to be furnished under a contract of service or
which constitute raw materials, work in process or materials used or consumed or
to be used or consumed in Borrower's business, or the processing, packaging,
promotion, delivery or shipping of the same, and all furnished goods whether or
not such inventory is listed on any schedules, assignments or reports furnished
to Lender from time to time and whether or not the same is in transit or in the
constructive, actual or exclusive occupancy or possession of Borrower or is held
by Borrower or by others for Borrower's account, including, without limitation,
all goods covered by purchase orders and contracts with suppliers and all goods
billed and held by suppliers and all inventory which may be located on premises
of Borrower or of any carriers, forwarding agents, truckers, warehousemen,
vendors, selling agents or other persons.
1.21 "LICENSE" means any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by Borrower or in which Borrower now holds or hereafter acquires any interest
and any renewals or extensions thereof.
1.22 "LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment for security, security interest, encumbrance, xxxx, xxxx or charge of
any kind, whether voluntarily incurred or arising by operation of law or
otherwise, against any property, any conditional sale or other title retention
agreement, any lease in the nature of a security interest, and the filing of any
financing statement (other than a precautionary financing statement with respect
to a lease that is not in the nature of a security interest) under the UCC or
comparable law of any jurisdiction.
1.23 "LOAN DOCUMENTS" shall mean and include this Agreement, the Note(s),
and any other documents executed in connection with the Secured Obligations or
the transactions contemplated hereby, as the same may from time to time be
amended, modified, supplemented or restated, provided, that the Loan Documents
shall not include any of the Excluded Agreements.
1.24 "MATERIAL ADVERSE EFFECT" means a material adverse effect upon: (i)
the business, operations, properties, assets or conditions (financial or
otherwise) of Borrower; or (ii) the ability of Borrower to perform, or of Lender
to enforce, the Secured Obligations.
1.25 "MATURITY DATE" means the date thirty-six (36) months from the
Advance Date of each installment of the Loan.
1.26 "PATENT LICENSE" means any written agreement granting any right with
respect to any invention on which a Patent is in existence now owned or
hereafter acquired by Borrower or in which Borrower now holds or hereafter
acquires any interest.
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1.27 "PATENTS" means all of the following now owned or hereafter acquired
by Borrower or in which Borrower now holds or hereafter acquires any interest:
(a) letters patent of, or rights corresponding thereto in, the United States or
any other county, all registrations and recordings thereof, and all applications
for letters patent of, or rights corresponding thereto in the United States or
any other country, including, without limitation, registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any other country;
(b) all reissues, continuations, continuations-in-part or extensions thereof;
(c) all xxxxx patents, divisionals, and patents of addition; and (d) all patents
to issue in any such applications.
1.28 "PERMITTED LIENS" means any and all of the following: (i) liens in
favor of Lender, (ii) liens related to, or arising in connection with, Senior
Debt.
1.29 "PROCEEDS" means "proceeds," as such term is defined in Section
9306(1) of the UCC and, in any event, shall include, without limitation, (a) any
and all Accounts, Chattel Paper, Instruments, cash or other forms of money or
currency or other proceeds payable to Borrower from time to time in respect of
the Collateral, (b) any and all proceeds of any insurance, indemnity, warranty
or guaranty payable to Borrower from time to time with respect to any of the
Collateral, (c) any and all payments (in any form whatsoever) made or due and
payable to Borrower from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any Person acting under color of
governmental authority), (d) any claim of Borrower against third parties (i) for
past, present or future infringement of any Copyright, Patent or Patent License
or (ii) for past, present or future infringement or dilution of any Trademark or
Trademark License or for injury to the goodwill associated with any Trademark,
Trademark registration or Trademark licensed under any Trademark License and (e)
any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral.
1.30 "RECEIVABLES" shall mean and include all of the Borrowers accounts,
instruments, documents, chattel paper and general intangibles whether secured or
unsecured, whether now existing or hereafter created or arising, and whether or
not specifically sold or assigned to Lender hereunder.
1.31 "SECURED OBLIGATIONS" shall mean and include all principal, interest,
fees, costs, or other liabilities or obligations for monetary amounts owed by
Borrower to Lender, whether due or to become due, matured or unmatured,
liquidated or unliquidated, contingent or non-contingent, and all covenants and
duties regarding such amounts, of any kind of nature, present or future, arising
under this Agreement, the Note(s), or any of the other Loan Documents, whether
or not evidenced by any Note(s), Agreement or other instrument, as the same may
from time to time be amended, modified, supplemented or restated, provided, that
the Secured Obligations shall not include any indebtedness or obligations of
Borrower arising under or in connection with the Excluded Agreements.
1.32 "SENIOR CREDITOR" means a bank, insurance company, pension fund, or
other institutional lender to be determined, or a syndication of such
institutional lenders that provides Senior Debt financing to Borrower; provided,
that Senior Creditor shall not include any officer, director, shareholder,
venture capital investor, or insider of Borrower, or any affiliate of the
foregoing persons, except upon the express written consent of Lender.
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1.33 "SENIOR DEBT" means accounts receivable and equipment financing
indebtedness and obligations for borrowed money (including, without limitation,
principal, premium (if any), interest, fees charges, expenses, costs,
professional fees and expenses, and reimbursement obligations) at any time owing
by Borrower to under the Senior Loan Documents, including, but not limited to
such amounts as may accrue or be incurred before or after default or workout or
the commencement of any liquidation, dissolution, bankruptcy, receivership or
reorganization by or against Borrower provided, that Senior Debt shall not
include the following indebtedness or obligations outstanding at any one time:
(a) obligations incurred after default or workout or the commencement of
any liquidation, dissolution, bankruptcy, receivership, or reorganization case
by or against Borrower, and
(b) debt exceeding 10 million during 1999, 15 Million during 2000 and 18
Million during 2001.
1.34 "SENIOR LOAN DOCUMENTS" means the loan agreement between Borrower and
Senior Creditor and any other agreement, security agreement, document,
promissory note, UCC financing statement, or instrument executed by Borrower in
favor of Senior Creditor pursuant to or in connection with the Senior Debt or
the loan agreement, as the same may from time to time be amended, modified,
supplemented, extended, renewed, restated or replaced.
1.35 "SUBORDINATION AGREEMENT" means the Subordination Agreement of even
date herewith, entered into between Borrower and Lender for the benefit of
Senior Creditor.
1.36 "TRADEMARK LICENSE" means any written agreement granting any right to
use any Trademark or Trademark registration now owned or hereafter acquired by
Borrower or in which Borrower now holds or hereafter acquires any interest.
1.37 "TRADEMARKS" means any of the following now owned or hereafter
acquired by Borrower or in which Borrower now holds or hereafter acquires any
interest: (a) any and all trademarks, tradenames, corporate names, business
names, trade styles, service marks, logos, other source or business identifiers,
prints and labels on which any of the foregoing have appeared or appear, designs
and general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and any applications in
connection therewith, including, without limitation, registrations, recordings
and applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof and (b) any reissues, extensions or
renewals thereof.
1.38 "UCC" shall mean the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of Illinois. Unless otherwise defined
herein, terms that are defined in the UCC and used herein shall have the
meanings given to them in the UCC.
1.39 "WARRANT AGREEMENT(S)" shall mean those agreements entered into in
connection with the Loan, substantially in the form attached hereto as Exhibit I
pursuant to which Borrower granted Lender the right to purchase that number of
shares of Series H Preferred Stock of Borrower as more particularly set forth
therein.
SECTION 2. THE LOAN
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2.1 The outstanding principal amount of the Loan, together with interest
thereon precomputed at the rate of twelve (12%) percent per annum, shall be due
and payable in six (6) equal monthly installments of interest only, payable on
the first day of each month, followed by thirty (30) equal monthly installments
of principal and interest, payable on the first day of each month , to and
including the Maturity Date (each, a "Payment Date"). If any payment under the
Note(s) shall be payable on a day other than a business day, then such payment
shall be due and payable on the next succeeding business day.
2.2 Borrower shall have the option to prepay the Loan, in whole or in
part, after 12 months from the Closing Date by paying the principal amount
thereon together with all accrued and unpaid interest with respect to such
principal amount, as of the date of such prepayment, without premium. In the
event Borrower prepays the Note(s) within 12 months from the Closing Date
hereof, Borrower shall pay the principal amount together with all accrued and
unpaid interest and a prepayment premium equal to 1% of the then outstanding
principal amount.
2.3 (a) Notwithstanding any provision in this Agreement, the Note(s),
or any other Loan Document, it is not the parties' intent to contract for,
charge or receive interest at a rate that is greater than the maximum rate
permissible by law which a court of competent jurisdiction shall deem applicable
hereto (which under the laws of the State of Illinois shall be deemed to be the
laws relating to permissible rates of interest on commercial loans) (the
"Maximum Rate"). If the Borrower actually pays Lender an amount of interest,
chargeable on the total aggregate principal Secured Obligations of Borrower
under this Agreement and the Note(s) (as said rate is calculated over a period
of time from the date of this Agreement through the end of time that any
principal is outstanding on the Note(s)), which amount of interest exceeds
interest calculated at the Maximum Rate on said principal chargeable over said
period of time, then such excess interest actually paid by Borrower shall be
applied first, to the payment of principal outstanding on the Note(s); second,
after all principal is repaid, to the payment of Lender's out of pocket costs,
expenses, and professional fees which are owed by Borrower to Lender under this
Agreement or the Loan Documents; and third, after all principal, costs,
expenses, and professional fees owed by Borrower to Lender are repaid, the
excess (if any) shall be refunded to Borrower, and the effective rate of
interest will be automatically reduced to the Maximum Rate.
(b) In the event any interest is not paid when due hereunder,
delinquent interest shall be added to principal and shall bear interest on
interest, compounded at the rate set forth in Section 2.1.
(c) Upon and during the continuation of an Event of Default
hereunder, all Secured Obligations, including principal, interest,
compounded interest, and professional fees, shall bear interest at a rate
per annum equal to the rate set forth in Section 2.1. plus five percent
(5%) per annum ("Default Rate").
SECTION 3. SECURITY INTEREST
As security for the prompt, complete and indefeasible payment when due
(whether at stated payment dates or otherwise) of all the Secured Obligations
and in order to induce Lender to make the Loan upon the terms and subject to the
conditions of the Note(s), Borrower hereby assigns, conveys, mortgages, pledges,
hypothecates and transfers to Lender for security purposes only, and hereby
grants to Lender a security interest in, all of Borrower's right, title
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and interest in, to and under each of the following (all of which being
hereinafter collectively called the "Collateral"):
(a) All Receivables;
(b) All Equipment;
(c) All Fixtures;
(d) All Inventory;
(e) All other tangible goods and personal property of Borrower whether
now or hereafter owned or existing, leased, consigned by or to, or
acquired by, Borrower and wherever located; and
(f) To the extent not otherwise included, all Proceeds of each of the
foregoing and all accessions to, substitutions and replacements for,
and rents, profits and products of each of the foregoing.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BORROWER
The Borrower represents, warrants and agrees that;
4.1 Borrower owns all right title and interest in and to the Collateral,
free of all liens, security interests, encumbrances and claims whatsoever,
except for Permitted Liens.
4.2 Borrower has the full power and authority to, and does hereby grant
and convey to the Lender, a perfected security interest in the Collateral as
security for the Secured Obligations, free of all liens, security interests,
encumbrances and claims, other than Permitted Liens and shall execute such
Uniform Commercial Code financing statements in connection herewith as the
Lender may reasonably request. Except as set forth herein, no other lien,
security interest, adverse claim or encumbrance has been created by Borrower or
is known by Borrower to exist with respect to any Collateral.
4.3 Borrower is a corporation duly organized, legally existing and in
good standing under the laws of the State of Delaware, and is duly qualified as
a foreign corporation in all jurisdictions in which the nature of its business
or location of its properties require such qualifications and where the failure
to be qualified would have a material adverse effect.
4.4 Borrower's execution, delivery and performance of the Note(s), this
Agreement, all financing statements, all other Loan Documents required to be
delivered or executed in connection herewith, and the Warrant Agreement(s) have
been duly authorized by all necessary corporate action of Borrower, the
individual or individuals executing the Loan Documents and the Warrant
Agreement(s) were duly authorized to do so; and the Loan Documents and the
Warrant Agreement(s) constitute legal, valid and binding obligations of the
Borrower, enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization or other similar laws
generally affecting the enforcement of the rights of creditors.
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4.5 This Agreement, the other Loan Documents and the Warrant Agreement(s)
do not and will not violate any provisions of Borrower's [Articles/Certificate
of Incorporation], bylaws or any contract, agreement, law, regulation, order,
injunction, judgment, decree or writ to which the Borrower is subject, or result
in the creation or imposition of any lien, security interest or other
encumbrance upon the Collateral, other than those created by this Agreement.
