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EXHIBIT 10.21
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STOCKHOLDERS AGREEMENT
among
PROBUSINESS, INC.,
GENERAL ATLANTIC PARTNERS 39, L.P.,
GAP COINVESTMENT PARTNERS, L.P.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & ▇▇▇▇ ▇. ▇▇▇▇▇▇
1989 IRREVOCABLE TRUST,
▇▇▇▇ ▇. ▇▇▇▇▇▇ AS CUSTODIAN FOR
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇. ▇▇▇▇▇▇ AS CUSTODIAN FOR
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ TRUST ESTATE
and
SILAS ▇▇▇▇ ▇▇▇▇▇▇ FAMILY TRUST
___________________________________
Dated: March 12, 1997
___________________________________
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TABLE OF CONTENTS
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1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Restrictions on Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1 Limitation on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2 Permitted Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.3 Permitted Transfer Procedures . . . . . . . . . . . . . . . . . . . . . . . 8
2.4 Transfers in Compliance with Law; Substitution of Transferee . . . . . . . . 8
3. Right of First Offer and Tag-Along Rights. . . . . . . . . . . . . . . . . . . . . . . . 9
3.1 Proposed Voluntary Transfers. . . . . . . . . . . . . . . . . . . . . . . . 9
3.2 Involuntary Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4. Future Issuance of Shares; Preemptive Rights . . . . . . . . . . . . . . . . . . . . . . 15
4.1 Offering Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.2 Preferred Stockholder Option; Exercise. . . . . . . . . . . . . . . . . . . 15
4.3 Preemptive Rights; Exercise . . . . . . . . . . . . . . . . . . . . . . . . 16
4.4 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.5 Sale to Subject Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . 17
5. After-Acquired Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6. Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Stockholders Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.3 Election of Directors; Number and Composition . . . . . . . . . . . . . . . 18
6.4 Reduction of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.5 Removal and Replacement of Directors . . . . . . . . . . . . . . . . . . . . 19
6.6 Reimbursement of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 19
7. Stock Certificate Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.2 Amendment and Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.3 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.5 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.6 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.7 Term of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.8 Variations in Pronouns . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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8.9 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.10 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.11 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
EXHIBITS
A Form of Transfer Agreement (Previously issued shares)
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STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated March 12, 1997 (this
"AGREEMENT"), among ProBusiness, Inc., a California corporation (the
"COMPANY"), General Atlantic Partners 39, L.P., a Delaware limited partnership
("GAP LP"), GAP Coinvestment Partners, L.P., a New York limited partnership
("GAP COINVESTMENT"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("THS"), ▇▇▇▇ ▇. ▇▇▇▇▇▇ ("JNS"), ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ & ▇▇▇▇ ▇. ▇▇▇▇▇▇ 1989 Irrevocable Trust ("1989 TRUST"), ▇▇▇▇ ▇.
▇▇▇▇▇▇ as custodian for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ("RHS"), ▇▇▇▇ ▇. ▇▇▇▇▇▇ as
custodian for ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ("LTS"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust Estate
("TRUST ESTATE") and Silas ▇▇▇▇ ▇▇▇▇▇▇ Family Trust ("FAMILY TRUST"; and,
together with ▇▇▇, ▇▇▇, ▇▇▇▇ Trust, RHS, LTS and Trust Estate, "SINTON").
WHEREAS, on the date hereof, Sinton owns (i) 100,000
shares, par value $.01 per share, of Common Stock of the Company (the "COMMON
STOCK"), (ii) 902,751 shares, par value $.01 per share, of Series A Preferred
Stock of the Company ("SERIES A STOCK"), (iii) 408,362 share, par value $.01
per share, of Series B Preferred Stock of the Company ("SERIES B STOCK") and
(iv) 58,921 shares, par value $.01 per share, of Series D Preferred Stock of
the Company ("SERIES D STOCK");
WHEREAS, on the date hereof, the Company, GAP LP and GAP
Coinvestment are entering into the Series F Preferred Stock Purchase Agreement,
dated the date hereof (the "STOCK PURCHASE AGREEMENT"), pursuant to which the
Company has agreed to, among other things, sell to (a) GAP LP an aggregate of
489,184 shares, par value $.01 per share, of Series F Preferred Stock of the
Company (the "SERIES F STOCK") and (b) GAP Coinvestment an aggregate of 85,549
shares of Series F Stock; and
WHEREAS, the parties hereto wish to restrict the transfer
of the Shares (as hereinafter defined) and to provide for, among other things,
first offer and preemptive rights and certain other rights under certain
conditions.
NOW, THEREFORE, in consideration of the mutual promises and
agreements set forth herein, the adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
1. Definitions. As used in this Agreement, the
following terms shall have the meanings set forth below:
"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
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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.
"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 California are
closed.
"Charter Documents" means the Articles of
Incorporation and the By-laws of the Company as in effect on the date hereof.
"Commission" means the Securities and Exchange
Commission or any similar agency then having jurisdiction to enforce the
Securities Act.
"Common Stock" means the 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 shares of Common Stock,
including, without limitation, the Preferred Stock, and any option, warrant or
other subscription or purchase right with respect to Preferred Stock or Common
Stock.
"Company" has the meaning assigned to such term in
the recital to this Agreement.
"Company Option" has the meaning set forth in Section 3.1.2 of this Agreement.
"Company Option Period" has the meaning set forth in
Section 3.1.2 of this Agreement.
"Contract Date" has the meaning set forth in Section
3.1.5 of this Agreement.
"Excess Offered Securities" has the meaning set
forth in Section 3.1.3 of this Agreement.
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"Exchange Act" means the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder.
