Purchase Agreement - Microsoft Corp. and CommVault Systems Inc.
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "AGREEMENT"), dated April 14,
2000, is by and between Microsoft Corporation, a Washington corporation
("MICROSOFT"), and the other persons listed on the signature page hereto
(collectively with Microsoft, the "PURCHASERS"), and Comm Vault Systems, Inc., a
Delaware corporation (the "COMPANY").
WHEREAS, the Company and Microsoft are entering into an
arrangement whereby the Company may develop certain software for Microsoft and
Microsoft will invest in the Company;
WHEREAS, each of the other Purchasers desire to invest in the
Company; and
WHEREAS, the Company desires to issue and sell to the
Purchasers an aggregate of 4,361,555 shares of its Series AA Preferred Stock
(the "SHARES") and the Purchasers desire to purchase the Shares on the terms and
subject to the conditions described herein.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants, agreements and warranties herein contained, the parties hereto
agree as follows:
1. DEFINITIONS. Capitalized terms that are not defined in the
text of this Agreement have the meanings set forth below:
"Affiliate" shall mean, with respect to any specified Person, any other
Person which, directly or indirectly, owns or controls, is under common
ownership or control with, or is owned or controlled by, such specified Person.
For purposes of this definition, a Person shall be deemed to control another
Person if the first Person owns or holds more than 50% of the voting power of
the second Person.
"Amended Certificate" shall mean the Amended and Restated Certificate
of Incorporation of the Company in the form of Exhibit 2.
"Board of Directors" shall mean the board of directors of the Company.
"Engineering and Marketing Agreement" shall mean an Engineering and
Marketing Agreement to be entered into between Microsoft and Company as of the
Closing.
"Governmental Authority" shall mean the government of the United States
or any foreign country or any state or political subdivision thereof and any
entity, body or authority exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
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"Initial Public Offering" shall mean the initial public offering or
sale of common stock by the Company through underwriters or otherwise, that
requires registration, qualification or the filing of a prospectus under
applicable securities laws.
"Knowledge" means the actual knowledge of N. Robert Hammer, Louis
Miceli, Larry Cormier or Al Bunte.
"Law" shall mean any law, statute, regulation, ordinance, rule, order,
decree, judgment, consent decree, settlement agreement or governmental
requirement enacted, promulgated, entered into, agreed or imposed by any
Governmental Authority.
"Lien" shall mean any mortgage, lien (except for any lien for taxes not
yet due and payable), charge, restriction, pledge, security interest, option,
lease or sublease, claim, right of any third party, easement, encroachment or
encumbrance.
"Material Adverse Effect" shall mean an effect on the business,
operations, assets, liabilities, results of operations, cash flows or condition
(financial or otherwise) of the Company which is material and adverse.
"Non-Preemptive Shares" shall mean any voting shares of the capital
stock of the Company issued, sold, granted or conveyed (i) in connection with
any acquisition of all or a portion of any Person or a merger or combination
with any Person duly authorized by the Board of Directors, (ii) to any current
or new director, officer, employee or consultant of the Company pursuant to any
plan or arrangement, now or hereafter existing, duly authorized by the Board of
Directors or (iii) pursuant to any of the items listed on Schedule B.
"Person" shall mean any individual, corporation, proprietorship, firm,
partnership, limited partnership, trust, association or other entity.
"Preferred Stock" shall mean the Company's issued and outstanding
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock and Series E Preferred Stock.
"Registration Rights Agreement" shall mean a Registration Rights
Agreement to be entered into between Purchasers and the Company as of the
Closing in the form of Exhibit 1.
"Related Agreements" shall mean, (i) with respect to the Company and
Microsoft, the Engineering and Marketing Agreement, the Registration Rights
Agreements and the Warrant and (ii) with respect to the other Purchasers, only
the Registration Rights Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Stock Plan" shall mean the Company's stock plan, as described on
SCHEDULE B.
"Subsidiaries" shall mean the Persons set forth on SCHEDULE A.
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"Warrant" shall mean a warrant to be issued to Microsoft to purchase
shares of common stock of the Company in connection the conditions specified in
the Engineering and Marketing Agreement.
2. PURCHASE AND SALE OF SHARES.
(a) PURCHASE PRICE. Subject to the terms and conditions set forth in
this Agreement, at the Closing (as hereinafter defined), the Purchasers shall
purchase, and the Company shall issue and sell to the Purchasers the Shares for
an aggregate purchase price (the "Purchase Price") of $25,000,002. The number of
Shares being sold to each Purchaser and the portion of the Purchase Price
attributable thereto is set forth under such Purchaser's name on the signature
page hereto.