4.6 The execution, delivery and performance of this Agreement, the other
Loan Documents and the Warrant Agreement(s) do not require the consent or
approval of any other person or entity including, without limitation, any
regulatory authority or governmental body of the United States or any state
thereof or any political subdivision of the United States or any state thereof.
4.7 No event which has had or could reasonably be expected to have a
Material Adverse Effect has occurred and is continuing.
4.8 No fact or condition exists that would (or would, with the passage of
time, the giving of notice, or both) constitute a default under the Loan
Agreement between Borrower and Senior Creditor.
4.9 Borrower has filed and will file all tax returns, federal, state and
local, which it is required to file and has duly paid or fully reserved for all
taxes or installments thereof (including any interest or penalties) as and when
due, which have or may become due pursuant to such returns or pursuant to any
assessment received by Borrower for the three (3) years preceding the Closing
Date, if any (including any taxes being contested in good faith and by
appropriate proceedings).
SECTION 5. INSURANCE
5.1 So long as there are any Secured Obligations outstanding, Borrower
shall cause to be carried and maintained comprehensive general liability
insurance against risks customarily insured against in Borrower's line of
business. Such risks shall include, without limitation, the risks of death,
bodily injury and property damage. So long as there are any Secured Obligations
outstanding, Borrower shall also cause to be carried and maintained insurance
upon the Collateral and Borrower's business, covering casualty, hazard and such
other property risks customarily insured against in Borrower's line of business.
Borrower shall deliver to Lender lender's loss payable endorsements (Form BFU
438 or equivalent) naming Lender as loss payee or additional insured, as
appropriate. Borrower shall use commercially reasonable efforts to cause all
policies evidencing such insurance to provide for at least thirty (30) days
prior written notice by the underwriter or insurance company to Lender in the
event of cancellation or expiration. Such policies shall be issued by such
insurers and in such amounts as are reasonably acceptable to Lender.
5.2 Borrower shall and does hereby indemnify and hold Lender, its agents
and shareholders harmless from and against any and all claims, costs, expenses,
damages and liabilities (including, without limitation, such claims, costs,
expenses, damages and liabilities based on liability in tort, including without
limitation, strict liability in tort), including reasonable attorneys' fees,
arising out of the disposition or utilization of the Collateral, other than
claims arising at or caused by Lender's gross negligence or willful misconduct.
SECTION 6. COVENANTS OF BORROWER
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Borrower covenants and agrees as follows at all times while any of the
Secured Obligations remain outstanding:
6.1 Borrower shall furnish to Lender the financial statements listed
hereinafter, each prepared in accordance with generally accepted accounting
principles consistently applied (the "Financial Statements"):
(a) as soon as practicable (and in any event within thirty (30)
days) after the end of each month, unaudited interim financial statements
as of the end of such month (prepared on a consolidated and consolidating
basis, if applicable), including balance sheet and related statements of
income and cash flows accompanied by a report detailing any material
contingencies (including the commencement of any material litigation by or
against Borrower) or any other occurrence that could reasonably be expected
to have a Material Adverse Effect, all certified by Borrower's Chief
Executive Officer or Chief Financial Officer to be true and correct;
(b) as soon as practicable (and in any event within ninety (90)
days) after the end of each fiscal year, unqualified audited financial
statements as of the end of such year (prepared on a consolidated and
consolidating basis, if applicable), including balance sheet and related
statements of income and cash flows, and setting forth in comparative form
the corresponding figures for the preceding fiscal year, certified by a
firm of independent certified public accountants selected by Borrower and
reasonably acceptable to Lender, accompanied by any management report from
such accountants;
(c) promptly after the sending or filing thereof, as the case may
be, copies of any proxy statements, financial statements or reports which
Borrower has made available to its shareholders and copies of any regular,
periodic and special reports or registration statements which Borrower
files with the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or any national securities
exchange; and
(d) promptly, any additional information, financial or otherwise
(including, but not limited, to tax returns and names of principal
creditors) as Lender reasonably believes necessary to evaluate Borrower's
continuing ability to meet its financial obligations.
6.2 Borrower shall permit any authorized representative of Lender and its
attorneys and accountants on reasonable notice to inspect, examine and make
copies and abstracts of the books of account and records of Borrower at
reasonable times during normal business hours. In addition, such representative
of Lender and its attorneys and accountants shall have the right to meet with
management and officers of the Company to discuss such books of account and
records.
6.3 Borrower will from time to time execute, deliver and file, alone or
with Lender, any financing statements, security agreements or other documents;
procure any instruments or documents as may be requested by Lender; and take all
further action that may be necessary or desirable, or that Lender may request,
to confirm, perfect, preserve and protect the security interests intended to be
granted hereby, and in addition, and for such purposes only, Borrower hereby
authorizes Lender to execute and deliver on behalf of Borrower and to file such
10
financing statements, security agreement and other documents without the
signature of Borrower either in Lender's name or in the name of Borrower as
agent and attorney-in-fact for Borrower. The parties agree that a carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement and may be filed in any appropriate office in lieu thereof.
6.4 Borrower shall protect and defend Borrower's title as well as the
interest of the Lender against all persons claiming any interest adverse to
Borrower or Lender and shall at all times keep the Collateral free and clear
from any legal process, liens or encumbrances whatsoever (except any placed
thereon by Lender) and shall give Lender immediate written notice thereof.
6.5 Without Lender's prior written consent, Borrower shall not (a) grant
any material extension of the time of payment of any of the Receivables, (b) to
any material extent, compromise, compound or settle the same for less than the
full amount thereof, (c) release, wholly or partly, any Person liable for the
payment thereof, or allow any credit or discount whatsoever thereon other than
trade discounts granted in the ordinary course of business of Borrower.
6.6 Borrower shall maintain and protect its properties, assets and
facilities, including without limitation, its Equipment and Fixtures, in good
order and working repair and condition (taking into consideration ordinary wear
and tear) and from time to time make or cause to be made all necessary and
proper repairs, renewals and replacements thereto and shall competently manage
and care for its property in accordance with prudent industry practices.
6.7 Borrower shall not merge with and into any other entity; or sell or
convey all or substantially all of its assets or stock to any other person or
entity without notifying Lender a minimum of thirty (30) days prior to the
closing date and requesting Lender's consent to the assignment of all of
Borrower's Secured Obligations hereunder to the successor entity in form and
substance satisfactory to Lender. In the event Lender does not consent to such
assignment the parties agree Borrower shall prepay the Loan in accordance with
Section 2.2 hereof.
6.8 Borrower shall not, without the prior written consent of Lender, such
consent not to be unreasonably withheld, declare or pay any cash dividend or
make a distribution on any class of stock, other than pursuant to employee
repurchase plans upon an employee's death or termination of employment or
transfer, sell, lease, lend or in any other manner convey any equitable,
beneficial or legal interest in any material portion of the assets of Borrower
(except inventory sold in the normal course of business).
6.9 Upon the request of Lender, Borrower shall, during business hours,
make the Inventory and Equipment available to Lender for inspection at the place
where it is normally located and shall make Borrower's log and maintenance
records pertaining to the Inventory and Equipment available to Lender for
inspection. Borrower shall take all action necessary to maintain such logs and
maintenance records in a correct and complete fashion.
6.10 Borrower covenants and agrees to pay when due, all taxes, fees or
other charges of any nature whatsoever (together with any related interest or
penalties) now or hereafter imposed or assessed against Borrower, Lender or the
Collateral or upon Borrower's ownership, possession, use, operation or
disposition thereof or upon Borrower's rents, receipts
11
or earnings arising therefrom. Borrower shall file on or before the due date
therefor all personal property tax returns in respect of the Collateral.
Notwithstanding the foregoing, Borrower may contest, in good faith and by
appropriate proceedings, taxes for which Borrower maintains adequate reserves
therefor.
6.11 Borrower shall not relocate any item of the Collateral (other than
sale of inventory in the ordinary course of business) except: (i) with the prior
written consent of the Lender not to be unreasonably withheld; and (ii) if such
relocation shall be within the continental United States. If permitted to
relocate Collateral pursuant to the foregoing sentence, unless otherwise agreed
in writing by Lender, Borrower shall first (a) cause to be filed and/or
delivered to the Lender all Uniform Commercial Code financing statements,
certificates or other documents or instruments necessary to continue in effect
the perfected security interest of the Lender in the Collateral, and (b) have
given the Lender no less than thirty (30) days prior written notice of such
relocation.
6.12 Borrower shall not redeem any preferred stock as long as any Advance
remains outstanding.
6.13 Borrower shall not sell, transfer, assign, hypothecate or otherwise
encumber its Intellectual Property without Lender's prior written consent.
SECTION 7. CONDITIONS PRECEDENT TO LOAN
The obligation of Lender to fund the Loan on each Advance Date shall be
subject to satisfaction by Borrower or waiver by Lender, in Lender's sole
discretion, of the following conditions:
7.1 (a) The Advance Date for any installment shall occur on or before
May 3, 1999
7.2 DOCUMENT DELIVERY. Borrower, on or prior to the Closing Date, shall
have delivered to Lender the following:
(a) executed originals of the Agreement, [Note(s)], and any
documents reasonably required by Lender to effectuate the liens of Lender,
with respect to all Collateral;
(b) certified copy of resolutions of Borrower's board of directors
evidencing approval of the borrowing and other transactions evidenced by
the Loan Documents and the Warrant Agreement(s);
(c) certified copies of the [Articles/Certificate of Incorporation]
and the Bylaws, as amended through the Closing Date, of Borrower;
(d) certificate of good standing for Borrower from its state of
incorporation and similar certificates from all other jurisdictions in
which it does business and where the failure to be qualified would have a
Material Adverse Effect;
(e) payment of the Facility Fee;
12
(f) such other documents as Lender may reasonably request.
7.3 ADVANCE REQUEST. Borrower shall:
(a) deliver to Lender, at least five (5) business day prior to the
Advance Date, written notice in the form of an Advance Request, or as
otherwise specified by Lender from time to time, specifying the date and
amount of such Advance .
(b) deliver executed original Note(s) and Warrant Agreements as set
forth in Section 2, as applicable.
(c) such other documents as Lender may reasonably request.
7.4 PERFECTION OF SECURITY INTERESTS. Borrower shall have taken or caused
to be taken such actions requested by Lender to grant Lender a first priority
perfected security interest in the Collateral, subject only to Permitted Liens.
Such actions shall include, without limitation, the delivery to Lender of all
appropriate financing statements, executed by Borrower, as to the Collateral
granted by Borrower for all jurisdictions as may be necessary or desirable to
perfect the security interest of Lender in such Collateral
7.5 ABSENCE OF EVENTS OF DEFAULTS. As of the Closing Date or the Advance
Date, no fact or condition exists that would (or would, with the passage of
time, the giving of notice, or both) constitute an Event of Default under this
Agreement or any of the Loan Documents and no fact or condition exists that
would (or would, with the passage of time, the giving of notice, or both)
constitute a default under the Senior Loan Documents between Borrower and Senior
Creditor.
7.6 MATERIAL ADVERSE EFFECT. As of the Closing Date or the Advance Date,
no event which has had or could reasonably be expected to have a Material
Adverse Effect has occurred and is continuing.
SECTION 8. DEFAULT
The occurrence of any one or more of the following events (herein called
"Events of Default") shall constitute a default hereunder and under the Note(s)
and other Loan Documents:
8.1 Borrower defaults in the payment of any principal, interest or other
Secured Obligation involving the payment of money under this Agreement, the
Note(s) or any of the other Loan Documents, and such default continues for more
than five (5) days after the due date thereof; or
8.2 Borrower defaults in the performance of any other covenant or Secured
Obligation of Borrower hereunder or under the Note(s) or any of the other Loan
Documents, and such default continues for more than twenty (20) days after
Lender has given notice of such default to Borrower.
