-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CQCYETgSW567/9yPjC2wvQB9+5mvQ+gCHASM2G/S1Bousb0s9QMluEjwFroZWk8d t8iOk4V04v/v64uZnxga6g== 0001036050-01-000614.txt : 20010410 0001036050-01-000614.hdr.sgml : 20010410 ACCESSION NUMBER: 0001036050-01-000614 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 20010409 GROUP MEMBERS: SCP PRIVATE EQUITY II, LLC GROUP MEMBERS: SCP PRIVATE EQUITY PARTNERS II LP SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: USDATA CORP CENTRAL INDEX KEY: 0000943895 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 752405152 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-49721 FILM NUMBER: 1597962 BUSINESS ADDRESS: STREET 1: 2435 NORTH CENTRAL EXPRESSWAY CITY: RICHARDSON STATE: TX ZIP: 75080 BUSINESS PHONE: 9726809700 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SCP PRIVATE EQUITY PARTNERS II LP CENTRAL INDEX KEY: 0001118995 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 233037972 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 435 DEVON PARK DRIVE STREET 2: BLDG 300 CITY: WAYNE STATE: PA ZIP: 19087 BUSINESS PHONE: 6109952900 MAIL ADDRESS: STREET 1: BUILDING 300 435 DEVON PARK DRIVE CITY: WAYNE STATE: PA ZIP: 19087 SC 13D 1 0001.txt SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. )* USDATA Corporation ------------------ (Name of Issuer) Common Stock, $0.01 Par Value Per Share --------------------------------------- (Title of Class of Securities) 917294 10 0 ----------- (CUSIP Number) Charles C. Freyer, Esquire -------------------------- General Counsel --------------- SCP Private Equity Partners II, L.P. ------------------------------------ 435 Devon Park Drive, Building 300 ---------------------------------- Wayne, PA 19087 --------------- 610-254-4242 ------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) copy to: Spencer W. Franck, Jr. -------------------------------- Saul Ewing LLP -------------- Centre Square West ------------------ 1500 Market Street, 38th Floor -------------------------------- Philadelphia, PA 19102-2186 --------------------------- 215-972-1955 ------------ March 30, 2001 -------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [X] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 240.13d-7 for other parties to whom copies are to be sent. CUSIP No. 917294 10 0 - -------------------------------------------------------------------------------- * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 917294 10 0 Page 1 of 13 ----------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON. 1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only). SCP Private Equity Partners II, L.P. 23-3037972 - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP 2 (a) [_] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 WC - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 0 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY 13,425,698 ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 0 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH* 10 13,425,698 - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 13,425,698 - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES 12 (SEE INSTRUCTIONS) [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 13 48.9% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) 14 PN - ------------------------------------------------------------------------------ CUSIP No. 917294 10 0 Page 2 of 13 - ------------------------------------------------------------------------------- * The total number of shares listed as beneficially owned by each of the Reporting Persons with shared voting power and shared dispositive power does not include any shares of the securities of USDATA Corporation owned by Safeguard 2000 Capital, L.P. and/or Safeguard Delaware, Inc., of which the Reporting Persons hereby disclaim beneficial ownership. Although Safeguard 2000 Capital, L.P. and Safeguard Delaware, Inc. have granted an irrevocable proxy to SCP Equity Partners, L.P. with respect to such securities, the irrevocable proxy is limited to voting on certain specified matters (as more fully described in Item 6). CUSIP No. 917294 10 0 Page 3 of 13 ----------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON. 1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only). SCP Private Equity II, LLC 23-3047235 - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP 2 (a) [_] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 AF - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 0 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY 13,425,698 ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 0 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH* 10 13,425,698 - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 13,425,698 - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES 12 (SEE INSTRUCTIONS) [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 13 48.9% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) 14 CO - ------------------------------------------------------------------------------ CUSIP No. 917294 10 0 Page 4 of 13 - -------------------------------------------------------------------------------- * The total number of shares listed as beneficially owned by each of the Reporting Persons with shared voting power and shared dispositive power does not include any shares of the securities of USDATA Corporation owned by Safeguard 2000 Capital, L.P. and/or Safeguard Delaware, Inc., of which the Reporting Persons hereby disclaim beneficial ownership. Although Safeguard 2000 Capital, L.P. and Safeguard Delaware, Inc. have granted an irrevocable proxy to SCP Equity Partners, L.P. with respect to such securities, the irrevocable proxy is limited to voting on certain specified matters (as more fully described in Item 6). CUSIP No. 917294 10 0 Page 5 of 13 - -------------------------------------------------------------------------------- Item 1. Security and Issuer This Statement on Schedule 13D relates to the common stock, $0.01 par value per share (the "Common Stock"), of USDATA Corporation, a Delaware corporation (the "Company"). The principal executive offices of the Company are located at 2435 North Central Expressway, Richardson, TX 75080-2722. As of March 16, 2001, 14,007,182 shares of the Company's Common Stock were issued and outstanding. Item 2. Identity and Background (a)-(c) This Schedule 13D is filed jointly on behalf of SCP Private Equity Partners II, L.P. ("SCP L.P.") and SCP Private Equity II, LLC ("SCP LLC") (collectively, the "Reporting Persons"). SCP L.P. is a private investment fund. SCP LLC's principal business is to serve as the manager of the General Partner of SCP L.P. (SCP Private Equity II General Partner, L.P. - the "General Partner") with respect to the operation and management of SCP L.P. Pursuant to a management agreement, SCP LLC exercises voting and investment powers on behalf of SCP L.P. The General Partner and the Reporting Persons are organized under the laws of the State of Delaware. The principal business of the General Partner is to serve as the general partner of SCP L.P. The address of the principal office and principal place of business of the General Partner and both of the Reporting Persons is 435 Devon Park Drive, Building 300, Wayne, PA 19087. The members of SCP LLC (collectively the "Members" and each a "Member"), and certain information with respect to the Members are set forth in Appendix I hereto, which is incorporated herein by reference. (d) During the past five years, neither the General Partner, nor either Reporting Person, nor, to the best of each Reporting Person's knowledge, any Member has been convicted in a criminal proceeding. (e) During the past five years, neither the General Partner nor either Reporting Person, nor, to the best of each Reporting Person's knowledge, any Member has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Each of the natural persons named as a Member in Appendix I is a United States citizen. CUSIP No. 917294 10 0 Page 6 of 13 - -------------------------------------------------------------------------------- Item 3. Source and Amount of Funds or Other Consideration On March 30, 2001, SCP L.P. entered into the Series C Preferred Stock Purchase Agreement (the "Series C Agreement") with the Company, pursuant to which SCP L.P. acquired (1) 37,500 shares of the Company's Series C-1 Preferred Stock, par value $0.01 per share (the "Series C-1 Preferred Stock"), (2) a warrant (the "USDATA Warrant") to purchase up to 75,000 shares of the Company's Series C-2 Preferred Stock, par value $0.01 per share (the "Series C-2 Preferred Stock") (at an initial exercise price of $40.00 per share), for an aggregate purchase price of $1,500,000. Each share of Series C-1 Preferred Stock and Series C-2 Preferred Stock (individually and collectively the "Series C Preferred Stock") is convertible into 100 shares of the Company's Common Stock. Pursuant to the terms of the Securities Purchase Agreement dated August 4, 2000 (the "Securities Purchase Agreement") among eMake Corporation ("eMake"), the Company, Safeguard 2000 Capital, L.P. ("Safeguard 2000") and SCP L.P., SCP L.P. acquired (1) 5,300,000 shares of Series A-1 Preferred Stock, par value $0.01 per share (the "Series A-1 Preferred Stock") of eMake and (2) a warrant (the "eMake Warrant") to purchase additional shares of Series A-1 Preferred Stock (at a per share exercise price of $0.01), for an aggregate purchase price of $13,250,000. The number of shares for which the eMake Warrant may be exercised is based on performance criteria for eMake's software products as of June 30, 2001. Each share of Series A-1 Preferred Stock of eMake is convertible into 0.025 shares of Series B Preferred Stock, par value $0.01 per share (the "Series B Preferred Stock") of the Company pursuant to the terms of the Exchange Agreement between the Company and SCP L.P., dated September 12, 2000. On January 31, 2001, SCP L.P. elected to exercise its right to convert its shares of Series A-1 Preferred Stock of eMake into shares of the Company's Series B Preferred Stock, which are convertible into 2,175,698 shares of the Company's Common Stock. SCP used its working capital to fund the securities purchased under the Series C Agreement and the Securities Purchase Agreement and plans to use its working capital to purchase the Series C-2 Preferred Stock pursuant to the USDATA Warrant. SCP L.P. has entered into an agreement not to exercise its right to convert any shares of Series A-1 Preferred Stock of eMake it may acquire upon exercise of the eMake Warrant into shares of Series B Preferred Stock of the Company, as described more fully in Item 6 below. Item 4. Purpose of Transaction Under the Series C Agreement (which is attached hereto as Exhibit 2 and the terms of which are incorporated herein by reference), SCP L.P. may purchase an additional 37,500 shares of the Series C-1 Preferred Stock (the "Option Preferred Stock") at the purchase price of $40.00 per share of Option Preferred Stock, at the option of the Company upon the approval of the stockholders of the Company pursuant to Section 2.5 of the Series C Agreement. The Company may exercise its right to sell shares of the Option Preferred Stock subject to certain specified conditions (as described in Section 1.4 of the Series C Agreement) CUSIP No. 917294 10 0 Page 7 of 13 - -------------------------------------------------------------------------------- on or before the expiration of 9 months after March 30, 2001 (the "Closing Date"), but not before 2 months after the Closing Date. Under the Right of First Refusal Agreement, dated as of March 30, 2001 among SCP L.P., the Company, Safeguard 2000 and Safeguard Delaware, Inc. ("SDI") (which is attached hereto as Exhibit 3 and the terms of which are incorporated herein by reference), Safeguard 2000 and SDI agreed to provide SCP L.P. with first refusal rights for transfers of shares of the Company's Common Stock and Preferred Stock (as defined therein) that they own or may own in the future. Pursuant to the Second Amended and Restated Investors' Rights Agreement, dated as of March 30, 2001, among the Company, SCP L.P. and the other parties therein (which is attached hereto as Exhibit 4 and the terms of which are incorporated herein by reference), SCP L.P. has the right to propose one director for election to the Company's board of directors and the Company is required to take all steps necessary to nominate such proposed director for election to the Company's board of directors at its annual meeting of stockholders. This right continues as long as SCP L.P. owns at least 5% of the outstanding Common Stock of the Company (on an as-converted basis). In addition, pursuant to the Series C Agreement, the Company is required to increase its board of directors to seven members and is required to fill the vacancy created by the increase with a director designated by SCP L.P. Under the Company's Certificate of Designation for Series C- 1 Preferred Stock and Series C-2 Preferred Stock (the "Designation"), the holders of a majority of the Series C Preferred Stock, voting as a class, are entitled to elect one of the Company's directors. Currently, SCP L.P. is the only holder of the Series C Preferred Stock. Except as set forth above, none of the Reporting Persons, the General Partner or any of the Members, have formulated any plans or proposals of the types referred to in clauses (a) through (j) of Item 4 of Schedule 13D. However, all of SCP L.P.'s investments are made with the intention of exiting within a matter of a few years. Accordingly, a future proposal or plan for the sale of the Company or of SCP L.P.'s interest in the Company by the Reporting Persons is possible. The Reporting Persons reserve the right to change their plans at any time. Item 5. Interest in the Securities of the Issuer (a)-(b) Both Reporting Persons may be deemed to be the beneficial owners with shared power to vote and dispose of a total of 13,425,698 shares of the Company's Common Stock (or 48.9% of the outstanding Common Stock). SCP LLC is deemed to be such a beneficial owner as described herein because of an agreement with SCP L.P. granting SCP LLC the power to make voting and investment decisions regarding the securities held by SCP L.P. The calculations of beneficial ownership herein, assume the conversion of the (1) Series B Preferred Stock of the Company held by SCP L.P. into 2,175,698 shares of the Common Stock of the Company; (2) Series C-1 Preferred Stock purchased on March 30, 2001 by SCP L.P pursuant to the Series C Agreement into 3,750,000 shares of the Company's Common Stock; and (3) the total number of Series C-2 Preferred Stock purchasable under the USDATA Warrant into 7,500,000 of the Company's Common Stock. The total number of CUSIP No. 917294 10 0 Page 8 of 13 - -------------------------------------------------------------------------------- shares listed as beneficially owned by the Reporting Persons herein does not include any shares of the securities of the Company owned by Safeguard 2000 and/or SDI, of which the Reporting Persons hereby disclaim beneficial ownership. Although Safeguard 2000 and SDI have granted an irrevocable proxy to SCP L.P. with respect to such securities, the irrevocable proxy is limited to voting on certain specified matters (as more fully described in Item 6). (c) Not applicable. (d) Not applicable. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer Under the Written Consent of the Holders of Series A Preferred Stock and Series B Preferred Stock, dated as of March 30, 2001, among SCP L.P., Safeguard 2000 and SDI (which is attached hereto as Exhibit 5 and the terms of which are incorporated herein by reference), the parties consented to the transactions contemplated by the Series C Agreement, including without limitation, the filing of the Designation. Pursuant to the Irrevocable Proxy, dated as of March 30, 2001, among SCP L.P., Safeguard 2000 and SDI (which is attached hereto as Exhibit 6 and the terms of which are incorporated herein by reference), Safeguard 2000 and SDI granted SCP L.P. an irrevocable proxy to vote all of their shares of the capital stock of the Company with respect to any matter related to stockholder approval of the issuance of (1) the Option Preferred Stock to SCP L.P. and (2) 50,500 shares of the Series C-2 Preferred Stock to SCP L.P. pursuant to the USDATA Warrant. Pursuant to the Warrant Agreement, dated as of March 30, 2001 between SCP L.P. and Safeguard 2000 (the "Warrant Agreement") (which is attached hereto as Exhibit 7 and the terms of which are incorporated herein by reference), SCP L.P. agreed not to exercise its right to convert any shares of Series A-1 Preferred Stock of eMake it may acquire upon exercise of the eMake Warrant into shares of Series B Preferred Stock of the Company. Safeguard 2000 also agreed not to exercise its right to convert any shares of the eMake preferred stock it may acquire (the "Series A-2 Preferred Stock") upon exercise of a warrant it holds (the "Safeguard Warrant") into shares of Series B Preferred Stock of the Company, pursuant to an exchange agreement between Safeguard 2000 and the Company. The parties further agreed that if they terminate the Warrant Agreement or amend the Warrant Agreement to permit the conversion of any shares of eMake Series A-1 Preferred Stock or Series A-2 Preferred Stock acquired upon exercise of the eMake Warrant or the Safeguard Warrant, as the case may be, into shares of the Company's Series B Preferred Stock, they would exercise such conversion rights only upon obtaining the requisite approval of the stockholders of the Company in accordance with applicable Nasdaq Stock Market regulations. CUSIP No. 917294 10 0 Page 9 of 13 - -------------------------------------------------------------------------------- Pursuant to the Waiver of Anti-Dilution for the Series A Preferred Stock and the Series B Preferred Stock, dated as of March 30, 2001 (the "Waiver") (which is attached hereto as Exhibit 8 and the terms of which are incorporated herein by reference), among the Company, SCP L.P., SDI and Safeguard 2000, SCP L.P., SDI and Safeguard 2000 agreed to waive their rights to any adjustment to the conversion price of their shares of Series A Preferred Stock and Series B Preferred Stock under Section 6(c) of the Series A and B Designation arising from the issuance of the Series C Stock (including such shares issuable as cumulative dividends under the Designation) and the USDATA Warrant. Except as otherwise described in this Item 6, and except for SCP L.P.'s right to receive Series C-2 Preferred Stock under the USDATA Warrant and as otherwise set forth in Items 4 and 5, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the Reporting Persons, the General Partner or any of the Members, with respect to any securities of the Company, including but not limited to transfer or voting of any securities of the Company, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. Item 7. Material to be Filed as Exhibits The following documents are filed as exhibits to this Schedule 13D: 1. Joint Filing Agreement, dated April 9, 2001 between SCP Private Equity Partners II, L.P. and SCP Private Equity II, LLC. 2. Series C Preferred Stock Purchase Agreement, dated as of March 30 2001. 3. Right of First Refusal Agreement, dated as of March 30 2001. 4. Second Amended and Restated Investors' Rights Agreement, dated as of March 30, 2001. 5. Written Consent of the Holders of Series A Preferred Stock and Series B Preferred Stock, dated as of March 30, 2001. 6. Irrevocable Proxy, dated as of March 30, 2001. 7. Warrant Agreement, dated as of March 30, 2001. 8. Waiver of Anti-Dilution for the Series A Preferred Stock and the Series B Preferred Stock, dated as of March 30, 2001. CUSIP No. 917294 10 0 Page 10 of 13 - -------------------------------------------------------------------------------- SIGNATURES After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and correct. SCP Private Equity Partners II, L.P. By: SCP Private Equity II General Partner, L.P., its General Partner By: SCP Private Equity II, LLC, its Manager By: /s/ Wayne B. Weisman ---------------------------- Name: Wayne B. Weisman ---------------------------- Title: Manager ---------------------------- SCP Private Equity II, LLC By: /s/ Wayne B. Weisman ---------------------------- Name: Wayne B. Weisman ---------------------------- Title: Manager ---------------------------- CUSIP No. 917294 10 0 Page 11 of 13 - -------------------------------------------------------------------------------- APPENDIX I SCP Private Equity II, LLC Members The following are the members of SCP Private Equity II, LLC: Safeguard Fund Management, Inc. ("SFMI") 103 Springer Building 3411 Silverside Road P.O. Box 7048 Wilmington, DE 19803 Winston J. Churchill 197 Mine Road Malvern, PA 19355 James W. Brown 1602 Sorrel Road Malvern, PA 19355 Thomas G. Rebar 547 Carriage House Lane Harleysville, PA 19438 Wayne B. Weisman 2 Saw Grass Lane Malvern, PA 19355 SFMI, a holding corporation organized under the laws of Delaware, is a wholly owned subsidiary of Safeguard Delaware, Inc. It is the sole general partner of Safeguard Fund Management, L.P., a Delaware limited partnership, which is the sole general partner of SCP Management II, L.P., the general partner of SCP Private Equity II General Partner, L.P., which is the general partner of SCP Private Equity Partners II, L.P. Messrs. Churchill, Brown, Rebar and Weisman are also principals of the following entities, all of which have the principal address of 435 Devon Park Drive, Building 300, Wayne, PA 19087: SCP Private Equity II, LLC SCP Private Equity Management, L.P. (general partner for SCP Private Equity Partners, L.P.) SCP Private Equity Partners II, L.P. SCP Private Equity Management Company, LLC (management company for SCP Private Equity Partners II, L.P.) SCP Private Equity II General Partner, L.P. SCP Management II, L.P. CUSIP No. 917294 10 0 Page 12 of 13 - -------------------------------------------------------------------------------- EXHIBIT INDEX Exhibit 1 Joint Filing Agreement, dated April 9, 2001 between SCP Private Equity Partners II, L.P. and SCP Private Equity II, LLC. Exhibit 2 Series C Preferred Stock Purchase Agreement, dated as of March 30 2001. Exhibit 3 Right of First Refusal Agreement, dated as of March 30 2001. Exhibit 4 Second Amended and Restated Investors' Rights Agreement, dated as of March 30, 2001. Exhibit 5 Written Consent of the Holders of Series A Preferred Stock and Series B Preferred Stock, dated as of March 30, 2001. Exhibit 6 Irrevocable Proxy, dated as of March 30, 2001. Exhibit 7 Warrant Agreement, dated as of March 30, 2001. Exhibit 8 Waiver of Anti-Dilution for the Series A Preferred Stock and the Series B Preferred Stock, dated as of March 30, 2001. EX-1 2 0002.txt JOINT FILING AGREEMENT DATED APRIL 9, 2001 CUSIP No. 917294 10 0 Page 13 of 13 - -------------------------------------------------------------------------------- EXHIBIT 1 JOINT FILING AGREEMENT The undersigned agree to the joint filing on behalf of each of them of a Schedule 13D (including any and all amendments thereto) with respect to the securities of USDATA Corporation, and further agree that this Agreement shall be included as an Exhibit to such filings. The undersigned further agree that each party hereto is responsible for timely filing of such Schedule 13D and any amendments thereto, and for the completeness and accuracy of the information concerning such party contained therein, provided that neither party is responsible for the completeness or accuracy of the information concerning the other party, unless such party knows or has reason to believe that such information is inaccurate. IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed this 9th day of April 2001. SCP Private Equity Partners II, L.P. By: SCP Private Equity II General Partner, L.P., its General Partner By: SCP Private Equity II, LLC, its Manager By: /s/ Wayne B. Weisman ---------------------------- Name: Wayne B. Weisman ---------------------------- Title: Manager ---------------------------- SCP Private Equity II, LLC By: /s/ Wayne B. Weisman ---------------------------- Name: Wayne B. Weisman ---------------------------- Title: Manager ---------------------------- EX-2 3 0003.txt SERIES C PREFERRED STOCK PURCHASE AGREEMENT EXHIBIT 2 USDATA CORPORATION SERIES C PREFERRED STOCK PURCHASE AGREEMENT March 30, 2001 TABLE OF CONTENTS -----------------
