ASK JEEVES, INC.
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS
PAGE
1. AGREEMENT TO SELL AND PURCHASE.. . . . . . . . . . . . . . . . . . . . . 1
1.1 Authorization of Shares.. . . . . . . . . . . . . . . . . . . . . 1
1.2 Sale and Purchase.. . . . . . . . . . . . . . . . . . . . . . . . 1
2. CLOSING, DELIVERY AND PAYMENT. . . . . . . . . . . . . . . . . . . . . . 1
2.1 Closing.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Delivery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Subsequent Sales of Shares. . . . . . . . . . . . . . . . . . . . 2
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . . . . . . . . . 2
3.1 Organization, Good Standing and Qualification.. . . . . . . . . . 2
3.2 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.3 Capitalization; Voting Rights.. . . . . . . . . . . . . . . . . . 3
3.4 Authorization; Binding Obligations. . . . . . . . . . . . . . . . 3
3.5 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . 4
3.6 Liabilities.. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.7 Agreements; Action. . . . . . . . . . . . . . . . . . . . . . . . 4
3.8 Obligations to Related Parties. . . . . . . . . . . . . . . . . . 5
3.9 Changes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.10 Title to Properties and Assets; Liens, etc. . . . . . . . . . . . 6
3.11 Patents and Trademarks. . . . . . . . . . . . . . . . . . . . . . 6
3.12 Compliance with Other Instruments.. . . . . . . . . . . . . . . . 7
3.13 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.14 Tax Returns and Payments. . . . . . . . . . . . . . . . . . . . . 8
3.15 Employees.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.16 Proprietary Information and Inventions Agreements.. . . . . . . . 8
3.17 Registration Rights.. . . . . . . . . . . . . . . . . . . . . . . 8
3.18 Compliance with Laws; Permits.. . . . . . . . . . . . . . . . . . 8
3.19 Offering Valid. . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.20 Accounting Controls.. . . . . . . . . . . . . . . . . . . . . . . 9
3.21 Minute Books. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
i.
TABLE OF CONTENTS
(CONTINUED)
PAGE
3.22 Environmental and Safety Laws.. . . . . . . . . . . . . . . . . . 9
3.23 Insurance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.. . . . . . . . . . . . 9
4.1 Requisite Power and Authority.. . . . . . . . . . . . . . . . . .10
4.2 Investment Representations. . . . . . . . . . . . . . . . . . . .10
4.3 Transfer Restrictions.. . . . . . . . . . . . . . . . . . . . . .11
5. CONDITIONS TO CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . .11
5.1 Conditions to Purchasers' Obligations at the Closing. . . . . . .11
5.2 Conditions to Obligations of the Company. . . . . . . . . . . . .12
6. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
6.1 Governing Law.. . . . . . . . . . . . . . . . . . . . . . . . . .13
6.2 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
6.3 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . .13
6.4 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . .13
6.5 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . .14
6.6 Amendment and Waiver. . . . . . . . . . . . . . . . . . . . . . .14
6.7 Delays or Omissions.. . . . . . . . . . . . . . . . . . . . . . .14
6.8 Notices.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
6.9 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
6.10 Attorneys' Fees.. . . . . . . . . . . . . . . . . . . . . . . . .15
6.11 Titles and Subtitles. . . . . . . . . . . . . . . . . . . . . . .15
6.12 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . .15
6.13 Broker's Fees.. . . . . . . . . . . . . . . . . . . . . . . . . .15
6.14 Exculpation Among Purchasers. . . . . . . . . . . . . . . . . . .15
6.15 Pronouns. . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
6.16 Additional Investors. . . . . . . . . . . . . . . . . . . . . . .15
6.17 California Corporate Securities Law.. . . . . . . . . . . . . . .15
ii.
ASK JEEVES, INC.
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES A PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is
entered into as of November 10, 1998, by and among Ask Jeeves, Inc., a
California 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 Seven Million Five Hundred Thousand (7,500,000) shares of its Series A
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 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:
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 (i) the sale and
issuance to Purchasers of the Shares and (ii) 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 Restated Articles of
Incorporation of the Company, as amended, in the form attached hereto as Exhibit
B (the "Restated Charter").
1.2 SALE AND PURCHASE. Subject to the terms and conditions
hereof, at the Closing (as hereinafter defined) 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 a purchase
price of $1.0315 per share.
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 at 10:00 a.m. on the date
hereof, at the offices of
1.