(b) CLOSING. The closing (the "Closing") of the transactions described
herein shall occur on April 14, 2000, or such other date as agreed upon by the
Purchasers and the Company. At the Closing, the Purchasers shall pay the Company
the Purchase Price in cash by wire transfer of immediately available funds to an
account designated by the Company at least three business days before the
Closing and the Company shall deliver to each Purchaser a certificate
representing the Shares purchased by such Purchaser.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to each of the Purchasers:
(a) DUE INCORPORATION; SUBSIDIARIES. Each of the Company and the
Subsidiaries is duly incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation, with all requisite power and
authority to own, lease and operate its properties and to carry on its business
as they are now being owned, leased, operated and conducted. Each of the Company
and the Subsidiaries is licensed or qualified to do business and is in good
standing as a foreign corporation in each jurisdiction where the nature of the
properties owned, leased or operated by it and the businesses transacted by it
require such licensing or qualification, except where the failure to be so
licensed or qualified would not individually or in the aggregate have a Material
Adverse Effect. Except as set forth on SCHEDULE A, the Company has no direct or
indirect subsidiaries, either wholly or partially owned, and the Company does
not hold any direct or indirect economic, voting or management interest in any
Person or directly or indirectly own any security issued by any Person. Each
Subsidiary is wholly owned by the Company.
(b) DUE AUTHORIZATION. The Company has full power and authority to
enter into this Agreement and its Related Agreements and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance by the Company of this Agreement and its Related Agreements have
been duly and validly approved by the board of directors of the Company and no
other actions or proceedings on the part of the Company are necessary to
authorize this Agreement, the Related Agreements and the transactions
contemplated hereby and thereby. The Company has duly and validly executed and
delivered this Agreement and has duly and validly executed and delivered (or
prior to or at the Closing will duly and validly execute and deliver) its
Related Agreements. This Agreement constitutes legal, valid and binding
obligations of the Company and the Company's Related Agreements upon execution
and delivery by the Company will constitute legal, valid and binding obligations
of the Company, in
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each case, enforceable in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws in effect which affect the enforcement of
creditors' rights generally and by equitable limitations on the availability of
specific remedies.
(c) CONSENTS AND APPROVALS; AUTHORITY RELATIVE TO THIS AGREEMENT.
(i) No consent, authorization or approval of, filing or
registration with, or cooperation from, any Governmental Authority or any other
Person not a party to this Agreement that has not been received by the Company
is necessary in connection with the execution, delivery and performance by the
Company of this Agreement and the execution, delivery and performance by the
Company of Related Agreements or the consummation of the transactions
contemplated hereby or thereby.
(ii) The execution, delivery and performance by Company of
this Agreement and its Related Agreements do not and will not (1) violate any
Law; (2) violate or conflict with, result in a breach or termination of,
constitute a default or give any third party any additional right (including a
termination right) under, permit cancellation of, result in the creation of any
Lien upon any of the assets or properties of the Company under, or result in or
constitute a circumstance which, with or without notice or lapse of time or
both, would constitute any of the foregoing under, any contract to which the
Company, is a party or by which the Company or any of its assets or properties
are bound; (3) permit the acceleration of the maturity of any indebtedness of
the Company or indebtedness secured by its assets or properties; or (4) violate
or conflict with any provision of any of the Certificate of Incorporation,
charter or by-laws of the Company.
(d) CAPITALIZATION.
(i) The authorized capital stock of the Company is as
described in the Amended Certificate. All of the outstanding capital stock of
the Company and each Subsidiary (i) is validly issued, fully paid and
nonassessable and (ii) is free of preemptive rights (except as provided in the
Amended Certificate or this Agreement). When issued, the Shares, the Conversion
Shares and the Warrant Shares will be validly issued, fully paid and
nonassessable.
(ii) Except as set forth above or on SCHEDULE B, there are no
shares of capital stock or other securities (whether or not such securities have
voting rights) of the Company issued or outstanding or any subscriptions,
options, warrants, calls, rights, convertible securities or other agreements or
commitments of any character obligating the Company to issue, transfer or sell,
or cause the issuance, transfer or sale of, any shares of its capital stock or
other securities (whether or not such securities have voting rights). Except as
set forth in SCHEDULE B, there are no outstanding contractual obligations of the
Company which relate to the purchase, sale, issuance, repurchase, redemption,
acquisition, transfer, disposition, holding or voting of any shares of its
capital stock or other securities.
(e) LITIGATION.
(i) There is no claim, action, suit, investigation or
proceeding ("Litigation") pending or, to the Knowledge of the Company,
threatened against the Company or any
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Subsidiary, or involving any of its properties or assets by or before any court,
arbitrator or other Governmental Entity which (1) in any manner challenges or
seeks to prevent, enjoin, alter or materially delay the transactions
contemplated by this Agreement or (2) if resolved adversely to the Company or
any Subsidiary, would reasonably be expected to have a Material Adverse Effect.
(ii) Neither the Company nor any Subsidiary is in default
under or in breach of any order, judgment or decree of any court, arbitrator or
other Governmental Authority, except for defaults or breaches, which
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect.
(f) COMPLIANCE WITH LAWS. The Company and each Subsidiary are in
compliance in all material respects with allapplicable Laws.
(g) OFFERING OF SHARES. Neither the Company nor any Person acting on
its behalf has taken or will take any action (including, without limitation, any
offering of any securities of the Company under circumstances which would
require, under the Securities Act, the integration of such offering with the
offering and sale of the Shares) which might reasonably be expected to subject
the offering, issuance or sale of the Shares to the registration requirements of
the Securities Act.