Page ---- 1. Purchase and Sale..................................................................................... 1 ----------------- 1.1 Sale and Issuance of Series C Preferred Stock................................................ 1 --------------------------------------------- 1.2 Closing...................................................................................... 1 ------- 1.3 Consideration................................................................................ 1 ------------- 1.4 Option Preferred Stock....................................................................... 1 ---------------------- 2. Representations and Warranties regarding the Company.................................................. 2 ---------------------------------------------------- 2.1 Organization, Good Standing and Qualification................................................ 2 --------------------------------------------- 2.2 SEC Reports; Financial Statements............................................................ 2 --------------------------------- 2.3 Capitalization and Voting Rights............................................................. 3 -------------------------------- 2.4 Authorization................................................................................ 3 ------------- 2.5 Stockholder Approval......................................................................... 4 -------------------- 2.6 Valid Issuance of Stock...................................................................... 4 ----------------------- 2.7 Governmental Consents........................................................................ 5 --------------------- 2.8 Offering..................................................................................... 5 -------- 2.9 Compliance with Certain Matters.............................................................. 5 ------------------------------- 2.10 Litigation................................................................................... 6 ---------- 2.11 Non-Disclosure and Proprietary Rights Agreements............................................. 6 ------------------------------------------------ 2.12 Patents and Trademarks....................................................................... 6 ---------------------- 2.13 Agreements; Action........................................................................... 8 ------------------ 2.14 Related-Party Transactions................................................................... 8 -------------------------- 2.15 Permits...................................................................................... 8 ------- 2.16 Environmental and Safety Laws................................................................ 9 ----------------------------- 2.17 Manufacturing and Marketing Rights........................................................... 9 ---------------------------------- 2.18 Disclosure................................................................................... 10 ---------- 2.19 Registration Rights.......................................................................... 10 ------------------- 2.20 Corporate Documents.......................................................................... 10 ------------------- 2.21 Title to Property and Assets................................................................. 10 ---------------------------- 2.22 Tax Returns, Payments and Elections.......................................................... 10 ----------------------------------- 2.23 Insurance.................................................................................... 10 --------- 2.24 Minute Books................................................................................. 10 ------------ 2.25 Labor Agreements and Actions................................................................. 11 ---------------------------- 2.26 Damage; Loss................................................................................. 11 ------------ 2.27 Liens; Claims................................................................................ 11 ------------- 2.28 Real Property Holding Company................................................................ 11 ----------------------------- 3. Representations and Warranties of the Investor........................................................ 11 ---------------------------------------------- 3.1 Authorization................................................................................ 12 -------------
i 3.2 Purchase Entirely for Own Account............................................................ 12 --------------------------------- 3.3 Disclosure of Information.................................................................... 12 ------------------------- 3.4 Investment Experience........................................................................ 12 --------------------- 3.5 Accredited Investor.......................................................................... 12 ------------------- 3.6 Restricted Securities........................................................................ 12 --------------------- 3.7 Further Limitations on Disposition........................................................... 13 ---------------------------------- 3.8 Legends...................................................................................... 13 ------- 4. Conditions of Investor's Obligations at Closing....................................................... 14 ----------------------------------------------- 4.1 Representations and Warranties............................................................... 14 ------------------------------ 4.2 Performance.................................................................................. 14 ----------- 4.3 Compliance Certificate....................................................................... 14 ---------------------- 4.4 Qualifications............................................................................... 14 -------------- 4.5 Proceedings and Documents.................................................................... 14 ------------------------- 4.6 Second Amended and Restated Investors' Rights Agreement...................................... 14 ------------------------------------------------------- 4.7 Stock Certificates; Warrant.................................................................. 14 --------------------------- 4.8 Confidentiality Agreements................................................................... 14 -------------------------- 4.9 Board of Directors........................................................................... 15 ------------------ 4.10 Legal Opinion................................................................................ 15 ------------- 4.11 Designation.................................................................................. 15 ----------- 4.12 NASD Matters................................................................................. 15 ------------ 4.13 Safeguard Agreement.......................................................................... 15 ------------------- 5. Conditions of the Company's and the Company's Obligations at Closing.................................. 15 -------------------------------------------------------------------- 5.1 Representations and Warranties............................................................... 15 ------------------------------ 5.2 Performance.................................................................................. 15 ----------- 5.3 Proceedings and Documents.................................................................... 15 ------------------------- 5.4 Payment of Purchase Price.................................................................... 15 ------------------------- 5.5 Qualifications............................................................................... 15 -------------- 6. Miscellaneous......................................................................................... 15 ------------- 6.1 Survival of Warranties....................................................................... 16 ---------------------- 6.2 Use of Proceeds.............................................................................. 16 --------------- 6.3 Successors and Assigns....................................................................... 16 ---------------------- 6.4 Governing Law................................................................................ 16 ------------- 6.5 Counterparts................................................................................. 16 ------------ 6.6 Titles and Subtitles......................................................................... 16 -------------------- 6.7 Notices...................................................................................... 16 ------- 6.8 Finder's Fee................................................................................. 17 ------------ 6.9 Expenses..................................................................................... 17 -------- 6.10 Dispute Resolution........................................................................... 17 ------------------ 6.11 Amendments and Waivers....................................................................... 19 ----------------------
ii 6.12 Severability................................................................................. 19 ------------ 6.13 Publicity.................................................................................... 19 --------- 6.14 Entire Agreement............................................................................. 19 ---------------- SCHEDULE A Disclosure Schedule EXHIBIT A Certificate of Designation EXHIBIT B Warrant EXHIBIT C Budget and Financial Management Plan EXHIBIT D Second Amended and Restated Investors' Rights Agreement EXHIBIT E Form of Non-Disclosure and Proprietary Rights Agreement EXHIBIT F Opinion of Counsel EXHIBIT G Warrant Agreement EXHIBIT H Investor Waiver
iii SERIES C PREFERRED STOCK PURCHASE AGREEMENT ------------------------------------------- THIS SERIES C PREFERRED STOCK PURCHASE AGREEMENT is made as of the 30th day of March, 2001, by and among USDATA Corporation, a Delaware corporation (the "Company") and SCP Private Equity Partners II, L.P., a Delaware limited - -------- partnership (the "Investor"). -------- In consideration of the mutual promises hereinafter set forth, the parties hereto, each intending to be legally bound hereby, agree as follows: 1. Purchase and Sale. ----------------- 1.1 Sale and Issuance of Series C Preferred Stock. --------------------------------------------- (a) The Company shall adopt and file with the Secretary of State of Delaware, on or before the Closing (as defined below), a Certificate of Designation in the form attached hereto as Exhibit A (the "Designation"). --------- ----------- (b) Subject to the terms and conditions of this Agreement, the Investor agrees to purchase at the Closing, and the Company agrees to sell and issue to the Investor at the Closing, (i) 37,500 shares of the Company's Series C-1 Preferred Stock, par value $0.01 per share (the "Series C-1 Preferred Stock"), -------------------------- and (ii) a warrant (the "Warrant") to purchase up to 75,000 shares of the ------- Company's Series C-2 Preferred Stock, par value $0.01 per share (the "Series C-2 ---------- Preferred Stock") (at an initial exercise price of $40.00 per share), for an - --------------- aggregate purchase price of $1,500,000. The Series C-1 Preferred Stock and the Series C-2 Preferred Stock are sometimes collectively and individually referred to as "Series C Preferred Stock". The rights, privileges and preferences of the ------------------------ Series C Preferred Stock shall be as stated in the Designation, and the Warrant shall be substantially in the form attached hereto as Exhibit B. As used herein, --------- the term "Securities" means the shares of Series C Preferred Stock and the ---------- Warrant to be issued and sold hereunder. 1.2 Closing. The purchase, sale and issuance of the Securities shall take ------- place at the offices of Saul Ewing LLP, Centre Square West, 1500 Market Street, 38/th/ Floor, Philadelphia PA 19102-2186 at 10:00 a.m. on March 30, 2001, or at such other place and time as the Company and the Investor mutually agree upon (which time is designated as the "Closing"). ------- 1.3 Consideration. At the Closing, the Company shall deliver to the ------------- Investor, certificates representing the Securities being sold to the Investor hereunder pursuant to Section 1.1(b) against payment of $1,500,000 by the Investor of the purchase price therefor by wire transfer. 1.4 Option Preferred Stock. On the basis of the representations, ---------------------- warranties and agreements herein contained, and upon the terms but subject to the conditions herein set forth and the approval of the Company's stockholders as set forth in Section 2.5, the Investor commits to purchase an additional 37,500 shares of the Series C-1 Preferred Stock (the "Option Preferred Stock") ---------------------- at the purchase price of $40.00 per share of Option Preferred Stock at the option of the Company. The Company may exercise its right to sell shares of the Option Preferred Stock on or before the expiration of 9 months after the date of Closing, but not before 2 months after the date of Closing, by means of a written notice therefore to the Investor (each, a "Notice") which certifies (a) ------ the Company's compliance with the specified monthly "EBITDA Targets" and "Revenue Targets" as stated in the Budget and Financial Management Plan (the "Plan") attached hereto as Exhibit C for three consecutive months prior to the ---- --------- date of such notice, (b) the Company's then current need for an installment of the purchase price for the Option Preferred Stock (the "Purchase Price -------------- Installment"), including that (i) such need is necessary for the Company to keep - ----------- a positive cash balance for the then current month and that (ii) the need does not arise out of the Company falling out of compliance with the specified EBITDA Targets and Revenue Targets set in the Plan and (c) the Board's approval of such Notice. Each Notice must be received by the Investor not less than ten business days prior to the desired date of payment and must be accompanied by financial information from the Company confirming to the reasonable satisfaction of the Investor the accuracy of the certifications contained in the Notice. The purchase and sale of the Option Preferred Stock pursuant to this Section may take place in one or more closings at such times or places as the Company and the Investor may mutually agree (each a "Subsequent Closing"). At each ------------------ Subsequent Closing, the Company shall deliver to the Investor a certificate or certificates, registered in the Investor's name, representing such number of shares of Option Preferred Stock purchasable for the amount of the Purchase Price Installment therefore, against payment of the Purchase Price Installment therefore, by check payable to the Company or wire transfer in accordance with the Company's instructions. The Investor's obligation to purchase the Option Preferred Stock at a Subsequent Closing is conditioned upon the Investor's receipt of a certificate, dated as of the date of such Subsequent Closing (the "Subsequent Closing Date"), and signed by an executive officer of the Company, ----------------------- certifying that the representations contained in Section 2 of this Agreement, are true and correct at and as of such Subsequent Closing Date. 2. Representations and Warranties regarding the Company. The Company ---------------------------------------------------- hereby represents and warrants to the Investor that, except as set forth on the Disclosure Schedule attached hereto as Schedule A (the "Disclosure Schedule") ---------- ------------------- furnished to the Investor, which exceptions shall be deemed to be representations and warranties as if made hereunder: 2.1 Organization, Good Standing and Qualification. The Company and each --------------------------------------------- of its subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the state of its formation and has all requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted. The Company and each of its subsidiaries is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on its business, properties, results of operation or financial condition. 2.2 SEC Reports; Financial Statements. The Company's Common Stock, $0.01 --------------------------------- par value per share (the "Common Stock") is registered under Section 12(b) or ------------ (g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and ------------ the Company is in compliance with its reporting and filing obligations under the Exchange Act. The Company has made available to the Investor (a) its annual reports to stockholders and its Annual Reports on Form 10-K for its last two fiscal years and (b) all of its Quarterly Reports on Form 10-Q and each other report, registration statement or definitive proxy statement filed with the Securities and Exchange Commission (the "SEC") since the beginning of such two --- fiscal years 2 (collectively, the "SEC Reports"). The SEC Reports do not (as of their ----------- respective dates) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The audited and unaudited financial statements of the Company included in the SEC Reports (the "Financial Statements") have been -------------------- prepared in accordance with generally accepted accounting principles applied on a consistent basis (except as stated in such Financial Statements or the notes thereto) and fairly present the financial position of the Company and its consolidated subsidiaries as of the dates thereof and the results of their operations and changes in financial position for the periods then ended. Except as disclosed by the Company in the SEC Reports, since the end of the most recent of such fiscal years, there has been no material adverse change in the business, properties, financial condition or results of operations of the Company and its subsidiaries taken together, and there is no existing condition, event or series of events which reasonably would be expected to have a material adverse effect on the business, properties, financial condition or results of operations of the Company and its subsidiaries taken together, or the ability of the Company to perform its obligations under this Agreement, the Warrant or the Second Amended and Restated Investors' Rights Agreement to be executed and delivered in connection herewith in the form attached hereto as Exhibit D (the "Second --------- ------ Amended and Restated Investors' Rights Agreement"). - ------------------------------------------------ 2.3 Capitalization and Voting Rights -------------------------------- (a) As of the date hereof, unless otherwise specified herein, the authorized capital of the Company consists of: (i) 2,200,000 shares of Preferred Stock, par value $0.01 per share (the "Preferred Stock"), of which (x) 100,000 shares have been designated as --------------- "Series A Preferred Stock," of which 50,000 currently are issued or outstanding; (y) 800,000 shares have been designated as "Series B Preferred Stock," of which 265,000 currently are issued or outstanding; and (z) 125,000 shares have been designated as "Series C-1 Preferred Stock," none of which are currently issued -------------------------- or outstanding and 125,000 shares have been designated as "Series C-2 Preferred -------------------- Stock," none of which are currently issued or outstanding. - ----- (ii) 40,000,000 shares of Company Common Stock, of which, as of March 16, 2001, 14,007,182 shares are issued and outstanding. 