EXHIBIT 10.15
▇▇▇▇▇▇▇▇.▇▇▇, INC.
SERIES C PREFERRED
STOCK PURCHASE AGREEMENT
June 3, 1999
TABLE OF CONTENTS
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Page
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1. Purchase and Sale of Stock............................................. 1
1.1 Sale and Issuance of Series C Preferred Stock.................... 1
1.2 Initial Closing.................................................. 1
1.3 Subsequent Sale of Series C Preferred Stock...................... 2
2. Representations and Warranties of the Company.......................... 2
2.1 Organization, Good Standing and Qualification.................... 2
2.2 Capitalization and Voting Rights................................. 2
2.3 Subsidiaries..................................................... 3
2.4 Authorization.................................................... 3
2.5 Valid Issuance of Preferred and Common Stock..................... 3
2.6 Governmental Consents............................................ 3
2.7 Offering......................................................... 4
2.8 Litigation....................................................... 4
2.9 Proprietary Information and Employee Stock Purchase Agreements... 4
2.10 Patents and Trademarks.......................................... 4
2.11 Compliance with Other Instruments............................... 5
2.12 Agreements; Action.............................................. 5
2.13 Permits......................................................... 6
2.14 Registration Rights............................................. 6
2.15 Corporate Documents............................................. 6
2.16 Title to Property and Assets.................................... 6
3. Representations and Warranties of the Investors........................ 6
3.1 Authorization.................................................... 6
3.2 Purchase Entirely for Own Account................................ 7
3.3 Disclosure of Information........................................ 7
3.4 Investment Experience............................................ 7
3.5 Accredited Investor.............................................. 7
3.6 Restricted Securities............................................ 7
3.7 Further Limitations on Disposition............................... 7
3.8 Legends.......................................................... 8
4. Conditions of Investors' Obligations at Closing........................ 8
4.1 Representations and Warranties................................... 8
4.2 Performance...................................................... 9
4.3 Compliance Certificate........................................... 9
4.4 Qualifications................................................... 9
4.5 Proceedings and Documents........................................ 9
4.6 Board of Directors............................................... 9
4.7 Opinion of Company Counsel....................................... 9
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4.8 Investors' Rights Agreement...................................... 9
5. Conditions of the Company's Obligations at Closing..................... 9
5.1 Representations and Warranties................................... 9
5.2 Payment of Purchase Price........................................ 10
5.3 Qualifications................................................... 10
5.4 Investors' Rights Agreement...................................... 10
6. Miscellaneous.......................................................... 10
6.1 Survival of Warranties........................................... 10
6.2 Successors and Assigns........................................... 10
6.3 Governing Law.................................................... 10
6.4 Counterparts..................................................... 10
6.5 Titles and Subtitles............................................. 10
6.6 Notices.......................................................... 10
6.7 Finder's Fee..................................................... 11
6.8 Expenses......................................................... 11
6.9 Amendments and Waivers........................................... 11
6.10 Severability.................................................... 11
6.11 Corporate Securities Law........................................ 11
6.12 Aggregation of Stock............................................ 12
6.13 Entire Agreement................................................ 12
6.14 Waiver of Conflicts............................................. 12
SCHEDULE A Schedule of Investors
SCHEDULE B Schedule of Exceptions
EXHIBIT A Restated Certificate of Incorporation
EXHIBIT B Amended and Restated Investors' Rights Agreement
EXHIBIT C Opinion of Counsel for the Company
EXHIBIT D Advertising Agreement between News America Incorporated and the
Company
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▇▇▇▇▇▇▇▇.▇▇▇, INC.
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of the 3rd day of June, 1999,
by and among ▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation (the "Company"), and the
investors listed on Schedule A hereto, each of which is herein referred to as an
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"Investor."
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
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1.1 Sale and Issuance of Series C Preferred Stock.
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(a) The Company shall adopt and file with the Secretary of State
of Delaware on or before the Closing (as defined below) the Restated Certificate
of Incorporation in the form attached hereto as Exhibit A (the "Restated
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Certificate").
(b) On or prior to the Initial Closing (as defined below), the
Company shall have authorized (i) the sale and issuance to the Investors of the
Series C Preferred Stock and (ii) the issuance of the shares of Common Stock to
be issued upon conversion of the Series C Preferred Stock (the "Conversion
Shares"). The Series C Preferred Stock and the Conversion Shares shall have the
rights, preferences, privileges and restrictions set forth in the Restated
Certificate.
