EXCLUSIVITY AGREEMENT
May 12, 2022
This Exclusivity Agreement (this "Agreement") is entered into as of May 12, 2022 (the "Effective Date"), by and between:
PINNACLE VENTURE FUND II LP, a Delaware limited partnership, with its principal place of business at 2400 Sand Hill Road, Suite 310, Menlo Park, California 94025 (the "Investor");
and
VERDANA SOFTWARE, INC., a Delaware corporation, with its principal place of business at 1175 NW Couch Street, Suite 800, Portland, Oregon 97209 (the "Company").
The Investor and the Company are each referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, the Company is a Delaware C-corporation (Employer Identification Number: 93-1485726; Delaware Secretary of State File Number: 6274913) engaged in the business of developing and marketing an AI-powered supply chain optimization software-as-a-service ("SaaS") platform for enterprise and mid-market customers;
WHEREAS, the Investor is a Delaware limited partnership whose general partner is Pinnacle Capital Management LLC, a Delaware limited liability company, and is a growth-stage venture capital fund focused on investments in enterprise software and related technology companies;
WHEREAS, the Investor has delivered to the Company a non-binding term sheet dated April 22, 2022 (the "Term Sheet") proposing a Sixty Million Dollar ($60,000,000) investment in Series D Preferred Stock of the Company (the "Proposed Transaction"), setting forth the principal terms and conditions upon which the Investor would make such investment;
WHEREAS, the Company, acting through its financial advisor, Hargrove Securities LLC, delivered to the Investor a counter-term sheet dated May 3, 2022 (the "Counter-Term Sheet"), proposing certain modifications to the terms set forth in the Term Sheet, and the Parties have subsequently engaged in preliminary discussions regarding such modifications;
WHEREAS, the Parties desire to enter into a period of exclusive negotiations to facilitate good-faith due diligence investigation and the negotiation and preparation of definitive transaction documents in connection with the Proposed Transaction;
WHEREAS, as a condition to the Investor's commitment of substantial time, internal resources, and professional fees — including, without limitation, the engagement of its legal counsel, Calderwood & Harkness LLP, its financial and accounting diligence teams, and its technical and commercial diligence specialists — the Investor has requested that the Company agree to negotiate exclusively with the Investor during the Exclusivity Period (as defined below), and the Company has agreed to do so on the terms and conditions set forth herein; and
WHEREAS, the Parties acknowledge that, except as expressly provided herein, this Agreement does not create any binding obligation on either Party to consummate the Proposed Transaction or to enter into definitive transaction documents in connection therewith.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
SECTION 1: DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth below:
1.1 "Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. For the avoidance of doubt, with respect to the Investor, the term "Affiliate" shall include Pinnacle Capital Management LLC (the general partner of the Investor), any other fund or investment vehicle managed or advised by Pinnacle Capital Management LLC or its affiliates, and any general partner, managing member, or controlling person of the foregoing entities.
1.2 "Alternative Transaction" means any (a) equity financing (including, without limitation, the issuance or sale of any shares of capital stock, preferred stock, convertible notes, SAFEs, or other equity or equity-linked securities of the Company), (b) debt financing (other than draws under the Company's existing revolving credit facility with Pacific Summit Bank, N.A., as described in Section 2.1(e) hereof), (c) merger, consolidation, or similar business combination involving the Company, (d) acquisition of the Company by any third party, whether by purchase of equity interests, tender offer, exchange offer, or otherwise, (e) sale, transfer, lease, or other disposition of all or substantially all of the assets of the Company, or (f) any other transaction or series of related transactions that would have the effect of providing equity or debt capital to the Company or transferring control of the Company to any third party, in each case involving any Person other than the Investor or its Affiliates.
1.3 "Business Day" means any day other than a Saturday, Sunday, or day on which banking institutions in New York, New York or San Francisco, California are authorized or required by law or executive order to close.
1.4 "Company Representatives" means the directors, officers, employees, advisors, agents, and other representatives of the Company, including, without limitation, (a) Raj Anand, Chief Executive Officer and Co-Founder, (b) Lena Kovac, Chief Technology Officer and Co-Founder, (c) Thomas Brightwell, Chief Financial Officer, (d) Sandra Mikkelsen, General Counsel, (e) Hargrove Securities LLC, the Company's financial advisor, (f) Langford Price & Associates LLP, the Company's outside legal counsel, and (g) any other Person acting on behalf of or at the direction of the Company.
