Exhibit 10.14
xxx.xxx, inc.
SERIES D PREFERRED STOCK
PURCHASE AGREEMENT
May 12, 1999
TABLE OF CONTENTS
1. Purchase and Sale of Stock.......................................... 4
--------------------------
1.1 Sale and Issuance of Series D Preferred Stock....................... 4
---------------------------------------------
1.2 Funding............................................................. 4
-------
2. Representations and Warranties of the Company....................... 5
---------------------------------------------
2.1 Organization, Good Standing and Qualification....................... 5
---------------------------------------------
2.2 Capitalization and Voting Rights.................................... 5
--------------------------------
2.3 Subsidiaries........................................................ 6
------------
2.4 Authorization....................................................... 6
-------------
2.5 Valid Issuance of Preferred and Common Stock........................ 6
--------------------------------------------
2.6 Governmental Consents............................................... 7
---------------------
2.7 Offering............................................................ 7
--------
2.8 Litigation.......................................................... 7
----------
2.9 Proprietary Information and Inventions Agreements................... 7
-------------------------------------------------
2.10 Patents and Trademarks.............................................. 8
----------------------
2.11 Compliance with Other Instruments................................... 8
---------------------------------
2.12 Agreements; Action.................................................. 9
------------------
2.13 Related Party Transactions.......................................... 10
--------------------------
2.14 Permits............................................................. 10
-------
2.15 Environmental and Safety Laws....................................... 10
-----------------------------
2.16 Manufacturing and Marketing Rights.................................. 10
----------------------------------
2.17 Disclosure.......................................................... 11
----------
2.18 Business Plan....................................................... 11
-------------
2.19 Registration Rights................................................. 11
-------------------
2.20 Corporate Documents................................................. 11
-------------------
2.21 Title to Property and Assets........................................ 11
----------------------------
2.22 Financial Statements................................................ 11
--------------------
2.23 Changes............................................................. 12
-------
2.24 Employee Benefit Plans.............................................. 12
----------------------
2.25 Tax Returns, Payments and Elections................................. 12
-----------------------------------
2.26 Insurance........................................................... 13
---------
2.27 Minutes............................................................. 13
-------
2.28 Labor Agreements and Actions; Employee Compensation................. 13
---------------------------------------------------
2.29 Section 83(b) Elections............................................. 13
-----------------------
2.30 Real Property Holding Company....................................... 13
-----------------------------
2.31 Net Operating Loss Carryforward..................................... 14
-------------------------------
2.32 Brokers............................................................. 14
-------
2.33 Significant Customers and Suppliers................................. 14
-----------------------------------
2.34 Qualified Small Business Stock...................................... 14
------------------------------
2.35 Year 2000........................................................... 14
---------
2.36 Offerees............................................................ 14
--------
3. Representations and Warranties of the Investors..................... 15
-----------------------------------------------
3.1 Authorization....................................................... 15
-------------
3.2 Purchase Entirely for Own Account................................... 15
---------------------------------
-2-
3.3 Disclosure of Information............................................ 15
-------------------------
3.4 Investment Experience................................................ 15
---------------------
3.5 Accredited Investor.................................................. 15
-------------------
3.6 Restricted Securities................................................ 16
---------------------
3.7 Further Limitations on Disposition................................... 16
----------------------------------
3.8 Legends.............................................................. 16
-------
3.9 Investors' State of Residence........................................ 17
-----------------------------
4. Conditions of Investors' Obligations at Funding...................... 17
-----------------------------------------------
4.1 Representations and Warranties....................................... 17
------------------------------
4.2 Performance.......................................................... 17
-----------
4.3 Compliance Certificate............................................... 17
----------------------
4.4 Qualifications....................................................... 17
--------------
4.5 Proceedings and Documents............................................ 17
-------------------------
4.6 Proprietary Information and Inventions Agreement..................... 17
------------------------------------------------
4.7 Bylaws............................................................... 17
------
4.8 Amended and Restated Voting Agreement................................ 18
-------------------------------------
4.9 Board of Directors................................................... 18
------------------
4.10 Opinion of Company Counsel........................................... 18
--------------------------
4.11 Amended and Restated Investors' Rights Agreement..................... 18
------------------------------------------------
4.12 Amended and Restated Right of First Refusal and Co-Sale Agreement.... 18
-----------------------------------------------------------------
4.13 Due Diligence and No Material Adverse Change......................... 18
--------------------------------------------
5. Conditions of the Company's Obligations at Funding................... 18
--------------------------------------------------
5.1 Representations and Warranties....................................... 18
------------------------------
5.2 Qualifications....................................................... 19
--------------
6. Miscellaneous........................................................ 19
-------------
6.1 Survival of Warranties............................................... 19
----------------------
6.2 Successors and Assigns............................................... 19
----------------------
6.3 Governing Law........................................................ 19
-------------
6.4 Counterparts......................................................... 19
------------
6.5 Titles and Subtitles................................................. 19
--------------------
6.6 Notices.............................................................. 19
-------
6.7 Finder's Fee......................................................... 19
------------
6.8 Expenses............................................................. 20
--------
6.9 Amendments and Waivers............................................... 20
----------------------
6.10 Severability......................................................... 20
------------
6.11 Corporate Securities Law............................................. 20
------------------------
6.12 Aggregation of Stock................................................. 20
--------------------
6.13 Entire Agreement..................................................... 21
----------------
SCHEDULE A Schedule of Investors
EXHIBIT A Restated Certificate of Incorporation
EXHIBIT B List of Stockholders
EXHIBIT C Amended and Restated Voting Agreement
EXHIBIT D Amended and Restated Investors' Rights Agreement
EXHIBIT E Amended and Restated Right of First Refusal and Co-Sale Agreement
-3-
xxx.xxx, inc.
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES D PREFERRED STOCK PURCHASE AGREEMENT is made as of the 12th day
of May, 1999, by and among xxx.xxx, inc., a Delaware corporation (the
"Company"), and the investors listed on Schedule A hereto, each of which is
herein referred to as an "Investor" and together as the "Investors."