2. Except for the ownership of shares and warrants in eMake Corporation by the parties to the Second Amended and Restated Investors' Rights Agreement and holders of options pursuant to the 2000 Equity Compensation Plan of eMake Corporation, all outstanding shares of capital stock of the Company's subsidiaries are owned beneficially and of record by the Company, free and clear of any liens, security interests, encumbrances or other adverse claims. Except as described in the Disclosure Schedule, the Company and its subsidiaries do not presently own or control, directly or indirectly, any interest in any other corporation, association or other business entity. Neither the Company nor its subsidiaries are participants in any joint venture, partnership, or similar arrangement. 3. All outstanding shares of capital stock of the Company and its subsidiaries have been duly and validly authorized and issued, are fully paid and nonassessable and were 3 issued in accordance with the registration or qualification provisions of the Securities Act of 1933, as amended (the "Securities Act"), and any relevant -------------- state securities laws or pursuant to valid exemptions therefrom. 4. Except (i) as disclosed in the SEC Reports, (ii) for warrants, options and rights in eMake Corporation held by the parties to the Second Amended and Restated Investors' Rights Agreement and holders of options pursuant to the 2000 Equity Compensation Plan of eMake Corporation, and (iii) except for the rights provided for in the Second Amended and Restated Investors' Rights Agreement and this Agreement, there are no outstanding options, warrants, rights (including conversion or preemptive rights) or agreements for the purchase or acquisition from the Company or any of its subsidiaries of any shares of their capital stock. 2.4 Authorization. All corporate action on the part of the Company, its ------------- officers, directors and stockholders necessary for the authorization, execution and delivery by the Company of this Agreement, the Warrant, and the Second Amended and Restated Investors' Rights Agreement, the performance of all obligations of the Company hereunder and thereunder, and the authorization, issuance (or reservation for issuance) and delivery of the Securities being sold hereunder, the Series C Preferred Stock issuable upon exercise of the Warrant and the Common Stock issuable upon conversion of the Series C Preferred Stock, has been taken, and this Agreement, the Warrant, and the Second Amended and Restated Investors' Rights Agreement constitute valid and legally binding obligations of the Company, enforceable in accordance with their respective terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors' rights generally, (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (c) to the extent the indemnification provisions contained in the Second Amended and Restated Investors' Rights Agreement may be limited by applicable federal or state securities laws. 2.5 Stockholder Approval. Except as otherwise provided in Section 1.4 of -------------------- the Agreement and Section 1.1 of the Warrant, approval by the stockholders of the Company is not required for the authorization, execution and delivery of this Agreement, the Warrant, and the Second Amended and Restated Investors' Rights Agreement, the performance of all obligations of the Company hereunder and thereunder, and the authorization, issuance (or reservation for issuance) and delivery of the Securities being sold hereunder, the Series C Preferred Stock issuable upon exercise of the Warrant and the Common Stock issuable upon conversion of the Series C Preferred Stock. The Company agrees to use its best efforts to obtain stockholder approval of the transactions contemplated in Section 1.4 of the Agreement and Section 1.1 of the Warrant, as soon as practicable, but no later than the date of the Company's next Annual Meeting of Stockholders, scheduled to take place on May 29, 2001. 2.6 Valid Issuance of Stock. The shares of Series C Preferred Stock that ----------------------- are being issued to the Investor hereunder, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid, and nonassessable, and will be free of restrictions on transfer other than restrictions on transfer under this Agreement, the Second Amended and Restated Investors' Rights Agreement and under applicable state and federal securities laws. The Series C Preferred Stock issuable upon exercise of the Warrant has been duly and validly reserved for issuance and, upon issuance 4 in accordance with the terms of the Warrant, will be duly and validly issued, fully paid and nonassessable, and will be free of restrictions on transfers other than restrictions on transfer under this Agreement, the Second Amended and Restated Investors' Rights Agreement and under applicable state and federal securities laws. The Common Stock issuable upon conversion of the Series C Preferred Stock purchased under this Agreement or issuable upon the exercise of the Warrant has been duly and validly reserved for issuance and, upon issuance in accordance with the terms of the Designation, will be duly and validly issued, fully paid, and nonassessable, and will be free of restrictions on transfer other than restrictions on transfer under this Agreement, the Second Amended and Restated Investors' Rights Agreement and under applicable state and federal securities laws. 2.7 Governmental Consents. Other than those that have been duly obtained --------------------- or filings which are required under applicable securities laws, which filings, if any, will be made within the applicable periods required by such laws, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority, including the National Association of Securities Dealers, Inc. (the "NASD"), on the part of the Company is required in connection ---- with the consummation of the transactions contemplated by this Agreement, the Warrant and the Second Amended and Restated Investors' Rights Agreement. 2.8 Offering. Subject in part to the truth and accuracy of the Investor -------- representations set forth in Section 3 of this Agreement, the offer, sale and issuance of the Securities as contemplated by this Agreement are exempt from the registration requirements of the Securities Act and applicable state securities laws, and neither the Company nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemption. The issuance of shares of Series C Preferred Stock upon the exercise of the Warrant and the issuance of shares of Common Stock upon the conversion of shares of Series C Preferred Stock will be exempt from the registration requirement of the Securities Act and applicable state securities laws. 2.9 Compliance with Certain Matters. Neither the Company nor any of its ------------------------------- subsidiaries is in violation or default under or in breach of any material provision of its Certificate of Incorporation or Bylaws, any material agreement, instrument, contract, document, judgment, order, writ or decree to which it is a party or by which it is bound or any federal or state statute, rule or regulation applicable to it. The execution, delivery and performance of this Agreement, the Warrant and the Second Amended and Restated Investors' Rights Agreement and the consummation of the transactions contemplated hereby and thereby will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such material provision, agreement, instrument, contract, document, judgment, order, writ, decree, statute, rule or regulation or an event that results in the creation of any lien, charge or encumbrance upon any assets of the Company or any of its subsidiaries or the suspension, revocation, impairment, forfeiture, or nonrenewal of any material permit, license, authorization, or approval applicable to the Company or any of its subsidiaries, their business or operations or any of their assets or properties. 2.10 Litigation. There is no action, suit, proceeding or investigation ---------- pending or, to the best of the Company's knowledge, currently threatened against the Company or any of 5 its subsidiaries that questions the validity of this Agreement, the Warrant or the Second Amended and Restated Investors' Rights Agreement or the right of the Company to enter into such agreements, or to consummate the transactions contemplated hereby or thereby, or that might result, either individually or in the aggregate, in any material adverse changes in the assets, condition, affairs or prospects of the Company or any of its subsidiaries, financially or otherwise, or any change in the current equity ownership of the Company or any of its subsidiaries. The foregoing includes, without limitation, actions, suits, proceedings or investigations pending or, to the best of the Company's knowledge, threatened involving the prior employment of any of the Company's or any of its subsidiaries' employees or consultants, their use in connection with the Company's or any of its subsidiaries' business of any information or techniques allegedly proprietary to any of their former employers, or their obligations under any agreements with prior employers. Neither the Company nor any of its subsidiaries is a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. There is no action, suit, proceeding or investigation by the Company or any of its subsidiaries currently pending or that the Company or any of its subsidiaries intends to initiate. 2.11 Non-Disclosure and Proprietary Rights Agreements. Except as described ------------------------------------------------ in the Disclosure Schedule, each employee, officer and consultant of the Company or any of its subsidiaries has executed a Non-Disclosure and Proprietary Rights Agreement in the form attached as Exhibit E hereto. The Company, after --------- reasonable investigation, is not aware that any of the Company's or its subsidiaries' key employees, officers or consultants are in violation of the agreements specified in this Section 2.11, and the Company and its subsidiaries will use their reasonable efforts to prevent any such violation. 2.12 Patents and Trademarks. The Disclosure Schedule contains a complete ---------------------- and accurate list of all (i) patented or registered Intellectual Property Rights (as defined below) owned or used by the Company or any of its subsidiaries, (ii) pending patent applications and applications for registrations of other Intellectual Property Rights filed by the Company or any its subsidiaries and (iii) unregistered trade names and corporate names owned or used by the Company or any of its subsidiaries. The Disclosure Schedule also contains a complete and accurate list of all licenses and other rights granted by the Company or any of its subsidiaries to any third party with respect to any Intellectual Property Rights and all licenses and other rights granted by any third party to the Company or any of its subsidiaries with respect to any Intellectual Property Rights, in each case identifying the subject Intellectual Property Rights but not including licenses arising from the purchase of standard "off the shelf" products. The Company or a subsidiary of the Company owns all right, title and interest in and to all of the Intellectual Property Rights listed on the Disclosure Schedule free and clear of all liens, encumbrances or claims of others except liens, encumbrances and claims of others with respect to third- party licenses. Except as set forth on the Disclosure Schedule, the Company or a subsidiary of the Company owns all right, title and interest to, or has the right to use pursuant to a valid license, all Intellectual Property Rights, as they currently exist, necessary for the operation of the business of the Company and its subsidiaries as presently conducted and as presently proposed to be conducted, free and clear of all liens, encumbrances or claims of others except liens, encumbrances and claims of others with respect to third-party licenses. The Company and its subsidiaries have taken all necessary and desirable actions to maintain and protect the Intellectual Property Rights that each of them own. To the best of the Company's 6 knowledge, the owners of any Intellectual Property Rights licensed to the Company or any of its subsidiaries have taken all necessary and desirable actions to maintain and protect the Intellectual Property Rights that are subject to such licenses. There have been no claims made against the Company or any of its subsidiaries asserting the invalidity, misuse or unenforceability of any of such Intellectual Property Rights, and to the best of the Company's knowledge, there are no valid grounds for the same. Neither the Company nor any of its subsidiaries has received any notices of, and the Company is not aware of any facts which indicate a likelihood of, any infringement or misappropriation by, or conflict with, any third party with respect to such Intellectual Property Rights (including, without limitation, any demand or request that the Company or any of its subsidiaries license any rights from a third party). To the best of the Company's knowledge, the conduct of the Company's and each of its subsidiaries' business has not infringed, misappropriated or conflicted with and does not infringe, misappropriate or conflict with any Intellectual Property Rights of others, nor to the best of the Company's belief would any future conduct as presently contemplated infringe, misappropriate or conflict with any Intellectual Property Rights of others. To the best of the Company's knowledge, the Intellectual Property Rights owned by or licensed to the Company or any of its subsidiaries have not been infringed upon, or misappropriated by or conflict with others. The transactions contemplated by this Agreement will have no material adverse effect on the Company's or any of its subsidiaries' right, title and interest in and to the Intellectual Property Rights listed on the Disclosure Schedule. To the best of the Company's knowledge, none of the Company's nor any of its subsidiaries' employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with the use of his or her best efforts to promote the interests of the Company or any of its subsidiaries or that would conflict with the Company's or any of its subsidiaries' business as presently conducted and to the best of the Company's belief as presently proposed to be conducted. Neither the execution of this Agreement nor the transactions contemplated by this Agreement nor the carrying on of the Company's or each of its subsidiaries' business by the employees of the Company and each of its subsidiaries, nor the conduct of the Company's or each of its subsidiaries' business as presently conducted or presently proposed to be conducted, will, to the best of the Company's knowledge, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any of such employees is now obligated. The Company does not believe it is or will be necessary for the Company or any of its subsidiaries to utilize any inventions of any of the Company's or any of its subsidiaries' employees (or people it currently intends to hire) made prior to their employment by the Company or any of its subsidiaries, as applicable. For purposes of this Agreement, "Intellectual Property Rights" means all (i) patents, patent applications, patent disclosures and inventions, (ii) trademarks, service marks, trade dress, trade names, logos and corporate names and registrations and applications for registration thereof together with all of the goodwill associated therewith, (iii) copyrights (registered and unregistered) and copyrightable works and registrations and applications for registration thereof, (iv) mask works and registrations and applications for registration thereof, (v) computer software, data, data bases and documentation thereof, (vi) trade secrets and other confidential information (including, without limitation, ideas, formulas, compositions, inventions (whether patentable or unpatentable and whether or not reduced to practice), know-how, manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data, 7 financial and marketing plans and customer and supplier lists and information), (vii) other intellectual property rights and (viii) copies and tangible embodiments thereof (in whatever form or medium). 2.13 Agreements; Action. ------------------ (a) The SEC Reports list all material agreements, understandings, instruments and contracts, whether written or oral, to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or its assets and properties are bound. (b) Except as set forth in the SEC Reports or the Disclosure Schedule, there are no agreements, understandings or proposed transactions between the Company or any of its subsidiaries and any of its officers, directors, affiliates or any affiliate thereof. (c) Except as set forth in the SEC Reports, this Agreement or as described in the Disclosure Schedule, there are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which the Company or any of its subsidiaries is a party or by which it is bound that may involve (i) obligations (contingent or otherwise) of, or payments to, the Company or any of its subsidiaries in excess of $25,000, (ii) the license of any patent, copyright, trade secret or other proprietary right to or from the Company or any of its subsidiaries, other than licenses arising from the purchase of "off the shelf" or other standard products, (iii) provisions restricting or affecting the development, manufacture or distribution of the Company's or any of its subsidiaries' products or services, (iv) a warranty with respect to its services rendered or its products sold or leased other than in the ordinary course of business, or (v) indemnification by the Company or any of its subsidiaries with respect to infringements of proprietary rights. (d) Except as set forth in the SEC Reports, neither the Company nor any of its subsidiaries has (i) declared or paid any dividends or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any material indebtedness for money borrowed or any other liabilities, (iii) made any material loans or advances to any person, other than advances for travel expenses and other customary employment-related advances made in the ordinary course of business, or (iv) sold, exchanged or otherwise disposed of any material amount of its assets or rights, other than the sale of its inventory in the ordinary course of business. (e) For the purposes of subsections (c) and (d) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. (f) All of the contracts, agreements and instruments set forth on the Disclosure Schedule pursuant to this Section 2.13 are valid, binding and enforceable in accordance with their respective terms and there has been no material change to or amendment to a material contract by which the Company or any of its subsidiaries or any of their respective assets or properties is bound or subject. Each of the Company and each of its subsidiaries has 8 performed all material obligations required to be performed by it and is not in material default under or in material breach of nor in receipt of any claim of default or breach under any contract, agreement or instrument and neither the Company nor any of its subsidiaries have any present expectation or intention of not fully performing all such obligations. No event has occurred which with the passage of time or the giving of notice or both would result in a material default, breach or event of noncompliance by the Company or any of its subsidiaries under any contract, agreement or instrument. None of the Company nor any of its subsidiaries have knowledge of any breach or anticipated breach by the other parties to any contract, agreement, instrument or commitment. (g) Neither the Company nor any of its subsidiaries is a party to or is bound by any contract, agreement or instrument, that materially adversely affects its business as now conducted or as proposed to be conducted, its properties or its financial condition. 2.14 Related-Party Transactions. Except as disclosed in the SEC Reports, -------------------------- no employee, consultant, officer, or director of the Company or any of its subsidiaries, or member of his or her immediate family is indebted to the Company or any of its the subsidiaries, nor is the Company or any of its subsidiaries indebted (or committed to make loans or extend or guarantee credit) to any of them except for compensation, wages and benefits and travel and customary expenses. Except for employment agreements, benefit plans, insurance policies and similar matters, no employee, consultant, officer, or director of the Company or any of its subsidiaries, or member of the immediate family of any officer or director of the Company or any of its subsidiaries is directly or indirectly interested in any material contract with the Company or any of its subsidiaries. 2.15 Permits. Each of the Company and each of its subsidiaries has all ------- franchises, permits, licenses and any similar authority necessary for the conduct of its business as now being conducted by it, the lack of which could materially and adversely affect its business, properties, prospects, or financial condition, and the Company believes that each of the Company and each of its subsidiaries can obtain, without undue burden or expense, any similar authority for the conduct of its business as planned to be conducted. Neither the Company nor any of its subsidiaries is in default in any material respect under any of such franchises, permits, licenses or other similar authority. 2.16 Environmental and Safety Laws. To the Company's knowledge, neither ----------------------------- the Company nor any of its subsidiaries is in violation of any applicable statute, law or regulation relating to the environment or occupational health and safety, and to the Company's knowledge, no material expenditures are or will be required in order to comply with any such existing statute, law or regulation. 2.17 Manufacturing and Marketing Rights. Except in the ordinary course of ---------------------------------- business or as disclosed in the SEC Reports, neither the Company nor any of its subsidiaries has granted rights to manufacture, produce, assemble, license, market, or sell its products to any other person and is not bound by any agreement that affects its exclusive right to develop, manufacture, assemble, distribute, market or sell its products. 