1.5 "Exclusivity Period" means the period commencing on the Effective Date (May 12, 2022) and ending at 11:59 p.m. Eastern Time on July 11, 2022 (sixty (60) calendar days from the Effective Date), subject to extension or early termination as provided in Section 4 hereof.
1.6 "Existing Investors" means (a) Ridgeline Ventures Fund III LP, in its capacity as a holder of Series A Preferred Stock of the Company, (b) Northgate Growth Partners Fund II LP, in its capacity as a holder of Series B Preferred Stock of the Company, and (c) Brindoval Capital Group LLC, in its capacity as a holder of Series C Preferred Stock of the Company.
1.7 "Person" means any natural person, corporation, limited liability company, partnership (general or limited), joint venture, association, trust, unincorporated organization, governmental authority, or other entity of any kind.
1.8 "Proposed Transaction" means the proposed purchase by the Investor of shares of Series D Preferred Stock of the Company for an aggregate purchase price of Sixty Million Dollars ($60,000,000), on terms and conditions to be set forth in definitive transaction documents to be negotiated and agreed upon by the Parties.
SECTION 2: EXCLUSIVITY COVENANT
2.1 Company's Exclusivity Obligation.
During the Exclusivity Period, the Company shall not, and shall cause each of the Company Representatives not to, directly or indirectly:
(a) solicit, initiate, seek out, encourage, promote, or knowingly facilitate any inquiry, indication of interest, proposal, or offer from any third party relating to or that could reasonably be expected to lead to an Alternative Transaction;
(b) enter into, continue, renew, or participate in any discussions, conversations, or negotiations with any third party regarding any Alternative Transaction, or respond in any substantive manner to any unsolicited inquiry, indication of interest, proposal, or offer from any third party regarding an Alternative Transaction;
(c) provide or make available any non-public, confidential, or proprietary information (including financial statements, projections, customer data, technical documentation, intellectual property information, or other business information) to any third party in connection with, in furtherance of, or for the purpose of facilitating an Alternative Transaction;
(d) enter into any letter of intent, term sheet, memorandum of understanding, agreement in principle, exclusivity agreement, or definitive agreement (whether binding or non-binding) with any third party relating to or providing for an Alternative Transaction; or
(e) authorize, direct, or instruct any Company Representative to take any of the actions described in clauses (a) through (d) above on behalf of the Company.
Notwithstanding the foregoing:
(i) The Company's existing revolving credit facility with Pacific Summit Bank, N.A. (the "Credit Facility"), which provides for a committed revolving credit line of Ten Million Dollars ($10,000,000), of which Six Million Two Hundred Thousand Dollars ($6,200,000) was drawn as of March 31, 2022, and which matures on June 30, 2024, and ordinary-course draws, repayments, and administrative activities thereunder (including any amendment or modification thereof that does not increase the aggregate commitment amount above Ten Million Dollars ($10,000,000)), shall not constitute an Alternative Transaction and shall not be restricted or prohibited by this Section 2.1.
(ii) Communications between the Company and its existing board members — including Priya Dasgupta (designee of Ridgeline Ventures Fund III LP), Elliott Margolis (designee of Northgate Growth Partners Fund II LP), and Diana Chen (designee of Brindoval Capital Group LLC) — in their capacity as directors of the Company, shall not be restricted or prohibited by this Section 2.1; provided, however, that such communications shall not constitute, and shall not be used for the purpose of, the solicitation, initiation, encouragement, or facilitation of an Alternative Transaction from any Existing Investor or any Affiliate thereof.
2.2 Cessation of Existing Discussions.
The Company represents and warrants to the Investor that, as of the Effective Date, the Company has ceased and terminated all existing discussions, negotiations, and communications with any third party (other than the Investor and its representatives) regarding any potential Alternative Transaction. Without limiting the generality of the foregoing, the Company confirms that any preliminary discussions or processes conducted by or at the direction of Hargrove Securities LLC with respect to potential financing or strategic transactions involving the Company have been terminated as of the date hereof, and no further communications with any third parties in connection with such process shall be conducted during the Exclusivity Period.