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
--------------------------
1.1 Sale and Issuance of Series D Preferred Stock.
(a) The Company shall adopt and file with the Secretary of State of
Delaware on or before the Funding (as defined below) the Restated Certificate of
Incorporation in the form attached hereto as Exhibit A (the "Restated
---------
Certificate").
(b) On or prior to the Funding (as defined below), the Company shall
have authorized (i) the sale and issuance to the Investors of 2,868,069 shares
of Series D Preferred Stock (as defined below), (ii) the issuance of the shares
of Common Stock (as defined below) to be issued upon conversion of the Series D
Preferred Stock (the "Common Shares"). The Series D Preferred Stock shall have
the rights, preferences, privileges and restrictions set forth herein, in the
Amended and Restated Investors' Rights Agreement in the form attached hereto as
Exhibit E and in the Restated Certificate.
(c) Subject to the terms and conditions of this Agreement, each
Investor agrees, severally and not jointly, to purchase at the Funding and the
Company agrees to sell and issue to each Investor at the Funding that number of
shares of the Company's Series D Preferred Stock set forth opposite such
Investor's name on Schedule A hereto for the purchase price set forth thereon.
----------
1.2 Funding. The funding and delivery of the Series D Preferred Stock
-------
shall take place at the offices of Day, Xxxxx & Xxxxxx LLP, CityPlace I,
Hartford, Connecticut, at 9:30 A.M., on May 12, 1999, or at such other time and
place as the Company and Investors acquiring in the aggregate more than fifty
percent (50%) the shares of Series D Preferred Stock sold pursuant hereto
mutually agree upon orally or in writing (which time and place are designated as
the "Funding"). At the Funding the Company shall deliver to each Investor a
certificate representing the Series D Preferred Stock purchased thereby against
payment of the purchase price therefor by wire transfer, cancellation of
indebtedness, or any combination thereof. In the event that payment by an
Investor is made, in whole or in part, by cancellation of indebtedness, then
such Investor shall surrender to the Company for cancellation at the Funding any
evidence of such indebtedness or shall execute an instrument of cancellation in
form and substance acceptable to the Company.
-4-
2. Representations and Warranties of the Company. The Company hereby
---------------------------------------------
represents and warrants to each Investor that, except as set forth on a Schedule
of Exceptions (the "Schedule of Exceptions") furnished each Investor and special
counsel for the Investors, specifically identifying the relevant subparagraph
hereof, which exceptions shall be deemed to be representations and warranties as
if made hereunder:
2.1 Organization, Good Standing and Qualification. The Company is a
---------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted and as proposed to be conducted. The
Company is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure to so qualify would have a material adverse
effect on its business or properties.
2.2 Capitalization and Voting Rights.
--------------------------------
(a) The authorized capital of the Company consists, or will
consist at the time of the Funding, of: (i) 16,862,500 shares of Preferred
Stock, par value $.001 per share (the "Preferred Stock"), 3,862,500 of which
will be designated Series A Preferred Stock (the "Series A Preferred Stock"),
225,000 of which will be issued and outstanding at the time of the Funding,
6,500,000 of which will be designated Series B Preferred Stock (the "Series B
Preferred Stock"), of which 6,500,000 will be issued and outstanding at the time
of to the Funding, 3,500,000 of which will be designated Series C Preferred
Stock (the "Series C Preferred Stock"), 2,785,516 of which will be issued and
outstanding at the time of to the Funding, and 3,000,000 of which will be
designated Series D Preferred Stock (the "Series D Preferred Stock"), up to
2,868,069 of which will be issuable pursuant to this Agreement; and (ii)
22,862,500 shares of common stock, par value $.001 per share ("Common Stock"),
of which 5,300,000 shares will be issued and outstanding at the time of the
Funding. The rights, privileges and preferences of the Common Stock, Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock will be as stated in the Restated Certificate.
(b) The outstanding shares of Common Stock and Preferred Stock
will be owned by the stockholders, in the numbers specified and subject to the
restrictions set forth in Exhibit B hereto, at the time of the Funding.
---------
(c) At the time of the Funding, the outstanding shares of Common
Stock and Preferred Stock will all be duly and validly authorized and issued,
fully paid and nonassessable and issued in accordance with the registration or
qualification provisions of the Securities Act of 1933, as amended (the "Act"),
and any relevant state securities laws, or pursuant to valid exemptions
therefrom.
(d) Except for (A) the conversion privileges of the Preferred
Stock, (B) the rights provided in Section 2.4 of the Amended and Restated
Investors' Rights Agreement, and the options and warrants listed in Exhibit B,
---------
there are not outstanding any options, warrants, rights (including conversion or
preemptive rights) or agreements for the purchase or acquisition from the
Company of any shares of its capital stock. In addition to the aforementioned
warrants,
-5-
the Company has reserved 3,700,000 shares of its Common Stock for purchase upon
exercise of options granted and to be granted in the future to directors,
officers, employees, consultants and advisors under the Company's 1999 Stock
Plan (the "Option Plan"). Except for the Amended and Restated Voting Agreement
in the form attached hereto as Exhibit C, the Company is not a party or subject
to any agreement or understanding, and, to the best of the Company's knowledge,
there is no agreement or understanding between any persons and/or entities,
which affects or relates to the voting or giving of written consents with
respect to any security or by a director of the Company. Following the
transactions contemplated hereby, except as set forth in the Schedule of
Exceptions and except as set forth in the Amended and Restated Investors' Rights
Agreement described in Section 4.11, there will be no preemptive or similar
rights to purchase or otherwise acquire shares of capital stock of the Company
pursuant to any provision of law, the Restated Certificate or the By-Laws of the
Company or any agreement to which the Company is a party, or otherwise.
2.3 Subsidiaries. The Company does not presently own or control,
------------
directly or indirectly, any interest in any other corporation, association, or
other business entity. The Company is not a participant in any joint venture,
partnership, or similar arrangement.
