SECOND AMENDMENT TO EXCLUSIVITY AGREEMENT
This SECOND AMENDMENT TO EXCLUSIVITY AGREEMENT (this "Second Amendment") is entered into as of August 15, 2022, by and between:
PINNACLE VENTURE FUND II LP, a Delaware limited partnership, with its principal office at 2400 Sand Hill Road, Suite 310, Menlo Park, California 94025 (the "Investor");
and
VERDANA SOFTWARE, INC., a Delaware corporation, with its principal office 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 Investor and the Company entered into that certain Exclusivity Agreement dated as of May 12, 2022 (the "Original Agreement"), pursuant to which the Company agreed to negotiate exclusively with the Investor regarding a proposed equity investment by the Investor in the Company;
WHEREAS, the Original Agreement provided for an exclusivity period of sixty (60) days commencing on May 12, 2022, and expiring on July 11, 2022;
WHEREAS, on July 8, 2022, the Investor and the Company entered into the First Amendment to Exclusivity Agreement (the "First Amendment"), which extended the Exclusivity Period (as defined in the Original Agreement) from July 11, 2022 to August 15, 2022;
WHEREAS, the Original Agreement, as amended by the First Amendment, is referred to herein as the "Agreement";
WHEREAS, the Investor and the Company are engaged in ongoing negotiations regarding a proposed investment by the Investor of Sixty Million Dollars ($60,000,000) in Series D Preferred Stock of the Company (the "Proposed Transaction") and desire additional time to complete the Investor's due diligence review of the Company and to negotiate definitive transaction documents relating to the Proposed Transaction;
WHEREAS, the Parties wish to further extend the Exclusivity Period through September 30, 2022, on the terms and conditions set forth herein; and
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 agree as follows:
Section 1. Defined Terms
Capitalized terms used but not otherwise defined in this Second Amendment shall have the respective meanings ascribed to such terms in the Agreement. For the avoidance of doubt, references in the Agreement to "this Agreement" shall, following the effectiveness of this Second Amendment, be deemed to refer to the Agreement as amended by this Second Amendment, unless the context otherwise requires.
The term "Exclusivity Period" as defined in Section 2.1 of the Original Agreement, as previously amended by Section 1 of the First Amendment, is hereby further amended as set forth in Section 2 below.
Section 2. Extension of Exclusivity Period
2.1. The Exclusivity Period, which was previously extended to and including August 15, 2022 pursuant to the First Amendment, is hereby further extended through and including September 30, 2022 (the "Extended Exclusivity Period").
2.2. During the Extended Exclusivity Period (from August 15, 2022 through and including September 30, 2022), the Company shall continue to comply with all exclusivity obligations set forth in the Agreement, including without limitation the Company's obligation not to, directly or indirectly:
(a) solicit, initiate, or encourage any inquiry, proposal, or offer from any third party relating to any Competing Transaction (as defined in the Original Agreement);
(b) participate in any discussions or negotiations with any third party regarding any Competing Transaction;
(c) provide any non-public information or data to any third party in connection with or in furtherance of any Competing Transaction; or
(d) enter into any agreement, arrangement, or understanding with any third party with respect to any Competing Transaction.
2.3. All other terms and conditions of the exclusivity obligations set forth in the Agreement, including the Company's obligations with respect to notification to the Investor of any unsolicited inquiries, proposals, or offers relating to any Competing Transaction, shall remain unchanged and shall continue in full force and effect throughout the Extended Exclusivity Period.
Section 3. No Other Amendments
3.1. Except as expressly modified by this Second Amendment, the Agreement remains in full force and effect in accordance with its terms. Nothing in this Second Amendment shall be deemed to constitute a waiver by either Party of any right, power, or remedy available under the Agreement, at law, or in equity.
3.2. The Original Agreement, as amended by the First Amendment and this Second Amendment, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, representations, agreements, or understandings, whether written or oral, relating thereto.
3.3. In the event of any conflict or inconsistency between the terms and provisions of this Second Amendment and the terms and provisions of the Agreement (including the Original Agreement as amended by the First Amendment), the terms and provisions of this Second Amendment shall govern and control.
