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EXHIBIT 4.03
NIKU CORPORATION
SERIES F PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES F PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is
made as of the 23rd day of January, 1998, by and among 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 F Preferred Stock. Subject to
the terms and conditions of this Agreement, Purchaser agrees to purchase at the
Closing, and the Company agrees to sell and issue to Purchaser at the Closing,
that number of shares of the Company's Series F Preferred Stock set forth
opposite Purchaser's name on Exhibit A hereto (the "Shares") for the purchase
price set forth thereon (the "Purchase Price").
1.2 Filing of Restated Certificate. The Company shall adopt and
file with the Secretary of State of Delaware on or before the Closing (as
defined below) an Amended and Restated Certificate of Incorporation (the
"Restated Certificate").
1.3 Closing Date. The closing of the purchase and sale of the
Shares hereunder shall be held at the offices of Venture Law Group, 0000 Xxxx
Xxxx Xxxx, Xxxxx Xxxx, Xxxxxxxxxx at 5:00 p.m., local time, on January 23, 1998
(the "Closing") or at such other time and place as shall be mutually agreed upon
by the Company and Purchaser.
2. Representations and Warranties of the Company. Except as set forth on
the Schedule of Exceptions attached as Exhibit C hereto (the "Schedule of
Exceptions"), the Company hereby represents and warrants to 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 Closing, of:
(i) Preferred Stock. Ten million (10,000,000)
shares of Preferred Stock (the "Preferred Stock"), all of which have been
designated Series F Preferred Stock (the "Series F Preferred Stock"), none of
which is outstanding prior to the Closing, and all
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of which will be sold pursuant to this Agreement. The rights, privileges and
preferences of the Series F Preferred Stock will be as stated in the Restated
Certificate.
(ii) Common Stock. Fifty million (50,000,000)
shares of Common Stock (the "Common Stock"), of which four million (4,500,000)
shares are issued and outstanding (and an additional 450,000 shares which have
been approved but not issued). The outstanding shares of Common Stock are all
duly and validly authorized and issued, fully paid and nonassessable. In
addition, the Company has reserved five million (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 1,800,000 shares have been granted.
(b) Except for (i) the conversion privileges of the
Series F Preferred Stock to be issued under this Agreement and (ii) the options
described in Section 2.2(a)(ii) above and (iii) 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. The Company is not a party or subject to any agreement or
understanding and, to the best of the Company's knowledge, there is no agreement
or understanding between any other persons or entities which affects or relates
to the voting or giving of written consents with respect to any security or by a
director of the Company.
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 Investor Rights
Agreement in substantially the form attached hereto as Exhibit D (the "Investor
Rights Agreement"), 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 F Preferred Stock being sold hereunder and the
Common Stock issuable upon conversion of the Series F Preferred Stock has been
taken or will be taken prior to the Closing, and this Agreement and the Investor
Rights Agreement 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 Investor Rights Agreement
may be limited by applicable federal or state securities laws. The Series F
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
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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 this Agreement or the Investor Rights Agreement, 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.
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 the best of its knowledge, holds a valid
leasehold interest free of any liens, claims or encumbrances.
2.9 Financial Statements. The Company has not prepared any
balance sheet, income statement, statement of operations, statement of cash flow
and stockholders' equity or other financial statement. The Company has not
engaged in any business, generated any revenues, entered into or become bound by
any contracts, agreements or commitments of any kind involving obligations of
the Company in excess of ten thousand dollars ($10,000). The Company does not
have any obligations or liabilities (whether accrued, absolute, contingent,
liquidated, unliquidated or otherwise, whether due or to become due) in excess
of an aggregate of ten thousand dollars ($10,000) arising out of transactions
entered into at or prior to the Closing, or arising out of any statement of
facts existing at or prior to the Closing.
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,
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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 and Voting Rights. Except as
contemplated in the Investor Rights Agreement, the Company has not granted or
agreed to grant any registration rights, including piggyback rights, to any
person or entity. To the Company's knowledge, no shareholders of the Company
have entered into any agreements with respect to the voting of capital shares of
the Company.
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 this Agreement and the Investor Rights Agreement and each such
agreement constitutes a valid and legally binding obligation of such Purchaser,
enforceable in accordance with its terms.
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 F 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 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 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.
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 F 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 F 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 F
Preferred Stock. If other than an individual, such Purchaser also represents it
has not been organized solely for the purpose of acquiring the Series F
Preferred Stock.
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3.5 Accredited Investor. Such Purchaser is an "accredited
investor" within the meaning of Securities and Exchange Commission ("SEC") Rule
501 of Regulation D, as presently in effect.