2.4 Authorization. All corporate action on the part of the Company,
-------------
its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement and the Amended and Restated Investors'
Rights Agreement described in Section 4.11, the Amended and Restated Right of
First Refusal and Co-Sale Agreement described in Section 4.12, and the Amended
and Restated Voting Agreement described in Section 4.8 (collectively, the
"Ancillary Agreements"), the performance of all obligations of the Company
hereunder and thereunder, and the authorization, issuance (or reservation for
issuance), sale and delivery of the Series D Preferred Stock being sold
hereunder and the Common Stock issuable upon conversion of the Series D
Preferred Stock being sold hereunder, has been taken or will be taken prior to
the Funding, and this Agreement and the Ancillary Agreements constitute, or
will, upon execution thereof by the parties thereto, constitute, valid and
legally binding obligations of the Company, enforceable in accordance with their
respective terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by laws and
principles relating to the availability of specific performance, injunctive
relief, or other equitable remedies, and (iii) to the extent the indemnification
provisions contained in the Amended and Restated Investors' Rights Agreement may
be limited by applicable federal or state securities laws.
2.5 Valid Issuance of Preferred and Common Stock. The Series D
--------------------------------------------
Preferred Stock that is being purchased by the Investors hereunder, when issued,
sold and delivered in accordance with the terms of this Agreement for the
consideration expressed herein, will be duly and validly issued, fully paid, and
nonassessable, and will be free of restrictions on transfer other than
restrictions on transfer under this Agreement, the Amended and Restated Voting
Agreement and the Amended and Restated Investors' Rights Agreement and under
applicable state and federal securities laws. The Common Shares have been or
will, prior to the Funding, be duly and validly reserved for issuance and, upon
issuance in accordance with the terms of the Restated Certificate will be duly
and validly issued, fully paid, and nonassessable and will be free of
restrictions on transfer other than restrictions on transfer under this
Agreement, the Amended and
-6-
Restated Voting Agreement, and the Amended and Restated Investors' Rights
Agreement and under applicable state and federal securities laws.
2.6 Governmental Consents. No consent, approval, order or
---------------------
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except (i) the filing of the Restated
Certificate with the Secretary of State of Delaware; and (ii) the filings
pursuant to Regulation D under the Act, Section 25102(f) of the California
Corporate Securities Law of 1968, as amended, and the rules thereunder, and
other applicable state securities laws, which filings will be effected within 15
days of the sale of the Series D Preferred Stock hereunder, and such other post-
Funding filings as may be required.
2.7 Offering. Subject in part to the truth and accuracy of each
--------
Investor's representations set forth in Section 3 of this Agreement, the offer,
sale and issuance of the Series D Preferred Stock as contemplated by this
Agreement are exempt from the registration requirements of any applicable state
and federal securities laws, and neither the Company nor any authorized agent
acting on its behalf will take any action hereafter that would cause the loss of
such exemption.
2.8 Litigation. There is no action, suit, proceeding or known
----------
investigation pending or, to the Company's knowledge, currently threatened
against the Company that questions the validity of this Agreement or any
Ancillary Agreements, or the right of the Company to enter into such agreements,
or to consummate the transactions contemplated hereby or thereby, or that might
result, either individually or in the aggregate, in any material adverse changes
in the assets, condition, affairs or prospects of the Company, financially or
otherwise, or any change in the current equity ownership of the Company, nor is
the Company aware that there is any basis for the foregoing. The foregoing
includes, without limitation, actions, suits, proceedings or investigations
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 that the Company intends to initiate.
2.9 Proprietary Information and Inventions Agreements. Each employee
-------------------------------------------------
and officer of the Company, and each consultant who has had access to
confidential or proprietary information of the Company, has executed a
Proprietary Information and Inventions Agreement. The Company is not aware that
any of its employees, officers or consultants are in violation thereof, and the
Company will use its best efforts to prevent any such violation.
2.10 Patents and Trademarks. The Company has sufficient title and
----------------------
ownership of or licenses to all patents, trademarks, service marks, trade names,
copyrights, trade secrets, information, proprietary rights and processes
necessary for its business as now conducted and as proposed to be conducted
without any violation or infringement of the rights of others, except for
-7-
such items as have yet to be conceived or developed or that are expected to be
available for licensing on reasonable terms from third parties. The Company has
no patents or pending patent applications. There are no outstanding options,
licenses, or agreements of any kind relating to the foregoing, nor is the
Company bound by or a party to any options, licenses or agreements of any kind
with respect to the patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information, proprietary rights and processes of any
other person or entity. 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 the use of his or her best efforts to promote
the interests of the Company or that would conflict with the Company's business
as proposed to be conducted. Neither the execution nor delivery of this
Agreement or the Ancillary 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 best of the Company's knowledge, conflict
with or result in a breach of the terms, conditions or provisions of, or
constitute a default under, any contract, covenant or instrument under which any
of such employees is now obligated. The Company does not believe it is necessary
to utilize any inventions of any of its employees (or people it currently
intends to hire) made prior to or outside the scope of their employment by the
Company. To the best knowledge of the Company, all data, information, ideas,
concepts, know-how and materials that the Company treats as trade secrets, and
all other confidential information and intellectual property rights of the
Company, are not part of the public domain or knowledge, nor, to the best
knowledge of the Company, have they been used, divulged or appropriated for the
benefit of any person other than the Company or otherwise to the detriment of
the Company.
2.11 Compliance with Other Instruments. The Company is not in
---------------------------------
violation or default of any provision of its Restated Certificate or Bylaws, or
of any instrument, judgment, order, writ, decree or contract to which it is a
party or by which it is bound. The Company has complied in all material respects
with all federal, state, local or foreign statutes, rules and regulations and
orders applicable to the Company, except where the failure to comply would not
have a material adverse effect on the business, properties or financial
condition of the Company. The execution, delivery and performance of this
Agreement and the Ancillary Agreements, and the consummation of the transactions
contemplated hereby and thereby will not result in any such violation or be in
conflict with or constitute, with or without the passage of time and giving of
notice, either a default under any such provision, instrument, judgment, order,
writ, decree or contract or an event that results in the creation of any lien,
charge or encumbrance upon any assets of the Company or the suspension,
revocation, impairment, forfeiture, or nonrenewal of any material permit,
license, authorization, or approval applicable to the Company, its business or
operations or any of its assets or properties.
