LENDINGCLUB CORPORATION SERIES D PREFERRED STOCK PURCHASE AGREEMENT JULY 28, 2011
LENDINGCLUB CORPORATION
This Series D Preferred Stock Purchase Agreement (this “Agreement”) is made and
entered into as of July 28, 2011, by and among LendingClub Corporation, a Delaware
corporation (the “Company”), and each of those persons and entities, severally and not jointly,
whose names are set forth on the Schedule of Purchasers attached hereto as Exhibit A (which
persons and entities are hereinafter collectively referred to as “Purchasers” and each individually
as a “Purchaser”).
Recitals
Whereas, the Company has authorized the sale and issuance of an aggregate of Eight
Million Four Hundred Thirty Three Thousand One Hundred Twenty Five (8,433,125) shares of its Series
D Preferred Stock (the “Shares”);
Whereas, Purchasers desire to purchase the Shares on the terms and conditions set
forth herein; and
Whereas, the Company desires to issue and sell the Shares to Purchasers on the terms
and conditions set forth herein.
Agreement
Now, Therefore, in consideration of the foregoing recitals and the mutual promises,
representations, warranties, and covenants hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Agreement To Sell And Purchase.
1.1 Authorization of Shares. The Company has authorized (a) the sale and issuance to
Purchasers of the Shares and (b) the reservation of such shares of Common Stock for issuance upon
conversion of the Shares (the “Conversion Shares”). The Shares and the Conversion Shares have the
rights, preferences, privileges and restrictions set forth in the Amended and Restated Certificate
of Incorporation of the Company, in the form attached hereto as Exhibit B (the “Restated
Charter”).
1.2 Sale and Purchase. Subject to the terms and conditions hereof, at the Closing (as
hereinafter defined) the Company hereby agrees to issue and sell to each Purchaser, and each
Purchaser agrees to purchase from the Company, severally and not jointly, the number of Shares set
forth opposite such Purchaser’s name on Exhibit A, at a purchase price of Three Dollars and
Fifty Five and Seventy Four Hundredths Cents ($3.5574) per share.
2. Closing, Delivery And Payment.
2.1 Closing. The closing of the sale and purchase of the Shares under this Agreement (the
“Closing”) shall take place at 11:00 a.m. on the date hereof, at the offices of Fenwick & West LLP,
000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx Xxxx, XX 00000 or at such other time or place as the Company and
Purchasers may mutually agree (such date is hereinafter referred to as the “Closing Date”).
2.2 Additional Closings. At any time and from time to time after the Closing, the Company may
sell, on the same terms and conditions as those contained in this Agreement, without obtaining the
signature, consent or permission of any of the Purchasers, up to One Million Four Hundred Five
Thousand Five Hundred Twenty One ( 1,405,521 ) additional shares (subject to appropriate adjustment
in the event of any stock dividend, stock split, combination or similar recapitalization affecting
such shares) of Series D Preferred Stock (the “Additional Shares”), to one or more purchasers (the
“Additional Purchasers”) that are acceptable to the holders of a majority of the outstanding
Preferred Stock (voting on an a single class on an as converted to Common Stock basis) of the
Company as of the date immediately prior to the proposed Additional Closing (as defined below)
which majority must include the affirmative approval of Union Square Ventures Opportunity Fund,
L.P. (“USV”) and a majority of the members of the Company’s Board of Directors, in additional
Closings (each, an “Additional Closing”), provided that (a) each such subsequent sale is
consummated prior to one hundred and eighty (180) days after the Closing, and (b) each Additional
Purchaser shall become a party to this Agreement and each of the Related Agreements (as defined
below), by executing and delivering a counterpart signature page to this Agreement and each of the
Related Agreements. Exhibit A to this Agreement shall be updated to reflect the number of
Additional Shares purchased at each such Additional Closing and the parties purchasing such
Additional Shares; provided, further, that USV shall have the right, but not the obligation, to
purchase such number of Additional Shares at each Additional Closing as may be necessary to allow
USV to maintain an ownership in the Company equal to not less than five percent (5%) of the fully
diluted capitalization of the Company following each such Additional Closing.
2.3 Delivery. At the Closing and each Additional Closing, subject to the terms and conditions
hereof, the Company will deliver to each Purchaser a certificate representing the number of Shares
to be purchased at the Closing or such Additional Closing by such Purchaser, against payment of the
purchase price therefor by check or wire transfer made payable to the order of the Company.
3. Representations and Warranties of The Company.
Except as set forth on a Schedule of Exceptions delivered by the Company to Purchasers at the
Closing attached hereto as Exhibit C, the Company hereby represents and warrants to each
Purchaser as of the date of this Agreement as set forth below. For purposes of this Section 3, the
terms “to the Company’s Knowledge,” “to its Knowledge” or “Known” shall mean the knowledge of
Xxxxxx Xxxxxxxxx, Xxxx Xxxxxxx and Xxxxx Xxxxxx, as such knowledge as such individuals would have
after reasonable investigation.
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3.1 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. The
Company has all requisite corporate power and authority to own and operate its properties and
assets, to execute and deliver this Agreement and the Amended and Restated Investor Rights
Agreement in the form attached hereto as Exhibit D (the “Investor Rights Agreement”), the
Amended and Restated Right of First Refusal and Co-Sale Agreement in the form attached hereto as
Exhibit E (the “Co-Sale Agreement”), and the Amended and Restated Voting Agreement in the
form attached hereto as Exhibit F (the “Voting Agreement”) (collectively, the “Related
Agreements”), to issue and sell the Shares and the Conversion Shares, and to carry out the
provisions of this Agreement, the Related Agreements and the Restated Charter and to carry on its
business as presently conducted and as presently proposed to be conducted. The Company is duly
qualified to do business and is in good standing as a foreign corporation in California and in all
jurisdictions in which the nature of its activities and of its properties (both owned and leased)
makes such qualification necessary, except for those jurisdictions in which failure to do so would
not have a material adverse effect on the Company or its business.
3.2 Subsidiaries. The Company does not own or control, directly or indirectly, any equity
security or other interest of any other corporation, partnership, limited liability company or
other business entity. The Company is not a participant in any joint venture, partnership, limited
liability company or similar arrangement. Since its inception, the Company has not consolidated or
merged with, acquired all or substantially all of the assets of, or acquired the stock of or any
interest in any corporation, partnership, limited liability company or other business entity.
3.3 Capitalization; Voting Rights.
(a) The authorized capital stock of the Company, immediately prior to the Closing, consists of
(i) 80,000,000 shares of Common Stock, par value $0.01 per share, 8,615,323 shares of which are
issued and outstanding, and (ii) 57,471,535 shares of Preferred Stock, par value $0.01 per share,
17,006,275 of which are designated Series A Preferred Stock, 15,740,285 are issued and outstanding,
and 16,410,526 are designated Series B Preferred Stock, 16,036,346 of which are issued and
outstanding, 15,621,609 are designated Series C Preferred Stock, all of which are issued and
outstanding and 8,433,125 are designated Series D Preferred Stock, none of which are issued and
outstanding.
