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IMPROVENET, INC.
SERIES C PREFERRED STOCK
PURCHASE AGREEMENT
DATED MARCH 29, 1999
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TABLE OF CONTENTS
PAGE
SECTION 1. AGREEMENT TO SELL AND PURCHASE...........................1
1.1 Authorization of Shares..................................1
1.2 Sale and Purchase........................................1
SECTION 2. CLOSING, DELIVERY AND PAYMENT............................2
2.1 Closing..................................................2
2.2 Delivery.................................................2
2.3 Subsequent Sale of Shares................................2
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY............2
3.1 Organization, Good Standing and Qualification............2
3.2 Capitalization; Voting Rights............................3
3.3 Authorization; Binding Obligations.......................3
3.4 Financial Statements.....................................4
3.5 Liabilities..............................................4
3.6 Agreements; Action.......................................4
3.7 Obligations to Related Parties...........................5
3.8 Changes..................................................5
3.9 Title to Properties and Assets; Liens, etc...............6
3.10 Patents and Trademarks...................................6
3.11 Compliance with Other Instruments........................7
3.12 Litigation...............................................7
3.13 Tax Returns and Payments.................................7
3.14 Employees................................................7
3.15 Proprietary Information and Inventions Agreements........8
3.16 Obligations of Management................................8
3.17 Registration Rights......................................8
3.18 Compliance with Laws; Permits............................8
3.19 Environmental and Safety Laws............................8
3.20 Offering Valid...........................................9
3.21 Full Disclosure..........................................9
3.22 Qualified Small Business.................................9
3.23 Minute Books.............................................9
3.24 Insurance................................................9
TABLE OF CONTENTS
(CONTINUED)
PAGE
3.25 Small Business Concern...................................9
3.26 Year 2000 Compliance.....................................9
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS........10
4.1 Requisite Power and Authority...........................10
4.2 Investment Representations..............................10
4.3 Transfer Restrictions...................................11
SECTION 5. CONDITIONS TO CLOSING...................................11
5.1 Conditions to Purchasers' Obligations at the Closing....11
5.2 Conditions to Obligations of the Company................13
SECTION 6. MISCELLANEOUS...........................................13
6.1 Governing Law...........................................13
6.2 Survival................................................13
6.3 Successors and Assigns..................................14
6.4 Entire Agreement........................................14
6.5 Severability............................................14
6.6 Amendment and Waiver....................................14
6.7 Delays or Omissions.....................................14
6.8 Waiver of Conflicts.....................................14
6.9 Notices.................................................15
6.10 Expenses................................................15
6.11 Attorneys' Fees.........................................15
6.12 Titles and Subtitles....................................15
6.13 Counterparts............................................15
6.14 Broker's Fees...........................................15
6.15 Exculpation Among Purchasers............................15
6.16 Pronouns................................................16
INDEX OF EXHIBITS
Schedule of Purchasers.................................Exhibit A
First Restated Certificate of Incorporation............Exhibit B
Schedule of Exceptions.................................Exhibit C
Second Amended and Restated
Investor Rights Agreement...........................Exhibit D
Second Amended and Restated Right
of First Refusal and Co-Sale Agreement..............Exhibit E
Second Amended and Restated Voting Agreement...........Exhibit F
List of Shareholders, Optionholders
and Warrantholders..................................Exhibit G
Financial Statements...................................Exhibit H
Proprietary Information and Inventions Agreement.......Exhibit I
Form of Legal Opinion .................................Exhibit J
IMPROVENET, INC.
SERIES C PREFERRED STOCK
PURCHASE AGREEMENT
THIS SERIES C PREFERRED STOCK PURCHASE AGREEMENT (the "AGREEMENT") is
entered into as of March 29th, 1999, by and among IMPROVENET, INC., a Delaware
corporation (the "COMPANY") and each of those persons and entities, severally
and not jointly, whose names are set forth on the Schedule of Purchasers
attached hereto as EXHIBIT A (which persons and entities are hereinafter
collectively referred to as "PURCHASERS" and each individually as a
"PURCHASER").
RECITALS
WHEREAS, the Company has authorized the sale and issuance of an
aggregate of three million five hundred thirty-seven thousand five hundred
twenty-four (3,537,524) shares of its Series C Preferred Stock (the "SHARES");
WHEREAS, Purchasers desire to purchase the Shares on the terms and
conditions set forth herein; and
WHEREAS, the Company desires to issue and sell the Shares to the
Purchasers on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:
SECTION 1. AGREEMENT TO SELL AND PURCHASE.
1.1 AUTHORIZATION OF SHARES. On or prior to the Closing (as defined in
Section 2 below), the Company shall have authorized (a) the sale and issuance to
Purchasers of the Shares, (b) the issuance of such shares of common stock to be
issued upon conversion of the Shares (the "CONVERSION SHARES"). The Shares and
the Conversion Shares shall have the rights, preferences, privileges and
restrictions set forth in the First Restated Certificate of Incorporation of the
Company in the form attached hereto as EXHIBIT B (the "RESTATED CERTIFICATE").
1.2 SALE AND PURCHASE. Subject to the terms and conditions hereof, at
the Closing the Company hereby agrees to issue and sell to each Purchaser,
severally and not jointly, and each Purchaser agrees to purchase from the
Company, severally and not jointly, the number of Shares set forth opposite such
Purchaser's name on EXHIBIT A at an aggregate purchase price for each Purchaser
set forth opposite such Purchaser's name.
1.
SECTION 2. CLOSING, DELIVERY AND PAYMENT.
2.1 CLOSING. The closing of the sale and purchase of the Shares under
this Agreement (the "Closing") shall take place on the date hereof, or at such
other time as the Company and Purchasers may mutually agree (such date is
hereinafter referred to as the "CLOSING DATE").
