-----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, MWa/4vhp3xLB1m3iRMu6ly3tPDanZBEhv6k/SnsjICwxIw7854VLRMv9ET1McEZw B6BJqB7G1Nlc8jdMdmK5Yg== 0001012975-05-000353.txt : 20051021 0001012975-05-000353.hdr.sgml : 20051021 20051021154819 ACCESSION NUMBER: 0001012975-05-000353 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20051021 DATE AS OF CHANGE: 20051021 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SABA SOFTWARE INC CENTRAL INDEX KEY: 0001070380 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 943267638 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-58995 FILM NUMBER: 051149734 BUSINESS ADDRESS: STREET 1: 2400 BRIDGE PARKWAY STREET 2: SIOTE 150 CITY: REDWOOD SHORES STATE: CA ZIP: 94065-1166 BUSINESS PHONE: 6506963822 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PEQUOT CAPITAL MANAGEMENT INC CENTRAL INDEX KEY: 0001071955 IRS NUMBER: 061524885 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 500 NYALA FARM ROAD CITY: WESTPORT STATE: CT ZIP: 06880 BUSINESS PHONE: 2034292200 MAIL ADDRESS: STREET 1: 500 NYALA FARM ROAD CITY: WESTPORT STATE: CT ZIP: 06880 FORMER COMPANY: FORMER CONFORMED NAME: PEQUOT CAPITAL MANAGEMENT INC/CT/ DATE OF NAME CHANGE: 19981118 SC 13D/A 1 eamendno1tosaba13d.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D/A UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 1) SABA SOFTWARE, INC. ------------------- (Name of Issuer) COMMON STOCK, PAR VALUE $0.001 PER SHARE ---------------------------------------- (Title of Class of Securities) 784932600 --------- (CUSIP Number) Aryeh Davis, Chief Operating Officer, General Counsel and Secretary Pequot Capital Management, Inc. 500 Nyala Farm Road, Westport, CT 06880 (203) 429-2200 ---------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) OCTOBER 5, 2005 --------------- (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 that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent. *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 disclosures provided in a prior cover page. The information required on 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, as amended ("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. 784932600 1 Names of Reporting Persons. Pequot Capital Management, Inc. I.R.S. Identification Nos. of above persons (entities only) 06-1524885 -------------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [X] - ---------------------------------------------------------------------------- 3 SEC Use Only - ---------------------------------------------------------------------------- 4 Source of Funds (See Instructions) 00 - ---------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] - ---------------------------------------------------------------------------- 6 Citizenship or Place of Organization Connecticut - ---------------------------------------------------------------------------- 7 Sole Voting Power 2,774,840(1) --------------------------------------------- Number of 8 Shared Voting Power 0 --------------------------------------------- Shares Bene- 9 Sole Dispositive Power 2,774,840(1) --------------------------------------------- ficially Owned 10 Shared Dispositive Power 0 --------------------------------------------- 11 Aggregate Amount Beneficially Owned by Each Reporting Person 2,774,840(1) - ----------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ](1) - ---------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 15.5%(1) - ---------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions) IA - ---------------------------------------------------------------------------- - ---------------- (1) The Reporting Person (as defined below) may be deemed to be part of a group with the other Voting Stockholder Parties (as defined below) and Centra pursuant to the terms of the Voting Agreement (as defined below), in each case, as described in Items 4 and 5. The Reporting Person does not affirm to be part of a group and expressly disclaims beneficial ownership of the 2,924,879 shares of Common Stock (as defined herein), in the aggregate, beneficially owned by the other Voting Stockholder Parties and Centra (including shares underlying options exercisable in 60 days). Accordingly, such shares of Common Stock are not included in the amounts specified by the Reporting Person above. 2 This Amendment No. 1 is filed by Pequot Capital Management, Inc., a Connecticut corporation (the "Reporting Person"), and amends and restates Items 2, 3, 4, 5, 6 and 7 of the Schedule 13D filed by the Reporting Person on August 11, 2004 ("Schedule 13D," and together with this Amendment No. 1, the "Statement"). This Amendment No. 1 relates to the Common Stock, par value $0.001 per share (the "Common Stock"), of Saba Software, Inc., a Delaware corporation (the "Issuer"). Capitalized terms used below and not otherwise defined herein shall have the meaning set forth in the Schedule 13D. ITEM 2. IDENTITY AND BACKGROUND This Statement is being filed on behalf of the Reporting Person. The Reporting Person is an investment adviser registered under the Investment Advisers Act of 1940, and acts as investment adviser to certain managed accounts over which the Reporting Person exercises discretionary authority (the "Accounts"). The