(h) BROKERS. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission from any party in connection with
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of the Company.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASERS. Each of the
Purchasers severally but not jointly hereby represents and warrants to the
Company as follows:
(a) DUE INCORPORATION. Each Purchaser that is not an individual is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, with all requisite power and authority to own,
lease and operate its properties and to carry on its business as they are now
being owned, leased, operated and conducted.
(b) DUE AUTHORIZATION. Each Purchaser that is not an individual has
full power and authority to enter into this Agreement and its Related Agreements
and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by such Purchaser of this Agreement and its
Related Agreements have been duly and validly approved by its governing body
empowered to authorize the transactions contemplated by this Agreement and its
Related Agreements and no other actions or proceedings on the part of such
Purchaser are necessary to authorize this Agreement, its Related Agreements and
the transactions contemplated hereby and thereby.
(c) DUE EXECUTION; BINDING EFFECT. Such Purchaser has validly executed
and delivered this Agreement and has duly and validly executed and delivered (or
prior to or at the Closing will duly and validly execute and deliver) its
Related Agreements. This Agreement constitutes legal, valid and binding
obligations of such Purchaser and such Purchaser's Related Agreements upon
execution and delivery by such Purchaser (as applicable) will constitute legal,
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valid and binding obligations of such Purchaser, in each case, enforceable in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws in effect which affect the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific remedies.
(d) CONSENTS AND APPROVALS; AUTHORITY RELATIVE TO THIS AGREEMENT.
(i) No consent, authorization or approval of, filing or
registration with, or cooperation from, any Governmental Authority or any other
Person not a party to this Agreement is necessary in connection with the
execution, delivery and performance by such Purchaser of this Agreement and its
Related Agreements and the consummation of the transactions contemplated hereby
and thereby.
(ii) The execution, delivery and performance by such Purchaser
of this Agreement and its Related Agreements do not and will not (1) violate any
Law; (2) violate or conflict with, result in a breach or termination of,
constitute a default or give any third party any additional right (including a
termination right) under, permit cancellation of, result in the creation of any
Lien upon any of the assets or properties of such Purchaser under, or result in
or constitute a circumstance which, with or without notice or lapse of time or
both, would constitute any of the foregoing under, any contract to which
Purchaser is a party or by which such Purchaser or any of its assets or
properties are bound; (3) permit the acceleration of the maturity of any
indebtedness of such Purchaser or indebtedness secured by its assets or
properties; or (4) for each Purchaser that is not an individual, violate or
conflict with any provision of such Purchaser's organizational documents.
(e) BROKERS. No broker, lender or investment banker is entitled to any
brokerage, lender's or other fee or commission from any party in connection with
the transactions contemplated by this Agreement based on arrangements made by or
on behalf of such Purchaser.
(f) PURCHASE FOR INVESTMENT. Such Purchaser is purchasing the Shares
hereunder for investment without any intent of the distribution thereof within
the meaning of the Securities Act.
(g) ACCREDITED INVESTOR. Such Purchaser is an "accredited investor"
within the meaning of Regulation 501(a) under the Securities Act and is able to
bear the economic risk of acquisition of the Shares, can afford to sustain a
total loss on such investment, and has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risk of the proposed investment. Such Purchaser has been furnished the
opportunity to ask questions of and receive answers from representatives of the
Company concerning the business and financial affairs of the Company.
5. COVENANTS.
(a) CONDUCT OF BUSINESS BY THE COMPANY PENDING THE CLOSING. The Company
shall, and shall cause each of its Subsidiaries to, during the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement or the Closing, unless the Purchasers otherwise agree in writing,
(1) conduct its business only in the ordinary course and
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consistent with past practice; (2) maintain its books and records in the usual,
regular and ordinary manner, on a basis consistent with past practice; and (3)
comply in all material respects with applicable Laws. Except as expressly
contemplated by this Agreement between the date of this Agreement and the
Closing, the Company shall not do any of the following without the prior written
consent of the Purchasers, which consent shall not be unreasonably withheld or
delayed:
(i) change any of its methods of accounting or accounting
practice, other than such changes required by GAAP;
(ii) (1) repurchase, redeem or otherwise acquire or exchange
any share of its common stock or other equity interests; (2) except for
issuances of its common stock pursuant to the exercise of options to purchase
common stock outstanding on the date hereof pursuant to any of the arrangements
listed on SCHEDULE B or an increase determined in good faith by the Company in
the amount of common stock to be issued under the Stock Plan, issue or sell any
additional shares of the capital stock of, or other equity interests in, the
Company, or securities convertible into or exchangeable for such shares or other
equity interests, or issue or grant any subscription rights, options, warrants
or other rights of any character relating to shares of such capital stock, such
other equity interests or such securities; or (3) declare, set aside, make or
pay any dividend, or make any distribution, in respect of any of its shares of
capital stock other than as required with respect to the Preferred Stock;
(iii) amend its charter or by-laws or other organizational
documents except with respect to the filing of the Amended Certificate;
(iv) take any action that is reasonably likely to result in
any of the representations and warranties set forth in Section 3 becoming false
or inaccurate in any material respect as of the Closing; or
(v) agree to take any of the actions restricted by this
Section 5(a).