(b) Under the Company’s 2007 Stock Incentive Plan, as amended to date (the “Plan”), (i)
204,323 shares have been issued pursuant to restricted stock purchase agreements and/or the
exercise of outstanding options, (ii) options to purchase 7,378,032 shares of Common Stock have
been granted and are currently outstanding, and (iii) 4,977,593 shares of Common Stock remain
available for future issuance to officers, directors, employees and consultants of the Company.
The Company has furnished to the Purchasers complete and accurate copies of the Plan and forms of
agreements used thereunder. The Company has not made any representations regarding equity
incentives to any officer, employee, director or consultant that are inconsistent with the share
amounts and terms set forth in the Company’s board minutes.
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(c) Warrants to purchase 265,945 shares of Common Stock are outstanding.
(d) Warrants to purchase 1,265,990 shares of Series A Preferred Stock are outstanding.
(e) Warrants to purchase 374,180 shares of Series B Preferred Stock are outstanding.
(f) Other than the shares reserved for issuance under the Plan, except as may be issued and
sold pursuant to this Agreement and the Related Agreements and except as disclosed in this
Agreement, there are no other outstanding options, warrants, rights (including conversion or
preemptive rights and rights of first refusal), proxy or stockholder agreements, agreements or
understandings, oral or written, of any kind for the purchase or acquisition from the Company of
any of its securities.
(g) All issued and outstanding shares of the Company’s capital stock (i) have been duly
authorized and validly issued and are fully paid and nonassessable, (ii) were issued in compliance
with all applicable state and federal laws concerning the issuance of securities, and (iii) as to
the issued and outstanding shares of the Company’s Common Stock, are subject to a right of first
refusal in favor of the Company upon transfer.
(h) The rights, preferences, privileges and restrictions of the Shares are as stated in the
Restated Charter. The Conversion Shares have been duly and validly reserved for issuance. When
issued in compliance with the provisions of this Agreement and the Restated Charter, the Shares and
the Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any
liens or encumbrances other than (i) liens and encumbrances created by or imposed upon the
Purchasers and (ii) any right of first refusal set forth in the Company’s Bylaws or the Co-Sale
Agreement; provided, however, that the Shares and the Conversion Shares may be subject to
restrictions on transfer under state and/or federal securities laws as set forth herein or as
otherwise required by such laws at the time a transfer is proposed. The sale of the Shares and the
subsequent conversion of the Shares into Conversion Shares are not and will not be subject to any
preemptive rights or rights of first refusal that have not been properly waived or complied with.
(i) All outstanding options (and Common Stock issued upon exercise of such options) vest as
follows: twenty-five percent (25%) of the shares vest one (1) year following the vesting
commencement date, with the remaining seventy-five percent (75%) vesting in equal quarterly
installments over the next three (3) years. No stock plan, stock purchase, stock option or other
agreement or understanding between the Company and any holder of any equity securities or rights to
purchase equity securities provides for acceleration or other changes in the vesting provisions or
other terms of such agreement or understanding as the result of (i) termination of employment or
consulting services (whether actual or constructive); (ii) any merger, sale of stock or assets,
change in control or any other transaction(s) by the Company; or (iii) the occurrence of any other
event or combination of events. All outstanding options and warrants to purchase shares of the
Company’s capital stock have been issued in
compliance with all applicable federal, state, foreign or local statutes, laws, rules, or
regulations, including federal and state securities laws.
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(j) All outstanding shares of Common Stock and all shares of Common Stock issuable upon the
exercise or conversion of outstanding options, warrants or other exercisable or convertible
securities are subject to a market standoff or “lockup” agreement of not less than 180 days
following the Company’s initial public offering.
(k) The Company has never adjusted or amended the exercise price of any stock options
previously awarded, whether through amendment, cancellation, replacement grant, repricing, or any
other means. Except as set forth in the Restated Charter, the Company has no obligation
(contingent or otherwise) to purchase or redeem any of its capital stock.
(l) The Company believes in good faith that any “nonqualified deferred compensation plan” (as
such term is defined under Section 409A(d)(1) of the Internal Revenue Code of 1986, as amended (the
“Code”), and the guidance thereunder) under which the Company makes, is obligated to make or
promises to make, payments (each, a “409A Plan”) complies in all material respects, in both form
and operation, with the requirements of Section 409A of the Code and the guidance thereunder. To
the Knowledge of the Company, no payment to be made under any 409A Plan is, or will be, subject to
the penalties of Section 409A(a)(1) of the Code.
3.4 Authorization; Binding Obligations. All corporate action on the part of the Company, its
officers, and directors, including, but not limited to, the consent of the Board of Directors and
the stockholders, necessary for the authorization of this Agreement and the Related Agreements, the
performance of all obligations of the Company hereunder and thereunder at the Closing and the
authorization, sale, issuance and delivery of the Shares pursuant hereto and the Conversion Shares
pursuant to the Restated Charter has been taken. This Agreement and the Related Agreements, when
executed and delivered, will be valid and binding obligations of the Company enforceable in
accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting enforcement of creditors’
rights, (b) general principles of equity that restrict the availability of equitable remedies, and
(c) to the extent that the enforceability of the indemnification provisions in the Investor Rights
Agreement may be limited by applicable laws.
3.5 Financial Statements. The Company has made available to each Purchaser its audited
balance sheet for the year ended March 31, 2011, an audited statement of income and cash flows for
the year ended March 31, 2011 and an unaudited balance sheet for the two (2) month period ended May
31, 2011 (the “Statement Date”) and unaudited statement of income and cash flows for the two (2)
month period ended May 31, 2011 (collectively, all of the previously listed financial statements
being referred to as the “Financial Statements”). The Financial Statements, together with the
notes thereto, have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated, except as disclosed therein and, as
to the unaudited Financial Statements, for the omission of notes thereto and normal year-end audit
adjustments, and present fairly the financial condition and position of the Company as of March 31,
2011 and as of the Statement Date, as the case may be.
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3.6 Company SEC Reports. The Company has filed all forms, reports and documents with the
Securities and Exchange Commission that have been required to be filed by it under applicable laws
since October 10, 2008 (all such forms, reports and documents, together with all exhibits and
schedules thereto, the “Company SEC Reports”). As of its filing date, each Company SEC Report
complied as to form in all material respects with the applicable requirements of the Securities Act
of 1933, as amended (the “Securities Act”), and the rules and regulations promulgated thereunder,
or the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (the “Exchange Act”), as the case may be, each as in effect on the date such Company SEC
Report was filed. As of its filing date (or, if amended or superseded by a filing prior to the
date of this Agreement, on the date of such amended or superseded filing), each Company SEC Report
did not contain any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the circumstances under
which they were made, not misleading.
3.7 Liabilities. Except as set forth in the Financial Statements, the Company has no
liabilities and, to its Knowledge, no material contingent liabilities, except current liabilities
incurred in the ordinary course of business which have not been, either in any individual case or
in the aggregate, materially adverse.
3.8 Agreements; Action.
(a) There are no agreements, understandings or proposed transactions between the Company and
any of its directors, employees, contractors or consultants that provide for compensation in excess
of $200,000.