address of the principal business and office of the Reporting Person, and of the Executive Officer, Director and Controlling Person (as defined below) is 500 Nyala Farm Road, Westport, CT 06880. The Reporting Person is the investment adviser/manager of, and exercises sole investment discretion over, Pequot Private Equity Fund III, L.P., a Delaware limited partnership ("PPE3") and Pequot Offshore Private Equity Partners III, L.P., a Cayman Islands limited partnership ("PPE3O", and together with PPE3, the "Funds"), each of which are Accounts. Mr. Arthur J. Samberg is the executive officer, director and the controlling shareholder of the Reporting Person (collectively, the "Executive Officer, Director and Controlling Person"). Mr. Samberg is a citizen of the United States. Lawrence D. Lenihan, Jr., an employee of the Reporting Person, is a director of the Issuer. Neither the Reporting Person nor Mr. Samberg has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). Neither the Reporting Person nor Mr. Samberg has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction which resulted in 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. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION As more fully described in Item 4 hereof, pursuant to a Purchase Agreement, dated as of August 9, 2004 (the "Purchase Agreement"), with the Funds, the Issuer issued and sold to the Funds an aggregate of 2,674,500 shares of Common Stock for a purchase price of $3.2841 per share of Common Stock representing aggregate consideration of $8,783,325.45. The funds for the purchase of such securities held by the Accounts were obtained from the contributions of the Accounts' partners/shareholders The Reporting Person entered into the Voting Agreement as a condition to Centra's (as such term is defined in Item 4) execution of the Merger Agreement (as such term is defined in Item 4), and as such, no funds were expended by the Reporting Person in connection with the execution of the Voting Agreement. On October 14, 2005, the Reporting Person acquired an aggregate of 95,340 shares of Common Stock at purchase prices ranging from $3.09 per share to $3.14 per share in open market transactions. The funds for the purchase of such securities held by the Accounts were obtained from the contributions of the Accounts' partners/shareholders. A copy of the Purchase Agreement was previously filed as Exhibit 1 to the Schedule 13D and is incorporated herein by reference. A copy of the Merger Agreement is incorporated herein by reference. A copy of the Voting Agreement is incorporated herein by reference as Exhibit 2. The descriptions herein of such agreements are qualified in their entirety by reference to such agreements. ITEM 4. PURPOSE OF TRANSACTION Item 4 is hereby amended and restated in its entirety as follows: 3 The Reporting Person acquired the shares of Common Stock pursuant to the terms of the Purchase Agreement. In addition, on October 14, 2005, the Reporting Person acquired an aggregate of 95,340 shares of Common Stock at purchase prices ranging from $3.09 per share to $3.14 per share in open market transactions. The Reporting Person considers the shares of Common Stock that it beneficially owns an investment made in the ordinary course of its business. The Reporting Person intends to review on a continuing basis its investment in the Issuer, including the Issuer's business, financial condition and operating results and general market and industry conditions and, based upon such review, may acquire additional shares of Common Stock or dispose of shares of Common Stock in the open market, in privately negotiated transactions or in any other lawful manner. PURCHASE AGREEMENT On August 10, 2004, pursuant to the Purchase Agreement, the Issuer issued and sold to the Funds an aggregate of 2,674,500 shares of Common Stock for a purchase price of $3.2841 per share of Common Stock representing aggregate consideration of $8,783,325.45. The funds for the purchase of such Common Stock held by the Funds were obtained from the contributions of the Funds' partners/shareholders. Capitalized terms used but not defined in this Item 4 or elsewhere in this Statement shall have the meanings assigned to such terms in the Purchase Agreement. Pursuant to the Purchase Agreement, at the Closing, the Issuer amended its by-laws to increase the size of its board of directors from five to six members and appointed Mr. Lawrence D. Lenihan, Jr. as a Class III member of the Board of Directors. From and after the Closing, for so long as the Reporting Person beneficially holds at least seventy-five percent of the Common Stock purchased by the Funds pursuant to the Purchase Agreement, the Issuer has agreed to use its best efforts to cause: (i) Mr. Lenihan to remain a Class III director; (ii) Mr. Lenihan to be nominated and elected to the board of directors of the Issuer in any election of directors; and (iii) any vacancy, should Mr. Lenihan cease for any reason to be a member of the board of directors of the Issuer, to be filled by a replacement designated by the Reporting Person and reasonably acceptable to the Issuer. REGISTRATION RIGHTS AGREEMENT In connection with the transactions contemplated by the Purchase