Section 4. Representations and Warranties
Each Party hereby represents and warrants to the other Party that:
(a) such Party has the requisite corporate, partnership, or other organizational power and authority to execute and deliver this Second Amendment and to perform its obligations hereunder;
(b) the execution, delivery, and performance of this Second Amendment by such Party have been duly authorized by all necessary corporate, partnership, or other organizational action on the part of such Party, and no other proceedings or actions on the part of such Party are necessary to authorize the execution, delivery, and performance of this Second Amendment;
(c) this Second Amendment has been duly executed and delivered by such Party and constitutes a valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other similar laws of general applicability relating to or affecting creditors' rights and to general equitable principles (whether considered in a proceeding in equity or at law); and
(d) the execution, delivery, and performance by such Party of this Second Amendment does not and will not (i) violate or conflict with the organizational documents of such Party, (ii) violate or conflict with any applicable law, regulation, order, judgment, or decree binding upon such Party, or (iii) result in a breach of, or constitute a default under, any material agreement, instrument, or obligation to which such Party is a party or by which such Party is bound.
Section 5. Governing Law
5.1. This Second Amendment shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
5.2. The foregoing governing law provision is consistent with, and supplements, the governing law provision set forth in the Original Agreement. To the extent applicable, the dispute resolution, jurisdiction, and venue provisions set forth in the Agreement shall apply to any dispute arising out of or relating to this Second Amendment.
Section 6. Counterparts
6.1. This Second Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. It shall not be necessary that any single counterpart be signed by all Parties so long as each Party has signed at least one counterpart.
6.2. Delivery of an executed counterpart of a signature page to this Second Amendment by electronic transmission, including by portable document format (PDF), shall be effective as delivery of a manually executed counterpart of this Second Amendment. Any Party delivering an executed counterpart by electronic transmission shall also deliver a manually executed counterpart, but the failure to do so shall not affect the validity, enforceability, or binding effect of this Second Amendment.
Section 7. Miscellaneous
7.1. Notices. All notices, requests, demands, consents, and other communications under or in connection with this Second Amendment shall be delivered in accordance with the notice provisions set forth in the Agreement, provided that, for purposes of this Second Amendment and the Agreement as amended hereby, notices shall be delivered to the following addresses (or to such other addresses as either Party may designate in writing from time to time in accordance with the Agreement):
If to the Investor:
Pinnacle Venture Fund II LP 2400 Sand Hill Road, Suite 310 Menlo Park, California 94025
Attention: Marcus Trejo, Partner, Head of Growth Equity
with a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 101 Montgomery Street, Suite 3500 San Francisco, California 94104
Attention: Harrison Wexford
If to the Company:
Verdana Software, Inc. 1175 NW Couch Street, Suite 800 Portland, Oregon 97209
Attention: Sandra Mikkelsen, General Counsel
with a copy (which shall not constitute notice) to:
Langford Price & Associates LLP 1000 SW Broadway, Suite 1600 Portland, Oregon 97205
Attention: Jonathan Hale
7.2. Headings. The section headings contained in this Second Amendment are for reference purposes only and shall not affect in any way the meaning or interpretation of this Second Amendment.
7.3. Severability. If any provision of this Second Amendment is held to be invalid, illegal, or unenforceable in any respect under any applicable law or rule, such invalidity, illegality, or unenforceability shall not affect any other provision of this Second Amendment, and this Second Amendment shall be reformed, construed, and enforced as if such invalid, illegal, or unenforceable provision had never been contained herein.
7.4. Assignment. Neither Party may assign or transfer any of its rights or obligations under this Second Amendment without the prior written consent of the other Party, and any attempted assignment or transfer without such consent shall be null and void.
7.5. Amendment and Waiver. No provision of this Second Amendment may be amended, modified, or waived except by an instrument in writing signed by both Parties. No waiver of any provision of this Second Amendment shall be deemed a waiver of any other provision, and no single or partial exercise of any right or remedy hereunder shall preclude any other or further exercise thereof or the exercise of any other right or remedy.
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties have caused this Second Amendment to Exclusivity Agreement to be executed 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: August 15, 2022
VERDANA SOFTWARE, INC.
By: ________
Name: Raj Anand
Title: Chief Executive Officer
Date: August 15, 2022