"Fair Value" has the meaning set forth in Section
3.2.2.
"Family Members" has the meaning set forth in Section
2.2 of this Agreement.
"GAAP" means generally accepted United States
accounting principles in effect from time to time.
"GAP Coinvestment" has the meaning assigned to such
term in the recital to this Agreement.
"GAP Director" has the meaning set forth in Section
6.3 of 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.
"General Atlantic Stockholders" means GAP LP, GAP
Coinvestment and any Permitted Transferee of either of them to which Shares are
transferred in accordance with Section 2.2, and the term "General Atlantic
Stockholder" shall mean any such Person.
"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.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended.
"Initial Public Offering" means the consummation of
firm commitment underwritten initial public offering pursuant to an effective
Registration Statement filed under the Securities Act covering the offer and
sale of shares of Common Stock for the account of the Company.
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"Involuntary Transfer" means any transfer (other
than a Permitted Pledge), proceeding or action by or in which a Stockholder
shall be deprived or divested of any right, title or interest in or to any of
the Shares (except for any transfer, proceeding or action pursuant to the death
of a Stockholder), including, without limitation, any seizure under levy of
attachment or execution, any transfer in connection with bankruptcy (whether
pursuant to the filing of a voluntary or an involuntary petition under the
United States Bankruptcy Code of 1978, or any modifications or revisions
thereto) or other court proceeding to a debtor in possession, trustee in
bankruptcy or receiver or other officer or agency, any transfer to a state or
to a public officer or agency pursuant to any statute pertaining to escheat or
abandoned property and any transfer pursuant to a divorce or separation
agreement or a final decree of a court in a divorce action.
"Involuntary Transferee" has the meaning assigned
such term in Section 3.2.1 of this Agreement.
"IPO Effectiveness Date" means the date upon which
the Company commences its Initial Public Offering.
"Liens" has the meaning assigned such term in Section
3.1.4 of this Agreement.
"New Issuance Notice" has the meaning set forth in
Section 4.1 of this Agreement.
"New Securities" has the meaning set forth in Section
4.1 of this Agreement.
"Offer Price" has the meaning assigned such term in
Section 3.1.1 of this Agreement.
"Offered Securities" has the meaning assigned such
term in Section 3.1.1 of this Agreement.
"Offering Notice" has the meaning assigned such term
in Section 3.1.1 of this Agreement.
"Option Agreements" means those Option Agreements
dated as of October 31, 1991 and March 27, 1992 between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
the persons named therein.
"Option Period" has the meaning set forth in Section
3.1.3 of this Agreement.
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"Other Stockholder" means any transferee of a Sinton
Stockholder or a General Atlantic Stockholder (other than a Permitted
Transferee thereof) who has agreed to be bound by the terms and conditions of
this Agreement in accordance with Section 2.4 and to whom Shares have been
transferred in accordance with Section 3.1.5.
"Permitted Pledge" has the meaning assigned to such
term in Section 2.1 of this Agreement.
"Permitted Transferee" has the meaning assigned such
term in Section 2.2 of this Agreement.
"Person" means any individual, corporation,
partnership, limited liability company, firm, joint venture, association, joint
stock company, trust, unincorporated organization, Governmental Authority or
other entity.
"Preemptive Rightholder" has the meaning set forth in
Section 4.3 of this Agreement.
"Preferred Stock" means, collectively, the Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, Series E Preferred Stock and Series F Preferred Stock, par
value $.01 per share, of the Company.
"Preferred Stockholders" means the General Atlantic
Stockholders and the Sinton Stockholders, and the term "Preferred Stockholder"
shall mean any such Person.
"Proportionate Percentage" has the meaning set forth
in Section 4.3 of this Agreement.
"Proposed Price" has the meaning set forth in Section
4.1 of this Agreement.
"Registration Statement" means a registration
statement filed pursuant to the Securities Act.
"Rightholder" has the meaning set forth in Section
3.1.3 of this Agreement.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
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"Selling Stockholder" has the meaning set forth in
Section 3.1.1 of this Agreement.
"Shares" means, with respect to each Stockholder, all
shares, whether now owned or hereafter acquired, of Common Stock and Preferred
Stock owned thereby; provided, however, for the purposes of any computation of
the number of Shares either outstanding (with respect to the Company) or owned
or held by any Stockholder or otherwise to be determined pursuant to Sections 2,
3, 4, 6 and 8.2(b), the shares of Common Stock issuable upon conversion,
exercise or exchange of all Common Stock Equivalents shall be deemed
outstanding, owned or held whether or not such conversion, exercise or exchange
has actually been effected.
"Sinton" means, collectively, ▇▇▇, ▇▇▇, ▇▇▇▇ Trust,
RHS, LTS, Trust Estate and Family Trust.
"Sinton Stockholders" means Sinton and any Permitted
Transferee thereof to which Shares are transferred in accordance with Section
2.2, and the term "Sinton Stockholder" shall mean any such Person.
"Stock Purchase Agreement" has the meaning assigned
to such term in the recital to this Agreement.
"Stockholders" means the Sinton Stockholders and the
General Atlantic Stockholders and any transferee thereof who has agreed to be
bound by the terms and conditions of this Agreement in accordance with Section
2.4, and the term "Stockholder" shall mean any such Person.
"Stockholders Meeting" has the meaning set forth in
Section 6.1.
"Subject Purchaser" has the meaning set forth in
Section 4.1 of this Agreement.
"Subsidiaries" means, as of the relevant date of
determination, with respect to any Person, a corporation or other Person 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. Unless otherwise qualified, or the
context otherwise requires, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Company
"Tag-Along Rightholder" has the meaning set forth in
Section 3.1.6(a) of this Agreement.