8.3 Any representation or warranty made herein by Borrower shall prove to
have been false or misleading in any material respect; or
13
8.4 Borrower shall make an assignment for the benefit of creditors, or
shall admit in writing its inability to pay its debts as they become due, or
shall file a voluntary petition in bankruptcy, or shall file any petition or
answer seeking for itself any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation pertinent to such circumstances, or shall seek
or consent to or acquiesce in the appointment of any trustee, receiver, or
liquidator of Borrower or of all or any substantial part (33-1/3% or more) of
the properties of Borrower; or Borrower or its directors or majority
shareholders shall take any action initiating the dissolution or liquidation of
Borrower; or
8.5 Sixty (60) days shall have expired after the commencement of an
action by or against Borrower seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation, without such action being dismissed or all
orders or proceedings thereunder affecting the operations or the business of
Borrower being stayed; or a stay of any such order or proceedings shall
thereafter be set aside and the action setting it aside shall not be timely
appealed; or Borrower shall file any answer admitting or not contesting the
material allegations of a petition filed against Borrower in any such
proceedings; or the court in which such proceedings are pending shall enter a
decree or order granting the relief sought in any such proceedings; or
8.6 Sixty (60) days shall have expired after the appointment, without the
consent or acquiescence of Borrower, of any trustee, receiver or liquidator of
Borrower or of all or any substantial part of the properties of Borrower without
such appointment being vacated; or
8.7 The default by Borrower under any Excluded Agreement(s), any other
promissory note or agreement for borrowed money, or any other agreement between
Borrower and Lender; or
8.8 The occurrence of any default under any lease or other agreement or
obligation of Borrower involving an amount in excess of $100,000.00 or having a
Material Adverse Effect; or the entry of any judgment against Borrower involving
an award in excess of $100,000.00 that would have a Material Adverse Effect,
that has not been bonded or stayed on appeal within thirty (30) days; or
8.9 The occurrence of any material default under the Senior Loan
Documents; or
SECTION 9. REMEDIES
Upon the occurrence of any one or more Events of Default, Lender, at its
option, may declare the Note and all of the other Secured Obligations to be
accelerated and immediately due and payable (provided, that upon the occurrence
of an Event of Default of the type described in Sections 8.4 or 8.5, the Note(s)
and all of the other Secured Obligations shall automatically be accelerated and
made due and payable without any further act), whereupon the unpaid principal of
and accrued interest on such Note(s) and all other outstanding Secured
Obligations shall become immediately due and payable, and shall thereafter bear
interest at the Default Rate set forth in, and calculated according to, Section
2.3 (c) of this Agreement. Lender may exercise all rights and remedies with
respect to the Collateral under the Loan Documents or otherwise available to it
under applicable law, including the right to release, hold or otherwise dispose
of all or any part of the Collateral and the right to occupy, utilize, process
and commingle the Collateral.
14
Upon the happening and during the continuance of any Event of Default,
Lender may then, or at any time thereafter and from time to time, apply,
collect, sell in one or more sales, lease or otherwise dispose of, any or all of
the Collateral, in its then condition or following any commercially reasonable
preparation or processing, in such order as Lender may elect, and any such sale
may be made either at public or private sale at its place of business or
elsewhere. Borrower agrees that any such public or private sale may occur upon
five (5) calendar days' prior written notice to Borrower. Lender may require
Borrower to assemble the Collateral and make it available to Lender at a place
designated by Lender which is reasonably convenient to Lender and Borrower. The
proceeds of any sale, disposition or other realization upon all or any part of
the Collateral shall be distributed by Lender in the following order of
priorities:
First, to Lender in an amount sufficient to pay in full Lender's costs and
professionals' and advisors' fees and expenses;
Second, to Lender in an amount equal to the then unpaid amount of the
Secured Obligations in such order and priority as Lender may choose in its
sole discretion; and
Finally, upon payment in full of all of the Secured Obligations, to
Borrower or its representatives or as a court of competent jurisdiction may
direct.
Lender shall be deemed to have acted reasonably in the custody,
preservation and disposition of any of the Collateral if it complies with the
obligations of a secured party under Section 9207 of the UCC.
Lender's rights and remedies hereunder are subject to the terms of the
Subordination Agreement.
SECTION 10. MISCELLANEOUS
10.1 CONTINUATION OF SECURITY INTEREST. This is a continuing Agreement and
the grant of a security interest hereunder shall remain in full force and effect
and all the rights, powers and remedies of Lender hereunder shall continue to
exist until the Secured Obligations are paid in full as the same become due and
payable and until Lender has executed a written termination statement (which
Lender shall execute within a reasonable time after full payment of the Secured
Obligations hereunder), reassigning to Borrower, without recourse, the
Collateral and all rights conveyed hereby and returning possession of the
Collateral to Borrower. The rights, powers and remedies of Lender hereunder
shall be in addition to all rights, powers and remedies given by statute or rule
of law and are cumulative. The exercise of any one or more of the rights, powers
and remedies provided herein shall not be construed as a waiver of or election
of remedies with respect to any other rights, powers and remedies of Lender.
10.2 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective only to the extent
and duration of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
15
10.3 NOTICE. Except as otherwise provided herein, all notices and service
of process required, contemplated, or permitted hereunder or with respect to the
subject matter hereof shall be in writing, and shall be deemed to have been
validly served, given or delivered upon the earlier of: (i) the first business
day after transmission by facsimile or hand delivery or deposit with an
overnight express service or overnight mail delivery service; or (ii) the third
calendar day after deposit in the United States mails, with proper first class
postage prepaid, and shall be addressed to the party to be notified as follows:
(a) IF TO LENDER:
COMDISCO, INC.
Legal Department
Attention: General Counsel
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
WITH A COPY TO:
COMDISCO, INC./COMDISCO VENTURES
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
(b) IF TO BORROWER:
VIGNETTE CORPORATION
Attention: Chief Financial Officer
0000 Xxx Xxxx Xxxx.,Xxxxx 000
Xxxxxx, XX 00000
Facsimile: 000-000-0000
Phone: 000-000-0000
or to such other address as each party may designate for itself by like notice.
10.4 ENTIRE AGREEMENT; AMENDMENTS. This Agreement, the Note(s), and the
other Loan Documents, and the Warrant Agreement(s) constitute the entire
agreement and understanding of the parties hereto in respect of the subject
matter hereof and thereof, and supersede and replace in their entirety any prior
proposals, term sheets, letters, negotiations or other documents or agreements,
whether written or oral, with respect to the subject matter hereof or thereof
(including, without limitation, Lender's proposal letter dated November 20,
1998, all of which are merged herein and therein. None of the terms of this
Agreement, the Note(s), any of the other Loan Documents or Warrant Agreement(s)
may be amended except by an instrument executed by each of the parties hereto.
10.5 HEADINGS. The various headings in this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provisions hereof.
10.6 NO WAIVER. The powers conferred upon Lender by this Agreement are
solely to protect its interest in the Collateral and shall not impose any duty
upon Lender to exercise any
16
such powers. No omission, or delay, by Lender at any time to enforce any right
or remedy reserved to it, or to require performance of any of the terms,
covenants or provisions hereof by Borrower at any time designated, shall be a
waiver of any such right or remedy to which Lender is entitled, nor shall it in
any way affect the right of Lender to enforce such provisions thereafter.
10.7 SURVIVAL. All agreements, representations and warranties contained
in this Agreement, the Note(s), the other Loan Documents and the Warrant
Agreement(s) or in any document delivered pursuant hereto or thereto shall be
for the benefit of Lender and shall survive the execution and delivery of this
Agreement and the expiration or other termination of this Agreement.
10.8 SUCCESSOR AND ASSIGNS. The provisions of this Agreement, the other
Loan Documents and the Warrant Agreement(s) shall inure to the benefit of and be
binding on Borrower and its permitted assigns (if any). Borrower shall not
assign its obligations under this Agreement, the Note(s), any of the other Loan
Documents or the Warrant Agreement(s), without Lender's express written consent,
and any such attempted assignment shall be void and of no effect. Lender may
assign, transfer, or endorse its rights hereunder and under the other Loan
Documents or Warrant Agreement(s) without prior notice to Borrower, and all of
such rights shall inure to the benefit of Lender's successors and assigns.
10.9 FURTHER INDEMNIFICATION. Borrower agrees to pay, and to save Lender
harmless from, any and all liabilities with respect to, or resulting from any
delay in paying, any and all excise, sales or other similar taxes which may be
payable or determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this Agreement.
10.10 GOVERNING LAW. This Agreement, the Note(s), the other Loan Documents
and the Warrant Agreement(s) have been negotiated and delivered to Lender in the
State of Illinois, and shall not become effective until accepted by Lender in
the State of Illinois. Payment to Lender by Borrower of the Secured Obligations
is due in the State of Illinois. This Agreement, the Note(s), the other Loan
Documents and the Warrant Agreement(s) shall be governed by, and construed and
enforced in accordance with, the laws of the State of Illinois, excluding
conflict of laws principles that would cause the application of laws of any
other jurisdiction.
10.11 CONSENT TO JURISDICTION AND VENUE. All judicial proceedings arising
in or under or related to this Agreement, the Note(s), any of the other Loan
Documents or Warrant Agreement(s) may be brought in any state or federal court
of competent jurisdiction located in the State of Illinois. By execution and
delivery of this Agreement, each party hereto generally and unconditionally: (a)
consents to personal jurisdiction in Xxxx County, State of Illinois; (b) waives
any objection as to jurisdiction or venue in Xxxx County, State of Illinois; (c)
agrees not to assert any defense based on lack of jurisdiction or venue in the
aforesaid courts; and (d) irrevocably agrees to be bound by any judgment
rendered thereby in connection with this Agreement, the Note(s), the other Loan
Documents or Warrant Agreement(s). Service of process on any party hereto in any
action arising out of or relating to this agreement shall be effective if given
in accordance with the requirements for notice set forth in Section 10.3, above
and shall be deemed effective and received as set forth in Section 10.3, above.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of either party to bring proceedings
in the courts of any other jurisdiction.
17
10.12 MUTUAL WAIVER OF JURY TRIAL. Because disputes arising in connection
with complex financial transactions are most quickly and economically resolved
by an experienced and expert person and the parties wish applicable state and
federal laws to apply (rather than arbitration rules), the parties desire that
their disputes be resolved by a judge applying such applicable laws. EACH OF
BORROWER AND LENDER SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY
OF ANY CAUSE OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR
ANY OTHER CLAIM (COLLECTIVELY, "CLAIMS") ASSERTED BY BORROWER AGAINST LENDER OR
ITS ASSIGNEE AND/OR BY LENDER OR ITS ASSIGNEE AGAINST BORROWER. This waiver
extends to all such Claims, including, without limitation, Claims which involve
persons or entities other than Borrower and Lender; Claims which arise out of or
are in any way connected to the relationship between Borrower and Lender; and
any Claims for damages, breach of contract arising out of this Agreement, any
other Loan Document or any of the Excluded Agreements, specific performance, or
any equitable or legal relief of any kind.
10.13 CONFIDENTIALITY. Lender acknowledges that certain items of
Collateral, including, but not limited to trade secrets, source codes, customer
lists and certain other items of Intellectual Property, and any Financial
Statements provided pursuant to Section 6 hereof, constitute proprietary and
confidential information of the Borrower (the "Confidential Information").
Accordingly, Lender agrees that any Confidential Information it may obtain in
the course of acquiring, perfecting or foreclosing on the Collateral or
otherwise provided under this Agreement, provided such Confidential Information
is marked as confidential by Borrower at the time of disclosure, shall be
received in the strictest confidence and will not be disclosed to any other
person or entity in any manner whatsoever, in whole or in part, without the
prior written consent of the Borrower, unless and until Lender has acquired
indefeasible title thereto.
10.14 COUNTERPARTS. This Agreement and any amendments, waivers, consents
or supplements hereto may be executed in any number of counterparts, and by
different parties hereto in separate counterparts, each of which when so
delivered shall be deemed an original, but all of which counterparts shall
constitute but one and the same instrument.
IN WITNESS WHEREOF, the Borrower and the Lender have duly executed and delivered
this Agreement as of the day and year first above written.
BORROWER: VIGNETTE CORPORATION
Signature: /s/ Xxxx X. Xxxxx
-----------------------------
Print Name: Xxxx Xxxxx
-----------------------------
Title: V.P. Finance & Operations
-----------------------------
ACCEPTED IN ROSEMONT, ILLINOIS:
------------------------------
LENDER: COMDISCO, INC.
Signature: /s/ Xxxxx X. Xxxx
-----------------------------
Print Name: Xxxxx X. Xxxx
-----------------------------
Title: President
-----------------------------
18
Exhibit C
ADVANCE REQUEST
Name: Vignette Corporation ("Borrower") Date:___________
Address: 0000 Xxx Xxxx Xxxx.
Xxxxx 000
Xxxxxx, XX 00000
Borrower hereby requests from Comdisco, Inc. ("Lender") an Advance in the
amount of $__________________ on ______________, 1998 (the "Advance Date") under
that Subordinated Loan and Security Agreement between Borrower and Lender dated
December 3, 1998 (the "Agreement").
Please:
(a) Issue a check payable to Borrower ________
19
or
(b) Wire Funds to Borrower's account
---------
Bank:
------------------------------------
Address:
---------------------------------
---------------------------------
ABA Number:
------------------------------
Account Number:
--------------------------
Account Name:
----------------------------
Borrower hereby affirms that all Representations and Warranties of Borrower
set forth in Section 4 and all Conditions Precedent to Loan set forth in Section
7 of the Agreement remain true and correct as of the date hereof.