Cooley Godward LLP, Five Palo Alto Square, 0000 Xx Xxxxxx Xxxx, Xxxx Xxxx,
Xxxxxxxxxx 00000 or at such other time or place 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 to be 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 SALES OF SHARES. At any time on or before the
30th day following the Closing, the Company may sell up to the balance of the
authorized shares of Series A Preferred Stock not sold at the Closing to
existing shareholders and their affiliates 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, the Investor Rights Agreement (as
defined below) and the Voting Agreement (as defined below), including, without
limitation, the representations and warranties by such Purchasers as set forth
in Section 4. Any Shares of Series A Preferred Stock sold pursuant to this
Section 2.3 shall be deemed to be "Shares" for all purposes under this Agreement
and any purchasers thereof shall be deemed to be "Purchasers" for all purposes
under this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as set forth on a Schedule of Exceptions delivered by the Company to
the Purchasers at the Closing, the Company hereby represents and warrants to
each Purchaser as of the date of this Agreement 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 California. 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 substantially in the form
attached hereto as Exhibit C (the "Investor Rights Agreement"), the Voting
Agreement substantially in the form attached hereto as Exhibit D (the "Voting
Agreement") and the Management Rights Letter substantially in the form attached
hereto as Exhibit E (the "Management Rights Letter") (collectively, the "Related
Agreements"), to issue and sell the Shares and the Conversion Shares and to
carry out the provisions of this Agreement, the Related Agreements and the
Restated Charter 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, except for those
jurisdictions in which failure to do so would not have a material adverse effect
on the Company or its business.
2.
3.2 SUBSIDIARIES. 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.
3.3 CAPITALIZATION; VOTING RIGHTS. The authorized capital stock
of the Company, immediately prior to the Closing, will consist of fifty million
(50,000,000) shares of Common Stock, twenty-two million three hundred four
thousand five hundred eight-six (22,304,586) shares of which are issued and
outstanding and five million thirteen thousand two hundred eighty-six
(5,013,286) shares of which are reserved for future issuance to employees
pursuant to outstanding options under the Company's 1996 Equity Incentive Plan,
forty three thousand (43,000) shares upon the exercise of certain warrants to
purchase Common Stock of the Company, and ten million (10,000,000) shares of
Preferred Stock, seven million five hundred thousand (7,500,000) of which are
designated Series A Preferred Stock, four million, nine hundred sixty one
thousand five hundred thirty (4,961,530) shares of which are issued and
outstanding. All issued and outstanding shares of the Company's Common Stock
(a) have been duly authorized and validly issued (b) are fully paid and
nonassessable, and (c) 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 Charter.
Subject to adjustment as set forth in the Restated Charter, each series of
Preferred Stock is convertible into Common Stock on a one-for-one basis. The
Conversion Shares have been duly and validly reserved for issuance. Other than
the shares reserved for issuance under the Company's 1996 Equity Incentive Plan,
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, or agreements of
any kind for the issuance by the Company or purchase or acquisition from the
Company of any of its securities. When issued in compliance with the provisions
of this Agreement and the Restated Charter, 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.
3.4 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on
the part of the Company, its officers, directors and shareholders 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 Charter 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 2.9
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
3.
subject to any preemptive rights or rights of first refusal that have not been
properly waived or complied with.
3.5 FINANCIAL STATEMENTS. The Company has been made available to
each Purchaser (a) its unaudited balance sheet as at December 31, 1997 and
unaudited statement of income and cash flows for the twelve months ending
December 31, 1997 and (b) its unaudited balance sheet as at August 31, 1998 (the
"Statement Date") and unaudited consolidated statement of income and cash flows
for the eight month period ending on the Statement Date (collectively, the
"Financial Statements"). The Financial Statements, together with the notes
thereto, are complete and correct in all material respects, have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods indicated, except as disclosed therein,
and present fairly the financial condition and results of operations of the
Company as of December 31, 1997 and the Statement Date; 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.
3.6 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.
3.7 AGREEMENTS; ACTION.
(a) 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 which may involve (i) obligations
(contingent or otherwise) of, or payments to, the Company in excess of $10,000
(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 (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).
(b) 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 indebtedness and other
obligations incurred in the ordinary course of business and as disclosed in the
Financial Statements) individually in excess of $10,000 or, in the case of
indebtedness and/or liabilities individually less than $10,000, in excess of
$25,000 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.
4.
(c) 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.
3.8 OBLIGATIONS TO RELATED PARTIES. There are no obligations of
the Company to officers, directors, shareholders, or employees of the Company
other than (a) for payment of 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). Except as may be disclosed in the Financial
Statements, the Company is not a guarantor or indemnitor of any indebtedness of
any other person, firm or corporation.
