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EXHIBIT 10.1
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PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
among
PROXICOM, INC.,
GENERAL ATLANTIC PARTNERS 34, L.P.
and
GAP COINVESTMENT PARTNERS, L.P.
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Dated: August 30, 1996
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS ............................................................ 1
1.1 Definitions................................................. 1
1.2 Accounting Terms; Financial Statements...................... 7
ARTICLE 2
PURCHASE AND SALE OF PREFERRED STOCK AND WARRANTS...................... 8
2.1 Purchase and Sale of Preferred Stock ...................... 8
2.2 Purchase and Sale of Warrants.............................. 8
2.3 Certificate of Designations................................ 8
2.4 Use of Proceeds............................................ 8
2.5 Closing ................................................... 8
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................... 9
3.1 Corporate Existence and Power.............................. 9
3.2 Authorization; No Contravention............................ 9
3.3 Governmental Authorization; Third Party Consents .......... 9
3.4 Binding Effect ............................................ 10
3.5 Litigation ................................................ 10
3.6 Compliance with Laws ...................................... 10
3.7 Capitalization ............................................ 11
3.8 No Default or Breach; Contractual Obligations.............. 12
3.9 Title to Properties........................................ 12
3.10 FIRPTA .................................................... 12
3.11 Financial Statements ...................................... 12
3.12 Taxes...................................................... 13
3.13 No Material Adverse Change; Ordinary Course of Business.... 13
3.14 Investment Company ........................................ 14
3.15 Subsidiaries .............................................. 14
3.16 Private Offering .......................................... 14
3.17 Labor Relations............................................ 14
3.18 Employee Benefit Plans .................................... 14
3.19 Title to Assets............................................ 15
3.20 Liabilities................................................ 15
3.21 Intellectual Property...................................... 15
3.22 Potential Conflicts of Interest ........................... 17
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3.23 Trade Relations............................................ 17
3.24 Outstanding Borrowing...................................... 17
3.25 Insurance.................................................. 17
3.26 Environmental Matters...................................... 18
3.27 Broker's, Finder's or Similar Fees......................... 18
3.28 Disclosure................................................. 18
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASES........................ 19
4.1 Existence and Power........................................ 19
4.2 Authorization; No Contravention............................ 19
4.3 Governmental Authorization; Third Party Consents .......... 19
4.4 Binding Effect ............................................ 19
4.5 Purchase for Own Account .................................. 20
4.6 Restricted Securities...................................... 21
4.7 Accredited Investor Status ................................ 21
4.8 Litigation ................................................ 21
4.9 Broker's, Finder's or Similar Fees......................... 21
ARTICLE 5
CONDITIONS TO THE OBLIGATION
OF THE PURCHASERS TO CLOSE............................................ 21
5.1 Representations and Warranties ............................ 22
5.2 Compliance with this Agreement ............................ 22
5.3 Secretary's Certificate.................................... 22
5.4 Officer's Certificate...................................... 22
5.5 Documents.................................................. 22
5.6 Repurchase of Common Stock ................................ 22
5.7 Consummation of Merger with Proxima, Inc................... 22
5.8 Filing of Certificate of Designations...................... 23
5.9 Purchased Shares .......................................... 23
5.10 Warrants .................................................. 23
5.11 Stockholders Agreement .................................... 23
5.12 Registration Rights Agreement.............................. 23
5.13 Opinion of Counsel ........................................ 23
5.14 Approval of Counsel to the Purchasers...................... 23
5.15 Consents and Approvals .................................... 24
5.16 No Material Judgment or Order.............................. 24
5.17 No Litigation ............................................. 24
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ARTICLE 6
CONDITIONS TO THE OBLIGATION
OF THE COMPANY TO CLOSE.............................................. 24
6.1 Representations and Warranties ............................ 24
6.2 Compliance with this Agreement ............................ 25
6.3 General Partners' Certificates ............................ 25
6.4 Payment of Purchase Price.................................. 25
6.5 Stockholders Agreement .................................... 25
6.7 Opinion of Counsel ........................................ 25
6.8 Approval of Counsel to the Company ........................ 25
6.9 Consents and Approvals .................................... 25
6.10 No Material Judgment or Order.............................. 26
6.11 No Litigation ............................................. 26
ARTICLE 7
INDEMNIFICATION........................................................ 26
7.1 Indemnification............................................ 26
7.2 Notification............................................... 27
7.3 Limitations on Indemnification............................. 28
ARTICLE 8
AFFIRMATIVE COVENANTS.................................................. 28
8.1 Preservation of Existence.................................. 28
8.2 Financial Statements and Other Information ................ 29
8.3 Reservation of Common Stock and Preferred Stock............ 30
8.4 Designation of Directors .................................. 30
8.5 Compliance with Laws ...................................... 30
8.6 Insurance.................................................. 30
8.7 Books and Records ......................................... 30
ARTICLE 9
MISCELLANEOUS.......................................................... 31
9.1 Survival of Representations and Warranties................. 31
9.2 Notices.................................................... 31
9.3 Successors and Assign; Third Party Beneficiaries........... 32
9.4 Amendment and Waiver....................................... 33
9.5 Counterparts............................................... 33
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9.6 Headings................................................... 33
9.7 GOVERNING LAW.............................................. 33
9.8 Severability............................................... 33
9.9 Rules of Construction...................................... 34
9.10 Entire Agreement........................................... 34
9.11 Fees....................................................... 34
9.12 Publicity.................................................. 34
9.13 Further Assurances......................................... 34
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EXHIBITS
A-1 Certificate of Incorporation
A-2 By-laws
B Form of Warrant
C Form of Certificate of Designations
D Form of Stockholders Agreement
E Form of Registration Rights Agreement
F Form of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ Opinion
G Form of ▇▇▇▇, ▇▇▇▇▇ Opinion
SCHEDULES
2 Purchased Shares, Warrants and Purchase Price
3.1(c) Jurisdictions in which Company Leases or Owns Properties
3.3 Governmental Authorizations; Third Party Consents
3.5 Litigation
3.7 List of Stockholders and Capital Stock and Common Stock Equivalents
owned by such Stockholders; Options, Warrants, Conversion
Privileges, Subscription or Purchase Rights or Other Rights.
3.8 Defaults or Breaches of Contractual Obligations; Contractual
Obligations
3.12 Taxes
3.13 Transactions Outside the Ordinary Course of Business
3.15 Subsidiaries
3.17 Labor Relations
3.18 Employee Benefit Plans
3.19 Title to Assets of the Company
3.20 Liabilities
3.21(a)(ii) Trademarks, Service Marks, Trade Names and Registered Copyrights
Owned by the Company and Applications therefor
3.21(a)(iii) Intellectual Property Licenses under which the Company is a
Licensor or Licensee
3.21(a)(iv) Infringements of the Company
3.21(a)(v) Intellectual Property Litigation
3.21(b) Infringement or Violations of Intellectual Property Rights
3.21(d) License Agreements which require a Material Royalty Payment
3.22 Potential Conflicts of Interest
3.23 Trade Relations
3.24 Outstanding Borrowing
3.25 Insurance
The Exhibits and Schedules to this Preferred Stock and Warrant Purchase
Agreement are not included with this Registration Statement on Form S-1. The
Registrant will provide these Exhibits and Schedules upon the request of the
Securities and Exchange Commission.
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PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
AGREEMENT, dated August 30, 1996 (this "Agreement"), among Proxicom,
Inc., a Delaware corporation (the "Company"), General Atlantic Partners 34,
L.P., a Delaware limited partnership ("GAP LP"), and GAP Coinvestment Partners,
L.P., a New York limited partnership ("GAP Coinvestment" and, together with GAP
LP, the "Purchasers")
WHEREAS, upon the terms and conditions set forth in this Agreement, the
Company proposes to issue and sell to (a) GAP LP (i) for an aggregate purchase
price of $4,541,890.56, an aggregate of 1,389,218 shares, par value $.0l per
share, of Series A Convertible Preferred Stock of the Company (the "Preferred
Stock") and (ii) for an aggregate purchase price of $852.30, a warrant (the "GAP
LP Warrant") to purchase, subject to the terms and conditions thereof, an
aggregate of 861,834 shares of Preferred Stock for an aggregate exercise price
of $7.91 per share (subject to adjustment), containing the terms and conditions
set forth in the form of warrant attached hereto as Exhibit B, and (b) GAP
Coinvestment (i) for an aggregate purchase price of $787,108.07, an aggregate
of 240,751 shares of Preferred Stock and (ii) for an aggregate purchase price of
$147.70, a warrant (the "GAPCO Warrant" and, together with the GAP LP Warrant,
the "Warrants") to purchase, subject to the terms and conditions thereof, an
aggregate of 149,544 shares of Preferred Stock for an aggregate exercise price
of $7.91 per share (subject to adjustment), containing the terms and conditions
set forth in the form of warrant attached hereto as Exhibit B; and
WHEREAS, each share of Preferred Stock is convertible (subject to
adjustment) into one share, par value $.01 per share, of Common Stock of the
Company (the "Common Stock").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
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"Affiliate" shall mean, with respect to any Person, any other Person
who controls, is controlled by or is under common control with such Person. In
addition, the following shall be deemed to be Affiliates of GAP LP: (a) GAP LLC,
the members of GAP LLC and the limited partners of GAP LP; (b) any Affiliate of
GAP LLC, the members of GAP LLC and the limited partners of GAP LP; and (c) any
limited liability company or partnership a majority of whose members or
partners, as the case may be, are members of GAP LLC. In addition, GAP LP and
GAP Coinvestment shall be deemed to be Affiliates of one another.
"Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"Board of Directors" means the Board of Directors of the Company.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in the State of New York are authorized or required by
law or executive order to close.
"By-laws" means the by-laws of the Company as in effect as of the
Closing Date substantially in the form attached hereto as Exhibit A-1.
"Capital Lease Obligations" of any Person shall mean, as of the date of
determination, the obligations of such Person to pay rent or other amounts under
any lease of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such Person
under GAAP and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP consistently applied.
"Certificate of Designations" means the Certificate of Designations
with respect to the Preferred Stock adopted by the Board of Directors and filed
with the Secretary of State of the State of Delaware on or before the Closing
Date substantially in the form attached hereto as Exhibit C.
"Certificate of Incorporation" means the Certificate of Incorporation
of the Company, as the same may have been amended and as in effect as of the
Closing Date substantially in the form attached hereto as Exhibit A-2.
"Claims" has the meaning set forth in Section 3.5 of this Agreement.
"Closing" has the meaning set forth in Section 2.5 of this Agreement.
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"Closing Date" has the meaning set forth in Section 2.5 of this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
"Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.
"Common Stock" means Common Stock, par value $.01 per share, of the
Company, or any other capital stock of the Company into which such stock is
reclassified or reconstituted.
"Common Stock Equivalents" means any security or obligation which is by
its terms convertible into or exchangeable for shares of Common Stock,
including, without limitation, the Preferred Stock, and any option, warrant or
other subscription or purchase right with respect to Common Stock.
"Company" has the meaning assigned to such term in the recital to this
Agreement.
"Condition of the Company" means the assets, business, properties,
operations or financial condition of the Company, taken as a whole.
"Contingent Obligation" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, guaranty, letter of credit or other obligation, contractual or
otherwise (the "primary obligation") of another Person (the "primary obligor"),
whether or not contingent, (a) to purchase, repurchase or otherwise acquire such
primary obligations or any property constituting direct or indirect security
therefor, or (b) to advance or provide funds (i) for the payment or discharge of
any such primary obligation, or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor, or (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, or (d) otherwise to assure or hold harmless the owner of any such
primary obligation against loss or failure or inability to perform in respect
thereof. The amount of any Contingent Obligation shall be deemed to be an amount
equal to the stated or determinable amount of the primary obligation in respect
of which such Contingent Obligation is made or, if not stated or determinable,
the maximum reasonably anticipated liability in respect thereof.
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"Contractual Obligations" means as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument to which such Person is a
party or by which it or any of its property is bound.
"Copyrights" means any foreign or United States-copyright registrations
and applications for registration thereof, and any non-registered copyrights.
"Defined Benefit Plan" means a defined benefit plan within the meaning
of Section 3(35) of ERISA or Section 414(j) of the Code, whether funded or
unfunded, qualified or nonqualified (whether or not subject to ERISA or the
Code).
"Environmental Laws" means federal, state, local and foreign laws,
principles of common law, civil law, regulations and codes, as well as orders,
decrees, judgments or injunctions issued, promulgated, approved or entered
thereunder relating to pollution, protection of the environment or public health
and safety.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any Person that is treated as a single employer
with the Company under Section 4 14(b), (c), (m) or (o) of the Code.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
"Financial Statements" has the meaning set forth in Section 3.12.
"GAAP" means generally accepted accounting principles in effect from
time to time.
"GAP Coinvestment" has the meaning assigned to such term in the recital
to this Agreement.
"GAP LLC" means General Atlantic Partners, LLC, a Delaware limited
liability company and the general partner of GAP LP, and any successor to such
entity.
"GAP LP" has the meaning assigned to such term in the recital to this
Agreement.
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"GAP LP Warrant" has the meaning assigned to such term in the recital
to this Agreement.
"GAPCO Warrant" has the meaning assigned to such term in the recital to
this Agreement.
"Governmental Authority" means the government of any nation, state,
city, locality or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Indebtedness" means, as to any Person, (a) all obligations of such
Person for borrowed money (including, without limitation, reimbursement and all
other obligations with respect to surety bonds, letters of credit and bankers'
acceptances, whether or not matured), (b) all obligations of such Person
evidenced by notes, bonds, debentures or similar instruments, (c) all
obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable and accrued commercial or trade
liabilities arising in the ordinary course of business, (d) all interest rate
and currency swaps, caps, collars and similar agreements or hedging devices
under which payments are obligated to be made by such Person, whether
periodically or upon the happening of a contingency, (e) all indebtedness
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (f) all obligations of
such Person under leases which have been or should be, in accordance with GAAP,
recorded as capital leases, (g) all indebtedness secured by any Lien (other than
Liens in favor of lessors under leases other than leases included in clause (f))
on any property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
non-recourse to the credit of that Person, and (h) any Contingent Obligation of
such Person.
"Internet Access" means any internet domain names and other computer
user identifiers and any rights in and to sites on the Worldwide Web, including
rights in and to any text, graphics, audio and video files and html or other
code incorporated in such sites.
"Liabilities" has the meaning set forth in Section 3.20 of this
Agreement.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other) or preference, priority,
right or
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other security interest or preferential arrangement of any kind or nature
whatsoever (excluding preferred stock and equity related preferences),
including, without limitation, those created by, arising under or evidenced by
any conditional sale or other title retention agreement, the interest of a
lessor under a Capital Lease Obligation, or any financing lease having
substantially the same economic effect as any of the foregoing.
"Mask Works" means any mask works and registrations and applications
for registrations thereof.
"Patents" means any foreign or United States patents and patent
applications, including any divisions, continuations, continuations-in-part,
substitutions or reissues thereof, whether or not patents are issued on such
applications and whether or not such applications are modified, withdrawn or
resubmitted.
"Person" means any individual, firm, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
limited liability company, Governmental Authority or other entity of any kind,
and shall include any successor (by merger or otherwise) of such entity.
"Purchased Stock" has the meaning assigned to such term in the recital
to this Agreement.
"Preferred Stock" has the meaning set forth in Section 2.1 of this
Agreement.
"Registration Rights Agreement" means the Registration Rights Agreement
substantially in the form attached hereto as Exhibit E.
"Requirements of Law" means, as to any Person, any law, statute,
treaty, rule, regulation, license or franchise or determination of an arbitrator
or a court or other Governmental Authority, in each case applicable or binding
upon such Person or any of its property or to which such Person or any of its
property is subject or pertaining to any or all of the transactions contemplated
or referred to herein.
"Software" means any computer software programs, source code, object
code and manuals and other written material with respect thereto.
"Securities" means the Purchased Shares, the shares of Common Stock
issuable upon conversion of the Purchased Shares, the Warrants and the Warrant
Shares.
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"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder.
"Stockholders Agreement" means the Stockholders Agreement substantially
in the form attached hereto as Exhibit D.
"Subsidiaries" means, as to any Person, a corporation, partnership,
limited liability company or other entity of which 50% or more of the voting
power of the outstanding voting equity securities or 50% or more of the
outstanding economic equity interest is held, directly or indirectly, by such
Person.
"Trade Secrets" means any trade secrets, research records, processes,
procedures, manufacturing formulae, technical know-how, technology, blue prints,
designs, plans, inventions (whether patentable and whether reduced to practice),
invention disclosures and improvements thereto.
"Trademarks" means any foreign or United States trademarks, service
marks, trade dress, trade names, brand names, designs and logos, corporate
names, product or service identifiers, whether registered or unregistered, and
all registrations and applications for registration thereof.
"Transaction Documents" means collectively, this Agreement, the
Warrant, the Certificate of Designations, the Stockholders Agreement and the
Registration Rights Agreement.
"Warrant Shares" has the meaning set forth in Section 2.2 of this
Agreement.
"Warrants" has the meaning assigned to such term in the recital to this
Agreement.
1.2 Accounting Terms; Financial Statements. All accounting terms used
herein not expressly defined in this Agreement shall have the respective
meanings given to them in accordance with sound accounting practice. The term
"sound accounting practice" shall mean such accounting practice as, in the
opinion of the independent certified public accountants regularly retained by
the Company, conforms at the time to GAAP applied on a consistent basis except
for changes with which such accountants concur.
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ARTICLE 2
PURCHASE AND SALE OF PREFERRED STOCK AND WARRANTS
2.1 Purchase and Sale of Preferred Stock. Subject to the terms and
conditions herein set forth, the Company agrees to issue and sell to each of the
Purchasers, and each of the Purchasers agrees that it will purchase from the
Company, on the Closing Date, the aggregate number of shares of Preferred Stock
set forth opposite such Purchaser's name on Schedule 2 hereto, for the
aggregate purchase price set forth opposite such Purchaser's name on Schedule 2
hereto (all of the shares of Preferred Stock being purchased pursuant hereto
being referred to herein as the "Purchased Shares").