2.2 DELIVERY. At the Closing, subject to the terms and conditions
hereof, the Company will deliver to the Purchasers certificates representing the
number of Shares purchased at the Closing by each Purchaser, against payment of
the purchase price therefor by check, wire transfer made payable to the order of
the Company, cancellation of indebtedness or any combination of the foregoing.
2.3 SUBSEQUENT SALE OF SHARES. At any time on or before the sixtieth
day following the Closing, the Company may sell up to the balance of the
authorized shares of Series C Preferred Stock not sold at the Closing to such
persons as may be approved by the Board of Directors of the Company. All such
sales shall be made on the terms and conditions set forth in this Agreement,
including, without limitation, the representations and warranties by the
Purchasers as set forth in Section 4. Any shares of Series C Preferred Stock
sold pursuant to this Section 2.3 shall be deemed to be Shares for all purposes
under this Agreement, any purchasers thereof shall be deemed to be Purchasers
for all purposes under this Agreement, and such persons or entities shall become
parties to this Agreement, that certain Second Amended and Restated Investor
Rights Agreement dated as of the date hereof, by and among the Company, certain
other Preferred Stock holders and the Purchasers, the form of which is attached
hereto as EXHIBIT D (the "INVESTOR RIGHTS AGREEMENT"), that certain Second
Amended and Restated Right of First Refusal and Co-Sale Agreement dated as of
the date hereof, by and among the Company, certain other Preferred Stock holders
a certain shareholder and the Purchasers, the form of which is attached hereto
as EXHIBIT E (the "CO-SALE AGREEMENT") and that certain Second Amended and
Restated Voting Agreement dated as of the date hereof, by and among the Company,
certain other Preferred Stock holders, certain Holders (as therein defined),
certain Stock Holders (as therein defined) and the Purchasers, the form of which
is attached hereto as EXHIBIT F (the "VOTING AGREEMENT") and shall have the
rights and obligations of a Purchaser and an Investor, respectively hereunder
and thereunder. The respective Exhibits to each of the Related Agreements (as
defined in Section 3.1 below) shall be revised to reflect any such additional
purchasers.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as set forth on the Schedule of Exceptions attached hereto as
EXHIBIT C, the Company hereby represents and warrants to each Purchaser as
follows:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement, the Investor Rights Agreement, the Co-Sale Agreement and the
Voting Agreement (collectively, the "RELATED AGREEMENTS"), to issue and sell the
Shares and to issue the Conversion Shares and to carry out the provisions of
this Agreement, the Related Agreements and the Restated Certificate and to carry
on its business as presently conducted and as presently proposed to be
conducted. The Company is duly qualified and is authorized to do business and is
in good standing as a foreign corporation in all jurisdictions in which the
nature of its activities and of its properties (both owned and leased) makes
such qualification necessary. The Company owns no equity securities of any other
corporation, limited partnership or similar entity. The Company is not a
participant in any joint venture, partnership or similar arrangement.
2.
3.2 CAPITALIZATION; VOTING RIGHTS. The authorized capital stock of the
Company, immediately prior to the Closing, will consist of twenty million
(20,000,000) shares of common stock, of which (i) one million four hundred six
thousand two hundred eighty nine (1,406,289) shares are issued and outstanding,
(ii) eight hundred forty five thousand nine hundred seventy (845,970) shares are
reserved for future issuance to employees pursuant to the Company's Amended and
Restated 1996 Stock Option Plan, (iii) seven hundred twenty one thousand seven
hundred eighty (721,780) shares are subject to outstanding options pursuant to
the 1996 Stock Option Plan (provided, however, the Company on the date hereof
shall issue to Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇ an option to purchase six percent (6%) of the
fully diluted shares of the Company outstanding immediately after the Closing of
this transaction) and (iv) ten thousand (10,000) shares are subject to
outstanding warrants to purchase common stock, and eight million (8,000,000)
shares of Preferred Stock, of which (A) one million three hundred one thousand
four hundred (1,301,400) are designated Series A Preferred Stock, one million
two hundred five thousand (1,205,000) of which are issued and outstanding and
ninety-six thousand four hundred (96,400) of which are reserved for issuance
pursuant to outstanding warrants to purchase Series A Preferred Stock, (B) one
million nine hundred eighty-one thousand five hundred thirty-five (1,981,535)
are designated Series B Preferred Stock, one million nine hundred thirty-four
thousand five hundred twenty-six (1,934,526) of which are issued and outstanding
and forty-seven thousand and nine (47,009) of which are reserved for issuance
pursuant to outstanding warrants to purchase Series B Preferred Stock and (C)
three million seven hundred thousand (3,700,000) are designed Series C Preferred
Stock, none of which are issued and outstanding as of the date immediately prior
to the date hereof. All issued and outstanding shares of the Company's common
stock and preferred stock (I) have been duly authorized and validly issued to
the persons listed on EXHIBIT G hereto, (II) are fully paid and nonassessable,
and (III) were issued in compliance with all applicable state and federal laws
concerning the issuance of securities. The rights, preferences, privileges and
restrictions of the Shares are as stated in the Restated Certificate. The
Conversion Shares have been duly and validly reserved for issuance. Other than
as set forth on EXHIBIT G, and except as may be granted pursuant to the Related
Agreements, there are no outstanding options, warrants, rights (including
conversion or preemptive rights and rights of first refusal), proxy or
shareholder agreements, voting agreements or agreements of any kind for the
purchase or acquisition from the Company of any of its securities. When issued
in compliance with the provisions of this Agreement and the Restated
Certificate, the Shares and the Conversion Shares will be validly issued, fully
paid and nonassessable, and will be free of any liens or encumbrances; PROVIDED,
HOWEVER, that the Shares and the Conversion Shares may be subject to
restrictions on transfer under state and/or federal securities laws as set forth
herein or as otherwise required by such laws at the time a transfer is proposed.