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"transfer" has the meaning set forth in Section 2.1
of this Agreement.
"Transferred Shares" has the meaning set forth in
Section 3.2.1 of this Agreement.
"Third Party Purchaser" has the meaning set forth
in Section 3.1.1 of this Agreement.
"Written Consent" has the meaning set forth in
Section 6.1 of this Agreement.
2. Restrictions on Transfer of Shares.
2.1 Limitation on Transfer. No Stockholder shall
sell, give, assign, hypothecate, pledge, encumber, grant a security interest in
or otherwise dispose of (whether by operation of law or otherwise) (each a
"TRANSFER") any Shares or any right, title or interest therein or thereto,
except in accordance with the provisions of this Agreement; provided, however,
that (i) as collateral for a loan to THS by a financial institution, THS may
pledge (a "PERMITTED PLEDGE") to such financial institution up to 200,000 shares
of Preferred Stock (subject to adjustment for stock splits, stock dividends,
recapitalizations or similar events) or the Common Stock Equivalent and (ii) the
Sinton Stockholders may transfer up to an aggregate of 28,612 shares of
Preferred Stock (subject to adjustment as provided for in the Option Agreements)
to certain holders of Series B Stock pursuant to the Option Agreements. In the
event of such transfer, any transferee obtaining any record of beneficial
interest or right to vote such Shares hereunder shall agree to be bound by this
Agreement and shall comply with Section 2.4. Any attempt to transfer any Shares
or any rights thereunder in violation of the preceding sentence shall be null
and void ab initio and the Company shall not register any such transfer.
2.2 Permitted Transfers. Notwithstanding anything to
the contrary contained in this Agreement, but subject to Sections 2.3 and 2.4,
at any time, (a) Sinton may transfer all or a portion of Shares held by Sinton
to (i) a member of such Sinton's respective immediate family, which shall
include parents, spouse, siblings, children or grandchildren ("FAMILY MEMBERS")
or (ii) a trust, corporation, partnership or limited liability company, all of
the beneficial interests in which shall be held by Sinton or one or more Family
Members of Sinton or which would otherwise be an Affiliate of Sinton; provided,
however, that during the period that any such trust, corporation, partnership or
limited liability company holds any right, title or interest in any Shares, no
Person other than Sinton or one or more Family Members of Sinton may be or
become beneficiaries, stockholders, limited or general partners or members
thereof; and (b) each of GAP LP and GAP Coinvestment may transfer all or a
portion of its Shares to any of its Affiliates (the Persons referred to in
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the preceding clauses (a) and (b) are each referred to hereinafter as a
"PERMITTED TRANSFEREE"). A Permitted Transferee of Shares pursuant to this
Section 2.2 may transfer its Shares pursuant to this Section 2.2 only to the
transferor Stockholder or to a Person that is a Permitted Transferee of such
transferor Stockholder. Notwithstanding anything to the contrary contained in
this Agreement, (a) if any Permitted Transferee of Sinton to whom or which
Shares have been transferred in accordance with this Section 2.2 ceases to be a
Permitted Transferee of Sinton, then, prior to such event, the Sinton
Stockholders (other than such Permitted Transferee) may repurchase such Shares
or, if such Sinton Stockholders do not wish to repurchase such Shares, then
such Permitted Transferee shall offer the Shares held by such Permitted
Transferee to the Company and the General Atlantic Stockholders in accordance
with Section 3.1 and (b) if any Permitted Transferee of GAP LP or GAP
Coinvestment, as the case may be, to whom or which Shares have been transferred
in accordance with this Section 2.2 ceases to be an Affiliate of GAP LP or GAP
Coinvestment, as the case may be, then, prior to such event, the General
Atlantic Stockholders (other than such Permitted Transferee) may repurchase
such Shares or, if such General Atlantic Shareholders do not wish to repurchase
such Shares, then such Permitted Transferee of GAP LP or GAP Coinvestment, as
the case may be, shall offer the Shares held by such Permitted Transferee to
the Company and the Sinton Stockholders in accordance with Section 3.1.
2.3 Permitted Transfer Procedures. If any
Stockholder wishes to transfer Shares to a Permitted Transferee under Section
2.2, such Stockholder shall give notice to the Company of its intention to make
any transfer permitted under Section 2.2 not less than ten (10) days prior to
effecting such transfer, which notice shall state the name and address of each
Permitted Transferee to whom such transfer is proposed and the number of Shares
proposed to be transferred to such Permitted Transferee.
2.4 Transfers in Compliance with Law;
Substitution of Transferee. Notwithstanding any other provision of this
Agreement, no transfer may be made pursuant to this Section 2 or Section 3
unless (a) the transferee has agreed in writing to be bound by the terms and
conditions of this Agreement pursuant to an instrument substantially in the
form attached hereto as Exhibit A, (b) the transfer complies in all respects
with the applicable provisions of this Agreement and (c) the transfer complies
in all respects with applicable federal and state securities laws, including,
without limitation, the Securities Act. If requested by the Company in its
reasonable judgment, an opinion of counsel to such transferring Stockholder
shall be supplied to the Company at such transferring Stockholder's expense, to
the effect that such transfer complies with the applicable federal and state
securities laws. Upon becoming a party to this Agreement, (i) the Permitted
Transferee of a Sinton Stockholder shall be substituted for, and shall enjoy
the same rights and be subject to the same obligations as, the transferring
Sinton Stockholder hereunder with respect to the Shares transferred to such
Permitted Transferee, (ii) the Permitted Transferee of a
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General Atlantic Stockholder shall be substituted for, and shall enjoy
the same rights and be subject to the same obligations as, a General Atlantic
Stockholder hereunder, (iii) an Other Stockholder shall be subject to the same
obligations as, but none of the rights of, the transferring Sinton Stockholder
or General Atlantic Stockholder, as the case may be, and (iv) the transferee of
an Other Stockholder shall be substituted for, and shall be subject to the same
obligations as, the transferring Other Stockholder hereunder with respect to
the Shares transferred to such transferee.
