Berkeleyside Direct Public Offering

Subscription Agreement


SUBSCRIPTION AGREEMENT

This Subscription Agreement (this “Agreement”) is made and entered into by and between Berkeleyside, Inc., a California benefit corporation (the “Company”), and the undersigned investor (“Investor”) as of the date set forth on the Company’s signature page hereto.

1. Subscription. Investor hereby subscribes for and agrees to purchase the number of shares of the Company’s Series A Preferred Stock (“Shares”) set forth on the signature page hereto, at a purchase price of $2.00 per Share (the “Purchase Price”), subject to the terms and conditions of this Agreement. The minimum subscription amount is 500 Shares (for a minimum aggregate Purchase Price of $1,000) (the “Minimum Subscription”).

2. Payment. Together with Investor’s execution and delivery to the Company of this Agreement, Investor shall pay the aggregate Purchase Price by check or other form of payment accepted by the Company. Payment by check shall be made payable to “Berkeleyside, Inc.” and mailed to the Company’s address set forth on the signature page hereto.

3. Acceptance/Rejection of Subscriptions. Notwithstanding Investor’s execution and delivery to the Company of this Agreement or any payment made by Investor to the Company in connection herewith, the Company may choose for any reason not to sell any Shares to Investor or to sell to Investor a number of Shares that is less than the number of Shares proposed to be purchased by Investor (but not less than the Minimum Subscription). If the Company agrees to sell Shares to Investor (whether the full number of Shares proposed to be purchased by Investor or a lesser number), then this Agreement shall constitute an irrevocable commitment by Investor to purchase the applicable number of Shares, the Company shall countersign and return to Investor a copy of this Agreement and, subject to receiving payment of the Purchase Price, the Company shall deliver to Investor a certificate representing the Shares (or, if the Shares are uncertificated, a notice of issuance for the Shares). If the Company chooses not to sell any Shares to Investor, the Company shall return to Investor any payment made by Investor to the Company in connection herewith, and thereupon this Agreement shall be of no further force or effect. If the Company chooses to sell to Investor a number of Shares that is less than the number of Shares proposed to be purchased by Investor, the Company shall promptly return to Investor any portion of any payment made by Investor to the Company in connection herewith that exceeds the aggregate Purchase Price for the number of Shares being sold to Investor hereunder.

4. Representations, Warranties, and Covenants of the Investor. Investor represents and warrants to the Company, and covenants, as follows:

(a) Offering Memorandum. Investor has received a copy of and has carefully read the disclosure document relating to the offering of the Shares, including the Company’s articles of incorporation and bylaws and all other exhibits thereto (the “Offering Memorandum”), and Investor fully understands (i) the rights, preferences, privileges and restrictions of the Shares, as described in the Offering Memorandum, including the Company’s articles of incorporation and bylaws, and this Agreement, and (ii) the risks associated with investing in the Shares. Without limiting the foregoing, Investor understands that the offer and sale of the Shares is made pursuant to, and subject to the terms and conditions of (including transfer restrictions imposed under), a permit granted by the California Department of Business Oversight.

(b) Suitability Requirements; California Residency. Investor satisfies the suitability requirements set forth in sections 7.1 and 7.2 of the Offering Memorandum. Without limiting the foregoing, (i) if Investor is an individual, his or her principal residence is in the state of California, and (ii) if Investor is an entity, its principal office is within the state of California (the “California Residency Requirement”).

(c) Able to Assess Risks. Investor has the requisite knowledge to assess the relative merits and risks of the investment contemplated hereby or has relied upon the advice of Investor’s professional advisors with regard to the investment contemplated hereby. Investor acknowledges that the Company has made available to Investor the opportunity to ask questions of and receive answers from the Company’s officers and directors concerning the terms and conditions of this Agreement, the business and financial condition of the Company and the rights, preferences, privileges and restrictions of the Shares, and Investor has received to its satisfaction such information regarding such matters as Investor has requested.

(d) Investor Advised to Seek Representation. Investor understands that nothing in this Agreement or any other materials made available to Investor by or on behalf of the Company in connection with the offer and sale of the Shares constitutes legal, tax or investment advice. The Company has advised Investor to consult with such legal, tax and investment advisors as Investor, in its sole discretion, deems necessary or appropriate in connection with an investment in the Shares.

