Exhibit 10.27
AVANTGO, INC.
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
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This Series C Preferred Stock Purchase Agreement (the "Agreement") is made
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as of the 4th day of June, 1999, by and between AvantGo, Inc., a Delaware
corporation (the "Company") and the investors listed on Exhibit A attached
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hereto (each a "Purchaser" and together, if more than one, the "Purchasers").
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The parties hereby agree as follows:
1. Purchase and Sale of Preferred Stock.
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1.1 Sale and Issuance of Series C Preferred Stock.
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(a) The Company shall adopt and file with the Secretary of State
of the State of Delaware on or before the Closing (as defined below) the Amended
and Restated Certificate of Incorporation in the form attached hereto as Exhibit
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B (the "Restated Certificate").
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(b) Subject to the terms and conditions of this Agreement, each
Purchaser agrees to purchase at the Closing and the Company agrees to sell and
issue to each Purchaser at the Closing that number of shares of Series C
Preferred Stock set forth opposite each such Purchaser's name on Exhibit A
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attached hereto at a purchase price of $7.88 per share. The shares of Series C
Preferred Stock issued to the Purchaser pursuant to this Agreement shall be
hereinafter referred to as the "Stock."
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1.2 Closings; Delivery.
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(a) The purchase and sale of the Stock (the "Closing") shall take
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place at the offices of Xxxxxxx Coie LLP, 000 Xxxxxxxxxxxx Xxxxx, Xxxxx 000,
Xxxxx Xxxx, Xxxxxxxxxx, at 1:00 p.m., on June 4, 1999, or at such other time and
place as the Company and the Purchasers acquiring a majority of the Stock at the
Closing mutually agree upon, orally or in writing (such date, the "Closing
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Date").
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(b) At the Closing, the Company shall deliver to each Purchaser a
certificate representing the Stock being purchased thereby against payment of
the purchase price therefor by check, by cancellation of indebtedness, or by
wire transfer to the Company's bank account.
2. Representations, Warranties and Covenants of the Company. The Company
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hereby represents, warrants and covenants to each Purchaser that, as of the
Closing Date, except as set forth on a Schedule of Exceptions attached hereto as
Exhibit C, which exceptions shall be deemed to be representations and warranties
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as if made hereunder:
2.1 Organization, Good Standing and Qualification. The Company is a
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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
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conducted and as currently proposed to be conducted and to own and operate its
properties. The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure so to qualify would have a
material adverse effect on its business or properties.
2.2 Capitalization. The authorized capital of the Company consists,
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or will consist, immediately prior to the Closing, of:
(a) Five Million Nine Hundred Seventeen Thousand Seventy-Eight
(5,917,078) shares of Preferred Stock, of which (i) Two Million Two Hundred
Seventeen Thousand Seventy-Eight (2,217,078) have been designated Series A
Preferred Stock, of which Two Million Two Hundred Seventeen Thousand Seventy-
Eight (2,217,078) are issued and outstanding immediately prior to the Closing,
(ii) One Million Seven Hundred Thousand (1,700,000) have been designated Series
B Preferred Stock, of which One Million Six Hundred Fifty Thousand Nine Hundred
Forty-Three (1,650,943) are issued and outstanding immediately prior to the
Closing, and (iii) Two Million (2,000,000) have been designated Series C
Preferred Stock, none of which are issued and outstanding immediately prior to
the Closing. The rights, privileges and preferences of the Preferred Stock are
as stated in the Restated Certificate. All of the outstanding shares of
Preferred Stock have been duly authorized, fully paid and are nonassessable and
issued in compliance with all applicable federal and state securities laws.
(b) Fifteen Million (15,000,000) shares of Common Stock, Four
Million Six Hundred Thirty-Nine Thousand One Hundred Sixty (4,639,160) shares of
which are issued and outstanding immediately prior to the Closing. All of the
outstanding shares of Common Stock have been duly authorized, fully paid and are
nonassessable and issued in compliance with all applicable federal and state
securities laws. The Company has reserved (i) Five Million, Nine Hundred
Seventeen Thousand and Seventy-Eight (5,917,078) shares of Common Stock for
issuance upon conversion of the Preferred Stock and (ii) Two Million Nine
Hundred Fifty-Six Thousand Eight Hundred (2,956,800) shares of Common Stock for
issuance to officers, directors, employees and consultants of the Company under
the Company's 1997 Stock Option Plan (the "1997 Plan"), of which (A) options to
purchase Three Hundred Seventy-Two Thousand (372,000) shares of Common stock are
issued and outstanding, (B) options to purchase One Million Three Hundred Fifty-
Eight Thousand One Hundred Sixty (1,358,160) shares of Common Stock have been
exercised and are included in the Company's outstanding Common Stock, (C)
options to purchase One Million Eight Thousand Six Hundred Forty (1,008,640)
shares are available for future issuance under the 1997 Plan and (D) Two Hundred
Eighteen Thousand (218,000) shares were exercised and subsequently repurchased
by the Company and are not available for reissuance under the 1997 Plan.