3. Right of First Offer and Tag-Along Rights.
3.1 Proposed Voluntary Transfers.
3.1.1 Offering Notice. Subject to Section
2, if any Stockholder (a "SELLING STOCKHOLDER") wishes to transfer all or any
portion of its or his Shares to any Person (other than to a Permitted
Transferee) (a "THIRD PARTY PURCHASER"), such Selling Stockholder shall offer
such Shares first to the Company by sending written notice (the "OFFERING
NOTICE") to the Company and the other Stockholders which shall state (a) the
number of Shares proposed to be transferred (the "OFFERED SECURITIES") and (b)
the proposed purchase price per Share which the Selling Stockholder is willing
to accept (the "OFFER PRICE"). Upon delivery of the Offering Notice, such
offer shall be irrevocable unless and until the rights of first offer provided
for herein shall have been waived or shall have expired.
3.1.2 Company Option; Exercise. For a period
of fifteen (15) days after the giving of the Offering Notice pursuant to
Section 3.1.1 (the "COMPANY OPTION PERIOD"), the Company shall have the right
(the "COMPANY OPTION") to purchase any or all of the Offered Securities at a
purchase price equal to the Offer Price and upon the terms and conditions set
forth in the Offering Notice. The right of the Company to purchase any or all
of the Offered Securities under this Section 3.1.2 shall be exercisable by
delivering written notice of the exercise thereof, prior to the expiration of
the 15-day period referred to above, to the Selling Stockholder, with a copy to
the Sinton Stockholders and the General Atlantic Stockholders, which notice
shall state the number of Offered Securities proposed to be purchased by the
Company. The failure of the Company to respond within such 15-day period shall
be deemed to be a waiver of the Company's rights under this Section 3.1.2,
provided that the Company may waive its rights under this Section 3.1.2 prior
to the expiration of such 15-day period by giving written notice to the Selling
Stockholder, with a copy to the Sinton Stockholders and the General Atlantic
Stockholders.
3.1.3 Stockholder Option; Exercise.
(a) If the Company does not elect to
purchase all of the Offered Securities pursuant to Section 3.1.2, then for a
period of thirty (30)
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days after the earlier to occur of (a) the expiration of the Company Option
Period pursuant to Section 3.1.2 and (b) the date upon which the Selling
Stockholder shall have received written notice from the Company of its exercise
of the Company Option pursuant to Section 3.1.2 or its waiver thereof (the
"OPTION PERIOD"), each of the Sinton Stockholders (in the event that the
Selling Stockholder is not a Sinton Stockholder) and each of the General
Atlantic Stockholders (in the event that the Selling Stockholder is not a
General Atlantic Stockholder) (each, a "RIGHTHOLDER") shall have the right to
purchase all, but not less than all, of the remaining Offered Securities at a
purchase price equal to the Offer Price and upon the terms and conditions set
forth in the Offering Notice. Each such Rightholder shall have the right to
purchase that percentage of the Offered Securities determined by dividing (i)
the total number of Shares then owned by such Rightholder by (ii) the total
number of Shares then owned by all such Rightholders. If any Rightholder does
not fully subscribe for the number or amount of Offered Securities it or he is
entitled to purchase, then each other participating Rightholder shall have the
right to purchase that percentage of the Offered Securities not so subscribed
for (for the purposes of this Section 3.1.3, the "EXCESS OFFERED SECURITIES")
determined by dividing (x) the total number of Shares then owned by such fully
participating Rightholder by (y) the total number of Shares then owned by all
fully participating Rightholders who elected to purchase Offered Securities.
The procedure described in the preceding sentence shall be repeated until there
are no remaining Excess Offered Securities. If the Company and/or the
Rightholders do not purchase all, but not less than all, of Offered Securities
pursuant to Section 3.1.2 and/or Section 3.1.3, then the Selling Stockholder
may, subject to Section 3.1.6, sell the Offered Securities to a Third Party
Purchaser in accordance with Section 3.1.5 without any of the obligations set
forth in Sections 3.1.2, 3.1.3 and 3.1.4.
(b) The right of each Rightholder to purchase
all of the remaining Offered Securities under subsection (a) above shall be
exercisable by delivering written notice of the exercise thereof, prior to the
expiration of the 30-day period referred to in subsection (a) above, to the
Selling Stockholder with a copy to the Company and the other Stockholders.
Each such notice shall state (i) the number of Shares held by such Rightholder
and (ii) the number of Shares that such Rightholder is willing to purchase
pursuant to this Section 3.1.3. The failure of a Rightholder to respond within
such 30-day period to the Selling Stockholder shall be deemed to be a waiver of
such Rightholder's rights under this Section 3.1.3, provided that each
Rightholder may waive its rights under this Section 3.1.3 prior to the
expiration of such 30-day period by giving written notice to the Selling
Stockholder, with a copy to the Company.