(c) Subject to the terms and conditions of this Agreement, each
Investor agrees, severally and not jointly, to purchase at the Initial Closing
or pursuant to Section 1.3, and the Company agrees to sell and issue to each
Investor at the Initial Closing or pursuant to Section 1.3, that number of
shares of the Company's Series C Preferred Stock set forth opposite such
Investor's name on Schedule A hereto for the purchase price set forth thereon.
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1.2 Initial Closing. The purchase and sale of the Series C Preferred
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Stock shall take place at the offices of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, at
2:00 P.M., June 3, 1999 or at such other time and place as the Company and
Investors acquiring in the aggregate more than half the shares of Series C
Preferred Stock sold pursuant hereto mutually agree upon orally or in writing
(which time and place are designated as the "Initial Closing"). At the Initial
Closing the Company shall deliver to each Investor a certificate representing
the Series C Preferred Stock that such Investor is purchasing against payment of
the purchase price therefor by check, wire transfer, cancellation of
indebtedness, or any combination thereof. In the case of News America
Incorporated ("News"), payment shall be made in cash or pre-paid media services
or a combination thereof. If payment is made, in whole or in part, in pre-paid
media services, the terms and conditions of such media services shall be those
contained in the Advertsing Agreement attached hereto as Exhibit D.
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1.3 Subsequent Sale of Series C Preferred Stock. The Company may
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sell up to the balance of the authorized number of shares of Series C Preferred
Stock not sold at the Initial Closing to such purchasers as it shall select, at
a price not less than $8.755 per share, provided the agreement for sale is
executed not later than July 1, 1999. Any such purchaser shall become a party to
this Agreement, and that certain Amended and Restated Investors' Rights
Agreement of even date herewith by and among the Company and the Investors, the
form of which is attached as Exhibit B (the "Investors' Rights Agreement"), and
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shall have the rights and obligations hereunder and thereunder, unless such
purchaser enters into an acquisition agreement that provides otherwise.
2. Representations and Warranties of the Company. The Company hereby
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represents and warrants to each Investor that, except as set forth on the
Schedule of Exceptions (the "Schedule of Exceptions") furnished to each Investor
which exceptions shall be deemed to be representations and warranties as if made
hereunder:
2.1 Organization, Good Standing and Qualification. The Company is a
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corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted and as proposed to be conducted. The
Company 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 or properties.
2.2 Capitalization and Voting Rights. The authorized capital of the
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Company consists of:
(a) Preferred Stock. Twenty-eight million (28,000,000) shares
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of Preferred Stock, par value $0.0001 (the "Preferred Stock"), fourteen million
(14,000,000) shares of which have been designated Series A Preferred Stock (the
"Series A Preferred Stock"), eleven million fifty-nine thousand (11,059,000) of
which are issued and outstanding, and seven million (7,000,000) shares of which
have been designated Series B Preferred Stock (the "Series B Preferred Stock"),
five million two hundred thousand (5,200,000) of which are currently
outstanding, and seven million (7,000,000) of which have been designated Series
C Preferred Stock (the "Series C Preferred Stock"), all of which may be sold
pursuant to this Agreement. The rights, privileges and preferences of the Series
A Preferred Stock, the Series B Preferred Stock and the Series C Preferred Stock
will be as stated in the Company's Restated Certificate.
(b) Common Stock. Forty-two million (42,000,000) shares of
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common stock, par value $0.0001 ("Common Stock"), of which nine million three
hundred forty-five thousand fifty (9,345,050) shares are issued and outstanding.
(c) Except for (A) the conversion privileges of the Series A
Preferred Stock, the Series B Preferred Stock and the Series C Preferred Stock,
(B) the rights provided in Section 2.4 of the Investors' Rights Agreement, (C)
warrants to purchase two hundred thousand (200,000) shares of Series A Preferred
Stock and warrants to purchase sixteen thousand (16,000) shares of Series B
Preferred Stock, (D) a note convertible into seven hundred thousand (700,000)
shares of Series B Preferred Stock, and (E) currently outstanding options to
purchase seven
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hundred seventy-nine thousand six hundred fifty (779,650) shares of the
Company's Common Stock granted to employees and service providers, there are not
outstanding any options, warrants, rights (including conversion or preemptive
rights) or agreements for the purchase or acquisition from the Company of any
shares of its capital stock. In addition, the Company has reserved one million
two hundred fifty-six thousand three hundred (1,256,300) shares of its Common
Stock for purchase upon exercise of options to be granted in the future to the
Company's employees and service providers. The Company is not a party or subject
to any agreement or understanding, and, to the best of the Company's knowledge,
there is no agreement or understanding between any persons and/or entities,
which affects or relates to the voting or giving of written consents with
respect to any security or by a director of the Company.