(c) Except for (i) conversion privileges of the Preferred Stock,
(ii) Two Million Nine Hundred Fifty-Six Thousand Eight Hundred (2,956,800)
shares of Common Stock reserved for issuance pursuant to the Stock Plan, (iii)
the rights of first refusal set forth in the Investors Rights Agreement and Co-
Sale Agreement and (iv) Cornerstone Properties I, LLC conversion rights pursuant
to the Convertible Promissory Note dated as of April 6, 1999, there are no
outstanding options, warrants, rights (including conversion or preemptive rights
and rights of first refusal or similar rights) or agreements, orally or in
writing, for the purchase or acquisition from the Company of any shares of its
capital stock.
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2.3 Subsidiaries. The Company does not currently own or control,
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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,
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its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement, the Second Amended and Restated
Investors' Rights Agreement in the form attached hereto as Exhibit D (the
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"Investors' Rights Agreement"), the Second Amended and Restated Right of First
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Refusal and Co-Sale Agreement in the form attached hereto as Exhibit E (the "Co-
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Sale Agreement"), and the Second Amended and Restated Voting Agreement in the
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form attached hereto as Exhibit F (the "Voting Agreement" and collectively with
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this Agreement, the Investors' Rights Agreement and the Co-Sale Agreement, the
"Agreements"), the performance of all obligations of the Company hereunder and
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thereunder and the authorization, issuance and delivery of the Stock and the
Common Stock issuable upon conversion of the Stock (together, the "Securities")
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has been taken or will be taken prior to the Closing, and the Agreements, when
executed and delivered by the Company, shall constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their terms except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, and other laws of
general application affecting enforcement of creditors' rights generally, as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies, or (b) to the extent the indemnification
provisions contained in the Investors' Rights Agreement may be limited by
applicable federal or state securities laws.
2.5 Valid Issuance of Securities. The Stock that is being issued to
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the Purchasers hereunder, when issued, sold and delivered in accordance with the
terms hereof for the consideration expressed herein, will be duly and validly
issued, fully paid and nonassessable and free of restrictions on transfer other
than restrictions on transfer under this Agreement, the Investors' Rights
Agreement and applicable state and federal securities laws. Based in part upon
the representations of the Purchasers in this Agreement and subject to the
provisions of Section 2.6 below, the Stock will be issued in compliance with all
applicable federal and state 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. The Common Stock issuable upon conversion of
the Stock has been duly and validly reserved for issuance, and upon issuance in
accordance with the terms of the Restated Certificate, shall be duly and validly
issued, fully paid and nonassessable and free of restrictions on transfer other
than restrictions on transfer under this Agreement, the Investors' Rights
Agreement and applicable federal and state securities laws and will be issued in
compliance with all applicable federal and state securities laws.
2.6 Governmental Consents. No consent, approval, order or
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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 for filings pursuant to Section 25102(f)
of the California Corporate Securities Law of 1968, as amended, and the rules
thereunder, other applicable state securities laws and Regulation D of the
Securities Act of 1933, as amended (the "Securities Act").
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2.7 Litigation. There is no action, suit, proceeding or
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investigation pending or, to the Company's knowledge, currently threatened
against the Company or any of its subsidiaries that questions the validity of
the Agreements or the right of the Company to enter into them, 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 or affairs 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 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. Neither the Company nor any of its subsidiaries
is 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 or any of its
subsidiaries currently pending or which the Company or any of its subsidiaries
intends to initiate.
2.8 Patents and Trademarks. To its knowledge, the Company owns or
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possesses sufficient legal rights to all patents, trademarks, service marks,
trade names, copyrights, trade secrets, licenses, information and proprietary
rights and processes necessary for its business as now conducted and as
currently proposed to be conducted without any conflict with, or 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, proprietary rights and processes of any other person or
entity. The Company has received no notice of any communications alleging that
the Company has violated or, by conducting its business as currently proposed,
would violate any of the patents, trademarks, service marks, trade names,
copyrights, trade secrets or other proprietary rights or processes of any other
person or entity. To its knowledge, no person has the right to assert any claims
against the Company regarding the Company's use of or rights to its patents,
trademarks, service marks, trade names, copyrights, trade secrets or other
proprietary rights. 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 such
employee's best efforts to promote the interest of the Company or that would
conflict with the Company's business as currently proposed to be conducted.