3.1.4 Closing. The closing of the purchases
of Offered Securities subscribed for by the Company under Section 3.1.2 and/or
the Rightholders under Section 3.1.3 shall be held at the principal office of
the Company at 11:00 a.m., local time, on the 60th day after the giving of the
Offering Notice
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pursuant to Section 3.1.1 or at such other time and place as the parties to the
transaction may agree. At such closing, the Selling Stockholder shall deliver
certificates representing the Offered Securities, duly endorsed for transfer
and accompanied by all requisite transfer taxes, if any, and such Offered
Securities shall be free and clear of any liens, claims, options, charges,
encumbrances or rights ("LIENS") (other than those arising hereunder and those
attributable to actions by the purchasers) and the Selling Stockholder shall so
represent and warrant, and further represent and warrant that it is the sole
beneficial and record owner of such Offered Securities. The Company or each
Rightholder, as the case may be, purchasing Offered Securities shall deliver at
the closing payment in full in immediately available funds for the Offered
Securities purchased by it or him. At such closing, all of the parties to the
transaction shall execute such additional documents as are otherwise necessary
or appropriate.
3.1.5 Sale to a Third Party Purchaser. Unless
the Company and/or the Rightholders elect to purchase all, but not less than
all, of the Offered Securities under Sections 3.1.2 and 3.1.3, the Selling
Stockholder may, subject to Section 3.1.6, sell the Offered Securities to a
Third Party Purchaser on the terms and conditions set forth in the Offering
Notice; provided, however, that such sale is bona fide and made pursuant to a
contract entered into within ninety (90) days of the earlier to occur of (i)
the waiver by the Company and the Rightholders of their options to purchase the
Offered Securities and (ii) the expiration of the Option Period (the earlier of
such dates being offered herein as the "CONTRACT DATE"); and provided further,
that such sale shall not be consummated unless and until all of the following
conditions are met:
(a) The Selling Stockholder shall deliver to
the Company a certificate of a Third Party Purchaser stating that (i)
such Third Party Purchaser is aware of the rights of the Company, the
Sinton Stockholders and the General Atlantic Stockholders contained in
Section 3.1 and (ii) prior to the purchase by such Third Party
Purchaser of any of such Offered Securities, such Third Party
Purchaser shall become a party to this Agreement and agree to be bound
by the terms and conditions hereof in accordance with Section 2.4
hereof.
(b) The consummation of such sale to a Third
Party Purchaser shall not be subject to any conditions (other than
necessary filings under the HSR Act), except that it may be
conditioned upon the truth as of the closing of the proposed purchase
of customary representations and warranties and conditions (including,
compliance with applicable securities laws) and the delivery of stock
certificates and a customary legal opinion.
(c) A Third Party Purchaser shall have
furnished evidence satisfactory to the Company, in its reasonable
judgment, as
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to the financial ability of such Third Party Purchaser to consummate the
proposed purchase.
If such sale is not consummated within forty-five (45) days of the Contract
Date for any reason, then the restrictions provided for herein shall again
become effective, and no transfer of such Offered Securities may be made
thereafter by the Selling Stockholder without again offering the same to the
Company, the Sinton Stockholders and the General Atlantic Stockholders in
accordance with this Section 3.1.
3.1.6 Tag-Along Rights.
(a) If a Sinton Stockholder is transferring
Offered Securities to a Third Party Purchaser pursuant to Section 3.1.5, then
each of the General Atlantic Stockholders (each, a "TAG-ALONG RIGHTHOLDER")
shall have the right to sell to such Third Party Purchaser, upon the terms set
forth in the Offering Notice, that number of Shares held by such Tag-Along
Rightholder equal to that percentage of the Offered Securities determined by
dividing (i) the total number of Shares then owned by such Tag-Along
Rightholder by (ii) the total number of Shares then owned by all Tag-Along
Rightholders exercising their rights pursuant to this Section 3.1.6 plus the
total number of Shares then owned by the Sinton Stockholders. The Selling
Stockholder and the Tag-Along Rightholder(s) shall effect the sale of the
Offered Securities and such Tag-Along Rightholder(s) shall sell the number of
Offered Securities required to be sold pursuant to this Section 3.1.6(a), and
the number of Offered Securities to be sold to such Third Party Purchaser by
the Selling Stockholder shall be reduced accordingly.
(b) In order to exercise its right to sell
Shares to a Third Party Purchaser pursuant to this Section 3.1.6, a Tag-Along
Rightholder must agree to make substantially the same representations,
warranties, covenants and indemnities and other similar agreements as a Sinton
Stockholder agrees to make in connection with the proposed sale by it or him of
Offered Securities to a Third Party Purchaser. Each Sinton Stockholder shall
give notice to each Tag-Along Rightholder of each proposed sale by it or him of
Offered Securities which gives rise to the rights of the Tag-Along Rightholders
set forth in this Section 3.1.6, at least thirty (30) days prior to the
proposed consummation of such sale, setting forth the name of such Sinton
Stockholder, the number of Offered Securities, the name and address of the
proposed Third Party Purchaser, the proposed amount and form of consideration
and terms and conditions of payment offered by such Third Party Purchaser, the
percent of Shares that such Tag-Along Rightholder may sell to such Third Party
Purchaser (determined in accordance with Section 3.1.6(a)), and a
representation that such Third Party Purchaser has been informed of the
"tag-along" rights provided for in this Section 3.1.6 and has agreed to
purchase Shares in accordance with the terms hereof. The tag-along rights
provided by this Section 3.1.6 must be exercised by such Tag-Along Rightholder
wishing to sell its Shares within fifteen (15) days following receipt
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of the notice required by the preceding sentence, by delivery of a written
notice to such Sinton Stockholder indicating such Tag-Along Rightholder's wish
to exercise its rights and specifying the number of Shares (up to the maximum
number of Shares owned by such Tag-Along Rightholder required to be purchased
by such Third Party Purchaser) it wishes to sell, provided that such Tag-Along
Rightholder may waive its rights under this Section 3.1.6 prior to the
expiration of such 15-day period by giving written notice to the Selling
Stockholder, with a copy to the Company. The failure of a Tag-Along
Rightholder to respond within such 15-day period shall be deemed to be a waiver
of such Tag-Along Rightholder's rights under this Section 3.1.6. If such Third
Party Purchaser fails to purchase Shares from any Tag-Along Rightholder that
has properly exercised its tag-along rights pursuant to this Section 3.1.6(b),
then such Sinton Stockholder shall not be permitted to consummate the proposed
sale of the Offered Securities, and any such attempted sale shall be null and
void and the Company shall not register any such transfer.