2.2 Purchase and Sale of Warrants. Subject to the terms and conditions
herein set forth, the Company agrees to issue and sell to each of the
Purchasers, and each of the Purchasers agrees that it will purchase from the
Company, on the Closing Date, the Warrants to purchase the aggregate number of
shares of Common Stock set forth opposite such Purchaser's name on hereto, for
the aggregate purchase price set forth opposite such Purchaser's name on
Schedule 2 hereto (all of the shares of Preferred Stock and, assuming that the
Warrants are exercisable for shares of Common Stock in accordance with the terms
thereof, Common Stock issuable upon exercise of the Warrants being purchased
pursuant hereto being referred to herein as the "Warrant Shares").
2.3 Certificate of Designations. The Purchased Shares shall have the
preferences and rights set forth in the Certificate of Designations.
2.4 Use of Proceeds. The Company shall use the proceeds from the sale
of the Purchased Shares to (a) fund the purchase from ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ of an
aggregate of 100,917 shares of Common Stock for an aggregate purchase price of
$329,998.59 and (b) provide for ongoing working capital and capital spending
needs of the Company.
2.5 Closing. The closing of the sale and purchase of the Purchased
Shares and the Warrants (the "Closing") shall take place at the offices of ▇▇▇▇,
Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, at 10:00 a.m., local time, on the date
hereof, or at such other time, place and date that the Company and the
Purchasers may agree in writing (the "Closing Date"). On the Closing Date, the
Company shall deliver to the Purchasers (a) stock certificates representing the
Purchased Shares and (b) the Warrants, against delivery by the Purchasers to the
Company of the aggregate purchase price therefor by wire transfer of immediately
available funds.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchasers as follows:
3.1 Corporate Existence and Power. The Company (a) is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation; (b) has all requisite power and authority to
own and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently, or is currently proposed to be,
engaged; (c) is duly qualified as a foreign corporation, licensed and in good
standing under the laws of the Commonwealth of Virginia; and (d) has the
corporate power and authority to execute, deliver and perform its obligations
under this Agreement and each of the other Transaction Documents. No
jurisdiction, other than those referred to in clause (c) above, has claimed, in
writing or otherwise, that the Company is required to qualify as a foreign
corporation therein, and the Company does not file any franchise, income or
other tax returns in any other jurisdiction based upon the ownership or use of
property therein or the derivation of income therefrom. Except as set forth on
Schedule 3.1(c), the Company does not own, lease or operate property in any
jurisdiction other than its jurisdiction of incorporation and the jurisdiction
referred to in clause (c) above.
3.2 Authorization; No Contravention. The execution, delivery and
performance by the Company of this Agreement and each of the other Transaction
Documents and the transactions contemplated hereby and thereby, including,
without limitation, the sale, issuance and delivery of the Securities, (a) have
been duly authorized by all necessary corporate action of the Company; (b) do
not contravene the terms of the Certificate of Incorporation or the By-laws, or
any amendment thereof; (c) do not violate, conflict with or result in any breach
or contravention of, or the creation of any Lien under, any Contractual
Obligation of the Company, or any Requirement of Law applicable to the Company;
and (d) do not violate any judgment, injunction, writ, award, decree or order of
any nature (collectively, "Orders") of any Governmental Authority against, or
binding upon, the Company. The Company has not previously entered into any
Contractual Obligation which is currently in effect or by which the Company is
currently bound, granting any rights to any Person which are inconsistent with
the rights to be granted by the Company in this Agreement and each of the other
Transaction Documents.
3.3 Governmental Authorization; Third Party Consents. Except as set
forth in Schedule 3.3, no approval, consent, compliance, exemption,
authorization or other action by, or notice to, or filing with, any Governmental
Authority or any other Person in respect of any Requirement of Law, and no lapse
of a waiting period
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under a Requirement of Law, is necessary or required in connection with the
execution, delivery or performance (including, without limitation, the sale,
issuance and delivery of the Securities) by, or enforcement against, the Company
of this Agreement and the other Transaction Documents or the transactions
contemplated hereby and thereby.
3.4 Binding Effect. This Agreement and each of the other Transaction
Documents have been duly executed and delivered by the Company, and constitute
the legal, valid and binding obligations of the Company enforceable against the
Company in accordance with their terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity relating to enforceability
(regardless of whether considered in a proceeding at law or in equity).
3.5 Litigation. Except as set forth on Schedule 3.5, there are no
actions, suits, proceedings, claims, complaints, disputes, arbitrations or
investigations (collectively, "Claims") pending or, to the knowledge of the
Company, threatened, at law, in equity, in arbitration or before any
Governmental Authority against the Company which would, if adversely
determined, have a material adverse effect on (a) the Condition of the Company
or (b) the ability of the Company to perform its obligations under this
Agreement or any of the other Transaction Documents. No Order has been issued
by any court or other Governmental Authority against the Company purporting to
enjoin or restrain the execution, delivery or performance of this Agreement or
any of the other Transaction Documents.
3.6 Compliance with Laws.
(a) The Company is in compliance with all Requirements of Law and
all Orders issued by any court or Governmental Authority against the Company in
all respects, except to the extent that the failure to comply with such
Requirements of Law or Orders would not have a material adverse effect on the
Condition of the Company.
(b) (i) The Company has all licenses, permits, orders and approvals
of any Governmental Authority (collectively, "Permits") that are necessary for
the conduct of the business of the Company, except to the extent that the
failure to have such Permits would not have a material adverse effect on the
Condition of the Company; (ii) such Permits are in full force and effect; and
(iii) no violations are or have been recorded in respect of any Permit.
(c) No material expenditure is presently required by the Company to
comply with any existing Requirement of Law or Order.
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(d) The property, assets and operations owned or leased by the
Company are in compliance in all material respects with all applicable
Environmental Laws, while so owned or leased.
3.7 Capitalization. On the Closing Date, after giving effect to the
transactions contemplated by this Agreement, the authorized capital stock of the
Company shall consist of (a) 20,000,000 shares of Common Stock, of which
8,899,084 shares shall be issued and outstanding to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and (b)
5,000,000 shares of Preferred Stock, of which 1,629,969 shares shall be
outstanding and issued to the Purchasers. Schedule 3.7 sets forth a true and
complete list of (i) the stockholders of the Company and, opposite the name of
each stockholder, the amount of all outstanding capital stock and Common Stock
Equivalents owned by such stockholder and (ii) the holders of Common Stock
Equivalents (other than the stockholders set forth in clause (i) above) and,
opposite the name of each such holder, the amount of all outstanding Common
Stock Equivalents owned by such holder. The Company has reserved an aggregate of
1,629,969 shares of Common Stock for issuance upon conversion of the Purchased
Shares, an aggregate of 1,011,378 shares of Preferred Stock for issuance upon
exercise of the Warrants and, assuming that the Warrants are exercisable for
shares of Common Stock in accordance with the terms thereof, 1,011,378 shares of
Common Stock for issuance upon exercise of the Warrants. Except as set forth on
Schedule 3.7 and except for the Warrants, there are no options, warrants,
conversion privileges, subscription or purchase rights or other rights presently
outstanding to purchase or otherwise acquire (x) any authorized but unissued,
unauthorized or treasury shares of the Company's capital stock, (y) any Common
Stock Equivalents or (z) other securities of the Company. The Purchased Shares
and the Warrants are duly authorized, and, assuming the accuracy of the
representations and warranties of the Purchasers set forth in Sections 4.6 and
4.7, when issued and sold to the Purchasers after payment therefor, will be
validly issued, fully paid and nonassessable and will be issued in compliance
with the registration and qualification requirements of all applicable federal
securities laws. The shares of Common Stock issuable upon conversion of the
Purchased Shares and the Warrant Shares are duly authorized and, when issued in
compliance with the provisions of the Certificate of Incorporation, the
Certificate of Designations (in the case of the shares of Common Stock issuable
upon conversion of the Purchased Shares) and the Warrants (in the case of the
Warrant Shares), will be validly issued, fully paid and nonassessable and will
be issued in compliance with the registration and qualification requirements of
all applicable federal securities laws. The issued and outstanding shares of
Common Stock are all duly authorized, validly issued, fully paid and
nonassessable, and were issued in compliance with the registration and
qualification requirements of all applicable federal securities laws.
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3.8 No Default or Breach; Contractual Obligations. Except as set forth
in Schedule 3.8, the Company has not received notice of, and is not in default
under, or with respect to, any Contractual Obligation in any respect, which,
individually or together with all such defaults, could have a material adverse
effect on (i) the Condition of the Company or (ii) the ability of the Company to
perform its obligations under this Agreement or the other Transaction Documents.