(e) No Finder’s Fee. Investor is not and will not be (and, if applicable, none of Investor’s officers, directors, employees or agents is or will be) obligated for any finder’s or broker’s fee or commission in connection with the transactions contemplated hereby.

(f) Complete Information. All information provided by Investor to the Company in connection with the purchase of Shares is true, correct and complete as of the date hereof, and if there should be any change in such information, Investor will promptly provide the Company with appropriate updated information.

(g) Authority; Binding Agreement. Investor has full right, power, authority and capacity to enter into this Agreement and to consummate the transactions contemplated hereby and has taken any necessary actions to authorize its execution, delivery and performance of this Agreement. This Agreement, when countersigned by the Company, constitutes a valid and binding obligation of Investor, enforceable against Investor in accordance with its terms, except as enforceability may be limited by applicable law.

(h) Indemnity. Investor shall indemnify and hold harmless the Company and its officers, directors, employees and agents from and against any and all losses, damages, liabilities, costs or expenses, including reasonable attorney’s fees, incurred or suffered by them as a result of any breach of Investor’s representations, warranties and covenants hereunder.

5. Limitations on Transfer; Right of First Refusal.

(a) Limitations on Transfers.

(i) Investor shall not, directly or indirectly, offer, sell, pledge, transfer, or otherwise dispose of (or solicit any offers to buy, take a pledge of or otherwise receive or acquire) any Shares except in compliance with this Agreement, the Company’s articles of incorporation and bylaws and any applicable state or federal securities laws, including rules and regulations thereunder.

(ii) Investor acknowledges and agrees that, during the period in which the Company is offering and selling securities that are part of the same issue as the Shares and for a period of nine (9) months thereafter, all resales of the Shares, by Investor or any other person, shall be made only to persons resident within the state of California.

(iii) Investor acknowledges that any certificate representing the Shares (or, if the Shares are uncertificated, any notice of issuance for the Shares), including any certificate issued (or notice of issuance delivered) upon any transfer of the Shares, will bear the following legends:

(A) “THE SECURITIES REFERENCED HEREIN HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS. WITHOUT LIMITING THE FOREGOING, DURING THE PERIOD IN WHICH SECURITIES THAT ARE PART OF THE SAME ISSUE AS THE SECURITIES REFERENCED HEREIN ARE BEING OFFERED AND SOLD BY THE ISSUER OF THE SECURITIES REFERENCED HEREIN, AND FOR A PERIOD OF NINE MONTHS FROM THE DATE OF THE LAST SALE OF SUCH SECURITIES BY SUCH ISSUER, ALL RESALES OF THE SECURITIES REFERENCED HEREIN, BY ANY PERSON, SHALL BE MADE ONLY TO PERSONS RESIDENT WITHIN THE STATE OF CALIFORNIA.”
(B) “THE SECURITIES REFERENCED HEREIN ARE SUBJECT TO RESTRICTIONS ON TRANSFER, RESTRICTIONS ON VOTING RIGHTS AND AN IRREVOCABLE PROXY, ALL AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE HOLDER THEREOF, A COPY OF WHICH IS ON FILE WITH AND MAY BE OBTAINED FROM THE SECRETARY OF THE COMPANY AT NO CHARGE.”
(C) “IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THE SECURITIES REFERENCED HEREIN, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF THE DEPARTMENT OF BUSINESS OVERSIGHT OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER’S RULES.”

(b) Right of First Refusal.

(i) Notice of Proposed Transfer. If Investor or any transferee of the Shares (collectively, “Holder”) proposes to sell or otherwise transfer (including by gift or operation of law) any Shares, then (x) prior to consummating such sale or transfer, Holder shall deliver to the Company a written notice (the “Transfer Notice”) stating (1) the name of each proposed purchaser or transferee (“Proposed Transferee”), (2) the number of Shares proposed to be sold or transferred to each Proposed Transferee, (3) the terms and conditions, including purchase price, of each proposed sale or transfer, and (4) Holder’s offer to the Company to purchase the Shares upon the same terms and conditions, including purchase price, as those described in the Transfer Notice (or upon terms and conditions as similar as reasonably possible to those described in the Transfer Notice) (the “Applicable Terms”), and (y) Holder shall not consummate such sale or transfer except in accordance with clauses (iv) or (v) below.