3.3 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on the
part of the Company, its officers, directors and stockholders necessary for the
authorization of this Agreement and the Related Agreements, the performance of
all obligations of the Company hereunder and thereunder at the Closing and the
authorization, sale, issuance and delivery of the Shares pursuant hereto and the
Conversion Shares pursuant to the Restated Certificate has been taken or will be
taken prior to the Closing. The Agreement and the Related Agreements, when
executed and delivered, will be valid and binding obligations of the Company
enforceable in accordance with their terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights, (b) general principles
of equity that restrict the availability of equitable remedies and (c) to the
extent that the enforceability of the indemnification provisions in Section 3.9
of the Investor Rights Agreement may be limited by applicable laws. The sale of
the Shares and the subsequent conversion of the Shares into Conversion Shares
are not and will not be subject to any preemptive rights or rights of first
refusal that have not been properly waived or complied with.
3.
3.4 FINANCIAL STATEMENTS. The Company has delivered to each Purchaser
(a) its audited balance sheet as of December 31, 1997 and an audited profit and
loss statement for the twelve (12) month period ending on December 31, 1997, (b)
its unaudited balance sheet as of December 31, 1998 (the "STATEMENT DATE") and
an unaudited profit and loss statement for the twelve (12) month period ending
on the Statement Date (collectively, the "FINANCIAL STATEMENTS"), copies of
which are attached hereto as EXHIBIT H. The Financial Statements, together with
the notes thereto, are complete and correct in all material respects and present
fairly the financial condition and position of the Company as of December 31,
1998; PROVIDED, HOWEVER, that the unaudited financial statements are subject to
normal recurring year-end audit adjustments (which are not expected to be
material) and do not contain all footnotes required under generally accepted
accounting principles.
3.5 LIABILITIES. The Company has no material liabilities and, to the
best of its knowledge, knows of no material contingent liabilities, not
disclosed in the Financial Statements, except current liabilities incurred in
the ordinary course of business subsequent to the Statement Date which have not
been, either in any individual case or in the aggregate, materially adverse and
in any event, has no liabilities in the aggregate in excess of $25,000.
3.6 AGREEMENTS; ACTION.
(a) Except for agreements explicitly contemplated hereby and
agreements between the Company and its employees with respect to the sale of the
Company's common stock, 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 to its knowledge by which it is bound which may
involve (i) obligations (contingent or otherwise) of, or payments to, the
Company in excess of $25,000 in the aggregate (other than obligations of, or
payments to, the Company arising from purchase or sale agreements entered into
in the ordinary course of business), or (ii) the license of any patent,
copyright, trade secret or other proprietary right to or from the Company (other
than licenses arising from the purchase of "off the shelf" or other standard
products or entered into in the ordinary course of business), or (iii)
provisions restricting or affecting the development, manufacture or distribution
of the Company's products or services, or (iv) indemnification by the Company
with respect to infringements of proprietary rights (other than indemnification
obligations arising from purchase or sale agreements entered into in the
ordinary course of business).
(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 (other than with respect to dividend obligations,
distributions, indebtedness and other obligations incurred in the ordinary
course of business) 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.
4.
3.7 OBLIGATIONS TO RELATED PARTIES. There are no obligations of the
Company to officers, directors, stockholders, or employees of the Company other
than (a) for payment of current salary for services rendered, (b) reimbursement
for reasonable expenses incurred on behalf of the Company and (c) for other
standard employee benefits made generally available to all employees (including
stock option agreements outstanding under any stock option plan approved by the
Board of Directors of the Company). None of the officers, directors or
stockholders of the Company, or any members of their immediate families, are
indebted to the Company or have any direct or indirect ownership interest in any
firm or corporation with which the Company is affiliated or with which the
Company has a business relationship, or any firm or corporation which competes
with the Company, except that officers, directors and/or stockholders of the
Company may own stock in publicly traded companies which may compete with the
Company. No officer, director or stockholder, or any member of their immediate
families, is, directly or indirectly, interested in any material contract with
the Company (other than such contracts as relate to any such person's ownership
of capital stock or other securities of the Company). The Company is not a
guarantor or indemnitor of any indebtedness of or otherwise provides credit
enhancement to any other person, firm or corporation.
3.8 CHANGES. Since the Statement Date, there has not been to the
Company's knowledge:
(a) Any change in the assets, liabilities, financial condition
or operations of the Company, other than changes in the ordinary course of
business, none of which individually or in the aggregate has had or is expected
to have a material adverse effect on such assets, liabilities, financial
condition or operations of the Company;
(b) Any resignation or termination of any key officers of the
Company; and the Company, to the best of its knowledge, does not know of the
impending resignation or termination of employment of any such officer;
(c) Any material change, except in the ordinary course of
business, in the contingent obligations of the Company by way of guaranty,
endorsement, indemnity, warranty or otherwise;
(d) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, business or
prospects or financial condition of the Company;
(e) Any waiver by the Company of a valuable right or
of a material debt owed to it;
(f) Any direct or indirect loans made by the Company to any
stockholder, employee, officer or director of the Company, other than advances
made in the ordinary course of business;
(g) Any material change in any compensation arrangement or
agreement with any employee, officer, director or stockholder;
(h) Any declaration or payment of any dividend or
other distribution of the assets of the Company;
(i) Any labor organization activity;
5.