Schedule 3.8 lists all of the Contractual Obligations to which the Company is a
party, whether written or oral, other than this Agreement, which involve an
amount in excess of $100,000 or which are otherwise material to the Condition of
the Company. All of such Contractual Obligations are valid, in full force and
effect and binding upon the Company and, to the knowledge of the Company, the
other parties thereto, and the Company has paid in full or accrued all amounts
due thereunder and has satisfied in full or provided for all of its liabilities
and obligations thereunder, and is not in default under any of them. To the
knowledge of the Company, no other party to any such Contractual Obligation is
in default thereunder, nor does any condition exist that with notice or lapse of
time or both would constitute a default thereunder. Except as separately
identified on Schedule 3.8, the Company is not a party to or bound by any
Contractual Obligation that individually or in the aggregate adversely affects
the Condition of the Company.
3.9 Title to Properties. The Company has good, record and marketable
title in fee simple to, or holds interests as lessee under leases in full force
and effect in, all real property used in connection with its business or
otherwise owned or leased by it, except for such defects in title as would not,
individually or in the aggregate, have a material adverse effect on the
Condition of the Company, or a material adverse effect on the ability of the
Company to perform its obligations under this Agreement or the other Transaction
Documents.
3.10 FIRPTA. The Company is not a "foreign person" within the meaning
of Section 1445 of the Code.
3.11 Financial Statements. The Company has delivered to the Purchasers
its audited financial statements (balance sheet and statements of operations,
cash flows and stockholders' equity, together with the notes thereto) for the
fiscal years ended and as at December 31, 1995 and December 31, 1994 (the
"Audited Financial Statements"), and its unaudited financial statements (balance
sheet and statement of operations) for the six months ended and as at June 30,
1996 (the "Unaudited Financial Statements"; the Audited Financial Statements and
Unaudited Financial Statements being collectively referred to as the "Financial
Statements"). The Financial Statements are complete and correct in all material
respects and have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods indicated and with each other, except that the
Unaudited Financial Statements do not contain footnotes or typical year-end
adjustments. The Financial Statements
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fairly present the financial position, operating results and cash flows of the
Company as of the respective dates and for the respective periods indicated,
subject, in the case of the Unaudited Financial Statements, to normal year-end
audit adjustments.
3.12 Taxes. (i) The Company has paid all federal, state, county, local,
foreign and other taxes, including, without limitation, income taxes, estimated
taxes, excise taxes, sales taxes, use taxes, gross receipts taxes, franchise
taxes, employment and payroll related taxes, property taxes and import duties,
whether or not measured in whole or in part by net income (hereinafter, "Taxes"
or, individually, a "Tax") which have come due and are required to be paid by it
through the date hereof, and all deficiencies or other additions to Tax,
interest and penalties owed by it in connection with any such Taxes, and shall
timely pay any Taxes including additions, interest and penalties, required to be
paid by it on, before or after the date hereof; (ii) the Company has timely
filed returns for Taxes that it is required to file on and through the date
hereof, and shall timely file all returns for Taxes that it is required to file
after the date hereof; (iii) with respect to all Tax returns of the Company, (x)
except as set forth in Schedule 3.12, to the knowledge of the Company, there is
no unassessed tax deficiency proposed or threatened against the Company and (y)
except as set forth in Schedule 3.12, no audit is in progress and no extension
of time is in force with respect to any date on which any return for Taxes was
or is to be filed and no waiver or agreement is in force for the extension of
time for the assessment or payment of any Tax; (iv) except as set forth in
Schedule 3.12, the Company has not agreed to or is required to make any
adjustments under Section 481(a) of the Code by reason of a change in
accounting methods or otherwise; and (v) all provisions for income and other
Tax liabilities of the Company with respect to the Audited Financial Statements
and the Unaudited Financial Statements have been made in accordance with GAAP
consistently applied, and all liabilities for Taxes of the Company attributable
to periods prior to or ending on December 31, 1995 and June 30, 1996 have been
adequately provided for on the Audited Financial Statements and the Unaudited
Financial Statements, respectively. Schedule 3.12 sets forth the status of
federal income tax audits and state, local and foreign tax audits of the Tax
returns of the Company for each taxable year for which the statute of
limitations has not expired.
3.13 No Material Adverse Change; Ordinary Course of Business. Since
December 31, 1995, there has not been any material adverse change, nor to the
knowledge of the Company is any such change threatened, in the Condition of the
Company. Except as set forth on Schedule 3.13, since June 30, 1996, the Company
has not participated in any transaction or otherwise acted outside the ordinary
course of business, including, without limitation, declaring or paying any
dividend or declaring or making any distribution to its stockholders, except out
of the earnings of the Company.
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3.14 Investment Company. The Company is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
3.15 Subsidiaries. The Company has no Subsidiaries. Except as set forth
in Schedule 3.15, the Company does not directly or indirectly own nor has it
made any investment in any of the capital stock of, or any other proprietary
interest in, any other Person.
3.16 Private Offering. No form of general solicitation or general
advertising was used by the Company or its representatives in connection with
the offer or sale of the Purchased Shares or the Warrants. No registration of
the Securities, pursuant to the provisions of the Securities Act or any state
securities or "blue sky" laws, will be required by the offer, sale or issuance
of the Securities. The Company agrees that neither it, nor anyone acting on its
behalf, shall offer to sell the Securities or any other security of the Company
so as to require the registration of the Securities pursuant to the provisions
of the Securities Act or any state securities or "blue sky" laws, unless such
Securities or other security is so registered.
3.17 Labor Relations. (a) The Company is not engaged in any unfair
labor practice; (b) there is (i) no grievance or arbitration proceeding arising
out of or under collective bargaining agreements pending or, to the knowledge of
the Company, threatened against the Company, and (ii) no strike, labor dispute,
slowdown or stoppage pending or, to the knowledge of the Company, threatened
against the Company; (c) except as set forth on Schedule 3.17, the Company is
not a party to any collective bargaining agreement or contract; (d) to the
knowledge of the Company, no union representation question existing with respect
to the employees of the Company; and (e) to the knowledge of the Company, no
union organizing activities are taking place.
3.18 Employee Benefit Plans. The Company has no actual or contingent,
direct or indirect, liability in respect of any employee benefit plan or
arrangement, including any plan subject to ERISA, other than to make
contributions under or pay benefits pursuant to the plans listed on Schedule
3.18 (collectively, the "Plans"). All of the Plans are in compliance with all
applicable Requirements of Law except to the extent that noncompliance with such
Requirements of Law would not have a material adverse effect on the Condition of
the Company. No Plan (a) is subject to Title IV of ERISA, or is otherwise a
Defined Benefit Plan, or is a multiple employer plan (within the meaning of
Section 413(c) of the Code); or (b) provides for post-retirement welfare
benefits or a "parachute payment" (within the meaning of Section 280G(b) of the
Code). The execution and delivery of this Agreement and each of the other
Transaction Documents, the purchase and sale of the Securities and the
consummation of the transactions contemplated hereby and thereby will not result
in
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any prohibited transaction within the meaning of Section 406 of ERISA or Section
4975 of the Code.
3.19 Title to Assets. Except as set forth on Schedule 3.19, the
Company owns and has good, valid, and marketable title to all of its properties
and assets used in its business and reflected as owned on the Financial
Statements or so described in any Schedule hereto (collectively, the "Assets"),
in each case free and clear of all Liens, except for (a) Liens specifically
described on the notes to the Financial Statements and (b) Liens on Assets not
material to the Condition of the Company.
3.20 Liabilities. As at June 30, 1996, except as set forth on Schedule
3.20, the Company has no obligation or liability ("Liabilities") other than (i)
Liabilities fully and adequately reflected or reserved against on the Financial
Statements, (ii) Liabilities not required by GAAP to be set forth on the
Financial Statements and (iii) Liabilities incurred since June 30, 1996 in the
ordinary course of business. The Company has no knowledge of any circumstance,
condition, event or arrangement that may hereafter give rise to any Liabilities
of the Company except in the ordinary course of business or as otherwise set
forth on Schedule 3.20.
3.21 Intellectual Property.
(a)(i) The Company is the exclusive owner of or has the license or
right to use, sell, license or dispose of all of the Copyrights, Patents, Trade
Secrets, Trademarks, Internet Assets, Mask Works, Software and other proprietary
rights (collectively, "Intellectual Property") that are used in connection with
its business as presently conducted, free and clear of all Liens.
(a)(ii) Schedule 3.21(a)(ii) sets forth all of the Intellectual
Property owned by, and applications for any of the above filed by, the Company.
None of the Intellectual Property listed on Schedule 3.21(a)(ii) is subject to
any outstanding Order, and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim or demand is pending or, to the knowledge of the
Company, threatened, which challenges the validity, enforceability, use or
ownership of the item.
(a)(iii) Schedule 3.21(a)(iii) sets forth all Intellectual
Property licenses, sublicenses and other agreements under which the Company is
either a licensor or licensee of any Intellectual Property, except such
licenses, sublicenses and other agreements relating to software used solely on
the computers of the Company. The Company has substantially performed all
obligations imposed upon it thereunder, and the Company is not, nor to the
knowledge of the Company is any other party thereto, in breach of or default
thereunder in any respect, nor is there any event
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which with notice or lapse of time or both would constitute a default
thereunder. All of the Intellectual Property licenses listed on Schedule
3.21(a)(iii) are valid, enforceable and in full force and effect, and will
continue to be so on identical terms immediately following the Closing, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity relating to enforceability (regardless of whether
considered in a proceeding at law or in equity).