Neither the execution or 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 currently 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 such employee is now obligated. The Company does not
believe it is or will be necessary to use any inventions of any of its employees
(or persons it currently intends to hire) made prior to their employment by the
Company.
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2.9 Compliance with Other Instruments.
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(a) The Company is not in violation or default of any provisions
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 or, to
its knowledge, of any provision of federal or state statute, rule or regulation
applicable to the Company. The execution, delivery and performance of the
Agreements and the consummation of the transactions contemplated hereby or
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 which 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 of its assets or properties.
(b) To its knowledge, the Company has avoided every condition,
and has not performed any act, the occurrence of which would result in the
Company's loss of any right granted under any license, distribution agreement or
other agreement.
2.10 Agreements; Action.
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(a) Except for the Agreements, there are no agreements,
understandings or proposed transactions between the Company and any of its
officers, directors, affiliates, or any affiliate thereof.
(b) Except for agreements explicitly contemplated by the
Agreements, there are no agreements, understandings, instruments, contracts or
proposed transactions to which the Company or any of its subsidiaries is a party
or by which it is bound that involve (i) obligations (contingent or otherwise)
of, or payments to, the Company or any of its subsidiaries in excess of,
$25,000, (ii) the license of any patent, copyright, trade secret or other
proprietary right to or from the Company or any of its subsidiaries, or (iii)
the grant of rights to manufacture, produce, assemble, license, market, or sell
its products to any other person or affect the Company's exclusive right to
develop, manufacture, assemble, distribute, market or sell its products.
(c) Neither the Company nor any of its subsidiaries has (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 incurred any other liabilities individually
in excess of $25,000 or in excess of $100,000 in the aggregate, (iii) made any
loans or advances to any person, 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.
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(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 or Bylaws, that adversely affects its business as now
conducted or currently proposed to be conducted, its properties or its financial
condition. To the Company's knowledge, each such agreement is in full force and
effect, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, and other laws of general
application affecting enforcement of creditors' rights generally, as limited by
laws relating to the availability of specific performance, injunctive relief, or
other equitable remedies, or (b) to the extent the indemnification provisions
contained in the Investors' Rights Agreement may be limited by applicable
federal or state securities laws, except where such unenforceability would not
have a material adverse effect on the Company's business.
2.11 Disclosure. The Company has fully provided the Purchasers with
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all the information which the Purchasers have requested for deciding whether to
acquire the Stock and all information which the Company believes is reasonably
necessary to enable the Purchasers to make such a decision, including certain of
the Company's projections describing its proposed business (collectively, the
"Business Plan"). No representation or warranty of the Company contained in
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this Agreement and the exhibits attached hereto or in any certificate furnished
or to be furnished to Purchasers at the Closing (when read together) contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances under which they were made. To the
extent the Business Plan was prepared by management of the Company, the Business
Plan and the financial and other projections contained in the Business Plan were
prepared in good faith and the Company reasonably believes there is a reasonable
basis for such projections.
2.12 No Conflict of Interest. The Company is not indebted, directly
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or indirectly, to any of its officers or directors or to their respective
spouses or children, in any amount whatsoever other than in connection with
expenses or advances of expenses incurred in the ordinary course of business.
None of the Company's officers or directors, or any members of their immediate
families, are, directly or indirectly, indebted to the Company (other than in
connection with purchases of the Company's stock) or have any direct or indirect
ownership interest in any firm or corporation with which the Company is
affiliated or with which the Company has a business relationship, or any firm or
corporation which competes with the Company except that officers, directors
and/or stockholders of the Company may own stock in (but not exceeding two
percent of the outstanding capital stock of) any publicly traded companies that
may compete with the Company. To the best of the Company's knowledge, none of
the Company's officers or directors or any members of their immediate families
are, directly or indirectly, interested in any material contract with the
Company. The Company is not a guarantor or indemnitor of any indebtedness of any
other person, firm or corporation.
2.13 Rights of Registration and Voting. Except as contemplated in
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the Investors' Rights Agreement, the Company has not granted or agreed to grant
any registration rights, including piggyback rights, to any person or entity. To
the Company's knowledge, except as contemplated in the Voting Agreement, no
stockholders of the Company have entered into any agreements with respect to the
voting of capital shares of the Company.