(b) There are no agreements, understandings, instruments, contracts, proposed transactions,
judgments, orders, writs or decrees to which the Company is a party, or to its Knowledge, by which
it is bound, which may involve (i) future obligations (contingent or otherwise) of, or payments to,
the Company in excess of $125,000, or (ii) the transfer or license of any patent, copyright, trade
secret or other proprietary right to or from the Company (other than licenses to the Company of
“off the shelf” software or other standard products), or (iii) the grant of any rights affecting
the development, manufacture, licensing, distribution, marketing, or sale of the Company’s products
or services, or (iv) indemnification by the Company with respect to infringements of proprietary
rights.
(c) The Company has not (i) accrued, 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 or
guaranteed any indebtedness for money borrowed or any other liabilities (other than trade payables
incurred in the ordinary course of business or as disclosed in the Financial Statements)
individually in excess of $125,000 or, in the case of indebtedness and/or liabilities individually
less than $125,000, in excess of $200,000 in the aggregate, (iii) made any loans or advances to any
person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise
disposed of any of its assets or rights.
(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 guarantor or indemnitor of any indebtedness of any other person.
3.9 Obligations to Related Parties. There are no obligations, understandings or proposed
transactions of the Company to officers, directors, stockholders, or employees of the Company or a
member of the immediate family or affiliate of the foregoing other than (a) for payment of salary
for services rendered, (b) reimbursement for reasonable expenses incurred on behalf of the Company
and (c) for other standard employee benefits made generally available to all employees (including
stock option agreements outstanding under any stock option plan approved by the Board of Directors
of the Company). None of the employees, officers, directors or, to the Company’s Knowledge,
stockholders of the Company or any members of the immediate family or affiliates of the foregoing,
is indebted to the Company or has any direct or indirect ownership interest in any firm or
corporation with which the Company is affiliated or with which the Company has a business
relationship, or any firm or corporation that competes with the Company, other than (i) passive
investments in publicly traded companies (representing less than one percent (1%) of such company)
and (ii) investments by venture capital funds with which directors of the Company may be affiliated
and service as a board member of a company in connection therewith due to a person’s affiliation
with a venture capital fund or similar institutional investor in such company. No employee,
officer or director or any member of such employee’s, officer’s or director’s immediate family or
affiliate of the foregoing or, to the Company’s Knowledge, stockholder or any member of such
stockholder’s immediate family or affiliate, is, directly or indirectly, interested in any material
contract with the Company (other than such contracts as relate to any such person’s ownership of
capital stock or other securities of the Company). Notwithstanding the foregoing, certain
employees, officers, directors or stockholders of the Company or members of the immediate family or
affiliates of the foregoing may be holders of Member Payment Dependent Notes on the Company’s
lending platform or may be borrowers on the Company’s lending platform.
3.10 Changes. Since the Statement Date, there has not been, to the Company’s Knowledge:
(a) Any change in the assets, liabilities, financial condition, operating results or
operations of the Company from that reflected in the Financial Statements, other than changes in
the ordinary course of business, none of which individually or in the aggregate has had or is
reasonably expected to have a material adverse effect on such assets, liabilities, financial
condition, operating results or operations of the Company;
(b) Any resignation or termination of any officer, key employee or group of employees of the
Company, and the Company is not aware of any impending resignation or termination of any officer,
key employee or group of employees of the Company;
(c) Any material change, except in the ordinary course of business, in the contingent
obligations of the Company by way of guaranty, endorsement, indemnity, warranty or otherwise;
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(d) Any damage, destruction or loss, whether or not covered by insurance, materially and
adversely affecting the properties, business or financial condition of the Company;
(e) Any waiver or compromise by the Company of a material right or of a material debt owed to
it;
(f) Any material change in any compensation arrangement or agreement with any employee,
officer, director or stockholder;
(g) Any labor organization activity related to the Company;
(h) Any sale, assignment, exclusive license or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets;
(i) Any change in any material agreement to which the Company is a party or by which it is
bound, which materially and adversely affects the business, assets, liabilities, financial
condition, operating results or operations of the Company;
(j) Any loans 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 business;
(k) 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;
(l) 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 and
payable;
(m) Any declaration, setting aside or payment or other distribution in respect of any of the
Company’s capital stock, or any direct or indirect redemption, purchase or other acquisition of any
such stock by the Company other than the acquisition of Common Stock by the Company pursuant to
agreements that permit the Company to repurchase such shares at cost (or the lesser of cost or fair
market value) upon termination of services to the Company;
(n) Any receipt of notice that there has been a loss of, or material order cancellation by,
any major customer of the Company;
(o) Any other event or condition of any character that, either individually or cumulatively,
has materially and adversely affected the business, assets, liabilities, financial condition,
operating results or operations of the Company; or
(p) Any arrangement or commitment by the Company to do any of the acts described in subsection
(a) through (p) above.
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3.11 Title to Properties and Assets; Liens, Etc. The Company has good and marketable title to
its properties and assets, in each case subject to no mortgage, pledge, lien, lease, encumbrance or
charge, other than (a) those resulting from taxes which have not yet become delinquent, (b) liens
and encumbrances which do not materially detract from the value of the property subject thereto or
materially impair the operations of the Company, and (c) those that have otherwise arisen in the
ordinary course of business. With respect to the property and assets it leases, the Company is in
compliance with such leases in all material respects and holds a valid leasehold interest free of
any liens, claims or encumbrances, subject to clauses (a) through (c) above.
3.12 Intellectual Property.
(a) The Company owns or possesses sufficient legal rights to all patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights
and processes necessary for its business as now conducted and as presently proposed to be
conducted, without any known infringement of the rights of others. The Schedule of Exceptions
contains a complete list of the Company’s registered patents, trademarks, copyrights and domain
names and pending patent, trademark and copyright applications. There are no outstanding options,
licenses or agreements of any kind relating to the foregoing proprietary rights, 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 and other
proprietary rights and processes of any other person or entity other than such licenses or
agreements arising from the purchase of “off the shelf” software or standard products.
(b) The Company has not received any written communications alleging that the Company has
violated or, by conducting its business as currently conducted or proposed to be conducted, would
violate any of the registered patents, trademarks, service marks, trade names, copyrights, trade
secrets or other proprietary rights of any other person or entity, nor is the Company aware of any
basis therefor.
(c) To the Company’s Knowledge, none 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 their
duties to the Company or that would conflict with the Company’s business as currently conducted or
proposed to be conducted. Neither the execution nor 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 presently conducted, will, to the Company’s Knowledge, conflict with or result in a
breach of the terms, conditions or provisions of, or constitute a default under, any contract,
covenant or instrument under which any of such employees is now obligated.
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(d) Each former and current employee, officer and consultant of the Company has executed a
proprietary information and inventions agreement in the form(s) as delivered to Purchasers’
counsel. No former or current employee, officer or consultant of the Company (i) has excluded
works or inventions made prior to his or her employment with the Company from his or her assignment
of inventions pursuant to such employee, officer or
consultant’s proprietary information and inventions agreement; (ii) is, to the Company’s
Knowledge, in violation of such employee, officer or consultant’s proprietary information and
inventions agreement; or (iii) has failed to affirmatively indicate in such proprietary information
and inventions agreement that no such works or inventions made prior to his or her employment with
the Company exist. The Company does not believe it is or will be necessary to utilize any
inventions, trade secrets or proprietary information of any of its employees made prior to their
employment by the Company, except for inventions, trade secrets or proprietary information that
have been assigned to the Company. Each employee and consultant has assigned to the
Company all intellectual property rights he or she owns that were created during such employee’s or
consultant’s service to the Company or using the Company’s confidential information and are related
to the Company’s business as now conducted and as presently proposed to be conducted.
