1
EXHIBIT 4.05
NIKU CORPORATION
SERIES B PREFERRED
STOCK PURCHASE AGREEMENT
October 13, 1998
2
NIKU CORPORATION
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES B PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is
made as of the 13th day of October, 1998, by and between Niku Corporation, a
Delaware corporation (the "Company"), and the Purchasers listed on Exhibit A
hereto (the "Purchasers").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
1.1 Sale and Issuance of Series B Preferred Stock. Subject to the
terms and conditions of this Agreement, each Purchaser agrees to purchase at the
Initial Closing (as defined below), and the Company agrees to sell and issue to
such Purchaser at the Initial Closing, that number of shares of the Company's
Series B Preferred Stock set forth opposite such Purchaser's name on Exhibit A
hereto (the "Shares") for the purchase price set forth thereon (the "Purchase
Price"). The Company's agreement with each Purchaser is a separate agreement,
and the sale of the Shares to each Purchaser is a separate sale.
1.2 Filing of Restated Certificate. The Company shall adopt and file
with the Secretary of State of Delaware on or before the Initial Closing a Third
Amended and Restated Certificate of Incorporation (the "Restated Certificate").
1.3 Closing. The initial purchase and sale of the Shares hereunder
shall take place at the offices of Venture Law Group, A Professional
Corporation, 0000 Xxxx Xxxx Xxxx, Xxxxx Xxxx, Xxxxxxxxxx, concurrently with the
execution and delivery of this Agreement or at such other time and place as the
Company and the Purchasers acquiring a majority of the total number of Shares to
be purchased at such time mutually agree upon orally or in writing (which time
and place are designated the "Initial Closing"). At the Initial Closing, the
Company shall deliver to each Purchaser a certificate representing the Shares
that such Purchaser is purchasing against payment of the purchase price therefor
by check or wire transfer to an account designated by the Company.
1.4 Subsequent Closing(s). The Company may sell up to 1,200,000
shares of the Series B Preferred Stock not sold at the Initial Closing to such
purchasers as it shall select, at the price and on the terms contained herein
and in the exhibits hereto, at one or more subsequent closings (each, a
"Subsequent Closing") provided that all Subsequent Closings shall take place not
later than December 31, 1998. Upon payment of the purchase price for the Shares
being purchased and execution of a signature page counterpart to this Agreement,
the Second Amended and Restated Investor Rights Agreement, the Co-Sale Agreement
and the Voting Agreement (each as defined below) and without need for an
amendment hereto or thereto except to add such purchaser's name to Exhibit A to
this Agreement and to the appropriate exhibit to such other agreements, any such
purchaser shall become a party to this Agreement and such other agreements, and
shall be deemed a "Purchaser" for purposes of this Agreement and an "Investor"
(or a "New Investor," as applicable) for purposes of such other agreements, in
each case as of the
3
date of the applicable Subsequent Closing. The Initial Closing and each
Subsequent Closing shall be deemed a "Closing" under this Agreement.
2. Representations and Warranties of the Company. Except as set forth on
the Schedule of Exceptions (as updated in connection with each Closing) (the
"Schedule of Exceptions"), the Company hereby represents and warrants to each
Purchaser as follows:
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 the
State of California.
2.2 Capitalization and Voting Rights.
(a) The authorized capital of the Company consists, or will
consist immediately prior to the Initial Closing, of:
(i) Preferred Stock. 23,400,000 shares of Preferred Stock
(the "Preferred Stock") have been authorized, 10,000,000 of which have been
designated Series F Preferred Stock (the "Series F Preferred Stock"), all of
which are outstanding prior to the Initial Closing, 5,142,851 shares of which
have been designated Series A Preferred Stock (the "Series A Preferred Stock"),
all of which are issued and outstanding prior to the Initial Closing, and
8,257,149 shares of which have been designated Series B Preferred Stock (the
"Series B Preferred Stock"), none of which are issued and outstanding prior to
the Initial Closing. The outstanding shares of Preferred Stock are all duly and
validly authorized and issued, fully paid and nonassessable and were issued in
compliance with applicable Federal and state securities laws. The rights,
privileges and preferences of the Preferred Stock will be as stated in the
Restated Certificate.