(a)(iv) To the knowledge of the Company, other than as set forth
on Schedule 3.21(a)(iv), none of the Intellectual Property currently sold or
licensed by the Company to any Person or used by or licensed to the Company
infringes upon or otherwise violates any Intellectual Property rights of others.
(a)(v) Except as set forth on Schedule 3.21(a)(v), no litigation
is pending and no Claim has been made against the Company or, to the knowledge
of the Company, is threatened, contesting the right of the Company to sell or
license to any Person or use the Intellectual Property presently sold or
licensed to such Person or used by the Company.
(b) Except as set forth on Schedule 3.21(b), to the knowledge of
the Company, no Person is infringing upon or otherwise violating the
Intellectual Property rights of the Company.
(c) No former employer of any employee of the Company, and no
current or former client of any consultant of the Company, has made a claim
against the Company that such employee or such consultant is utilizing
proprietary information of such former employer or client.
(d) Except as set forth on Schedule 3.21(d), the Company is not a
party to or bound by any license or other agreement requiring the payment of any
material royalty payment, excluding such agreements relating to software
licensed for use solely on the computers of the Company.
(e) To the knowledge of the Company, no employee of the Company is
in violation of any term of any employment agreement, patent or invention
disclosure agreement or other contract or agreement relating to the relationship
of such employee with the Company.
(f) To the knowledge of the Company, none of the designs, plans,
trade secrets, inventions, processes, procedures, research records,
manufacturing know-how and formulae, wherever located, the value of which is
contingent upon maintenance of confidentiality thereof, has been disclosed to
any
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Person other than employees, representatives and agents of the Company, except
as required pursuant to the filing of a patent application by the Company, or
when disclosure to a Person is necessary pursuant to confidentiality agreements
entered into by the Company.
3.22 Potential Conflicts of Interest. Except as set forth on Schedule
3.22, no officer, director or stockholder of the Company, no spouse of any such
officer, director or stockholder and, to the knowledge of the Company, no
relative of such spouse or of any such officer, director or stockholder and no
Affiliate of any of the foregoing (a) owns, directly or indirectly, any
interest in (excepting less than 1% stock holdings for investment purposes in
securities of publicly held and traded companies), or is an officer, director,
employee or consultant of, any Person which is, or is engaged in business as, a
competitor, lessor, lessee, supplier, distributor, sales agent or customer of,
or lender to or borrower from, the Company; (b) owns, directly or indirectly,
in whole or in part, any tangible or intangible property that the Company has
used, or that the Company will use, in the conduct of business; or (c) has any
cause of action or other claim whatsoever against, or owes or has advanced any
amount to, the Company, except for claims in the ordinary course of business
such as for accrued vacation pay, accrued benefits under employee benefit
plans, and similar matters and agreements existing on the date hereof.
3.23 Trade Relations. Except as set forth on Schedule 3.23, there
exists no actual or, to the knowledge of the Company, threatened termination,
cancellation or limitation of, or any adverse modification or change in, the
business relationship of the Company, or the business of the Company, with any
customer or distributor or any group of customers or distributors whose
purchases are individually or in the aggregate material to the Condition of the
Company, or with any material supplier of the Company, and, to the knowledge of
the Company, there exists no present condition or state of fact or circumstances
that would materially adversely affect the Condition of the Company or prevent
the Company from conducting such business relationships or such business with
any such customer, such group of customers or distributors or such material
supplier in the same manner as heretofore conducted by the Company.
3.24 Outstanding Borrowing. Schedule 3.24 sets forth (a) the amount of
all Indebtedness of the Company as of the Closing Date, (b) the Liens that
relate to such Indebtedness and that encumber the Assets and (c) the name of
each lender thereof.
3.25 Insurance. The Company maintains insurance with insurance
companies or associations in such amounts and covering such risks as are usually
and customarily carried by Persons engaged in the business conducted by the
Company. Except as set forth on Schedule 3.25, such policies and binders are
valid and
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enforceable in accordance with their terms and are in full force and effect.
None of such policies will be affected by, or terminate or lapse by reason of,
any transaction contemplated by this Agreement or any of the other Transaction
Documents.
3.26 Environmental Matters. The Company is and has been in compliance
with all applicable Environmental Laws, except to the extent that the failure to
comply with such Environmental Laws would not have a material adverse effect on
the Condition of the Company. There is no civil, criminal or administrative
judgment, action, suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter pending or, to the knowledge
of the Company, threatened against the Company pursuant to Environmental Laws
which would reasonably be expected to result in a fine, penalty or other
obligation, cost or expense that would have a material adverse affect on the
Condition of the Company; and, to the knowledge of the Company, there are no
past or present events, conditions, circumstances, activities, practices,
incidents, agreements, actions or plans which may prevent compliance with, or
which have given rise to or will give rise to liability under, Environmental
Laws that would have a material adverse affect on the Condition of the Company.
3.27 Broker's, Finder's or Similar Fees. There are no brokerage
commissions, finder's fees or similar fees or commissions payable by the Company
in connection with the transactions contemplated hereby based on any agreement,
arrangement or understanding with the Company or any action taken by any such
Person.
3.28 Disclosure.
(a) Agreement and Other Documents. This Agreement and the
documents and certificates furnished to the Purchasers by the Company, taken as
a whole, do not contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements contained herein or
therein, in the light of the circumstances under which they were made, not
misleading.
(b) Material Adverse Effects. There is no fact known to the
Company, which the Company has not disclosed to the Purchasers in writing, which
materially adversely affects the Condition of the Company or the ability of the
Company to perform its obligations under this Agreement, any of the other
Transaction Documents or any document contemplated hereby or thereby.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each of the Purchasers hereby represents and warrants (severally as to
itself and not jointly) to the Company as follows:
4.1 Existence and Power. Such Purchaser (a) is a partnership duly
organized and validly existing under the laws of the jurisdiction of its
formation and (b) has the requisite partnership power and authority to execute,
deliver and perform its obligations under this Agreement and each of the other
Transaction Documents to which it is a party.
4.2 Authorization; No Contravention. The execution, delivery and
performance by such Purchaser of this Agreement and each of the other
Transaction Documents to which it is a party and the transactions contemplated
hereby and thereby, including, without limitation, the purchase of the Purchased
Shares and the Warrants, (a) have been duly authorized by all partnership
necessary action, (b) do not contravene the terms of such Purchaser's
organizational documents, or any amendment thereof, and (c) do not violate,
conflict with or result in any breach or contravention of or the creation of any
Lien under, any Contractual Obligation of such Purchaser, or any Requirement of
Law applicable to such Purchaser.
4.3 Governmental Authorization; Third Party Consents. No approval,
consent, compliance, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person with respect to
any Requirement of Law, and no lapse of a waiting period under any Requirement
of Law, is necessary or required in connection with the execution, delivery or
performance (including, without limitation, the purchase of the Purchased Shares
and the Warrants) by, or enforcement against, such Purchaser of this Agreement
and each of the other Transaction Documents to which such Purchaser is a party
or the transactions contemplated hereby and thereby.
4.4 Binding Effect. This Agreement and each of the other Transaction
Documents to which such Purchaser is a party have been duly executed and
delivered by such Purchaser and constitute the legal, valid and binding
obligations of such Purchaser, enforceable against it in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability (regardless of whether
considered in a proceeding at law or in equity).
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4.5 Purchase for Own Account. The Purchased Shares and the Warrants to
be acquired by such Purchaser pursuant to this Agreement are being or will be
acquired for its own account and with no intention of distributing or reselling
such Purchased Shares or Warrants or any part thereof in any transaction that
would be in violation of the securities laws of the United States of America, or
any state, without prejudice, however, to the rights of such Purchaser at all
times to sell or otherwise dispose of all or any part of such Purchased Shares
or Warrants under an effective registration statement under the Securities Act,
or under an exemption from such registration available under the Securities Act,
and subject, nevertheless, to the disposition of such Purchaser's property being
at all times within its control. If such Purchaser should in the future decide
to dispose of any of the Securities, such Purchaser understands and agrees that
it may do so only in compliance with the Securities Act and applicable state
securities laws, as then in effect. Such Purchaser agrees to the imprinting, so
long as required by law, of a legend on certificates representing all of its
Purchased Shares, shares of Common Stock issuable upon conversion of its
Purchased Shares and Warrant Shares to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS
OR PURSUANT TO A WRITTEN OPINION OF COUNSEL FOR THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
THE SALE, ASSIGNMENT, HYPOTHECATION, PLEDGE, ENCUMBRANCE OR OTHER
DISPOSITION (EACH A "TRANSFER") AND VOTING OF ANY OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE TERMS OF THE
STOCKHOLDERS AGREEMENT, DATED AUGUST 30, 1996, AMONG PROXICOM, INC.,
GENERAL ATLANTIC PARTNERS 34, L.P., GAP COINVESTMENT PARTNERS, L.P. AND
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, A COPY OF WHICH MAY BE INSPECTED AT THE COMPANY'S
PRINCIPAL OFFICE. THE COMPANY WILL NOT REGISTER THE TRANSFER OF SUCH
SECURITIES ON THE BOOKS OF THE COMPANY UNLESS AND UNTIL THE TRANSFER
HAS BEEN MADE IN COMPLIANCE WITH THE TERMS OF THE STOCKHOLDERS
AGREEMENT.