(b) BOARD REPRESENTATION; OBSERVERS. Microsoft shall be entitled to
designate for election to the Board of Directors one director (the "MICROSOFT
DIRECTOR") and, in addition, designate one non-voting observer (the "NON-VOTING
OBSERVER") to attend and participate in (but not vote at) all meetings of the
Board of Directors. The Company will take all action necessary for the Microsoft
Director to be elected to the Board of Directors as of the Closing. In
connection with any annual meeting of stockholders of the Company at which the
term of the Microsoft Director is to expire, the Company will take all necessary
action to cause the Microsoft Director to be nominated and use its reasonable
best efforts to cause the Microsoft Director to be elected to the Board of
Directors. In the event a vacancy shall exist in the office of the Microsoft
Director, Microsoft shall be entitled to designate a successor and the Board of
Directors shall elect such successor and, in connection with the meeting of
stockholders of the Company next following such election, nominate such
successor for election as director by the stockholders and use its reasonable
best efforts to cause the successor to be elected. The Non-Voting Observer shall
have the same access to information concerning the business and operations of
the Company and at the same time as the directors of the Company, and shall be
entitled to participate in discussions and consult with the Board of Directors
without voting. The provision of any such information to the Non-Voting Observer
shall be subject to the receipt by
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the Company of a confidentiality agreement covering such information and
reasonably acceptable to the Company and the Non-Voting Observer. Microsoft's
right to nominate the Microsoft Director and the Non-Voting Observer and the
Company's obligation to take any action to cause the Microsoft Director to be
elected to the Board of Director shall terminate as of the Initial Public
Offering. In addition, the term of the Microsoft Director and all rights of the
Microsoft Director and the Non-Voting Observer, including the rights to observe
the books and records of the Company as provided above, shall expire as of such
time. Microsoft agrees that the information provided by the Company, officers,
directors and employees pursuant to this Section 5(b) will be used solely for
the purpose of evaluating Microsoft's investment in the Shares, the Conversion
Shares and the Warrant Shares, and that such information will be kept strictly
confidential by Microsoft; PROVIDED that the foregoing obligation of Microsoft
shall not (a) relate to any information that (i) is or becomes generally
available other than as a result of unauthorized disclosure by Microsoft or by
persons to whom Microsoft has made such information available or (ii) is or
becomes available to Microsoft on a non-confidential basis from a third party
that is not, to Microsoft's knowledge, bound by any other confidentiality
agreement with the Company or its subsidiaries, or (b) prohibit disclosure of
any information if required by Law or the rules of any stock exchange. Microsoft
hereby acknowledges that it is aware that the United States securities laws
prohibit any person who has received from an issuer or any Affiliate thereof any
material, non-public information from purchasing or selling securities of such
issuer or from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell such securities. Microsoft acknowledges and agrees that
there would be no adequate remedy at Law if Microsoft fails to perform its
obligations under this Section 5(b) and accordingly agrees that the Company, in
addition to any other remedy to which it may be entitled at Law or in equity,
shall be entitled to compel specific performance of the obligations of Microsoft
under this Section 5(b).
(c) AMENDED CERTIFICATE. The Company shall, prior to or concurrently
with the Closing, cause the Amended Certificate to be filed with the Secretary
of State of the State of Delaware.
(d) COOPERATION. Each of the Purchasers and the Company agrees to use
its reasonable best efforts to take, or cause to be taken, all such further
actions as shall be necessary to make effective and consummate the transactions
contemplated by this Agreement.
(e) RESERVE SHARES. The Company will at all times reserve and keep
available, solely for issuance and delivery upon conversion of the Shares, the
number of shares of common stock from time to time issuable upon conversion of
all Shares at the time outstanding (the "CONVERSION SHARES") and any shares to
be issued pursuant to the Warrant (the "WARRANT SHARES"). All Conversion Shares
and Warrant Shares shall be duly authorized and, when issued upon such
conversion or exercise, shall be validly issued, fully paid and nonassessable.