2.12 Agreements; Action.
------------------
(a) Except for agreements explicitly contemplated hereby and the
Ancillary Agreements, there are no agreements, understandings or proposed
transactions between the Company and any of its officers, directors, affiliates,
or any affiliate thereof.
-8-
(b) There are no agreements, understandings, instruments, contracts,
proposed transactions, judgments, orders, writs or decrees to which the Company
is a party or by which it is bound that may involve (i) obligations (contingent
or otherwise) of, or payments to the Company in excess of, $100,000, or (ii) the
license of any patent, copyright, trade secret or other proprietary right to or
from the Company (other than the license of the Company's or generally available
shrinkwrap software and products in the ordinary course of business), or (iii)
provisions restricting or affecting the development, manufacture or distribution
of the Company's products or services, or (iv) indemnification by the Company
with respect to infringements of proprietary rights. The Company is not a party
to any written or oral (a) contract with any labor union; (b) contract for the
future purchase of fixed assets or for the future purchase of materials,
supplies or equipment in excess of normal operating requirements, in excess of
$50,000 per annum for all such contracts; (c) contract for the employment of any
officer, employee or other person or any contract with any person on a
consulting basis; (d) agreement or indenture relating to the borrowing of money;
(e) lease or agreement under which the Company is lessee of or holds or operates
any property, real or personal, owned by any other party, in excess of $50,000
per annum for all such contracts; (f) lease or agreement under which the Company
is lessor of or permits any third party to hold or operate any property, real or
personal, owned or controlled by the Company, in excess of $50,000 per annum for
all such contracts; (g) contract, agreement or commitment under which the
Corporation is obligated to pay any broker's fees, finder's fees or any such
similar fees, to any third party other than for the hiring of employees; or (h)
other contract, agreement, arrangement or understanding which is material to the
business of the Company. The Company is not a party to any term sheet,
memorandum or letter of understanding which could lead to any such contract,
agreement, arrangement, understanding or commitment.
(c) The Company has not (i) declared or paid any dividends or
authorized or made any distribution upon or with respect to any class or series
of its capital stock, (ii) incurred any indebtedness for money borrowed or any
other liabilities individually in excess of $100,000 or, in the case of
indebtedness and/or liabilities individually less than $100,000, in excess of
$200,000 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.
(e) The Company is not a party to and is not bound by any contract,
agreement or instrument, or subject to any restriction under its Restated
Certificate of Incorporation or Bylaws that adversely affects its business as
now conducted or as proposed to be conducted, its properties or its financial
condition.
-9-
(f) The Company has not engaged in the past three (3) months in
any discussion (i) with any representative of any corporation or corporations
regarding the consolidation or merger of the Company with or into any such
corporation or corporations, (ii) with any corporation, partnership, association
or other business entity or any individual regarding the sale, conveyance or
disposition of all or substantially all of the assets of the Company or a
transaction or series of related transactions in which more than fifty percent
(50%) of the voting power of the Company is disposed of, or (iii) regarding any
other form of acquisition, liquidation, dissolution or winding up of the
Company.
2.13 Related Party Transactions. No employee, officer, or director of
--------------------------
the Company or member of his or her immediate family is indebted to the Company,
nor is the Company indebted (or committed to make loans or extend or guarantee
credit) to any of them. To the best of the Company's knowledge, none of such
persons has 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 that competes with the Company, except
that employees, officers, or directors of the Company and members of their
immediate families may own stock in publicly traded companies that may compete
with the Company. No member of the immediate family of any officer or director
of the Company is directly or indirectly interested in any material contract
with the Company.
2.14 Permits. 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 the
Company believes it can obtain, without undue burden or expense, any similar
authority for the conduct of its business as planned to be conducted. The
Company is not in default in any material respect under any of such franchises,
permits, licenses, or other similar authority.
2.15 Environmental and Safety Laws. To the best of its knowledge, the
-----------------------------
Company has complied with all applicable statutes, laws and regulations relating
to the environment or occupational health and safety, and to the best of its
knowledge, no material expenditures are or will be required in order to comply
with any such existing statute, law or regulation.
2.16 Manufacturing and Marketing Rights. The Company has not granted
----------------------------------
rights to manufacture, produce, assemble, license, market, or sell its products
to any other person and is not bound by any agreement that affects the Company's
exclusive right to develop, manufacture, assemble, distribute, market or sell
its products.
2.17 Disclosure. The Company has fully provided each Investor with
----------
all the information that such Investor has requested for deciding whether to
purchase the Series D Preferred Stock and all information that the Company
believes is reasonably necessary to enable such Investor to make such decision.
Neither this Agreement, the Amended and Restated Investors' Rights Agreement,
nor any other statements or certificates made or delivered in connection
herewith or therewith contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements herein or therein not
misleading.
-10-
2.18 Business Plan. The 1999 Information Memorandum previously
-------------
delivered to each Investor in connection with the sale and issuance of Series D
Preferred Stock, has been prepared in good faith by the Company and does not
contain any untrue statement of a material fact nor does it omit to state a
material fact necessary to make the statements made therein not misleading,
except that with respect to projections contained in the Business Plan, the
Company represents only that such projections were prepared in good faith and
that the Company reasonably believes there is a reasonable basis for such
projections.
2.19 Registration Rights. Except as provided in the Amended and
-------------------
Restated Investors' Rights Agreement, the Company has not granted or agreed to
grant any registration rights, including piggyback rights, to any person or
entity.
2.20 Corporate Documents. Except for amendments necessary to satisfy
-------------------
representations and warranties or conditions contained herein (the form of which
amendments has been approved by the Investors), the Restated Certificate and
Bylaws of the Company are in the form previously provided to special counsel for
the Investors.