(j) Any debt, obligation or liability incurred, assumed or
guaranteed by the Company, except those for immaterial amounts and for current
liabilities incurred in the ordinary course of business;
(k) Any sale, assignment or transfer of any patents,
trademarks, copyrights, trade secrets or other intangible assets;
(l) Any change in any material agreement to which the Company
is a party or by which it is bound which materially and adversely affects the
business, assets, liabilities, financial condition, operations or prospects of
the Company, including compensation agreements with the Company's employees; or
(m) Any other event or condition of any character that, either
individually or cumulatively, has materially and adversely affected the
business, assets, liabilities, financial condition, operations or prospects of
the Company.
3.9 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC. The Company has good
and marketable title to its properties and assets, and good title to its
leasehold estates, in each case subject to no mortgage, pledge, lien, lease,
encumbrance or charge, other than (a) those resulting from taxes which have not
yet become delinquent, (b) minor liens and encumbrances which do not materially
detract from the value of the property subject thereto or materially impair the
operations of the Company, and (c) those that have otherwise arisen in the
ordinary course of business. All facilities, machinery, equipment, fixtures,
vehicles and other properties owned, leased or used by the Company are in good
operating condition and repair and are reasonably fit and usable for the
purposes for which they are being used. The Company is in compliance with all
material terms of each lease to which it is a party or is otherwise bound.
3.10 PATENTS AND TRADEMARKS. To the best of its knowledge, the Company
owns or possesses sufficient legal rights to all patents, trademarks, service
marks, trade names, copyrights, trade secrets, information and other proprietary
rights and processes necessary for the Company's business as now conducted and
as proposed to be conducted, without any known infringement of the rights of
others. The Schedule of Exceptions contains a complete list of the patents and
pending patent applications of the Company. 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 and other proprietary rights and processes
of any other person or entity other than such licenses or agreements arising
from the purchase of "off the shelf" or standard products. The Company has not
received any 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 their duties to 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 Related Agreements 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 employee is
now obligated. The Company does not believe it is or will be necessary to
utilize any inventions, trade secrets or proprietary information of any of its
6.
employees made prior to their employment by the Company, except for inventions,
trade secrets or proprietary information that have been duly and validly
assigned to the Company.
3.11 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in violation
or default of any term of its Restated Certificate or Bylaws. The Company is not
in violation or default of any provision of any mortgage, indenture, contract,
agreement, instrument or contract to which it is party or by which it is bound
or of any judgment, decree, order, writ or, to its knowledge, any statute, rule
or regulation applicable to the Company. The execution, delivery and performance
of and compliance with this Agreement, and the Related Agreements, and the
issuance and sale of the Shares and of the Conversion Shares pursuant to the
Restated Certificate will not, with or without the passage of time or giving of
notice, result in any such material violation, or be in conflict with or
constitute a default under any such term, or result in the creation of any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Company or the suspension, revocation, impairment, forfeiture or
nonrenewal of any permit license, authorization or approval applicable to the
Company, its business or operations or any of its assets or properties.
3.12 LITIGATION. There is no action, suit, proceeding or investigation
pending or to the Company's knowledge currently threatened against the Company
that questions the validity of this Agreement, the Related Agreements or the
right of the Company to enter into any of such agreements, or to consummate the
transactions contemplated hereby or thereby, or which might result, either
individually or in the aggregate, in any material adverse change in the assets,
condition, affairs or prospects of the Company, financially or otherwise, or any
change in the current equity ownership of the Company nor is the Company aware
that there is any basis for the foregoing. The foregoing includes, without
limitation, actions pending or threatened (or any basis therefor known to the
Company) 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 which the
Company intends to initiate.
3.13 TAX RETURNS AND PAYMENTS. The Company has timely filed all tax
returns (federal, state and local) required to be filed by it. These returns and
reports are true and correct in all material respect. All taxes shown to be due
and payable on such returns, any assessments imposed, and to the Company's
knowledge all other taxes due and payable by the Company on or before the
Closing have been paid or will be paid prior to the time they become delinquent.
The Company has not been advised (a) that any of its returns, federal, state or
other, have been or are being audited as of the date hereof or (b) of any
deficiency in assessment or proposed judgment to its federal, state or other
taxes. The Company has no knowledge of any liability of any tax to be imposed
upon its properties or assets as of the date of this Agreement that is not
adequately provided for.
3.14 EMPLOYEES. The Company has no collective bargaining agreements
with any of its employees. There is no labor union organizing activity pending
or, to the Company's knowledge, threatened with respect to the Company. No
employee has any agreement or contract, written or verbal, regarding his
employment. The Company is not a party to or bound by any currently effective
employment contract, deferred compensation arrangement, bonus plan, incentive
plan, profit sharing plan, retirement agreement or other employee compensation
plan or agreement. To the Company's knowledge, no employee of the Company nor
any consultant with whom the Company has contracted is in violation of any term
of any employment contract, proprietary information agreement or any other
7.
agreement relating to the right of any such individual to be employed by or to
contract with the Company, because of the nature of the business to be conducted
by the Company; and to the Company's knowledge the continued employment by the
Company of its present employees, and the performance of the Company's contracts
with its independent contractors, will not result in any such violation. The
Company has not received any notice alleging that any such violation has
occurred. No employee of the Company has been granted the right to continued
employment by the Company or to any material compensation following termination
of employment with the Company. The Company is not aware that any officer, key
employee or any group of key employees intends to terminate their employment
with the Company nor does the Company have a present intention to terminate the
employment of any officer, key employee or group of key employees.
3.15 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTS. Each former and
current employee, officer and consultant of the Company has executed a
Proprietary Information and Inventions Agreement in the form of EXHIBIT I
attached hereto. No current employee, officer or consultant of the Company has
excluded works or inventions made prior to his or her employment with the
Company from his or her assignment of inventions pursuant to such employee's,
officer's or consultant's Proprietary Information and Inventions Agreement.
3.16 OBLIGATIONS OF MANAGEMENT. Each officer of the Company is
currently devoting one hundred percent (100%) of his business time to the
conduct of the business of the Company. The Company is not aware of any officer
or key employee of the Company planning to work less than full time at the
Company in the future.