3.2 Involuntary Transfers.
3.2.1 Rights of First Offer upon Involuntary
Transfer. If an Involuntary Transfer of any Shares (the "TRANSFERRED SHARES")
owned by any Stockholder shall occur, then the Company, the Sinton Stockholders
and the General Atlantic Stockholders (unless such Stockholder is the
Involuntary Transferee) shall have the same rights as specified in Sections
3.1.2 and 3.1.3, respectively, with respect to such Transferred Shares as if
the Involuntary Transfer had been a proposed voluntary transfer by a Selling
Stockholder and shall be governed by Section 3.1 except that (a) the time
periods shall run from the date of receipt by the Company of actual notice of
the Involuntary Transfer (and the Company shall immediately give notice to the
Rightholders of the date of receipt of such notice), (b) such rights shall be
exercised by notice to the transferee of such Transferred Shares (the
"INVOLUNTARY TRANSFEREE") rather than to the Stockholder who suffered or will
suffer the Involuntary Transfer and (c) the purchase price per Transferred
Share shall be agreed upon by the Involuntary Transferee and the Company or the
purchasing Rightholders, as the case may be; provided, however, that if such
parties fail to agree as to such purchase price, the purchase price shall be
the Fair Value thereof as determined in accordance with Section 3.2.2.
3.2.2 Fair Value. If the parties fail to
agree upon the purchase price of the Transferred Shares in accordance with
Section 3.2.1 hereof, then the Company or the Rightholders, as the case may be,
shall purchase the Transferred Shares at a purchase price equal to the Fair
Value (as hereinafter defined) thereof. The Fair Value of the Transferred
Shares shall be determined by a panel of three independent appraisers, which
shall be nationally recognized investment banking firms or nationally
recognized experts experienced in the valuation of corporations engaged in the
business conducted by the Company. Within five (5) Business Days after the
date the applicable parties determine that they cannot agree as to the
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purchase price, the Involuntary Transferee and the Board of Directors (in the
case of a purchase by the Company) or the purchasing Rightholders, as the case
may be, shall each designate one such appraiser that is willing and able to
conduct such determination. If either the Involuntary Transferee or the Board
of Directors or the purchasing Rightholders, as the case may be, fails to make
such designation within such period, then other party that has made the
designation shall have the right to make the designation on its behalf. The
two appraisers designated shall, within a period of five (5) Business Days
after the designation of the second appraiser, agree to designate a third
appraiser. The three appraisers shall conduct their determination as promptly
as practicable, and the Fair Value of the Transferred Shares shall be the
average of the determination of the two appraisers that are closer to each
other than to the determination of the third appraiser, which third
determination shall be discarded; provided, however, that if the determination
of two appraisers are equally close to the determination of the third
appraiser, then the Fair Value of the Transferred Shares shall be the average
of the determination of all three appraisers. Such determination shall be
final and binding on the Involuntary Transferee, the Company and the
Rightholders. The Involuntary Transferee shall be responsible for the fees and
expenses of the appraiser designated by or on behalf of it, and the Company or
the purchasing Rightholders, as the case may be, for the fees and expenses of
the appraiser designated by or on behalf of the Board of Directors or the
Purchasing Rightholders, as the case may be. The Involuntary Transferee and
the Company or the purchasing Rightholders, as the case may be, shall each
share half the fees and expenses of the appraiser designated by the appraisers.
For purposes of this Section 3.2.2, the "Fair Value" of the Transferred Shares
means the fair market value of such Transferred Shares determined in accordance
with this Section 3.2.2 based upon all considerations that the appraisers
determine to be relevant.
3.2.3 Closing. The closing of any purchase
under this Section 3.2 shall be held at the principal office of the Company at
11:00 a.m., local time, on the earlier to occur of (a) the fifth Business Day
after the purchase price per Transferred Share shall have been agreed upon by
the Involuntary Transferee and the Company or the purchasing Rightholders, as
the case may be, in accordance with Section 3.2.1(c) or (b) the fifth Business
Day after the determination of the Fair Value of the Transferred Shares in
accordance with Section 3.2.2, or at such other time and place as the parties
to the transaction may agree. At such closing, the Involuntary Transferee
shall deliver certificates, if applicable, or other instruments or documents
representing the Transferred Shares being purchased under this Section 3.2,
duly endorsed with a signature guarantee for transfer and accompanied by all
requisite transfer taxes, if any, and such Transferred Shares shall be free and
clear of any Liens (other than those arising hereunder) arising through the
action or inaction of the Involuntary Transferee and the Involuntary Transferee
shall so represent and warrant, and further represent and warrant that it is
the beneficial owner of such Transferred Shares. The Company or each
Rightholder, as the case may be, purchasing such Transferred Shares shall
deliver at closing payment in full in
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immediately available funds for such Transferred Shares. At such closing, all
parties to the transaction shall execute such additional documents as are
otherwise necessary or appropriate.