(ii) Exercise of Right of First Refusal. At any time within 30 days after the Company receives the Transfer Notice, the Company shall have the right, exercisable by written notice to Holder during such period, to purchase any or all of the Shares described in the Transfer Notice upon the Applicable Terms; provided, however, that (x) if the purchase price described in the Transfer Notice consists of no legal consideration (as, for example, in the case of a transfer by gift), the applicable purchase price for the Company shall be the fair market value of the Shares as determined in good faith by the Company, and (y) if the purchase price described in the Transfer Notice includes non-cash consideration, the applicable purchase price for the Company shall reflect the cash equivalent value of such non-cash consideration as determined in good faith by the Company.

(iii) Payment. If the Company exercises its right of first refusal under clause (ii) above, the Company shall pay the applicable purchase price, at the election of the Company, in cash (by check), by cancellation of all or a portion of any outstanding indebtedness of Holder to the Company or by any combination thereof, within 60 days after receipt of the Transfer Notice or in such other manner or at such other time as may be mutually agreed by the Company and the Holder.

(iv) Holder’s Right to Transfer. If the Company does not exercise its right to purchase all of the Shares described in the Transfer Notice within the applicable time period, then Holder may sell or otherwise transfer the unpurchased Shares to the Proposed Transferee(s) described in the Transfer Notice upon the terms and conditions, including purchase price, described in the Transfer Notice (or upon terms and conditions, including purchase price, less favorable to the Proposed Transferee), so long as (x) such sale or transfer is consummated within 120 days after the date of the Transfer Notice, (y) such sale or transfer is effected in accordance with applicable laws and (z) without limiting Section 5(d), any such Proposed Transferee agrees in writing that the provisions of this Agreement (including the transfer restrictions and covenants of Investor hereunder) shall continue to apply to the Shares in the hands of such Proposed Transferee and otherwise be binding upon such Proposed Transferee to the same extent as such provisions would (but for any such transfer) be binding on Investor. If such Shares are not so transferred to such Proposed Transferee(s) within such period, then the provisions of this Section 5(b) shall once again apply to any proposed sale or other transfer of Shares.

(v) Exception for Certain Family Transfers. Notwithstanding anything to the contrary in this Section 5(b), the transfer of any or all of the Shares during Holder’s lifetime or on Holder’s death by will or intestacy to Holder’s Close Family or a trust for the benefit of Holder or Holder’s Close Family shall be exempt from the provisions of this Section 5(b). “Close Family” means (x) any spouse, domestic partner, child, parent, sibling, grandparent or grandchild or (y) any other close relative (including adoptive and in-law relationships) approved in good faith by the Company.

(vi) Assignment of Rights. The Company’s rights to purchase Shares under this Section 5(b) may be assigned by the Company, in whole or in part, to any other person or entity, without any requirement that the Company obtain Holder’s consent to such assignment.

(c) No Transfer to Competitors. Without limiting Section 5(b), without the prior written consent of the Company, Holder shall not sell or otherwise transfer (including by gift or operation of law) any Shares to (i) any third party that sells or provides, or intends to sell or provide, any products or services that directly or indirectly compete with any products or services sold or provided by the Company (“Competitor”), (ii) any director or officer of any Competitor or (iii) any person who owns, or is part of group acting in unison that owns, more than 5% of the outstanding voting securities of any Competitor.

(d) Transfer Restrictions and Covenants Binding on Transferees. The transfer restrictions and covenants of Investor under this Agreement shall continue to apply to the Shares in the hands of any transferee of the Shares and otherwise be binding upon any transferee of the Shares to the same extent as such transfer restrictions and covenants would (but for any such transfer) be binding on Investor.

(e) Stop-Transfer Instructions; Refusal to Transfer. Investor acknowledges that, to ensure compliance with the restrictions set forth herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. In addition, the Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom any Shares have been sold or otherwise transferred in violation of any of the provisions of this Agreement.