(f) RESTRICTIONS ON TRANSFER. The Purchasers will not, prior to the
earlier of (a) December 31, 2004 or (b) the time of the closing of the Initial
Public Offering, sell, transfer, assign, convey, gift, mortgage, pledge,
encumber, hypothecate, or otherwise dispose of, directly or indirectly,
("TRANSFER") any of the Shares or any Conversion Shares except for (i) Transfers
between and among the Purchasers and their Affiliates provided such Transfer is
in accordance
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with the transfer restrictions applicable to the Shares or the Conversion Shares
under federal and state securities laws and the Affiliate transferee agrees to
be bound by the restrictions applicable to such Shares or Conversion Shares,
including without limitation the agreements set forth in this Section 5(f), and
(ii) Transfers (x) pursuant to a bona fide tender or exchange offer made
pursuant to a merger or other agreement approved by the Board of Directors to
acquire securities of the Company; provided, that the Purchasers may not tender
or exchange in such offer unless at least 50% of the outstanding voting
securities of the Company have previously been tendered or exchanged by other
holders of the Company's securities in connection therewith, (y) pursuant to any
cash merger, or other business combination transaction to which the Company is a
party or involved in which the common stock of the Company's stockholders is
exchanged for cash upon consummation of such merger or other business
combination or (z) agreed to in writing by the Company. Notwithstanding any
other provision of this Section 5(f), no Purchaser shall avoid the provisions of
this Section 5(f) by making one or more transfers to one or more Affiliates and
then disposing of all or any portion of such Purchaser's interest in any such
Affiliate.
(g) PREEMPTIVE RIGHT. If at any time the Company desires to issue or
sell any shares (the "ADDITIONAL SHARES") of its capital stock that entitle the
holder thereof to voting rights (other than Non-Preemptive Shares) to any
Person, the Company shall give a written notice (the "ISSUANCE NOTICE") to the
Purchasers setting forth the proposed terms of such Additional Shares and the
quantity of Additional Shares to be issued, the issuance date and the price at
which such Additional Shares shall be issued. Each of the Purchasers shall have
the option to purchase the number of Additional Shares necessary to maintain
such Purchaser's percentage of issued and outstanding voting shares of the
Company at the time of the Issuance Notice, which option may be exercised by
giving written notice to the Company (the "RESPONSE NOTICE") within 14 days of
the Issuance Notice that contains an unconditional agreement to purchase all
(and not less than all) of the Additional Shares to which such Purchaser is
entitled to purchase. Failure by a Purchaser to give the Response Notice to the
Company within such 14-day period shall be deemed to be a rejection of such
option. At the option of the Company, within 14 days of Company's receipt of the
Response Notice or at the time of the closing of the sale of Additional Shares
to any Persons pursuant to the next sentence, the Company shall sell to such
Purchaser and such Purchaser shall purchase the Additional Shares that such
Purchaser agreed to purchase in the Response Notice, at the price and on the
terms set forth in the Issuance Notice. For a period of 270 days after any
Issuance Notice, the Company shall have the right to issue or sell to any Person
up to the number of Additional Shares specified in the Issuance Notice less the
number of Additional Shares pursuant to duly tendered Response Notices at a
price and on terms not materially less favorable to the Company than as
specified in the Issuance Notice. If the Company desires to issue or sell
Additional Shares, (i) after such 270-day period, (ii) on terms materially less
favorable to the Company than as specified in the Issuance Notice or (iii) in a
quantity greater than as specified in the previous sentence, the Company must
again comply with this Section 5(g). The rights and obligations of the parties
pursuant to this Section 5(g) shall terminate upon the closing of an Initial
Public Offering.
(h) COMPLIANCE WITH SECURITIES LAWS. Such Purchaser understands that
the Shares, the Conversion Shares and the Warrant Shares will not be registered
under the Securities Act or applicable state securities laws and agrees not to
sell, pledge or otherwise transfer any of the Shares, Conversion Shares and the
Warrant Shares in the absence of such registration or an opinion of counsel
reasonably satisfactory to the Company that such registration is not required.
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Except as set forth in the Registration Rights Agreement, such Purchaser
acknowledges that the Company is not required to register the Shares, the
Conversion Shares or the Warrant Shares.
6. CONDITIONS.
(a) CONDITIONS TO OBLIGATIONS OF THE PURCHASERS. The obligations of the
Purchasers to consummate the transactions contemplated hereby shall be subject
to the satisfaction or waiver at or prior to the Closing of each of the
following conditions:
(i) No statute, rule or regulation or order of any court or
administrative agency shall be in effect which prohibits the consummation of the
transactions contemplated hereby;
(ii) Each of the representations and warranties of the Company
contained in this Agreement shall be true and correct when made and as of the
Closing (except to the extent such representations and warranties are made as of
a particular date, in which case such representations and warranties shall have
been true and correct in all material respects as of such date), except for
failures to be true and correct which individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect;
(iii) The Company shall have performed, satisfied and complied
in all material respects with all of its covenants and agreements set forth in
this Agreement to be performed, satisfied and complied with prior to or at the
Closing;
(iv) The Company shall have delivered to the Purchasers an
officer's certificate certifying as to the Company's compliance with the
conditions set forth in clauses (ii) and (iii) of this Section 6(a);
(v) The Company shall have executed and delivered to each of
the Purchasers the Registration Rights Agreement;
(vi) The Amended Certificate shall have been duly filed with
the Secretary of State of the State of Delaware in accordance with the laws of
the State of Delaware and the Amended Certificate shall be in full force and
effect;
(vii) The Company shall have executed and delivered to
Microsoft the Engineering and Marketing Agreement;
(viii) The Company shall have executed and delivered to
Microsoft the Warrant;
(ix) The Conversion Shares and the Warrant Shares shall have
been duly authorized and reserved for issuance;
(x) Mayer, Brown & Platt shall have delivered an opinion in
form and substance reasonably satisfactory to Purchasers; and
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(xi) There shall not have occurred any event, circumstances,
condition, fact, effect, or other matter which has had or would reasonably be
expected to have a Material Adverse Effect.