Executed this ___ day of __________, 1998 by:
BORROWER: VIGNETTE CORPORATION
BY:
-------------------------------
TITLE:
-------------------------------
PRINT:
-------------------------------
20
EXHIBIT A
SUBORDINATED PROMISSORY NOTE
$ DATE:
------------ -------------
DUE:
-------------
FOR VALUE RECEIVED, Vignette Corporation a Delaware corporation (the "Borrower")
hereby promises to pay to the order of Comdisco, Inc., a Delaware corporation
(the "Lender") at X.X. Xxx 00000, Xxxxxxx, XX 00000 or such other place of
payment as the holder of this Secured Promissory Note (this "Note") may specify
from time to time in writing, in lawful money of the United States of America,
the principal amount of ____________ and 00/100 Dollars ($____________) together
with interest at twelve percent (12%) per annum from the date of this Note to
maturity of each installment on the principal hereof remaining from time to time
unpaid, such principal and interest to be paid in six (6) monthly installments
of interest only in the amount of _________ each commencing __________ and on
the same day of each month thereafter to and including _______________ followed
by thirty (30) equal months installment of $____________ each, commencing
____________ and on the same day of each month thereafter to and including
___________ , such installments to be applied first to accrued and unpaid
interest and the balance to unpaid principal. Interest shall be computed on the
basis of a year consisting of twelve months of thirty days each.
This Note is the Note referred to in, and is executed and delivered in
connection with, that certain Subordinated Loan and Security Agreement dated
___________ by and between Borrower and Lender (as the same may from time to
time be amended, modified or supplemented in accordance with its terms, the
"Loan Agreement"), and is entitled to the benefit and security of the Loan
Agreement and the other Loan Documents (as defined in the Loan Agreement), to
which reference is made for a statement of all of the terms and conditions
thereof. All terms defined in the Loan Agreement shall have the same
definitions when used herein, unless otherwise defined herein.
THIS NOTE IS EXPRESSLY SUBJECT TO THE TERMS OF THAT CERTAIN SUBORDINATION
AGREEMENT BY AND BETWEEN LENDER AND BORROWER FOR THE BENEFIT OF SENIOR CREDITOR.
IN THE EVENT OF ANY CONTRADICTION OR INCONSISTENCY BETWEEN THIS NOTE AND THE
SUBORDINATION AGREEMENT, THE TERMS OF THE SUBORDINATION AGREEMENT SHALL CONTROL.
The Borrower waives presentment and demand for payment, notice of dishonor,
protest and notice of protest and any other notice as permitted under the UCC or
any applicable law.
-1-
This Note has been negotiated and delivered to Lender and is payable in the
State of Illinois, and shall not become effective until accepted by Lender in
the State of Illinois. This Note shall be governed by and construed and
enforced in accordance with, the laws of the State of Illinois, excluding any
conflicts of law rules or principles that would cause the application of the
laws of any other jurisdiction.
BORROWER: VIGNETTE CORPORATION
ADDRESS:
ADDRESS:
Signature:
----------------------------
Print Name:
----------------------------
Title:
----------------------------
-2-
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement") dated as of December
3,1998, is entered into by and between COMDISCO, INC., a Delaware corporation
("Subordinated Creditor"), and Vignette Corporation ("Borrower"), a Delaware
corporation, for the express benefit of Senior Creditor (as defined in Section
1, below).
RECITALS
Concurrently herewith, Subordinated Creditor is agreeing to advance to
Borrower a secured loan of money in the aggregate original principal amount of
Five Million Dollars ($5,000,000) as evidenced by a Subordinated Promissory Note
and a Subordinated Loan and Security Agreement, each dated as of December 3,
1998 (as the same may from time to time be amended, modified, supplemented,
extended, renewed, restated or replaced, the "Subordinated Note" and the
"Subordinated Loan Agreement," respectively), made by Borrower in favor of
Subordinated Creditor. Borrower's obligations to Subordinated Creditor
evidenced by the Subordinated Note are secured by the personal property
collateral granted by Borrower to Subordinated Creditor pursuant to the
Subordinated Loan Agreement.
Borrower has advised Subordinated Creditor that it contemplates entering
into a loan agreement (as the same may from time to time be amended, modified,
supplemented or restated, the "Senior Loan Agreement") with Senior Creditor,
pursuant to which Senior Creditor shall make available to Borrower, on a senior
secured basis, certain extensions of credit as described in the Senior Loan
Agreement.
In contemplation of Borrower obtaining such senior secured financing and
the conditions expected to be imposed by Senior Creditor as conditions precedent
to making available to Borrower the proceeds of such financing, Subordinated
Creditor is entering into this Agreement with Borrower for the express benefit
of Senior Creditor, on the terms and subject to the conditions set forth below.
AGREEMENT
NOW, THEREFORE, in consideration of Borrower's and Subordinated Creditor's
entering into the Subordinated Loan Documents (as defined in Section 1, below),
Subordinated Creditor and Borrower hereby severally agree, each on behalf of
itself and for the benefit of Senior Creditor, as set forth below.
1. DEFINITIONS
As used herein, the following terms shall have the following meanings:
"EXCLUDED AGREEMENTS" means:
(a) the Warrant Agreement of even date herewith between Borrower and
Subordinated Creditor pursuant to which Borrower granted Subordinated
Creditor the right to purchase certain shares of stock (as the same may
from time to time be amended, modified, supplemented or restated, the
"Warrant Agreement"), and any other warrants to acquire, or agreements
governing the rights of the holders of, any equity security of Borrower,
-1-
(b) any stock of the Company issued or purchased pursuant to the
Warrant Agreement,
(c) the Master Lease Agreement dated as of December 3, 1998 between
Borrower, as lessee, and Subordinated Creditor, as lessor, including,
without limitation, any Equipment Schedules and Summary Equipment Schedules
to the Master Lease Agreement executed or delivered by Borrower pursuant
thereto and any other modifications or amendments thereof whereby Borrower
(as lessee) leases equipment, software, or goods from Subordinated Creditor
(as lessor).
"SENIOR CREDITOR" means a bank, insurance company, pension fund, or other
institutional lender to be determined, or a syndicate of such institutional
lenders (including, without limitation, any agent or other representative for
such syndicate), that provides Senior Debt financing to Borrower; provided, that
Senior Creditor shall not include any officer, director, shareholder, venture
capital investor, or insider of Borrower, or any affiliate of the foregoing
persons, except upon the express written consent of Subordinated Creditor.
"SENIOR DEBT" means any and all indebtedness and obligations for borrowed
money (including, without limitation, principal, premium (if any), interest,
fees, charges, expenses, costs, professional fees and expenses, and
reimbursement obligations) at any time owing by Borrower to Senior Creditor
under the Senior Loan Documents including but not limited to such amounts as may
accrue or be incurred before or after default or workout or the commencement of
any liquidation, dissolution, bankruptcy, receivership, or reorganization case
by or against Borrower provided, that Senior Debt shall not include the
following indebtedness or obligations outstanding at any one time:
(a) obligations incurred after default or workout or the commencement of
any liquidation, dissolution, bankruptcy, receivership, or reorganization case
by or against Borrower, and
(b) debt exceeding 10 Million Dollars during 1999, 15 Million Dollars
during 2000 and 18 Million Dollars during 2001.
"SENIOR LOAN DOCUMENTS" means the Senior Loan Agreement and any other
agreement, security agreement, document, promissory note, UCC financing
statement, or instrument executed by Borrower in favor of Senior Creditor
pursuant to or in connection with the Senior Debt or the Senior Loan Agreement,
as the same may from time to time be amended, modified, supplemented, extended,
renewed, restated or replaced.
"SUBORDINATED DEBT" means any and all indebtedness and obligations for
borrowed money (including, without limitation, principal, premium (if any),
interest, fees, charges, expenses, costs, professional fees and expenses, and
reimbursement obligations) at any time owing by Borrower to Subordinated
Creditor under the Subordinated Loan Documents, including but not limited to
such amounts as may accrue or be incurred before or after default or workout or
the commencement of any liquidation, dissolution, bankruptcy, receivership, or
reorganization case by or against Borrower; provided, that notwithstanding
anything to the contrary contained in this Agreement, Subordinated Debt shall
not include any indebtedness or obligations of Borrower arising under or in
connection with any of the Excluded Agreements.
-2-
"SUBORDINATED LOAN DOCUMENTS" means the Subordinated Note(s), the
Subordinated Loan Agreement, and any other agreement, document, promissory note,
UCC financing statement, or instrument executed by Borrower pursuant to or in
connection with the Subordinated Debt, as the same may from time to time be
amended, modified, supplemented, extended, renewed, restated or replaced;
provided, that the Subordinated Loan Documents shall not include any of the
Excluded Agreements. Any changes to the payment schedule or the maturity of the
Subordinated Note requires prior written approval from Senior Creditor which
shall not be unreasonably withheld.
2. SUBORDINATION
(a) On the terms and conditions set forth below, Subordinated Creditor's
right to payment and performance of the Subordinated Debt and all liens and
security interests securing the Subordinated Debt are hereby subordinated to
Senior Creditor's right to full payment and performance of the Senior Debt and
all liens and security interests securing the Senior Debt. Subject to and
except as set forth in Section 3, below, Subordinated Creditor shall not ask,
demand, xxx for, take or receive from Borrower, by setoff or in any other
manner, the whole or any part of any monies which may now or hereafter be owing
by Borrower to Subordinated Creditor, or be owing by any other person to
Subordinated Creditor under a guaranty or similar instrument, on account of the
Subordinated Debt, nor any collateral security for any of the foregoing,
including, without limitation, any personal property collateral granted to
Subordinated Creditor pursuant to the Subordinated Loan Agreement, unless and
until all Senior Debt shall have been paid in cash or otherwise provided for in
property or securities in the full amount of the allowed claim of the Senior
Debt and all commitments to extend credit under the Senior Loan Agreement shall
have been terminated (the temporary reduction of outstanding obligations,
liabilities and indebtedness of Borrower to Senior Creditor not being deemed to
constitute full payment or satisfaction thereof). Nothing herein shall be
deemed to subordinate, waive or restrict the payment or performance of the
obligations arising under the Excluded Agreements or subordinate the priority of
any lien or interest in property securing or evidenced by the Excluded
Agreements.
(b) Subordinated Creditor expressly understands that Senior Creditor is
expected not to permit Subordinated Creditor to create, maintain or perfect any
lien on or in any property of Borrower, other than the security interest granted
in favor of Subordinated Creditor in certain of Borrower's personal property
under and as described in the Subordinated Loan Agreement and which liens and
security interests are junior to those securing the Senior Debt. If,
notwithstanding the foregoing, any lien shall be created or shall arise
(including, without limitation, the security interests granted in favor of
Subordinated Creditor pursuant to the Subordinated Loan Agreement), whether by
operation of law or otherwise, and may from time to time exist in favor of
Subordinated Creditor in or on any property of Borrower to secure all or any
portion of the Subordinated Debt, then, regardless of the relative times of
attachment or perfection thereof or the order of filing of financing statements,
mortgages or other documents, any liens granted by Borrower in favor of Senior
Creditor to secure the Senior Debt shall in all respects be first and senior
liens, superior to any liens in favor of Subordinated Creditor securing the
Subordinated Debt, including, without limitation, the security interests granted
in favor of Subordinated Creditor pursuant to the Subordinated Loan Agreement.
In the event Subordinated Creditor has or obtains possession of any such
property or forecloses upon or enforces its lien upon any such property, whether
by judicial action or otherwise, then all such property shall be immediately
delivered in kind to Senior Creditor or, if not deliverable in kind, all cash or
non-cash proceeds and profits of such property shall be held in trust for the
benefit of Senior Creditor and paid over to Senior Creditor, without any
deduction or offset, unless and
-3-
until all of the Senior Debt shall have been paid in cash or otherwise provided
for in property or securities in the full amount of the allowed claim of the
Senior Debt and all commitments to extend credit under the Loan Agreement shall
have been terminated.
(c) The subordination contained in this Agreement is intended to define
the rights and duties of Subordinated Creditor and Senior Creditor; it is not
intended that any third party (including any bankruptcy trustee, receiver, or
debtor-in-possession) shall benefit from it. If the effect of the subordination
contained in this Agreement would be to give any third party a priority status
to which that party would not otherwise be entitled, that provision shall, to
the extent necessary to avoid that priority, be given no effect and the rights
and priorities of Senior Creditor and Subordinated Creditor shall be determined
in accordance with applicable law and this Subordination Agreement.