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4.6 Restricted Securities. Such Purchaser understands that the
Purchased Shares will not be registered at the time of their issuance under the
Securities Act for the reason that the sale provided for in this Agreement is
exempt pursuant to Section 4(2) of the Securities Act and that the reliance of
the Company on such exemption is predicated in part on such Purchaser's
representations set forth herein. Such Purchaser represents that it is
experienced in evaluating recently organized companies such as the Company, has
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of its investment and has the ability to
suffer the total loss of its investment. Such Purchaser further represents that
it has had the opportunity to ask questions of and receive answers from the
Company concerning the terms and conditions of the offering and to obtain
additional information (to the extent the Company possessed such information or
could acquire it without unreasonable effort or expense).
4.7 Accredited Investor Status. Such Purchaser is an "accredited
investor" as that term is defined by Rule 501 of Regulation D promulgated under
the Securities Act.
4.8 Litigation. There are no Claims pending or, to the knowledge of
such Purchaser, threatened, at law, in equity, in arbitration or before any
Governmental Authority against any Purchaser which would, if adversely
determined, have a material adverse effect on the ability of such Purchaser to
perform its obligations under this Agreement or any of the other Transaction
Documents. No Order has been issued by any court or other Governmental Authority
against such Purchaser purporting to enjoin or restrain the execution, delivery
or performance of this Agreement or any of the other Transaction Documents.
4.9 Broker's, Finder's or Similar Fees. There are no brokerage
commissions, finder's fees or similar fees or commissions payable by the
Purchasers, in connection with the transactions contemplated hereby based on any
agreement, arrangement or understanding with the Purchasers or any action taken
by the Purchasers.
ARTICLE 5
CONDITIONS TO THE OBLIGATION
OF THE PURCHASERS TO CLOSE
The obligation of the Purchasers to purchase the Purchased Shares and
the Warrants, to pay the purchase price therefor at the Closing and to perform
any obligations hereunder shall be subject to the satisfaction as determined by,
or waiver by, the Purchasers of the following conditions on or before the
Closing Date.
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5.1 Representations and Warranties. The representations and warranties
of the Company contained in Article 3 hereof shall be true and correct in all
material respects at and on the Closing Date as if made at and on such date.
5.2 Compliance with this Agreement. The Company shall have performed
and complied in all material respects with all of its agreements and conditions
set forth herein that are required to be performed or complied with by the
Company on or before the Closing Date.
5.3 Secretary's Certificate. The Purchasers shall have received a
certificate from the Company, in form and substance satisfactory to the
Purchasers, dated the Closing Date and signed by the Secretary or an Assistant
Secretary of the Company, certifying (a) that the attached copies of the
Certificate of Incorporation, the By-laws and resolutions of the Board of
Directors of the Company approving this Agreement and each of the other
Transaction Documents to which the Company is a party and the transactions
contemplated hereby and thereby, are all true, complete and correct and remain
unamended and in full force and effect and (b) as to the incumbency and specimen
signature of each officer of the Company executing this Agreement, each other
Transaction Document and any other document delivered in connection herewith on
behalf of the Company.
5.4 Officer's Certificate. The Purchasers shall have received a
certificate from the Company, in form and substance satisfactory to the
Purchaser, dated the Closing Date and signed by the Chief Executive Officer and
Treasurer of the Company, certifying that (a) the representations and warranties
of the Company contained in Article 3 hereof are true and correct in all
material respects at and on the Closing Date and (b) the Company has performed
and complied in all material respects with all of the agreements and conditions
set forth or contemplated herein that are required to be performed or complied
with by the Company on or before the Closing Date.
5.5 Documents. The Purchasers shall have received true, complete and
correct copies of such documents as they may reasonably request in connection
with or relating to the sale of the Purchased Shares, the Warrants and the
transactions contemplated hereby, all in form and substance reasonably
satisfactory to the Purchasers.
5.6 Repurchase of Common Stock. Simultaneously with the Closing, the
Company shall have purchased from ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ an aggregate of 100,917 shares
of Common Stock for an aggregate purchase price of $329,998.59.
5.7 Consummation of Merger with Proxima, Inc.. (a) The merger agreement
(the "Proxima Merger Agreement") between Proxima, Inc., a Maryland
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corporation ("Proxima"), and the Company shall have been duly executed and
delivered by each of Proxima and the Company, (b) the Proxima Merger Agreement
and the transactions contemplated thereby shall have been approved and adopted
at a meeting of the stockholders of Proxima, or in a written consent executed in
lieu of such meeting, in accordance the Articles of Incorporation, as amended,
of Proxima and the Business Corporation Law of the State of Maryland, (c) the
Proxima Merger Agreement and the transactions contemplated thereby shall have
been approved and adopted at a meeting of the stockholders of the Company, or in
a written consent executed in lieu of such meeting, in accordance with the
Certificate of Incorporation and the General Corporation Law of the State of
Delaware and (d) the merger of Proxima with and into the Company in accordance
with the Proxima Merger Agreement shall have been consummated.
5.8 Filing of Certificate of Designations. The Certificate of
Designations shall have been duly filed by the Company with the Secretary of
State of the State of Delaware in accordance with the General Corporation Law of
the State of Delaware.
5.9 Purchased Shares. The Company shall have delivered to the
Purchasers certificates in definitive form representing the number of Purchased
Shares set forth opposite such Purchaser's name on Schedule 2 hereto, registered
in the name of such Purchaser.
5.10 Warrants. The Company shall have duly executed and delivered to
GAP LP the GAP LP Warrant and to GAP Coinvestment the GAPCO Warrant, each
substantially in the form attached hereto as Exhibit B, and registered in the
name of GAP LP and GAP Coinvestment, respectively.
5.11 Stockholders Agreement. The Company shall have duly executed and
delivered the Stockholders Agreement, substantially in the form attached hereto
as Exhibit D.
5.12 Registration Rights Agreement. The Company shall have duly
executed and delivered the Registration Rights Agreement, substantially in the
form attached hereto as Exhibit E.
5.13 Opinion of Counsel. The Purchasers shall have received an opinion
of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, corporate counsel to the Company, dated the Closing Date,
relating to the transactions contemplated by or referred to herein,
substantially in the form attached hereto as Exhibit F.
5.14 Approval of Counsel to the Purchasers. All actions and proceedings
hereunder and all documents required to be delivered by the Company
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hereunder or in connection with the consummation of the transactions
contemplated hereby, and all other related matters, shall have been acceptable
to ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the Purchasers, in their
reasonable judgment as to their form and substance.
5.15 Consents and Approvals. All consents, exemptions, authorizations,
or other actions by, or notices to, or filings with, Governmental Authorities
and other Persons required in respect of all Requirements of Law and with
respect to those Contractual Obligations of the Company which are necessary in
connection with the execution, delivery or performance by, or enforcement
against, the Company of this Agreement and each of the other Transaction
Documents shall have been obtained and be in full force and effect, and the
Purchasers shall have been furnished with appropriate evidence thereof.
5.16 No Material Judgment or Order. There shall not be on the Closing
Date any Order of a court of competent jurisdiction or any ruling of any
Governmental Authority or any condition imposed under any Requirement of Law
which, in the reasonable judgment of the Purchasers, would prohibit the purchase
of the Purchased Shares or the Warrants or subject the Purchasers to any penalty
or other onerous condition under or pursuant to any Requirement of Law if the
Purchased Shares or the Warrants were to be purchased hereunder.
5.17 No Litigation. No action, suit, proceeding, claim or dispute shall
have been brought or otherwise arisen at law, in equity, in arbitration or
before any Governmental Authority against the Company which would, if adversely
determined, (a) have a material adverse effect on the Condition of the Company
or (b) have a material adverse effect on the ability of the Company to perform
its obligations under this Agreement or each of the other Transaction Documents.
ARTICLE 6
CONDITIONS TO THE OBLIGATION
OF THE COMPANY TO CLOSE
The obligation of the Company to issue and sell the Purchased Shares
and the Warrants and the obligation of the Company to perform its other
obligations hereunder, shall be subject to the satisfaction as determined by, or
waiver by, the Company of the following conditions on or before the Closing
Date:
6.1 Representations and Warranties. The representations and warranties
of the Purchasers contained in Article 4 hereof shall be true and correct in all
material respects at and on the Closing Date as if made at and on such date.
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6.2 Compliance with this Agreement. The Purchasers shall have performed
and complied in all material respects with all of its agreements and conditions
set forth herein that are required to be performed or complied with by the
Purchasers on or before the Closing Date.