Agreement, the Issuer and the Funds entered into a Registration Rights Agreement (the "Registration Rights Agreement"), dated as of August 9, 2004. Pursuant to the Registration Rights Agreement, the Issuer filed a Registration Statement on Form S-3 registering the Common Stock for resale on a continuous basis under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"), which was declared effective on January 11, 2005. The Issuer is required to keep such registration statement effective until all the Common Stock registered thereunder is sold or the holders are entitled to sell such Common Stock without volume restrictions under Rule 144(k) under the Securities Act. MERGER AGREEMENT On October 5, 2005, the Issuer entered into an Agreement and Plan of Reorganization (the "Merger Agreement") by and among the Issuer, Spruce Acquisition Corporation, a Delaware corporation and a wholly owned subsidiary of the Issuer ("Merger Sub 1"), Spruce Acquisition, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Issuer ("Merger Sub 2"), and Centra Software, Inc., a Delaware corporation ("Centra"). Pursuant to the Merger Agreement, (i) Merger Sub 1 will merge with and into Centra, with Centra as the surviving corporation (the "First Step Merger"), and (ii) immediately after the effective time of the First Step Merger, Centra will merge with and into Merger Sub 2, with Merger Sub 2 as the surviving company (the "Second Step Merger," and together with the First Step Merger, the "Mergers"). The boards of directors of the Parent, Merger Sub 1, Merger Sub 2 and Centra have unanimously approved the Mergers and the Merger Agreement. Under the terms of the Merger Agreement, each outstanding share of Centra's common stock will be converted into the right to receive 0.354 shares of Parent's common stock and $0.663 in cash. The Mergers are subject to customary conditions to closing, including: (i) approval of the holders of majority of the Common Stock of the Issuer; (ii) approval of the holders of majority of the common stock of Centra, par value $0.001 ("Centra Common Stock"); (iii) the accuracy of representations and warranties and the performance and compliance with all covenants and the absence of any material adverse effect with respect to each party's business (in each case, subject to certain exceptions); (iv) the delivery of customary opinions from legal counsel to each party that the Mergers will qualify as a tax-free reorganization for federal income tax purposes; 4 (v) Centra obtaining all required third party consents and approvals; and (vi) holders of less than ten percent in the aggregate of the Centra Common Stock having appraisal rights that have not been waived. The closing of the Mergers is expected to occur during the third quarter of the fiscal year ending May 31, 2006. VOTING AGREEMENT Concurrently with, and as a condition to, Centra's execution of the Merger Agreement, Centra and certain shareholders of the Issuer, consisting of the Funds, Babak Yazdani ("Yazdani"), Sequoia Capital IX ("Sequoia IX"), Sequoia Capital IX Principals Fund ("Sequoia Principals"), Sequoia Capital Entrepreneurs Annex Fund ("SCEAF"), Sequoia Capital Franchise Fund ("SCFF") and Sequoia Capital Franchise Partners ("SCFP, together with Sequoia IX, Sequoia Principals, SCEAF and SCFF, "Sequoia," and collectively with the Funds and Yazdani, the "Stockholder Parties"), entered into a Voting Agreement (the "Voting Agreement"). Under the Voting Agreement, the Stockholder Parties agreed that, at any meeting of the stockholders of the Issuer and on every action or approval by written consent or resolution of the stockholders of the Issuer for purposes of voting on the Merger Agreement and the transactions contemplated thereby, the Stockholder Parties will vote or cause the record holder to vote in favor of the approval of the First Step Merger and the Merger Agreement and the transactions contemplated thereby and against any action that would impede, interfere with, delay, postpone, discourage or adversely affect the consummation of the First Step Merger or any of the other transactions contemplated by the Merger Agreement. The Stockholder Parties also agreed: (i) not to enter into any agreement or understanding with any person the effect of which would be inconsistent with, or would violate, the agreements to vote their respective shares in the manner described above; and (ii) to execute and deliver to Centra a proxy in a form reasonably acceptable to Centra with respect to each meeting or action or approval by written consent or resolution of the stockholders of the Issuer. Pursuant to the terms of the Voting Agreement, the Stockholder Parties also agreed, except for certain permitted transferees, not to transfer, sell, exchange, pledge, assign, or otherwise dispose of or encumber such stockholder's shares of the Issuer or deposit any of each such Stockholder Party's share of the Issuer into a voting trust or grant certain proxies or to make or accept any offer or other agreement relating thereto unless the permitted transferee agrees in writing to be bound by the terms of the Voting Agreement. Pursuant to its terms, the Voting Agreement, and all rights and obligations of the parties thereunder, terminate upon the earlier of: (i) the effective time of the First Step Merger and (ii) the termination of the Merger Agreement. Copies of the Purchase Agreement and the Registration Rights Agreement (which contains the form of Penalty Warrant as an exhibit) were previously filed as Exhibits 1 and 2, respectively, to the Schedule 13D and are incorporated herein by reference. A copy of the Merger Agreement is incorporated herein by reference. A copy of the Voting Agreement is incorporated herein by reference as Exhibit 2. The descriptions herein of such agreements are qualified in their entirety by reference to such agreements. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER Item 5 is hereby amended and restated in its entirety as follows: (a) The Reporting Person beneficially owns 2,774,840 shares of Common Stock, representing approximately 15.5% of shares of Common Stock outstanding as of September 23, 2005. In addition, by virtue of each of the Voting Agreement it could be alleged that a "group," within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or Rule 13d-5(b)(1) thereunder, has been formed that includes the other Voting Stockholder Parties, Centra and the Reporting Person. While the Reporting Person does not concede that such a "group" has been formed, this filing is being made to ensure compliance with the Exchange Act. Such a group including the other Voting Stockholder Parties, Centra and the Reporting Person would be deemed to beneficially own, in the aggregate, 5,699,719 shares of Common Stock (including shares underlying options exercisable within 60 days of the date hereof), representing 31.8% of the Common Stock outstanding as of September 23, 2005. The Reporting Person expressly disclaims beneficial ownership of Common Stock beneficially owned by any other group member and does not affirm that any such "group" exists. (b) The Reporting Person has the sole power to vote, direct the vote, dispose and direct the disposition of the 2,774,840 shares of Common Stock. 5 Pursuant to, and to the extent set forth in, the Voting Agreement, it could be alleged that the Reporting Person shares voting and dispositive power with respect to the shares of Common Stock beneficially owned by the other Voting Stockholder Parties and Centra. To the knowledge of the Reporting Person and based on documents publicly filed by the other group members the name, address and principal occupation of each group member is as set forth on Exhibit 3 hereto and is incorporated herein by reference. To the knowledge of the Reporting Person, the name, address and principal occupation of the officers, directors and controlling person(s) of the other group members is as set forth on Exhibit 3 hereto and is incorporated herein by reference. To the knowledge of the Reporting Person and based on documents publicly filed by the group members, during the last five years, no group member has been: (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (ii) 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. (c) Except for the information set forth, or incorporated by reference, in Items 3 and 4, which is incorporated herein by reference, none of the Reporting Persons has effected any transaction relating to the Common Stock during the past 60 days. (d) Not applicable. (e) Not applicable. ITEM 6. CONTRACTS, AGREEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER Reference is made to the Purchase Agreement and the Registration Rights Agreement described in Items 3 and 4, which were previously filed as Exhibits 1 and 2 to the Schedule 13D, and are incorporated by reference herein. In connection with the Reporting Person's participation (through its employees) on the Issuer's Board of Directors, on December 14, 2004 (the "Grant Date"), the Issuer granted options to purchase 5,000 shares of Common Stock to Lawrence D. Lenihan, Jr. (the "Director's Options"), pursuant to the Issuer's 2000 Stock Incentive Plan. The Director's Options are immediately exercisable at the exercise price of $4.20 per share and expire on December 14, 2010. The description of the Director's Options is qualified in its entirety by reference to the Issuer's 2000 Stock Incentive Plan and is incorporated herein by reference. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit 1 Agreement and Plan of Reorganization, dated as of October 5, 2005, by and among the Issuer, Spruce Acquisition Corporation, Spruce Acquisition, LLC and Centra Software, Inc. (incorporated by reference to Exhibit 2.1 to the Issuer's Form 8-K, dated October 5, 2005 (filed October 6, 2005)). Exhibit 2 Voting Agreement, by and among Centra, the Funds, Sequoia and Babak Yazdani. Exhibit 3 Name, address and principal occupation of certain group members. Exhibit 4 Issuer 2002 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 of the Issuer's Registration Statement on Form S-1 (Registration No. 333-95761) filed January 31, 2000). 