9 2.18 Disclosure. The Company has fully provided the Investor with all the ---------- information that the Investor has requested for deciding whether to purchase the Securities and to consummate the transactions contemplated by this Agreement. None of this Agreement, the Warrant, the Second Amended and Restated Investors' Rights Agreement, any other statements or certificates made or delivered in connection herewith or therewith or any other information supplied by the Company with respect to the transactions contemplated hereby, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements herein or therein not misleading. 2.19 Registration Rights. Except as (a) provided in the Second Amended and ------------------- Restated Investors' Rights Agreement, (b) provided in the Investors' Rights Agreement dated as of September 12, 2000 by and among eMake Corporation and the other parties named therein, or (c) as disclosed in the SEC Reports, neither the Company nor any of its subsidiaries has granted or agreed to grant any registration rights, including piggyback rights, to any person or entity. 2.20 Corporate Documents. Except as contemplated by this Agreement, the ------------------- Company's Certificate of Incorporation and Bylaws and each of its subsidiaries' Certificates of Incorporation or Articles of Incorporation, as applicable, and Bylaws are in the form previously provided to the Investor. 2.21 Title to Property and Assets. Each of the Company and each of its ---------------------------- subsidiaries owns its property and assets free and clear of all mortgages, liens, loans and encumbrances, except such encumbrances and liens that arise in the ordinary course of business and do not materially impair its ownership or use of such property or assets. With respect to the property and assets it leases, each of the Company and each of its subsidiaries is in compliance with such leases and holds a valid leasehold interest free of any liens, claims or encumbrances. 2.22 Tax Returns, Payments and Elections. Each of the Company and each of ----------------------------------- its subsidiaries has filed all tax returns and reports as required by law. These returns and reports are true and correct in all material respects. Each of the Company and each of its subsidiaries has paid all taxes and other assessments due, except those contested by it in good faith that are listed in the Disclosure Schedule. 2.23 Insurance. Each of the Company and each of its subsidiaries has in --------- full force and effect or will obtain in a reasonable amount of time after the Closing, fire and casualty insurance policies, with extended coverage in amounts customary for companies similarly situated. Each of the Company and each of its subsidiaries has in full force and effect or will obtain in a reasonable amount of time after the Closing, products liability and errors and omissions insurance in amounts customary for companies similarly situated. Each of the Company and each of its subsidiaries shall have or will obtain in a reasonable amount of time after the Closing, directors' and officers' insurance in amounts satisfactory to the Investor. 2.24 Minute Books. The minute books of the Company and each of its ------------ subsidiaries made available to the Investor contain a complete summary of all meetings of directors and stockholders since the time of incorporation and reflect all transactions referred to in such minutes accurately in all material respects. 10 2.25 Labor Agreements and Actions. Neither the Company nor any of its ---------------------------- subsidiaries is bound by or subject to (and none of its assets or properties is bound by or subject to) any written or oral, express or implied, contract, commitment or arrangement with any labor union, and no labor union has requested or, to the Company's knowledge, requested or sought to represent any of its employees, consultants, representatives or agents. There is no strike or other labor dispute involving the Company or any of its subsidiaries pending, or to the Company's knowledge, threatened, that could have a material adverse effect on the assets, properties, financial condition, operating results, or business of the Company or any of its subsidiaries (as such business is presently conducted and as it is proposed to be conducted), nor is the Company aware of any labor organization activity involving the employees or consultants of the Company or any of its subsidiaries. Except with respect to eMake Corporation, the Company is not aware that any officer or key employee or key consultant, or that any group of key employees or key consultants, intends to terminate their employment or consulting relationship with the Company or any of its subsidiaries, nor does the Company or any of its subsidiaries have a present intention to terminate the employment or consulting relationship of any of the foregoing nor has there been any material change in any compensation arrangement or agreement with any employee or consultant. With the exception of those officers and employees that have executed employment contracts with the Company or any subsidiary of the Company as listed in the Disclosure Schedule, the employment of each officer and employee of the Company and each of its subsidiaries is terminable at the will of the Company or a subsidiary of the Company, as applicable, and without any required severance payment. With the exception of the Company's consulting arrangement with Phoenix Management, Inc., the consulting relationship of each consultant of the Company or any of its subsidiaries is terminable at the will of the Company or a subsidiary of the Company, as applicable, and without any required severance payment. To the knowledge of the Company, each of the Company and each of its subsidiaries have complied in all material respects with all applicable state and federal equal employment opportunity and other laws related to employment. 2.26 Damage; Loss. Neither the Company nor any of its subsidiaries ------------ has experienced any damage, destruction or loss, whether or not covered by insurance, that would materially and adversely affect the assets, properties, financial condition, operating results, prospects or business of the Company (as such business is presently conducted and as it is proposed to be conducted). 2.27 Liens; Claims. There has not been any satisfaction or ------------- discharge of any lien, claim or encumbrance or payment of any obligation by the Company or any of its subsidiaries, except in the ordinary course of business and that is material to its assets, properties, financial condition, operating results or business (as such business is presently conducted and as it is proposed to be conducted). 2.28 Real Property Holding Company. Neither the Company nor any of ----------------------------- its subsidiaries is a real property holding company within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended. 3. Representations and Warranties of the Investor. The Investor ---------------------------------------------- hereby represents and warrants to the Company that: 11 3.1 Authorization. The Investor has full power and authority to ------------- enter into this Agreement and the Second Amended and Restated Investors' Rights Agreement, and each of them constitutes the valid and legally binding obligation of the Investor enforceable against the Investor in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors' rights generally, (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (c) to the extent the indemnification provisions contained in the Second Amended and Restated Investors' Rights Agreement may be limited by applicable federal or state securities laws. 3.2 Purchase Entirely for Own Account. The Securities to be purchased --------------------------------- by the Investor hereunder, the Series C Preferred Stock issuable upon exercise of the Warrant to be issued to the Investor hereunder and the Common Stock issuable upon conversion of the Series C Preferred Stock issued or issuable to the Investor hereunder or under the Warrant issued to the Investor hereunder, are being acquired for investment for the Investor's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. The Investor does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Securities to be purchased by the Investor hereunder, the Series C Preferred Stock issuable upon exercise of the Warrant to be issued to the Investor hereunder, and the Common Stock issuable upon conversion of the Series C Preferred Stock issued or issuable to the Investor hereunder or under the Warrant issued to the Investor hereunder. 3.3 Disclosure of Information. The Investor has received all the ------------------------- information it considers necessary or appropriate for deciding whether to purchase the Securities. The Investor further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Securities and the business, properties, prospects and financial condition of the Company. The foregoing, however, does not limit or modify the representations and warranties in Section 2 of this Agreement or the right of the Investor to rely thereon. 3.4 Investment Experience. The Investor is an investor in securities --------------------- of companies in the development stage and acknowledges that it is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Securities. The Investor also represents it has not been organized for the purpose of acquiring the Securities. 3.5 Accredited Investor. The Investor is an "accredited investor" ------------------- within the meaning of Rule 501 of Regulation D promulgated under the Securities Act, as presently in effect. 3.6 Restricted Securities. The Investor understands that the --------------------- Securities it is purchasing are characterized as "restricted securities" under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without 12 registration under the Securities Act, only in certain limited circumstances. In this connection, the Investor represents that it is familiar with Rule 144 promulgated under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act. 3.7 Further Limitations on Disposition. Without in any way limiting ---------------------------------- the representations set forth above, the Investor further agrees not to make any disposition of all or any portion of the Securities to be purchased by the Investor hereunder, the Series C Preferred Stock issuable upon exercise of the Warrant to be issued to the Investor hereunder, and the Common Stock issuable upon conversion of the Series C Preferred Stock issued or issuable to the Investor hereunder or under the Warrant to be issued to the Investor hereunder unless and until the transferee has agreed in writing for the benefit of the Company to be bound by this Section 3 and the applicable provisions of the Second Amended and Restated Investors' Rights Agreement and: (a) There is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or (b) Such Investor shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition and, if requested by the Company, such Investor shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company that such disposition will not require registration of such shares under the Act. It is agreed that the Company will not require opinions of counsel for transactions made pursuant to Rule 144 except in unusual circumstances or unless required by a transfer agent. Notwithstanding the provisions of subsections (a) and (b) above, no such registration statement or opinion of counsel shall be necessary for a transfer by an Investor that is a partnership to a partner of such partnership or a retired partner of such partnership who retires after the date hereof, or to the estate of any such partner or retired partner or the transfer by gift, will or intestate succession of any partner to his or her spouse or to the siblings, lineal descendants or ancestors of such partner or his or her spouse, if the transferee agrees in writing to be subject to the terms hereof to the same extent as if he or she were an original Investor hereunder. 3.8 Legends. It is understood that the certificates evidencing the ------- Securities, the Series C Preferred Stock issuable upon exercise of the Warrant and the Common Stock issuable upon conversion of the Series C Preferred Stock issued or issuable to the Investor hereunder or under the Warrant to be issued to the Investor hereunder, may bear one or all of the following legends: (a) "These securities have not been registered under the Securities Act of 1933, as amended. They may not be sold, offered for sale, pledged or hypothecated in the absence of a registration statement in effect with respect to the securities under such Act or an opinion of counsel satisfactory to the issuer thereof that such registration is not required or unless sold pursuant to Rule 144 of such Act." 13 (b) Any legend required by the securities laws of any applicable jurisdictions. (c) Any legend required by the Second Amended and Restated Investors' Rights Agreement or other applicable agreement. 4. Conditions of Investor's Obligations at Closing. The obligations ----------------------------------------------- of the Investor under Sections 1.1 and 1.2 of this Agreement are subject to the fulfillment on or before the Closing of each of the conditions hereinafter set forth. 4.1 Representations and Warranties. The representations and ------------------------------ warranties of the Company contained in Section 2 shall be true in all material respects on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the date of the Closing, unless another date is specified therein. 4.2 Performance. The Company shall have performed and complied in ----------- all material respects with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing. 4.3 Compliance Certificate. The President of the Company shall ---------------------- deliver to the Investor at the Closing a certificate on behalf of the Company, stating that the conditions specified in Sections 4.1 and 4.2 have been fulfilled. 4.4 Qualifications. All authorizations, approvals, or permits, if -------------- any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Securities and the other transactions contemplated by this Agreement shall be duly obtained and effective as of the Closing. 4.5 Proceedings and Documents. All corporate approvals, stockholder ------------------------- approvals and other proceedings in connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to the Investor and their special counsel, and they shall have received all such counterpart original and certified or other copies of such documents as they may reasonably request. 4.6 Second Amended and Restated Investors' Rights Agreement. The ------------------------------------------------------- Company, the Investor, Safeguard 2000 Capital, L.P. ("Safeguard"), Safeguard Delaware, Inc. and Safeguard Scientifics, Inc. shall have entered into the Second Amended and Restated Investors' Rights Agreement. 4.7 Stock Certificates; Warrant. The Company shall have delivered to --------------------------- the Investor executed certificates representing the Series C Preferred Stock and the Warrant to be purchased at the Closing. 4.8 Confidentiality Agreements. Each employee, officer and -------------------------- consultant of the Company or any of its subsidiaries shall have entered into the applicable confidentiality agreement as specified in Section 2.11 hereof. 14 4.9 Board of Directors. Effective as of the Closing, the Company's ------------------ Board of Directors shall be increased to seven members, one of which shall have been designated by the Investor. 4.10 Legal Opinion. The Investor shall have received an opinion of ------------- counsel to the Company, in the form attached hereto as Exhibit F. --------- 4.11 Designation. The Company shall have adopted and filed with the ----------- Secretary of State of Delaware the Designation. 4.12 NASD Matters. The Company shall have given or made all notices ------------ to or filings with the NASD, and shall have complied with all rules and regulations of the NASD, required in connection with the transactions contemplated hereby. 4.13 Safeguard Agreements. The Company, the Investor and Safeguard -------------------- shall have entered into the Warrant Agreement in the form attached hereto as Exhibit G. The Investor, Safeguard and Safeguard Delaware, Inc. shall have - --------- entered into the Waiver of Anti-Dilution Rights for Series A Preferred Stock and Series B Preferred Stock (the "Investor Waiver") in the form attached hereto as --------------- Exhibit H. - --------- 5. Conditions of the Company's Obligations at Closing. The -------------------------------------------------- obligations of the Company to the Investor under this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions by the Investor: 5.1 Representations and Warranties. The representations and ------------------------------ warranties of the Investor contained in Section 3 shall be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the date of the Closing. 5.2 Performance. The Investor shall have performed and complied ----------- with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing. 5.3 Proceedings and Documents. All corporate approvals, stockholder ------------------------- approvals and other proceedings in connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to the Company's counsel, and they shall have received all such counterpart original and certified or other copies of such documents as they may reasonably request. 5.4 Payment of Purchase Price. The Investor shall have delivered to ------------------------- the Company the purchase price payable at the Closing pursuant to Section 1.3. 5.5 Qualifications. All authorizations, approvals, or permits, if -------------- any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Securities and the other transactions contemplated by this Agreement shall be duly obtained and effective as of the Closing. 6. Miscellaneous. ------------- 15 6.1 Survival of Warranties. The warranties, representations and ---------------------- covenants of the Company and the Investor contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing for a period of two years, and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of the Investor or the Company; provided, however, that there shall be no limitation period for those matters addressed in Section 2.3(a) or (b) hereof. 6.2 Use of Proceeds. The Company shall use the proceeds from the --------------- sale of the Securities to the Investor hereunder for general corporate purposes. 6.3 Successors and Assigns. Except as otherwise provided herein, ---------------------- the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any Securities, any Series C Preferred Stock issuable upon exercise of the Warrant or any Common Stock issuable upon conversion of the Series C Preferred Stock). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 6.4 Governing Law. The construction, validity and interpretation of ------------- this Agreement will be governed by the internal laws of the State of Delaware without giving effect to any choice of law 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. 6.5 Counterparts. This Agreement may be executed in two or more ------------ counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 6.6 Titles and Subtitles. The titles and subtitles used in this -------------------- Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 6.7 Notices. All notices and other communications hereunder shall ------- be in writing and shall be deemed given if delivered personally or by commercial overnight courier (with confirmation of receipt) or sent via facsimile (with confirmation of receipt), (a) in case of the Company, to the Company at 2345 North Central Expressway, Richardson, Texas 75080 (Fax: (972) 669-9557), Attention: General Counsel and (b) in the case of SCP Private Equity Partners II, L.P., to SCP Private Equity Partners II, L.P. at 435 Devon Park Drive, Building 300, Wayne, Pennsylvania 19087, (Fax: (610) 293-0601), Attention: Chief Financial Officer (or at such other address for a party as shall be specified by like notice). Notice given by facsimile shall be confirmed by appropriate answer back and shall be effective upon actual receipt if received during the recipient's normal business hours, or at the beginning of the recipient's next business day after receipt if not received during the recipient's normal business hours. All notices by facsimile shall be confirmed promptly after transmission in writing by certified mail or personal delivery. Any party may change any 16 address to which notice is to be given to it by giving notice as provided above of such change of address. 6.8 Finder's Fee. Each party represents that it neither is nor will ------------ be obligated for any finders' fee or commission in connection with this transaction. The Investor agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finders' fee (and the costs and expenses of defending against such liability or asserted liability) for which the Investor or any of its officers, partners, employees, or representatives is responsible. The Company agrees to indemnify and hold harmless the Investor from any liability for any commission or compensation in the nature of a finders' fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its respective officers, employees, consultants or representatives is responsible. 6.9 Expenses. Irrespective of whether the Closing is effected, the -------- Company shall pay all costs and expenses incurred by the Investor with respect to the negotiation, execution, delivery and performance of this Agreement and any schedules or exhibits hereto. The Company shall also reimburse the Investor for all unreimbursed expenses of the Investor related to the Company's offer and sale of its Series B Preferred Stock and negotiation, execution, delivery and performance of the Exchange Agreement, dated September 12, 2000 by and between the Company and the Investor. 