(e) The Company is not subject to any “open source” or “copyleft” obligations or otherwise
required to make any public disclosure or general availability of source code either used or
developed by the Company.
3.13 Compliance with Other Instruments. The Company is not in violation or default of any
term of its charter documents, each as amended, of any provision of any mortgage, indenture,
contract, lease, agreement, instrument or contract to which it is party or, to its Knowledge, by
which it is bound or of any judgment, decree, order or writ other than any such violation that
would not have a material adverse effect on the Company. The execution, delivery, and performance
of and compliance with this Agreement, and the Related Agreements, and the issuance and sale of the
Shares pursuant hereto and of the Conversion Shares pursuant to the Restated Charter, will not,
with or without the passage of time or giving of notice, result in any such material violation, or
be in conflict with or constitute a material default under any such term or provision, or result in
the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any
permit, license, authorization or approval applicable to the Company, its business or operations or
any of its assets or properties. To the Company’s Knowledge, the Company has not performed any
act, or failed to perform any act, which action or failure to act would result in the Company’s
loss of any material right granted under any license or other agreement required to be disclosed in
the Schedule of Exceptions.
3.14 Litigation. There is no action, suit, proceeding or investigation pending or, to the
Company’s Knowledge, currently threatened in writing against the Company that would reasonably be
expected to result, either individually or in the aggregate, in any material adverse change in the
assets, condition or affairs of the Company, financially or otherwise, or any change in the current
equity ownership of the Company or that questions the validity of this Agreement or the Related
Agreements or the right of the Company to enter into any of such agreements, or to consummate the
transactions contemplated hereby or thereby. The foregoing includes, without limitation, actions
pending or, to the Company’s Knowledge, threatened in writing involving the prior employment of
any of the Company’s employees, their use in connection with the Company’s business of any
information or techniques allegedly proprietary to any of their former employers, or their
obligations under any agreements with prior employers. The Company is not a party or to its
Knowledge 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
which the Company intends to initiate.
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3.15 Tax Returns and Payments. The Company is and always has been a subchapter C corporation.
The Company has timely filed all tax returns (federal, state and local) required to be filed by it
or extensions thereof, and there are in effect no waivers of applicable statutes of limitations
with respect to taxes for any year. Such tax returns are true and correct in all material respects
and have been completed in accordance with applicable law. All taxes shown to be due and payable
on such returns, any assessments imposed, and to the Company’s Knowledge all other taxes due and
payable by the Company on or before the Closing have been paid or will be paid prior to the time
they become delinquent. The Company has timely withheld and paid over to the appropriate
governmental authorities all amounts required to be withheld and paid over with respect to its
employees and other third parties and is not liable in arrears of wages, taxes, penalties or other
sums for failure to comply with any of the foregoing. The Company has not been advised (a) that
any of its returns, federal, state or other, have been or are being audited as of the date hereof,
or (b) of any deficiency in assessment or proposed judgment to its federal, state or other taxes.
The Company has no Knowledge of any liability of any tax to be imposed upon its properties or
assets as of the date of this Agreement that is not adequately provided for.
3.16 Employees.
(a) The Company has no collective bargaining agreements with any of its employees. There is
no labor union organizing activity pending or, to the Company’s Knowledge, threatened with respect
to the Company.
(b) The Company is not a party to or bound by any currently effective employment contract,
deferred compensation arrangement, bonus plan, incentive plan, profit sharing plan, retirement
agreement or other employee compensation plan or agreement.
(c) No employee of the Company has been granted the right to continued employment by the
Company or to any material compensation following termination of employment with the Company.
(d) To the Company’s Knowledge, no employee of the Company, nor any consultant with whom the
Company has contracted, is in violation of any term of any employment contract, proprietary
information agreement or any other agreement relating to the right of any such individual to be
employed by, or to contract with, the Company; and to the Company’s Knowledge the continued
employment by the Company of its present employees, and the performance of the Company’s contracts
with its independent contractors, will not result in any such violation. The Company has not
received any written notice alleging that any such violation has occurred.
(e) Each former employee of the Company whose employment was terminated by the Company has
entered into an agreement with the Company providing for the full release of any claims against the
Company or any related party arising out of such employment.
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(f) The Company is not delinquent in payments to any of its employees, consultants, or
independent contractors for any wages, salaries, commissions, bonuses, or other direct compensation
for any service performed for it or amounts required to be reimbursed to such employees,
consultants, or independent contractors. 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, including those related to wages, hours, worker classification, and collective
bargaining.
3.17 Obligations of Management. Each officer and key employee of the Company is currently
devoting substantially all of his or her business time to the conduct of the business of the
Company. To the Company’s Knowledge, no officer or key employee of the Company is planning to work
less than full time at the Company in the future. No officer or key employee is currently working
or, to the Company’s Knowledge, plans to work for a competitive enterprise, whether or not such
officer or key employee is or will be compensated by such enterprise.
3.18 Registration Rights and Voting Rights. Except as required pursuant to the Investor
Rights Agreement, the Company is presently not under any obligation, and has not granted any
rights, to register under the Securities Act any of the Company’s presently outstanding securities
or any of its securities that may hereafter be issued. To the Company’s Knowledge, except as
contemplated in the Voting Agreement, no stockholder of the Company has entered into any agreement
with respect to the voting of equity securities of the Company.
3.19 Compliance with Laws; Permits. The Company is not in violation of any applicable
statute, rule, regulation, order or restriction of any domestic or foreign government or any
instrumentality or agency thereof in respect of the conduct of its business or the ownership of its
properties, which violation would materially and adversely affect the business, assets,
liabilities, financial condition, operating results or operations of the Company. No governmental
orders, permissions, consents, approvals or authorizations are required to be obtained and no
registrations or declarations are required to be filed in connection with the execution and
delivery of this Agreement, the issuance of the Shares or the Conversion Shares, or the
consummation of any other transaction contemplated by this Agreement, except such as have been duly
and validly obtained or filed, or with respect to any filings that must be made after the Closing,
as will be filed in a timely manner. The Company has all franchises, permits 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, assets, properties or financial condition of
the Company and believes it can obtain, without undue burden or expense, any similar authority for
the conduct of its business as planned to be conducted. The Company has all licenses (including
without limitation lending licenses in each state) required for the conduct of its business as now
conducted and as presently proposed to be conducted. The Company is not in default in any material
respect under any of such franchises, permits, licenses or other similar authority.
3.20 Offering Valid. Assuming the accuracy of the representations and warranties of
Purchasers contained in Section 4.2 hereof, the offer, sale and issuance of the Shares and the
Conversion Shares will be exempt from the registration requirements of the Securities Act, and will
have been registered or qualified (or are exempt from registration and
qualification) under the registration, permit or qualification requirements of all applicable
state securities laws. Neither the Company nor any agent on its behalf has solicited any offers to
sell or has offered to sell all or any part of the Shares to any person or persons so as to bring
the sale of such Shares by the Company within the registration provisions of the Securities Act or
any state securities laws.