3.9 CHANGES. Since the Statement Date, there has not been:
(a) Any change in the assets, liabilities, financial
condition or operations of the Company from that reflected in the Financial
Statements, 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) To the best of its knowledge, 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
shareholder, 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 shareholder;
5.
(h) Any declaration or payment of any dividend or other
distribution of the assets of the Company;
(i) To the best of its knowledge, any labor organization
activity;
(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; or
(m) Any other event or condition of any character that,
either individually or cumulatively, has or, to the best of its knowledge, may
materially and adversely affected the business, assets, liabilities, financial
condition, operations or prospects of the Company.
3.10 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC. The Company has
good and marketable title to its properties and assets, including the properties
and assets reflected in the most recent balance sheet included in the Financial
Statements, 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.
3.11 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, licenses, information and
other proprietary rights and processes necessary for its business as now
conducted and as presently proposed to be conducted, without any known or
asserted infringement of the rights of others. 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 presently proposed, would violate any
of the patents, trademarks, service marks, trade names,
6.
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 presently proposed to be
conducted. Neither the execution nor delivery of this 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 presently 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 employees made prior to their employment
by the Company, except for inventions, trade secrets or proprietary information
that have been assigned to the Company.
3.12 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in
violation or default of any term of its Restated Charter or Bylaws, or 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, any statute, rule or regulation applicable to the
Company which would materially and adversely affect the business, assets,
liabilities, financial condition, operations or prospects of 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 pursuant hereto
and of the Conversion Shares pursuant to the Restated Charter, 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.
3.13 LITIGATION. There is no action, suit, proceeding or
investigation pending or to the Company's knowledge currently threatened in
writing against the Company that questions the validity of this Agreement, or
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 in
writing (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.
7.
3.14 TAX RETURNS AND PAYMENTS. The Company has filed all tax
returns (federal, state and local) required to be filed by it. 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.
3.15 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. 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 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 or key employee, or that 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.
3.16 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTS. Each
current employee and officer of the Company has executed a Proprietary
Information and Inventions Agreement in the form of Exhibit F attached hereto.
No current employee or officer 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 or officer Proprietary Information and
Inventions Agreement.
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 1.1 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. 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,
8.
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.
3.19 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 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.
3.20 ACCOUNTING CONTROLS. The Company maintains a system of
internal accounting controls sufficient to provide assurance that: (1)
transactions are executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit preparation
of financial statements materially in conformity with generally accepted
accounting principles and to maintain accountability for assets; (3) access to
assets is permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
3.21 MINUTE BOOKS. The minute books of the Company provided to
the Purchasers contain a complete summary of all meetings of directors and
shareholders since the time of incorporation.
3.22 ENVIRONMENTAL AND SAFETY LAWS. To its knowledge, the Company
is not in violation of any applicable statue, 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
stature, law or regulation.
3.23 INSURANCE. The Company has fire and casualty insurance
policies with coverage customary for companies similarly situated to the
Company.
9.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
Each Purchaser hereby represents and warrants to the Company as follows
(such representations and warranties do not lessen or obviate 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 have 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 2.9 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) GENERAL SOLICITATION. Purchaser is aware of no
publication of any advertisement in connection with the transactions
contemplated in the Agreement.
10.
(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 Business Plan 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 as in effect from
time to time, 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 following the required holding period under Rule
144 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; 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.
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.
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 Date, 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.
(b) 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.
11.
(c) 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).
(d) FILING OF RESTATED CHARTER. The Restated Charter shall
have been filed with the Secretary of State of the State of California.
(e) 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.
(f) 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.
(g) COMPLIANCE CERTIFICATE. The Company shall have
delivered to Purchasers a Compliance Certificate, executed by the President of
the Company, dated the Closing Date, to the effect that the conditions specified
in subsections (a), (c) and (f) of this Section 5.1 have been satisfied.
(h) INVESTOR RIGHTS AGREEMENT. The Investor Rights
Agreement shall have been executed and delivered by the parties thereto.
(i) VOTING AGREEMENT. The Voting Agreement shall have been
executed and delivered by the parties thereto.
(j) MANAGEMENT RIGHTS LETTER. The Management Rights Letter
shall have been executed and delivered by the parties thereto.
(k) 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 G.
(l) 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 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.
5.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's
obligation to issue and sell the Shares at each Closing is subject to the
satisfaction, on or prior to such Closing, of the following conditions:
12.
(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) FILING OF RESTATED CHARTER. The Restated Charter shall
have been filed with the Secretary of State of the State of California.