6.3 General Partners' Certificates. The Company shall have received a
certificate from the general partner of each of GAP LP and GAP Coinvestment, in
form and substance satisfactory to the Company, dated the Closing Date and
signed by such general partner(s), certifying that (a) the representations and
warranties of GAP LP or GAP Coinvestment, as the case may be, contained in
Article 4 hereof are true and correct in all material respects at and on Closing
Date and (b) GAP LP or GAP Coinvestment, as the case may be, has performed and
complied in all material respects with all of its agreements and conditions set
forth or contemplated herein that are required to be performed or complied with
by GAP LP or GAP Coinvestment, as the case may be, on or before the Closing
Date.
6.4 Payment of Purchase Price. The Company shall have received the
aggregate purchase price for the Purchased Shares.
6.5 Stockholders Agreement. The Purchasers shall have duly executed and
delivered the Stockholders Agreement, substantially in the form attached hereto
as Exhibit D.
6.6 Registration Rights Agreement. The Purchasers shall have duly
executed and delivered the Registration Rights Agreement, substantially in the
form attached hereto as Exhibit E.
6.7 Opinion of Counsel. The Company shall have received an opinion of
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the Purchasers, dated the
Closing Date, relating to the transactions contemplated by or referred to
herein, substantially in the form attached hereto as Exhibit G.
6.8 Approval of Counsel to the Company. All actions and proceedings
hereunder and all documents required to be delivered by the Purchasers hereunder
or in connection with the consummation of the transactions contemplated hereby,
and all other related matters, shall have been acceptable to ▇▇▇▇▇ & ▇▇▇▇▇▇▇,
counsel to the Company, in their reasonable judgment as to their form and
substance.
6.9 Consents and Approvals. All consents, exemptions, authorizations,
or other actions by, or notices to, or filings with, Governmental Authorities
and other Persons required in respect of all Requirements of Law and with
respect to those Contractual Obligations of the Purchasers which are necessary
in connection with the execution, delivery or performance by, or enforcement
against,
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the Company of this Agreement and each of the other Transaction Documents shall
have been obtained and be in full force and effect, and the Company shall have
been furnished with appropriate evidence thereof.
6.10 No Material Judgment or Order. There shall not be on the Closing
Date any Order of a court of competent jurisdiction or any ruling of any
Governmental Authority or any condition imposed under any Requirement of Law
which, in the reasonable judgment of the Company, would prohibit the sale of the
Purchased Shares or the Warrants or subject the Company to any penalty or other
onerous condition under or pursuant to any Requirement of Law if the Purchased
Shares or the Warrants were to be sold hereunder.
6.11 No Litigation. No action, suit, proceeding, claim or dispute shall
have been brought or otherwise arisen at law, in equity, in arbitration or
before any Governmental Authority against the Purchasers which would, if
adversely determined, have a material adverse effect on the ability of the
Purchasers to perform their obligations under this Agreement or any of the other
Transaction Documents to which they are a party.
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification. Except as otherwise provided in this Article 7,
the Company (the "Indemnifying Party") agrees to indemnify, defend and hold
harmless the Purchasers and their Affiliates and their respective officers,
directors, agents, employees, subsidiaries, partners, members and controlling
persons (each, an "Indemnified Party") to the fullest extent permitted by law
from and against any and all losses, Claims, or written threats thereof
(including, without limitation, any Claim brought by the Purchasers or another
Person), damages, expenses (including reasonable fees, disbursements and other
charges of counsel incurred by the Indemnified Party in any action between the
Indemnifying Party and the Indemnified Party or between the Indemnified Party
and any third party or otherwise) or other liabilities (collectively, "Losses")
resulting from or arising out of any breach of any representation or warranty,
covenant or agreement by the Company in this Agreement or the other Transaction
Documents; provided, however, that the Indemnifying Party shall not be liable
under this Section 7.1 to an Indemnified Party to the extent that it is finally
judicially determined that such Losses resulted or arose from the breach by
such Indemnified Party of any representation, warranty, covenant or other
agreement of such Indemnified Party contained in this Agreement or the other
Transaction Documents; and provided further, that if and to the extent that
such indemnification is unenforceable for any reason, the Indemnifying Party
shall make the maximum
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contribution to the payment and satisfaction of such Losses which shall be
permissible under applicable laws. The amount of any payment to any Indemnified
Party herewith in respect of any Loss shall be of sufficient amount to make such
Indemnified Party whole. In connection with the obligation of the Indemnifying
Party to indemnify for expenses as set forth above, the Indemnifying Party
shall, upon presentation of appropriate invoices containing reasonable detail,
reimburse each Indemnified Party for all such expenses (including reasonable
fees, disbursements and other charges of counsel incurred by the Indemnified
Party in any action between the Indemnifying Party and the Indemnified Party or
between the Indemnified Party and any third party or otherwise) (a) after the
final resolution or disposition of the particular action, investigation, claim
or other proceeding and (b) if such Indemnified Party prevails with respect
thereto.
7.2 Notification. Each Indemnified Party under this Article 7 shall,
promptly after the receipt of notice of the commencement of any action,
investigation, claim or other proceeding against such Indemnified Party in
respect of which indemnity may be sought from the Indemnifying Party under this
Article 7, notify the Indemnifying Party in writing of the commencement thereof.
The omission of any Indemnified Party to so notify the Indemnifying Party of any
such action shall not relieve the Indemnifying Party from any liability which it
may have to such Indemnified Party (a) other than pursuant to this Article 7 or
(b) under this Article 7 unless, and only to the extent that, such omission
results in the Indemnifying Party's forfeiture of substantive rights or
defenses. In case any such action, claim or other proceeding shall be brought
against any Indemnified Party, and it shall notify the Indemnifying Party of the
commencement thereof, the Indemnifying Party shall be entitled to assume the
defense thereof at its own expense, with counsel satisfactory to such
Indemnified Party in its reasonable judgment; provided, however, that any
Indemnified Party may, at its own expense, retain separate counsel to
participate in such defense at its own expense. Notwithstanding the foregoing,
in any action, claim or proceeding in which both the Indemnifying Party, on the
one hand, and an Indemnified Party, on the other hand, are, or are reasonably
likely to become, a party, such Indemnified Party shall have the right to employ
separate counsel and to control its own defense of such action, claim or
proceeding if, in the reasonable opinion of counsel to such Indemnified Party, a
conflict or potential conflict exists between the Indemnifying Party, on the one
hand, and such Indemnified Party, on the other hand, that would make such
separate representation advisable; provided, however, that the Indemnifying
Party (i) shall not be liable for the fees and expenses of more than one
counsel to all Indemnified Parties and (ii) shall reimburse the Indemnified
Parties for all of such fees and expenses of such counsel incurred in any
action between the Indemnifying Party and the Indemnified Parties or between
the Indemnified Parties and any third party or otherwise (x) after the final
resolution or disposition of such action, claim or proceeding and (y) if the
Indemnified Parties prevail with respect thereto. The Indemnifying Party agrees
that it will not, without
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the prior written consent of the Purchasers, settle, compromise or consent to
the entry of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated hereby (if any Indemnified Party
is a party thereto or has been actually threatened to be made a party thereto)
unless such settlement, compromise or consent includes an unconditional release
of the Purchasers and each other Indemnified Party from all liability arising or
that may arise out of such claim, action or proceeding. The Indemnifying Party
shall not be liable for any settlement of any claim, action or proceeding
effected against an Indemnified Party without its written consent, which consent
shall not be unreasonably withheld. The rights accorded to Indemnified Party
hereunder shall be in addition to any rights that any Indemnified Party may have
at common law, by separate agreement or otherwise; provided, however, that
notwithstanding the foregoing or anything to the contrary contained in this
Agreement, nothing in this Article 7 should restrict or limit any rights that
any Indemnified Party may have to seek equitable relief.
7.3 Limitations on Indemnification. Notwithstanding anything to the
contrary contained in this Article 7, the Indemnifying Party shall have no
obligation to pay any amounts for indemnification pursuant to Section 7.1 to the
extent that the aggregate of such amounts for indemnification do not exceed
$250,000 (the "Basket Amount"), whereupon the Indemnifying Party shall be
obligated to pay in full all of such amounts for indemnification, including the
Basket Amount.
ARTICLE 8
AFFIRMATIVE COVENANTS
The Company hereby covenants and agrees with the Purchasers as follows:
8.1 Preservation of Existence. So long as the Purchasers and/or any
Affiliate thereof own shares of Common Stock and/or shares of Preferred Stock or
other securities of the Company convertible into or exchangeable for shares of
voting capital stock of the Company that represent (after giving effect to any
adjustments) at least 5% of the total number of shares of Common Stock
outstanding on an as-converted basis, the Company shall:
(a) use its reasonable efforts to preserve and maintain in full
force and effect its existence and good standing under the laws of its
jurisdiction of formation or organization;
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(b) use its reasonable efforts to preserve and maintain in full
force and effect all material rights, privileges, qualifications, applications,
estimates, licenses and franchises necessary in the normal conduct of its
business;
(c) use its reasonable efforts to preserve its business
organization;
(d) conduct its business in accordance with sound business
practices, keep its properties in good working order and condition (normal wear
and tear excepted) so that the efficiency of its business operations shall be
fully maintained and preserved; and
(e) file or cause to be filed in a timely manner all reports,
applications, estimates and licenses that shall be required by a Governmental
Authority and that, if not timely filed, would have a material adverse effect on
the Condition of the Company.