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3.21 Full Disclosure. The Company has provided Purchasers with all information requested by
the Purchasers in connection with their decision to purchase the Shares. Neither this Agreement,
the exhibits hereto, the Related Agreements nor any other document delivered by the Company to
Purchasers or their attorneys or agents in connection herewith or therewith at the Closing or with
the transactions contemplated hereby or thereby, contain any untrue statement of a material fact
nor omit 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.
3.22 Corporate Documents. The Restated Charter and Bylaws of the Company are in the form
provided to Purchasers or Purchasers’ counsel. The minute books of the Company made available to
Purchasers contain a complete and accurate summary of all meetings of directors and stockholders
and all actions by written consent without a meeting by the directors and stockholders since the
time of incorporation and accurately reflects in all material respects all actions by the directors
(and any committees of directors) and stockholders with respect to all transactions referred to in
such minutes.
3.23 Real Property Holding Corporation. The Company is not a real property holding
corporation within the meaning of Code Section 897(c)(2) and any regulations promulgated
thereunder.
3.24 Insurance. The Company has general commercial, product liability, director and officer
liability, fire and casualty insurance policies with coverage customary for companies similarly
situated to the Company.
3.25 Executive Officers. No executive officer or person nominated to become an executive
officer of the Company (i) to the Company’s Knowledge, has been convicted in a criminal proceeding
or is a named subject of a pending criminal proceeding (excluding minor traffic violations) or (ii)
is or has been subject to any judgment or order of, or is the subject of any pending civil or
administrative action by the Securities and Exchange Commission or any related self-regulatory
organization.
3.26 83(b) Elections. To the Company’s Knowledge, all individuals who have purchased shares
of the Company’s Common Stock under agreements that at the time of purchase provided for the
vesting of such shares have timely filed elections under Section 83(b) of the Code and any
analogous provisions of applicable state tax laws.
3.27 Employee Benefit Plans. The Company is in substantial compliance with its “employee
benefits plans” as defined in the Employee Retirement Income Security Act of 1974, as amended.
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3.28 Investment Company. The Company is not an “investment company,” as such term is defined
in the Investment Company Act of 1940, as amended (the “Investment Company Act”).
3.29 Internal Control over Financial Reporting; Disclosure Controls and Procedures.
(a) The Company maintains a system of internal control over financial reporting (as such term
is defined in Rule 13a-15(f) under the Exchange Act) that complies with the requirements of the
Exchange Act and has been designed by the Company’s principal executive officer and principal
financial officer, or under their supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. Except as disclosed in the
Schedule of Exceptions, the Company’s internal control over financial reporting is effective and
the Company is not aware of any material weaknesses in its internal control over financial
reporting.
(b) Since the date of the filing of the Company’s Form 10-Q for the quarterly period ended
December 31, 2009, there has been no change in the Company’s internal control over financial
reporting that has materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.
(c) The Company maintains disclosure controls and procedures (as such term is defined in Rule
13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such
disclosure controls and procedures have been designed to ensure that material information relating
to the Company and its subsidiaries is made known to the Company’s principal executive officer and
principal financial officer by others within those entities in a manner to allow timely decisions
regarding required disclosure; and such disclosure controls and procedures are effective.
4. Representations and Warranties of Purchasers.
Each Purchaser hereby represents and warrants to the Company, severally and not jointly, as
follows (provided that such representations and warranties do not lessen or obviate the
representations and warranties of the Company set forth in this Agreement or the right of each
Purchaser to rely thereon):
4.1 Requisite Power and Authority. Purchaser has all necessary power and authority to execute
and deliver this Agreement and the Related Agreements and to carry out its obligations hereunder
and thereunder. All action on Purchaser’s part required for the lawful execution and delivery of
this Agreement and the Related Agreements has been taken. Upon Purchaser’s execution and delivery,
this Agreement and the Related Agreements will be valid and binding obligations of Purchaser,
enforceable in accordance with their terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application affecting enforcement
of creditors’ rights, (b) as limited by general principles of equity that restrict the availability
of equitable remedies, and (c) to the extent that the
enforceability of the indemnification provisions of the Investor Rights Agreement may be
limited by applicable laws.
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4.2 Investment Representations. Purchaser understands that neither the Shares nor the
Conversion Shares have been registered under the Securities Act. Purchaser also understands that
the Shares are being offered and sold pursuant to an exemption from registration contained in the
Securities Act based in part upon Purchaser’s representations contained in this Agreement.
Purchaser hereby represents and warrants as follows:
(a) Purchaser Bears Economic Risk. Purchaser has substantial experience in evaluating and
investing in private placement transactions of securities in companies similar to the Company so
that it is capable of evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. Purchaser must bear the economic risk of this investment
indefinitely unless the Shares (or the Conversion Shares) are registered pursuant to the Securities
Act, or an exemption from registration is available. Purchaser understands that the Company has no
present intention of registering the Shares, the Conversion Shares or any shares of its Common
Stock. Purchaser also understands that there is no assurance that any exemption from registration
under the Securities Act will be available and that, even if available, such exemption may not
allow Purchaser to transfer all or any portion of the Shares or the Conversion Shares under the
circumstances, in the amounts or at the times Purchaser might propose.
(b) Acquisition for Own Account. Purchaser is acquiring the Shares and the Conversion Shares
for Purchaser’s own account for investment only, and not with a view towards their distribution.
(c) Purchaser Can Protect Its Interest. Purchaser represents that by reason of its, or of its
management’s, business or financial experience, Purchaser has the capacity to protect its own
interests in connection with the transactions contemplated in this Agreement, and the Related
Agreements. Further, Purchaser is aware of no publication of any advertisement in connection with
the transactions contemplated by this Agreement.
(d) Accredited Investor. Purchaser represents that it is an “accredited investor” within the
meaning of Regulation D under the Securities Act.
(e) Company Information. Purchaser has had an opportunity to discuss the Company’s business,
management and financial affairs with directors, officers and management of the Company and has had
the opportunity to review the Company’s operations and facilities. Purchaser has also had the
opportunity to ask questions of and receive answers from, the Company and its management regarding
the terms and conditions of the purchase of the Shares and the operation of the Company’s business
as currently conducted. Purchaser further acknowledges that Purchaser or Purchaser’s counsel has
had access to the Company’s SEC Reports.
15
(f) Rule 144. Purchaser acknowledges and agrees that the Shares, and, if issued, the
Conversion Shares are “restricted securities” as defined in Rule 144 promulgated under the
Securities Act as in effect from time to time and must be held indefinitely
unless they are subsequently registered under the Securities Act or an exemption from such
registration is available. Purchaser has been advised or is aware of the provisions of Rule 144,
which permits limited resale of shares purchased in a private placement subject to the satisfaction
of certain conditions, including, among other things: the availability of certain current public
information about the Company, the resale occurring following the required holding period under
Rule 144 and the number of shares being sold during any three-month period not exceeding specified
limitations.
(g) Residence. If Purchaser is an individual, then Purchaser resides in the state or province
identified in the address of Purchaser set forth on Exhibit A; if Purchaser is a
partnership, corporation, limited liability company or other entity, then the office or offices of
Purchaser in which its investment decision was made is located at the address or addresses of
Purchaser set forth on Exhibit A.