2.21 Title to Property and Assets. The Company owns its property and
----------------------------
assets free and clear of all mortgages, liens, loans and encumbrances, except
such encumbrances and liens that arise in the ordinary course of business and do
not materially impair the Company's ownership or use of such property or assets.
With respect to the property and assets it leases, the Company is in compliance
with such leases and, to the best of its knowledge, holds a valid leasehold
interest free of any liens, claims or encumbrances.
2.22 Financial Statements. The Company has delivered to the
--------------------
Investors its unaudited financial statements (balance sheet and statement of
operations) as at and for the year ended December 31, 1998 and the two-month
period ended February 28, 1999 (the "Financial Statements"). The Financial
Statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods covered thereby,
except for the absence of footnotes. The Financial Statements fairly present the
financial condition and operating results of the Company as of the dates, and
for the periods, indicated therein, subject to normal year-end audit
adjustments. Except as set forth in the Financial Statements, the Company has no
material liabilities, contingent or otherwise, other than (i) liabilities
incurred in the ordinary course of business subsequent to February 28, 1999 and
(ii) obligations under contracts and commitments incurred in the ordinary course
of business and not required under generally accepted accounting principles to
be reflected in the Financial Statements, which, in both cases, individually or
in the aggregate, are not material to the financial condition or operating
results of the Company. Except as disclosed in the Financial Statements, the
Company is not a guarantor or indemnitor of any indebtedness of any other
person, firm or corporation. The Company maintains and will continue to maintain
a standard system of accounting established and administered in accordance with
generally accepted accounting principles.
2.23 Changes. Since February 28, 1999, there has not been any adverse
-------
change in the assets, liabilities, financial condition or operating results of
the Company from that reflected in the Financial Statements, except changes in
the ordinary course of business that have not been, in the aggregate, materially
adverse.
-11-
2.24 Employee Benefit Plans. The Company does not have any Employee
----------------------
Benefit Plan as defined in the Employee Retirement Income Security Act of 1974.
2.25 Tax Returns, Payments and Elections. The Company has filed all
-----------------------------------
tax returns and reports (including information returns and reports) as required
by law. These returns and reports are true and correct in all material respects.
The Company has paid all taxes and other assessments due, except those contested
by it in good faith that are listed in the Schedule of Exceptions. The provision
for taxes of the Company as shown in the Financial Statements is adequate for
taxes due or accrued as of the date thereof. The Company has not elected
pursuant to the Internal Revenue Code of 1986, as amended (the "Code"), to be
treated as a Subchapter S corporation pursuant to Section 1362(a) of the Code,
nor has it made an election pursuant to Section 341(f) of the Code, nor has it
made any other elections pursuant to the Code (other than elections that relate
solely to methods of accounting, depreciation or amortization) that would have a
material effect on the Company, its financial condition, its business as
presently conducted or proposed to be conducted or any of its properties or
material assets. The Company has never had any tax deficiency proposed or
assessed against it and has not executed any waiver of any statute of
limitations on the assessment or collection of any tax or governmental charge.
None of the Company's federal income tax returns and none of its state income or
franchise tax or sales or use tax returns has ever been audited by governmental
authorities. Since the date of the Financial Statements, the Company has not
incurred any taxes, assessments or governmental charges other than in the
ordinary course of business and the Company has made adequate provisions on its
books of account for all taxes, assessments and governmental charges with
respect to its business, properties and operations for such period. The Company
has withheld or collected from each payment made to each of its employees, the
amount of all taxes (including, but not limited to, federal income taxes,
Federal Insurance Contribution Act taxes and Federal Unemployment Tax Act taxes)
required to be withheld or collected therefrom, and has paid the same to the
proper tax receiving officers or authorized depositories. The Company is not
party to any contract, arrangement or understanding that could obligate the
Company to make a payment to an individual that would be a "parachute payment"
to a "disqualified individual," as those terms are defined in Section 280G of
the Code, without regard to whether such payment might constitute reasonable
compensation for personal services performed or to be performed in the future.
2.26 Insurance. The Company has in full force and effect fire and
---------
casualty insurance policies, with extended coverage, sufficient in amount
(subject to reasonable deductibles) to allow it to replace any of its properties
that might be damaged or destroyed. The Company has in full force and effect
products liability and errors and omissions insurance in amounts customary for
companies similarly situated.
2.27 Minutes. The minutes of the Company provided to the Investors
-------
contain a complete summary of all meetings of directors and stockholders since
the time of incorporation and reflect all transactions referred to in such
minutes accurately in all material respects.
2.28 Labor Agreements and Actions; Employee Compensation. The
---------------------------------------------------
Company is not bound by or subject to (and none of its assets or properties is
bound by or subject to) any written or oral, express or implied, contract,
commitment or arrangement with any labor union, and no labor union has requested
or, to the best of the Company's knowledge, has sought to
-12-
represent any of the employees, representatives or agents of the Company. There
is no strike or other labor dispute involving the Company pending, or to the
best of the Company's knowledge, threatened, that could have a material adverse
effect on the assets, properties, financial condition, operating results, or
business of the Company (as such business is presently conducted and as it is
proposed to be conducted), nor is the Company aware of any labor organization
activity involving its employees. 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 of the foregoing. The employment of each officer
and employee of the Company is terminable at the will of the Company. To the
best of its knowledge, the Company has complied in all material respects with
all applicable state and federal equal employment opportunity and other laws
related to employment. The Company is not a party to or bound by any currently
effective employment contract, deferred compensation agreement, bonus plan,
incentive plan, profit sharing plan, retirement agreement, or other employee
compensation agreement.
2.29 Section 83(b) Elections. To the best of the Company's
-----------------------
knowledge, all individuals who have purchased unvested shares of the Company's
Common Stock have timely filed or will timely file elections under Section 83(b)
of the Code and any analogous provisions of applicable state tax laws.