3. PERMITTED PAYMENTS; PAYMENT BLOCKAGE
(a) Notwithstanding anything to the contrary contained in Section 2,
above, but subject expressly to Section 3.b, below, Borrower shall be permitted
to make, and Subordinated Creditor shall be permitted to accept or receive the
following permitted payments ("Permitted Payments"): (i) scheduled repayments of
principal when due under the Subordinated Note(s) and Subordinated Loan
Agreement, (ii) scheduled payments of accrued interest when due under the
Subordinated Note(s) and Subordinated Loan Agreement, (iii) payments of
reimbursable expenses, costs and professional fees and expenses as and when due
under the Subordinated Note(s) and the other Subordinated Loan Documents, (iv)
cancellation of Subordinated Debt in consideration of the Exercise Price for
stock purchased by Subordinated Creditor under the Warrant Agreement, and (v)
other payments consented to in writing by Senior Creditor.
(b) Notwithstanding anything to the contrary contained in this Section 3
or elsewhere in this Agreement, if Senior Creditor delivers to Subordinated
Creditor written notice (a "Blockage Notice") which states that either:
(i) a specific default by Borrower involving the payment of Senior
Debt (a "Payment Default") has occurred under the Senior Loan Documents and
continues to exist after the giving of any required notice and the
expiration of any applicable grace or cure period, or
(ii) a specific default by Borrower not involving the payment of
Senior Debt (a "Non-Payment Default") has occurred under the Senior Loan
Documents and continues to exist after the giving of any required notice
and the expiration of any applicable grace or cure period, such notice to
include all such defaults in existence at the time,
then from and after the date of delivery of any such Blockage Notice,
Subordinated Creditor shall not accept or receive any payment of any kind of or
on account of the Subordinated Debt (including any Permitted Payment), unless
and until the earlier of (A) the time such Payment Default or Non-Payment
Default shall have been cured by Borrower or waived in writing by Senior
Creditor, or (B) the expiration of the Blockage Period (as defined below) for
such Blockage Notice.
As used herein, "Blockage Period" means a period of time beginning on the
date a Blockage Notice is delivered to Subordinated Creditor and terminating on
the earlier to occur of:
(1) 120 days following such date; provided that if, prior to the
expiration of such 120-day period, Senior Lender has commenced a judicial
proceeding or non-
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judicial actions to collect or enforce the Senior Debt or the acceleration
of the Senior Debt or the collateral for the Senior Debt, or a case or
proceeding by or against Borrower is commenced under the federal Bankruptcy
Code or any other insolvency law, then such period shall be extended during
the continuation of such proceedings and actions until the payment in cash
or other property or securities in the full amount of the allowed claim of
the Senior Debt; or
(2) Senior Creditor's written consent to such termination.
Senior Creditor shall not issue more than two (2) Blockage Notice for Non-
Payment Defaults in any period of 365 consecutive days. After the satisfaction
of the applicable conditions specified in (A) or (B) above, Subordinated
Creditor shall be entitled to receive all Permitted Payments.
4. ENFORCEMENT RIGHTS
Any rights of Subordinated Creditor to accelerate the maturity of the
Subordinated Debt, enforce any claim (including any default remedy) with respect
to the Subordinated Debt or the collateral for the Subordinated Debt, or
otherwise to take any action against Borrower or Borrower's property with
respect to the Subordinated Debt shall be subject to any Blockage Notice given
pursuant to Section 3.b hereof.
5. ASSIGNMENT OF SUBORDINATED DEBT
Subordinated Creditor hereby covenants to Senior Creditor that prior to the
termination of this Agreement in accordance with Section 10, below, the entire
Subordinated Debt created in favor of Subordinated Creditor shall continue to be
owing only to Subordinated Creditor, and any collateral security therefor
(including, without limitation, the collateral security granted to Subordinated
Creditor pursuant to the Subordinated Security Agreement) shall continue to be
held solely for the benefit of Subordinated Creditor, unless assigned pursuant
to an assignment made expressly subject to this Agreement. The Subordinated
Note(s) shall be legended to expressly state that it is subject to this
Subordination Agreement.
6. SENIOR CREDITOR'S PRIORITY
In the event of any distribution, division, or application, partial or
complete, voluntary or involuntary, by operation of law or otherwise, of all or
any part of the property of Borrower or the proceeds thereof to the creditors of
Borrower, or the readjustment of the Senior Debt and the Subordinated Debt of
Borrower, whether by reason of liquidation, bankruptcy, arrangement,
receivership, assignment for the benefit of creditors or any other action or
proceeding involving the readjustment of all or any part of the Senior Debt or
the Subordinated Debt, or the application of the property of Borrower to the
payment or liquidation thereof, or upon the dissolution, liquidation,
reorganization, or other winding up of Borrower's business, or upon the sale of
all or any substantial part of Borrower's property (any of the foregoing being
hereinafter referred to as an "Insolvency Event"), then, and in any such event,
Senior Creditor shall be entitled to receive payment in cash or other property
or securities in the full amount of the allowed claim of the Senior Debt, before
Subordinated Creditor shall be entitled to receive any payment on account of the
Subordinated Debt, and to that end and in furtherance thereof:
(a) All payments and distributions of any kind or character,
whether in cash, property, or securities, in respect of the Subordinated
Debt to which Subordinated Creditor would be entitled if the Subordinated
Debt were not subordinated pursuant to
-5-
this Agreement, shall be paid to Senior Creditor and applied in payment of
the Senior Debt.
(b) Subordinated Creditor shall file a claim or claims, on the form
required in such proceedings, on or before thirty (30) days prior to the
last date such claims or proofs of claim may be filed pursuant to law or
the order of any court exercising jurisdiction over such proceeding.
(c) In the event that, notwithstanding the foregoing, any payment
or distribution of any kind or character, whether in cash, properties or
securities, shall be received by Subordinated Creditor on account of the
Subordinated Debt before all of the Senior Debt has been paid, then such
payment or distribution shall be received by Subordinated Creditor in trust
for and shall be promptly paid over to Senior Creditor for application to
the payments of amounts due on the Senior Debt until the Senior Debt shall
have been paid in cash, property, or securities in the full amount of the
allowed claim of the Senior Debt.
7. GRANT OF AUTHORITY
In the event of the occurrence of an Insolvency Event, and in order to
enable Senior Creditor to enforce its rights hereunder in any of the aforesaid
actions or proceedings, Senior Creditor is hereby irrevocably authorized and
empowered, in Senior Creditor's discretion, as follows:
(a) Senior Creditor is hereby irrevocably authorized and empowered
(in its own name or in the name of Subordinated Creditor or otherwise), but
shall have no obligation, (i) to demand, xxx for, collect and receive every
payment or distribution referred to in Section 6, above, and give
acquittance therefor and (ii) (if Subordinated Creditor has failed to file
claims or proofs of claim on or before thirty (30) days prior to the last
date such claims or proofs of claim may be filed pursuant to law or the
order of any court exercising jurisdiction over such proceeding) to file
claims and proofs of claim, and (iii) to take such other action (including,
without limitation, enforcing any lien securing payment of the Subordinated
Debt) as it may deem necessary or advisable for the exercise or enforcement
of any of the rights or interests of Senior Creditor hereunder.
Subordinated Creditor shall duly and promptly take such action as Senior
Creditor may reasonably request to execute and deliver to Senior Creditor
such authorizations, endorsements, assignments, or other instruments as
Senior Creditor may reasonably request in order to enable Senior Creditor
to enforce any and all claims with respect to, and any liens securing
payment of, the Subordinated Debt as such enforcement is contemplated
herein.
(b) To the extent that payments or distributions on account of the
Subordinated Debt are made in property or securities other than cash,
Subordinated Creditor authorizes Senior Creditor to sell or dispose of such
property or securities on such terms as are commercially reasonable in the
situation in question. Following full payment of the Senior Debt, Senior
Creditor shall remit to Subordinated Creditor (with all necessary
endorsements) to the extent of Subordinated Creditor's interest therein,
all payments and distributions of cash, property, or securities paid to and
held by Senior Creditor in excess of the allowed amount of the Senior Debt.
8. PAYMENTS RECEIVED BY SUBORDINATED CREDITOR
-6-
Should any payment, distribution, or security be received by Subordinated
Creditor upon or with respect to the Subordinated Debt (other than Permitted
Payments) prior to termination of this Agreement in accordance with Section 10,
below, Subordinated Creditor shall receive and hold the same in trust for the
benefit of Senior Creditor and shall forthwith deliver the same to Senior
Creditor in precisely the form received (except for the endorsement or
assignment of Subordinated Creditor where necessary), for application to the
Senior Debt, and, until so delivered, the same shall be held in trust by
Subordinated Creditor as the property of Senior Creditor.
9. FURTHER ASSURANCES; COOPERATION
Subject to Section 16.b hereof, Subordinated Creditor agrees to cooperate
with Senior Creditor and to take all actions that Senior Creditor may reasonably
require to enable Senior Creditor to realize the full benefits of this
Agreement.
10. TERMINATION OF AGREEMENT
This Agreement shall be effective upon the date set forth in Section 21
hereof. After the effective date occurs, this Agreement shall remain in effect
and cannot be revoked or amended by Subordinated Creditor, except with the
written consent of Senior Creditor. This Agreement shall terminate upon the
date which is 105 days following the date on which the Senior Debt shall have
been paid in cash or other property or securities in the full amount of the
allowed claim of the Senior Debt and all commitments to extend credit under the
Loan Agreement shall have been terminated.
11. ADDITIONAL AGREEMENTS FOR SENIOR CREDITOR
Senior Creditor may administer and manage its credit and other
relationships with Borrower in its own best interest, without notice to or
consent of Subordinated Creditor. At any time and from time to time, Senior
Creditor may enter into any amendment or agreement with Borrower as Senior
Creditor may deem proper, extending the time of payment of or renewing or
otherwise altering the terms of all or any of the obligations constituting
Senior Debt or affecting the collateral security for, supporting or underlying
any or all of the Senior Debt, and may exchange, sell, release, surrender or
otherwise deal with any such collateral without in any way thereby impairing or
affecting this Agreement, and all such additional agreements and amendments
shall be "Senior Loan Documents" evidencing the Senior Debt; provided, that
neither this Section 11 nor any provision of such agreements shall affect the
limitations contained in the definitions of Senior Creditor or Senior Debt.
12. SUBROGATION
If cash or other property otherwise payable or deliverable to Subordinated
Creditor or on account of the Subordinated Debt shall have been applied pursuant
to this Agreement to the payment of the Senior Debt, and if the Senior Debt
shall have been paid in cash, property or securities in the full amount of the
allowed claim of Senior Debt, then Subordinated Creditor shall be subrogated to
any rights of Senior Creditor to receive further payments or distributions
applicable to the Senior Debt until the Subordinated Debt shall have been fully
paid. No such payments or distributions received by Subordinated Creditor by
reason of such subrogation shall, as between Borrower and its creditors other
than Senior Creditor, on the one hand, and Subordinated Creditor, on the other
hand, be deemed to be a payment by Borrower on account of the Subordinated Debt
owed to Subordinated Creditor.
-7-
13. SUBORDINATED CREDITOR'S WAIVERS AND COVENANTS
(a) Without limiting the generality of any other waiver made by
Subordinated Creditor in this Agreement, Subordinated Creditor hereby expressly
waives (i) reliance by Senior Creditor upon the subordination and other
agreements herein provided, and (ii) any claim that Subordinated Creditor may
now or hereafter have against Senior Creditor arising out of any and all actions
that Senior Creditor, in good faith, takes or omits to take (A) with respect to
the creation, perfection or continuation of liens in or on any collateral
security for the Senior Debt, (B) with respect to the foreclosure upon, sale,
release, or depreciation of, or failure to realize upon, any of the collateral
security for the Senior Debt, (C) with respect to the collection of any claim
for all or any part of the Senior Debt from any account debtor, guarantor or any
other third party and (D) with respect to the valuation, use, protection or
release of any collateral security for the Senior Debt.
(b) Without limiting the generality of any other covenant or agreement
made by Subordinated Creditor in this Agreement, Subordinated Creditor hereby
covenants and agrees that (i) Senior Creditor has not made any warranties or
representations with respect to the due execution, legality, validity,
completeness or enforceability of the Senior Loan Agreement or any of the other
Senior Loan Documents, or the collectibility of the Senior Debt; and (ii)
Subordinated Creditor will not interfere with or in any manner oppose a
disposition of any collateral security for the Senior Debt by Senior Creditor.