(h) Foreign Investors. If Purchaser is not a United States person (as defined by Section
7701(a)(30) of the Code), 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
Shares or any use of this Agreement, including (i) the legal requirements within its jurisdiction
for the purchase of the Shares, (ii) any foreign exchange restrictions applicable to such purchase,
(iii) any government 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 Shares. The Company’s offer and sale and Purchaser’s subscription and payment for
and continued beneficial ownership of the Shares will not violate any applicable securities or
other laws of Purchaser’s jurisdiction.
4.3 Transfer Restrictions. Each Purchaser acknowledges and agrees that the Shares and, if
issued, the Conversion Shares are subject to restrictions on transfer as set forth in the Investor
Rights Agreement.
5. Conditions To Closing.
5.1 Conditions to Purchasers’ Obligations at the Closing. Each Purchaser’s obligation to
purchase Shares at the Closing are subject to the satisfaction, at or prior to the Closing Date, of
the following conditions, unless otherwise waived by Purchaser:
(a) Representations and Warranties True; Performance of Obligations. The representations and
warranties made by the Company in Section 3 hereof shall be true and correct in all material
respects as of the Closing Date with the same force and effect as if they had been made as of the
Closing Date, except for representations made as of a specific date, which shall be true and
correct in all material respects as of such date, and the Company shall have performed or complied
with all obligations and conditions herein required to be performed or complied with by it on or
prior to the Closing.
(b) Legal Investment. On the Closing Date, the sale and issuance of the Shares and the
proposed issuance of the Conversion Shares shall be legally permitted by all laws and regulations
to which Purchasers and the Company are subject.
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(c) Consents, Permits, and Waivers. The Company shall have obtained any and all consents,
permits and waivers necessary or appropriate for consummation of the transactions contemplated by
this Agreement and the Related Agreements (including any filing required to comply with the Xxxx
Xxxxx Xxxxxx Antitrust Improvements Act of 1976, as amended) except for such as may be properly
obtained subsequent to the Closing.
(d) Filing of Restated Charter. The Restated Charter shall have been duly authorized,
executed, filed with and accepted by the Secretary of State of the State of Delaware and shall
continue to be in full force and effect as of the Closing Date.
(e) Corporate Documents. The Company shall have delivered to Purchasers or their counsel
copies of all corporate documents of the Company as Purchasers shall reasonably request, and such
Purchasers shall have completed their due diligence to their satisfaction.
(f) Reservation of Conversion Shares. The Conversion Shares issuable upon conversion of the
Shares shall have been duly authorized and reserved for issuance upon such conversion.
(g) Compliance Certificate. The Company shall have delivered to Purchasers a Compliance
Certificate, executed by the President of the Company, dated the Closing Date, to the effect that
the conditions specified in subsections (a), (c), (d) and (f) of this Section 5.1 have been
satisfied.
(h) Secretary’s Certificate. Purchasers shall have received from the Company’s Secretary, a
certificate having attached thereto good standing certificates (including tax good standing) with
respect to the Company from the applicable authority(ies) in Delaware and in California, dated
within five calendar days before the Closing.
(i) Investor Rights Agreement. The Investor Rights Agreement shall have been executed and
delivered by the Company and each Investor (as such term is defined therein).
(j) Co-Sale Agreement. The Co-Sale Agreement shall have been executed and delivered by the
Company, the Key Holders and the Investors (as such terms are defined therein).
(k) Voting Agreement. The Voting Agreement shall have been executed and delivered by the
Company, the Key Holders, the Investors and the Designated Common Stockholders (as such terms are
defined therein).
(l) Legal Opinion. Purchasers shall have received from legal counsel to the Company an opinion
addressed to them, dated as of the Closing Date, in substantially the form attached hereto as
Exhibit G.
(m) Proceedings and Documents. All corporate and other proceedings in connection with the
transactions contemplated at the Closing hereby and all documents and instruments incident to such
transactions shall be reasonably satisfactory in
substance and form to Purchasers and their special counsel, and Purchasers and their special
counsel shall have received all such counterpart originals or certified or other copies of such
documents as they may reasonably request.
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(n) Proprietary Information and Inventions Agreement. The Company and each of its current and
former officers, employees and consultants shall have entered into the Company’s standard form of
Proprietary Information and Inventions Agreement, in a form reasonably acceptable to Purchasers,
with no exceptions noted in such agreements.
(o) Increase in Option Pool. The Board of Directors and the Company’s stockholders shall have
approved an increase in the number of shares of Common Stock authorized for issuance under the Plan
by 3,463,170 shares of Common stock such that a total of 12,559,948 shares of Common Stock shall be
authorized for issuance under the Plan as of the date hereof.
(p) Management Rights Letter. The Company and USV shall have entered into a Management Rights
Letter in substantially the form attached hereto as Exhibit H.
(q) Attorneys’ Fees. The Company shall pay the fees set forth in Section 6.10 of this
Agreement.
5.2 Conditions to Obligations of the Company. The Company’s obligation to issue and sell the
Shares at each Closing is subject to the satisfaction, on or prior to such Closing, of the
following conditions:
(a) Representations and Warranties True. The representations and warranties in Section 4 made
by those Purchasers acquiring Shares hereby shall be true and correct at the date of the Closing,
with the same force and effect as if they had been made on and as of said date.
(b) Performance of Obligations. The Purchasers acquiring Shares hereby shall have performed
and complied with all agreements and conditions herein required to be performed or complied with by
such Purchasers on or before the Closing.
(c) Filing of Restated Charter. The Restated Charter shall have been duly authorized,
executed, filed with and accepted by, the Secretary of State of the State of Delaware and shall
continue to be in full force and effect as of the Closing Date.
(d) Voting Agreement. The Voting Agreement shall have been executed and delivered by the
Company, the Key Holders, the Investors and the Designated Common Stockholders (as such terms are
defined therein).
(e) Consents, Permits, and Waivers. The Company shall have obtained any and all consents,
permits and waivers necessary or appropriate for consummation of the transactions contemplated by
this Agreement and the Related Agreements (including any filing required to comply with the Xxxx
Xxxxx Xxxxxx Antitrust Improvements Act of 1976, as amended, and except for such as may be properly
obtained subsequent to the Closing).
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6. Miscellaneous.
6.1 Governing Law. This Agreement shall be governed by and construed under the laws of the
State of California in all respects as such laws are applied to agreements among California
residents entered into and performed entirely within California, without giving effect to conflict
of law principles thereof. The parties agree that any action brought by either party under or in
relation to this Agreement, including without limitation to interpret or enforce any provision of
this Agreement, shall be brought in, and each party agrees to and does hereby submit to the
jurisdiction and venue of, any state or federal court located in the County of Santa Clara,
California.