2.3 Subsidiaries. The Company does not presently own or control,
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directly or indirectly, any interest in any other corporation, association, or
other business entity. The Company is not a participant in any joint venture,
partnership, or similar arrangement.
2.4 Authorization. All corporate action on the part of the Company,
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its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement and the Investors' Rights Agreement,
the performance of all obligations of the Company hereunder and thereunder, and
the authorization, issuance (or reservation for issuance), sale and delivery of
the Series C Preferred Stock being sold hereunder and the Common Stock issuable
upon conversion of the Series C Preferred Stock has been taken or will be taken
prior to the Initial Closing, and this Agreement and the Investors' Rights
Agreement constitute valid and legally binding obligations of the Company,
enforceable in accordance with their respective terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors' rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies, and (iii) to the extent the
indemnification provisions contained in the Investors' Rights Agreement may be
limited by applicable federal or state securities laws.
2.5 Valid Issuance of Preferred and Common Stock. The Series C
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Preferred Stock that is being purchased by the Investors 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, and the Investors' Rights
Agreement under applicable state and federal securities laws. The Common Stock
issuable upon conversion of the Series C Preferred Stock purchased under this
Agreement has been duly and validly reserved for issuance and, upon issuance in
accordance with the terms of the Restated Certificate, 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 and the
Investors' Rights Agreement and under applicable state and federal securities
laws.
2.6 Governmental Consents. No consent, approval, order or
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authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except (i) the filing of the
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Restated Certificate with the Secretary of State of Delaware; and (ii) the
filing pursuant to Section 25102(f) of the California Corporate Securities Law
of 1968, as amended, and the rules thereunder, which filing will be effected
within 15 days of the sale of the Series C Preferred Stock hereunder, or such
other post-closing filings as may be required.
2.7 Offering. Subject in part to the truth and accuracy of each
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Investor's representations set forth in Section 3 of this Agreement, the offer,
sale and issuance of the Series C Preferred Stock as contemplated by this
Agreement are exempt from the registration requirements of any applicable state
and federal 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.
2.8 Litigation. There is no action, suit, proceeding or
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investigation pending or, to the Company's knowledge, currently threatened
against the Company that questions the validity of this Agreement and the
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,
financially or otherwise, or any change in the current equity ownership of the
Company. The foregoing includes, without limitation, actions, suits, proceedings
or investigations pending or threatened involving the prior employment of any of
the Company's employees, their use in connection with the Company's business of
any information or techniques allegedly proprietary to any of their former
employers, or their obligations under any agreements with prior employers. The
Company is not 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 currently pending or that the Company intends to initiate.
2.9 Proprietary Information and Employee Stock Purchase Agreements.
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Each employee, officer and consultant of the Company has executed a Proprietary
Information and Inventions Agreement in substantially the form provided to the
Investors. The Company is not aware that any of its employees, officers or
consultants are in violation thereof, and the Company will use reasonable
efforts to prevent any such violation.
2.10 Patents and Trademarks. To its knowledge (but without having
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conducted any special investigation or patent or trademark search), the Company
has sufficient title and ownership of or licenses to all patents, trademarks,
service marks, trade names, copyrights, trade secrets, information, proprietary
rights and processes necessary for its business as now conducted and as proposed
to be conducted without any conflict with or infringement of the rights of
others, except for such items as have yet to be conceived or developed or that
are expected to be available for licensing on reasonable terms from third
parties. There are no outstanding options, licenses, or agreements of any kind
relating to the foregoing, nor is the Company bound by or a party to any
options, licenses or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information, proprietary rights and processes of any other person or entity,
except, in either case, for end-user, object code, internal-use software license
and support/maintenance agreements. The Company has not received any
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communications alleging that the Company has violated or, by conducting its
business as proposed, would violate any of the patents, trademarks, service
marks, trade names, copyrights or trade secrets or other proprietary rights of
any other person or entity. The Company is not aware that any of its 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 that would conflict
with the Company's business as proposed to be conducted. Neither the execution
nor delivery of this Agreement or the Investors' Rights Agreement, nor the
carrying on of the Company's business by the employees of the Company, nor the
conduct of the Company's business as proposed, will, to 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 to utilize any inventions of any of its employees (or people
it currently intends to hire) made prior to or outside the scope of their
employment by the Company.