14. REINSTATEMENT OF SENIOR DEBT
To the extent that the Senior Creditor receives payments on, or proceeds of
any collateral security for the Senior Debt which are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, receiver or any other party under any bankruptcy law, state or
federal law, common law, or equitable cause, then, to the extent of such payment
or proceeds invalidated, declared to be fraudulent or preferential, set aside or
required to be repaid, the Senior Debt, or part thereof, intended to be
satisfied shall be revived and continue in full force and effect as if such
payments or proceeds had not been received by Senior Creditor.
15. NO WAIVERS
Senior Creditor shall not be prejudiced in its rights under this Agreement
by any act or failure to act of Borrower or Subordinated Creditor or any
noncompliance of Borrower or Subordinated Creditor with any agreement or
obligation, regardless of any knowledge thereof which Senior Creditor may have,
or with which Senior Creditor may be charged; and no action permitted hereunder
taken by Senior Creditor shall in any way affect or impair the rights of Senior
Creditor in the exercise of any other right or remedy or shall operate as a
waiver thereof, and no single or partial exercise by Senior Creditor of any
right or remedy shall preclude any other or further exercise thereof; nor shall
any modification or waiver of any of the provisions of this Agreement be binding
upon Senior Creditor, except as expressly set forth in a writing duly signed and
delivered by Senior Creditor.
16. INFORMATION CONCERNING BORROWER; CREDIT ADMINISTRATION
(a) Subordinated Creditor hereby assumes responsibility for keeping
itself informed of the financial condition of Borrower, any and all endorsers
and any and all guarantors of the Senior Debt and of all other circumstances
bearing upon the risk of nonpayment of the Senior
Debt or the Subordinated Debt that diligent inquiry would reveal, and
Subordinated Creditor hereby agrees that Senior Creditor shall have no duty to
advise Subordinated Creditor of information known to Senior Creditor regarding
such condition.
(b) Subject to Sections 2.b, 3, 4, 7, and 8 hereof, Subordinated
Creditor may (i) administer and manage its credit and other relationships with
Borrower in its own best interest, and (ii) amend or extend its agreements with
Borrower or enter into additional agreements with Borrower, all without the
consent of or notice to the Senior Creditor; provided that neither this Section
16.b nor any amendments or additional agreements referred to therein shall
impair or affect the subordination of Subordinated Debt or change the definition
of Subordinated Debt, Subordinated Creditor, Senior Debt or Senior Creditor.
17. NOTICES
Except as otherwise provided herein, all notices and service of process
required, contemplated, or permitted hereunder or with respect to the subject
matter hereof shall be in writing, and shall be deemed to have been validly
served, given or delivered upon the earlier of: (i) the first business day
after transmission by facsimile or hand delivery or deposit with an overnight
express service or overnight mail delivery service; or (ii) the third calendar
day after deposit in the United States mails, with proper first class postage
prepaid, and shall be addressed to the party to be notified as follows:
IF TO SUBORDINATED CREDITOR:
COMDISCO, INC.
Legal Department
Attention: General Counsel
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
WITH A COPY TO:
COMDISCO INC./VENTURE GROUP
Attention: Xxxxx Xxxx
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
IF TO BORROWER:
VIGNETTE CORPORATION
Attention: Xxxx X. Xxxxx
0000 Xxx Xxxx Xxxx.
Xxxxx 000
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
If to Senior Creditor, at such address as Senior Creditor shall designate
in a writing given to Subordinated Creditor and Borrower, or to such other
address as each party may designate for itself by like notice.
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18. SEVERABILITY
Wherever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
19. GOVERNING LAW
This Agreement has been approved by Subordinated Creditor in the State of
California, and shall be governed by and interpreted in accordance with the laws
of the State of California without regard to principles of conflict of laws that
would cause the application of laws of any other jurisdiction.
20. ASSIGNMENT
This Agreement shall be binding upon Subordinated Creditor, Borrower and
their respective successors and assigns, and shall inure to the benefit of and
be enforceable by Senior Creditor and its successors and assigns.
21. EFFECTIVENESS OF AGREEMENT
This Agreement shall be effective upon the occurrence of both of the
following events: (a) the execution of this Agreement by Borrower and its
acceptance in Rosemont, Illinois by Subordinated Creditor, and (b) the delivery
by Borrower and Senior Creditor to Subordinated Creditor of written notice (the
"Notice of Senior Loan") in the form attached hereto as Exhibit A, that Borrower
has entered into a Senior Loan Agreement with Senior Creditor for Senior Debt,
which notice shall identify Senior Creditor and state the address to which
notices to Senior Creditor are to be sent. Borrower agrees to furnish
Subordinated Creditor with a copy of the Senior Loan Agreement and such other
Senior Loan Documents as Subordinated Creditor shall reasonably request;
provided, however, that any delay or failure by Borrower to furnish such copies
shall not limit or impair the effectiveness of this Agreement.
22. MUTUAL WAIVER OF JURY TRIAL
Because disputes arising in connection with complex financial transactions
are most quickly and economically resolved by an experienced and expert person
and the parties wish applicable state and federal laws to apply (rather than
arbitration rules), the parties desire that their disputes be resolved by a
judge applying such applicable laws. EACH OF BORROWER, SUBORDINATED CREDITOR,
AND SENIOR CREDITOR SPECIFICALLY WAIVE EACH PARTY'S RIGHT TO TRIAL BY JURY OF
ANY CAUSE OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY
OTHER CLAIM (COLLECTIVELY, "CLAIMS") ASSERTED BY BORROWER, SUBORDINATED
CREDITOR, OR SENIOR CREDITOR AGAINST THE OTHER PARTY OR PARTIES TO THIS
AGREEMENT. This Waiver extends to all such claims, including, without
limitation, claims which involve persons or entities other than Borrower,
Subordinated Creditor, and Senior Creditor; claims which arise out of or are in
any way connected to the relationships between or among Borrower, Subordinated
Creditor, and Senior Creditor; and any claims for damages, breach of contract,
specific performance, or any equitable or legal relief of any kind.
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23. COUNTERPARTS
This Agreement and any amendments, waivers, consents or supplements hereto
may be executed in any number of counterparts, and by different parties hereto
in separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which counterparts together shall constitute but
one and the same instrument.
IN WITNESS WHEREOF, this Subordination Agreement has been executed as of
the date first above written.
BORROWER VIGNETTE CORPORATION
Signature: /s/ Xxxx X. Xxxxx
---------------------------
Print Name: Xxxx X. Xxxxx
---------------------------
Title: V.P. Finance & Operations
---------------------------
ACCEPTED IN ROSEMONT, ILLINOIS:
SUBORDINATED CREDITOR COMDISCO, INC.
Signature: /s/ Xxxxx X. Xxxx
---------------------------
Print Name: Xxxxx X. Xxxx
---------------------------
Title: President
---------------------------
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NOTICE OF SENIOR LOAN
Pursuant to Section 22 of the Subordination Agreement dated as of December
3, 1998, by and between Comdisco, Inc., (as Subordinated Creditor) and Vignette
Corporation (as Borrower), notice is hereby given that Borrower has entered into
a Senior Loan Agreement with Imperial Bank (as Senior Creditor), whose address
is: 0000 Xxxx Xxxx Xxxx, Xxxxx 000, Xxxxx Xxxx, XX 00000 Attn: Xxx Le Deit
Facsimile: (000) 000-0000, and that on and after the date of this Notice Senior
Creditor is and shall be entitled to all the rights and benefits of the
Subordination Agreement and shall be bound thereby.
Attached hereto are true and correct copies, as executed, of the Senior
Loan Agreement and the other Senior Loan Documents.
BORROWER: VIGNETTE CORPORATION
Signature: /s/ Xxxx X. Xxxxx
---------------------------
Print Name: Xxxx X. Xxxxx
---------------------------
Title: V.P. Finance & Operations
---------------------------
SENIOR CREDITOR: IMPERIALBANK
Signature: /s/ Xxxxxxx Xxxxx
---------------------------
Print Name: Xxxxxxx Xxxxx
---------------------------
Title: Senior V.P. & Regional Mgr.
---------------------------
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THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS
AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OpeggylparkerFinancial Printing GroupTHESE SECURITIES HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED, OR ANY STATE
SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO OR AN OPINION OF COUNSEL (WHICH MAY BE COMPANY COUNSEL) REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS.
WARRANT AGREEMENT
TO PURCHASE SHARES OF THE SERIES H PREFERRED STOCK OF
VIGNETTE CORPORATION
DATED AS OF DECEMBER 3, 1998 (THE "EFFECTIVE DATE")
WHEREAS, Vignette Corporation, a Delaware corporation (the "Company") has
entered into a Subordinated Loan and Security Agreement dated as of December 3,
1998, and related Subordinated Promissory Note(s) (collectively, the "Loans")
with Comdisco, Inc., a Delaware corporation (the "Warrantholder"); and
WHEREAS, the Company desires to grant to Warrantholder, in consideration
for such Loans, the right to purchase shares of its Series H Preferred Stock;
NOW, THEREFORE, in consideration of the Warrantholder executing and
delivering such Loans and in consideration of mutual covenants and agreements
contained herein, the Company and Warrantholder agree as follows:
1. GRANT OF THE RIGHT TO PURCHASE PREFERRED STOCK.
The Company hereby grants to the Warrantholder, and the Warrantholder is
entitled, upon the terms and subject to the conditions hereinafter set forth, to
subscribe to and purchase, from the Company, 42,865 fully paid and non-
assessable shares of the Company's Series H Preferred Stock ("Preferred Stock")
at a purchase price of $16.33 per share (the "Exercise Price"). The number and
purchase price of such shares are subject to adjustment as provided in Section 8
hereof.
2. TERM OF THE WARRANT AGREEMENT.
Except as otherwise provided for herein, the term of this Warrant Agreement
and the right to purchase Preferred Stock as granted herein shall commence on
the Effective Date and shall be exercisable for a period of (i) seven (7) years
or (ii) three (3) years from the effective date of the Company's initial public
offering, whichever is shorter.
3. EXERCISE OF THE PURCHASE RIGHTS.
The purchase rights set forth in this Warrant Agreement are exercisable by
the Warrantholder, in whole or in part, at any time, or from time to time, prior
to the expiration of the term set forth in Section 2 above, by tendering to the
Company at its principal office a notice of exercise in the form attached hereto
as Exhibit I (the "Notice of Exercise"), duly completed and executed. Promptly
upon receipt of the Notice of Exercise and the payment of the purchase price in
accordance with the terms set forth below, and in no event later than twenty-one
(21) days thereafter, the Company shall issue to the Warrantholder a certificate
for the number of shares of Preferred Stock purchased and shall execute the
acknowledgment of exercise in the form attached hereto as Exhibit II (the
"Acknowledgment of Exercise") indicating the number of shares which remain
subject to future purchases, if any.
The Exercise Price may be paid at the Warrantholder's election either (i)
by cash or check, or (ii) by surrender of Warrants ("Net Issuance") as
determined below. If the Warrantholder elects the Net Issuance method, the
Company will issue Preferred Stock in accordance with the following formula:
X = Y(A-B)
------
A
-1-
Where: X = the number of shares of Preferred Stock to be issued to the
Warrantholder.
Y = the number of shares of Preferred Stock requested to be
exercised under this Warrant Agreement.
A = the fair market value of one (1) share of Preferred Stock.
B = the Exercise Price.
For purposes of the above calculation, current fair market value of
Preferred Stock shall mean with respect to each share of Preferred Stock:
(i) if the exercise is in connection with an initial public
offering of the Company's Common Stock, and if the Company's Registration
Statement relating to such public offering has been declared effective by
the SEC, then the fair market value per share shall be the product of (x)
the initial "Price to Public" specified in the final prospectus with
respect to the offering and (y) the number of shares of Common Stock into
which each share of Preferred Stock is convertible at the time of such
exercise;
(ii) if this Warrant is exercised after, and not in connection
with the Company's initial public offering, and:
(a) if traded on a securities exchange, the fair market
value shall be deemed to be the product of (x) the average of the
closing prices over a twenty-one (21) day period ending three days
before the day the current fair market value of the securities is
being determined and (y) the number of shares of Common Stock into
which each share of Preferred Stock is convertible at the time of
such exercise; or
(b) if actively traded over-the-counter, the fair market
value shall be deemed to be the product of (x) the average of the
closing bid and asked prices quoted on the NASDAQ system (or
similar system) over the twenty-one (21) day period ending three
days before the day the current fair market value of the securities
is being determined and (y) the number of shares of Common Stock
into which each share of Preferred Stock is convertible at the time
of such exercise;
(iii) if at any time the Common Stock is not listed on any
securities exchange or quoted in the NASDAQ System or the over-the-counter
market, the current fair market value of Preferred Stock shall be the
product of (x) the highest price per share which the Company could obtain
from a willing buyer (not a current employee or director) for shares of
Common Stock sold by the Company, from authorized but unissued shares, as
determined in good faith by its Board of Directors and (y) the number of
shares of Common Stock into which each share of Preferred Stock is
convertible at the time of such exercise, unless the Company shall become
subject to a merger, acquisition or other consolidation pursuant to which
the Company is not the surviving party, in which case the fair market value
of Preferred Stock shall be deemed to be the value received by the holders
of the Company's Preferred Stock on a common equivalent basis pursuant to
such merger or acquisition.