The Company shall promptly, and in any event within five (5) Business Days following the Effective Date, request in writing the return or certified destruction of any and all confidential or proprietary information of the Company that was provided to any third party (other than the Investor and its representatives) in connection with any prior financing process conducted by Hargrove Securities LLC or otherwise. The Company shall use commercially reasonable efforts to enforce any existing confidentiality or non-disclosure agreements with such third parties, including any standstill provisions contained therein.
2.3 Notification Obligation.
If, during the Exclusivity Period, the Company or any Company Representative receives any inquiry, indication of interest, proposal, or offer (whether written or oral, solicited or unsolicited) from any third party regarding or relating to a potential Alternative Transaction, the Company shall:
(a) promptly, and in any event within two (2) Business Days of receipt of such inquiry, indication of interest, proposal, or offer, notify the Investor in writing (which may include notification via email to Marcus Trejo at the email address set forth in Section 9.3 hereof) of the receipt thereof;
(b) include in such notification the identity of the third party making such inquiry, indication of interest, proposal, or offer; and
(c) provide a reasonably detailed summary description of the material terms and conditions of any such proposal or offer, including the proposed transaction structure, valuation (if indicated), and any other material terms.
For the avoidance of doubt, the Company shall not be required to provide copies of any written proposals or offers received from third parties, but shall provide sufficient detail to enable the Investor to understand the nature and scope of the communication received.
SECTION 3: INVESTOR'S OBLIGATIONS DURING EXCLUSIVITY PERIOD
3.1 Good-Faith Negotiation.
The Investor shall negotiate in good faith with the Company toward the execution and delivery of mutually acceptable definitive transaction documents for the Proposed Transaction during the Exclusivity Period. The Investor shall use commercially reasonable efforts to conduct and complete its legal, financial, commercial, and technical due diligence review of the Company during the Exclusivity Period, including the review of materials and information made available by the Company in connection therewith. Without limiting the foregoing, the Investor shall endeavor to communicate its material diligence findings and any open issues to the Company on a reasonably current basis so as to facilitate timely resolution of any outstanding matters.
3.2 Confidentiality. The Parties acknowledge that, concurrently with or prior to the execution of this Agreement, they have entered into that certain Mutual Non-Disclosure Agreement dated as of March 28, 2022 (the "NDA"), which governs the treatment and use of confidential and proprietary information exchanged between the Parties in connection with the evaluation of the Proposed Transaction. The NDA shall remain in full force and effect in accordance with its terms and is hereby incorporated by reference into this Agreement. To the extent of any conflict between the confidentiality provisions of the NDA and this Agreement, the more protective provision shall govern.
In addition to the obligations set forth in the NDA, both Parties agree that the existence, terms, and conditions of this Agreement, and all information relating to the status and substance of negotiations regarding the Proposed Transaction, shall be treated as confidential and shall not be disclosed to any Person, except:
(a) to such Party's respective directors, officers, employees, legal counsel, financial advisors, accountants, and other professional advisors who have a need to know such information in connection with the Proposed Transaction and who are bound by obligations of confidentiality (whether by agreement or professional obligation);
(b) to the Existing Investors and their designated representatives, to the extent reasonably necessary to keep such Existing Investors informed of the Company's financing activities, provided that such Existing Investors are bound by obligations of confidentiality;
(c) as may be required by applicable law, regulation, or legal process (including any court order or subpoena), provided that the disclosing Party shall, to the extent legally permitted, provide prior written notice to the other Party of such required disclosure and cooperate with the other Party in seeking a protective order or other appropriate remedy; and
(d) as otherwise agreed in writing by both Parties.
3.3 Access and Cooperation.
The Company shall provide the Investor and its representatives (including Calderwood & Harkness LLP, as the Investor's legal counsel, and any financial, accounting, technical, or other diligence advisors engaged by the Investor) with reasonable access to a virtual data room established by the Company (or its advisors) containing relevant corporate, financial, legal, intellectual property, commercial, and operational documents and information of the Company. The Company shall populate such virtual data room in a timely manner and shall use commercially reasonable efforts to respond to reasonable due diligence information requests submitted by the Investor or its representatives within five (5) Business Days of receipt of each such request (or such longer period as may be reasonably required for requests involving complex or voluminous materials).