6 S I G N A T U R E After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete, and correct. Date: October 21, 2005 Pequot Capital Management, Inc. /s/ Aryeh Davis -------------------------------------- Aryeh Davis, Chief Operating Officer, General Counsel and Secretary 7 EXHIBIT INDEX ------------- Exhibit 1 Agreement and Plan of Reorganization, dated as of October 5, 2005, by and among the Issuer, Spruce Acquisition Corporation, Spruce Acquisition, LLC and Centra Software, Inc. (incorporated by reference to Exhibit 2.1 to the Issuer's Form 8-K, dated October 5, 2005 (filed October 6, 2005)). Exhibit 2 Voting Agreement, by and among Centra, the Funds, Sequoia and Babak Yazdani. Exhibit 3 Name, address and principal occupation of certain group members. Exhibit 4 Issuer 2002 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 of the Issuer's Registration Statement on Form S-1 (Registration No. 333-95761) filed January 31, 2000). 8 EXHIBIT 3 To the knowledge of the Reporting Person, the address of BabakYazdani is 2400 Bridge Parkway, Redwood Shores, California 94065 and his principal occupation is serving as the Chairman of the Board and Chief Executive Officer of the Issuer. To the knowledge of the Reporting Person, based on the Schedule 13D/A filed by Sequoia on April 12, 2005: (a) Each of Sequoia IX, Sequoia Principals, Sequoia Capital Entrepreneurs Fund, SCEAF, SC IX Management LLC, SC IX.I Management LLC, SCFF, SCFP and SCFF Management LLC are each referred to as a Sequoia Reporting Entity. Each of Michael Goguen, Mark Kvamme, Douglas Leone, Michael Moritz and Mark Stevens are referred to as a "Sequoia Reporting Individual." Each Sequoia Reporting Entity and each Sequoia Reporting Individuals are referred to as a Sequoia Reporting Person. (b) The address of each Sequoia Reporting Person is 3000 Sand Hill Road, Building 4, Suite 280, Menlo Park, California 94025. (c) The principal business or occupation of each Sequoia Reporting Individual is engaging through venture capital investment entities in acquiring, holding and disposing of interests in various companies for investment purposes. (d) Each Sequoia Reporting Entity is organized in the State of Delaware and is a venture capital investment entity. (e) Except as set forth below, each of the Sequoia Reporting Individuals is a citizen of the United States of America and is a managing member of the limited liability companies that are the general partners of the following entities ("Sequoia Holding Entities") that hold of record shares of the Issuer's Common Stock: NAME OF MANAGING NAME OF SEQUOIA HOLDING MEMBERS OF THE GENERAL ENTITY NAME OF GENERAL PARTNER* PARTNER* - ------------------------------------------------------------------------------ Sequoia Capital IX SC IX.I Management LLC Michael Goguen, Mark Kvamme, Douglas Leone, Michael Moritz and Mark Stevens Sequoia Capital IX SC IX.I Management LLC* Michael Goguen, Mark Principals Fund* Kvamme, Douglas Leone, Michael Moritz and Mark Stevens* Sequoia Capital SCIX.I Management LLC Michael Goguen, Mark Entrepreneurs Annex Fund Kvamme, Douglas Leone, Michael Moritz and Mark Stevens Sequoia Capital Franchise SCFF Management LLC Michael Goguen, Douglas Fund Leone, Michael Moritz and Mark Stevens Sequoia Capital Franchise SCFF Management LLC Michael Goguen, Douglas Partners Leone, Michael Moritz and Mark Stevens
*NOTE: Sequoia Capital IX Principals Fund is a limited liability company. Accordingly, the entity shown in the second column is the Managing Member (not the General Partner), and the individuals shown in the third column are Managing Members of the Managing Member. 9 EX-2 2 e1008539sprucestockholder.txt VOTING AGREEMENT THIS VOTING AGREEMENT (this "AGREEMENT") is entered into as of the 5th day of October, 2005 by and among Centra Software, Inc., a Delaware corporation (the "COMPANY"), and the undersigned holders of common stock of Saba Software, Inc., a Delaware corporation ("PARENT"), $0.001 par value ("PARENT COMMON STOCK"), listed on the Schedule of Stockholders attached hereto as SCHEDULE A (individually referred to herein as a "STOCKHOLDER," and collectively referred to herein as the "STOCKHOLDERS"). Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Merger Agreement (as defined below). RECITALS A. Parent, Spruce Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent ("MERGER SUB 1"), Spruce Acquisition, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Parent ("MERGER SUB 2"), and the Company have concurrently herewith entered into an Agreement and Plan of Reorganization, dated as of the date hereof (the "MERGER AGREEMENT"), pursuant to which (i) Merger Sub 1 will merge with and into the Company, with the Company as the surviving corporation (the "FIRST STEP MERGER"), and (ii) immediately after the effective time of the First Step Merger, the Company, as a wholly-owned subsidiary of Parent, will be merged with and into Merger Sub 2, with Merger Sub 2 as the surviving company (the "SECOND STEP Merger"). B. In order to induce the Company to enter into the Merger Agreement, the Company has requested that each of the Stockholders, and each of the Stockholders has agreed to, enter into this Agreement. C. Each Stockholder beneficially owns the number of shares of Parent Common Stock and the options to purchase Parent Common Stock set forth opposite such Stockholder's name on SCHEDULE A hereto as of the date hereof, and the Company and each Stockholder wish to bind each Stockholder to vote such number of shares of Parent Common Stock so owned by such Stockholder as contemplated herein. NOW, THEREFORE, in consideration of the promises and the mutual agreements, provisions and covenants set forth in the Merger Agreement and in this Agreement, it is hereby agreed as follows: 1. Agreement to Retain Shares. 