Upon partial exercise by either cash or Net Issuance, the Company shall
promptly issue an amended Warrant Agreement representing the remaining number of
shares purchasable hereunder. All other terms and conditions of such amended
Warrant Agreement shall be identical to those contained herein, including, but
not limited to the Effective Date hereof.
4. RESERVATION OF SHARES.
(a) Authorization and Reservation of Shares. During the term of this
Warrant Agreement, the Company will at all times have authorized and reserved a
sufficient number of shares of its Preferred Stock to provide for the exercise
of the rights to purchase Preferred Stock as provided for herein.
(b) Registration or Listing. If any shares of Preferred Stock required
to be reserved hereunder require registration with or approval of any
governmental authority under any Federal or State law (other than any
registration under the Securities Act of 1933, as amended ("1933 Act"), as then
in effect, or any similar Federal statute then enforced, or any state securities
law, required by reason of any transfer involved in such conversion), or listing
on any domestic securities exchange, before such shares may be issued upon
conversion, the Company will, at its expense and as expeditiously as possible,
use its best efforts to cause such shares to be duly registered, listed or
approved for listing on such domestic securities exchange, as the case may be.
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5. NO FRACTIONAL SHARES OR SCRIP.
No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of the Warrant, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the Exercise
Price then in effect.
6. NO RIGHTS AS SHAREHOLDER.
This Warrant Agreement does not entitle the Warrantholder to any voting
rights or other rights as a shareholder of the Company prior to the exercise of
the Warrant.
7. WARRANTHOLDER REGISTRY.
The Company shall maintain a registry showing the name and address of the
registered holder of this Warrant Agreement.
8. ADJUSTMENT RIGHTS.
The purchase price per share and the number of shares of Preferred Stock
purchasable hereunder are subject to adjustment, as follows:
(a) Merger and Sale of Assets. If at any time there shall be a capital
reorganization of the shares of the Company's stock (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein), or a merger or consolidation of the Company with or into another
corporation whether or not the Company is the surviving corporation, or the sale
of all or substantially all of the Company's properties and assets to any other
person (hereinafter referred to as a "Merger Event"), then, as a part of such
Merger Event, lawful provision shall be made so that the Warrantholder shall
thereafter be entitled to receive, upon exercise of the Warrant, the number of
shares of preferred stock or other securities of the successor corporation
resulting from such Merger Event, equivalent in value to that which would have
been issuable if Warrantholder had exercised this Warrant immediately prior to
the Merger Event. In any such case, appropriate adjustment (as determined in
good faith by the Company's Board of Directors) shall be made in the application
of the provisions of this Warrant Agreement with respect to the rights and
interest of the Warrantholder after the Merger Event to the end that the
provisions of this Warrant Agreement (including adjustments of the Exercise
Price and number of shares of Preferred Stock purchasable) shall be applicable
to the greatest extent possible.
(b) Reclassification of Shares. If the Company at any time shall, by
combination, reclassification, exchange or subdivision of securities or
otherwise, change any of the securities as to which purchase rights under this
Warrant Agreement exist into the same or a different number of securities of any
other class or classes, this Warrant Agreement shall thereafter represent the
right to acquire such number and kind of securities as would have been issuable
as the result of such change with respect to the securities which were subject
to the purchase rights under this Warrant Agreement immediately prior to such
combination, reclassification, exchange, subdivision or other change.
(c) Subdivision or Combination of Shares. If the Company at any time
shall combine or subdivide its Preferred Stock, the Exercise Price shall be
proportionately decreased in the case of a subdivision, or proportionately
increased in the case of a combination.
(d) Stock Dividends. If the Company at any time shall pay a dividend
payable in, or make any other distribution (except any distribution specifically
provided for in the foregoing subsections (a) or (b)) of the Company's stock,
then the Exercise Price shall be adjusted, from and after the record date of
such dividend or distribution, to that price determined by multiplying the
Exercise Price in effect immediately prior to such record date by a fraction (i)
the numerator of which shall be the total number of all shares of the Company's
stock outstanding immediately prior to such dividend or distribution, and (ii)
the denominator of which shall be the total number of all shares of the
Company's stock outstanding immediately after such dividend or distribution.
The Warrantholder shall thereafter be entitled to purchase, at the Exercise
Price resulting from such adjustment, the number of shares of Preferred Stock
(calculated to the nearest whole share) obtained by multiplying the Exercise
Price in effect immediately prior to such adjustment by the number of shares of
Preferred Stock issuable upon the exercise hereof immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment.
(e) Right to Purchase Additional Stock. If the Company has not paid
any Subordinated Promissory Note(s) entered into pursuant to the Loan(s) in its
entirety by the Maturity Date (as defined in the applicable Subordinated
Promissory Note(s)), then for each additional month, or portion thereof,
thereafter that the outstanding
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principal is not paid, Warrantholder shall have the right to purchase from the
Company, at the Exercise Price (adjusted as set forth herein), an additional
number of shares of Preferred Stock which number shall be determined by (i)
multiplying the outstanding principal amount which due but unpaid by 1% and (ii)
dividing the product thereof by the Exercise Price.
(f) Antidilution Rights. Additional antidilution rights applicable to
the Preferred Stock purchasable hereunder are as set forth in the Company's
Certificate of Incorporation, as amended through the Effective Date, a true and
complete copy of which is attached hereto as Exhibit __ (the "Charter"). The
Company shall promptly provide the Warrantholder with any restatement,
amendment, modification or waiver of the Charter. The Company shall provide
Warrantholder with prior written notice of any issuance of its stock or other
equity security to occur after the Effective Date of this Warrant, which notice
shall include (a) the price at which such stock or security is to be sold, (b)
the number of shares to be issued, and (c) such other information as necessary
for Warrantholder to determine if a dilutive event has occurred.
(g) Notice of Adjustments. If: (i) the Company shall declare any
dividend or distribution upon its stock, whether in cash, property, stock or
other securities; (ii) the Company shall offer for subscription prorata to the
holders of any class of its Preferred or other convertible stock any additional
shares of stock of any class or other rights; (iii) there shall be any Merger
Event; (iv) there shall be an initial public offering; or (v) there shall be any
voluntary dissolution, liquidation or winding up of the Company; then, in
connection with each such event, the Company shall send to the Warrantholder:
(A) at least twenty (20) days' prior written notice of the date on which the
books of the Company shall close or a record shall be taken for such dividend,
distribution, subscription rights (specifying the date on which the holders of
Preferred Stock shall be entitled thereto) or for determining rights to vote in
respect of such Merger Event, dissolution, liquidation or winding up; (B) in the
case of any such Merger Event, dissolution, liquidation or winding up, at least
twenty (20) days' prior written notice of the date when the same shall take
place (and specifying the date on which the holders of Preferred Stock shall be
entitled to exchange their Preferred Stock for securities or other property
deliverable upon such Merger Event, dissolution, liquidation or winding up); and
(C) in the case of a public offering, the Company shall give the Warrantholder
at least twenty (20) days written notice prior to the effective date thereof.
Each such written notice shall set forth, in reasonable detail, (i) the
event requiring the adjustment, (ii) the amount of the adjustment, (iii) the
method by which such adjustment was calculated, (iv) the Exercise Price, and (v)
the number of shares subject to purchase hereunder after giving effect to such
adjustment, and shall be given by first class mail, postage prepaid, addressed
to the Warrantholder, at the address as shown on the books of the Company.
(h) Timely Notice. Failure to timely provide such notice required by
subsection (g) above shall entitle Warrantholder to retain the benefit of the
applicable notice period notwithstanding anything to the contrary contained in
any insufficient notice received by Warrantholder. The notice period shall begin
on the date Warrantholder actually receives a written notice containing all the
information specified above.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
(a) Reservation of Preferred Stock. The Preferred Stock issuable upon
exercise of the Warrantholder's rights has been duly and validly reserved and,
when issued in accordance with the provisions of this Warrant Agreement, will be
validly issued, fully paid and non-assessable, and will be free of any taxes,
liens, charges or encumbrances of any nature whatsoever; provided, however, that
the Preferred Stock issuable pursuant to this Warrant Agreement may be subject
to restrictions on transfer under state and/or Federal securities laws. The
Company has made available to the Warrantholder true, correct and complete
copies of its Charter and Bylaws, as amended. The issuance of certificates for
shares of Preferred Stock upon exercise of the Warrant Agreement shall be made
without charge to the Warrantholder for any issuance tax in respect thereof, or
other cost incurred by the Company in connection with such exercise and the
related issuance of shares of Preferred Stock. The Company shall not be required
to pay any tax which may be payable in respect of any transfer involved and the
issuance and delivery of any certificate in a name other than that of the
Warrantholder.
(b) Due Authority. The execution and delivery by the Company of this
Warrant Agreement and the performance of all obligations of the Company
hereunder, including the issuance to Warrantholder of the right to acquire the
shares of Preferred Stock, have been duly authorized by all necessary corporate
action on the part of the Company, and the Loans and this Warrant Agreement are
not inconsistent with the Company's Charter or Bylaws, do not contravene any law
or governmental rule, regulation or order applicable to it, do not and will not
contravene any provision of, or constitute a default under, any indenture,
mortgage, contract or other instrument to which it is a party or by which it is
bound, and the Loans and this Warrant Agreement constitute legal, valid and
binding agreements of the Company, enforceable in accordance with their
respective terms.
-4-
(c) Consents and Approvals. No consent or approval of, giving of
notice to, registration with, or taking of any other action in respect of any
state, Federal or other governmental authority or agency is required with
respect to the execution, delivery and performance by the Company of its
obligations under this Warrant Agreement, except for the filing of notices
pursuant to Regulation D under the 1933 Act and any filing required by
applicable state securities law, which filings will be effective by the time
required thereby.
(d) Issued Securities. All issued and outstanding shares of Common
Stock, Preferred Stock or any other securities of the Company have been duly
authorized and validly issued and are fully paid and nonassessable. All
outstanding shares of Common Stock, Preferred Stock and any other securities
were issued in full compliance with all Federal and state securities laws. In
addition:
(i) Immediately prior to the Closing, the authorized capital
stock of the Company shall consist of 17,000,000 shares of Common Stock,
par value $0.01 per share (the "Common Stock"), of which 2,856,745 shares
shall be issued and outstanding, and 9,000,000 shares of Preferred Stock,
$0.01 par value per share, of which 407,500 shares shall have been
designated as Series A Convertible Preferred Stock, 1,853,182 shares shall
have been designated as Series B Convertible Preferred Stock, 1,865,000
shares shall have been designated as Series C Convertible Preferred Stock,
200,000 shares shall have been designated as Series D Convertible Preferred
Stock, 2,358,492 shares shall have been designated as Series E Preferred
Stock, 1,365,808 shares shall have been designated Series F Convertible
Preferred Stock, 191,022 shares shall have been designated Series G
Preferred Stock and 580,000 shall have been designated Series H Preferred
Stock. Immediately prior to the Closing, 400,000 shares of Series A
Convertible Preferred Stock, 1,853,182 shares of Series B Convertible
Preferred Stock, 1,865,000 shares of Series C Convertible Preferred Stock,
65,386 shares of Series D Convertible Preferred Stock, 2,358,492 shares of
Series E. Convertible Preferred Stock, 1,365,808 shares of Series F
Convertible Preferred Stock, 191,022 shares of Series G Convertible
Preferred Stock and no shares of Series H Convertible Preferred Stock were
issued and outstanding. All of the issued and outstanding shares of
Preferred Stock have been duly authorized and validly issued and are fully
paid and nonassessable. All of the issued and outstanding shares of Common
Stock have been duly authorized and validly issued and are fully paid and
nonassessable. Immediately prior to the Closing, there will be 6,061,000
shares of Common Stock reserved for issuance under the Company's 1995 Stock
Option/Stock Issuance Plan, of which 2,942,898 shares have been issued upon
the exercise of options, 2,165,062 shares are subject to outstanding
options and 953,040 shares remain available for issuance. Except as set
forth in Exhibit C hereto, the Certificate of Incorporation, the other
agreements required to be executed by the Company on or prior to the
Closing pursuant to paragraph 5D (the "Ancillary Agreements") or as
provided in this Agreement, (i) no subscription, warrant, option,
convertible security or other right (contingent or otherwise) to purchase
or acquire any shares of capital stock of the Company is authorized or
outstanding, (ii) the Company has no obligation (contingent or otherwise)
to issue any subscription, warrant, option, convertible security or other
such right or to issue or distribute to holders of an share of its capital
stock any evidences of indebtedness or assets of the Company, and (iii) the
Company has no obligation (contingent or otherwise) to purchase, redeem or
otherwise acquire any shares of its capital stock or any interest therein
or to pay any dividend to make any other distribution in respect thereof.