8.2 Financial Statements and Other Information. The Company shall
deliver to each Purchaser, in form and substance satisfactory to such Purchaser:
(a) as soon as available, but not later than ninety (90) days after
the end of each fiscal year of the Company, a copy of the audited balance sheet
of the Company as of the end of such fiscal year and the related statements of
operations and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous year, all in reasonable detail and
accompanied by a management summary and analysis of the operations of the
Company for such fiscal year and by the opinion of a nationally recognized
independent certified public accounting firm which report shall state without
qualification that such financial statements present fairly the financial
condition as of such date and results of operations and cash flows for the
periods indicated in conformity with GAAP applied on a consistent basis;
(b) commencing with the fiscal period ending on September 30, 1996,
as soon as available, but in any event not later than forty-five (45) days after
the end of each of the first three fiscal quarters of each fiscal year, the
unaudited balance sheet of the Company, and the related statements of operations
and cash flows for such quarter and for the period commencing on the first day
of the fiscal year and ending on the last day of such quarter, all certified by
an appropriate officer of the Company as presenting fairly the financial
condition as of such date and results of operations and cash flows for the
periods indicated in conformity with GAAP applied on a consistent basis, subject
to normal year-end adjustments and the absence of footnotes required by GAAP;
and
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(c) as promptly as practicable, but not later than five (5) days
after the end of each fiscal year of the Company, a certificate signed by the
Chief Executive Officer of the Company in customary form certifying that the
Company is not a "foreign person" within the meaning of Section 1445 of the
Code.
8.3 Reservation of Common Stock and Preferred Stock. The Company shall
at all times (a) reserve and keep available out of its authorized shares of
Common Stock, solely for the purpose of issue or delivery upon conversion of the
Purchased Shares, and (b) reserve and keep available out of its authorized
shares of Preferred Stock and, assuming that the Warrants are exercisable for
shares of Common Stock in accordance with the terms thereof, Common Stock,
solely for the purpose of issue or delivery upon exercise of the Warrants, as
provided in the Certificate of Incorporation, the Certificate of Designations
(in the case of the shares of Common Stock issuable upon conversion of the
Purchased Shares) and the Warrants (in the case of the Warrant Shares), the
maximum number of shares of Common Stock and Preferred Stock that may be
issuable or deliverable upon such conversion or exercise, as the case may be.
Such shares of Common Stock and Preferred Stock are duly authorized and, when
issued or delivered in accordance with the Certificate of Incorporation, the
Certificate of Designations (in the case of the shares of Common Stock issuable
upon conversion of the Purchased Shares) and the Warrants (in the case of the
Warrant Shares), as the case may be, against payment therefor, shall be validly
issued, fully paid and non-assessable. The Company shall issue such shares of
Common Stock and Preferred Stock in accordance with the terms of the Certificate
of Incorporation and the Certificate of Designations or the Warrants, as the
case may be, and otherwise comply with the terms hereof and thereof.
8.4 Designation of Directors. Within ninety (90) days of the Closing
Date, the Company shall identify and obtain the commitment of two individuals to
serve on the Board of Directors, who shall (a) not be Affiliates of or
Affiliated with the Company or ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, (b) be reasonably acceptable to
the Purchasers and (c) be designated to serve on the Board of Directors in
accordance with Section 6.3(d) of the Stockholders Agreement.
8.5 Compliance with Laws. The Company shall comply in all material
respects with all Requirements of Law and with the directions of any
Governmental Authority having jurisdiction over the Company or its business or
property.
8.6 Insurance. The Company shall maintain key-man insurance with
respect to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ in an aggregate amount of not less than $500,000.
8.7 Books and Records. The Company shall keep proper books of record
and account, in which full and correct entries shall be made of all financial
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transactions and the assets and business of the Company in accordance with GAAP
consistently applied.
ARTICLE 9
MISCELLANEOUS
9.1 Survival of Representations and Warranties. All of the
representations and warranties made herein shall survive the execution and
delivery of this Agreement until the date that is ninety (90) days after the
receipt by the Purchasers of audited financial statements of the Company for the
fiscal year ending December 31, 1997 (or, if such fiscal year changes and no
such audited consolidated financial statements are available, then the successor
fiscal year), except for (a) Sections 3.1, 3.2, 3.4, 3.7, 4.1, 4.2, 4.4, 4.6 and
4.7, which representations and warranties shall survive until the second
anniversary of the Closing Date and (b) Section 3.12, which shall survive until
the later to occur of (i) the lapse of the statute of limitations with respect
to the assessment of any Tax to which such representation and warranty relates
(including any extensions or waivers thereof) and (y) sixty (60) days after the
final administrative or judicial determination of the Taxes to which such
representation and warranty relates, and no claim with respect to Section 3.12
may be asserted thereafter with the exception of claims arising out of any fact,
circumstance, action or proceeding to which the party asserting such claim shall
have given notice to the other parties to this Agreement prior to the
termination of such period of reasonable belief that a tax liability will
subsequently arise therefrom.
9.2 Notices. All notices, demands and other communications provided for
or permitted hereunder shall be made in writing and shall be by registered or
certified first-class mail, return receipt requested, telecopier, courier
service or personal delivery:
(a) if to the Company:
Proxicom, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.,
General Counsel
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with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
440 Louisiana
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III, Esq.
and
▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(b) if to GAP LP or GAP Coinvestment:
c/o General Atlantic Service Corporation
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
All such notices and communications shall be deemed to have been duly
given when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial courier service; five (5) Business Days
after being deposited in the mail, postage prepaid, if mailed; and when receipt
is mechanically acknowledged, if telecopied.
9.3 Successors and Assigns: Third Party Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the successors and permitted
assigns of the parties hereto. Subject to applicable securities laws, the
Purchasers may assign any of its rights under any of the Transaction Documents
to any
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of its Affiliates. The Company may not assign any of their rights under this
Agreement without the written consent of the Purchasers. Except as provided in
Article 7, no Person other than the parties hereto and their successors and
permitted assigns is intended to be a beneficiary of this Agreement.
9.4 Amendment and Waiver.
(a) No failure or delay on the part of the Company or the
Purchasers in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to the
Company or the Purchasers at law, in equity or otherwise.
(b) Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by the Company or the Purchasers from the terms of
any provision of this Agreement, shall be effective (i) only if it is made or
given in writing and signed by the Company and the Purchasers, and (ii) only in
the specific instance and for the specific purpose for which made or given.
Except where notice is specifically required by this Agreement, no notice to or
demand on the Company in any case shall entitle the Company to any other or
further notice or demand in similar or other circumstances.
9.5 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
9.6 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
9.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF VIRGINIA, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF.
9.8 Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or
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unenforceable shall substantially impair the benefits of the remaining
provisions hereof.
9.9 Rules of Construction. Unless the context otherwise requires,
references to sections or subsections refer to sections or subsections of this
Agreement.
9.10 Entire Agreement. This Agreement, together with the exhibits and
schedules hereto, and the other Transaction Documents are intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein and therein. There are no
restrictions, promises, representations, warranties or undertakings, other than
those set forth or referred to herein or therein. This Agreement, together with
the exhibits and schedules hereto, and the other Transaction Documents supersede
all prior agreements and understandings between the parties with respect to such
subject matter.
9.11 Fees. The Purchasers shall bear all of their fees, disbursements
and other charges of counsel incurred in connection with this Agreement and the
transactions contemplated hereby.
9.12 Publicity. Except as may be required by applicable Requirement of
Law, none of the parties hereto shall issue a publicity release or public
announcement or otherwise make any disclosure concerning this Agreement or the
transactions contemplated hereby, without prior approval by the other parties
hereto; provided, however, that nothing in this Agreement shall restrict any
Purchaser from disclosing information (a) that is already publicly available;
(b) to the prospective transferee in connection with any contemplated transfer
of any of the Purchased Shares; and (c) to its attorneys, accountants,
consultants and other advisors to the extent necessary to obtain their services
in connection with such Purchaser's investment in the Company. If any
announcement is required by law to be made by any party hereto, prior to making
such announcement such party will deliver a draft of such announcement to the
other parties and shall give the other parties an opportunity to comment
thereon.
9.13 Further Assurances. Each of the parties shall execute such
documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or making any filings with, any Governmental Authority or
any other Person) as may be reasonably required or desirable to carry out or to
perform the provisions of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective officers hereunto duly authorized on
the date first above written.
PROXICOM, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
GENERAL ATLANTIC PARTNERS 34, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: A Managing Member
GAP COINVESTMENT PARTNERS, L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: A General Partner