(d) INVESTOR RIGHTS AGREEMENT. An Investor Rights
Agreement shall have been executed and delivered by the Purchasers.
(e) VOTING AGREEMENT. The Voting Agreement shall have been
executed and delivered by the parties thereto.
(f) MANAGEMENT RIGHTS LETTER. The Management Rights Letter
shall have been executed and delivered by the parties thereto.
(g) 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).
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.
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 from time to time.
6.4 ENTIRE AGREEMENT. This Agreement, the Exhibits and Schedules
hereto, the Related Agreements and the other documents delivered pursuant hereto
constitute the full and
13.
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 through any
subsequent sales provided by Section 2.3 of this Agreement only upon the written
consent of the Company and holders of at least fifty percent (50%) 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 through any subsequent sales provided by Section 2.3 of this Agreement
only with the written consent of the holders of at least fifty percent (50%) 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).
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 Articles, 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 Articles or any waiver on such party's part of
any provisions or conditions of the Agreement, the Related Agreements, or the
Restated Articles 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 Articles, by law, or otherwise
afforded to any party, shall be cumulative and not alternative.
6.8 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 (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (d) one (1) 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
14.
such other address as the Company or Purchaser may designate by ten (10) days
advance written notice to the other parties hereto.
6.9 EXPENSES. Each party shall pay all costs and expenses that
it incurs with respect to the negotiation, execution, delivery and performance
of the Agreement.
6.10 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.
6.11 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.
6.12 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.
6.13 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. 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 6.13 being untrue.
6.14 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
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.
6.15 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.
6.16 ADDITIONAL INVESTORS. Notwithstanding anything to the
contrary contained herein, if the Company shall issue additional shares of its
Series A Preferred Stock pursuant to the Agreement, any purchaser of such shares
of Series A Preferred Stock may become a party to this Agreement by executing
and delivering an additional counterpart signature page to this Agreement and
shall be deemed a "PURCHASER" hereunder.
15.
6.17 CALIFORNIA CORPORATE SECURITIES LAW. THE SALE OF THE
SECURITIES WHICH 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
THEREFOR PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE OF AN EXEMPTION FROM SUCH
QUALIFICATION IS UNLAWFUL. PRIOR TO ACCEPTANCE OF SUCH CONSIDERATION BY THE
COMPANY, THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED
UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION FROM SUCH QUALIFICATION
BEING AVAILABLE.
16.
IN WITNESS WHEREOF, the parties hereto have executed the SERIES A PREFERRED
STOCK PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof.
COMPANY: PURCHASER:
ASK JEEVES, INC. INVESTOR
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Investors Listed on Exhibit A
-------------------------------- -------------------------------------
President
Name:
----------------------------------
Title:
---------------------------------
Address:
-------------------------------
----------------------------------------
----------------------------------------
Phone Number: ( )
--------------------
Facsimile: ( )
----------------------
SIGNATURE PAGE
17.
LIST OF EXHIBITS
Schedule of Purchasers Exhibit A
Restated Articles of Incorporation Exhibit B
Investor Rights Agreement Exhibit C
Voting Agreement Exhibit D
Management Rights Letter Exhibit E
Proprietary Information and Exhibit F
Inventions Agreement
Form of Legal Opinion Exhibit G
19.
EXHIBIT A
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
SCHEDULE OF PURCHASERS
AGGREGATE
NAME SHARES PURCHASE PRICE
-------------------------------------------- -------------- ------------------
CPQ Holdings, Inc. 4,961,530 $5,117,818
J. Xxxxxx Xxxxxxx 9,695 $10,000.39
Xxxxxxx X. Xxxxxx 9,695 $10,000.39
Xxxxxxx Xxxxxxx 185,191 $191,024.52
Xxxxxx Xxxx Xxxxxx 18,146 $18,717.60
P. Xxxx Xxxxx 9,695 $10,000.39
Xxxxx Xxxxx Xxxxxxx and Xxxx X. Xxxxxx 18,146 $18,717.60
Living Turst 12-15-95
Xxxxxxx X. Xxxxxxxxx, Trustee for the 15,578 $16,068.71
Xxxxxxxxx Revocable Trust U/T/D 6/12/83
Xxxxxxx Family Trust U/T/D 4-20-89 84,497 $87,158.66
Xxxxxx X. and Xxxx Xxx Revocable Trust 9,695 $10,000.39
8/14/89
Xxxxxx Xxxxxx 212,250 $218,935.88
M. Xxxxx Xxxxx 1994 Trust 9,695 $10,000.39
Xxxxxxxx Xxxxx 69,597 $71,789.31
969,492 $1,000,031.00
1.