2.30 Real Property Holding Company. The Company is not currently, and
-----------------------------
has not been during the prior five years, a United States real property holding
corporation within the meaning of Section 897 of the Code and the Company has
filed with the Internal Revenue Service all statements, if any, with its United
States income tax returns which are required under Section 1.897-2(h) of the
Treasury Regulations.
2.31 Net Operating Loss Carryforward. The information contained in
-------------------------------
the Schedule of Exceptions or otherwise provided to counsel for the Investors
regarding the application of Section 382 of the Code to the Company's federal
net operating loss carryforward is true and correct to the best of the Company's
knowledge.
2.32 Brokers. The Company has no contract, arrangement or
-------
understanding with any broker, finder or similar agent with respect to the
transactions contemplated by this Agreement.
2.33 Significant Customers and Suppliers. No customer or supplier
-----------------------------------
that was or is significant to the Company has terminated, materially reduced or
threatened to terminate or materially reduce its purchases from or provision of
products or services to the Company, as the case may be.
2.34 Qualified Small Business Stock. As of the Funding: (i) the
------------------------------
Company will be an eligible corporation as defined in Section 1202(e)(4) of the
Internal Revenue Code of 1986, as amended (the "Code"), (ii) the Company will
not have made any purchases of its own stock during the one-year period
proceeding the Funding having an aggregate value exceeding 5% of the aggregate
value of all its stock as of the beginning of such period and (iii) the
Company's aggregate gross assets, as defined by Code Section 1202(d)(2), at no
time through the Funding have exceeded or will exceed $50 million, taking into
account the assets of any corporations required to be aggregated with the
Company in accordance with Code Section 1202(d)(3).
-13-
2.35 Year 2000. The Company's proprietary software is capable of
---------
recording, storing, processing, calculating and displaying calendar dates
falling before, on and after January 1, 2000, without loss of functionality or
data integrity, except where the failure to do so could not reasonably be
expected to have a material adverse affect on the assets, properties, financial
condition, operating results or business of the Company. The foregoing does not
constitute a warranty or representation that the Company's software will be
capable of recording, storing, processing, calculating and displaying correct
calendar dates based on software supplied by or licensed from any party other
than the Company, or that the Company's software will properly interact with
such third party software.
2.36 Offerees. The Company has not, either directly or through any
--------
agent, broker or finder, offered any securities exercisable for or convertible
into Common Stock or Preferred Stock or any security or securities similar to
any thereof, for sale to, or solicited any offers to buy any securities
exercisable for or convertible into Common Stock or Preferred Stock, or any such
similar security or securities from, or otherwise approached or negotiated in
respect thereof with, any person or entity other than the Investors, other
"accredited investors" (as that term is defined in Regulation D promulgated
under the Securities Act) who have not invested under this Agreement and
employees, directors and consultants of the Company, except for offers,
solicitations or other actions that would not, under applicable law, be
integrated with the sale of the Series D Preferred Stock hereunder.
3. Representations and Warranties of the Investors. Each Investor
-----------------------------------------------
hereby represents and warrants to the Company, for each Investor itself and only
for itself, that:
3.1 Authorization. Such Investor has full power and authority to
-------------
enter into this Agreement and the Ancillary Agreements, and each such Agreement
constitutes its valid and legally binding obligation, enforceable in accordance
with its terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief, or other equitable
remedies, and (iii) to the extent the indemnification provisions contained in
the Amended and Restated Investors' Rights Agreement may be limited by
applicable federal or state securities laws.
3.2 Purchase Entirely for Own Account. This Agreement is made with
---------------------------------
such Investor in reliance upon such Investor's representation to the Company,
which by such Investor's execution of this Agreement such Investor hereby
confirms, that the Series D Preferred Stock to be received by such Investor and
the Common Stock issuable upon conversion of the Series D Preferred Stock
(collectively, the "Securities") will be acquired for investment for such
Investor's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that such Investor has no
present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, such Investor further
represents that such Investor does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to any of the Securities.
3.3 Disclosure of Information. Such Investor represents that it has
-------------------------
had an opportunity to ask questions and receive answers from the Company
regarding the terms and
-14-
conditions of the offering of the Series D Preferred Stock, and the business,
properties, prospects and financial condition of the Company. The foregoing,
however, does not limit or modify the representations and warranties of the
Company in Section 2 of this Agreement or the right of the Investors to rely
thereon.
3.4 Investment Experience. Such Investor is an investor in
---------------------
securities of companies in the development stage and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment, and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Series D
Preferred Stock. If other than an individual, such Investor also represents it
has not been organized for the purpose of acquiring the Series D Preferred
Stock.
3.5 Accredited Investor. Such Investor is an "accredited investor"
-------------------
within the meaning of Securities and Exchange Commission ("SEC") Rule 501 of
Regulation D, as presently in effect.
3.6 Restricted Securities. Such Investor understands that the
---------------------
Securities it is purchasing are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Act, only in certain limited circumstances. In this connection, such
Investor represents that it is familiar with SEC Rule 144, as presently in
effect, and understands the resale limitations imposed thereby and by the Act.
3.7 Further Limitations on Disposition. Without in any way limiting
----------------------------------
the representations set forth above, such Investor further agrees not to make
any disposition of all or any portion of the Securities unless and until the
transferee has agreed in writing for the benefit of the Company to be bound by
this Section 3 and the Amended and Restated Investors' Rights Agreement provided
and to the extent this Section and such agreement are then applicable, and:
(a) There is then in effect a Registration Statement under the
Act covering such proposed disposition and such disposition is made in
accordance with such Registration Statement; or
(b) (i) Such Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
reasonably requested by the Company, such Investor shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such shares under the Act. It
is agreed that the Company will not require opinions of counsel for transactions
made pursuant to Rule 144 except in unusual circumstances.