(b) CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligations of the
Company to consummate the transactions contemplated hereby shall be subject to
the satisfaction or waiver at or prior to the Closing of each of the following
conditions:
(i) No statute, rule or regulation or order of any court or
administrative agency shall be in effect which prohibits the consummation of the
transactions contemplated hereby;
(ii) Each of the representations and warranties of the
Purchasers contained in this Agreement shall be true and correct when made and
as of the Closing (except to the extent such representations and warranties are
made as of a particular date, in which case such representations and warranties
shall have been true and correct in all material respects as of such date),
except for failures to be true and correct which individually or in the
aggregate would not reasonably be expected to have a material adverse effect on
the Purchasers' ability to perform its obligations under this Agreement;
(iii) Each of the Purchasers shall have executed and delivered
to the Company its Related Agreements;
(iv) The Purchasers shall have performed, satisfied and
complied in all material respects with all of their covenants and agreements set
forth in this Agreement to be performed, satisfied and complied with prior to or
at the Closing Date; and
(v) Each of Purchasers shall have delivered to the Company a
certificate certifying as to his compliance with the conditions set forth in
clauses (ii) and (iii) of this Section 6(b).
7. TERMINATION. This Agreement shall be terminable:
(i) by the parties upon mutual written agreement;
(ii) by the Company, on one hand, and the Purchasers, on the
other hand, if the other party materially breaches any covenant, representation
or warranty contained herein, upon written notice to such breaching party; and
(iii) by the Company, on one hand, and the Purchasers, on the
other hand, if any condition precedent to any party's obligation to proceed with
the Closing is not satisfied by May 31, 2000, upon written notice to the other
party (provided that the right to terminate this Agreement shall not be
available to any party whose failure to fulfill any obligation under this
agreement had been the cause of or resulted in the failure of the Closing to
occur before such date).
Upon termination of this Agreement, all obligations of each party hereunder
shall terminate except those obligations pursuant to Sections 13, 19, 20, 21 and
22. Neither party shall have any
<PAGE>
liability to the other party upon a termination of this Agreement, unless such
termination arises under clause (ii) above.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the parties contained in this
Agreement shall expire on the 18-month anniversary of the Closing. After the
expiration of such period, any claim by a party based upon any such
representation or warranty shall be of no further force and effect, except to
the extent a party has given notice to the other party of a claim for breach of
any such representation or warranty prior to the expiration of such period, in
which event any representation or warranty to which such claim relates shall
survive with respect to such claim until such claim is resolved as provided in
this Section 8. The covenants and agreements of the parties hereto contained in
this Agreement shall survive the Closing until performed in accordance with
their terms.
9. RESTRICTIVE LEGENDS. In addition to the restrictions set
forth in Section 5(f), no Shares, Conversion Shares or Warrant Shares may be
transferred without registration under the Securities Act and applicable state
securities laws unless counsel acceptable to the Company shall advise the
Company that such transfer may be effected without such registration. Each
certificate representing any of the foregoing shall bear legends in
substantially the following form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE SHALL BE CONVERTIBLE INTO
THE COMPANY'S COMMON STOCK IN THE MANNER AND ACCORDING TO THE TERMS SET
FORTH IN THE CERTIFICATE OF INCORPORATION. THE COMPANY IS AUTHORIZED TO
ISSUE MORE THAN ONE CLASS OR SERIES OF STOCK. AS REQUIRED UNDER
DELAWARE LAW, THE COMPANY SHALL FURNISH TO ANY HOLDER UPON REQUEST AND
WITHOUT CHARGE, A FULL SUMMARY STATEMENT OF THE DESIGNATIONS, VOTING
RIGHTS, PREFERENCES, LIMITATIONS AND SPECIAL RIGHTS OF THE SHARES OF
EACH CLASS OR SERIES AUTHORIZED TO BE ISSUED BY THE COMPANY SO FAR AS
THEY HAVE BEEN FIXED AND DETERMINED AND THE AUTHORITY OF THE BOARD OF
DIRECTORS TO FIX AND DETERMINE THE DESIGNATIONS, VOTING RIGHTS,
PREFERENCES, LIMITATIONS AND SPECIAL RIGHTS OF THE CLASSES AND SERIES
OF SECURITIES OF THE COMPANY.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR UNDER
ANY APPLICABLE STATE LAWS. THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE BEEN ACQUIRED BY THE REGISTERED OWNER HEREOF FOR INVESTMENT AND
NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION
THEREOF WITHIN THE MEANING OF THE 1933 ACT. THE SHARES MAY NOT BE SOLD,
PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT IN A TRANSACTION WHICH IS
EXEMPT UNDER
<PAGE>
THE PROVISIONS OF THE 1933 ACT OR ANY APPLICABLE STATE SECURITIES LAWS,
OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN A TRANSACTION
OTHERWISE IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES
LAWS.