3.17 REGISTRATION RIGHTS. Except as required pursuant to the Investor
Rights Agreement, the Company is presently not under any obligation and has not
granted any rights to register (as defined in Section 2.1 of the Investor Rights
Agreement) any of the Company's presently outstanding securities or any of its
securities that may hereafter be issued.
3.18 COMPLIANCE WITH LAWS; PERMITS. To its knowledge, the Company is
not in violation of any applicable statute, rule, regulation, order or
restriction of any domestic or foreign government or any instrumentality or
agency thereof in respect of the conduct of its business or the ownership of its
properties which violation would materially and adversely affect the business,
assets, liabilities, financial condition, operations or prospects of the
Company. No governmental orders, permissions, consents, approvals or
authorizations are required to be obtained and no registrations or declarations
are required to be filed in connection with the execution and delivery of this
Agreement and the issuance of the Shares or the Conversion Shares, except such
as has been duly and validly obtained or filed, or with respect to any filings
that must be made after the Closing, as will be filed in a timely manner. The
Company has all franchises, permits, licenses and 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 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.
3.19 ENVIRONMENTAL AND SAFETY LAWS. To its knowledge, the Company is
not in violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and to its knowledge, no material
expenditures are or will be required in order to comply with any such existing
statute, law or regulation.
8.
3.20 OFFERING VALID. Assuming the accuracy of the representations and
warranties of the Purchasers contained in Section 4.2 hereof, the offer, sale
and issuance of the Shares and the issuance of the Conversion Shares will be
exempt from the registration requirements of the Securities Act of 1933, as
amended (the "SECURITIES ACT") and will have been registered or qualified (or
are exempt from registration and qualification) under the registration, permit
or qualification requirements of all applicable state securities laws. Neither
the Company nor any agent on its behalf has solicited or will solicit any offers
to sell or has offered to sell or will offer to sell all or any part of the
Shares to any person or persons so as to bring the sale of such Shares by the
Company within the registration provisions of the Securities Act or any state
securities laws.
3.21 FULL DISCLOSURE. The Private Placement Memorandum dated December
1998 (the "PPM"), this Agreement, the Exhibits hereto, the Related Agreements
and all other documents delivered by the Company to the Purchasers or their
attorneys or agents in connection herewith or therewith or with the transactions
contemplated hereby or thereby, do not contain any untrue statement of a
material fact nor, to the Company's knowledge, omit to state a material fact
necessary in order to make the statements contained herein or therein not
misleading. Notwithstanding the foregoing, the PPM provided to each of the
Purchasers was prepared by the management of the Company in a good faith effort
to describe the Company's proposed business and products and the markets
therefore. The forward-looking statements made in the PPM appeared reasonable to
management as of the date thereof; however, there is no assurance that these
forward-looking statements will prove to be valid or that the objectives set
forth in the PPM will be achieved. To the Company's knowledge, there are no
facts regarding the Company which (individually or in the aggregate) materially
adversely affect the business, assets, liabilities, financial condition,
prospects or operations of the Company that have not been set forth in the PPM,
the Agreement, the Exhibits hereto, the Related Agreements or in other documents
delivered to Purchasers or their attorneys or agents in connection herewith.
3.22 QUALIFIED SMALL BUSINESS. The Company represents and warrants to
the Purchasers that, to the best of its knowledge, the Shares should qualify as
"QUALIFIED SMALL BUSINESS STOCK" as defined in Section 1202(c) of the Internal
Revenue Code of 1986, as amended (the "CODE"), as of the date hereof.
3.23 MINUTE BOOKS. The minute books of the Company provided to the
Purchasers or their counsel contain a complete summary of all meetings of
directors and stockholders since the time of incorporation and correctly reflect
all issuances of stock or other equity rights in the Company.
3.24 INSURANCE. The Company has or will obtain promptly following
Closing fire and casualty insurance policies with coverage customary for
companies similarly situated to the Company.
3.25 SMALL BUSINESS CONCERN. The Company together with its "affiliates"
(as that term is defined in Section 121.103 of Title 13 of the Code of Federal
Regulations (the "FEDERAL REGULATIONS")), is a "SMALL BUSINESS CONCERN" within
the meaning of the Small Business Investment Act of 1958, as amended (the "SMALL
BUSINESS ACT"), and the regulations promulgated thereunder, including Section
121.301 of Title 13 of the Federal Regulations (a "SMALL BUSINESS CONCERN"). The
information delivered to each Purchaser that is a licensed Small Business
Investment Company (an "SBIC PURCHASER") on SBA Forms 480, 652 and 1031
delivered in connection herewith is true and correct.
3.26 YEAR 2000 COMPLIANCE. All of the Company's products and services
(including any products or services currently under development as of the date
hereof) will record, store, process and calculate and present calendar dates
falling on and after January 1, 2000, and will calculate any information
dependent on or relating to such dates in the same manner and with the same
functionality,
9.
data integrity and performance as the products record, store, process,
calculate and present calendar dates on or before December 31, 1999, or
calculate any information dependent on or relating to such dates
(collectively "YEAR 2000 COMPLIANT"). None of the Company's material products
will lose material functionality with respect to the introduction of records
containing dates falling on or after January 1, 2000. The Company has taken
all reasonable actions to ensure that all of the Company's internal computer
systems, including without limitation, its accounting systems, are Year 2000
Compliant.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
Each Purchaser hereby represents and warrants to the Company as follows
(it being agreed that such representations and warranties do not in any way
limit or effect the Purchasers' right to rely upon and enforce any breach of the
representations and warranties of the Company set forth in this Agreement):
4.1 REQUISITE POWER AND AUTHORITY. Purchaser has all necessary power
and authority under all applicable provisions of law to execute and deliver this
Agreement and the Related Agreements and to carry out their provisions. All
action on Purchaser's part required for the lawful execution and delivery of
this Agreement and the Related Agreements has been or will be effectively taken
prior to the Closing. Upon their execution and delivery, this Agreement and the
Related Agreements will be valid and binding obligations of Purchaser,
enforceable in accordance with their terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights, (b) general principles
of equity that restrict the availability of equitable remedies, and (c) to the
extent that the enforceability of the indemnification provisions of Section 3.9
of the Investor Rights Agreement may be limited by applicable laws.