SCHEDULE OF PURCHASERS
AGGREGATE
NAME SHARES PURCHASE PRICE
-------------------------------------------- -------------- ------------------
Xxxxx X. Xxxxx and Xxxxxxx X. Xxxxx 18,146 $18,717.60
Revocable Trust dated July 29, 1994
XX Xxxxx 29,640 $30,573.66
242,365 $249,999.50
Xxxxxxx Xxxxxxxxxx Family Trust 212,250 $218,935.88
Xxxxxxxx X. Xxxxxx 9,695 $10,000.39
Xxxxxx X. Still, Jr. 24,237 $25,000.47
Xxx Xxxxxx 9,695 $10,000.39
GC&H Investments 24,237 $25,000.47
24,237 $25,000.47
Xxxxxx Xxxxxx 48,473 $49,999.90
Angel Investors, L.P. 193,892 $199,999.60
TOTAL: 7,419,769 $7,653,491.56
--------- -------------
--------- -------------
EXHIBIT E
MANAGEMENT RIGHTS LETTER
November 10, 1998
CPQ Holdings, Inc.
00000 X.X. 000
Xxxxxxx, XX 00000-0000
RE: MANAGEMENT RIGHTS
Ladies and Gentlemen:
This letter will confirm our agreement that pursuant to the purchase of
5,133,301 shares of Series A Preferred Stock of Ask Jeeves, Inc. (the "Company")
by CPQ Holdings, Inc. ("Investor"), Investor will be entitled to the following
contractual management rights, in addition to rights to nonpublic financial
information, inspection rights, and other rights specifically provided to all
investors in the current financing:
1. The Company shall allow one representative designated by the Investor to
attend all meetings of the Company's Board of Directors in a nonvoting capacity,
and in connection therewith, the Company shall give such representative copies
of all notices, minutes, consents and other materials, financial or otherwise,
which the Company provides to its Board of Directors at the same time and in the
same manner it provides the materials to the Board; PROVIDED, HOWEVER, that the
Company reserves the right to exclude such representative from such meetings if
such meetings are to discuss clients or prospective clients that are competitive
with the Investor or its subsidiaries; and PROVIDED, FURTHER, that the Company
reserves the right to exclude such representative from access to any material or
meeting or portion thereof where legal advice is sought or offered if the
distribution of such material to the representative or the presence of the
representative as such meeting or portion thereof would invalidate the Company's
attorney-client privilege.
2. Investor and its affiliates shall have the right to review all written
disclosures by the Company regarding Investor or its affiliates; PROVIDED,
HOWEVER, that following an "IPO", if disclosure by the Company is required by
law, then the Company shall give Investor and its affiliates at least three (3)
business days notice of such written disclosure and Investor and its affiliates
shall promptly provide their comments, if any, to the Company. The Company shall
have the right to review all written disclosures by Investor or its affiliates
regarding the Company or its affiliates. The term sheet and the terms set forth
herein shall not be disclosed in writing by either party without the prior
consent of the other party, which consent shall not be unreasonably withheld.
1
3. The Company shall notify Investor in writing at least fifteen (15) days
before the Company knowingly sells any securities of the Company to a then
current employee of the Investor or its affiliates who is known by the Company
to be an employee of Investor or its affiliates.
The Company and Investor agree to abide by the terms of the Non-Disclosure
Agreement dated August 6, 1998 and Investor agrees, to hold in confidence and
trust and not disclose any confidential information provided to or learned by
it in connection with its rights under this letter.
The rights described in paragraphs 1 and 3 herein shall terminate and be of
no further force or effect upon the earlier of (i) consummation of the sale of
the Company's securities pursuant to a registration statement filed by the
Company under the Securities Act of 1933, as amended, in connection with the
firm commitment underwritten offering of its securities to the general public
(an "IPO") or (ii) upon (a) the acquisition of all or substantially all of the
assets of the Company or (b) an acquisition of the Company by another
corporation or entity by consolidation, merger or other reorganization in which
the holders of the Company's outstanding voting stock immediately prior to such
transaction own, immediately after such transaction, securities representing
less than fifty percent (50%) of the voting power of the corporation or other
entity surviving such transaction (a "Change in Control").
The confidentiality provision hereof will survive any such termination.
Very truly yours,
ASK JEEVES, INC.
By: /s/ Xxxxxx Xxxxxx
---------------------------------
Title: Chief Executive Officer
------------------------------
Agreed and accepted:
CPQ HOLDINGS, INC.
By: /s/ Rod Stchrock
---------------------------------
Title: Vice President
------------------------------