THE SALE, PLEDGE, TRANSFER, ASSIGNMENT OR OTHER DISPOSITION OF THE
SHARES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY AND SUBJECT TO
THE PROVISIONS OF A PURCHASE AGREEMENT DATED AS OF APRIL 14, 2000, A
COPY OF WHICH IS AVAILABLE UPON REQUEST FOR INSPECTION AT THE OFFICE'S
OF THE COMPANY. ANY SUCH REQUEST SHOULD BE ADDRESSED TO THE SECRETARY
OF THE COMPANY.
10. SUCCESSORS AND ASSIGNS; NO THIRD PARTY BENEFICIARIES. This
Agreement shall bind and inure to the benefit of the Company and the Purchasers
and the respective successors, permitted assigns, heirs and personal
representatives of the Company and the Purchasers; PROVIDED that the Company may
not assign its rights or obligations under this Agreement to any Person without
the prior written consent of the Purchasers, and provided further that the
Purchasers may not assign their rights or obligations under this Agreement to
any Person (other than an Affiliate) without the prior written consent of the
Company. This Agreement is intended for the benefit of the parties hereto and
their respective permitted successors and assigns, and is not for the benefit
of, nor may any provision hereof be enforced by, any other person.
11. NOTICES. Each notice, demand, request, request for
approval, consent, approval, disapproval, designation or other communication
(each of the foregoing being referred to herein as a notice) required or desired
to be given or made under this Agreement shall be in writing (except as
otherwise provided in this Agreement), and shall be effective and deemed to have
been received (i) when delivered in person, (ii) when sent by fax with receipt
acknowledged, (iii) five days after having been mailed by certified or
registered United States mail, postage prepaid, return receipt requested, or
(iv) the next business day after having been sent by a nationally recognized
overnight mail or courier service, receipt requested. Notices shall be addressed
as set forth below:
If to Microsoft:
Microsoft Corporation
One Microsoft Way
Redmond, Washington 98502
Attn: Chief Financial Officer
Facsimile: (425) 936-7329
with a copy to: Law and Corporate Affairs
Facsimile: (425) 936-7329
If to any of the other Purchasers, at the address set forth under his
name on the signature page.
With a copy to:
<PAGE>
Preston, Gates & Ellis
701 5th Avenue, Suite 5000
Seattle, Washington 98104
Attn: Richard B. Dodd
Facsimile: (206) 623-7022
If to the Company:
CommVault Systems, Inc.
2 Crescent Place
Oceanport, New Jersey 07757
Attn: N. Robert Hammer
Facsimile: (732) 870-4514
With a copy to:
Mayer, Brown & Platt
190 S. LaSalle Street
Chicago, Illinois 60603
Attention: Philip J. Niehoff
Facsimile: (312) 701-7711
12. FURTHER ASSURANCES. At any time or from time to time after
the Closing, the Company, on the one hand, and the Purchasers, on the other
hand, agree to cooperate with each other, and at the request of the other party,
to execute and deliver any further instruments or documents and to take all such
further action as the other party may reasonably request in order to evidence or
effectuate the consummation of the transactions contemplated hereby and to
otherwise carry out the intent of the parties hereunder.
13. PUBLIC DISCLOSURE. Except as required by Law or the rules
of any stock exchange, no public announcement or other publicity regarding the
transactions referred to herein shall be made by any of the Purchasers or the
Company or any of their respective Affiliates, officers, directors, employees,
representatives or agents, without the prior written agreement of Purchasers and
Company, in any case, as to form, content, timing and manner of distribution or
publication; provided, however, that nothing in this Section shall prevent such
parties from (i) discussing such transactions with those Persons whose approval,
agreement or opinion, as the case may be, is required for consummation of such
particular transaction or transactions or (ii) disclosing such information about
such transactions in a registration statement or prospectus in connection with
the Initial Public Offering. Each of the parties acknowledge and agree that
there would be no adequate remedy at Law if it fails to perform its obligations
under this Section 13 and accordingly agrees that each of the other parties, in
addition to any other remedy to which it may be entitled at Law or in equity,
shall be entitled to compel specific performance of the obligations of the first
party under this Section 13.
14. WAIVER. No party may waive any of the terms or conditions
of this Agreement except by a duly signed writing referring to the specific
provision to be waived.
<PAGE>
15. ENTIRE AGREEMENT. This Agreement and the Related
Agreements constitute the entire agreement, and supersedes all other prior
agreements and understandings, both written and oral, among the parties hereto
and their affiliates with respect to the matters set forth herein.
16. SEVERABILITY. If any provision of this Agreement shall be
held invalid, illegal or unenforceable, the validity, legality or enforceability
of the other provisions hereof shall not be affected thereby, and there shall be
deemed substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.
17. CAPTIONS. The Section references herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
18. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same instrument.
19. GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware.
20. [INTENTIONALLY OMITTED]
21. WAIVER OF JURY TRIAL. THE COMPANY AND THE PURCHASERS
HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR
IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.