4.2 INVESTMENT REPRESENTATIONS. Purchaser understands that neither the
Shares nor the Conversion Shares have been registered under the Securities Act.
Purchaser also understands that the Shares are being offered and sold pursuant
to an exemption from registration contained in the Securities Act based in part
upon Purchaser's representations contained in the Agreement. Purchaser hereby
represents and warrants as follows:
(a) PURCHASER BEARS ECONOMIC RISK. Purchaser has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. Purchaser must bear the economic risk of
this investment indefinitely unless the Shares or the Conversion Shares are
registered pursuant to the Securities Act or an exemption from registration is
available. Purchaser understands that the Company has no present intention of
registering the Shares, the Conversion Shares or any shares of its Common Stock.
Purchaser also understands that there is no assurance that any exemption from
registration under the Securities Act will be available and that, even if
available, such exemption may not allow Purchaser to transfer all or any portion
of the Shares or the Conversion Shares under the circumstances in the amounts or
at the times Purchaser might propose.
(b) ACQUISITION FOR OWN ACCOUNT. Purchaser is acquiring the
Shares and the Conversion Shares for Purchaser's own account for investment only
and not with a view towards their distribution.
(c) PURCHASER CAN PROTECT ITS INTEREST. Purchaser represents
that by reason of its, or of its management's, business or financial experience,
Purchaser has the capacity to protect its own
10.
interests in connection with the transactions contemplated in this Agreement
and the Related Agreements. Further, Purchaser is aware of no publication of
any advertisement in connection with the transactions contemplated in the
Agreement.
(d) ACCREDITED INVESTOR. Purchaser represents that it is an
accredited investor within the meaning of Regulation D under the Securities Act.
(e) COMPANY INFORMATION. Purchaser has received and read the
Financial Statements and the PPM and has had an opportunity to discuss the
Company's business, management and financial affairs with directors, officers
and management of the Company and has had the opportunity to review the
Company's operations and facilities. Purchaser has also had the opportunity to
ask questions of and receive answers from, the Company and its management
regarding the terms and conditions of this investment.
(f) RULE 144. Purchaser acknowledges and agrees that the
Shares and, if issued, the Conversion Shares must be held indefinitely unless
they are subsequently registered under the Securities Act or an exemption from
such registration is available. Purchaser has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act, which permits
limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things: the
availability of certain current public information about the Company, the resale
occurring not less than one year after a party has purchased and paid for the
security to be sold, the sale being through an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934, as amended) and the number of
shares being sold during any three-month period not exceeding specified
limitations.
(g) RESIDENCE. If the Purchaser is an individual, then the
Purchaser resides in the state or province identified in the address of the
Purchaser set forth on EXHIBIT A hereto; if the Purchaser is a partnership,
corporation, limited liability company or other entity, then the office or
offices of the Purchaser in which its investment decision was made is located at
the address or addresses of the Purchaser set forth on EXHIBIT A hereto.
4.3 TRANSFER RESTRICTIONS. Each Purchaser acknowledges and agrees that
the Shares and, if issued, the Conversion Shares are subject to restrictions on
transfer as set forth in the Investor Rights Agreement.
SECTION 5. CONDITIONS TO CLOSING.
5.1 CONDITIONS TO PURCHASERS' OBLIGATIONS AT THE CLOSING. Purchasers'
obligations to purchase the Shares at the Closing are subject to the
satisfaction, at or prior to the Closing, of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF
OBLIGATIONS. The representations and warranties made by the Company in Section 3
hereof shall be true and correct in all material respects as of the Closing Date
with the same force and effect as if they had been made as of the Closing Date,
and the Company shall have performed all obligations and conditions herein
required to be performed or observed by it on or prior to the Closing.
11.
(b) PERFORMANCE OF OBLIGATIONS. The Company shall have
performed and complied with all agreements, obligations and conditions contained
in this Agreement that are required to be performed or complied with by it on or
before the Closing.
(c) LEGAL INVESTMENT. On the Closing Date, the sale and
issuance of the Shares and the proposed issuance of the Conversion Shares shall
be legally permitted by all laws and regulations to which Purchasers and the
Company are subject.
(d) CONSENTS, PERMITS, AND WAIVERS. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the Related
Agreements (except for such as may be properly obtained subsequent to the
Closing).
(e) FILING OF RESTATED CERTIFICATE. The Restated Certificate
shall have been filed with the Secretary of State of the State of Delaware.
(f) CORPORATE DOCUMENTS. The Company shall have delivered to
Purchasers or their counsel, copies of all corporate documents of the Company as
Purchasers shall reasonably request.
(g) RESERVATION OF CONVERSION SHARES. The Conversion Shares
issuable upon conversion of the Shares shall have been duly authorized and
reserved for issuance upon such conversion.
(h) COMPLIANCE CERTIFICATE. The Company shall have delivered
to Purchasers a Compliance Certificate, executed by the President of the
Company, dated the date of the Closing, to the effect that the conditions
specified in subsections (a), (b), (d), (e) and (g) of this Section 5.1 have
been satisfied.