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2.14 Title to Property and Assets. The Company owns its property and
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assets free and clear of all mortgages, liens, loans and encumbrances, except
such encumbrances and liens which 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. All facilities,
machinery, equipment, fixtures, vehicles and other properties owned or leased by
the Company are in good operating condition and repair and are reasonably fit
and usable for the purposes for which they are currently being used.
2.15 Manufacturing and Marketing Rights. The Company has not granted
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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.
2.16 Financial Statements. The Company has delivered to each
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Purchaser its unaudited financial statements (balance sheet and statements of
operations, and statement of cash flows) at March 31, 1999 and for the fiscal
year then ended (the "Financial Statements"). The Financial Statements have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods indicated and with each other, except
that the Financial Statements may not contain all footnotes required by
generally accepted accounting principles. The Financial Statements fairly
represent 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 March 31, 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.
2.17 Changes. Since the inception of the Company's business, there
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has not been:
(a) any change in the assets, liabilities, financial condition
or operating results of the Company from that reflected in the Business Plan,
except changes in the ordinary course of business that have not been, in the
aggregate, materially adverse;
(b) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the business, properties,
prospects, or financial condition of the Company (as such business is presently
conducted and as it is currently proposed to be conducted);
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(c) any waiver or compromise by the Company of a valuable right
or of a material debt owed to it;
(d) any satisfaction or discharge of any lien, claim, or
encumbrance or payment of any obligation by the Company, except in the ordinary
course of business and that is not material to the business, properties,
prospects or financial condition of the Company (as such business is presently
conducted and as it is currently proposed to be conducted);
(e) any material change to a material contract or agreement by
which the Company or any of its assets is bound or subject;
(f) any material change in any compensation arrangement or
agreement with any key employee, officer, director or stockholder;
(g) any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets;
(h) any resignation or termination of employment of any officer
or key employee of the Company; and the Company, to the best of its knowledge,
does not know of any impending resignation or termination of employment of any
such officer or key employee;
(i) receipt of notice that there has been a loss of, or material
order cancellation by, any major customer of the Company;
(j) any mortgage, pledge, transfer of a security interest in, or
lien, created by the Company, with respect to any of its material properties or
assets, except liens for taxes not yet due or payable;
(k) any loans or guarantees made by the Company to or for the
benefit of its employees, officers or directors, or any members of their
immediate families, other than travel advances and other advances made in the
ordinary course of its business;
(l) any declaration, setting aside or payment or other
distribution in respect to any of the Company's capital stock, or any direct or
indirect redemption, purchase, or other acquisition of any of such stock by the
Company;
(m) to the best of the Company's knowledge, any other event or
condition of any character that might materially and adversely affect the
business, properties, prospects or financial condition of the Company (as such
business is presently conducted and as it is currently proposed to be
conducted); or
(n) any arrangement or commitment by the Company to do any of
the things described in this Section 2.17.
2.18 Employee Benefit Plans. The Company does not have any Employee
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Benefit Plan as defined in the Employee Retirement Income Security Act of 1974.
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2.19 Tax Returns and Payments. The Company has filed all tax returns
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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. There is no pending dispute with any taxing authority relating to any of
such returns and the Company has not received notice of any proposed liability
for any tax to be imposed upon the properties or assets of the Company.
2.20 Labor Agreements and Actions. The Company is not bound by or
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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 knowledge of the
Company, has sought to 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 knowledge of the Company threatened, which 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 currently proposed to be conducted), nor is the Company
aware of any labor organization activity involving its employees. The employment
of each officer and employee of the Company is terminable at the will of the
Company. To its knowledge, the Company has complied in all material respects
with all applicable state and federal equal employment opportunity laws and with
other laws related to employment.
2.21 Proprietary Information and Inventions Agreements. Each
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employee, consultant and officer of the Company has executed an agreement with
the Company regarding confidentiality and proprietary information substantially
in the form or forms delivered to the counsel for the Purchasers. The Company,
after reasonable investigation, is not aware that any of its employees or
consultants is in violation thereof, and the Company will use its best efforts
to prevent any such violation. All consultants to or vendors of the Company
with access to confidential information of the Company are parties to a written
agreement substantially in the form or forms provided to counsel for the
Purchasers under which, among other things, each such consultant or vendor is
obligated to maintain the confidentiality of confidential information of the
Company. The Company, after reasonable investigation, is not aware that any of
its consultants or vendors are in violation thereof, and the Company will use
its best efforts to prevent any such violation.