22. FEES AND EXPENSES. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such costs
or expense.
23. JOINT PARTICIPATION IN DRAFTING. Each party to this
Agreement has participated in the negotiation and drafting of this Agreement. As
such, the language used herein shall be deemed to be the language chosen by the
parties hereto to express their mutual intent, and no rule of strict
construction will be applied against any party to this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the day and year first written above.
MICROSOFT CORPORATION
By: /S/ ILLEGIBLE
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Shares: 2,616,933
-----------------------------------
Purchase Price: $15,000,000
/S/ GREG REYES
------------------------------------------
GREG REYES
1901 Guadelupe Parkway
San Jose, CA 95131
Shares: 87,321
-----------------------------------
Purchase Price: 500,000
--------------------------
<PAGE>
THE VAN WAGONER FUNDS
By: /S/ GARRETT R. VAN WAGONER
--------------------------------------
Name: GARRETT R. VAN WAGONER
------------------------------------
Title: DIRECTOR
-----------------------------------
345 California Street
Suite 2450
San Francisco, California 94104
Shares: 582,703
Purchase Price: $3,339,995
VAN WAGONER CAPITAL PARTNERS, L.P.
By: /S/ GARRETT R. VAN WAGONER
--------------------------------------
Name: GARRETT R. VAN WAGONER
------------------------------------
Title: GENERAL PARTNER
-----------------------------------
345 California Street
Suite 2450
San Francisco, California 94104
Shares: 22,021
Purchase Price: $126,222
VAN WAGONER CROSSOVER FUND, LP
By: /S/ GARRETT R. VAN WAGONER
--------------------------------------
Name: GARRETT R. VAN WAGONER
------------------------------------
Title: MANAGING MEMBER GENERAL PARTNER
-----------------------------------
345 California Street
Suite 2450
San Francisco, California 94104
Shares: 1,000,329
Purchase Price: $5,733,785
<PAGE>
/S/ BILL RUSHER
-----------------------------------------
BILL RUSHER
142 Sansome Street
5th Floor
San Francisco, CA 94104
Shares: 8,723
----------------------------------
Purchase Price: $50,000
--------------------------
/S/ FRANK JUSKA
------------------------------------------
FRANK JUSKA
142 Sansome Street
5th Floor
San Francisco, CA 94104
Shares: 8,723
----------------------------------
Purchase Price: $50,000
--------------------------
/S/ WILL HERMAN
------------------------------------------
WILL HERMAN
8 Cobblestone Place
Sudbury, MA 01776
Shares: 34,842
----------------------------------
Purchase Price: $200,000
--------------------------
<PAGE>
COMMVAULT SYSTEMS, INC.
By: /S/ N. ROBERT HAMMER
--------------------------------------
Name: N. ROBERT HAMMER
------------------------------------
Title: CEO
-----------------------------------
<PAGE>
SCHEDULE A
SUBSIDIARIES
CommVault Systems (Canada) Inc., a Canadian corporation
CommVault Systems Mexico S de RL de CV, a Mexican company
CommVault Holding Company BV, a Netherlands company
CommVault Systems Netherlands BV, a Netherlands company
<PAGE>
SCHEDULE B
1. Employment Agreement, dated as of January 20, 1999, between the Company
and N. Robert Hammer, under which Mr. Hammer has received options to
purchase common stock.
2. Corporate Change of Control Agreements, between the Company and (i) Louis
Miceli, (ii) Brian McAteer, (iii) Harry Cormier and (iv) Al Bunte.
3. Stock Plan dated as of May 22, 1996, pursuant to which (i) the Company is
authorized to issue options to purchase 8.7 million shares of its common
stock and (ii) options to purchase 8.2 million shares of common stock have
been granted.
4. Preferred Stock holders have conversion rights, pursuant to the Amended
Certificate, and preemptive rights pursuant to the Stockholders'
Agreement, dated as of May 22, 1996 and amended as of July 23, 1998,
between the Company and DLJ Merchant Banking Partners, L.P., DLJ
International Partners C.V., DLJ Offshore Partners C.V., DLJ Merchant
Banking Funding, Inc., DLJ Capital Corporation, Sprout Growth II L.P.,
Sprout CEO Fund L.P. and certain other investors.
5. A Warrant to purchase common stock was issued to DLJ Merchant Banking
Partners, L.P. and certain of its Affiliates in connection with the Loan
Agreement dated as of January 14, 2000, between the Company and the
Lenders therein.
6. Purchase Agreement, dated as of August 4, 1999, between the Company and
Comm Vault Systems International, B.V. ("CVSI") and the shareholders of
CVSI, pursuant to which the Company's common stock would be issued in
consideration for the acquisition of the business of CVSI by the Company.
7. The Company expects to consummate an acquisition of Northern Concepts
Incorporated ("NCI"), pursuant to which the Company's common stock may be
issued in consideration for the acquisition of the business of NCI by the
Company.
The Company may, from time to time, issue additional shares of common stock or
options or warrants to purchase its common stock in an effort to recruit new
officers and employees.