6.10 Dispute Resolution. ------------------ (a) If any dispute arising out of or relating to this Agreement, the Warrant, the Second Amended and Restated Investors' Rights Agreement or any other agreement executed in connection herewith or the breach, termination or validity thereof (a "Dispute") is not settled promptly in the ordinary course of business, the parties shall seek to resolve any such Dispute between them, first, by negotiating promptly with each other in good faith in face-to-face negotiations. These face-to-face negotiations shall be conducted by the respective designated senior management representative of each party. If the parties are unable to resolve the Dispute between them through these face-to- face negotiations, within 20 business days (or such period as the parties shall otherwise agree) following the date of notification (the "Notice Date") by one ----------- party to the others of the existence of such Dispute, then any such Dispute shall be resolved in the following manner. (b) The parties shall endeavor to resolve any such Dispute by mediation under the CPR Mediation Procedures for Business Disputes. Unless otherwise agreed, the parties will select a mediator from the CPR Panels of Neutrals and shall notify CPR to initiate the selection process. (c) Any action, suit or proceeding where the amount in controversy as to at least one party, exclusive of interest and costs, exceeds $100,000 ("Summary Proceeding"), arising out of or relating to a Dispute which has not ------------------ been resolved by mediation as provided herein within 90 days of the Notice Date, shall be litigated exclusively in the Superior Court of the State of Delaware (the "Delaware Superior Court") as a summary proceeding pursuant to Rules 124- ----------------------- 131 of the Delaware Superior Court, or any successor rules (the "Summary ------- 17 Proceeding Rules"). Each of the parties hereto hereby irrevocably and - ---------------- unconditionally (A) submits to the jurisdiction of the Delaware Superior Court for any Summary Proceeding, (B) agrees not to commence any Summary Proceeding except in the Delaware Superior Court, (C) waives, and agrees not to plead or to make, any objection to the venue of any Summary Proceeding in the Delaware Superior Court, (D) waives, and agrees not to plead or to make any claim that any Summary Proceeding brought in the Delaware Superior Court has been brought in an improper or otherwise inconvenient forum, (E) waives, and agrees not to plead or to make, any claim that the Delaware Superior Court lacks personal jurisdiction over it, (F) waives its right to remove any Summary Proceeding to the federal courts except where such courts are vested with sole and exclusive jurisdiction by statute, and (G) understands and agrees that it shall not seek a jury trial or punitive damages in any Summary Proceeding based upon or arising out of a Dispute, and waives any and all rights to any such jury trial or to seek punitive damages. (d) In the event any action, suit or proceeding where the amount in controversy as to at least one party, exclusive of interest and costs, does not exceed $100,000 (a "Proceeding"), arising out of or relating to a Dispute is ---------- brought, the parties to such Proceeding agree to make application to the Delaware Superior Court to proceed under the Summary Proceeding Rules. Until such time as such application is rejected, such Proceeding shall be treated as a Summary Proceeding and all of the foregoing provisions of Section 6.10(c) relating to Summary Proceedings shall apply to such Proceeding. (e) If a Summary Proceeding is not available to resolve any Dispute hereunder, the controversy or claim shall be settled by arbitration conducted on a confidential basis, under the U.S. Arbitration Act, if applicable, and the then current Commercial Arbitration Rules of the American Arbitration Association (the "Association") strictly in accordance with the terms of this ----------- Agreement and the substantive law of the State of Delaware including law in respect of any statute of limitations. The arbitration shall be conducted at the Association's regional office located in Philadelphia, Pennsylvania by three arbitrators, at least one of whom shall be knowledgeable in the industry in which the Company is engaged in business, one of whom shall be an attorney and one of whom shall be a member of a "Big Five" accounting firm familiar with the industry in which the Company is engaged in business. Absent mutual agreement of the parties, the arbitrators specified in the preceding sentence shall be appointed pursuant to the Commercial Arbitration Rules of the Association. The arbitrators are not empowered to award damages in excess of compensatory damages and each party hereby irrevocably waives any right to recover damages in excess of compensatory damages with respect to any such Dispute. Judgment upon the arbitrators' award may be entered and enforced in any court of competent jurisdiction. (f) No party shall be precluded hereby from securing equitable remedies in courts of any jurisdiction, including, but not limited to, temporary restraining orders and preliminary injunctions to protect its rights and interests but shall not be sought as a means to avoid or stay arbitration or Summary Proceeding. (g) Each party is required to continue to perform its obligations under this contract pending final resolution of any Dispute, unless to do so would be impossible or impracticable under the circumstances. 18 6.11 Amendments and Waivers. Any term of this Agreement may be ---------------------- amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any Securities purchased under this Agreement at the time outstanding, any securities into or for which such Securities are convertible or exchangeable, each future holder of all such securities, and the Company. 6.12 Severability. If one or more provisions of this Agreement are ------------ held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. 6.13 Publicity. Neither the Company nor the Investor shall take any --------- action, or permit any of its employees, consultants, officers, directors or stockholders to take any action, which may result in the public disclosure of the transactions effected hereby or the identity of the Investor, except pursuant to the Company's filing obligations under applicable securities laws or unless otherwise required by law. Other than with respect to filing obligations under applicable securities laws, if the Company determines that it is required by law to disclose these transactions or the identity of the Investor, it shall, at a reasonable time before making any such disclosure, consult with the Investor regarding such disclosure. 6.14 Entire Agreement. This Agreement and the documents referred to ---------------- herein constitute the entire agreement among the parties and no party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants except as specifically set forth herein or therein. [Signature Page Follows] 19 IN WITNESS WHEREOF, the parties have executed this Series C Preferred Stock Purchase Agreement as of the date first above written. COMPANY: ------- USDATA CORPORATION By:/s/ Robert Merry ------------------------- Robert Merry, Chief Executive Officer INVESTOR: -------- SCP PRIVATE EQUITY PARTNERS II, L.P. By: SCP Private Equity II General Partner, L.P., its General Partner By: SCP Private Equity II LLC, its Manager By:/s/ Winston Churchill ------------------------- Name: Winston Churchill ---------------------- Title: Manager --------------------- [SIGNATURE PAGE--SERIES C PREFERRED STOCK PURCHASE AGREEMENT] EX-3 4 0004.txt RIGHT OF FIRST REFUSAL AGREEMENT, DATED 03/30/2001 EXHIBIT 3 RIGHT OF FIRST REFUSAL AGREEMENT This Right of First Refusal Agreement (the "Agreement") is made and entered --------- into as of this 30th day of March, 2001, by and among the Investors listed on Schedule A hereto (each, an "Investor" and collectively, the "Investors"), SCP - ---------- -------- --------- Private Equity Partners II, L.P., a Delaware limited partnership ("SCP"), and --- USDATA Corporation, a Delaware corporation (the "Corporation"). ----------- Recitals WHEREAS, SCP has agreed to purchase from USDATA Corporation (the "Company"), and the Company has agreed to issue and sell to SCP, shares of the ------- Company's Series C-1 Preferred Stock , $0.01 per share ("Series C-1 Stock"), and ---------------- to issue to SCP a warrant to purchase shares of the Company's Series C-2 Preferred Stock, $0.01 per share ("Series C-2 Stock"), pursuant to that certain ---------------- Series C Preferred Stock Purchase Agreement, dated as of even date herewith (the "Purchase Agreement"), by and between the Company and SCP; ------------------ WHEREAS, each of the Investors is a holder of shares of the Company's Common Stock, par value $0.01 per share ("Common Stock"), Series A Preferred ------------ Stock, par value $0.01 per share ("Series A Stock"), and/or Series B Preferred -------------- Stock, par value $0.01 per share ("Series B Stock") (The Common Stock, the -------------- Series A Stock, and the Series B Stock are sometimes hereinafter referred to as the "Capital Stock."); ------------- WHEREAS, in order to induce SCP to enter into the Purchase Agreement and to consummate the transactions contemplated thereby, the Investors have agreed to grant SCP a right of first refusal with respect to transfers of their Capital Stock; NOW THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: 1. Definitions. 1.1 "Investor Stock" shall mean the shares of the Company's Common Stock or Preferred Stock now owned or subsequently acquired by the Investors. 1.2 "Preferred Stock" shall mean shares of the Series A Stock, the Series B Stock, the Series C-1 Stock and Series C-2 Stock. 1.3 "Transfer" shall include any sale, assignment, encumbrance, hypothecation, pledge, conveyance in trust, gift, transfer by request, devise or descent, or other transfer or disposition of any kind, including, but not limited to, transfers to receivers, levying creditors, trustees or receivers in bankruptcy proceedings or general assignees for the benefit of creditors, whether voluntary or by operation of law, directly or indirectly, of any of the Investor Stock. 2. Transfers. 2.1 Prohibition on Transfers. Except as otherwise permitted herein, no Investor shall Transfer any Investor Stock unless such Investor has complied with all of the terms of this Agreement. Any purported Transfer in violation of this Agreement shall be void and ineffective and shall not operate to transfer any interest or title to the purported transferee. Notwithstanding the foregoing, the prohibition on Transfer shall not apply to (a) any existing pledge or hypothecation of any Investor Stock, (b) any future pledge or hypothecation by an Investor of its Investor Stock if, in the case of such future pledge or hypothecation, the proposed pledgee or beneficiary of the hypothecation agrees in writing to be bound by the terms of this Agreement, or (c) one or more sales pursuant to Rule 144 of the Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended, if the number of shares sold during any three-month period is not greater than one percent of the outstanding shares of the Company's Common Stock at the commencement of such three-month period. 2.2 Notice of Transfer. If an Investor proposes to Transfer any shares of Investor Stock pursuant to a bona fide offer, then the Investor shall promptly give written notice (the "Notice") to SCP at least fifteen (15) days prior to ------ the closing of such Transfer. The Notice shall describe in reasonable detail the proposed Transfer including, without limitation, the number of shares of Investor Stock to be transferred, the nature of such Transfer, the consideration to be paid, and the name and address of each prospective purchaser or transferee, and shall include a copy of the bona fide offer. 2.3 Right of First Refusal. SCP shall have the right, exercisable upon written notice to the Investor (the "Exercise Notice") within five (5) days --------------- after the receipt of the Notice, to purchase the Investor Stock subject to the Notice and on the same terms and conditions as set forth therein. SCP shall effect the purchase of the Investor Stock, including payment of the purchase price, not more than ten (10) days after delivery of the Exercise Notice, and at such time the Investor shall deliver to SCP the certificate(s) representing the Investor Stock to be purchased by SCP, each certificate to be properly endorsed for transfer. In the event that SCP shall not elect to exercise its right of first refusal with respect to all of the offered Investor Stock, the Investor shall be permitted to Transfer the Investor Stock to the bona fide transferee on terms no less favorable to the Investor than the terms provided for in the bona fide offer. In the event that such Transfer to the bona fide transferee shall not be effectuated within sixty (60) days after delivery of the Notice to SCP, any proposed Transfer thereafter by the Investor shall become subject to the terms of this Agreement. 3. Legend. 3.1 Each certificate representing shares of Investor Stock now or hereafter owned by the Investors shall be endorsed with the following legend: "THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A RIGHT OF FIRST REFUSAL BY AND BETWEEN THE STOCKHOLDER, THE -2- COMPANY AND CERTAIN HOLDERS OF STOCK OF THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY." 3.2 The Investors agree that the Company may instruct its transfer agent to impose transfer restrictions on the shares represented by certificates bearing the legend referred to in Section 3.1 above to enforce the provisions of this Agreement and the Company agrees to promptly do so. The legend shall be removed upon termination of this Agreement. 4. Miscellaneous. 4.1 Conditions to Exercise of Rights. Exercise of SCP's rights under this Agreement shall be subject to and conditioned upon, and the Investors and the Company shall use their best efforts to assist SCP in, compliance with applicable laws. 4.2 Governing Law. The construction, validity and interpretation of this Agreement will be governed by the internal laws of the State of Delaware without giving effect to any choice of law 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. 4.3 Successors in Interest. The provisions of this Agreement shall be binding upon the successors in interest to any of the shares of the Investor Stock subject to this Agreement. The Company shall not permit the transfer of any shares of Investor Stock on its books or issue a new certificate representing any shares of Investor Stock unless and until the person to whom such security is to be transferred shall have executed a written agreement, substantially in the form of this Agreement, pursuant to which such person becomes a party to this Agreement and agrees to be bound by all the provisions hereof as if such person were an Investor. 4.4 Assignability. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. 4.5 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial overnight courier (with confirmation of receipt) or sent via facsimile (with confirmation of receipt) (i) if to the Company, at USDATA Corporation, 2435 North Central Expressway, Richardson, Texas 75080 (fax: (972) 669-9557), Attention: General Counsel, (ii) if to an Investor, at the address beneath such Investor's name on Schedule A attached hereto, and (iii) if to SCP, at Building 300, 435 Devon Park Drive, Wayne, Pennsylvania 19087, Attention: General Counsel (fax: (610) 293-0601). Notice given by facsimile shall be confirmed by appropriate answer back and shall be effective upon actual receipt if received during the recipient's normal business hours, or at the beginning of the recipient's next business day after receipt if not received during the recipient's normal business hours. All notices by facsimile shall be confirmed promptly after transmission in writing by certified mail or personal delivery. Any party may change any address to which notice is to be given to it by giving notice as provided above of such change of address. -3- 4.6 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. 4.7 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 4.8 Expenses. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. 4.9 Entire Agreement. This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof. 4.10 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. [THIS SPACE INTENTIONALLY LEFT BLANK] -4- The foregoing Right of First Refusal Agreement is hereby executed as of the date first above written. SAFEGUARD DELAWARE, INC. By: /s/ N. Jeffrey Klauder --------------------------- Name: N. Jeffrey Klauder --------------------------- Title: Vice President -------------------------- SAFEGUARD 2000 CAPITAL, L.P. By: Safeguard Delaware, Inc., its General Partner By: /s/ N. Jeffrey Klauder --------------------------- Name: N. Jeffrey Klauder --------------------------- Title: Vice President -------------------------- SCP PRIVATE EQUITY PARTNERS II, L.P. By: SCP Private Equity II General Partner, L.P., its General Partner By: SCP Private Equity II LLC, its Manager By: /s/ Winston Churchill ---------------------------- Name: Winston Churchill --------------------------- Title: Manager ------------------------- USDATA CORPORATION By: /s/ Robert Merry --------------------------- Robert Merry Chief Executive Officer SCHEDULE A Investors --------- Safeguard Delaware, Inc. c/o Safeguard Scientifics, Inc. 800 The Safeguard Building 435 Devon Park Drive Wayne, Pennsylvania 19087 Fax: (610) 293-0601 ATTN: Chief Financial Officer Safeguard 2000 Capital, L.P., c/o Safeguard Scientifics, Inc. 800 The Safeguard Building 435 Devon Park Drive Wayne, Pennsylvania 19087 Fax: (610) 293-0601 ATTN: Chief Financial Officer A-1 EX-4 5 0005.txt SECOND AMEND. AND RESTATED INVESTORS RIGHTS AGREE. EXHIBIT 4 SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT ------------------------------------------------------- This Second Amended and Restated Investors' Rights Agreement (this "Agreement") is made as of the 30th day of March, 2001, by and among USDATA --------- Corporation, a Delaware corporation (the "Company"), the Investors listed on ------- Schedule A hereto (each, an "Investor" and collectively, the "Investors") and, - ---------- -------- --------- for the limited purpose of agreeing to Sections 2, 3 and 5 hereof, Safeguard Scientifics, Inc. ("Safeguard"). This Agreement shall become effective as of --------- the Closing (as defined therein) of the transactions contemplated by that certain Series C Preferred Stock Purchase Agreement, dated as of even date herewith (the "Purchase Agreement"), by and between the Company and SCP Private ------------------ Equity Partners II, L.P., a Delaware limited partnership ("SCP"). --- RECITALS -------- WHEREAS, the Company and the Investor named therein are parties to the Stock Purchase Agreement (the "Original Purchase Agreement"), dated August 6, --------------------------- 1999; WHEREAS, the Company, the Investor named therein and Safeguard are parties to the Investors' Rights Agreement (the "Original Agreement"), dated ------------------ August 6, 1999; WHEREAS, the Company and the Investors named therein are parties to the Securities Purchase Agreement (the "Securities Purchase Agreement"), dated ----------------------------- August 4, 2000; WHEREAS, the Company, the Investors and Safeguard are parties to the Amended and Restated Investors' Rights Agreement (the "Amended Agreement"), ----------------- dated as of September 12, 2000; WHEREAS, the execution of this Agreement and the amendment and restatement of the Amended Agreement pursuant hereto is a condition precedent to the closing of the Purchase Agreement; and WHEREAS, in order to induce SCP to enter into the Purchase Agreement and to consummate the transactions contemplated thereby, the Company, the Investors and Safeguard hereby agree that this Agreement shall amend, restate and supercede the Amended Agreement and shall govern the rights of the Investors to cause the Company to register shares of Common Stock and certain other matters as set forth herein; AGREEMENT --------- NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, each intending to be legally bound hereby, agree as follows: 1 1. Registration Rights. The Company covenants and agrees as ------------------- follows: 1.1 Definitions. For purposes of this Section 1: ----------- (a) the term "Act" means the Securities Act of 1933, as amended; --- (b) the term "Holder" means any person owning or having the right to ------ acquire Registrable Securities or any assignee thereof in accordance with Section 1.12 hereof; (c) the term "1934 Act" shall mean the Securities Exchange Act of -------- 1934, as amended; (d) the terms "register," "registered," and "registration" refer to -------- ---------- ------------ a registration effected by preparing and filing a registration statement or similar document in compliance with the Act, and the declaration or ordering of effectiveness of such registration statement or document; (e) the term "Registrable Securities" means (i) the Series A and B ---------------------- Registrable Securities, (ii) the Series C Registrable Securities; and (iii) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of the securities referenced under (i) and (ii) above; (f) the term "Common Stock" means shares of the Company's Common ------------ Stock, par value $0.01 per share; (g) the term "Series A Preferred Stock" means shares of the ------------------------ Company's Series A Preferred Stock, par value $0.01 per share; (h) the term "Series B Preferred Stock" means shares of the ------------------------ Company's Series B Preferred Stock, par value $0.01 per share; (i) the term "Series C-1 Preferred Stock" means shares of the -------------------------- Company's Series C-1 Preferred Stock, par value $0.01 per share; (j) the term "Series C-2 Preferred Stock" means shares of the -------------------------- Company's Series C-2 Preferred Stock, par value $0.01 per share; (k) the term "Series C Preferred Stock" means shares of the Series ------------------------ C-1 Preferred Stock and the Series C-2 Preferred Stock; (l) the term "Series A and B Registrable Securities" means the ------------------------------------- Common Stock issued and sold to Safeguard Delaware, Inc. pursuant to the Original Purchase Agreement, the Common Stock issuable or issued upon conversion of the Series A Preferred Stock issued and sold to Safeguard Delaware, Inc. pursuant to the Original Purchase Agreement and the Common Stock issued or issuable upon conversion of the Series B Preferred Stock issuable or issued under the Exchange Agreements (as defined in the Securities Purchase Agreement); 2 (m) the term "Series C Registrable Securities" means the Common ------------------------------- Stock issuable or issued upon conversion of (i) the Series C-1 Preferred Stock issued and sold to SCP pursuant to the Purchase Agreement or (ii) the Series C-2 Preferred Stock issued to SCP upon its exercise of the Warrant (as defined in the Purchase Agreement); (n) the number of shares of "Registrable Securities then --------------------------- outstanding" shall be determined by the number of shares of Common Stock outstanding which are, and the number of shares of Common Stock issuable pursuant to then exercisable or convertible securities which are, Registrable Securities; (o) the term "SEC" shall mean the Securities and Exchange --- Commission; (p) the term "Shelf Registration Period" shall have the meaning set ------------------------- forth in Section 1.2(b) hereof; and (q) the term "Shelf Registration Statement" shall mean a "shelf" ---------------------------- registration statement of the Company pursuant to the provisions of Section 1.2 hereof which covers all of the Registrable Securities on Form S-3 or on another appropriate form for an offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case, including the prospectus contained therein, all exhibits thereto and all documents incorporated or deemed to be incorporated by reference therein. 