2.22 Permits. The Company and each of its subsidiaries has all
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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 that 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.
2.23 Corporate Documents. The Restated Certificate and Bylaws of the
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Company are in the form provided to counsel for the Purchasers. The copy of the
minute books of the Company provided to the Purchasers' counsel contains minutes
of all meetings of directors and stockholders and all actions by written consent
without a meeting by the directors and stockholders since the date of
incorporation and reflects all actions by the directors (and any
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committee of directors) and stockholders with respect to all transactions
referred to in such minutes accurately in all material respects.
2.24 Real Property Holding Corporation. The Company is not a United
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States real property holding corporation within the meaning of Internal Revenue
Code Section 897(c)(2) and any regulations promulgated thereunder.
2.25 Qualified Small Business Stock. The Company represents and
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warrants to the Purchasers that, to the best of its knowledge, the Stock should
qualify as "Qualified Small Business Stock" as defined in Section 1202(c) of the
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Internal Revenue Code of 1986, as amended as of the date hereof.
2.26 Year 2000 Compatibility. To the Company's knowledge, all of the
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Company's products currently available to license to third parties record,
store, process, calculate and present calendar dates falling on or after January
1, 2000, and calculate any information dependent on or relating to such dates in
the same manner and with the same functionality, data, integrity and performance
as the products record, store, process, calculate and present calendar dates on
or before December 31, 1999, or calculate any information dependent on or
relating to such dates. Notwithstanding the foregoing, the parties acknowledge
and agree that the Company's products are dependent on hardware and software
developed and supplied by third parties and the foregoing representation does
not apply to such third party hardware and software.
3. Representations and Warranties of the Purchasers. Each Purchaser
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hereby represents and warrants to the Company that:
3.1 Authorization. The Agreements, when executed and delivered by
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the Purchaser, will constitute valid and legally binding obligations of the
Purchaser, enforceable in accordance with their terms, except (a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, and any other laws of general application affecting enforcement of
creditors' rights generally, and as limited by laws relating to the availability
of a specific performance, injunctive relief, or other equitable remedies, or
(b) to the extent the indemnification provisions contained in the 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
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the Purchaser in reliance upon the Purchaser's representation to the Company,
which by the Purchaser's execution of this Agreement, the Purchaser hereby
confirms, that the Stock to be acquired by the Purchaser will be acquired for
investment for the Purchaser'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 the
Purchaser has no present intention of selling, granting any participation in, or
otherwise distributing the same. By executing this Agreement, the Purchaser
further represents that the Purchaser does not presently 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
Stock. The Purchaser represents that it has full power and authority to enter
into this Agreement. The Purchaser has not been formed for the specific purpose
of acquiring the Stock.
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3.3 Disclosure of Information. The Purchaser has had an opportunity
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to discuss the Company's business, management, financial affairs and the terms
and conditions of the offering of the Stock with the Company's management and
has had an opportunity to review the Company's facilities. The Purchaser
understands that such discussions, as well as the written information issued by
the Company, were intended to describe the aspects of the Company's business
which it believes to be material. 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 Restricted Securities. The Purchaser understands that the Stock
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have not been, and will not be, registered under the Securities Act, by reason
of a specific exemption from the registration provisions of the Securities Act
which depends upon, among other things, the bona fide nature of the investment
intent and the accuracy of the Purchaser's representations as expressed herein.
The Purchaser understands that the Stock constitutes "restricted securities"
under applicable U.S. federal and state securities laws and that, pursuant to
these laws, the Purchaser must hold the Stock indefinitely unless they are
registered with the Securities and Exchange Commission and qualified by state
authorities, or an exemption from such registration and qualification
requirements is available. The Purchaser acknowledges that the Company has no
obligation to register or qualify the Stock for resale except as set forth in
the Investors' Rights Agreement. The Purchaser further acknowledges that if an
exemption from registration or qualification is available, it may be conditioned
on various requirements including, but not limited to, the time and manner of
sale, the holding period for the Stock, and on requirements relating to the
Company which are outside of the Purchaser's control, and which the Company is
under no obligation and may not be able to satisfy.
3.5 No Public Market. The Purchaser understands that no public
----------------
market now exists for any of the securities issued by the Company, and that the
Company has made no assurances that a public market will ever exist for the
Stock.
3.6 Legends. The Purchaser understands that the Stock and any
-------
securities issued in respect of or exchange for the Stock, may bear one or all
of the following legends:
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933."
