ASK JEEVES, INC.
COMMON STOCK SUBSCRIPTION AGREEMENT
This COMMON STOCK SUBSCRIPTION AGREEMENT ("Agreement") is made as of
August 26, 1998, by and among ASK JEEVES, INC., a California corporation (the
"Company") and the investors listed on SCHEDULE I attached hereto (individually,
a "Purchaser" and collectively, "Purchasers").
1. AUTHORIZATION AND SALE OF SHARES.
1.1 AUTHORIZATION. The Company has authorized the issuance and sale to
Purchasers of three million seven hundred ten thousand (3,710,830) shares of its
Common Stock (the "Shares").
1.2 SALE. Subject to the terms and conditions hereof, the Company hereby
agrees to issue and sell to Purchasers, and Purchasers hereby agree to purchase
from the Company, the Shares free and clear of all liens, encumbrances and
charges whatsoever for a purchase price of Thirty Six and Third Eight
Hundredths Cents ($.3638) per share that number of shares of Common Stock set
forth opposite each Purchaser's name on Schedule I.
1.3 CLOSING. The closing of the sale of purchase of the Shares under this
Agreement shall be held on August 31, 1998 at the Palo Alto office of Xxxxxx
Godward LLP, or at such other time and place as the Company and Purchasers may
agree.
1.4 DELIVERY. At the closing and upon full payment of the purchase price
of the Shares, the Company will deliver to each Purchaser a certificate
representing the Shares, dated the date of the Closing.
2. REPRESENTATIONS OF THE PURCHASERS.
Each Purchaser hereby represents and warrants to the Company as follows:
(a) Purchaser is acquiring the Shares for Purchaser's own account,
not as nominee or agent, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act of 1933, as amended (the "Securities Act").
(b) Purchaser understands that (i) the Shares have not been
registered under the Securities Act by reason of a specific exemption therefrom,
that they must be held by Purchaser indefinitely, and that Purchaser must,
therefore, bear the economic risk of such investment indefinitely, unless a
subsequent disposition thereof is registered under the Securities Act or is
exempt from such registration; (ii) each certificate representing the Shares
will be endorsed with the following legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
RIGHT OF FIRST REFUSAL OPTION IN FAVOR OF THE COMPANY AND/OR ITS
ASSIGNEE(S) AS PROVIDED IN THE BYLAWS OF THE COMPANY."
and (iii) the Company will instruct any transfer agent not to register the
transfer of any of the Shares unless the conditions specified in the foregoing
legend are satisfied.
(c) Purchaser has been furnished with all the information necessary
to make an informed investment decision. Purchaser has been given access to
such information relating to the Company as Purchaser has requested.
(d) By reason of Purchaser's business or financial experience,
Purchaser has the capacity to make the decision referred to in subsection (c)
above.
(e) Purchaser is an accredited investor within the meaning of
Regulation D under the Securities Act.
(f) Purchaser is aware that the Shares may not be sold pursuant to
Rule 144 adopted under the Securities Act unless certain conditions are met and
until Purchaser has held the Shares for the applicable holding period. Among
the conditions for use of Rule 144 is the availability of specified current
public information about the Company. Purchaser recognizes that the Company
presently has no plans to make such information available to the public.
Each Purchaser further agrees not to make any disposition of any of the
Shares in any event unless and until:
(i) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or
(ii) (A) Purchaser shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and
(B) Purchaser shall have given the Company an opinion of counsel, which opinion
and counsel shall be satisfactory to the Company, to the effect that such
disposition will not require registration of the Shares under the Securities
Act.
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3. MISCELLANEOUS.
3.1 GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents, made and to be performed entirely within the State
of California. Each party hereby expressly consents to the personal
jurisdiction of the state and federal courts located in San Mateo and Santa
Xxxxx Counties, California for any lawsuit arising from or related to this
Agreement.
3.2 CHAPTER S ELECTION. Purchasers hereby consent and agree that the
Company is currently and shall continue to be treated as an S Corporation for
tax purposes and agree to execute such other documents that the Company requests
in order to make such election. Nothing in this Section 3.2 shall be construed
as an obligation on the part of the Company to continue to elect to be treated
as an S Corporation, and it shall be in the Company's sole discretion to decide
whether to continue such election.
3.3 SURVIVAL. The representations, warranties, covenants, and agreements
made herein shall survive any investigation made by Purchasers and the closing
of the transaction contemplated hereby.
3.4 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.
3.5 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
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.
3.6 ENTIRE AGREEMENT. This Agreement constitutes the full and entire
understanding and agreement among the parties with regard to the subject matter
hereof.
3.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.
3.8 FURTHER ACTION. Each party shall, without further consideration, take
such further action and execute and deliver such further documents as may be
reasonably requested by the other party in order to carry out the provisions and
purposes of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this COMMON STOCK
SUBSCRIPTION AGREEMENT as of the day and year first set forth above.
COMPANY: PURCHASERS:
ASK JEEVES, INC.
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[Print Name of Purchaser]
By: /s/ Xxxxxx Xxxxxxxxxx By: /s/ Investors Listed on Schedule I
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Print Name: Xxxxxx Xxxxxxxxxx Print Name:
------------------- ---------------------------
Title: VP Finance & Operations Title:
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SCHEDULE I
SCHEDULE OF INVESTORS
INVESTOR NAME $ AMOUNT NUMBER OF SHARES
Xxxxxx, Xxx $ 125,000 343,595
Xxxxx, Xxxx $ 50,000 137,438
Xxxxxxx, Xxxxx $ 50,000 137,438
Xxxxxx, Xxxxxxx $ 75,000 206,157
Xxxxxxx, Xxxxxx $ 75,000 206,157
XxXxxxxxxx, Xxxxxx $ 50,000 137,438
Xxxxxx, Xxxxxx $ 100,000 274,876
Xxxxx, Xxxx $ 50,000 137,438
Xxxxx, Xxx $ 425,000 1,168,224
Xxxxx, XX $ 225,000 618,472
Xxxxxxx, Xxxxx $ 100,000 274,876
Total $1,350,000 3,710,830
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