(ii) Common Stock. 50,000,000 shares of Common Stock (the
"Common Stock"), of which 5,282,500 shares are issued and outstanding. The
outstanding shares of Common Stock are all duly and validly authorized and
issued, fully paid and nonassessable and were issued in compliance with
applicable Federal and state securities law. In addition, the Company has
reserved 5,000,000 shares of its Common Stock for issuance pursuant to the
Company's 1998 Stock Plan, of which options to purchase a total of 2,048,500
shares have been granted and are outstanding and 470,000 shares of Restricted
Stock are outstanding thereunder (which shares of Restricted Stock are included
in the total number of issued and outstanding shares of Common Stock set forth
above).
(b) Except for (i) the conversion privileges of the Preferred
Stock, and (ii) the options described in Section 2.2(a)(ii) above, there are no
outstanding options, warrants, rights (including conversion or preemptive
rights) or obligations for the purchase or acquisition from the Company of any
shares of its capital stock. Except for the Voting Agreement (as defined below),
the Company is not a party or subject to any agreement or understanding and, to
the Company's knowledge, there is no agreement or understanding between any
other persons or
2
4
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.
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 Second Amended and Restated
Investor Rights Agreement (the "Amended Rights Agreement"), the Co-Sale
Agreement (the "Co-Sale Agreement") and the Voting Agreement (the "Voting
Agreement," and collectively with the Amended Rights Agreement, the Co-Sale
Agreement and this Agreement, the "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 B
Preferred Stock being sold hereunder and the Common Stock issuable upon
conversion of the Series B Preferred Stock has been taken or will be taken prior
to the Initial Closing, and the Agreements, when executed, will 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
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 Rights Agreement may be limited by applicable federal
or state securities laws. The Series B Preferred Stock being purchased by
Purchasers hereunder, when issued, sold and delivered in accordance with the
terms of this Agreement for the consideration expressed herein, and the Common
Stock issuable upon conversion thereof (when issued in accordance with the
Restated Certificate), will be duly and validly issued, fully paid and
nonassessable.
2.5 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 for the filing pursuant to Section
25102(f) of the California Corporate Securities Law of 1968, as amended, and the
rules thereunder.
2.6 Litigation. There is no action, suit, proceeding or
investigation pending or currently threatened against the Company that questions
the validity of the Agreements, or the right of the Company to enter into any
such agreement, 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. 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.
3
5
2.7 Proprietary Information and Inventions Agreements. Each
employee, officer and consultant of the Company has executed a Proprietary
Information and Inventions Assignment. 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. The Company is not
aware that any officer or key employee intends to terminate employment with the
Company, nor does the Company have a present intention to terminate the
employment of any of the foregoing. Subject to general principles relating to
wrongful termination of employees, the employment of each officer and employee
of the Company is terminable at the will of the Company.
2.8 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 its knowledge, holds a valid leasehold interest free of
any liens, claims or encumbrances.
2.9 Financial Statements. Prior to the Initial Closing, the Company
has made available to each Purchaser its unaudited balance sheet and income
statement at and for the six months ended June 30, 1998 and the month ended
August 31, 1998 (collectively, 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,
except that the Financial Statements may not contain all footnotes required by
generally accepted accounting principles. 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 which the Company does not expect to be material. 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 the date of last set of Financial Statements
delivered to the Purchasers 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 indemnity of any
indebtedness of any other person, firm or corporation.
2.10 Books and Records. The minute books of the Company contain
accurate summary records of all meetings and written consents to action of the
Company's stockholders, the Company's Board of Directors and all committees, if
any, appointed by the Board of Directors. The Company's stock ledger is complete
and reflects all issuances, transfers, repurchases and cancellations of shares
of capital stock of the Company.
2.11 Rights of Registration. Except as contemplated in the Amended
Rights Agreement, the Company has not granted or agreed to grant any
registration rights, including piggyback rights, to any person or entity.