6.2 Survival; Limitation of Liability. The representations, warranties, covenants and
agreements made herein shall survive the closing of the transactions contemplated hereby; provided,
however, that in the event a Purchaser receives written notice of a breach of any representation,
warranty, covenant or agreement made herein by the Company, such Purchaser shall have two (2) years
after the date of such notice to bring a claim against the Company in connection with such breach;
provided further, however, that in the event that such Purchaser obtains knowledge of any breach of
any representation, warranty, covenant or agreement made herein by the Company after the Closing,
such Purchaser shall promptly provide notice to the Company of such breach. All statements as to
factual matters contained in any certificate or other instrument delivered by or on behalf of the
Company pursuant hereto in connection with the transactions contemplated hereby shall be deemed to
be representations and warranties by the Company hereunder solely as of the date of such
certificate or instrument. The representations, warranties, covenants and obligations of the
Company, and the rights and remedies that may be exercised by the Purchasers, shall not be limited
or otherwise affected by or as a result of any information furnished to, or any investigation made
by or knowledge of, any of the Purchasers or any of their representatives.
6.3 Successors and Assigns. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon the parties hereto and their respective
successors, assigns, heirs, executors and administrators and shall inure to the benefit of and be
enforceable by each person who shall be a holder of the Shares from time to time; provided,
however, that prior to the receipt by the Company of adequate written notice of the transfer of any
Shares specifying the full name and address of the transferee, the Company may deem and treat the
person listed as the holder of such Shares in its records as the absolute owner and holder of such
Shares for all purposes.
6.4 Entire Agreement. This Agreement, the exhibits and schedules hereto, the Related
Agreements and the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects hereof, and no party
shall be liable for or bound to any other in any manner by any oral or written representations,
warranties, covenants and agreements except as specifically set forth herein and therein.
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6.5 Severability. In the event one or more of the provisions of this Agreement should, for
any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. In such event, the parties shall negotiate, in good
faith, a legal, valid and enforceable substitute provision which most nearly effects, to the extent
legally possible, the same economic, business or other purposes of the invalid, illegal or
unenforceable provision. A court of competent jurisdiction may replace such invalid, illegal or
unenforceable provision of this Agreement with a valid and enforceable provision that will achieve,
to the extent possible, the same economic, business and other purposes of the invalid, illegal or
unenforceable provision.
6.6 Amendment and Waiver. This Agreement may be amended or modified, and the obligations of
the Company and the rights of the holders of the Shares and the Conversion Shares under this
Agreement may be waived, only upon the written consent of the Company and holders of at least
sixty-five percent (65%) of the Shares purchased pursuant to this Agreement (treated as if
converted and including any Conversion Shares into which the then outstanding Shares have been
converted that have not been sold to the public).
6.7 Delays or Omissions. It is agreed that no delay or omission to exercise any right, power
or remedy accruing to any party, upon any breach, default or noncompliance by another party under
this Agreement, the Related Agreements or the Restated Charter, shall impair any such right, power
or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such
breach, default or noncompliance, or any acquiescence therein, or of or in any similar breach,
default or noncompliance thereafter occurring nor shall any waiver of any single breach or default
be deemed a waiver of any other breach or default theretofore or thereafter occurring. It is
further agreed that any waiver, permit, consent or approval of any kind or character on any party’s
part of any breach, default or noncompliance under this Agreement, the Related Agreements or the
Restated Charter or any waiver on such party’s part of any provisions or conditions of this
Agreement, the Related Agreements or the Restated Charter must be in writing and shall be effective
only to the extent specifically set forth in such writing. All remedies, either under this
Agreement, the Related Agreements or the Restated Charter or otherwise shall be cumulative and not
alternative.
6.8 Notices. All notices required or permitted hereunder shall be in writing and shall be
deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by
confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if
not, then on the next business day, (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with written verification of
receipt. All communications shall be sent to the Company at 00 Xxxxxxxxx, Xxxxx 000 Xxx Xxxxxxxxx,
XX 00000, Attention: General Counsel and a copy (which shall not constitute notice) shall also be
sent to Fenwick & West, LLP, Silicon Valley Center, 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx Xxxx,
Xxxxxxxxxx 00000 Attention: Xxxxxxx Xxxxxxxxx Xxxx and to each Purchaser at the address set forth
on Exhibit A attached hereto or at such other address, facsimile number or electronic mail
address as the Company or Purchaser may designate by ten (10) days advance written notice to the
other parties hereto. For purposes of this Section 6.8, a “business day” means a weekday on which
banks are open for general banking business in San Francisco, California.
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6.9 Expenses. Each party shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this Agreement; provided, however, that the
Company shall, at the Closing, reimburse the reasonable fees of and expenses of Xxxxxxxxx Xxxxxxx
Xxxxxx Xxxxxxxxxx Xxxxxxxx & Xxxxxxxxx, LLP not to exceed Forty Thousand Dollars ($40,000),
incurred in connection with the negotiation, execution, delivery and performance of this Agreement.
6.10 Attorneys’ Fees. In the event that any suit or action is instituted under or in relation
to this Agreement, including without limitation to enforce any provision in this Agreement, the
prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of attorneys and
accountants, which shall include, without limitation, all fees, costs and expenses of appeals.
6.11 Titles and Subtitles. The titles of the sections and subsections of this Agreement are
for convenience of reference only and are not to be considered in construing this Agreement.
6.12 Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one instrument.
6.13 Broker’s Fees. Each party hereto represents and warrants that no agent, broker,
investment banker, person or firm acting on behalf of or under the authority of such party hereto
is or will be entitled to any broker’s or finder’s fee or any other commission directly or
indirectly in connection with the transactions contemplated herein. Each party hereto further
agrees to indemnify each other party for any claims, losses or expenses incurred by such other
party as a result of the representation in this Section 6.13 being untrue.
6.14 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 to any other Purchaser for any action heretofore or hereafter taken or
omitted to be taken by any of them in connection with the purchase of the Shares and Conversion
Shares.
6.15 Pronouns. All pronouns contained herein, and any variations thereof, shall be deemed to
refer to the masculine, feminine or neutral, singular or plural, as to the identity of the parties
hereto may require.
6.16 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 OR IN THE ABSENCE OF AN EXEMPTION FROM SUCH QUALIFICATION IS UNLAWFUL. PRIOR TO
ACCEPTANCE OF SUCH CONSIDERATION BY THE COMPANY, THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION FROM SUCH
QUALIFICATION BEING AVAILABLE.
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6.17 Waiver of Right of First Refusal. The Purchasers hereby waive any rights to notice of,
and hereby waive any rights of first refusal contained in (i) Section 4 of that certain Amended
and Restated Investors Rights Agreement dated as of March 13, 2009 by and among the Company and
certain investors or (ii) in the case of Xxxxxx Xxxxxxxxx, his rights of first refusal contained in
that certain Stock Subscription Agreement dated October 15, 2006, as amended to date, in each case,
as such rights would apply to the issuance of the Shares under this Agreement and any Conversion
Shares, except to the extent that such Purchasers are purchasing Shares hereunder as set forth in
Exhibit A hereto.
6.18 Waiver of Conflict of Interest. Each Purchaser and the Company is aware that Fenwick &
West LLP (“F&W”) may have an investment in certain of the Purchasers or may have previously
performed and may continue to perform certain legal services for certain of the Purchasers in
matters unrelated to F&W’s representation of the Company. In connection with its Purchaser
representation, F&W may have obtained confidential information of such Purchasers that could be
material to F&W’s representation of the Company in connection with negotiation, execution and
performance of this Agreement. In addition, an affiliate of F&W, may be investing as a Purchaser
under the terms of this Agreement. By signing this Agreement, each Purchaser and the Company
hereby (a) acknowledges that the terms of this Agreement were negotiated between the Purchasers and
the Company, (b) waives any potential conflict of interest arising out of such representation
(including any future representation of such parties) or such possession of confidential
information and (c) consents to the investment by such affiliate of F&W. Each Purchaser and the
Company further represents that it has had the opportunity to be, or has been, represented by
independent counsel in giving the waivers contained in this Section 6.18.