1.2 Shelf Registration. ------------------ (a) Upon the request of the Holders of 25% of the Registrable Securities then outstanding, the Company shall prepare and, not later than 30 days following such request, shall file with the SEC a Shelf Registration Statement with respect to resales of the Registrable Securities from time to time in accordance with the methods of distribution elected by the Holders of the Registrable Securities and set forth in such Shelf Registration Statement and thereafter shall use its best efforts to cause such Shelf Registration Statement to be declared effective under the Act prior to 45 days following the filing of the Shelf Registration Statement with the SEC. The Company shall supplement or amend the Shelf Registration Statement if required by the rules, regulations or instructions applicable to the registration form used by the Company for the Shelf Registration Statement, if required by the Act, the 1934 Act or the SEC. (b) The Company shall keep the Shelf Registration Statement continuously effective under the Act in order to permit the prospectus forming a part thereof to be usable by all Holders until the earliest of (i) the fifth anniversary of the date hereof, (ii) the date as of which all Registrable Securities could be transferred without restriction pursuant to Rule 144 under the Securities Act (or any similar provision then in force), and (iii) such date as of which all Registrable Securities have been sold pursuant to the Shelf Registration Statement (in any such case, such period being called the "Shelf ----- Registration Period"). The Company shall: (i) subject to Section 1.2(c), - ------------------- prepare and file with the SEC such amendments and post-effective amendments to the Shelf Registration Statement as may be necessary to keep the Shelf Registration Statement continuously effective for the Shelf Registration Period; (ii) subject to 3 Section 1.2(c), cause the related prospectus to be supplemented by any required supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Act; and (iii) comply in all material respects with the provisions of the Act with respect to the disposition of all securities covered by the Shelf Registration Statement during the applicable period in accordance with the intended methods of disposition by the sellers thereof set forth in such Shelf Registration Statement as so amended or such prospectus as so supplemented. (c) The Company may suspend the use of the prospectus forming a part of the Shelf Registration Statement for two periods not to exceed an aggregate of 60 days in any twelve-month period for valid business reasons, to be determined by the Company in its reasonable judgment (not including avoidance of the Company's obligations hereunder), including, without limitation, the acquisition or divestiture of assets, public filings with the SEC, pending corporate developments and similar events. The Company shall provide written notice to the Holders of any such suspension. 1.3 Company Registration. If (but without any obligation to do so) -------------------- the Company proposes to register (including for this purpose a registration effected by the Company for stockholders other than the Holders) any securities under the Act in connection with the public offering of such securities solely for cash for its own account (other than a registration relating solely to the sale of securities to participants in a Company stock plan, a registration on Form S-4 (or its successor) relating to an offering of shares in connection with any acquisition of any entity or business, a registration on any form which does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities or a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities or exercise of warrants which are also being registered) and the Registrable Securities have not theretofore been included in a Shelf Registration Statement pursuant to Section 1.2 that remains effective, the Company shall, at such time, promptly give each Holder written notice of such registration. Upon the written request of each Holder given within 20 days after mailing of such notice by the Company, the Company shall, subject to the provisions of Section 1.8, cause to be registered under the Act all of the Registrable Securities that each such Holder has requested to be registered. The obligations of the Company under this Section 1.3 with respect to any particular offering may be waived at any time upon the written consent of Holders of a majority of the outstanding Registrable Securities. The right of any Holder to request inclusion of Registrable Securities held by it in any registration pursuant to this Section 1.3 shall terminate if all shares of Registrable Securities held or entitled to be held upon conversion by such Holder are eligible to be sold under Rule 144 under the Act during any 90-day period. In any event, such right shall terminate on the fifth anniversary of the date hereof. 1.4 Obligations of the Company. Whenever required under this Section -------------------------- 1 to effect the registration of any Registrable Securities, the Company shall, in a reasonable amount of time and as promptly as possible: (a) prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, and in the case of a registration under Section 1.14 hereof, upon the request of the 4 Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to 120 days or, if earlier, until the distribution contemplated in such registration statement has been completed; provided, however, that such 120-day period shall be extended -------- ------- for a period of time equal to the period the Holder refrains from selling any securities included in such registration at the request of an underwriter of Common Stock (or other securities) of the Company; (b) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement; (c) furnish to the Holders such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them; (d) use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders; provided, however, that the Company shall not be required in connection - -------- ------- therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions in which it is not, at the time, so qualified or otherwise subject itself to general taxation in any such states or jurisdictions; (e) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering, it being understood and agreed that each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement; (f) notify each Holder of Registrable Securities covered by such registration statement in writing at any time when a prospectus relating thereto is required to be delivered under the Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; (g) cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed; (h) provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration; (i) use its best efforts to obtain the withdrawal of any order suspending the effectiveness of any such registration statement or the lifting of any suspension of the 5 qualification (or exemption from qualification) of any of the Registrable Securities for offer or sale in any jurisdiction at the earliest possible time; and (j) cooperate in all necessary respects with (A) counsel in preparation of the customary legal opinions and (B) accountants in preparation of the customary comfort letters. 1.5 Furnish Information. It shall be a condition precedent to the ------------------- obligations of the Company to take any action pursuant to this Section 1 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be required to effect the registration of such Holder's Registrable Securities. 1.6 Expenses of Shelf Registration. All expenses other than ------------------------------ underwriting discounts and commissions incurred in connection with registrations, filings or qualifications pursuant to Section 1.2, including (without limitation) all registration, filing and qualification fees, printers' and accounting fees, fees and disbursements of counsel for the Company and the reasonable fees and disbursements, which shall not exceed $25,000, of one counsel for the selling Holders (to be selected by the Holders holding a majority of the Registrable Securities) shall be borne and paid by the Company. 1.7 Expenses of Company Registration. The Company shall bear and pay -------------------------------- all expenses incurred in connection with any registration, filing or qualification of Registrable Securities with respect to the registrations pursuant to Section 1.3 for each Holder (which right may be assigned as provided in Section 1.13), including (without limitation) all registration, filing, and qualification fees, printers and accounting fees relating or apportionable thereto and the fees and disbursements, which shall not exceed $25,000, of one counsel for the selling Holders (to be selected by the holders of a majority of the Registrable Securities to be registered), but excluding underwriting discounts and commissions relating to Registrable Securities. 1.8 Underwriting Requirements. In connection with any offering ------------------------- involving an underwriting of shares of the Company's capital stock under Section 1.3, the Company shall not be required to include any of the Holders' securities in such underwriting unless they accept the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters), and then only in such quantity as the underwriters determine in their sole discretion will not, jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters determine in their sole discretion will not jeopardize the success of the offering. The securities so included shall be apportioned (a) first to the holders of the Series C Registrable Securities selling Series C Registrable Securities pro rata according to the total amount of Series C Registrable Securities entitled to be included therein owned by each such selling holder; (b) second to the holders selling Series A and B Registrable Securities pro rata according to the total 6 amount of Series A and B Registrable Securities entitled to be included therein owned by each such selling holder and (c) third, to the extent determined by the underwriters to be compatible with the offering, to other stockholders. 1.9 Delay of Registration. No Holder shall have any right to --------------------- obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 1. 1.10 Indemnification. In the event any Registrable Securities are --------------- included in a registration statement under this Section 1: (a) to the extent permitted by law, the Company will indemnify and hold harmless each Holder, any underwriter (as defined in the Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Act or the 1934 Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a "Violation"): (i) any untrue statement or alleged untrue --------- statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein (for which such statement of material fact is untrue in light of the circumstances under which it was made) or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Act, the 1934 Act, any state securities law or any rule or regulation promulgated under the Act, the 1934 Act or any state securities law; and the Company will pay to each such Holder, underwriter or controlling person, promptly following delivery of an invoice for such amounts incurred, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity -------- ------- agreement contained in this subsection 1.10(a) shall not apply to: (x) amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld); (y) any such loss, claim, damage, liability, or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Holder, underwriter or controlling person; (z) any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon such Holder's or underwriter's failure to deliver a copy of the registration statement or prospectus or any amendments or supplements thereto; (b) to the extent permitted by law, each selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the meaning of the Act, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages, or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages, or 7 liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this subsection 1.10(b), in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity -------- ------- agreement contained in this subsection 1.10(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; provided, that, in no event shall any indemnity -------- under this subsection 1.10(b) exceed the gross proceeds from the offering received by such Holder; (c) promptly after receipt by an indemnified party under this Section 1.10 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 1.10, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party -------- ------- (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 1.10, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 1.10; (d) if the indemnification provided for in this Section 1.10 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage, or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission. In no event shall any contribution by a Holder under this subsection 1.10(d) exceed the gross proceeds from the offering received by such Holder. In no event shall a person or entity guilty of 8 fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) be entitled to contribution from any person or entity who was not guilty of fraudulent misrepresentation; (e) notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control for such offering; and (f) the obligations of the Company and Holders under this Section 1.10 shall survive the completion of any offering of Registrable Securities in a registration statement under this Section 1, and otherwise. 1.11 Reports Under Securities Exchange Act of 1934. The Company shall --------------------------------------------- cause its Common Stock to continue to be registered under Sections 12(b) or 12(g) of the 1934 Act, shall comply in all respects with its reporting and filing obligations under the 1934 Act, and shall not take any action or file any document (whether or not permitted by the 1934 Act or the rules thereunder) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under the 1934 Act. The Company shall take all reasonable actions necessary to continue the listing or trading of its Common Stock on any national securities exchange or the Automated Quotation System of the National Association of Securities Dealers on which Common Stock is listed or traded, and shall comply in all material respects with its reporting, filing and other obligations under the bylaws or rules of such exchange or association. The Company will furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144, the Act and the 1934 Act or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 under the Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents as are filed by the Company under the 1934 Act, and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC which permits the selling of any such securities without registration or pursuant to such form. 1.12 Assignment of Registration Rights. The rights to cause the --------------------------------- Company to register Registrable Securities pursuant to this Section 1 may be assigned (but only with all related obligations) by a Holder to (a) any partner or retired partner of any holder which is a partnership, (b) any family member or trust for the benefit of any individual holder, or (c) any transferee or assignee who, after such assignment or transfer, holds at least 15% of the then outstanding Registrable Securities, provided: (i) the Company is, within a -------- reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; (ii) such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement; and (iii) such assignment shall be effective only if immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Act. 1.13 Limitations on Subsequent Registration Rights. From and after --------------------------------------------- the date of this Agreement, the Company shall not, without the prior written consent of the Holders of a majority of the outstanding Registrable Securities then outstanding, enter into any agreement 9 with any holder or prospective holder of any securities of the Company which would allow such holder or prospective holder to interfere with or otherwise limit a Holder's registration rights under this Agreement. 1.14 Request for Registration. ------------------------- (a) If the Company shall at any time during the Shelf Registration Period be ineligible to use Form S-3 or Form S-3 shall be for any reason unavailable to register the Registrable Securities under the rules and regulation of the SEC, and the duration of such ineligibility or unavailability exceeds or is expected to exceed 60 days, the Holders shall have the right by a written request from the Holders of a majority of the Registrable Securities then outstanding to the Company, to require the Company to file a registration statement under the Act covering the resales of at least 25% of the Registrable Securities then outstanding (or a lesser percent if the anticipated aggregate offering price, net of underwriting discounts and commissions, would exceed $10,000,000), but in no event will the aggregate value of the shares to be registered under such registration statement be less than $500,000. Upon its receipt of such a written request, the Company shall given written notice of such request to all Holders within ten days thereof. The Company shall file as soon as practicable, and in any event within 90 days of the receipt of such request, a registration statement under the Act covering resales of all Registrable Securities which Holders request to be registered, subject to the limitations of subsection 1.14(b). (b) If the Holders initiating the registration request hereunder (the "Initiating Holders") intend to distribute the Registrable Securities ------------------ covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to subsection 1.14(a) and the Company shall include such information in the written notice referred to in subsection 1.14(a). The managing underwriter shall be selected by a majority in interest of the Initiating Holders and shall be reasonably acceptable to the Company. In such event, the right of any Holder to include his Registrable Securities in such registration shall be conditioned upon such Holder's participation in such underwriting and the inclusion of such Holder's Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in subsection 1.4(e)) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting. Notwithstanding any other provision of this Section 1.14, if the underwriter advises the Initiating Holders in writing that marketing factors require a limitation of the number of shares to be underwritten, then the Initiating Holders shall so advise all Holders of Registrable Securities which would otherwise be underwritten pursuant hereto, and the number of shares of Registrable Securities that may be included in the underwriting shall be apportioned (a) first to the holders of the Series C Registrable Securities selling Series C Registrable Securities pro rata according to the total amount of Series C Registrable Securities entitled to be included therein owned by each such selling holder; (b) second to the holders selling Series A and B Registrable Securities pro rata according to the total amount of Series A and B Registrable Securities entitled to be included therein owned by each such selling holder and (c) third, to the extent determined by the underwriters to be compatible with the offering, to other stockholders. 10 (c) The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to this Section 1.14(a) after the Company has effected two registrations pursuant to this Section 1.14(a) and such registrations have been declared or ordered effective; provided, however, that a -------- ------- registration will not count as a registration pursuant to this Section 1.14(a) unless the Holders requesting registration are able to register the offering and sale of at least 50% of the shares of Registrable Securities that they have requested be included in such registration. 