(b) Any legend required by the Blue Sky laws of any state to the
extent such laws are applicable to the shares represented by the certificate so
legended.
11
3.7 Accredited Investor. The Purchaser is an accredited investor as
-------------------
defined in Rule 501(a) of Regulation D promulgated under the Act.
3.8 Foreign Investors. If the Purchaser is not a United States
-----------------
person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986,
as amended), such Purchaser hereby represents that it has satisfied itself as to
the full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Stock or any use of this Agreement, including
(i) the legal requirements within its jurisdiction for the purchase of the
Stock, (ii) any foreign exchange restrictions applicable to such purchase, (iii)
any governmental or other consents that may need to be obtained, and (iv) the
income tax and other tax consequences, if any, that may be relevant to the
purchase, holding, redemption, sale, or transfer of the Stock. Such Purchaser's
subscription and payment for and continued beneficial ownership of the Stock,
will not violate any applicable securities or other laws of the Purchaser's
jurisdiction.
4. Conditions of the Purchasers' Obligations at Closing. The obligations
----------------------------------------------------
of each Purchaser to the Company under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
4.1 Representations and Warranties. The representations and
------------------------------
warranties of the Company contained in Section 2 shall be true and correct in
all material respects on and as of the Closing with the same effect as though
such representations and warranties had been made on and as of the date of the
Closing.
4.2 Performance. The Company shall have performed and complied with
-----------
all covenants, agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing.
4.3 Compliance Certificate. The President of the Company shall
----------------------
deliver to the Purchasers at the Closing a certificate certifying that the
conditions specified in Sections 4.1 and 4.2 have been fulfilled.
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 Stock pursuant to this Agreement shall be obtained and effective as of the
Closing.
4.5 Opinion of Company Counsel. The Purchasers shall have received
--------------------------
from Xxxxxxx Coie LLP, counsel for the Company, an opinion, dated as of the
Closing, in substantially the form of Exhibit G.
---------
4.6 Board of Directors. As of the Closing, the Board shall be
------------------
comprised of Xxxxx Xxxxxxxxxx, Xxxxx Xxx, Xxxxx Xxxxx, Xxxxx X. Xxxxxxxxx,
Xxxxxx Xxxxx and Xxxxxxx Xxxxxxx, with one vacancy.
12
4.7. Proceedings and Documents. All corporate and other proceedings
-------------------------
in connection with the transactions contemplated at the Closing 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 and certification by the Company's Secretary regarding the
Company's Certificate of Incorporation and Bylaws and Board of Director and
stockholder resolutions approving the transactions contemplated by this
Agreement.
4.8 Proprietary Information and Employee Stock Purchase Agreements.
--------------------------------------------------------------
Each employee of and consultant to the Company shall have entered into a
Proprietary Information and Inventions Agreement in the form previously provided
to counsel for the Investors. Each holder of Common Stock of the Company shall
have entered into an Employee Stock Purchase Agreement in the form previously
provided to counsel for the Investors.
4.9 Bylaws. The Bylaws of the Company shall provide that the Board
------
of Directors of the Company shall consist of seven (7) persons.
4.10 Investors' Rights Agreement. The Company, each Purchaser and
---------------------------
Xxxxx Xxx, Xxxxx Xxxxx and Xxxxxx Xxxxxxxxx shall have executed and delivered
the Investors' Rights Agreement.
4.11 Co-Sale Agreement. The Company, each Purchaser, and Xxxxx Xxx,
-----------------
Xxxxx Xxxxx and Xxxxxx Xxxxxxxxx shall have executed and delivered the Co-Sale
Agreement.
4.12 Voting Agreement. The Company, each Purchaser, and Xxxxx Xxx,
----------------
Xxxxx Xxxxx and Xxxxxx Xxxxxxxxx shall have executed and delivered the Voting
Agreement.
4.13 Tag Along Side Letter Agreement. The Company, Microsoft
-------------------------------
Corporation ("Microsoft") and 3Com Corporation ("3Com") shall have executed a
--------- ----
Tag Along Side Letter Agreement in substantially the form attached hereto as
Exhibit H.
---------
4.14 Restated Certificate. The Company shall have filed the Restated
--------------------
Certificate with the Secretary of State of Delaware on or prior to the Closing
Date, which shall continue to be in full force and effect as of the Closing
Date.
5. Conditions of the Company's Obligations at Closing. The obligations of
--------------------------------------------------
the Company to each Purchaser under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
5.1 Representations and Warranties. The representations and
------------------------------
warranties of each Purchaser contained in Section 3 shall be true and correct in
all material respects on and as of the Closing with the same effect as though
such representations and warranties had been made on and as of the Closing.