The Company shall make its management team, including the individuals identified in Section 1.4 hereof, reasonably available for management presentations, site visits (if applicable), and follow-up diligence calls and meetings during the Exclusivity Period, in each case at mutually convenient times and upon reasonable advance notice by the Investor.
SECTION 4: TERM AND TERMINATION
4.1 Term. The Exclusivity Period shall commence on the Effective Date (May 12, 2022) and shall expire at 11:59 p.m. Eastern Time on July 11, 2022 (sixty (60) calendar days from the Effective Date), unless earlier terminated or extended in accordance with the provisions of this Section 4. Upon expiration or termination of the Exclusivity Period, the exclusivity obligations set forth in Section 2 shall automatically cease and be of no further force or effect, subject to the survival provisions set forth in Section 4.3(b).
4.2 Extension. The Exclusivity Period may be extended beyond July 11, 2022 by mutual written agreement of the Parties, which agreement shall specify the new expiration date and any additional or modified terms applicable during the extended period. Any such extension shall be documented in a written amendment or letter agreement executed by both Parties in accordance with Section 9.5 hereof. The Parties acknowledge that extensions of the Exclusivity Period may be necessary or desirable in the event that due diligence activities, regulatory inquiries, or the negotiation and preparation of definitive transaction documents require additional time beyond the initial sixty (60)-day period.
4.3 Early Termination.
(a) This Agreement and the Exclusivity Period may be terminated prior to the expiration date set forth in Section 4.1 (or any extended expiration date pursuant to Section 4.2) upon the occurrence of any of the following:
(i) Mutual Agreement. The Parties mutually agree in writing to terminate the Exclusivity Period;
(ii) Investor Determination. The Investor notifies the Company in writing that it has determined, in its sole discretion, not to pursue the Proposed Transaction; or
(iii) Material Breach by the Company. The Company materially breaches any of its obligations under Section 2 of this Agreement and fails to cure such breach (to the extent such breach is capable of cure) within five (5) Business Days after receipt of written notice from the Investor specifying in reasonable detail the nature of such breach.
(b) Survival. Termination or expiration of the Exclusivity Period (whether upon the scheduled expiration date, upon early termination pursuant to this Section 4.3, or otherwise) shall not affect, release, or discharge any obligations of the Parties that by their express terms survive termination or expiration, including, without limitation, the confidentiality obligations set forth in Section 3.2 (which shall survive in accordance with the terms of the NDA), the expense provisions set forth in Section 6, the remedies provisions set forth in Section 7, the representations and warranties set forth in Section 8, and the miscellaneous provisions set forth in Section 9.
SECTION 5: NON-BINDING NATURE OF PROPOSED TRANSACTION
5.1 No Obligation to Close.
The Parties expressly acknowledge and agree that this Agreement does not constitute, and shall not be deemed to constitute, a commitment, agreement, or obligation by either Party to enter into, execute, or consummate the Proposed Transaction or any other transaction. This Agreement relates solely to the Parties' agreement regarding exclusivity during the Exclusivity Period and certain related covenants, and does not address or govern the substantive terms and conditions of the Proposed Transaction.
The Term Sheet dated April 22, 2022 and the Counter-Term Sheet dated May 3, 2022 are and shall remain non-binding on the Parties, except with respect to any provisions expressly stated therein to be binding (including, without limitation, provisions relating to confidentiality, exclusivity (to the extent superseded by this Agreement), and governing law). No binding obligation on either Party with respect to the Proposed Transaction shall arise unless and until definitive transaction documents have been negotiated, agreed upon, executed, and delivered by all requisite parties thereto. Such definitive transaction documents are expected to include, without limitation:
(a) a Series D Preferred Stock Purchase Agreement;
(b) an Amended and Restated Investors' Rights Agreement;
(c) an Amended and Restated Voting Agreement;
(d) an Amended and Restated Right of First Refusal and Co-Sale Agreement;
(e) an Amended and Restated Certificate of Incorporation of the Company (reflecting the authorization and designation of the Series D Preferred Stock); and
(f) such other ancillary agreements, certificates, opinions, and instruments as may be required in connection with the Proposed Transaction.
