Letter Agreement Regarding Issuance of Warrant for Series B-1 Preferred Stock between EpicEdge, Inc. and Edgewater Private Equity Fund III, L.P.

Summary

EpicEdge, Inc. and Edgewater Private Equity Fund III, L.P. have agreed that, as part of Edgewater's additional loans totaling $500,000 to EpicEdge, EpicEdge will issue a warrant to Edgewater. This warrant will allow Edgewater to purchase $1,000,000 worth of Series B-1 Preferred Stock, contingent upon the completion of a related debt/equity financing. The agreement outlines the mutual understanding and acceptance of this arrangement as consideration for the loans provided.

EX-4.59 13 d01266exv4w59.txt LETTER AGREEMENT RE: SERIES B-1 PREFERRED STOCK EXHIBIT 4.59 November 1, 2002 EpicEdge, Inc. 5508 Hwy. 290 West Suite 300 Austin, Texas 78735 Attention: Richard Carter Re: Warrant to be Issued Pursuant to Substitute Convertible Secured Promissory Note Dear Richard: Reference is hereby made to (a) that certain Substitute Convertible Promissory Note dated October __, 2002 in the original principal amount of $2,850,000 issued by EpicEdge, Inc. (the "Company") in favor of Edgewater Private Equity Fund III, L.P. ("Edgewater"), which was issued in connection with the funding by Edgewater of an additional $250,000 (the "Initial 250") to the Company; and (b) that certain Substitute Convertible Secured Promissory Note of even date herewith in the original principal amount of $3,100,000 issued by the Company in favor of Edgewater, which was issued in connection with the funding by Edgewater of an additional $250,000 (together with the Initial 250, the "Additional Loans") to the Company. Whereas, a condition subsequent to and as partial consideration for the funding of the Additional Loans, the Company has agreed to issue to Edgewater a Warrant to purchase shares of Series B-1 Preferred Stock having a face value of $1,000,000 on terms mutually agreeable to Edgewater and the Company (the "Warrant"). The Company hereby agrees and acknowledges that it shall issue the Warrant to Edgewater upon the consummation of the Series B-1 Preferred Stock debt/equity financing as consideration for the Additional Loans. If the foregoing satisfactorily reflects your understanding of the subject matter contained herein, please confirm by dating and executing this letter in the space provided below. Very truly yours, Edgewater Private Equity Fund III, L.P. By: Edgewater III Management, L.P. Its: General Partner By: Gordon Management, Inc. Its: General Partner By: /s/ Mark McManigal ----------------------------------- Its: VP ----------------------------------- AGREED AND ACCEPTED AS OF THE 1st DAY OF NOVEMBER, 2002 EPICEDGE, INC. By: /s/ Richard Carter ------------------------------------- Name: Richard K. Carter ---------------------------------- Its: President and CEO ------------------------------------