SERIES B
PREFERRED STOCK PURCHASE AGREEMENT
This Series B
Preferred Stock Purchase Agreement (the “ Agreement ”) is
made and entered into as of March 13, 2009, 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
”).
Whereas
, the Company has authorized the
sale and issuance of an aggregate of Sixteen Million Thirty Six
Thousand Three Hundred Forty Six (16,036,346) shares of its
Series B 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.
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 issuance of such shares of Common Stock to be issued
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 Seventy-Four and
Eighty Three Hundredths of a Cent ($0.7483) 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 and West LLP, 801 California Street,
Mountain View, CA 94041 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 Delivery . At the 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 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 Renaud
Laplanche, John Donovan, and Soulaiman Htite, as such knowledge as
such individuals would have after reasonable
investigation.
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.
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3.3 Capitalization; Voting Rights
.
(a) The authorized capital stock of the Company,
immediately prior to the Closing, consists of (i) 50,000,000
shares of Common Stock, par value $0.01 per share, 8,199,750 shares
of which are issued and outstanding, and (ii) 33,200,000
shares of Preferred Stock, par value $0.01 per share, 17,100,000 of
which are designated Series A Preferred Stock, 15,740,285 are
issued and outstanding, and 16,100,000 are designated Series B
Preferred Stock, none of which are issued and
outstanding.
(b) Under the Company’s 2007 Stock Incentive
Plan (the “ Plan ”), (i) no shares
have been issued pursuant to restricted stock purchase agreements
and/or the exercise of outstanding options, (ii) options to
purchase 1,906,050 shares of Common Stock have been granted and are
currently outstanding, and (iii) 4,632,200 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.
(c) Warrants to purchase 325,000 shares of Common
Stock are outstanding.
(d) Warrants to purchase 1,265,990 shares of
Series A Preferred Stock are outstanding.
(e) Other than the shares reserved for issuance
under the Plan, and except as may be granted pursuant to this
Agreement and the Related Agreements, there are no outstanding
options, warrants, rights (including conversion or preemptive
rights and rights of first refusal), proxy or stockholder
agreements, or agreements of any kind for the purchase or
acquisition from the Company of any of its securities.
(f) 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.
(g) 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; 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.
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(h) 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, and, as of the Closing, no such options or shares
are more than twenty five percent (25%) vested. 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,
and were issued and transferred in accordance with any right of
first refusal or similar right or limitation Known to the Company,
including those in the Company’s certificate of incorporation
and Bylaws, each as amended to date.
(i) 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.
(j) 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.
(k) 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. The 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.
4
3.5 Financial Statements . The Company has made available to each
Purchaser its audited balance sheet for the year ended
March 31, 2008, an audited statement of income and cash flows
for the year ended March 31, 2008 and an unaudited balance
sheet for the nine (9) month period ending December 31,
2008 (the “ Statement Date ”) and
unaudited statement of income and cash flows for the nine
(9) month period ending December 31, 2008 (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, 2008 and
as of the Statement Date, as the case may be.
3.6 Liabilities . The Company has no liabilities and, to its
Knowledge, no material contingent liabilities, not disclosed in the
Financial Statements, 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.
(a) Except for agreements explicitly contemplated
hereby and agreements between the Company and its employees with
respect to the sale of the Company’s outstanding Common
Stock, there are no agreements, understandings or proposed
transactions between the Company and any of its officers,
directors, employees, affiliates or any affiliate
thereof.
(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 $25,000, 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 $25,000 or, in the
case of indebtedness and/or liabilities individually less than
$25,000, in excess of $50,000 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.
5
(d) For the purposes of subsections (b) and
(c) above, all indebtedness, liabilities, agreements,
understandings, instruments, contracts and proposed transactions
involving the same person or entity (including persons or entities
the Company has reason to believe are affiliated therewith) shall
be aggregated for the purpose of meeting the individual minimum
dollar amounts of such subsections.
(e) The Company is not a guarantor or indemnitor of
any indebtedness of any other person.
3.8 Obligations to Related Parties
. There are no obligations of the
Company to officers, directors, stockholders, or employees of the
Company 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 officers,
directors or, to the Company’s Knowledge, key employees or
stockholders of the Company or any members of their immediate
families, 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)
which may compete with the 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
officer or director or any member of such officer’s or
director’s immediate families or, to the Company’s
Knowledge, stockholder or any member of such stockholder’s
immediate family, 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).
3.9 Changes . Since the Statement Date, there has not been,
to the Company’s Knowledge:
(a) Any change in the assets, liabilities, financial
condition 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 or operations of the
Company;
(b) Any 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;
6
(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 by the Company of a valuable 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 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 resignation or termination of any executive
officer or key employee of the Company, and the Company is not
aware of any impending resignation or termination of employment of
any such officer or key employee;
(l) 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;
(m) 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;
(n) 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;
(o) Any receipt of notice that there has been a loss
of, or material order cancellation by, any major customer of the
Company;
(p) Any other event or condition of any character
that, either individually or cumulatively, has materially and
adversely affected the business, assets, liabilities, financial
condition or operations of the Company; or
(q) Any arrangement or commitment by the Company to
do any of the acts described in subsection (a) through
(p) above.
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3.10 Title to Properties and Assets; Liens,
Etc . The Company has
good and marketable title to its properties and assets and good
title to its leasehold estates, 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) minor 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.
3.11 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 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 communications
alleging that the Company has violated or, by conducting its
business as presently proposed to be conducted, would violate any
of the patents, trademarks, service marks, trade names, copyrights
or trade secrets or other proprietary rights of any other person or
entity, 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 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.
8
(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.
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.
3.12 Compliance with Other
Instruments . The Company
is not in violation or default of any term of its charter
documents, each as amended, or 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.
3.13 Litigation . There is no action, suit, proceeding or
investigation pending or, to the Company’s Knowledge,
currently threatened 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 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 an
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