2. Rights Offering. --------------- 2.1 Rights. ------ (a) As used herein, the term "Subsidiary" shall mean, with respect to ---------- the Company, any direct or indirect subsidiary of the Company more than 50% of the outstanding voting securities of which are owned directly or indirectly by the Company. The Company shall, upon receipt of a Rights Offering Notice (as defined below), cause the Subsidiary designated as the "Relevant Subsidiary" in connection therewith (the "Relevant Subsidiary"), to grant to the holders of the ------------------- common stock of Safeguard rights (the "Rights") to purchase from such Relevant ------ Subsidiary such number of shares of such Relevant Subsidiary's common stock as determined by Safeguard up to a maximum of 40% of the sum of (i) all issued shares of common stock of such Relevant Subsidiary, and (ii) all shares of common stock of such Relevant Subsidiary subject to issuance pursuant to options, warrants or other agreements, plans, instruments or understandings, all as of the effective date of the registration statement relating to such Rights (the "Rights Registration Statement"). The Rights shall be issued in an ----------------------------- offering (the "Rights Offering") pursuant to the Rights Registration Statement, --------------- shall be exercisable for a period of no greater than 45 days after the commencement of the Rights Offering and shall be transferable by the holder thereof during that period. The Company shall cause the Relevant Subsidiary to engage an investment banking firm selected by the Company, subject to the reasonable approval of Safeguard, which firm shall underwrite, on a standby, firm commitment basis, any portion of the offered common stock of the Relevant Subsidiary not purchased through the exercise of Rights. The Company shall also engage legal counsel selected by Safeguard, subject to the reasonable approval of a majority of the Board of Directors of the Company, which counsel shall represent the Relevant Subsidiary in connection with the conduct of the Rights Offering. The exercise price of the Rights shall be determined by negotiation among the Relevant Subsidiary, the underwriters and the selling stockholders, if any. Prior to the commencement of the Rights Offering, the Company shall use its best efforts to cause (and shall cause the Relevant Subsidiary to use its best efforts to cause) any holder of more than 1% of the Relevant Subsidiary's common stock (or rights to acquire more than 1% of the Relevant Subsidiary's common stock) and the Relevant Subsidiary's officers and directors to execute and deliver to the underwriter of the Rights Offering a market stand-off agreement. Such market stand-off agreement shall provide that, during the period of duration specified by the Relevant Subsidiary and the underwriter of common stock or other securities of the Relevant Subsidiary following the effective date of the Rights Registration Statement, such persons shall not, to the extent requested by the Relevant Subsidiary and such underwriter, directly or indirectly sell, offer to sell, contract to sell (including, without limitation, any short sale), grant any option to purchase or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) any securities of the 11 Relevant Subsidiary held by them at any time during such period except common stock included in such Rights Registration Statement. (b) Safeguard may initiate a Rights Offering with respect to any Subsidiary by giving written notice to the Company (a "Rights Offering Notice") ---------------------- at any time during the Rights Exclusivity Period (as hereinafter defined) at such time as the total market value of such Subsidiary is at least $35,000,000, which determination shall be made in good faith, upon request by Safeguard from time to time, by the Board with the assistance and advice of such experts or consultants as the Board may choose to retain, if any. The obligations of the Company pursuant to this Section 2.1 shall commence on the date hereof and expire on August 6, 2004 (such period, the "Rights Exclusivity Period"), unless ------------------------- a registration statement relating to a Rights Offering has been filed with the SEC by such date, in which case the Rights covered by such Registration Statement shall not expire until 150 days after the date such filing was made. (c) The Company agrees that it will not (i) sell or otherwise transfer any of the capital stock of any Subsidiary owned by it, (ii) permit any Subsidiary to merge or consolidate with any other person or entity other than the Company or another Subsidiary or sell, lease or otherwise transfer any substantial portion of any Subsidiary's assets, or (iii) permit any Subsidiary to undertake any registration of any of its securities under the Act or the 1934 Act other than pursuant to this Section 2.1, in any case, prior to the earlier of the expiration of the Rights Exclusivity Period or the completion of a Rights Offering with respect to such Subsidiary, except with the consent of Safeguard; provided, however, that this subsection shall not apply to the registration - -------- ------- rights provided under that certain Investors' Rights Agreement, dated as of September 12, 2000, by and among eMake Corporation and the other parties thereto. (d) Upon closing of a Rights Offering with respect to any Subsidiary, Safeguard's right to require such Subsidiary to conduct any further Rights Offerings under this Section 2 and any Directed Shares Offering under Section 3 below shall terminate. 2.2 Split. After Safeguard has notified the Company of its intention ----- to commence a Rights Offering, the Company shall, prior to the filing of the Rights Registration Statement with respect thereto as provided hereinafter (or at such earlier date as agreed to by the Company and Safeguard), take all such actions as shall be necessary to cause the Relevant Subsidiary to cause a split of its authorized common stock in such ratio as Safeguard shall determine. All references to share amounts in this Agreement other than as specifically noted shall be deemed to refer to share amounts prior to such split. 2.3 Registration Statement. Upon notice by Safeguard to the Company ---------------------- of its intention to commence a Rights Offering, the Company shall cause the Relevant Subsidiary to promptly prepare a Rights Registration Statement to register under the Act, the Rights and the shares of the common stock of the Relevant Subsidiary to be acquired upon exercise of the Rights (the "Rights ------ Shares"). The Company covenants that such Rights Registration Statement and the - ------ prospectus included therein shall be in form reasonably satisfactory to Safeguard, shall comply in all material respects with the Act and the rules and regulations of the SEC promulgated thereunder, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in 12 light of the circumstances under which they were made, not misleading and shall conform with the provisions of Section 1.4 hereof. 2.4 Registration Process. The Company shall use its best efforts to -------------------- cause the Relevant Subsidiary to cause the Rights Registration Statement to be filed with the SEC and to become effective as promptly as practicable in accordance with Section 1.4 hereof. The Company shall cause the Relevant Subsidiary to prepare and file with the SEC, promptly upon Safeguard's request, any amendments or supplements to the Rights Registration Statement or the related prospectus that, in Safeguard's opinion, may be necessary or advisable in connection with the Rights Offering, subject to the reasonable approval of the Relevant Subsidiary and its counsel. The Company shall not permit the Relevant Subsidiary to file any amendment or supplement to the Rights Registration Statement or the related prospectus unless (A) it has furnished Safeguard with a copy of such amendment or supplement a reasonable time prior to filing and (B) Safeguard has not reasonably objected to such amendment or supplement by notice to the Company within 10 days of receipt of such copy. The Company shall not issue (and shall not permit the Relevant Subsidiary to issue) any advertisement, press release, mailing or other solicitation material of which Safeguard reasonably disapproves by prompt written notice to the Company after receiving reasonable notice thereof. The Company shall cause the Relevant Subsidiary to comply with the Act and the rules and regulations thereunder in connection with the Rights Offering and, until the termination of the Rights Offering, the Company shall cause the Relevant Subsidiary to use its best efforts to qualify the Rights Shares under the securities laws of all jurisdictions in which qualification is required and there are holders of Safeguard common stock and to continue such qualifications in effect during the exercise period of the Rights. At the time of mailing the prospectus relating to the Rights Offering and at the time of the closing of the Rights Offering, Safeguard shall be entitled to receive (A) from the Company and the Relevant Subsidiary such certificates and documents evidencing compliance with such representations and warranties of the Company and the Relevant Subsidiary as Safeguard shall reasonably request of the Company, and (B) from the counsel and independent accountants of the Company and the Relevant Subsidiary such opinions and documents as Safeguard may reasonably request thereof as if it were applicable to the Rights Offering. 2.5 Use of Proceeds. The Company shall cause the Relevant Subsidiary --------------- to apply all proceeds of the Rights Offering first to the payment of the expenses of the Rights Offering and thereafter to general working capital purposes or such other purposes as shall be described in the related prospectus and agreed to by Safeguard. 2.6 Registration Services. --------------------- (a) Services. Safeguard shall diligently and in a timely fashion -------- assist the Company and the Relevant Subsidiary in structuring the Rights Offering, in preparing the necessary registration statement and related disclosure documentation, in clearing the Rights Offering with the SEC and applicable state securities authorities and shall provide such other services and assistance in connection with the Rights Offering as the Company or the Relevant Subsidiary shall reasonably request. Nothing contained herein shall require Safeguard to provide to the Company or the Relevant Subsidiary any services or assistance which, if rendered by Safeguard, would require Safeguard to register as a broker-dealer under Section 15 of the 13 Exchange Act or any state securities laws, or as an investment adviser under the Investment Advisor Act of 1940, as amended. (b) Working Group. The Company shall cause the counsel, auditors, ------------- employees, officers and consultants of the Company and the Relevant Subsidiary to render such assistance in consummating the Rights Offering, at the expense of the Company, as is customary in the consummation by a company of its initial public offering. In addition, in rendering services under this Section 2.6, Safeguard may engage special legal counsel, one or more rights, registrar and transfer agents, and such other consultants as Safeguard may deem necessary or desirable in connection with the Rights Offering, subject to the reasonable approval of the Company, the expenses of which shall be paid by the Company and which are not included in the reimbursement described in subsection 2.6(c) below. In addition, Safeguard may require the Relevant Subsidiary to engage a registered broker-dealer of Safeguard's designation, subject to the reasonable approval of the Company, to provide such services in connection with the Rights Offering as Safeguard may deem reasonably necessary or desirable, including without limitation, to effect or underwrite the offering of the Rights or the Rights Shares in states in which applicable state laws require that a registered broker-dealer effect such offering. (c) Expenses. The Company shall bear all reasonable costs and -------- expenses of the Rights Offering, including, but not limited to, the Relevant Subsidiary's printing, legal and accounting fees and expenses, SEC and NASD filing fees and "Blue Sky" fees and expenses; provided, however, that the -------- ------- Company shall have no obligation to pay or otherwise bear any portion of the underwriters' discounts attributable to the Rights Shares not being offered and sold by the Relevant Subsidiary, or the fees and expenses of counsel for the selling holders of Rights Shares in connection with the registration of the Rights Shares if other than counsel to the Relevant Subsidiary. The Company shall reimburse Safeguard for its internal expenses incurred under this Section 2 by payment of $50,000 on a nonaccountable basis, such payment to be made on the earlier of the closing of the Rights Offering or 90 days after the Registration Statement is filed. 2.7 Indemnification. In connection with the Rights Offering: --------------- (a) to the extent permitted by law, the Company will indemnify and hold harmless Safeguard, any underwriter (as defined in the Act) for Safeguard and each person, if any, who controls Safeguard or underwriter within the meaning of the Act or the 1934 Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a "Violation"): (i) any untrue statement or alleged untrue --------- statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company or the Relevant Subsidiary of the Act, the 1934 Act, any state securities law or any rule or regulation promulgated under the Act, the 1934 Act or any state securities law; and the Company will pay to Safeguard and each underwriter or controlling person, promptly following delivery of an invoice for such amounts incurred, any 14 legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this subsection - -------- ------- 2.7(a) shall not apply to: (x) amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld); (y) any such loss, claim, damage, liability, or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by Safeguard or the underwriter or controlling person; (z) any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon Safeguard's or the underwriter's failure to deliver a copy of the registration statement or prospectus or any amendments or supplements thereto; (b) to the extent permitted by law, Safeguard will indemnify and hold harmless the Relevant Subsidiary, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Relevant Subsidiary within the meaning of the Act, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages, or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by Safeguard expressly for use in connection with such registration; and Safeguard will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this subsection 2.7(b), in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this subsection - -------- ------- 2.7(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of Safeguard, which consent shall not be unreasonably withheld; provided, that, -------- in no event shall any indemnity under this subsection 2.7(b) exceed the gross public offering price of all such securities offered by Safeguard and sold pursuant to such registration statement; (c) promptly after receipt by an indemnified party under this Section 2.7(c) of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.7, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party -------- ------- (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party 15 under this Section 2.7, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.7; (d) if the indemnification provided for in this Section 2.7 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage, or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission. In no event shall any contribution by Safeguard under this subsection 2.7(d) exceed the gross public offering price of all such securities offered by Safeguard and sold pursuant to such registration statement. In no event shall a person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) be entitled to contribution from any person or entity who was not guilty of fraudulent misrepresentation; (e) notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control; and (f) the obligations of the Company and Safeguard under this Section 2.7 shall survive the completion of the Rights Offering. 3. Safeguard Subscription Offering. ------------------------------- 3.1 Directed Shares Registration. Safeguard shall have the right to ---------------------------- require the Company to cause any Subsidiary to file a registration statement on Form S-1 for the registration of shares of the Subsidiary's common stock pursuant to this Section 3 at such time as the total market value of such Subsidiary is at least $35,000,000 (the "Safeguard Subscription Offering"). Such ------------------------------- registration statement shall register common stock (i) sufficient in number to satisfy the Directed Shares requirement described below and (ii) with an aggregate offering price, prior to underwriting discounts and commissions, of at least $10,000,000. In connection with such Safeguard Subscription Offering, the Company shall cause the applicable Subsidiary to adjust its authorized shares as requested by Safeguard in order to facilitate distribution of Directed Shares to its stockholders. The Company shall cause the applicable Subsidiary to engage (i) an underwriter or underwriters selected by Safeguard, subject to the approval of a majority of the Board of Directors of the Company, and (ii) legal counsel selected by Safeguard, subject to the reasonable approval of a majority of the Board of Directors of the Company, which 16 counsel shall represent the applicable Subsidiary in connection with the conduct of the Safeguard Subscription Offering. 3.2 Directed Shares Subscription Program. In connection with the ------------------------------------ Safeguard Subscription Offering, the Company shall cause the applicable Subsidiary to: (a) provide in the related underwriting agreement a right for Safeguard to designate persons (the "Safeguard Designees") who may purchase from ------------------- the underwriter(s) shares of the Relevant Subsidiary's common stock (the "Directed Shares") at the public offering price of such Subsidiary's common - ---------------- stock in the Safeguard Subscription Offering (the "IPO Price"); and --------- (b) use its best efforts to cause such Subsidiary to cause the underwriters of the Safeguard Subscription Offering to allow the Safeguard Designees to purchase at the IPO Price that number of Directed Shares equal to 20% of the shares of common stock offered by such Subsidiary in such Safeguard Subscription Offering. Upon closing of the Safeguard Subscription Offering with respect to any Subsidiary and sale of the number of shares set forth in this Section 3.2(b), Safeguard's right to require the Company to cause such Subsidiary to conduct a Rights Offering pursuant to Section 2 above shall terminate. The Company shall reimburse Safeguard for its internal expenses incurred under this Section 3 by payment of $50,000 on a nonaccountable basis, such payment to be made on the earlier of the closing of the Safeguard Subscription Offering or 90 days after the Registration Statement is filed. 4. Board Nominations. In addition to its right to designate one of ----------------- the members of the Board of Directors of the Company pursuant to the Company's Certificate of Designation for Series C-1 Preferred Stock and Series C-2 Preferred Stock, for so long as SCP owns at least 5% of the outstanding Common Stock of the Company (on an as-converted basis), SCP shall have the right to propose one director for election to the Board of Directors of the Company and the Company shall take all steps necessary to nominate such proposed director for election to the Company's Board of Directors at its annual meeting of stockholders. 5. Miscellaneous. ------------- 5.1 Successors and Assigns. Except as otherwise provided herein, the ---------------------- terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 5.2 Governing Law. The construction, validity and interpretation of ------------- this Agreement will be governed by the internal laws of the State of Delaware without giving effect to any choice of law 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. 17 5.3 Counterparts. This Agreement may be executed in two or more ------------ counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 5.4 Titles and Subtitles. The titles and subtitles used in this -------------------- Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 5.5 Notices. All notices and other communications hereunder shall be ------- in writing and shall be deemed given if delivered personally or by commercial overnight courier (with confirmation of receipt) or sent via facsimile (with confirmation of receipt) (i) if to the Company, at USDATA Corporation, 2435 North Central Expressway, Richardson, Texas 75080 (fax: (972) 669-9557), Attention: Robert A. Merry, (ii) if to an Investor, at the address beneath such Investor's name on Schedule A attached hereto, and (iii) if to Safeguard, at Safeguard Scientifics, Inc., 800 The Safeguard Building, 435 Devon Park Drive, Wayne, Pennsylvania 19087 (fax: (610) 293-0601). Notice given by facsimile shall be confirmed by appropriate answer back and shall be effective upon actual receipt if received during the recipient's normal business hours, or at the beginning of the recipient's next business day after receipt if not received during the recipient's normal business hours. All notices by facsimile shall be confirmed promptly after transmission in writing by certified mail or personal delivery. Any party may change any address to which notice is to be given to it by giving notice as provided above of such change of address. 5.6 Expenses. If any action at law or in equity is necessary to -------- enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. 5.7 Amendments and Waivers. Any term other than Sections 1.1, 1.8, ---------------------- 1.14, 2, 3 and 4 and the next two sentences of this Agreement may be amended and the observance of any term other than Sections 1.1, 1.8, 1.14, 2, 3 and 4 and the next two sentences of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the holders of a majority of the shares of Registrable Securities then outstanding. Sections 1.1, 1.8, 1.14 and this sentence of this Agreement may be amended and the observance of any term of Sections 1.1, 1.8, 1.14 and this sentence of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company, the holders of a majority of the shares of the Series C Registrable Securities and the holders of a majority of the Series A and B Registrable Securities. Sections 2 and 3 and this sentence of this Agreement may be amended and the observance of any term of Sections 2 and 3 and this sentence of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Safeguard. Section 4 of this Agreement may be amended and the observance of any term of Section 4 of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and SCP. 18 5.8 Severability. If one or more provisions of this Agreement are ------------ held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. 