2.11 Compliance with Other Instruments. The Company is not in
---------------------------------
violation or default in any material respect of any provision of its Restated
Certificate or Bylaws, or in any material respect of any instrument, judgment,
order, writ, decree or contract to which it is a party or by which it is bound,
or, to its knowledge, of any provision of any federal or state statute, rule or
regulation applicable to the Company. The execution, delivery and performance of
this Agreement and the 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 provision,
instrument, judgment, order, writ, decree or contract or an event that results
in the creation of any lien, charge or encumbrance upon any assets of the
Company or the suspension, revocation, impairment, forfeiture, or nonrenewal of
any material permit, license, authorization, or approval applicable to the
Company, its business or operations or any of its assets or properties.
2.12 Agreements; Action.
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(a) Except for agreements explicitly contemplated hereby and by
the Investors' Rights Agreement, there are no agreements, understandings or
proposed transactions between the Company and any of its officers, directors,
affiliates, or any affiliate thereof.
(b) There are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs or decrees to which
the Company is a party or by which it is bound that may involve (i) obligations
(contingent or otherwise) of, or payments to the Company in excess of, $25,000,
or (ii) the license of any patent, copyright, trade secret or other proprietary
right to or from the Company (other than the license of the Company's software
and products in the ordinary course of business), or (iii) provisions
restricting or affecting the development, manufacture or distribution of the
Company's products or services.
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(c) The Company has not (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 indebtedness for money borrowed or any
other liabilities individually in excess of $25,000 or, in the case of
indebtedness and/or liabilities individually less than $25,000, in excess of
$50,000 in the aggregate, (iii) made any loans or advances to any person, other
than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise
disposed of any of its assets or rights, other than the sale of its inventory in
the ordinary course of business.
(d) For the purposes of subsections (b) and (c) 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.
2.13 Permits. The Company has all franchises, permits, licenses, and
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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 the
business, properties, prospects, or financial condition of the Company, and the
Company believes it can obtain, without undue burden or expense, any similar
authority for the conduct of its business as planned to be conducted. The
Company is not in default in any material respect under any of such franchises,
permits, licenses, or other similar authority.
2.14 Registration Rights. Except as provided in the Investors' Rights
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Agreement, the Company has not granted or agreed to grant any registration
rights, including piggyback rights, to any person or entity.
2.15 Corporate Documents. Except for amendments necessary to satisfy
-------------------
representations and warranties or conditions contained herein (the form of which
amendments has been approved by the Investors), the Restated Certificate and
Bylaws of the Company are in the form previously provided to the Investors.
2.16 Title to Property and Assets. The Company owns its property and
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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 the Company's ownership or use of such property or assets.
With respect to the property and assets it leases, the Company is in compliance
with all material terms of such leases and, to the best of its knowledge, holds
a valid leasehold interest free of any liens, claims or encumbrances.
3. Representations and Warranties of the Investors. Each Investor
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hereby represents and warrants that:
3.1 Authorization. Such Investor has full power and authority to
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enter into this Agreement and the Investors' Rights Agreement, and each such
Agreement constitutes its valid and legally binding obligation, enforceable in
accordance with its terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors' rights generally, (ii) as limited by laws
6
relating to the availability of specific performance, injunctive relief, or
other equitable remedies, and (iii) to the extent the indemnification provisions
contained in the Investors' Rights Agreement may be limited by applicable
federal or state securities laws.
3.2 Purchase Entirely for Own Account. This Agreement is made with
---------------------------------
such Investor in reliance upon such Investor's representation to the Company,
which by such Investor's execution of this Agreement such Investor hereby
confirms, that the Series C Preferred Stock to be received by such Investor and
the Common Stock issuable upon conversion thereof (collectively, the
"Securities") will be acquired for investment for such 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 that such Investor has no present intention of selling,
granting any participation in, or otherwise distributing the same. By executing
this Agreement, such Investor further represents that such 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.