6. Covenants of the Company.

(a) Annual Report. For so long as Investor holds Shares, the Company shall deliver to Investor a written annual report describing the Company’s financial performance in its most recently completed fiscal year; provided, however, that Investor shall not disclose any confidential or proprietary information in any such report to any third party, or use any such information for any purpose other than monitoring Investor’s investment in the Company, in each case without the prior written consent of the Company. Each such annual report shall be delivered to Investor at the same time as such annual report is generally delivered to holders of the Company’s Series A Preferred Stock.

(b) Perks. For so long as Investor holds Shares, Investor shall be entitled to participate in any programs or discounts generally offered by the Company to its direct public offering investors, which (at the Company’s discretion) may include a regular newsletter, annual party, meetings with the Company’s officers, and discounted tickets to events.

7. Covenants of Investor.

(a) Approval of Certain Corporate Actions. In the event that the board of directors of the Company and the holders of the Company’s common stock approve in writing either (i) a Deemed Liquidation Event (as defined in the Company’s articles of incorporation) or (ii) any amendment to the Company’s articles of incorporation for the sole purpose of increasing the authorized number of shares of the Company’s Series A Preferred Stock, in either case ((i) or (ii)) specifying that this provision shall apply to such action (a “Corporate Action”), then Investor shall (x) if such Corporate Action requires approval of the holders of the Company’s Series A Preferred Stock, vote (in person, by proxy or by action by written consent, as applicable) all of Investor’s Shares in favor of, and adopt, such Corporate Action (and any related actions necessary to give effect to such Corporate Action) and vote in opposition to any other proposal that could delay or impair the ability of the Company to consummate such Corporate Action, (y) execute and deliver any related documentation and take any other action in support of such Corporate Action as may be reasonably requested by the Company in order to carry out the purposes of this Section 7, and (z) to refrain from exercising any applicable dissenters’ rights or rights of appraisal in connection with such Corporate Action.

(b) Exception. Notwithstanding the foregoing, Investor shall not be required to comply with Investor’s obligations under Section 7(a) in connection with any proposed Deemed Liquidation Event unless, upon the consummation of such Deemed Liquidation Event, (i) each holder of shares of the Company’s Series A Preferred Stock will receive, in respect of such shares of such holder, the same form and per share amount of consideration as is received by each other holder of shares of the Company’s Series A Preferred Stock, in respect of such shares of such other holder, and (ii) the aggregate consideration receivable by all holders of the Company’s capital stock will be allocated among such holders on the basis of the relative liquidation preferences to which such holders are entitled in accordance with the Company’s articles of incorporation.

(c) Grant of Irrevocable Proxy, Power of Attorney and Authorization. Solely to the extent that Investor fails to comply with Investor’s obligations under Section 7(a) (excluding, for clarity, scenarios in which Investor is not required to comply with such obligations in accordance with Section 7(b)), Investor hereby constitutes and appoints as Investor’s proxy, and grants a power of attorney (with full power of substitution) to, the President of the Company for the purpose of voting such Investor’s Shares or taking such other actions on behalf of such Investor, and hereby authorizes the President of the Company to vote such Shares or take such other actions on behalf of such Investor, in each case as may be required by Section 7(a). Each of the proxy, power of attorney and authorization granted pursuant to the immediately preceding sentence is given in consideration of the agreements and covenants of the Company in connection with the transactions contemplated by this Agreement and, as such, is coupled with an interest and shall be irrevocable and perpetual. Investor shall not grant or purport to grant any proxy, power of attorney or authorization that conflicts with the proxy, power of attorney and authorization granted hereunder.

8. General Provisions.

(a) Consent of Spouse. If Investor is an individual with a spouse, Investor shall cause such spouse to execute and deliver to the Company the consent set forth in Exhibit A hereto.

(b) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state of California, without giving effect to principles of conflicts of law.

(c) Entire Agreement. This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and supersedes all prior or contemporaneous discussions, understandings and agreements, whether oral or written, between them relating to the subject matter hereof.

(d) Amendments and Waivers. No modification of or amendment to this Agreement shall be effective unless in writing signed by the parties, and no waiver of any rights under this Agreement shall be effective unless in writing signed by the waiving party.

(e) Successors and Assigns. Investor may not assign this Agreement or any of its rights or obligations hereunder without the prior written consent of the Company, and any attempted assignment in violation of this provision shall be null and void. Subject to the foregoing and the transfer restrictions described herein, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties.