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In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.
COMPANY: |
LendingClub Corporation |
Signature: /s/ Xxxxxx Xxxxxxxxx |
Name: Xxxxxx Xxxxxxxxx |
Title: President & CEO |
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In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.
| PURCHASERS: | ||||
| UNION SQUARE VENTURES OPPORTUNITY FUND, L.P., | ||||
| a Delaware limited partnership | ||||
By:
|
Union Square Opportunity GP, L.L.C., its general partner and a Delaware limited liability company |
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By:
|
/s/ Xxxx Xxxxxxxx
|
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| Title: Managing Member | ||||
Address:
|
000 Xxxxxxxx, 00xx Xxxxx Xxx Xxxx, Xxx Xxxx 00000 |
24
In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.
| PURCHASERS: | ||||
| Foundation Capital VI, L.P. | ||||
| By: Foundation Capital Management Co. VI, LLC, its Manager | ||||
By:
|
/s/ Xxxxxxx Xxxxxx
|
|||
| Title: General Partner | ||||
Address:
|
000 Xxxxxxxxxxx Xxxx Xxxxx Xxxx, XX 00000 |
| Foundation Capital VI Principals Fund, LLC | ||||
| By: Foundation Capital Management Co. VI, LLC, its Manager | ||||
By:
|
/s/ Xxxxxxx Xxxxxx
|
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| Title: General Partner | ||||
Address:
|
000 Xxxxxxxxxxx Xxxx Xxxxx Xxxx, XX 00000 |
25
In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.
| PURCHASER: | ||||
| Xxxxxxxxxxxx Ventures IX, L.P. | ||||
| By: Xxxxxxxxxxxx Management Partners IX, LLC, Its Managing Partner |
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| Signature: /s/ Xxxxxxx Xxxx | ||||
Print Name: |
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Title: Member
|
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Address:
|
0000 Xxxx Xxxx Xxxx, Xxx. 000 Xxxxx Xxxx, XX 00000 |
26
In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.
| PURCHASER: | ||||
| Norwest Venture Partners X, LP | ||||
| by: genesis vc partners x, llc, its general partner | ||||
| Signature: /s/ Xxxx Xxxxx | ||||
Print Name: |
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Title: General Partner
|
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Address:
|
000 Xxxxxxxxxx Xxxxxx, Xxx. 000 Xxxx Xxxx, XX 00000 |
27
In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.
| PURCHASER: | ||||
| Canaan VII L.P. | ||||
| By: Canaan Partners VII LLC | ||||
| Signature: /s/ Xxxxxx Xxxxxxx | ||||
Print Name: |
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Title: |
||||
Address:
|
000 Xxxxxxxxx Xxxxxx, Xxxxx 000 Xxxxxxxx, XX 00000 |
28
In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.
| PURCHASER: | ||||
| Xxxxxx Xxxxxxx | ||||
| Signature: /s/ Xxxxxx Xxxxxxx | ||||
Print Name: |
||||
Title: |
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Address:
|
c/o Canaan Partners 000 Xxxxxxxxx Xxxxxx, Xxxxx 000 Xxxxxxxx, XX 00000 |
29
In Witness Whereof, the parties hereto have executed the Series D Preferred Stock
Purchase Agreement as of the date set forth in the first paragraph hereof.
| PURCHASERS: | ||||
| Bay Partners XI, L.P. |
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| By Bay Management Company XI, LLC, General Partner | ||||
Signature: |
/s/ Xxxxx Xxxxxxxxx | |||
Print Name: |
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Title: |
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| Bay Partners XI Parallel Fund, L.P. |
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| By Bay Management Company XI, LLC, General Partner | ||||
Signature: |
/s/ Xxxxx Xxxxxxxxx | |||
Print Name: |
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Title: |
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Address:
|
000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 000 Xxxx Xxxx, XX 00000 |
30
List Of Exhibits
Schedule of Purchasers |
Exhibit A | |
Amended and Restated Certificate of Incorporation |
Exhibit B | |
Schedule of Exceptions |
Exhibit C | |
Amended and Restated Investor Rights Agreement |
Exhibit D | |
Amended and Restated Co-Sale Agreement |
Exhibit E | |
Amended and Restated Voting Agreement |
Exhibit F | |
Form of Legal Opinion |
Exhibit G | |
Form of Management Rights Letter |
Exhibit H |
31
Exhibit A
SCHEDULE OF PURCHASERS
| Series D | Aggregate | |||||||
| Name and Address | Preferred Stock Shares | Purchase Price | ||||||
Union Square Ventures Opportunity Fund, L.P. 000 Xxxxxxxx, 00xx Xxxxx Xxx Xxxx, Xxx Xxxx 00000 |
3,865,182 | $ | 13,749,998.45 | |||||
Foundation Capital VI, L.P. 000 Xxxxxxxxxxx Xxxx Xxxxx Xxxx, XX 00000 |
742,897 | $ | 2,642,781.79 | |||||
Foundation Capital VI Principals Fund, LLC 000 Xxxxxxxxxxx Xxxx Xxxxx Xxxx, XX 00000 |
8,301 | $ | 29,529.98 | |||||
Xxxxxxxxxxxx Ventures IX, L.P. 0000 Xxxx Xxxx Xxxx, Xxxxx 000 Xxxxx Xxxx, XX 00000 |
421,656 | $ | 1,499,999.06 | |||||
Norwest Venture Partners X, LP 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000 Xxxx Xxxx, XX 00000 |
908,816 | $ | 3,233,022.04 | |||||
Canaan VII L.P. 000 Xxxxxxxxx Xxxxxx, Xxxxx 000 Xxxxxxxx, XX 00000 |
950,011 | $ | 3,379,569.14 | |||||
Bay Partners XI, L.P. 000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 000 Xxxx Xxxx, XX 00000 |
120,137 | $ | 427,375.37 | |||||
Bay Partners XI Parallel Fund, L.P. 000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 000 Xxxx Xxxx, XX 00000 |
604 | $ | 2,148.67 | |||||
Xxxxxx Xxxxxxx c/o Canaan Partners 000 Xxxxxxxxx Xxxxxx, Xxxxx 000 Xxxxxxxx, XX 00000 |
10,000 | $ | 35,574.00 | |||||
Total: |
7,027,604 | $ | 24,999,998.50 | |||||
Exhibit B
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
Exhibit C
SCHEDULE OF EXCEPTIONS
Exhibit D
AMENDED AND RESTATED
INVESTORS’ RIGHTS AGREEMENT
Exhibit E
AMENDED AND RESTATED
CO-SALE AGREEMENT
Exhibit F
AMENDED AND RESTATED
VOTING AGREEMENT
Exhibit G
FORM OF LEGAL OPINION
Exhibit H
FORM OF MANAGEMENT RIGHTS LETTER