3.3 Disclosure of Information. Such Investor believes it has
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received all the information it considers necessary or appropriate for deciding
whether to purchase the Series C Preferred Stock. Such 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
Series C Preferred Stock and the business, properties, prospects and financial
condition of the Company. The foregoing, however, does not limit or modify the
representations and warranties of the Company in Section 2 of this Agreement or
the right of the Investors to rely thereon.
3.4 Investment Experience. Such Investor acknowledges that it is
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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 Series C
Preferred Stock. If other than an individual, Investor also represents it has
not been organized for the purpose of acquiring the Series C Preferred Stock.
3.5 Accredited Investor. Such Investor is an "accredited investor"
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within the meaning of Securities and Exchange Commission ("SEC") Rule 501 of
Regulation D, as presently in effect.
3.6 Restricted Securities. Such Investor understands that the
---------------------
Securities it ispurchasing 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 registration under
the Act, only in certain limited circumstances. In this connection, such
Investor represents that it is familiar with SEC Rule 144, as presently in
effect, and understands the resale limitations imposed thereby and by the Act.
3.7 Further Limitations on Disposition. Without in any way limiting
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the representations set forth above, such Investor further agrees not to make
any disposition of all or any portion of the Securities unless and until the
transferee has agreed in writing for the benefit
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of the Company to be bound by this Section 3 and the Investors' Rights Agreement
provided and to the extent this Section and such agreements are then applicable,
and:
(a) There is then in effect a Registration Statement under the
Act covering such proposed disposition and such disposition is made in
accordance with such Registration Statement; or
(b) (i) 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 (ii) if
reasonably 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.
(c) Notwithstanding the provisions of Paragraphs (a) and (b)
above, no such registration statement or opinion of counsel shall be necessary
for (i) a transfer by an Investor to a parent or majority owned subsidiary of
such Investor, or, (ii) if such Investor 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; provided however, that the transferee under (i) or (ii) above 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
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Securities may bear one or all of the following legends:
"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
Company that such registration is not required or unless sold pursuant to Rule
144 of such Act."
4. Conditions of Investors' Obligations at Closing. The
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obligations of each Investor under subsection 1.1(c) of this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions, the waiver of which shall not be effective against any Investor who
does not consent thereto:
4.1 Representations and Warranties. The representations and
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warranties of the Company contained in Section 2 shall be true on and as of the
Initial Closing with the same effect as though such representations and
warranties had been made on and as of the date of such Initial Closing.
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4.2 Performance. The Company shall have performed and complied with
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all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Initial
Closing.
4.3 Compliance Certificate. The Chief Executive Officer of the
----------------------
Company shall deliver to each Investor at the Initial Closing a certificate
stating that the conditions specified in Sections 4.1 and 4.2 have been
fulfilled and stating that there shall have been no material adverse change in
the business, affairs, operations, properties, assets or condition of the
Company since the date of the incorporation.
4.4 Qualifications. All authorizations, approvals, or permits, if
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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 pursuant to this Agreement shall be duly obtained and effective
as of the Initial Closing.
4.5 Proceedings and Documents. All corporate and other proceedings in
-------------------------
connection with the transactions contemplated at the Initial Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to Investors, and they shall have received all such counterpart
original and certified or other copies of such documents as they may reasonably
request.
4.6 Board of Directors. The authorized number of directors of the
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Company shall be seven (7). The directors of the Company as of the Initial
Closing shall be Messrs. Razzouk, Bruner, Beirne, Moritz, Cotsakos, ▇▇▇▇▇ and
▇▇▇▇▇▇.
4.7 Opinion of Company Counsel. Each Investor shall have received
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from ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP ("▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇"), counsel for the Company, an opinion, dated as of the Closing, in the
form attached hereto as Exhibit C.
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4.8 Investors' Rights Agreement. The Company and each Investor shall
---------------------------
have entered into the Investors' Rights Agreement. Additionally, the requisite
parties to that certain Amended and Restated Investors' Rights Agreement dated
as of January 15, 1999 by and among the Company and the Investors listed on
Schedule A thereto (the "Prior Agreement") shall also enter into the Investors'
Rights Agreement so that the Prior Agreement shall be replaced in its entirety
by the Investors' Rights Agreement.