3.6 Restricted Securities. Such 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 F 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, and until the transferee has agreed
in writing for the benefit of the Company to be bound by this Section 3 and
Section 6 of this Agreement and Section 1.9 of the Investor Rights Agreement,
and:
(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.
3.8 Legends. It is understood that the certificate(s) evidencing
the Shares shall bear the following legends:
"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."
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"The shares represented by this certificate are subject
to the market stand-off provisions contained in the
Corporation's Investor Rights Agreement, dated January 23, 1998.
A copy of such agreement may be obtained without charge upon
written request to the Corporation at its principal place of
business."
4. Conditions of Purchasers' Obligations at Closing. The obligations of
Purchaser to purchase Shares at the 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 Closing with the same effect as though such
representations and warranties had been made on and as of the 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 Closing.
4.3 Qualifications. All authorizations, approvals, or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale
of the Securities will have been obtained by the Company as of the Closing.
4.4 Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to Purchaser.
4.5 Investor Rights Agreement. The Company and Purchaser shall
have entered into the Investor Rights Agreement.
4.6 Restated Certificate. The Restated Certificate shall have
been filed with the Delaware Secretary of State.
5. Conditions of the Company's Obligations at Closing. The obligations
of the Company to sell and issue the Shares at the 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 Closing with the same effect as though such
representations and warranties had been made on and as of the 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 pursuant to this Agreement shall be duly obtained and
effective as of the Closing.
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5.3 Investor Rights Agreement. The Company and Purchaser shall
have entered into the Investor Rights Agreement.
5.4 Restated Certificate. The Restated Certificate shall have
been filed with the Delaware Secretary of State.
6. Miscellaneous.
6.1 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.
6.2 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.
6.3 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.
6.4 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.
6.5 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 Purchaser, at 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.
6.6 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. 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
Purchaser from any liability for any commission or compensation in the nature of
a finders' fee (and the
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costs and expenses of defending against such liability
or asserted liability) for which the Company or any of its officers, employees
or representatives is responsible.
6.7 Expenses. Purchaser shall pay all costs and expenses that
they incur with respect to the negotiation, execution, delivery and performance
of this Agreement.
6.8 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 F Preferred
Stock sold hereunder. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon each holder of any securities purchased under
this Agreement at the time outstanding (including securities into which such
securities are convertible), each future holder of all such securities and the
Company.
6.9 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.
6.10 Aggregation of Stock. All shares of the Series F 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.
6.11 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.
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The parties have executed this Series F Preferred Stock Purchase
Agreement as of the date first above written.
NIKU CORPORATION
By:
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Xxxxxx Xxxxxxx
President and Chief Executive Officer
Address: 0000 Xxxx XxxXxxxx Xxxx,
Xxxxx 00X
Xxxxxxx Xxxx, XX 00000
PURCHASERS
XXXXXXX X. XXXXXXX and XXXXXXX X.
XXXXXXX, TRUSTEES OF THE XXXXXXX FAMILY
TRUST U/D/T DATED 4-2-97
By:
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Xxxxxxx X. Xxxxxxx, Trustee
THE XXXXXXX 1996 CHILDREN'S TRUST UTA
DATED 0-0-00, XXXXXX X. XXXXXX, TRUSTEE
By:
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Xxxxxx X. Xxxxxx, Trustee
XXXXXXXX XXXXX DIBACHI 1996 TRUST,
XXXXXX XXXXXX, TRUSTEE
By:
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Xxxxxx Xxxxxx, Trustee
XXXXXXXX V LLC, XXXXXX XXXXXX,
MANAGING MEMBER
By:
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Title: Managing Member
XXXXXX XXXXXXX
By:
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SIGNATURE PAGE TO NIKU CORPORATION
SERIES F PREFERRED STOCK PURCHASE AGREEMENT
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EXHIBIT A
SCHEDULE OF PURCHASERS
NAME NO. OF SHARES AGGREGATE PRICE
---- ------------- ---------------
Xxxxxxx 1996 Children's Trust UTA dtd 3-11-96, 700,000 $ 35,000
Xxxxxx X. Xxxxxx, Trustee
Xxxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxx, Trustees of the 1,300,000 $ 65,000
Xxxxxxx Family Trust U/D/T dated 4-2-97
Xxxxxx Xxxxxxx 6,000,000 $ 300,000
Xxxxxxxx V LLC, Xxxxxx Xxxxxx, Managing Member 1,500,000 $ 75,000
Xxxxxxxx Xxxxx Dibachi 1996 Trust, Xxxxxx Xxxxxx, Trustee 500,000 $ 25,000
TOTAL 10,000,000 $ 500,000
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