Marketo, Inc.

On May 27, 2016, Marketo entered into an Agreement and Plan of Merger (Merger Agreement) with Milestone Holdco, LLC, a Delaware limited liability company (Parent), and Milestone Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (Merger Sub), providing for the merger of Merger Sub with and into the Company (the Merger), with the Company surviving the Merger as a wholly owned subsidiary of Parent. Parent and Merger Sub were formed by affiliates of Vista Equity Partners Fund VI, L.P., a Delaware limited partnership (Vista).  Parent will acquire all outstanding shares of Marketo common stock for a total value of approximately $1.79 billion.

Consummation of the Merger is subject to customary closing conditions, including, but not limited to, the: (i) requisite approvals by the Company’s stockholders; (ii) expiration or termination of any waiting periods applicable to the consummation of the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act); and (iii) absence of any law or order restraining, enjoining or otherwise prohibiting the Merger. On June 22, 2016, the U.S. Federal Trade Commission notified Marketo that early termination of the waiting period under the HSR Act was granted, effective immediately. On July 28, 2016, Marketo held a special meeting of stockholders (the Special Meeting) at Marketo’s principal executive offices in San Mateo, CA to vote on the proposals described in the Company’s definitive proxy statement filed with the Securities and Exchange Commission on June 29, 2016 and first mailed to Marketo’s stockholders on June 29, 2016. At the Special Meeting, stockholders approved the proposal to adopt the Merger Agreement.

On July 12, 2016, a purported stockholder class action lawsuit captioned Rosati v. Marketo, Inc. et al., Case No. 3:16-cv-3907, was filed in the United States District for the Court Northern District of California against Marketo and its directors. The lawsuit alleges, generally, that Marketo and its directors violated Section 14(a) and Rule 14a-9 promulgated thereunder by the SEC pursuant to Section 14 under the Securities Exchange Act of 1934, as amended. The lawsuit also alleges that defendants have failed to disclose all material facts concerning the proposed Merger to stockholders. The lawsuit also alleges that Marketo’s directors breached their fiduciary duties to Marketo stockholders by conducting an inadequate sales process and agreeing to a transaction that provides Marketo’s stockholders with inadequate consideration. On July 21, 2016, the plaintiff filed a request for a Temporary Restraining Order seeking to enjoin the shareholder vote. On July 26, 2016, the Court denied plaintiff’s request. The lawsuit seeks, among other things, equitable relief that would enjoin the consummation of the proposed Merger, damages, rescission of the proposed Merger to the extent it is consummated, and attorneys’ fees and costs.

The Company does not currently believe a loss from the above lawsuits are probable or estimable.

(ii)                                  Company Stock-Based Award, whether vested or unvested, will be cancelled and converted into the right to receive an amount equal to (x) the Per Share Price (less the exercise price per share, if any, attributable to such Company Stock-Based Award), multiplied by, (y) (A) in the case of a Company Stock-Based Award that is only subject to time-vesting requirements, the total number of shares of Company Common Stock that are subject to such Company Stock-Based Award, and (B) in the case of a Company Stock-Based Award that is subject to time- and performance-vesting requirements, the total number of shares of Company Common Stock determined pursuant to the “change in control” provisions of the award agreement underlying such Company Stock Based Award, and with the remaining time-vesting requirements deemed satisfied; and

On July 5, 2016, a purported stockholder class action lawsuit captioned Porwal v. Marketo, Inc. et al., Case No. 16CIV00265, was filed in Superior Court of the State of California, County of San Mateo against Marketo, its directors, Vista Equity Partners Fund VI, L.P. (Vista), Milestone Holdco LLC (Parent), and Mileston Merger Sub (Merger Sub).  The lawsuit alleges, generally, that Marketo’s directors breached their fiduciary duties to Marketo stockholders by seeking to sell Marketo through an allegedly defective process, for an unfair price, and on unfair terms, and that the other defendants aided and abetted those purported breaches. The lawsuit also alleges that defendants have failed to disclose all material facts concerning the proposed Merger to stockholders. The lawsuit seeks, among other things, equitable relief that would enjoin the consummation of the proposed Merger, damages, rescission of the proposed Merger to the extent it is consummated, and attorneys’ fees and costs.

On July 12, 2016, a purported stockholder class action lawsuit captioned Rosati v. Marketo, Inc. et al., Case No. 3:16-cv-3907, was filed in the United States District for the Court Northern District of California against Marketo and its directors. The lawsuit alleges, generally, that Marketo and its directors violated Section 14(a) and Rule 14a-9 promulgated thereunder by the SEC pursuant to Section 14 under the Securities Exchange Act of 1934, as amended. The lawsuit also alleges that defendants have failed to disclose all material facts concerning the proposed Merger to stockholders. The lawsuit also alleges that Marketo’s directors breached their fiduciary duties to Marketo stockholders by conducting an inadequate sales process and agreeing to a transaction that provides Marketo’s stockholders with inadequate consideration. On July 21, 2016, the plaintiff filed a request for a Temporary Restraining Order seeking to enjoin the shareholder vote. On July 26, 2016, the Court denied plaintiff’s request. The lawsuit seeks, among other things, equitable relief that would enjoin the consummation of the proposed Merger, damages, rescission of the proposed Merger to the extent it is consummated, and attorneys’ fees and costs.