All of the issued and outstanding securities or the Company have been
offered, issued and sold by the Company is compliance with applicable
federal and state securities laws.
(ii) In accordance with the Company's Articles of Incorporation,
no shareholder of the Company has preemptive rights to purchase new
issuances of the Company's capital stock.
(e) Insurance. The Company has in full force and effect insurance
policies, with extended coverage, insuring the Company and its property and
business against such losses and risks, and in such amounts, as are customary
for corporations engaged in a similar business and similarly situated and as
otherwise may be required pursuant to the terms of any other contract or
agreement.
(f) Other Commitments to Register Securities. Except as set forth in
this Warrant Agreement, the Company is not, pursuant to the terms of any other
agreement currently in existence, under any obligation to register under the
1933 Act any of its presently outstanding securities or any of its securities
which may hereafter be issued.
(g) Exempt Transaction. Subject to the accuracy of the Warrantholder's
representations in Section 10 hereof, the issuance of the Preferred Stock upon
exercise of this Warrant will constitute a transaction exempt from (i) the
registration requirements of Section 5 of the 1933 Act, in reliance upon Section
4(2) thereof, and (ii) the qualification requirements of the applicable state
securities laws.
(h) Compliance with Rule 144. At the written request of the
Warrantholder, who proposes to sell Preferred Stock issuable upon the exercise
of the Warrant in compliance with Rule 144 promulgated by the
-5-
Securities and Exchange Commission, the Company shall furnish to the
Warrantholder, within ten days after receipt of such request, a written
statement confirming the Company's compliance with the filing requirements of
the Securities and Exchange Commission as set forth in such Rule, as such Rule
may be amended from time to time.
10. REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDER.
This Warrant Agreement has been entered into by the Company in reliance
upon the following representations and covenants of the Warrantholder:
(a) Investment Purpose. The right to acquire Preferred Stock or the
Preferred Stock issuable upon exercise of the Warrantholder's rights contained
herein will be acquired for investment and not with a view to the sale or
distribution of any part thereof, and the Warrantholder has no present intention
of selling or engaging in any public distribution of the same except pursuant to
a registration or exemption.
(b) Private Issue. The Warrantholder understands (i) that the
Preferred Stock issuable upon exercise of this Warrant is not registered under
the 1933 Act or qualified under applicable state securities laws on the ground
that the issuance contemplated by this Warrant Agreement will be exempt from the
registration and qualifications requirements thereof, and (ii) that the
Company's reliance on such exemption is predicated on the representations set
forth in this Section 10.
(c) Disposition of Warrantholder's Rights. In no event will the
Warrantholder make a disposition of any of its rights to acquire Preferred Stock
or Preferred Stock issuable upon exercise of such rights unless and until (i) it
shall have notified the Company of the proposed disposition, and (ii) if
requested by the Company, it shall have furnished the Company with an opinion of
counsel (which counsel may either be inside or outside counsel to the
Warrantholder) satisfactory to the Company and its counsel to the effect that
(A) appropriate action necessary for compliance with the 1933 Act has been
taken, or (B) an exemption from the registration requirements of the 1933 Act is
available. Notwithstanding the foregoing, the restrictions imposed upon the
transferability of any of its rights to acquire Preferred Stock or Preferred
Stock issuable on the exercise of such rights do not apply to transfers from the
beneficial owner of any of the aforementioned securities to its nominee or from
such nominee to its beneficial owner, and shall terminate as to any particular
share of Preferred Stock when (1) such security shall have been effectively
registered under the 1933 Act and sold by the holder thereof in accordance with
such registration or (2) such security shall have been sold without registration
in compliance with Rule 144 under the 1933 Act, or (3) a letter shall have been
issued to the Warrantholder at its request by the staff of the Securities and
Exchange Commission or a ruling shall have been issued to the Warrantholder at
its request by such Commission stating that no action shall be recommended by
such staff or taken by such Commission, as the case may be, if such security is
transferred without registration under the 1933 Act in accordance with the
conditions set forth in such letter or ruling and such letter or ruling
specifies that no subsequent restrictions on transfer are required. Whenever
the restrictions imposed hereunder shall terminate, as hereinabove provided, the
Warrantholder or holder of a share of Preferred Stock then outstanding as to
which such restrictions have terminated shall be entitled to receive from the
Company, without expense to such holder, one or more new certificates for the
Warrant or for such shares of Preferred Stock not bearing any restrictive
legend.
(d) Financial Risk. The Warrantholder has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of its investment, and has the ability to bear the economic
risks of its investment.
(e) Risk of No Registration. The Warrantholder understands that if the
Company does not register with the Securities and Exchange Commission pursuant
to Section 12 of the 1934 Act (the "1934 Act"), or file reports pursuant to
Section 15(d), of the 1934 Act", or if a registration statement covering the
securities under the 1933 Act is not in effect when it desires to sell (i) the
rights to purchase Preferred Stock pursuant to this Warrant Agreement, or (ii)
the Preferred Stock issuable upon exercise of the right to purchase, it may be
required to hold such securities for an indefinite period. The Warrantholder
also understands that any sale of its rights of the Warrantholder to purchase
Preferred Stock or Preferred Stock which might be made by it in reliance upon
Rule 144 under the 1933 Act may be made only in accordance with the terms and
conditions of that Rule.
(f) Accredited Investor. Warrantholder is an "accredited investor"
within the meaning of the Securities and Exchange Rule 501 of Regulation D, as
presently in effect.
11. TRANSFERS.
Subject to the terms and conditions contained in Section 10 hereof, this
Warrant Agreement and all rights hereunder are transferable in whole or in part
by the Warrantholder and any successor transferee, provided, however, in no
event shall the number of transfers of the rights and interests in all of the
Warrants exceed three (3)
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transfers. The transfer shall be recorded on the books of the Company upon
receipt by the Company of a notice of transfer in the form attached hereto as
Exhibit III (the "Transfer Notice"), at its principal offices and the payment to
the Company of all transfer taxes and other governmental charges imposed on such
transfer.
12. MISCELLANEOUS.
(a) Effective Date. The provisions of this Warrant Agreement shall be
construed and shall be given effect in all respects as if it had been executed
and delivered by the Company on the date hereof. This Warrant Agreement shall
be binding upon any successors or assigns of the Company.
(b) Attorney's Fees. In any litigation, arbitration or court
proceeding between the Company and the Warrantholder relating hereto, the
prevailing party shall be entitled to attorneys' fees and expenses and all costs
of proceedings incurred in enforcing this Warrant Agreement.
(c) Governing Law. This Warrant Agreement shall be governed by and
construed for all purposes under and in accordance with the laws of the State of
Illinois.
(d) Counterparts. This Warrant 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.
(e) Notices. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery,
facsimile transmission (provided that the original is sent by personal delivery
or mail as hereinafter set forth) or seven (7) days after deposit in the United
States mail, by registered or certified mail, addressed (i) to the Warrantholder
at 0000 Xxxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, attention: Venture Lease
Administration, cc: Legal Department, attn.: General Counsel, (and/or, if by
facsimile, (000) 000-0000 and (000)000-0000 and (ii) to the Company at 0000 Xxx
Xxxx Xxxx., Xxxxx 000, Xxxxxx, XX 00000, attention: Chief Financial Officer
(and/or if by facsimile, (000) 000-0000 or at such other address as any such
party may subsequently designate by written notice to the other party.
(f) Remedies. In the event of any default hereunder, the non-
defaulting party may proceed to protect and enforce its rights either by suit in
equity and/or by action at law, including but not limited to an action for
damages as a result of any such default, and/or an action for specific
performance for any default where Warrantholder will not have an adequate remedy
at law and where damages will not be readily ascertainable. The Company
expressly agrees that it shall not oppose an application by the Warrantholder or
any other person entitled to the benefit of this Agreement requiring specific
performance of any or all provisions hereof or enjoining the Company from
continuing to commit any such breach of this Agreement.
(g) No Impairment of Rights. The Company will not, by amendment of its
Charter or through any other means, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will 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 the
Warrantholder against impairment.
(h) Survival. The representations, warranties, covenants and
conditions of the respective parties contained herein or made pursuant to this
Warrant Agreement shall survive the execution and delivery of this Warrant
Agreement.
(i) Severability. In the event any one or more of the provisions of
this Warrant Agreement shall for any reason be held invalid, illegal or
unenforceable, the remaining provisions of this Warrant Agreement shall be
unimpaired, and the invalid, illegal or unenforceable provision shall be
replaced by a mutually acceptable valid, legal and enforceable provision, which
comes closest to the intention of the parties underlying the invalid, illegal or
unenforceable provision.
(j) Amendments. Any provision of this Warrant Agreement may be amended
by a written instrument signed by the Company and by the Warrantholder.
(k) Additional Documents. The Company, upon execution of this Warrant
Agreement, shall provide the Warrantholder with certified resolutions with
respect to the representations, warranties and covenants set forth in
subparagraphs (a) through (d), (f) and (g) of Section 9 above. If the purchase
price for the Loans referenced in the preamble of this Warrant Agreement exceeds
$1,000,000, the Company will also provide Warrantholder with an opinion from the
Company's counsel with respect to those same representations, warranties and
covenants. The Company shall also supply such other documents as the
Warrantholder may from time to time reasonably request.
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IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement
to be executed by its officers thereunto duly authorized as of the Effective
Date.
COMPANY: VIGNETTE CORPORATION
By: /s/ Xxxx X. Xxxxx
-------------------------
Title: V.P. Finance & Operations
-------------------------
WARRANTHOLDER: COMDISCO, INC.
By: /s/ Xxxxx X. Xxxx
-------------------------
Title: President
-------------------------
-8-
EXHIBIT I
NOTICE OF EXERCISE
TO:
----------------------
(1) The undersigned Warrantholder hereby elects to purchase _______ shares of
the Series ____ Preferred Stock of _________________, pursuant to the terms
of the Warrant Agreement dated the ______ day of ________________________,
19__ (the "Warrant Agreement") between
_____________________________________ and the Warrantholder, and tenders
herewith payment of the purchase price for such shares in full, together
with all applicable transfer taxes, if any.
(2) In exercising its rights to purchase the Series ____ Preferred Stock of
________________________________________, the undersigned hereby confirms
and acknowledges the investment representations and warranties made in
Section 10 of the Warrant Agreement.
(3) Please issue a certificate or certificates representing said shares of
Series ____ Preferred Stock in the name of the undersigned or in such other
name as is specified below.
---------------------------------
(Name)
---------------------------------
(Address)
WARRANTHOLDER: COMDISCO, INC.
By:
-------------------------
Title:
-------------------------
Date:
-------------------------
-9-
EXHIBIT II
ACKNOWLEDGMENT OF EXERCISE
The undersigned ____________________________________, hereby acknowledge
receipt of the "Notice of Exercise" from Comdisco, Inc., to purchase ____ shares
of the Series ____ Preferred Stock of _________________, pursuant to the terms
of the Warrant Agreement, and further acknowledges that ______ shares remain
subject to purchase under the terms of the Warrant Agreement.
COMPANY:
By:
----------------------
Title:
----------------------
Date:
----------------------
-10-
EXHIBIT III
TRANSFER NOTICE
(TO TRANSFER OR ASSIGN THE FOREGOING WARRANT AGREEMENT EXECUTE THIS FORM AND
SUPPLY REQUIRED INFORMATION. DO NOT USE THIS FORM TO PURCHASE SHARES.)
FOR VALUE RECEIVED, the foregoing Warrant Agreement and all rights
evidenced thereby are hereby transferred and assigned to
------------------------------------------------------------------
(Please Print)
whose address is
--------------------------------------------------
------------------------------------------------------------------
Dated:
----------------------------------------
Holder's Signature:
---------------------------
Holder's Address:
---------------------------
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Signature Guaranteed:
-------------------------------------------
NOTE: The signature to this Transfer Notice must correspond with the name as it
appears on the face of the Warrant Agreement, without alteration or
enlargement or any change whatever. Officers of corporations and those
acting in a fiduciary or other representative capacity should file proper
evidence of authority to assign the foregoing Warrant Agreement.
-11-
