Exhibit 99.4
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XXXXXXXXXXXXXXXX.XXX, INC.
SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
1. Subscription. MathSoft, Inc., a Massachusetts corporation ("MathSoft"),
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hereby subscribes for 3,000,000 shares (the "Shares") of the Series A
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Convertible Preferred Stock, $.001 par value per share ("Series A Convertible
Preferred Stock"), of XxxxXxxxxxxxxxxx.xxx, Inc. ("FreeScholarships" or the
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"Company") for a purchase price of $1.00 per share.
2. Due Authorization. The Shares have been duly authorized and, when issued
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and paid for in accordance with the provisions of this Agreement, will be
validly issued, fully paid and nonassessable.
3. Relationship to Other Documents. The Series A Convertible Preferred
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Stock shall be considered "Purchased Shares" for all purposes of that certain
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Registration Rights Agreement (the "Registration Rights Agreement") dated the
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date hereof.
4. Financial Statements; Reports. FreeScholarships shall furnish to any
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holder of at least 350,000 shares of Series A Convertible Preferred Stock the
following information:
(a) within ninety (90) days after the end of each fiscal year of the
Company a consolidated balance sheet of the Company and its subsidiaries, if
any, as of the end of such fiscal year and the related consolidated statements
of income, stockholders' equity and cash flows for the fiscal year then ended,
prepared in accordance with generally accepted accounting principles and
certified by a firm of independent public accountants of recognized national
standing selected by the Board of Directors of the Company;
(b) within thirty (30) days after the end of each month and each
quarter in each fiscal year (other than the last month or last quarter in each
fiscal year) a consolidated balance sheet of the Company and its subsidiaries,
if any, and the related consolidated statements of income, stockholders' equity
and cash flows, unaudited but prepared in accordance with generally accepted
accounting principles and certified by the Chief Financial Officer of the
Company, such consolidated balance sheet to be as of the end of such month and
such consolidated statements of income, stockholders' equity and cash flows to
be for such month and for the period from the beginning of the fiscal year to
the end of such month, in each case with comparative statements to the annual
budget;
(c) no later than sixty (60) days prior to the start of each fiscal
year, consolidated capital and operating expense budgets, cash flow projections
and income and loss projections for the Company and its subsidiaries in respect
of such fiscal year, all itemized in reasonable detail and prepared on a monthly
basis, and, promptly after preparation, any revisions to any of the foregoing;
and
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(d) the Company's obligations under this Section 4 shall terminate upon
the completion of a Qualifying Public Offering (as defined in Section 5) of the
Company's securities.
5. Right of First Offer. For so long as MathSoft continues to hold at least
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350,000 shares of Series A Convertible Preferred Stock, the Company shall, prior
to any issuance by the Company of any of its securities, offer to MathSoft by
written notice the right, for a period of thirty (30) days, to purchase all of
such securities for cash at an amount equal to the price or other consideration
for which such securities are to be issued; provided, however, that the first
offer rights of MathSoft pursuant to this Section 5 shall not apply to
securities issued (A) upon conversion of any of the Preferred Shares, (B) as a
stock dividend or upon any subdivision of shares of common stock, $.001 par
value per share (the "Common Stock"), provided that the securities issued
pursuant to such stock dividend or subdivision are limited to additional shares
of Common Stock, (C) solely in consideration for the acquisition (whether by
merger or otherwise) by the Company or any of its subsidiaries of all or
substantially all of the stock or assets of any other entity, (D) pursuant to a
firm commitment underwritten public offering, (E) pursuant to the exercise of
options to purchase Common Stock granted to directors, officers, employees or
consultants of the Company in connection with their service to the Company, not
to exceed in the aggregate 1,909,090 shares (appropriately adjusted to reflect
stock splits, stock dividends, combinations of shares and the like with respect
to the Common Stock) (the shares exempted by this clause (E) being hereinafter
referred to as the "Reserved Employee Shares"), and (F) upon the exercise of any
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right which was not itself in violation of the terms of this Section 5. The
Company's written notice to MathSoft shall describe the securities proposed to
be issued by the Company and specify the number, price and payment terms.
MathSoft may accept the Company's offer as to the full number of securities
offered to it or any lesser number, by written notice thereof given by it to the
Company prior to the expiration of the aforesaid thirty (30) day period, in
which event the Company shall promptly sell and MathSoft shall buy, upon the
terms specified, the number of securities agreed to be purchased by MathSoft.
The Company shall be free at any time prior to ninety (90) days after the date
of its notice of offer to MathSoft, to offer and sell to any third party or
parties the number of such securities not agreed by MathSoft to be purchased by
it, at a price and on payment terms no less favorable to the Company than those
specified in such notice of offer to MathSoft. However, if such third party
sale or sales are not consummated within such ninety (90) day period, the
Company shall not sell such securities as shall not have been purchased within
such period without again complying with this Section 5. The Company's
obligations under this Section 5 shall terminate upon the completion of a
"Qualifying Public Offering"of the company's securities. A "Qualifying Public
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Offering" shall mean a firm commitment underwritten public offering pursuant to
an effective registration statement under the Securities Act covering the offer
and sale by the Company of Common Stock in which the aggregate net proceeds to
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the Company after deducting underwriters' discounts and commissions equals or
exceeds $20,000,000 and in which the price per share of Common Stock offered to
the public equals or exceeds $4.00 (such price to be equitably adjusted in the
event of any stock dividend, stock split, combination, recapitalization,
reorganization, reclassification or other similar event).
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IN WITNESS WHEREOF, the parties hereto have caused this Series A Preferred
Stock Purchase Agreement to be executed and accepted as of the date set forth
below.
MATHSOFT, INC. XXXXXXXXXXXXXXXX.XXX, INC.
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and Chief Title: President
Financial Officer
EIN#: 00-0000000 Date of Acceptance: June 11, 1999
Address: 000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