(f) Notices. Any notice, demand or request required or permitted to be given under this Agreement shall be in writing and shall be deemed given when delivered personally or by overnight courier or sent by email, or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, addressed to the party to be notified at such party’s address as set forth on the signature page hereto (as may be subsequently updated by written notice to the other party), or if no address is specified on the signature page, at the most recent address set forth in the Company’s books and records.

(g) Severability. If any provision of this Agreement is held to be unenforceable under applicable law in any context, such provision shall be deemed limited or modified to the minimum extent necessary to render it enforceable under applicable law in such context, and the remainder of this Agreement shall remain in full force and effect.

(h) Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and all of which together shall constitute one and the same agreement. An executed signature page of this Agreement delivered by facsimile transmission or by electronic mail in “portable document format” (“.pdf”) shall be as effective as an original executed signature page.

(i) Electronic Delivery. Investor hereby consents to the Company’s use of email, or any other form of electronic transmission permitted under applicable law, for the delivery to Investor of any documents, notices or other communications required or permitted to be delivered by the Company to Investor under this Agreement, the Company’s articles of incorporation or bylaws or applicable law. Investor understands that Investor (i) has the right, upon written request delivered to the Company, to receive a non-electronic copy of any such document, notice or other communication and (ii) may withdraw the consent given in the preceding sentence at any time by delivering written notice of such withdrawal to the Company.

(j) Transactions Void if Investor is Not a California Resident. Notwithstanding anything to the contrary in this Agreement, if as of the date hereof Investor does not satisfy the California Residency Requirement, then (i) this Agreement (except for Section 4 and any applicable provisions of Section 8, including this Section 8(j)) shall be deemed void ab initio, the offer, sale and purchase of Shares hereunder or in connection herewith shall be deemed not to have occurred and (unless Investor is otherwise a shareholder of the Company) Investor shall be deemed never to have been a shareholder of the Company, in each case for all purposes whatsoever, (ii) any certificate or other document evidencing the purported issuance of Shares to Investor hereunder shall be destroyed and all records of the purported issuance of Shares to Investor hereunder shall be removed from the books and records of the Company and (iii) the Company shall return to Investor any payment made by Investor to the Company in connection herewith (less the amount, if any, of any distributions previously made by the Company to Investor in respect of the Shares purported to have been issued hereunder).

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth on the Company’s signature page hereto. 

Number of Shares (minimum subscription is 500 Shares) 

Total Purchase Price (at $2.00 per Share) 

INVESTOR:

Name (Enter the name that should be reflected in the Company’s record of shareholders):   

Signature:  (to be signed below)

If Investor is an entity, name and title of person signing for Investor (if Investor is not an entity, leave blank.): 

Name:   

Title:   

Address:   

Phone:   

Email:   

Social Security Number or Taxpayer ID Number:   

CERTIFICATION: Under penalties of perjury, Investor hereby certifies that: (a) the taxpayer ID number or social security number shown above is the correct taxpayer identification number issued to Investor; (b) Investor is not subject to backup withholding because: (i) Investor is exempt from backup withholding, or (ii) Investor has not been notified by the Internal Revenue Service (IRS) that Investor is subject to backup withholding as a result of a failure to report all interest or dividends, or (iii) the IRS has notified Investor that it is no longer subject to backup withholding; and (c) Investor is a U.S. citizen or other U.S. person.

BERKELEYSIDE, INC. 

By:  _________________________ (Leave this field blank. It will be signed by a Berkeleyside representative once this document has been vetted and your payment has been received.)

Name: Lance Knobel 

Title: President 

Date: ___________________________ (Leave this field blank. It will be signed by a Berkeleyside representative once this document has been vetted and your payment has been received.)

Address: 

2908 Pine Avenue 
Berkeley, CA 94705
corporate@berkeleyside.com 

 

Date:

 

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Berkeleyside Direct Public Offering https://invest.berkeleyside.com
Signature Certificate
Document name: Subscription Agreement
Unique Document ID: 4ccaf4a1ed94b3faea8c890ab10540715047607b
Timestamp Audit
2016-07-22 14:57:31 PDTSubscription Agreement Uploaded by Tracey Taylor - traceyktaylor@gmail.com IP 142.254.24.252