1.1 AGREEMENT TO RETAIN SHARES. Each Stockholder agrees not to transfer (except as may be specifically required by court order, by operation of law or as a distribution to members or partners of such Stockholder (a "PERMITTED Transferee")), sell, exchange, pledge or otherwise dispose of or encumber such Stockholder's Shares (as defined below) or deposit any of such Stockholder's Shares into a voting trust or grant a proxy (except for a Proxy (as defined below)) or to make or accept any offer or other agreement relating thereto, at any time prior to the Expiration Date (as defined below), unless the Permitted Transferee of such Stockholder's Shares agrees in writing to be bound by the terms hereof. Each Stockholder agrees and consents to the entry of stop transfer instructions by Parent consistent with the terms of this Section 1 against the transfer of any of such Stockholder's Shares. As used herein, the term "EXPIRATION DATE" shall mean the earlier to occur of (i) the Effective Time (as defined in the Merger Agreement), or (ii) the termination of the Merger Agreement. As used herein, the term "SHARES" shall mean all issued and outstanding shares of Parent Common Stock owned of record or beneficially by Stockholder or over which Stockholder exercises voting power, in each case, as of the record date for persons entitled (i) to receive notice of, and to vote at, the meeting of the stockholders of Parent called for the purpose of voting on matters referred to in section 2.1, or (ii) to take action by written consent of the stockholders of Parent with respect to the matters referred to in Section 2.1; all other securities of Parent (including all options, warrants and other rights to acquire shares of Parent Common Stock) beneficially owned by the Stockholder as of the date of this Agreement; and all additional securities of Parent (including all additional shares of Parent Common Stock and all additional options, warrants and other rights to acquire shares of Parent Common Stock) of which Stockholder acquires ownership during the period from the date of this Agreement through the earlier of termination of this Agreement pursuant to Section 6 or the record date for the meeting at which the stockholders of Parent are asked to vote upon the approval and adoption of the Merger Agreement and the approval of the First Step Merger. Stockholder agrees that any shares of capital stock of Parent that Stockholder purchases or with respect to which Stockholder otherwise acquires beneficial ownership or over which Stockholder exercises voting power after the execution of this Agreement and prior to the earlier of termination of this Agreement pursuant to Section 6 or the record date for the meeting at which the stockholders of Parent are asked to vote upon the approval and adoption of the Merger Agreement and the approval of the First Step Merger, shall be subject to the terms and conditions of this Agreement to the same extent as if they constituted Shares on the date hereof. 2. Voting. 2.1 AGREEMENT TO VOTE SHARES. Each Stockholder hereby agrees to appear, or cause the holder of record (the "RECORD HOLDER") of any shares of Parent Common Stock included in such Stockholder's Shares on any applicable record date to appear, in person or by proxy, for the purpose of obtaining a quorum at any annual or special meeting of the stockholders of Parent and at any adjournment thereof and on every action or approval by written consent or resolution of the stockholders of Parent for the purpose of voting on the Merger Agreement and the transactions contemplated thereby (a "MEETING"). Prior to the Expiration Date, at every Meeting, each Stockholder shall vote or cause the Record Holder to vote, such Shares: (a) in favor of approval of the First Step Merger and the Merger Agreement and the transactions contemplated thereby, and any matter that could reasonably be expected to facilitate the First Step Merger; and (b) against any action which would, impede, interfere with, delay, postpone, discourage or adversely affect the consummation of the First Step Merger or any of the other transactions contemplated by the Merger Agreement. 2 Stockholder further agrees not to enter into any agreement or understanding with any person the effect of which would be inconsistent with, or would violate, any provision contained in this Section 2.1. 2.2 OBLIGATIONS AS DIRECTOR AND/OR OFFICER. If at any time prior to the Expiration Date, a Stockholder (or any affiliate of Stockholder) is a member of the board of directors of Parent ("DIRECTOR") or an officer of Parent ("Officer"), nothing in this Agreement shall be deemed to limit or restrict such Stockholder's ability to act or vote in his or her capacity as a Director or Officer in any manner he or she so chooses, it being agreed and understood that this Agreement shall apply to such Stockholder solely in his or her capacity as a stockholder of Parent and shall not apply to his or her actions, judgments or decisions as a Director or Officer. 