4
6
2.12 Proprietary Rights. To its knowledge, the Company owns, has
licensed or otherwise possesses all trademarks, trade names, copyrights and
other intellectual property rights necessary to conduct its business as now
being conducted without any known conflict with or infringement upon any
intellectual property rights of others. The Company has not received any notice
alleging that the Company has infringed upon or is conflict with the asserted
rights of others. The Company has certain trade secrets, including know-how,
computer software programs and other proprietary data (the "Proprietary
Information") used, or proposed to be used, in the development, manufacture and
sale of its products. To its knowledge, the Company has the right to use the
Proprietary Information, except that the possibility exists that other persons
may have independently developed trade secrets or technical information similar
or identical to those of the Company.
2.13 No Conflict of Interest. The Company is not indebted, directly
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 or
relocation expenses of employees. To the Company's knowledge, 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). To the Company's knowledge, none of the
Company's officers or directors or any members of their immediate families have,
directly or indirectly, any economic interest in any contract material to the
Company other than with respect to equity held in the Company.
2.14 Tax Returns. All tax returns, declarations, statements,
reports, schedules, forms and information returns ("Returns") required by all
U.S. federal, state and local and foreign jurisdictions (in each case, including
all political subdivisions thereof) relating to all U.S. federal, state, local
and foreign taxes and other assessments of a similar nature (whether imposed
directly or through withholding), including any interest, additions to tax, or
penalties applicable thereto ("Taxes"), if any, required to be filed by the
Company prior to the Initial Closing have been (or will be) timely filed and
such Returns are (or will be) true, complete and correct in all material
respects. All Taxes shown on any such Returns to be due from the Company that
are due and payable have been paid, other than those being contested in good
faith and for which an adequate reserve or accrual has been established in
accordance with GAAP. The Company does not know of any actual or proposed
material addition Tax assessments against the Company.
2.15 Compliance with Laws. The Company has obtained and maintained
in good standing all of its licenses, permits, consents and authorizations
required to be obtained by it or them under federal, state and local laws
(collectively, "Laws"), except for those which, individually or in the
aggregate, would not have a material adverse effect on the assets, condition,
affairs or prospects of the Company, financially or otherwise, and all such
licenses, permits, consents and authorizations remain in full force and effect.
The Company is in material compliance with such Laws, and there is no pending
or, to the Company's knowledge, threatened, action or proceeding against the
Company under any of such Laws, other than any such actions or proceedings
which, individually or in the aggregate, if adversely determined,
5
7
would not have a material adverse effect on the assets, condition, affairs or
prospects of the Company, financially or otherwise.
2.16 Qualified Small Business Stock.
(a) As of and immediately following the Closing, the Stock will
meet each of the requirements for qualification as "qualified small business
stock" set forth in Section 1202(c) of the Internal Revenue Code of 1986, as
amended (the "Code"), including without limitation the following: (i) the
Company will be a domestic C corporation, (ii) the Company will not have made
any purchases of its own stock described in Code Section 1202(c)(3)(B) during
the one-year period preceding the Closing, and (iii) the Company's (and any
predecessor's) aggregate gross assets, as defined by Code Section 1202(d)(2), at
no time from the date of incorporation of the Company and through the Closing
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).
(b) As of the Closing, at least 80% (by value) of the assets of
the Company are used by it in the active conduct of one or more qualified trades
or businesses, as defined by Code Section 1202(e)(3), and the Company is an
eligible corporation, as defined by Code Section 1202(e)(4).
3. Representations and Warranties of Purchaser. Each Purchaser hereby
represents and warrants that:
3.1 Authorization. Such Purchaser has full power and authority to
enter into the Agreements and the Agreements, when executed, will constitute
valid and legally binding obligations of such Purchaser, 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 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 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 Purchaser in reliance upon Purchaser's representation to the Company, which
by such Purchaser's execution of this Agreement such Purchaser hereby confirms,
that the Series B Preferred Stock to be received by such Purchaser and the
Common Stock issuable upon conversion thereof (collectively, the "Securities")
will be acquired for investment for such 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, except as disclosed to the Company, such Purchaser has no
present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, such Purchaser further
represents that, except as disclosed to the Company, such Purchaser 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.
