VERTICA SOFTWARE, INC.
NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT ("Agreement") is made as of the 9th day of
April 1997 by and between VERTICA SOFTWARE, INC. a California corporation (the
"Company"), and Xxxxxx X. Xxxxxxx, an individual (the "Purchaser").
In consideration of the mutual promises hereinafter set forth the
parties hereby agree as follows:
SECTION 1. AMOUNT AND TERMS OF THE LOAN
1.1 The Loan. Subject to the terms of this Agreement, the Company
agrees to sell and Purchaser agrees to loan to the Company, One Hundred Thousand
Dollars ($100,000.00) (the "Loan Amount") pursuant to two (2) convertible
promissory notes (the "First Note" and "Second Note", collectively, the
"Notes"), each in the form attached hereto as Exhibit A. Upon the closing of the
Company's Stock Financing (as defined below) the outstanding principal balance
and unpaid accrued interest of the Notes shall automatically convert into shares
of Company's Securities pursuant to the terms of Section 1.3. In the event the
Stock Financing has not closed within one year from the date of this Agreement,
the principal balance and unpaid accrued interest of the Notes shall be
automatically converted into shares of the Company's Series A Preferred Stock.
1.2 Stock Financing. For purposes of this Agreement, "Stock Financing"
shall mean the sale by the Company of shares of its capital stock ("Securities")
to investors ("Investors") with aggregate cash proceeds to the Company equal to
or in excess of Three Hundred Thousand Dollars ($300,000).
1.3 Conversion Upon Stock Financing. Immediately prior to or upon the
closing of a Stock Financing as defined in Section 1.2, the principal amount and
any accrued and unpaid interest on the Notes shall automatically convert into
shares of the Company's Securities purchased by the Investors at a conversion
price equal to the lower of (i) One Dollar and Sixty Cents ($1.60) per share, or
(ii) eighty percent (80%) of the price per share paid by the Investors
purchasing the Securities.
1.4 Other Conversion. In the event the Stock Financing has not closed
within one year from the date of this Agreement, the principal amount and any
accrued and unpaid interest on the Notes shall automatically convert into shares
of the Company's Series A Preferred Stock at a conversion price equal to One
Dollar and Sixty Cents ($1.60) per share.
SECTION 2. THE CLOSING
2.1 Closings.
(a) First Closing. The closing of the purchase and sale of the
First Note (the
"First Closing") shall be held on April 10, 1997, at the offices of Xxxxxx
Godward LLP, Five Palo Alto Square, 0000 Xx Xxxxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx
00000, or at such other time as the Company and the Purchaser shall agree (the
"First Closing Date").
(b) Second Closing. The closing of the purchase and sale of
the Second Note (the "Second Closing") shall be held on April 11, 1997, at the
offices of Cooley Godward LLP, Five Palo Alto Square, 0000 Xx Xxxxxx Xxxx, Xxxx
Xxxx, Xxxxxxxxxx 00000, or at such other time as the Company and the Purchaser
shall agree (the "Second Closing Date").
2.2 Deliveries.
(a) At the First Closing (i) Purchaser will deliver to the
Company a check or wire transfer funds in the amount of Fifty Thousand Dollars
($50,000); and (ii) the Company shall deliver to Purchaser a Note representing
such Purchaser's Loan Amount.
(b) At the Second Closing (i) Purchaser will deliver to the
Company a xxxxxxx wire transfer funds in the amount of Fifty Thousand Dollars
($50,000); and (ii) the Company shall deliver to Purchaser a Note representing
such Purchaser's Loan Amount.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to Purchaser as follows:
3.1 Corporate Power. The Company will have at the Closing Date all
requisite corporate power to execute and deliver this Agreement and to carry out
and perform its obligations under the terms of this Agreement.
3.2 Authorization. All corporate action on the part of the Company, its
directors and its shareholders necessary for the authorization, execution,
delivery and performance of this Agreement by the Company and the performance of
the Company's obligations hereunder, including the issuance and delivery of the
Notes has been taken or will be taken prior to the Closing. This Agreement and
the Notes when executed and delivered by the Company, shall constitute valid and
binding obligations of the Company enforceable in accordance with their terms,
subject to laws of general application relating to bankruptcy, insolvency, the
relief of debtors and, with respect to rights to indemnity, subject to federal
and state securities laws. The Series A Preferred Stock or other equity
securities of the Company, when issued in compliance with the provisions of this
Agreement, or the Notes, will be validly issued, fully paid and nonassessable
and free of any liens or encumbrances.