13
5.2 Performance. All covenants, agreements and conditions contained
-----------
in this Agreement to be performed by the Purchasers on or prior to the Closing
shall have been performed or complied with in all material respects.
5.3 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 Stock pursuant to this Agreement shall be obtained and effective as of the
Closing.
5.4 Tag Along Side Letter Agreement. The Company, Microsoft, and
-------------------------------
3Com shall have executed a Tag Along Side Letter Agreement in substantially the
form attached hereto as Exhibit H.
---------
6. Miscellaneous.
-------------
6.1 Survival of Warranties. The warranties, representations and
----------------------
covenants of the Company and the Purchasers contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Purchasers or the Company.
6.2 Transfer; Successors and Assigns. 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. 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 and all acts and transactions
-------------
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.
6.4 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall constitute one 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. Any notice required or permitted by this Agreement
-------
shall be in writing and shall be deemed sufficient upon delivery, when delivered
personally or by overnight courier or sent by telegram or fax, or forty-eight
(48) hours after being deposited in the U.S. mail, as certified or registered
mail, with postage prepaid, addressed to the party to be notified at such
party's address as set forth below or on Exhibit A hereto, or as subsequently
---------
modified by written
14
notice, and (a) if to the Company, with a copy to Xxxxxxx Coie LLP, 000
Xxxxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxx Xxxx, Xxxxxxxxxx 00000 fax (000) 000-0000,
Attn: Xxxxx X. Xxxxxxx III or (b) if to the Purchasers, with a copy to Howard,
Rice, Nemerovski, Canady, Xxxx & Xxxxxx, Attn: Xxxx Xxxxxx, Three Xxxxxxxxxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxxxxxxx, XX 00000 fax (000) 000-0000.
6.7 Finder's Fee. Each party severally represents that it neither is
------------
nor will be obligated for any finder's fee or commission in connection with this
transaction. Each Purchaser agrees to severally indemnify and to hold harmless
the Company from any liability for any commission or compensation in the nature
of a finder's fee (and the costs and expenses of defending against such
liability or asserted liability) for which such Purchaser or any of its
officers, employees, or representatives is responsible. The Company agrees to
indemnify and hold harmless each Purchaser from any liability for any commission
or compensation in the nature of a finder's 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 Fees and Expenses. The Company shall pay the reasonable fees and
-----------------
expenses of counsel for the Purchasers, incurred with respect to this Agreement,
the documents referred to herein and the transactions contemplated hereby and
thereby (such fees not to exceed $15,000.00).
6.9 Attorney's Fees. If any action at law or in equity (including
---------------
arbitration) is necessary to enforce or interpret the terms of any of the
Agreements, 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.
6.10 Amendments and Waivers. Any term of this Agreement may be
----------------------
amended with the written consent of the Company and the holders of at least a
majority of the Common Stock issued or issuable upon conversion of the Stock.
Any amendment or waiver effected in accordance with this Section 6.10 shall be
binding upon the Purchasers and each transferee of the Stock (or the Common
Stock issuable upon conversion thereof), each future holder of all such
securities, and the Company.
6.11 Severability. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.
6.12 Delays or Omissions. No delay or omission to exercise any
-------------------
right, power or remedy accruing to any holder of any of the Stock, upon any
breach or default of the Company under this Agreement, shall impair any such
right, power or remedy of such holder nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein, or of or in any
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default
15
be deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any holder of any breach or default under this Agreement, or any
waiver on the part of any holder of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any holder, shall be cumulative and
not alternative.
6.13 Entire Agreement. This Agreement, and the documents referred to
----------------
herein constitute the entire agreement between the parties hereto pertaining to
the subject matter hereof, and any and all other written or oral agreements
existing between the parties hereto are expressly canceled.
6.14 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 THE SECURITIES OR
THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE
QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE
QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS
CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED
UPON THE QUALIFICATION BEING OBTAINED UNLESS THE SALE IS SO EXEMPT.