(c) Notwithstanding the provisions of Paragraphs (a) and (b)
above, no such registration statement or opinion of counsel shall be necessary
for a transfer by an Investor that is a partnership to a partner of such
partnership or a retired partner of such partnership who retires after the date
hereof, or to the estate of any such partner or retired partner or the transfer
by gift, will or intestate succession of any partner to his or her spouse or to
the siblings, lineal
-15-
descendants or ancestors of such partner or his or her spouse, if the transferee
agrees in writing to be subject to the terms hereof to the same extent as if he
or she were an original Investor hereunder.
3.8 Legends. It is understood that the certificates evidencing the
-------
Series D Preferred Stock and the Common Shares may bear 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 a registration
statement in effect with respect to the securities under such Act and any
applicable state securities laws or pursuant to an opinion of counsel
satisfactory to the Company that such registration is not required or
unless sold pursuant to Rule 144 of such Act."
3.9 Investors' State of Residence. Each Investor represents that,
-----------------------------
as of the Funding, it is a resident of the state listed as its address on
Schedule A hereto.
----------
4. Conditions of Investors' Obligations at Funding. The
-----------------------------------------------
obligations of each Investor under subsection 1.1(c) of this Agreement are
subject to the fulfillment on or before the Funding of each of the following
conditions, the waiver of which shall not be effective against any Investor who
does not consent thereto:
4.1 Representations and Warranties. The representations and
------------------------------
warranties of the Company contained in Section 2 shall be true on and as of the
Funding with the same effect as though such representations and warranties had
been made on and as of the date of such Funding.
4.2 Performance. 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 Funding.
4.3 Compliance Certificate. The President of the Company shall
----------------------
deliver to each Investor at the Funding a certificate stating that the
conditions specified in Sections 4.1 and 4.2 have been fulfilled and stating
that there shall have been no adverse change in the business, affairs,
prospects, operations, properties, assets or condition of the Company since
February 28, 1999 ("No Material Adverse Change").
4.4 Qualifications. All authorizations, approvals, or permits, if
--------------
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Securities pursuant to this Agreement shall be duly obtained and effective
as of the Funding.
4.5 Proceedings and Documents. All corporate and other proceedings
-------------------------
in connection with the transactions contemplated at the Funding and all
documents incident thereto shall be reasonably satisfactory in form and
substance to Investors' special counsel, and they shall have received all such
counterpart original and certified or other copies of such documents as they may
reasonably request. This may include, without limitation, good standing
certificates
-16-
and certification by the Company's Secretary regarding the Restated Certificate
and Bylaws and Board of Director and stockholder resolutions relating to this
transaction.
4.6 Proprietary Information and Inventions Agreement. Each employee
------------------------------------------------
of the Company, and each consultant to the Company who has had access to
confidential or proprietary information of the Company, shall have entered into
a Proprietary Information and Inventions Agreement in the form previously
provided to special counsel for the Investors.
4.7 Bylaws. The Bylaws of the Company shall provide that the Board
------
of Directors of the Company shall consist of seven (7) persons.
4.8 Amended and Restated Voting Agreement. The Company, each Founder
-------------------------------------
(as defined therein) and each Investor shall have entered into the Amended and
Restated Voting Agreement in the form attached hereto as Exhibit C.
---------
4.9 Board of Directors. The Board of Directors of the Company,
------------------
immediately following the Funding, shall be comprised of the following members:
Xxxxx Xxxxxxx and Xxxx Xxx as designees of the holders of shares of the Common
Stock of the Company; Xxxxx Xxxxxx and Xxxx Xxxxxxxx, as designees of the
holders of shares of Series A Preferred Stock and Series B Preferred Stock of
the Company; Xxxxxxx Xxxxxxx, as designee of the holders of shares of Series C
Preferred Stock of the Company; and Xxxxxx Xxxxxxxxxx as a designee of the
holders of the Common Stock, Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock and Series D Preferred Stock of the Company.
4.10 Opinion of Company Counsel. Each Investor shall have received
--------------------------
from Day, Xxxxx & Xxxxxx LLP, counsel for the Company, an opinion, dated as of
the Funding, in form and substance reasonably acceptable to the Investors.
4.11 Amended and Restated Investors' Rights Agreement. The Company,
------------------------------------------------
the Founders and each Investor shall have entered into the Amended and Restated
Investors' Rights Agreement in the form attached as Exhibit D .
---------
4.12 Amended and Restated Right of First Refusal and Co-Sale
-------------------------------------------------------
Agreement. The Investors, the Founders and the Company shall each have entered
---------
into the Amended and Restated Co-Sale Agreement in the form attached hereto as
Exhibit E.
---------
4.13 Due Diligence and No Material Adverse Change. The Company shall
--------------------------------------------
have provided the Investors access to such information as the Investors have
reasonably requested in connection with their due diligence review and the
Investors shall have concluded their due diligence review of the Company to
their complete satisfaction and shall be reasonably satisfied that there has
been No Material Adverse Change.
5. Conditions of the Company's Obligations at Funding. The
--------------------------------------------------
obligations of the Company to each Investor under this Agreement are subject to
the fulfillment on or before the Funding of each of the following conditions by
that Investor:
-17-
5.1 Representations and Warranties. The representations and
------------------------------
warranties of the Investors contained in Section 3 shall be true on and as of
the Funding with the same effect as though such representations and warranties
had been made on and as of the Funding.
5.2 Qualifications. All authorizations, approvals, or permits, if
--------------
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Securities pursuant to this Agreement shall be duly obtained and effective
as of the Funding.
6. Miscellaneous.
-------------
6.1 Survival of Warranties. The warranties, representations and
----------------------
covenants of the Company and Investors contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Funding and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Investors or the Company.
6.2 Successors and Assigns. Except as otherwise provided herein, the
----------------------
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any Securities). Nothing in this Agreement, express or implied,
is intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
6.3 Governing Law. This Agreement shall be governed by and construed
-------------
under the laws of the State of Connecticut as applied to agreements among
Connecticut residents entered into and to be performed entirely within
Connecticut.
6.4 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.5 Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
6.6 Notices. Unless otherwise provided, any notice required or
-------
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof, or at such other address
as such party may designate by ten (10) days' advance written notice to the
other parties.