5.9 Aggregation of Stock. All shares of securities held or acquired -------------------- by affiliated entities or persons shall be aggregated together for the purpose of determining the availability of any rights under this Agreement. 5.10 Entire Agreement. This Agreement (including the Schedules and ---------------- Exhibits hereto) amends, supercedes and replaces the Original Agreement (including the Schedules and Exhibits thereto) in its entirety, and constitutes the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. [Signature page follows.] 19 IN WITNESS WHEREOF, the parties have executed this Second Amended and Restated Investors' Rights Agreement as of the date first above written. COMPANY: ------- USDATA CORPORATION By: /s/ Robert Merry --------------------------------- Robert Merry Chief Executive Officer INVESTORS: --------- SAFEGUARD DELAWARE, INC. By: /s/ N. Jeffrey Klauder --------------------------------- Name: N. Jeffrey Klauder ------------------------------- Title: Vice President ------------------------------ SAFEGUARD 2000 CAPITAL, L.P. By: Safeguard Delaware, Inc., its General Partner By: /s/ N. Jeffrey Klauder --------------------------------- Name: N. Jeffrey Klauder ------------------------------- Title: Vice President ------------------------------ SCP PRIVATE EQUITY PARTNERS II, L.P. By: SCP Private Equity II General Partner, L.P., its General Partner By: SCP Private Equity II LLC, its Manager By: /s/ Winston Churchill ---------------------------------- Name: Winston Churchill -------------------------------- Title: Manager ------------------------------- OTHER PARTY: ----------- SAFEGUARD SCIENTIFICS, INC. (solely for the limited purpose of agreeing to Sections 2, 3 and 5 hereof) By: /s/ N. Jeffrey Klauder ---------------------------------------- Name: N. Jeffrey Klauder ---------------------------------------- Title: Vice President --------------------------------------- 2 SCHEDULE A Investors --------- Safeguard Delaware, Inc. c/o Safeguard Scientifics, Inc. 800 The Safeguard Building 435 Devon Park Drive Wayne, Pennsylvania 19087 Fax: (610) 293-0601 ATTN: Chief Financial Officer Safeguard 2000 Capital, L.P., c/o Safeguard Scientifics, Inc. 800 The Safeguard Building 435 Devon Park Drive Wayne, Pennsylvania 19087 Fax: (610) 293-0601 ATTN: Chief Financial Officer SCP Private Equity Partners II, L.P., 300 The Safeguard Building 435 Devon Park Drive Wayne, Pennsylvania 19087 Fax: (610) 293-0601 ATTN: Chief Financial Officer EX-5 6 0006.txt WRITTEN CONSENT DATED MARCH 30, 2001 EXHIBIT 5 USDATA CORPORATION WRITTEN CONSENT OF THE HOLDERS OF SERIES A PREFERRED STOCK AND SERIES B PREFERRED STOCK Dated as of March 30, 2001 The undersigned, being the all of the holders (the "Stockholders") of ------------ Series A Preferred Stock and Series B Preferred Stock of USDATA Corporation (the "Company"), in accordance with the applicable provisions of the Certificate of ------- Incorporation for the Company, hereby consent to the transactions contemplated by the USDATA Corporation Series C Preferred Stock Purchase Agreement dated as of March 30, 2001, by and among the Company and SCP Private Equity Partners II, L.P. (the "Agreement"), including without limitation to the filing of the --------- Certificate of Designation for the Series C-1 and Series C-2 Preferred Stock attached as Exhibit A and the issuance of the Series C-1 and Series C-2 --------- Preferred Stock and related warrants as contemplated by the Agreement. [Signature page follows.] IN WITNESS WHEREOF, the undersigned Stockholders have duly executed this Written Consent this 30th day of March, 2001. Safeguard Delaware, Inc. By: /s/ N. Jeffrey Klauder ----------------------- Name: N. Jeffrey Klauder ------------------- Title: Vice President ------------------- Safeguard 2000 Capital, L.P. By: Safeguard Delaware, Inc., its General Partner By: /s/ N. Jeffrey Klauder ----------------------- Name: N. Jeffrey Klauder ------------------- Title: Vice President ------------------- SCP Private Equity Partners II, L.P. By: SCP Private Equity II General Partner, L.P. its General Partner By: SCP Private Equity II LLC, its Manager By: /s/ Thomas G. Rebar ----------------------- Name: Thomas G. Rebar ------------------- Title: Manager ------------------- EX-6 7 0007.txt IRREVOCABLE PROXY, DATED AS OF MARCH 30, 2001 EXHIBIT 6 IRREVOCABLE PROXY ----------------- This Irrevocable Proxy (this "Proxy") is made as of the 30th day of March, 2001, by the Investors listed on Schedule A hereto (each, an "Investor" ---------- -------- and collectively, the "Investors") in favor of SCP Private Equity Partners II, --------- L.P., a Delaware limited partnership ("SCP"). This Proxy shall become effective --- as of the Closing (as defined therein) of the transactions contemplated by that certain Series C Preferred Stock Purchase Agreement, dated as of even date herewith (the "Purchase Agreement"), by and between USDATA Corporation, a ------------------ Delaware corporation (the "Company") and. SCP. ------- RECITALS -------- WHEREAS, SCP has agreed to purchase from the Company, and the Company has agreed to issue and sell to SCP, shares of the Company's Series C-1 Preferred Stock, par value $0.01 per share, and to issue to SCP a warrant (the "Warrant") ------- to purchase shares of the Company's Series C-2 Preferred Stock, $0.01 per share (the "Financing"); --------- WHEREAS, the Company is required to obtain prior stockholder approval in connection with certain matters related to the Financing (all as set forth in Section 2.5 of the Purchase Agreement and Section 1.1 of the Warrant and hereinafter referred to as the "Financing Proposals"); ------------------- WHEREAS, each of the Investors is a holder of shares of the Company's Common Stock, par value $0.01 per share ("Common Stock"), Series A Preferred ------------ Stock, par value $0.01 per share ("Series A Stock"), and/or Series B Preferred -------------- Stock, par value $0.01 per share ("Series B Stock") (The Common Stock, the -------------- Series A Stock, and the Series B Stock are sometimes hereinafter referred to as the "Capital Stock"); ------------- WHEREAS, in order to induce SCP to enter into the Purchase Agreement and to consummate the transactions contemplated thereby, the Investors have agreed to grant SCP an irrevocable proxy to vote their shares of Capital Stock with respect to the Financing Proposals; AGREEMENT --------- NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: 1. Grant of Irrevocable Proxy. Each of the Investors hereby irrevocably -------------------------- grants to SCP a proxy to vote all shares of Capital Stock owned by it with respect to any matter related to the Financing Proposals. This proxy shall terminate one year after the date of this Proxy. 2. Agreement to Vote Shares. Each of the Investors hereby agrees that if ------------------------ for any reason the irrevocable proxy set forth in Section 1 of this Proxy shall be declared unenforceable or if SCP shall advise such Investor that it does not wish to avail itself of the irrevocable proxy, such Investor shall vote its shares of Capital Stock, or exercise a consent or waiver with respect to such shares of Capital Stock, with respect to any matter related to the Financing Proposals in such manner as shall be directed by SCP. 3. Successors in Interest. The provisions of this Proxy shall be binding ---------------------- upon the successors in interest to any of the shares of the Capital Stock subject to this Proxy. The Company shall not permit the transfer of any shares of Capital Stock on its books or issue a new certificate representing any shares of Capital Stock unless and until the person to whom such security is to be transferred shall have executed a written agreement, substantially in the form of this Proxy, pursuant to which such person becomes a party to this Proxy and agrees to be bound by all the provisions hereof as if such person were an Investor. 4. Assignability. Except as otherwise provided herein, the terms and ------------- conditions of this Proxy shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. 5. Governing Law. The construction, validity and interpretation of this ------------- Proxy will be governed by the internal laws of the State of Delaware without giving effect to any choice of law 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. 6. Counterparts; Necessary Parties. This Proxy may be executed in two or ------------------------------- more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. In the event that this Proxy is executed and delivered by less than all of the Investors, it shall nevertheless be effective and enforceable with respect to those Investors which have executed and delivered this Proxy. 7. Titles and Subtitles. The titles and subtitles used in this Proxy are -------------------- used for convenience only and are not to be considered in construing or interpreting this Proxy. 8. Notices. All notices and other communications hereunder shall be in ------- writing and shall be deemed given if delivered personally or by commercial overnight courier (with confirmation of receipt) or sent via facsimile (with confirmation of receipt) (i) if to the Company, at USDATA Corporation, 2435 North Central Expressway, Richardson, Texas 75080 (fax: (972) 669-9557), Attention: General Counsel, (ii) if to an Investor, at the address beneath such Investor's name on Schedule A attached hereto, and (iii) if to SCP, at Building 300, 435 Devon Park Drive, Wayne, Pennsylvania 19087, Attention: General Counsel (fax: (610) 293-0601). Notice given by facsimile shall be confirmed by appropriate answer back and shall be effective upon actual receipt if received during the recipient's normal business hours, or at the beginning of the recipient's next business day after receipt if not received during the recipient's normal business hours. All notices by facsimile shall be confirmed promptly after transmission in writing by certified mail or personal delivery. Any party may change any address to which notice is to be given to it by giving notice as provided above of such change of address. 2 9. Expenses. If any action at law or in equity is necessary to enforce -------- or interpret the terms of this Proxy, the prevailing party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. 10. Severability. If one or more provisions of this Proxy are held to ------------ be unenforceable under applicable law, such provision shall be excluded from this Proxy and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. 11. Entire Agreement. This Proxy constitutes the full and entire ---------------- understanding and agreement between the parties with regard to the subject matter hereof. [Signature page follows.] 3 IN WITNESS WHEREOF, the parties have executed this Irrevocable Proxy as of the date first above written. SAFEGUARD DELAWARE, INC. By: /s/ N. Jeffrey Klauder ---------------------------------------- Name: N. Jeffrey Klauder -------------------------------------- Title: Vice President ------------------------------------- SAFEGUARD 2000 CAPITAL, L.P. By: Safeguard Delaware, Inc., its General Partner By: /s/ N. Jeffrey Klauder ---------------------------------------- Name: N. Jeffrey Klauder -------------------------------------- Title: Vice President ------------------------------------- SCP PRIVATE EQUITY PARTNERS II, L.P. By: SCP Private Equity II General Partner, L.P., its General Partner By: SCP Private Equity II LLC, its Manager By: /s/ Thomas G. Rebar ---------------------------------------- Name: Thomas G. Rebar -------------------------------------- Title: Manager -------------------------------------- TECHNOLOGY LEADERS I, L.P. By: _______________________________________ Name: _____________________________________ Title: ____________________________________ TECHNOLOGY LEADERS II, L.P. By: _______________________________________ Name: _____________________________________ Title: ____________________________________ SCHEDULE A Investors --------- Safeguard Delaware, Inc. c/o Safeguard Scientifics, Inc. 800 The Safeguard Building 435 Devon Park Drive Wayne, Pennsylvania 19087 Fax: (610) 293-0601 ATTN: Chief Financial Officer Safeguard 2000 Capital, L.P., c/o Safeguard Scientifics, Inc. 800 The Safeguard Building 435 Devon Park Drive Wayne, Pennsylvania 19087 Fax: (610) 293-0601 ATTN: Chief Financial Officer Technology Leaders I, L.P. 2435 North Central Expressway Richardson, TX 75080 Technology Leaders II, L.P. 2435 North Central Expressway Richardson, TX 75080 EX-7 8 0008.txt WARRANT AGREEMENT, DATED AS OF MARCH 30, 2001 EXHIBIT 7 Warrant Agreement This Warrant Agreement (this "Agreement") is entered into as of this 30th --------- of March 2001 by and between USDATA Corporation, a Delaware corporation (the "Parent"), Safeguard 2000 Capital, L.P., a Delaware limited partnership ------ ("Safeguard 2000") and SCP Private Equity Partners II, L.P., a Delaware limited -------------- partnership ("SCP"). --- Recitals WHEREAS, SCP is the holder of Warrant No. A-1-1 (the "SCP Warrant") of ----------- eMake Corporation, a Delaware corporation ("eMake"), pursuant to which SCP has ----- the right to purchase shares of eMake's Series A-1 Convertible Preferred Stock, par value $0.01 per share ("Series A-1 Stock"); ---------------- WHEREAS, Safeguard 2000 is the holder of Warrant No. A-2-1 (the "Safeguard --------- Warrant") of eMake, pursuant to which Safeguard 2000 has the right to purchase - ------- shares of eMake's Series A-2 Convertible Preferred Stock, par value $0.01 per share ("Series A-2 Stock"); ---------------- WHEREAS, pursuant to the Exchange Agreement, dated September 12, 2000, by and between the Parent and SCP, SCP has the right, upon certain terms and conditions, to exchange any shares of Series A-1 Stock it may acquire upon exercise of the SCP Warrant for shares of the Parent's Series B Convertible Stock, par value $0.01 per share ("Series B Stock"); -------------- WHEREAS, pursuant to the Exchange Agreement, dated September 12, 2000, by and between the Parent and Safeguard 2000, Safeguard 2000 has the right, upon certain terms and conditions, to exchange any shares of Series A-2 Stock it may acquire upon exercise of the Safeguard Warrant for shares of the Series B Stock; WHEREAS, the Parent proposes to issue and sell up to 75,000 shares of the Parent's Series C-1 Preferred Stock, par value $0.01 per share ("Series C-1 ---------- Stock"), to SCP at a purchase price of $40.00 per share and to issue to SCP a - ----- warrant (the "Series C Warrant") to purchase 75,000 shares of Series C-2 ---------------- Preferred Stock, par value $0.01 per share ("Series C-2 Stock") pursuant to the ---------------- Series C Preferred Stock Purchase Agreement (the "Purchase Agreement"); ------------------ WHEREAS, as a condition to the consummation of the purchase and sale of the Series C-1 Stock, the Series C-2 Stock and the Series C Warrant, SCP and Safeguard 2000 have each agreed not to exercise their respective rights to convert the Series A-1 Stock and the Series A-2 Stock into shares of Series B Stock; Agreement Now Therefore, in consideration of the foregoing and the mutual covenants hereinafter set forth, the parties hereto, each intending to be legally bound hereby, agree as follows: 1. SCP agrees that it shall not exercise its right to convert any shares of Series A-1 Stock it may acquire upon exercise of the SCP Warrant into shares of Series B Stock. 2. Safeguard 2000 agrees that it shall not exercise its right to convert any shares of Series A-2 Stock it may acquire upon exercise of the Safeguard Warrant into shares of Series B Stock. 3. The parties agree that if they choose to terminate this Agreement or to amend the Agreement to permit the conversion of any shares of Series A-1 Stock or Series A-2 Stock acquired upon exercise of the SCP Warrant or the Safeguard Warrant, as applicable, into shares of Series B Stock, they shall exercise such conversion rights only upon obtaining the requisite approval of the stockholders of the Parent in accordance with applicable Nasdaq Stock Market regulations. 4. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 5. The construction, validity and interpretation of this Agreement will be governed by the internal laws of the State of Delaware without giving effect to any choice of law 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. 6. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] -2- IN WITNESS WHEREOF, the parties have executed this Warrant Agreement as of the date first above written. USDATA CORPORATION By: /s/ Robert Merry ----------------------- Robert Merry, Chief Executive Officer SAFEGUARD 2000 CAPITAL, L.P. By: Safeguard Delaware, Inc., its General Partner By: /s/ N. Jeffrey Klauder ----------------------- Name: N. Jeffrey Klauder ----------------------- Title: Vice President ---------------------- SCP PRIVATE EQUITY PARTNERS II, L.P. By: SCP Private Equity II General Partner, L.P., its General Partner By: SCP Private Equity II LLC, its Manager By: /s/ Winston Churchill ------------------------ Name: Winston Churchill ---------------------- Title: Manager --------------------- EX-8 9 0009.txt WAIVER OF ANTI-DILUTION, DATED AS OF 03/30/2001 EXHIBIT 8 Waiver of Anti-Dilution Rights Series A Preferred Stock and Series B Preferred Stock This Waiver of Anti-Dilution Rights for Series A Preferred Stock and Series B Preferred Stock ("Waiver") is entered into as of this 30th day of March 2001 ------ by and among USDATA Corporation, a Delaware corporation (the "Corporation"), ----------- Safeguard Delaware, Inc., a Delaware corporation ("Safeguard Delaware"), ------------------ Safeguard 2000 Capital, L.P., a Delaware limited partnership ("Safeguard 2000") -------------- and SCP Private Equity Partners II, L.P., a Delaware limited partnership ("SCP"). --- Recitals -------- WHEREAS, Safeguard Delaware and Safeguard 2000 (the "Preferred Stock --------------- Holders") hold shares of Series A Preferred Stock, par value $0.01 per share - ------- (the "Series A Preferred Stock") or Series B Preferred Stock, par value $0.01 ------------------------ per share (the "Series B Preferred Stock") of the Corporation; ------------------------ WHEREAS, Section 6(c) of the Corporation's Certificate of Designation for Series A Preferred Stock and Series B Preferred Stock (the "Series A and B -------------- Designation") provides for certain adjustments to the conversion prices of the - ----------- Series A Preferred Stock and Series B Preferred Stock upon certain issuances of stock or warrants by the Corporation (the "Anti-Dilution Rights"); -------------------- WHEREAS, the Corporation plans to issue and sell up to 75,000 shares of the Parent's Series C-1 Preferred Stock, par value $0.01 per share ("Series ------ C-1 Stock"), to SCP at a purchase price of $40.00 per share and to issue to SCP - --------- a warrant (the "Warrant") to purchase 75,000 shares of Series C-2 Preferred ------- Stock, par value $0.01 per share ("Series C-2 Stock") pursuant to the Series C ---------------- Preferred Stock Purchase Agreement (the "Purchase Agreement"); ------------------ WHEREAS, the Corporation plans to reserve shares of Series C-1 Stock and Series C-2 Stock, issuable as cumulative dividends under the Corporation's Certificate of Designation for Series C-1 Preferred Stock and Series C-2 Preferred Stock (the "PIK Shares"); ---------- WHEREAS, in order to induce SCP to enter into the Purchase Agreement and to consummate the transactions contemplated thereby, the Preferred Stock Holders now desire to provide for the waiver of their Anti-Dilution Rights with respect to their shares of the Series A Preferred Stock and the Series B Preferred Stock; Waiver Now Therefore, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, each intending to be legally bound hereby, agree as follows: 1. The Preferred Stock Holders hereby waive their rights to any adjustment to the conversion price of their shares of Series A Preferred Stock and Series B Preferred Stock under Section 6(c) of the Series A and B Designation arising from the issuance of the Series C-1 Stock, the Series C-2 Stock, the Warrant, the Warrant Shares and the PIK Shares. 2. The construction, validity and interpretation of this Waiver will be governed by the internal laws of the State of Delaware without giving effect to any choice of law 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. 3. This Waiver may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] -2- IN WITNESS WHEREOF, the parties have executed this Waiver of Anti- Dilution Rights for Series A Preferred Stock and Series B Preferred Stock as of the date first above written. USDATA CORPORATION By: /s/ Robert Merry ------------------------------------------- Robert Merry Chief Executive Officer SAFEGUARD DELAWARE, INC. By: /s/ N. Jeffrey Klauder ------------------------------------------- Name: N. Jeffrey Klauder ----------------------------------------- Title: Vice President ---------------------------------------- SAFEGUARD 2000 CAPITAL, L.P. By: Safeguard Delaware, Inc., its General Partner By: /s/ N. Jeffrey Klauder ------------------------------------------- Name: N. Jeffrey Klauder ----------------------------------------- Title: Vice President ---------------------------------------- SCP PRIVATE EQUITY PARTNERS II, L.P. By: SCP Private Equity II General Partner, L.P., its General Partner By: SCP Private Equity II LLC, its Manager By: /s/ Winston Churchill ------------------------------------------- Name: Winston Churchill ----------------------------------------- Title: Manager ---------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----