Until such definitive transaction documents are fully executed and delivered, either Party may, in its sole and absolute discretion, elect not to proceed with the Proposed Transaction, for any reason or no reason, without liability to the other Party (except as expressly provided in this Agreement with respect to the exclusivity and other covenants set forth herein).
5.2 Reservation of Rights.
The Investor reserves the right, in its sole and absolute discretion, to modify, amend, supplement, or withdraw its proposal with respect to the Proposed Transaction, including the terms set forth in the Term Sheet, at any time prior to the execution and delivery of definitive transaction documents. No statement, representation, or communication (whether written or oral) made by the Investor or any of its representatives during the Exclusivity Period shall be deemed to create any binding obligation on the Investor, except as expressly set forth in this Agreement.
Nothing in this Agreement shall be construed to require the Investor to invest in the Company, to limit the Investor's right to conduct due diligence or investment activities with respect to any other company or opportunity (including companies that may be competitive with the Company), or to restrict the Investor's general business activities in any manner. The Investor and its Affiliates may pursue, evaluate, negotiate, and consummate investments in other companies, including competitors of the Company, without any obligation to notify the Company of such activities and without any liability to the Company arising therefrom.
SECTION 6: EXPENSES
Each Party shall bear its own costs, fees, and expenses incurred in connection with the evaluation, negotiation, and documentation of the Proposed Transaction and this Agreement, including, without limitation, the fees and disbursements of such Party's legal counsel, financial advisors, accountants, technical consultants, and other professional advisors. Neither Party shall have any obligation to reimburse or indemnify the other Party for any such costs, fees, or expenses, whether or not the Proposed Transaction is consummated.
The Company specifically acknowledges that the Investor will incur significant expenses during the Exclusivity Period in connection with its evaluation of the Proposed Transaction, including, without limitation, legal fees and disbursements payable to Calderwood & Harkness LLP, internal personnel costs, travel expenses, and fees of third-party diligence providers, and that the Investor is incurring such expenses in reliance upon the Company's exclusivity commitments set forth in Section 2 of this Agreement.
For the avoidance of doubt, no break-up fee, termination fee, expense reimbursement, or similar payment is payable by either Party under this Agreement upon the expiration or termination of the Exclusivity Period or in the event that the Proposed Transaction is not consummated for any reason.
SECTION 7: REMEDIES
7.1 Specific Performance.
The Parties acknowledge and agree that the exclusivity covenants set forth in Section 2 of this Agreement are a material inducement to the Investor's willingness to commit substantial time, resources, and professional fees to the due diligence investigation and negotiation of the Proposed Transaction. The Parties further acknowledge and agree that a breach or threatened breach of the exclusivity covenants set forth in Section 2 would cause irreparable harm to the Investor that cannot be adequately compensated by an award of monetary damages alone, and that the Investor would be without an adequate remedy at law in the event of such breach or threatened breach.
Accordingly, in the event of any actual or threatened breach of Section 2 by the Company or any Company Representative, the Investor shall be entitled, in addition to any and all other remedies available at law or in equity, to seek and obtain:
(a) a temporary restraining order, preliminary injunction, permanent injunction, or other order of specific performance compelling the Company and the Company Representatives to comply with their obligations under Section 2;
(b) any other equitable relief that may be appropriate to prevent or remedy any breach or threatened breach of Section 2; and
(c) recovery of the Investor's reasonable attorney's fees and costs incurred in connection with the enforcement of the Investor's rights under this Section 7.1.
The Investor's right to obtain the foregoing equitable remedies shall not be subject to any requirement to prove actual damages or irreparable harm (the existence of which is hereby stipulated by the Company), to post any bond, security, or undertaking, or to satisfy any other prerequisite to the issuance of equitable relief, to the fullest extent permitted by applicable law. Nothing in this Section 7.1 shall be construed to limit the Investor's right to pursue any other remedy available at law or in equity.