6.7 Finder's Fee. Each party represents that it neither is nor will
------------
be obligated for any finders' fee or commission in connection with this
transaction. Each Investor agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Investor or any of its officers, partners,
employees, or representatives is responsible.
-18-
The Company agrees to indemnify and hold harmless each Investor from any
liability for any commission or compensation in the nature of a finders' fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees or
representatives is responsible.
6.8 Expenses. Irrespective of whether the Funding is effected, the
--------
Company shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this Agreement. If the
Funding is effected, the Company shall, at the Funding, reimburse the reasonable
fees of one special counsel for the Investors and shall, upon receipt of a xxxx
therefor, reimburse the reasonable out-of-pocket expenses of such counsel,
provided, however, that in no event shall the Company be required to reimburse
fees and expenses in excess of $15,000 in the aggregate. If any action at law or
in equity is necessary to enforce or interpret the terms of this Agreement, the
Ancillary Agreements or the Restated Certificate, the prevailing party shall be
entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
6.9 Amendments and Waivers. Any term of this Agreement may be
----------------------
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
a majority of the Common Stock issuable or issued upon conversion of the Series
D Preferred Stock. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon each holder of any securities purchased under
this Agreement at the time outstanding (including securities into which such
securities are convertible), each future holder of all such securities, and the
Company.
6.10 Severability. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
6.11 Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE
------------------------
THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR
THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT AFFECTED BY THE
FOREGOING ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED,
UNLESS THE SALE IS SO EXEMPT.
6.12 Aggregation of Stock. All shares of the Preferred Stock held or
--------------------
acquired by affiliated entities or persons shall be aggregated together for the
purpose of determining the availability of any rights under this Agreement.
6.13 Entire Agreement. This Agreement and the documents referred to
----------------
herein constitute the entire agreement among the parties with respect to the
subject matter hereof and no
-19-
party shall be liable or bound to any other party in any manner by any
warranties, representations, or covenants with respect to such subject matter
except as specifically set forth herein or therein.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
COMPANY
xxx.xxx, inc.
By: _____________________________________
Title: __________________________________
Address: 000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, XX 00000
INVESTORS:
VantagePoint Venture Partners 1996, L.P.
By: VantagePoint Associates, LLC, its
General Partner
By: _____________________________________
Managing Member
Address: 0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
VantagePoint Communications Partners, L.P.
By: VantagePoint Communication Associates, LLC,
its General Partner
By: _____________________________________
Managing Member
Address: 0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
VantagePoint Venture Partners III, L.P.
By: VantagePoint Venture Associates III, LLC
-20-
its General Partner
By: _____________________________________
Managing Member
Address: 0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Prism Venture Partners II, L.P.
By: Prism Investment Partners II, L.P.,
its general partner
By: Prism Venture Partners II, L.L.C.,
its general partner
By:______________________________________
Managing Director
Address: 000 Xxxxxx Xxxxx Xxxxx,
Xxxxx 0000
Xxxxxxxx, XX 00000
Oak Investment Partners VIII, LP
By: Oak Associates VIII, LLC,
its General Partner
By: _____________________________________
Xx Xxxxxxxxxx, Managing Member
Address: One Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Oak VIII Affiliates Fund, L.P.
By: Oak VIII Affiliates, LLC,
its General Partner
By: _____________________________________
Xx Xxxxxxxxxx, Managing Member
Address: One Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
-21-
Crosspoint Venture Partners 1997, L.P.
By: _____________________________________
Name:
Title:
Address: 0000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Gleacher/DSL Investors LLC
By: _____________________________________
Name:
Title:
Xxxx Xxxxxxxx, Managing Member
Address: 000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
[Signatures Continue on Next Page]
-00-
Xxxxxxx Xxxxxx Xxxxxxx, X.X.
By: CGC Partners, L.P.,
its General Partner
By: _____________________________________
Name: Xxxxx X. XxXxxxxxx
Title: General Partner
Address: 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx, XX 00000
Charter Growth Capital Co-Investment Fund, L.P.
By: CGC Partners, L.P.,
its General Partner
By: _____________________________________
Xxxxx X. XxXxxxxxx, General Partner
Address: 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx, XX 00000
CGC Investors, L.P.
By: CGC Partners, L.P.,
its General Partner
By: _____________________________________
Xxxxx X. XxXxxxxxx, General Partner
Address: 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx, XX 00000
-23-
SCHEDULE OF EXCEPTIONS
-24-
Schedule A
Schedule of Investors
Total Purchase Price
Name and Address Series D Shares Purchased of Series D Shares
---------------- ------------------------- ------------------
Prism Venture Partners II, L.P. 95,602 $ 999,996.92
000 Xxxxxx Xxxxx Xxxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
VantagePoint Venture Partners 1996 L.P. 191,204 $ 1,999,993.84
0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
VantagePoint Communications Partners, L.P. 382,410 $ 4,000,008.60
0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
VantagePoint Venture Partners III, L.P. 573,614 $ 6,000,002.44*
0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Oak Investment Partners VIII, L.P. 515,823 $ 5,395,508.58
One Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Oak VIII Affiliates Fund, L.P. 9,990 $ 104,495.40
Xxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Crosspoint Venture Partners 1997, L.P. 764,818 $ 7,999,996.28
0000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
-00-
Xxxxxxx Xxxxxx Xxxxxxx, X.X. 14,722 $ 1,199,992.12
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx, XX 00000
Charter Growth Capital Co-Investment 21,511 $ 225,005.06
Fund, L.P.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx, XX 00000
CGC Investors, L.P. 7,170 $ 4,998.20
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx, XX 00000
Gleacher/DSL Investors LLC 191,205 $ 2,000,004.30
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
TOTAL 2,868,069 $30,000,001.74
*Payment to be made with $573.62 in
cash and a Secured Full-Recourse
Promissory Note (due May 26,1999) in
favor of xxx.xxx, inc. for the balance.