3. IRREVOCABLE PROXY. Promptly after the execution of this Agreement, each Stockholder shall execute and deliver to the Company a duly executed proxy in a form reasonably acceptable to the Company (a "PROXY") with respect to each and every Meeting or action or approval by written consent or resolution of the stockholders of Parent, such Proxy to cover the total number of such Stockholder's Shares held of record at any such meeting or in connection with any such written consent which calls for the vote of the stockholders of Parent to approve the First Step Merger, the Merger Agreement, the transactions contemplated thereby, or any matter that could reasonably be expected to facilitate the First Step Merger. 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF EACH STOCKHOLDER. Each Stockholder hereby represents, warrants and covenants to the Company as follows: 4.1 Stockholder is the beneficial owner of the number of Shares and options to purchase Shares listed opposite his, her or its name on SCHEDULE A. The number of Shares set forth on SCHEDULE A are the only Shares beneficially owned by Stockholder and, except as set forth on SCHEDULE A, Stockholder holds no options to purchase or rights to subscribe for or otherwise acquire any securities of Parent and has no other interest in or voting rights with respect to any securities of Parent. As of the date hereof, except as set forth on the signature page hereto, (i) such Stockholder's Shares are free and clear of any liens, claims, options, charges or other encumbrances, (ii) none of such Stockholder's Shares are deposited into a voting trust with voting instructions inconsistent with any of the provisions of Section 2; and (iii) other than a Proxy, no proxy is granted, and no voting agreement or similar agreement is entered into, with respect to any of such Stockholder's Shares that is inconsistent with any of the provisions of Section 2. 4.2 Stockholder has the legal capacity and absolute and unrestricted right, power, authority and capacity to execute and deliver this Agreement and a Proxy, and to perform its obligations hereunder and thereunder. This Agreement has been (and a Proxy will be) duly executed and delivered by such Stockholder and constitute legal, valid and binding obligations of such Stockholder, enforceable against such Stockholder in accordance with their terms, subject to (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies. 4.3 The execution and delivery of this Agreement and a Proxy by such Stockholder do and will not, and the performance of this Agreement and a Proxy by such 3 Stockholder will not result in or constitute (with or without notice or lapse of time) any breach of or default under, or give to any other Person (as defined in the Merger Agreement) (with or without notice or lapse of time) any right of termination, amendment, acceleration or cancellation of, or result (with or without notice or lapse of time) in the creation of any encumbrance or restriction on any of such Stockholder's Shares pursuant to, any contract to which such Stockholder is a party or by which such Stockholder or any of his, her or its affiliates or properties is or may be bound or affected. 4.4 Subject to and without limiting in any respect, Section 2.2, Stockholder shall not advise or counsel or seek to advise or counsel any Person to vote against the First Step Merger, any of the other transactions contemplated by the Merger Agreement, or any matter that could reasonably be expected to facilitate the First Step Merger. 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents and warrants to each Stockholder as follows: 5.1 The Company has the legal capacity and absolute and unrestricted right, power, authority and capacity to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement has been duly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies. 6. TERMINATION. This Agreement shall terminate and shall have no further force or effect as of the Expiration Date. 7. Miscellaneous. 7.1 SEVERABILITY. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, then the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. 7.2 BINDING EFFECT AND ASSIGNMENT. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, but, except as otherwise specifically provided herein, neither this Agreement nor any of the rights, interests or obligations of the parties hereto may be assigned by either of the parties without the prior written consent of the other. This Agreement is intended to bind each Stockholder as a stockholder of Parent only with respect to the specific matters set forth herein. 7.3 AMENDMENT AND MODIFICATION. This Agreement may not be modified, amended, altered or supplemented except by the execution and delivery of a written agreement executed by the parties hereto. 