7.2 Cumulative Remedies.
All remedies provided under this Agreement, whether at law or in equity, are cumulative and not exclusive of any other remedies that may be available to either Party under applicable law, at equity, or otherwise. The exercise of any one remedy by a Party shall not preclude or limit such Party's right to exercise any other available remedy simultaneously or subsequently. No single or partial exercise of any right, power, or remedy hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power, or remedy.
SECTION 8: REPRESENTATIONS AND WARRANTIES
8.1 Company Representations and Warranties.
The Company hereby represents and warrants to the Investor, as of the Effective Date, as follows:
(a) Organization and Good Standing. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has all requisite corporate power and authority to own, lease, and operate its properties and to carry on its business as currently conducted.
(b) Authorization. The execution, delivery, and performance of this Agreement by the Company have been duly authorized by all necessary corporate action, including approval by the Company's board of directors. No further corporate approval, vote, or consent of the Company's stockholders or any other Person is required in connection with the Company's execution, delivery, or performance of this Agreement.
(c) Enforceability. This Agreement constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith, and fair dealing), regardless of whether considered in a proceeding in equity or at law.
(d) No Conflict. The execution, delivery, and performance of this Agreement by the Company do not and will not (i) violate or conflict with the Company's certificate of incorporation (as amended or restated) or bylaws (as amended or restated), (ii) violate, conflict with, result in a breach of, or constitute a default (with or without notice or lapse of time or both) under any material contract, agreement, or instrument to which the Company is a party or by which it or any of its properties or assets are bound, including, without limitation, the Credit Agreement dated as of June 30, 2021, between the Company and Pacific Summit Bank, N.A. (as amended, restated, supplemented, or otherwise modified from time to time), or (iii) violate or conflict with any applicable law, rule, regulation, judgment, order, decree, or governmental requirement applicable to the Company.
(e) No Governmental Approval. No consent, approval, authorization, license, permit, registration, or filing with or from any governmental authority or regulatory body, and no consent or approval of any third party (including any stockholder of the Company or any lender under the Credit Facility), is required for the Company's execution, delivery, and performance of this Agreement.
8.2 Investor Representations and Warranties.
The Investor hereby represents and warrants to the Company, as of the Effective Date, as follows:
(a) Organization and Good Standing. The Investor is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has all requisite partnership power and authority to execute, deliver, and perform this Agreement.
(b) Authorization. The execution, delivery, and performance of this Agreement by the Investor have been duly authorized by all necessary partnership action, including by Pinnacle Capital Management LLC, a Delaware limited liability company, acting in its capacity as the general partner of the Investor. No further partnership or other approval, vote, or consent is required in connection with the Investor's execution, delivery, or performance of this Agreement.
(c) Enforceability. This Agreement constitutes the valid and binding obligation of the Investor, enforceable against the Investor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith, and fair dealing), regardless of whether considered in a proceeding in equity or at law.
SECTION 9: MISCELLANEOUS PROVISIONS
9.1 Governing Law.
This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware, without giving effect to any choice-of-law or conflict-of-law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the substantive laws of any jurisdiction other than the State of Delaware.
9.2 Jurisdiction and Venue.
Any action, suit, or proceeding arising out of, relating to, or in connection with this Agreement or the transactions contemplated hereby shall be brought exclusively in the Court of Chancery of the State of Delaware, or, if such court lacks subject matter jurisdiction, in the United States District Court for the District of Delaware, and each Party hereby irrevocably and unconditionally (a) consents and submits to the exclusive personal jurisdiction and venue of such courts for the purposes of any such action, suit, or proceeding, (b) waives any objection that it may now or hereafter have to the laying of venue of any such action, suit, or proceeding in any such court, and (c) waives and agrees not to plead or claim in any such court that any such action, suit, or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such action, suit, or proceeding may be served on any Party anywhere in the world, whether within or without the jurisdiction of any such court.