6.15 Confidentiality. Each party hereto agrees that, except with the
---------------
prior written permission of the other party, it shall at all times keep
confidential and not divulge, furnish or make accessible to anyone any
confidential information, knowledge or data concerning or relating to the
business or financial affairs of the other parties to which such party has been
or shall become privy by reason of this Agreement, discussions or negotiations
relating to this Agreement, the performance of its obligations hereunder or the
ownership of Stock purchased hereunder. The provisions of this Section 6.15
shall be in addition to, and not in substitution for, the provisions of any
separate nondisclosure agreement executed by and among any of the parties hereto
with respect to the transactions contemplated hereby, provided, however, that
this Section 6.15 is not intended to supercede the provisions of any separate
nondisclosure agreement executed by and among any of the parties hereto with
respect to transactions not contemplated hereby.
6.16 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 Securities.
[Signature Pages Follow]
16
The parties have executed this Series C Preferred Stock Purchase Agreement
as of the date first written above.
COMPANY:
AVANTGO, INC.
By: /s/ Xxxxx Xxx
-----------------------------------
Xxxxx Xxx,
Chief Executive Officer
Address: 0000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
INVESTORS:
21ST CENTURY INTERNET FUND, L.P.
By: 21/st/ Century Internet Management
Partners, LLC
/s/ Xxxxx X. Xxxxxxxxx
---------------------------------------
Xxxxx X. Xxxxxxxxx, Member
H&Q AVANTGO INVESTORS, L.P.
By: H&Q Management Corp.
Its General Partner
/s/ Xxxxxx Xxxxxxxxxxxx
---------------------------------------
Xxxxxx Xxxxxxxxxxxx, Attorney-in-Fact
ADOBE VENTURES II, L.P.
By: Adobe Ventures Management II, LLC
Its General Partner
/s/ Xxxxxx Xxxxxxxxxxxx
---------------------------------------
Xxxxxx Xxxxxxxxxxxx, Attorney-in-Fact
SIGNATURE PAGE TO SERIES C PREFERRED STOCK PURCHASE AGREEMENT
17
XXXXXXXXX & XXXXX EMPLOYEE
VENTURE FUND, X.X. XX
By: H&Q Venture Management L.L.C.
Its General Partner
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Its: Attorney-in-Fact
----------------------------------
/s/ Xxxxx Xxxxxxxx
---------------------------------------
XXXXX XXXXXXXX
SIGNATURE PAGE TO SERIES C PREFERRED STOCK PURCHASE AGREEMENT
18
SLEEPY HOLLOW INVESTMENT
PARTNERSHIP, L.P.
By: /s/ Xxxx X. Xxxxx
---------------------------------------
Name: /s/ (Mrs.) Xxxx X. Xxxxx
-------------------------------------
Its: /s/ Officer of General Partner's
--------------------------------------
Managing General Partner,
--------------------------------------
FSI No. 2 Corporation
--------------------------------------
MICROSOFT CORPORATION
By: /s/
---------------------------------------
Name: _____________________________________
Its: ______________________________________
3COM VENTURES, INC.
By: /s/ Xxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxx
-------------------------------------
Its: ______________________________________
STEALTH FUND, L.P.
By: /s/ Pacific Edge Investment Mgt, Inc.
---------------------------------------
Name: Xxxxx Xxxxx, President
-------------------------------------
Its: General Partner
--------------------------------------
TACIT FUND, L.P.
By: /s/ Pacific Edge Investment Mgt, Inc.
--------------------------------------
Name: Xxxxx Xxxxx, President
-------------------------------------
Its: General Partner
--------------------------------------
ENTREPRENEURS FUND, L.P.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------------
Its: Managing Director
---------------------------------------
SIGNATURE PAGE TO SERIES C PREFERRED STOCK PURCHASE AGREEMENT
19
RBW INVESTMENTS LLC
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------------
Its: Managing Director
---------------------------------------
CORNERSTONE PROPERTIES I, LLP
By: /s/ Xxxxx Xxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxx
--------------------------------------
Its: Managing Member
---------------------------------------
ANGEL INVESTORS, L.P.
By: Angel Management, LLC
Its General Partner
By: /s/ J. Xxxxx XxXxxxx
----------------------------------------
Name: J. Xxxxx XxXxxxx
--------------------------------------
Its: Admin Member
---------------------------------------
TWB INVESTMENT PARTNERSHIP
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxx
--------------------------------------
Its: General Partner
--------------------------------------
XXXXX PARTNERS LLC
By: /s/ Xxxxxx Xxxxxx
----------------------------------------
Name: Xxxxxx Xxxxxx
--------------------------------------
Its: Member
---------------------------------------
/s/ Xxxxxxxxx X. Xxxxx
--------------------------------------------
XXXXXXXXX XXXXX
(signature)
SIGNATURE PAGE TO SERIES C PREFERRED STOCK PURCHASE AGREEMENT
20