(i) INVESTOR RIGHTS AGREEMENT. An Investor Rights Agreement
substantially in the form attached hereto as EXHIBIT D shall have been executed
and delivered by the parties thereto.
(j) RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT. The Right of
First Refusal and Co-Sale Agreement substantially in the form attached hereto as
EXHIBIT E shall have been executed and delivered by the parties thereto.
(k) VOTING AGREEMENT. The Voting Agreement substantially in
the form attached hereto as EXHIBIT F shall have been executed and delivered by
the parties thereto.
(l) BOARD OF DIRECTORS. Upon the Closing, the authorized size
of the Board of Directors of the Company shall be five (5) members and the Board
shall consist of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇▇▇.
(m) LEGAL OPINION. The Purchasers shall have received from
legal counsel to the Company an opinion addressed to them, dated as of the
Closing Date, in substantially the form attached hereto as EXHIBIT J.
(n) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing
hereby and all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to the Purchasers and
12.
their special counsel, and the Purchasers and their special counsel shall
have received all such counterpart originals or certified or other copies of
such documents as they may reasonably request.
(o) PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTS. All key
employees shall have executed a Proprietary Information and Inventions Agreement
that is reasonably acceptable to Investors' counsel.
5.2 CONDITiONS TO OBLIGATIONS OF THE COMPANY. The Company's obligation
to issue and sell the Shares at the Closing is subject to the satisfaction, on
or prior to the Closing, of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties made by those Purchasers acquiring Shares in Section 4 hereof
shall be true and correct in all material respects at the date of the Closing,
with the same force and effect as if they had been made on and as of said date.
(b) PERFORMANCE OF OBLIGATIONS. Such Purchasers shall have
performed and complied with all agreements and conditions herein required to be
performed or complied with by such Purchasers on or before the Closing.
(c) INVESTOR RIGHTS AGREEMENT. An Investor Rights Agreement
substantially in the form attached hereto as EXHIBIT D shall have been executed
and delivered by the Purchasers.
(d) RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT. A Right of
First Refusal and Co-Sale Agreement substantially in the form attached hereto as
EXHIBIT E shall have been executed and delivered by the parties thereto.
(e) VOTING AGREEMENT. The Voting Agreement substantially in
the form attached hereto as EXHIBIT F shall have been executed and delivered by
the parties thereto.
(f) CONSENTS, PERMITS, AND WAIVERS. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the Related
Agreements (except for such as may be properly obtained subsequent to the
Closing).
SECTION 6. MISCELLANEOUS.
6.1 GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of California as such laws are applied to agreements
between California residents entered into and performed entirely in California.
6.2 SURVIVAL. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by any Purchaser and the
Closing of the transactions contemplated hereby. All statements as to factual
matters contained in any certificate or other instrument delivered by or on
behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.
13.
6.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Shares and the Conversion Shares from time
to time.
6.4 ENTIRE AGREEMENT. This Agreement, the Exhibits and Schedules
hereto, the Related Agreements, the PPM and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof and no party shall be
liable or bound to any other in any manner by any representations, warranties,
covenants and agreements except as specifically set forth herein and therein.
6.5 SEVERABILITY. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
6.6 AMENDMENT AND WAIVER.
(a) This Agreement may be amended or modified only upon the
written consent of the Company and holders of at least a majority of the Shares
(treated as if converted and including any Conversion Shares into which the
Shares have been converted that have not been sold to the public).
(b) The obligations of the Company and the rights of the
holders of the Shares and the Conversion Shares under the Agreement may be
waived only with the written consent of the holders of at least a majority of
the Shares (treated as if converted and including any Conversion Shares into
which the Shares have been converted that have not been sold to the public).
(c) Any amendment, modification or waiver effected in
accordance with Section 6.6(a) or Section 6.6(b) with the consent of the
requisite parties 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 and the Company (even if
such holder did not consent to such amendment, modification or waiver).
6.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, the Related
Agreements or the Restated Certificate, shall impair any such right, power or
remedy, nor shall it be construed to be a waiver of any such breach, default or
noncompliance, or any acquiescence therein, or of or in any similar breach,
default or noncompliance thereafter occurring. It is further agreed that any
waiver, permit, consent or approval of any kind or character on any Purchaser's
part of any breach, default or noncompliance under this Agreement, the Related
Agreements or under the Restated Certificate or any waiver on such party's part
of any provisions or conditions of the Agreement, the Related Agreements, or the
Restated Certificate must be in writing and shall be effective only to the
extent specifically set forth in such writing. All remedies, either under this
Agreement, the Related Agreements, the Restated Certificate, by law, or
otherwise afforded to any party, shall be cumulative and not alternative.
6.8 WAIVER OF CONFLICTS. Each party to this Agreement acknowledges that
legal counsel for the Company, ▇▇▇▇▇▇ Godward LLP ("▇▇▇▇▇▇ GODWARD"), has in the
past and may continue in the future to perform legal services for one or more of
the Purchasers or their affiliates in matters unrelated to the transactions
contemplated by this Agreement, including, but not limited to, the
representation of the
14.
Purchasers in matters of a similar nature to the transactions contemplated
herein. Each party to this Agreement hereby (a) acknowledges that they have
had an opportunity to ask for and have obtained information relevant to such
representation, including disclosure of the reasonably foreseeable adverse
consequences of such representation, (b) acknowledges that with respect to
the transactions contemplated herein, ▇▇▇▇▇▇ Godward has represented the
Company and not any individual Purchaser or any individual stockholder,
director or employee of the Company and (c) gives its informed consent to
▇▇▇▇▇▇ Godward's representation of the Company in the transactions
contemplated by this Agreement and ▇▇▇▇▇▇ Godward's representation of one or
more of the Purchasers or their affiliates in matters unrelated to such
transactions.