6
8
3.3 Disclosure of Information. Such Purchaser believes it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Series B Preferred Stock. Such Purchaser further
represents that it has had an opportunity to ask questions and receive answers
from the Company regarding the terms and conditions of the offering of the
Series B 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 such Purchaser to rely thereon.
3.4 Investment Experience. Such Purchaser 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 B
Preferred Stock. If other than an individual, such Purchaser also represents it
has not been organized solely for the purpose of acquiring the Series B
Preferred Stock.
3.5 Accredited Investor. Such Purchaser is an "accredited investor"
within the meaning of Securities and Exchange Commission ("SEC") Rule 501 of
Regulation D promulgated under the Securities Act, as presently in effect.
3.6 Restricted Securities. Such Purchaser 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 Securities Act of 1933, as amended (the "Securities Act"), only in certain
limited circumstances. In addition, such Purchaser represents that it is
familiar with SEC Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and by the Securities Act. Each Purchaser
understands that no public market presently exists for the Series B Preferred
Stock or Common Stock of the Company, and that there are no assurances that any
such market will be created.
3.7 Further Limitations on Disposition. Without in any way limiting
the above, such Purchaser further agrees not to make any disposition of all or
any portion of the Securities unless:
(a) There is then in effect a Registration Statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such Registration Statement; or
(b) (i) Such Purchaser shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
reasonably requested by the Company, such Purchaser 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
Securities Act, provided, however, that the Company will not request an opinion
in connection with customary distributions to general and limited partners of
venture capital funds.
7
9
3.8 Legends. It is understood that the certificate(s) evidencing the
Shares shall bear the following legends:
(a) "The shares represented by this certificate
have been acquired for investment and have not been registered
under the Securities Act of 1933, as amended. Such shares may not
be sold or transferred in the absence of such registration or
unless the Corporation receives an opinion of counsel reasonably
acceptable to it stating that such sale or transfer is exempt
from the registration and prospectus delivery requirements of
said act. Copies of the agreements covering the purchase of these
shares and restricting their transfer may be obtained at no cost
by written request made by the holder of record of this
certificate to the Secretary of the Corporation at the principal
executive offices of the Corporation."
(b) "The shares represented by this certificate are
subject to the market stand-off provisions contained in the
Corporation's Second Amended and Restated Investor Rights
Agreement. A copy of such agreement may be obtained without
charge upon written request to the Corporation at its principal
place of business."
(c) Any other legends required by the Agreements or applicable
law.
4. Conditions of Purchasers' Obligations at Closing. The obligations of
each Purchaser to purchase Shares at the applicable Closing are subject to the
fulfillment of each of the following conditions.
4.1 Representations and Warranties. The representations and
warranties of the Company contained in Section 2 shall be true in all material
respects on and as of the applicable Closing with the same effect as though such
representations and warranties had been made on and as of such Closing.
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 applicable
Closing.
4.3 Compliance Certificate. The President of the Company shall
deliver to such Purchaser at the applicable 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 Shares at the applicable Closing shall have been obtained by the Company as
of such Closing
8
10
4.5 Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated at the applicable Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to such Purchaser.
4.6 Restated Certificate. The Restated Certificate shall have been
filed with the Delaware Secretary of State.
4.7 Amended Rights Agreement. The Company, such Purchaser and
Investors (as defined therein) holding a sufficient number of shares of
"Registrable Securities" to amend and restate the Company's Amended and Restated
Investor Rights Agreement shall have entered into the Amended Rights Agreement.
4.8 Co-Sale Agreement. The Company, such Purchaser and the Founders
(as defined therein) shall have executed and delivered the Co-Sale Agreement.
4.9 Voting Agreement. The Company and the stockholders specified
therein shall have executed and delivered the Voting Agreement.