3.2.4 General. In the event that the
provisions of this Section 3.2 shall be held to be unenforceable with respect
to any particular Involuntary Transfer, the Company and the Rightholders shall
have the rights specified in Sections 3.1.2 and 3.1.3, respectively, with
respect to any transfer by an Involuntary Transferee of such Shares, and each
Rightholder agrees that any Involuntary Transfer shall be subject to such
rights, in which case the Involuntary Transferee shall be deemed to be the
Selling Stockholder for purposes of Section 3.1 of this Agreement and shall be
bound by the provisions of Section 3.1 and other related provisions of this
Agreement.
4. Future Issuance of Shares; Preemptive Rights.
4.1 Offering Notice. Except for (a) capital
stock of the Company which may be issued to employees, consultants or directors
of the Company pursuant to a stock option plan or other employee benefit
arrangement approved by the Board of Directors, (b) a dividend on the
outstanding shares of Common Stock in capital stock of the Company or a
subdivision of the outstanding shares of Common Stock into a larger number of
shares of Common Stock, (c) capital stock of the Company issued upon exercise,
conversion or exchange of any Common Stock Equivalent, (d) capital stock of the
Company issued in consideration of the acquisition, approved by the Board of
Directors, by the Company or any of its Subsidiaries of another Person, (e)
capital stock of the Company which may be issued in connection with bank or
lease financings, facilities leases or strategic alliances; provided, however,
that (i) aggregated on an annual basis, such issuances do not exceed 1% of the
outstanding Shares of the Company and (ii) each such issuance is approved by
the Board of Directors or (f) the Series F Stock purchased under the Stock
Purchase Agreement (collectively, "NEW SECURITIES"), if the Company wishes to
issue any shares of capital stock or any other securities convertible into or
exchangeable for capital stock of the Company to any Person (the "SUBJECT
PURCHASER") after the date hereof and prior to the IPO Effectiveness Date, then
the Company shall offer such New Securities first to the Preferred Stockholders
by sending written notice (the "NEW ISSUANCE NOTICE") to the General Atlantic
Stockholders and the Sinton Stockholders, which New Issuance Notice shall state
(a) the number of New Securities proposed to be issued and (b) the proposed
purchase price per share of the New Securities that the Company is willing to
accept (the "PROPOSED PRICE"). Upon delivery of the New Issuance Notice, such
offer shall be irrevocable unless and until the rights provided for in Sections
4.2 and 4.3 shall have been waived or shall have expired.
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4.2 Preferred Stockholder Option; Exercise. For
a period of fifteen (15) days after the giving of the New Issuance Notice
pursuant to Section 4.1, the Preferred Stockholders shall have the right (the
"PREFERRED OPTION") to purchase all, but not less than all, of the New
Securities at a purchase price equal to the Proposed Price and upon the terms
and conditions set forth in the New Issuance Notice. The Sinton Stockholders
shall have the right to purchase that percentage (the "SINTON PERCENTAGE") of
the New Securities determined by dividing (i) the total number of Shares then
owned by the Sinton Stockholders by (ii) the total number of Shares then
outstanding. The General Atlantic Stockholders shall have the right to
purchase that percentage of the New Securities equal to one (1) minus the
Sinton Percentage. If any Preferred Stockholder does not fully subscribe for
the number or amount of New Securities it is entitled to purchase, then each
other participating Preferred Stockholder shall have the right to purchase the
New Securities not so subscribed for. The right of the Preferred Stockholders
to purchase all of the New Securities under this Section 4.2 shall be
exercisable by delivering written notice of the exercise thereof, prior to the
expiration of the 15-day period referred to above, to the Company, which notice
shall state that the Preferred Stockholders elect to purchase all of the New
Securities. The failure of the Preferred Stockholders to respond within such
15-day period shall be deemed to be a waiver of the Preferred Stockholders'
rights under this Section 4.2, provided that the Preferred Stockholders may
waive their rights under this Section 4.2 prior to the expiration of such
15-day period by giving written notice to the Company.
4.3 Preemptive Rights; Exercise.
(a) If the Preferred Stockholders do not elect
to purchase all, but not less than all, of the New Securities pursuant to
Section 4.2, then for a period of fifteen (15) days after the earlier to occur
of (a) the expiration of the 15-day period referred to in Section 4.2 and (b)
the date upon which the Company shall have received written notice from the
Preferred Stockholders of their exercise of the Preferred Option pursuant to
Section 4.2 or the waiver thereof, the General Atlantic Stockholders and the
Sinton Stockholders (each, a "PREEMPTIVE RIGHTHOLDER") shall have the right to
purchase its Proportionate Percentage (as hereinafter defined) of the New
Securities at a purchase price equal to the Proposed Price and upon the terms
and conditions set forth in the New Issuance Notice. Each such Preemptive
Rightholder shall have the right to purchase that percentage of the New
Securities determined by dividing (a) the total number of Shares then owned by
such Preemptive Rightholder exercising its rights under this Section 4.3 by (b)
the total number of Shares then outstanding (the "PROPORTIONATE PERCENTAGE").
(b) The right of each Preemptive Rightholder
to purchase the New Securities under subsection (a) above shall be exercisable
by delivering written notice of the exercise thereof, prior to the expiration
of the 15-day period referred to in subsection (a) above, to the Company, which
notice shall state
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the amount of New Securities that such Preemptive Rightholder elects to
purchase pursuant to Section 4.3(a). The failure of a Preemptive Rightholder
to respond within such 15-day period shall be deemed to be a waiver of such
Preemptive Rightholder's rights under Section 4.3(a), provided that each
Preemptive Rightholder may waive its rights under Section 4.3(a) prior to the
expiration of such 15-day period by giving written notice to the Company.