4 7.4 SPECIFIC PERFORMANCE; INJUNCTIVE RELIEF. The parties hereto acknowledge that the Company will be irreparably harmed and that there will be no adequate remedy at law for a violation of any of the covenants or agreements of any Stockholder set forth herein. Therefore, it is agreed that, in addition to any other remedies that may be available to the Company upon any such violation, the Company shall have the right to enforce such covenants and agreements by specific performance, injunctive relief or by any other means available to the Company at law or in equity and each Stockholder hereby waives any and all defenses which could exist in its favor in connection with such enforcement and waives any requirement for the security or posting of any bond in connection with such enforcement. 7.5 NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial delivery service, or mailed by registered or certified mail (return receipt requested) or sent via facsimile (with confirmation of receipt) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): (a) If to a Stockholder, at the address set forth below such Stockholder's signature on the signature page hereto with a copy to: Morrison & Foerster LLP 755 Page Mill Road Palo Alto, CA 94304-1010 Attention: Paul "Chip" L. Lion III, Esq. Facsimile: (650) 494-0792 (b) If to the Company: Centra Software, Inc. 430 Bedford St. Lexington, MA 02420 Attention: Melinda Brown, General Counsel Facsimile: (781) 897-8188 with a copy to: Foley Hoag LLP 155 Seaport Boulevard Boston, MA 02110 Attention: Robert L. Birnbaum, Esq. Facsimile: (617) 832-7000 or to such other address as any party hereto may designate for itself by notice given as herein provided. 7.6 GOVERNING LAW. This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of Delaware without reference to such state's principles of conflicts of laws. 5 7.7 ENTIRE AGREEMENT. This Agreement and each Proxy contain the entire understanding of the parties in respect of the subject matter hereof, and supersede all prior negotiations and understandings between the parties with respect to such subject matter. 7.8 COUNTERPARTS; DELIVERY BY FACSIMILE. This Agreement may be executed in several counterparts, each of which shall be an original, but all of which together shall constitute one and the same agreement. This Agreement may be delivered by facsimile. 7.9 EFFECT OF HEADINGS. The section headings herein are for convenience only and shall not affect the construction or interpretation of this Agreement. 7.10 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All representations, warranties, covenants and agreements made by each Stockholder and the Company in this Agreement shall survive until, but terminate at, the Expiration Date. 7.11 WAIVER OF APPRAISAL RIGHTS. Each Stockholder hereby irrevocably and unconditionally waives, and agrees to cause to be waived and to prevent the exercise of, any rights of appraisal, any dissenters' rights and any similar rights relating to the First Step Merger or any related transaction that each such Stockholder or any other Person may have by virtue of the ownership of any Shares. 7.12 NON-EXCLUSIVITY. The rights and remedies of the Company or any Stockholder under this Agreement are not exclusive of or limited by any other rights or remedies which either the Company or any Stockholder may have, whether at law, in equity, by contract or otherwise, all of which shall be cumulative (and not alternative). Without limiting the generality of the foregoing, the rights and remedies of the Company and each Stockholder under this Agreement, and the obligations and liabilities of the Company and each Stockholder under this Agreement, are in addition to their respective rights, remedies, obligations and liabilities under common law requirements and under all applicable statutes, rules and regulations. Nothing in this Agreement shall limit the Company's obligations or any Stockholder's obligations, or the rights or remedies of the Company or any Stockholder, under any agreement between the Company and any Stockholder, and nothing in any such agreement shall limit any of the Company's or any Stockholder's obligations, or any of the rights or remedies of the Company or any Stockholder, under this Agreement. [Signature Pages Follow] 6 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first above written. COMPANY CENTRA SOFTWARE, INC. By: ------------------------- Name: ----------------------- Title: ---------------------- Signature Page to Parent Stockholder Voting Agreement STOCKHOLDER [NAME] - ------------------------------ (Signature) - ------------------------------ (Print Name) - ------------------------------ (Print Address) - ------------------------------ (Print Address) - ------------------------------ (Print Telephone Number) - ------------------------------ (Print Facsimile Number) - ------------------------------ (Social Security or Tax I.D. Number) NUMBER OF SHARES OF PARENT BENEFICIALLY OWNED BY STOCKHOLDER ON THE DATE OF THIS AGREEMENT: Common Stock: _________ shares of Parent Common Stock Stock Options: _________ pa-1008539 SCHEDULE A SCHEDULE OF STOCKHOLDERS NAME OF STOCKHOLDER SHARES OF COMMON STOCK STOCK OPTIONS Bobby Yazdani 1,586,697 215,000 Pequot Private Equity Fund III, L.P. 2,344,063 0 Pequot Offshore Private Equity Partners III, L.P. 330,437 0 Sequoia Capital IX 217,180 0 Sequoia Capital IX Principals Fund 40,087 0 Sequoia Capital Entrepreneurs Annex Fund 33,430 0 Sequoia Capital Franchise Fund 767,441 0 Sequoia Capital Franchise Partners 104,651 0
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