4.10 Opinion of Company Counsel. Such Purchaser shall have received
from Venture Law Group, A Professional Corporation, counsel for the Company, an
opinion, dated as of the applicable Closing.
4.11 Board of Directors. As of the Initial Closing, the Board shall
be comprised of Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxx Xxxx and Xxxxxxx Xxxx.
5. Conditions of the Company's Obligations at Closing. The obligations
of the Company to sell and issue the Shares at the applicable Closing are
subject to the fulfillment of each of the following conditions:
5.1 Representations and Warranties. The representations and
warranties of each Purchaser contained in Section 3 shall be true in all
material respects on and as of the applicable Closing with the same effect as
though such representations and warranties had been made on and as of such
Closing.
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 at the applicable Closing pursuant to this Agreement shall be
duly obtained and effective as of such Closing.
5.3 Restated Certificate. The Restated Certificate shall have been
filed with the Delaware Secretary of State.
5.4 Amended Rights Agreement. The Company and Investors (as defined
therein) holding a sufficient number of shares of "Registrable Securities" to
amend and restate the Company's Amended and Restated Investor Rights Agreement
shall have entered into the Amended Rights Agreement.
9
11
5.5 Co-Sale Agreement. The Company and the Founders (as defined
therein) shall have executed and delivered the Co-Sale Agreement.
5.6 Voting Agreement. The Company and the other parties thereto
shall have executed and delivered the Voting Agreement.
6. Covenants.
6.1 Key Man Insurance. If and to the extent the Board of Directors
deems it reasonable and appropriate, the Company shall obtain and maintain term
life insurance as on key employees with the Company as named beneficiary,
6.2 Indemnification Agreements. The Company has entered into
customary indemnification agreements with each of its current directors and
executive officers and shall enter into such agreements with future directors
and executive officers.
6.3 Publicity. The Company agrees not to make any public disclosure
of any Investor's investment without such Investor's consent. Each Purchaser
agrees not to make any public disclosure of its investment in the Company
without the Company's prior consent.
6.4 Termination of Covenants. The covenants contained in this
Section 6 shall terminate upon the earliest to occur of any one of the following
events:
(a) The liquidation, dissolution or indefinite cessation of the
business operations of the Company;
(b) The execution by the Company of a general assignment for the
benefit of creditors or the appointment of a receiver or trustee to take
possession of the property and assets of the Company;
(c) The consummation of an underwritten public offering by the
Company of shares of its Common Stock pursuant to a registration statement on
form S-1 or SB-2 under the Securities Act, yielding gross proceeds to the
Company in excess of ten million dollars ($10,000,000);
(d) The acquisition of the Company by another entity by means of
any transaction or series of related transactions (including, without
limitation, any reorganization, merger or consolidation); or a sale of all or
substantially all of the assets of the Corporation (including, for purposes of
this section, intellectual property rights which, in the aggregate, constitute
substantially all of the Corporation's material assets); unless in each case,
the Corporation's stockholders of record as constituted immediately prior to
such acquisition or sale will, immediately after such acquisition or sale (by
virtue of securities issued as consideration for the Corporation's acquisition
or sale or otherwise) hold at least fifty percent (50%) of the voting power of
the surviving or acquiring entity.
7. Miscellaneous.
10
12
7.1 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.
7.2 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.
7.3 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.
7.4 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.
7.5 Notices. All notices and other communications required or
permitted hereunder shall be in writing, shall be effective when given, and
shall in any event be deemed to be given upon receipt or, if earlier, (a) five
(5) days after deposit with the U.S. Postal Service or other applicable postal
service, if delivered by first class mail, postage prepaid, (b) upon delivery,
if delivered by hand, (c) one (1) business day after the business day of deposit
with Federal Express or similar overnight courier, freight prepaid or (d) one
(1) business day after the business day of facsimile transmission, if delivered
by facsimile transmission with copy by first class mail, postage prepaid, and
shall be addressed (i) if to a Purchaser, at such Purchaser's address as set
forth on Exhibit A, and (ii) if to the Company, at the address of its principal
corporate offices (attention: Secretary), or at such other address as a party
may designate by ten days' advance written notice to the other party pursuant to
the provisions above.