9.3 Notices. All notices, requests, demands, consents, waivers, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and received (a) when delivered by hand (with written confirmation of receipt), (b) when sent by email (with confirmation of transmission and no return of an undeliverable message), or (c) one (1) Business Day following the date of deposit with a nationally recognized overnight courier service (with proof of delivery), in each case addressed as follows:
If to the Company:
Verdana Software, Inc. 1175 NW Couch Street, Suite 800 Portland, Oregon 97209
Attention: Raj Anand, Chief Executive Officer
with a copy (which shall not constitute notice) to:
Sandra Mikkelsen, General Counsel (at the same address)
and with a copy (which shall not constitute notice) to:
Langford Price & Associates LLP 1000 SW Broadway, Suite 1600 Portland, Oregon 97205
Attention: Jonathan Hale
If to the Investor:
Pinnacle Venture Fund II LP c/o Pinnacle Capital Management LLC 2400 Sand Hill Road, Suite 310 Menlo Park, California 94025
Attention: Marcus Trejo, Partner
with a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 101 Montgomery Street, Suite 3500 San Francisco, California 94104
Attention: Harrison Wexford
Either Party may change its address or designee for notice purposes by giving written notice of such change to the other Party in accordance with this Section 9.3.
9.4 Entire Agreement.
This Agreement (together with the NDA) constitutes the entire agreement between the Parties with respect to the subject matter hereof (i.e., the exclusivity arrangement between the Parties) and supersedes all prior and contemporaneous agreements, understandings, negotiations, discussions, representations, warranties, commitments, and communications (whether written or oral) between the Parties relating to the subject of exclusivity. For the avoidance of doubt, the Term Sheet dated April 22, 2022 and the Counter-Term Sheet dated May 3, 2022 are not superseded by this Agreement except to the extent that the exclusivity provisions contained in such documents are addressed and superseded by the provisions of this Agreement.
9.5 Amendment and Waiver.
This Agreement may not be amended, modified, supplemented, or otherwise changed except by a written instrument duly executed by both Parties. No waiver by either Party of any provision hereof, or of any right or remedy hereunder, shall be effective unless set forth in a written instrument signed by the Party granting such waiver. No waiver of any breach or default shall be deemed to constitute a waiver of any other or subsequent breach or default, and no delay or omission by either Party in exercising any right or remedy hereunder shall operate as a waiver thereof or of any other right or remedy.
9.6 Assignment. Neither Party may assign, transfer, delegate, or otherwise dispose of any of its rights or obligations under this Agreement without the prior written consent of the other Party, and any attempted assignment without such consent shall be null and void and of no force or effect; provided, however, that the Investor may assign its rights (but not its obligations) under this Agreement to an Affiliate of the Investor without the prior written consent of the Company, provided that such Affiliate agrees in writing to be bound by the terms of this Agreement and the Investor remains jointly and severally liable for the performance of all obligations hereunder. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective permitted successors and assigns.
9.7 Severability. If any provision of this Agreement (or any portion thereof) is held to be invalid, illegal, or unenforceable by any court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement (or the remaining portion of such provision), and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision (or portion thereof) had never been contained herein; provided, however, that the Parties shall negotiate in good faith to replace any such invalid, illegal, or unenforceable provision with a valid, legal, and enforceable provision that, to the extent possible, achieves the Parties' original intent and economic effect.
9.8 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by portable document format (PDF), facsimile, Brightwater Software, or other electronic signature shall be as effective as delivery of an originally executed counterpart. The Parties agree that electronic signatures shall have the same legal effect, validity, and enforceability as manually executed signatures.
9.9 No Third-Party Beneficiaries.
This Agreement is entered into solely for the benefit of the Parties hereto and their respective permitted successors and assigns. Nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person (including, without limitation, any Existing Investor, Hargrove Securities LLC, Langford Price & Associates LLP, Calderwood & Harkness LLP, Pacific Summit Bank, N.A., or any current or former stockholder, director, officer, employee, agent, or advisor of either Party) any legal or equitable right, benefit, claim, or remedy of any nature whatsoever under or by reason of this Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Parties have caused this Exclusivity Agreement to be executed and delivered by their respective duly authorized representatives as of the date first written above.
PINNACLE VENTURE FUND II LP
By: Pinnacle Capital Management LLC, its General Partner
By: ________
Name: Marcus Trejo
Title: Partner, Head of Growth Equity
Date: May 12, 2022
VERDANA SOFTWARE, INC.
By: ________
Name: Raj Anand
Title: Chief Executive Officer & Co-Founder
Date: May 12, 2022
Signature Page to Exclusivity Agreement between Pinnacle Venture Fund II LP and Verdana Software, Inc.