6.9 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified; (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (c) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (d) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the Company
at the address as set forth on the signature page hereof and to Purchaser at the
address set forth on EXHIBIT A attached hereto or at such other address as the
Company or Purchaser may designate by ten days advance written notice to the
other parties hereto.
6.10 EXPENSES. The Company shall pay all costs and expenses that it
incurs with respect to the negotiation, execution, delivery and performance of
the Agreement. The Company shall, at the Closing, reimburse the reasonable fees
of and expenses of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, LLP,
special counsel for the Purchasers, not to exceed $20,000.
6.11 ATTORNEYS' FEES. In the event that any dispute among the parties
to this Agreement should result in litigation, the prevailing party in such
dispute shall be entitled to recover from the losing party all fees, costs and
expenses of enforcing any right of such prevailing party under or with respect
to this Agreement, including without limitation, such reasonable fees and
expenses of attorneys and accountants, which shall include, without limitation,
all fees, costs and expenses of appeals.
6.12 TITLES AND SUBTITLES. The titles of the sections and subsections
of the Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
6.13 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
6.14 BROKER'S FEES. Each party hereto represents and warrants that no
agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party hereto is or will be entitled to any broker's or
finder's fee or any other commission directly or indirectly in connection with
the transactions contemplated herein, except that the Company shall be obligated
to compensate ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ for its fees incurred in connection with this
transaction pursuant to its engagement letter with the Company related to this
transaction. Each party hereto further agrees to indemnify each other party for
any claims, losses or expenses incurred by such other party as a result of the
representation in this Section 6.14 being untrue.
6.15 EXCULPATION AMONG PURCHASERS. Each Purchaser acknowledges that it
is not relying upon any person, firm, or corporation, other than the Company and
its officers and directors, in making its investment or decision to invest in
the Company. Each Purchaser agrees that no Purchaser nor the
15.
respective controlling persons, officers, directors, partners, agents, or
employees of any Purchaser shall be liable for any action heretofore or
hereafter taken or omitted to be taken by any of them in connection with the
Shares and Conversion Shares.
6.16 PRONOUNS. All pronouns contained herein, and any variations
thereof, shall be deemed to refer to the masculine, feminine or neutral,
singular or plural, as to the identity of the parties hereto may require.
[THIS SPACE INTENTIONALLY LEFT BLANK]
16.
IN WITNESS WHEREOF, the parties hereto have executed the SERIES C
PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY: PURCHASERS:
IMPROVENET, INC. ----------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ (PRINT NAME OF PURCHASER)
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ All Series C Investors
------------------------------- ------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President Title:
---------------------------------
Address:
-------------------------------
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
EXHIBIT A
SCHEDULE OF PURCHASERS
SHARES OF SERIES C AGGREGATE
NAME AND ADDRESS PREFERRED PURCHASE PRICE
----------------------------------------------- --------------------------- ---------------------------
Allstate Insurance Company 306,278 $1,999,995.34
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Alta California Partners, L.P. 411,728 $2,688,583.84
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Alta Embarcadero Partners, LLC 9,406 $61,421.18
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ARCH Venture Fund III, L.P. 612,558 $4,000,003.74
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
August Capital II, L.P. 1,378,255 $9,000,005.15
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Zero Stage Capital VI Limited Partnership 306,279 $2,000,001.87
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Company 153,140 $1,000,004.20
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 3,382 $22,084.46
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 3,382 $22,084.46
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 3,382 $22,084.46
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
EXHIBIT A-1
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
SHARES OF SERIES C AGGREGATE
NAME AND ADDRESS PREFERRED PURCHASE PRICE
----------------------------------------------- --------------------------- ---------------------------
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ California 14,931 $97,499.43
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ Employee Venture Fund, L.P. 5,743 $37,501.79
II
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Access Technology Partners, L.P. 120,980 $789,999.40
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Access Technology Partners Brokers Fund, L.P. 1,340 $8,750.20
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Partners, L.P. 89,587 $585,002.46
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Clear Fir Partners, LP 9,954 $65,000.27
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇-▇▇ Joint Venture, LLC * 8,429 $55,041.37
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
J2 JV, LLC * 3,828 $24,996.84
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Joint Venture, LLC * 5,359 $34,994.27
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
----------------------------
* With a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
EXHIBIT A-2
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
SHARES OF SERIES C AGGREGATE
NAME AND ADDRESS PREFERRED PURCHASE PRICE
----------------------------------------------- --------------------------- ---------------------------
KFIT - JRS Joint Venture, LLC * 3,828 $24,996.84
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇▇▇▇▇▇▇ Joint Venture, LLC * 3,828 $24,996.84
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
MAD Fund JV, LLC * 3,828 $24,996.84
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Carmel Fund LLC * 3,828 $24,996.84
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Blackshirts Joint Venture, LLC * 5,359 $34,994.27
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
JR-JS JV, LLC * 3,828 $24,996.84
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Alco JV, LLC * 3,828 $24,996.84
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GT-JS JV, LLC * 3,828 $24,996.84
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ANV Joint Venture, LLC * 3,828 $24,996.84
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
----------------------------
* With a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
EXHIBIT A-3
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
SHARES OF SERIES C AGGREGATE
NAME AND ADDRESS PREFERRED PURCHASE PRICE
----------------------------------------------- --------------------------- ---------------------------
Madrona Investment Group, LLC 15,314 $100,000.42
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ 7,657 $50,000.21
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ 1,914 $12,498.42
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,914 $12,498.42
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Stanford University 7,657 $50,000.21
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 3,829 $25,003.37
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 7,657 $50,000.21
▇.▇. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ 3,829 $25,003.37
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 3,829 $25,003.37
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ -------------------------- --------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TOTAL 3,537,524 $23,100,031.72
========================== ==========================
EXHIBIT A-4
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