5. Conditions of the Company's Obligations at Closing. The
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obligations of the Company to each Investor under this Agreement are subject to
the fulfillment on or before the Closing of each of the following conditions by
that Investor:
5.1 Representations and Warranties. The representations and
------------------------------
warranties of the Investors 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 Closing.
9
5.2 Payment of Purchase Price. The Investor shall have delivered the
-------------------------
purchase price specified in Section 1.1(c).
5.3 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 pursuant to this Agreement shall be duly obtained and effective
as of the Closing.
5.4 Investors' Rights Agreement. The Company and each Investor and
---------------------------
shall have entered into the Investors' Rights Agreement. Additionally, the
requisite parties to the Prior Agreement shall also have entered into the
Investors' Rights Agreement so that the Prior Agreement shall be replaced in its
entirety by the Investors' Rights Agreement.
6. Miscellaneous.
-------------
6.1 Survival of Warranties. The warranties, representations and
----------------------
covenants of the Company and Investors contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Investors or the Company.
6.2 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). 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.
6.3 Governing Law. This Agreement shall be governed by and construed
-------------
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.
6.4 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.
6.5 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.
6.6 Notices. Unless otherwise provided, any notice required or
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permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified, upon
transmission via facsimile to a facsimile number indicated by such party in
writing as such party may designate by ten (10) days' advance written notice to
the other parties, or upon deposit with the United States Post Office, by
registered or certified mail, postage prepaid and addressed to the party to be
notified at the
10
address indicated for such party on the signature page hereof, or at such other
address as such party may designate by ten (10) days' advance written notice to
the other parties.
6.7 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. Each 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 such Investor or any of its officers, partners,
employees, or representatives is responsible.
The Company agrees to indemnify and hold harmless each 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 officers, employees or
representatives is responsible.
6.8 Expenses. Irrespective of whether the Closing is effected, the
--------
Company shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this Agreement. If the
Initial Closing is effected, the Company shall, at the Initial Closing,
reimburse the reasonable fees and expenses of any counsel to the Investors, not
to exceed a maximum aggregate amount of $15,000. If any action at law or in
equity is necessary to enforce or interpret the terms of this Agreement, the
Investors' Rights Agreement, or the Restated Certificate, 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.
6.9 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 holders of a majority of the
Common Stock issuable or issued upon conversion of the Series C Preferred Stock.
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 (including securities into which such securities are
convertible), each future holder of all such securities, and the Company.
6.10 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.
6.11 Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE
------------------------
THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR
THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
11
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO
EXEMPT.
6.12 Aggregation of Stock. All shares of the Preferred Stock 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.
6.13 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.
6.14 Waiver of Conflicts. Each party to this Agreement acknowledges
-------------------
that ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, counsel for the Company, has in the past and may
continue to perform legal services for certain of the Investors in matters
unrelated to the transactions described in this Agreement, including the
representation of such Investors in venture capital financings and other
matters. Accordingly, each party to this Agreement hereby (1) acknowledges that
it has had an opportunity to ask for information relevant to this disclosure;
(2) acknowledges that ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ represented the Company in the
transaction contemplated by this Agreement and has not represented any
individual Investor or any individual stockholder or employee of the Company in
connection with such transaction; and (3) gives its informed consent to
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ representation of certain of the Investors in such unrelated
matters and to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ representation of the Company in connection
with this Agreement and the transactions contemplated hereby.
12
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
COMPANY:
▇▇▇▇▇▇▇▇.▇▇▇, INC.
By:______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman and Chief Executive Officer
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Signature Page
▇▇▇▇▇▇▇▇.▇▇▇, Inc. Series C Preferred Stock Purchase Agreement
Schedule A
Schedule of Investors
---------------------
Number of Total Purchase
Name and Address Shares Purchased Price of Shares
---------------- ---------------- ---------------
TOTALS 6,776,364 $59,327,067
============== =============
Schedule B
----------
Schedule of Exceptions
----------------------
Exhibit A
---------
Restated Certificate of Incorporation
-------------------------------------
Exhibit B
---------
Investors' Rights Agreement
---------------------------
Exhibit C
---------
Opinion of Counsel for the Company
----------------------------------
Exhibit D
---------
Advertising Agreement Between News America Incorporated and the Company
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