7.6 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 Purchaser agrees to indemnify and 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 Purchaser or any of its officers, partners,
employees, or representative 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 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.
7.7 Fees and Expenses. The Company shall pay the reasonable fees and
expenses of Xxxxx Xxxxxxxxxx, counsel for the Venrock entities, incurred with
respect to this Agreement, the documents referred to herein and the transactions
contemplated hereby and thereby, up to a maximum of $15,000.
11
13
7.8 Amendment and Waivers. Any term of this Agreement may be amended
and the severance 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 issued or issuable upon conversion of the Series B Preferred Stock sold
hereunder, provided, that no such consent will be required to add a party
pursuant to Section 1.4 hereof. 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.
7.9 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.
7.10 Aggregation of Stock. All shares of the Series B Preferred
Stock held or acquired (or Common Stock issued upon conversion thereof) by
affiliated entities or persons shall be aggregated for the purpose of
determining the availability of or discharge of any rights under this Agreement.
7.11 Entire Agreement. This Agreement and the documents referred to
herein constitute the entire agreement among the parties and no party shall be
liable or bound to any other party in any manner by any warranties,
representations, or covenants except as specifically set forth herein or
therein.
7.12 California Corporate Securities Law. THE SALE OF THE SECURITIES
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR
PRIOR TO SUCH QUALIFICATION 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 SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO
EXEMPT.
12
14
The parties have executed this Series B Preferred Stock Purchase
Agreement as of the date first above written.
NIKU CORPORATION
By:
-------------------------------------
Xxxxxx Xxxxxxx
President and Chief Executive Officer
Address: 000X Xxxxxxx Xxxxxx
Xxxxxxx Xxxx, XX 00000
INITIAL CLOSING PURCHASERS
----------------------------------------
Name of Purchaser
----------------------------------------
Signature of Purchaser
----------------------------------------
Title, if any
SUBSEQUENT CLOSING PURCHASERS:
----------------------------------------
Name of Purchaser
----------------------------------------
Signature of Purchaser
----------------------------------------
Title, if any
----------------------------------------
Date
13
15
EXHIBIT A
SCHEDULE OF PURCHASERS
Number
Stockholder Name of Shares
--------------------------------------------------------------------------------
Venrock Associates 2,328,000
Venrock Associates II, L.P. 2,845,333
Xxxxxxx, Xxxxxx and Xxxxxx X., Trustees of 666,666
the Dibachi Family Trust UDT dated 0-00-00
Xxxxxxx, Xxxxxxx X. and Xxxxxxx X., Trustees of 333,333
the Xxxxxxx Family Trust U/D/T dated 0-00-00
Xxxxxxx, Xxxxxxx X. and Xxxxxxx X., Trustees of 160,000
the Xxxxxxx Family Trust U/D/T dated 4-27-97
Xxxx, Xxxxxxx X. Xx. and Xxxxx X. Xxxx, 133,333
Trustees of the Xxxx Family Trust, dated 6/3/95
Broadview, Xxxxx Xxxxxx as nominee for 293,333
the Broadview Partners Group
Xxxxx Family Partners 133,333
Xxxxxx, Xxxx 66,666
Xxxxxxxx, Xxxxxxx X. 66,666
Xxxxx, Xxxxx 66,666
Xxxxxx, Xxxxxx and Xxxxx JTWROS 133,333
Xxxxxx Beiren Partners, LLC 160,000
Comdisco, Inc. 146,666
Xxxx, Xxx & Xxxxxxxx Xxxx, Trustees of the 6,666
1998 Revocable Trust, dated 10/5/98
Xxxxxxxxx, Xxxxxx 6,666
14
16
Phoenix Partners 333,333
Xxxxxx, Xxxxxx 13,333
VLG Investments 1998 13,333
Xxxxxxxxxx, Xxxxxxxxx 60,000
Xxxxxxxxxxx, Xxxxx X. 33,333
TOTALS 7,999,992
15
