NOTICE OF EXERCISE OF PURCHASE OPTIONTO: eGroups, Inc. ("Borrower")(1) Subject to the successful completion of an Initial Public Offering, as setforth in the Loan Agreement, the undersigned Lender hereby elects to exerciseits Purchase Option with respect to 437,500 shares of the Series D PreferredStock of Borrower, pursuant to the terms of the Subordinated Loan and SecurityAgreement dated the 8th day of October, 1999, as amended pursuant to the letterdated November 17, 1999 between Borrower and the Lender (the "Loan Agreement"),and tenders herewith payment of the purchase price for such shares, togetherwith all applicable transfer taxes, if any, by converting and cancelling debtoutstanding in the amount of $3,150,000.00 which represents a portion of theoutstanding debt under that certain Subordinated Promissory Note dated October13, 1999.(2) In exercising its rights with respect to the Purchase Option, theundersigned hereby represents and warrants to Borrower as follows: (a) The right to acquire Preferred Stock or the Preferred Stock issuable uponexercise of the Lender's rights contained herein will be acquired for investmentand not with a view to the sale or distribution of any part thereof, and theLender has no present intention of selling or engaging in any publicdistribution of the same except pursuant to a registration or exemption.(b) The Lender understands (i) that the Preferred Stock issuable upon exerciseof its Purchase Option is not registered under the 1933 Act nor qualified underapplicable state securities laws on the ground that the issuance contemplated byits Purchase Option will be exempt from the registration and qualificationsrequirements thereof, and (ii) that the Borrower's reliance on such exemption ispredicated on the representations set forth in this notice.(c) The Lender has such knowledge and experience in financial and businessmatters as to be capable of evaluating the merits and risks of its investment,and has the ability to bear the economic risks of its investment.(d) The Lender understands that if the Borrower does not register with theSecurities and Exchange Commission pursuant to Section 12 of the 1934 Act (the"1934 Act"), or file reports pursuant to Section 15(d), of the 1934 Act, or if aregistration statement covering the securities under the 1933 Act is not ineffect when it desires to sell (i) the rights to purchase Preferred Stockpursuant to this its Purchase Option, or (ii) the Preferred Stock issuable uponexercise of the right to purchase, it may be required to hold such securitiesfor an indefinite period. The Lender also understands that any sale of itsrights of the Lender to purchase Preferred Stock or Preferred Stock which mightbe made by it in reliance upon Rule 144 under the 1933 Act may be made only inaccordance with the terms and conditions of that Rule.(e) Lender is an "accredited investor" within the meaning of the Securities andExchange Rule 501 of Regulation D, as presently in effect.<PAGE> 2(3) Subject to our review and acceptance of your Acknowledgement Certificatewith respect to this Notice, please issue a certificate or certificatesrepresenting said shares of Series D Preferred Stock in the name of theundersigned or in such other name as is specified below.COMDISCO, INC.(Name)Attn: Ms. Jill Hanses6111 N. River Rd.Rosemont, IL 60018(Address)Lender: COMDISCO, INC.By:Title: JILL R HANSESSENIOR VICE PRESIDENTDate:ACKNOWLEDGMENT OF RECEIPT OF NOTICE OF EXERCISE OF PURCHASE OPTIONThe undersigned eGroups, Inc. ("Borrower") hereby acknowledges receipt of the"Notice of Purchase" from Comdisco, Inc. ("Lender") to exercise its PurchaseOption with respect to 437,500 shares of the Series D Preferred Stock ofeGroups, Inc., pursuant to the terms of the Subordinated Loan and SecurityAgreement dated October 8, 1999, as amended pursuant to the letter datedNovember 17, 1999 (the "Agreement"). Borrower further acknowledges that suchshares remain subject to purchase under the terms of the Agreement.In connection with such Purchase Option the undersigned hereby represents,warrants and agrees as follows:(a) All representations and warranties of the Borrower made pursuant to theAgreement are true and correct in all material respects on and as of the date ofthis Acknowledgment with the same effect as though made on and as of this date(except as set forth in Schedule 1 to this Acknowledgment)(b) The Preferred Stock issuable upon exercise of the Lender's rights has beenduly and validly reserved and, when issued in accordance with the provisions ofthe Purchase Option, will be validly issued, fully paid and non-assessable, andwill be free of any taxes, liens, charges or encumbrances of any naturewhatsoever; provided, however, that the Preferred Stock issuable pursuant to thePurchase Option may be subject to restrictions on transfer under state and/orfederal securities laws. The Borrower has made available to the Lender true,correct and complete copies of its Charter and Bylaws, as amended. The issuanceof certificates for shares of Preferred Stock following exercise of the PurchaseOption shall be made without charge to the Lender for any issuance tax inrespect thereof, or other cost incurred by the Borrower in connection with suchpurchase and the related issuance of shares of Preferred Stock. The Borrowershall not be required to pay any tax which may <PAGE> 3be payable in respect of any transfer involved and the issuance and delivery ofany certificate in a name other than that of the Lender.(c) The issuance to Lender of the right to acquire the shares of PreferredStock, has been duly authorized by all necessary corporate action on the part ofthe Borrower, and the Purchase Option is not inconsistent with the Borrower'sCharter or Bylaws, does not contravene any law or governmental rule, regulationor order applicable to it, does not and will not contravene any provision of, orconstitute a default under, any material indenture, mortgage, contract or otherinstrument to which it is a party or by which it is bound, and the PurchaseOption constitutes a legal, valid and binding agreement of the Borrower,enforceable in accordance with its terms.(d) No consent or approval of, giving of notice to, registration with, or takingof any other action in respect of any state, federal or other governmentalauthority or agency is required with respect to the execution, delivery andperformance by the Borrower of its obligations under the Purchase Option, exceptfor the filing of notices pursuant to Regulation D under the 1933 Act and anyfiling required by applicable state securities law, which filings will beeffective by the time required thereby.(e) The Borrower is not, pursuant to the terms of any other agreement currentlyin existence, under any obligation to register under the 1933 Act any of itspresently outstanding securities or any of its securities which may hereafter beissued.(f) Subject to the accuracy of the Lender's representations in its Notice, theissuance of the Preferred Stock upon exercise of the Purchase Option willconstitute a transaction exempt from (i) the registration requirements ofSection 5 of the 1933 Act, in reliance upon Section 4(2) thereof, and (ii) thequalification requirements of the applicable state securities laws.(g) If Lender proposes to sell Preferred Stock issuable upon the exercise of thePurchase Option in compliance with Rule 144 promulgated by the Securities andExchange Commission, the Borrower shall furnish to the Lender, within five (5)days after receipt of a written request, a written statement confirming theBorrower's compliance with the filing requirements of the Securities andExchange Commission as set forth in such Rule, as such Rule may be amended fromtime to time.Borrower acknowledges that Lender has the right to review Schedule 1 to thisCertificate and that Lender may in its sole discretion withdraw its notice ofexercise of Purchase Option within the ten (10) business days after Lender'sreceipt of this Acknowledgment.Borrower: EGROUPS, INC.By:Title:Date:Sponsored Links