3.3 Governmental Consents. All consents, approvals, orders, or
authorizations of, or registrations, qualifications, designations, declarations,
or filings with, any governmental authority, required on the part of the Company
in connection with the valid execution and delivery of this Agreement, the
offer, sale or issuance of the Notes and the equity securities issuable upon
conversion of the Notes or the consummation of any other transaction
contemplated hereby shall have been obtained and will be effective at the
Closing, except for notices required or permitted to be filed with certain state
and federal securities commissions,
which notices will be filed on a timely basis.
3.4 Offering. Assuming the accuracy of the representations and
warranties of the Purchasers contained in Section 4 hereof, the offer, issue,
and sale of the Notes are and will be exempt from the registration and
prospectus delivery requirements of the Securities Act of 1933, as amended (the
" 1933 Act"), and have been registered or qualified (or are exempt from
registration and qualification) under the registration, permit, or qualification
requirements of all applicable state securities laws.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
4.1 Purchase for Own Account. Purchaser represents that it is acquiring
the Notes and the equity securities issuable upon conversion of the Notes
(collectively, the "Notes and Underlying Securities") solely for its own account
and beneficial interest for investment and not for sale or with a view to
distribution of the Notes and Underlying Securities or any part thereof, has no
present intention of selling (in connection with a distribution or otherwise),
granting any participation in, or otherwise distributing the same, and does not
presently have reason to anticipate a change in such intention.
4.2 Information and Sophistication. Purchaser acknowledges that it has
received all the information it has requested from the Company and considers
necessary or appropriate for deciding whether to acquire the Notes. Purchaser
represents that it has had an opportunity to ask questions and receive answers
from the Company regarding the terms and conditions of the offering of the Notes
and to obtain any additional information necessary to verify the accuracy of the
information given the Purchaser. Purchaser further represents that it has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risk of this investment.
4.3 Ability to Bear Economic Risk. Purchaser acknowledges that
investment in the Notes involves a high degree of risk, and represents that it
is able, without materially impairing its financial condition, to hold the
Securities for an indefinite period of time and to suffer a complete loss of its
investment.
4.4 Further Limitations on Disposition. Without in any way limiting the
representations set forth above, Purchaser further agrees not to make any
disposition of all or any portion of the Securities unless and until:
(a) There is then in effect a Registration Statement under the
1933 Act covering such proposed disposition and such disposition is made in
accordance with such Registration Statement; or
(b) (i) The Purchaser shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
reasonably requested by the Company, such Purchaser shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration under the 1933 Act.
4.5 Experience. Purchaser is an "accredited investor" as such term is
defined in Rule 501 under the Securities Act.
SECTION 5. MISCELLANEOUS
5.1 Binding Agreement. The terms and conditions of this Agreement shall
inure to. the benefit of and be binding upon the respective successors and
assigns of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any third party any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
5.2 Governing Law Venue. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents, made and to be performed entirely within the State
of California. Each of Company and Purchaser hereby submits to the exclusive
jurisdiction of the State and Federal courts located in the County of Santa
Xxxxx, State of California.
5.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.4 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
5.5 Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile, (iii) five
(5) days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (iv) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt.
5.6 Modification; Waiver. No modification or waiver of any provision of
this Agreement or consent to departure therefrom shall be effective unless in
writing and approved by the Company and the Purchaser.
5.7 Entire Agreement. This Agreement and the Exhibits hereto constitute
the full and entire understanding and agreement between the par-ties with regard
to the subjects hereof and no party shall be liable or bound to any other in any
manner by any representations, warranties, covenants and agreements except as
specifically set forth herein.
IN WITNESS WHEREOF, the parties have executed this Notes Purchase
Agreement as of the date set forth in the first paragraph hereof.
COMPANY:
VERTICA SOFTWARE, INC.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
By:
---------------------------------------
Xxxx Xxxxx
President and Chief Executive Officer
PURCHASER:
Xxxxxx X. Xxxxxxx
000 Xxxxxx Xxxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
/s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxx X. Xxxxxxx
21275299
040997
IN WITNESS WHEREOF, the parties have executed this Notes Purchase
Agreement as of the date set forth in the first paragraph hereof.
COMPANY:
VERTICA SOFTWARE, INC.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
By: /s/ Xxxx Xxxxx
---------------------------------------
Xxxx Xxxxx
President and Chief Executive Officer
PURCHASER:
Xxxxxx X. Xxxxxxx
000 Xxxxxx Xxxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
--------------------------------------
Xxxxxx X. Xxxxxxx
21275299
040997