4.4 Closing. The closing of the purchase of New
Securities subscribed for by the Preferred Stockholders under Section 4.2 or by
the Preemptive Rightholders under Section 4.3, as the case may be, shall be
held at the principal office of the Company at 11:00 a.m., local time, on (a)
the 30th day after the giving of the New Issuance Notice pursuant to Section
4.1, if the Preferred Stockholders elect to purchase all of the New Securities
pursuant to Section 4.2, (b) the 45th day after the giving of the New Issuance
Notice pursuant to Section 4.1, if the Preemptive Rightholders elect to
purchase any of the New Securities under Section 4.3 or (c) at such other time
and place as the parties to the transaction may agree. At such closing, the
Company shall deliver certificates representing the New Securities, and such
New Securities shall be issued free and clear of all Liens and the Company
shall so represent and warrant, and further represent and warrant that such New
Securities shall be, upon issuance thereof to the General Atlantic Stockholders
or the Sinton Stockholders as the case may be, and after payment therefor, duly
authorized, validly issued, fully paid and nonassessable. The General Atlantic
Stockholders or the Sinton Stockholders, as the case may be, purchasing the New
Securities shall deliver at the closing payment in full in immediately
available funds for the New Securities purchased by him or it. At such
closing, all of the parties to the transaction shall execute such additional
documents as are otherwise necessary or appropriate.
4.5 Sale to Subject Purchaser. Unless all of the
New Securities are purchased pursuant to Section 4.2 or Section 4.3, the
Company may sell to the Subject Purchaser the New Securities not purchased by
the Preferred Stockholders pursuant to Section 4.2 or the Preemptive
Rightholders pursuant to Section 4.3 on terms and conditions that are no more
favorable to the Subject Purchaser than those set forth in the New Issuance
Notice; provided, however, that such sale is bona fide and made pursuant to a
contract entered into within six (6) months of the earlier to occur of (i) the
notice or waiver by the Preemptive Rightholders of their option to purchase the
New Securities pursuant to Section 4.3 and (ii) the expiration of the 15-day
period referred to in Section 4.3. If such sale is not consummated within 30
days of the contract date referred to above for any reason, then the
restrictions provided for herein shall again become effective, and no issuance
and sale of New Securities may be made thereafter by the Company without again
offering the same in accordance with this Section 4. The closing of any issue
and purchase pursuant to this Section 4.5 shall be held at the time and place
as the parties to the transaction may agree.
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5. After-Acquired Securities. All of the provisions of
this Agreement shall apply to all of the Shares or Common Stock Equivalents now
owned or which may be issued or transferred hereafter to a Stockholder in
consequence of any additional issuance, purchase, exchange or reclassification
of any of such Shares or Common Stock Equivalents, corporate reorganization, or
any other form of recapitalization, consolidation, merger, share split or share
dividend, or which are acquired by a Stockholder in any other manner.
6. Corporate Governance.
6.1 General. From and after the execution of
this Agreement, each Stockholder shall vote its or his Shares at any regular or
special meeting of stockholders of the Company (a "STOCKHOLDERS MEETING") or in
any written consent executed in lieu of such a meeting of stockholders (a
"WRITTEN CONSENT"), and shall take all other actions necessary, to give effect
to the provisions of this Agreement (including, without limitation, Section 6.3
hereof) and to ensure that the Charter Documents do not, at any time hereafter,
conflict in any respect with the provisions of this Agreement.
6.2 Stockholders Actions. In order to effectuate
the provisions of this Section 6, each Stockholder (a) hereby agrees that when
any action or vote is required to be taken by such Stockholder pursuant to
Section 6 of this Agreement, such Stockholder shall use its best efforts to
call, or cause the appropriate officer and directors of the Company to call, a
Stockholders Meeting or to execute or cause to be executed a Written Consent to
effectuate such stockholder action, (b) shall use its best efforts to cause the
Board of Directors to adopt, either at a meeting of the Board of Directors or
by unanimous written consent of the Board of Directors, all the resolutions
necessary to effectuate the provisions of Section 6 of this Agreement and (c)
shall use its best efforts to cause the Board of Directors to cause the
Secretary of the Company, or if there be no secretary, such other officer of
the Company as the Board of Directors may appoint to fulfill the duties of
Secretary, not to record any vote or consent contrary to the terms of this
Section 6.
6.3 Election of Directors; Number and
Composition. Each Stockholder shall vote its or his Shares at any Stockholders
Meeting, or act by Written Consent with respect to such Shares, and take all
other actions necessary to ensure that the number of directors constituting the
entire Board of Directors shall be not less than five (5) nor more than nine
(9). Each Stockholder shall vote its or his Shares at any Stockholders Meeting
called for the purpose of filling the positions on the Board of Directors, or
in any Written Consent executed for such purpose, and to take all other actions
necessary to ensure the election to the Board of Directors of one (1)
individual designated by the General Atlantic Stockholders (who shall initially
be ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇) (the "GAP DIRECTOR"). Provided that the Stockholders have
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satisfied their obligations under this Section 6.3, the Sinton Stockholders may
vote their Shares (to the extent available) to elect THS to the Board of
Directors.
6.4 Reduction of Directors. Notwithstanding
anything to the contrary contained in this Agreement, if at any time the
General Atlantic Stockholders own less than 25% of the total number of Shares
purchased under the Stock Purchase Agreement, then the General Atlantic
Stockholders shall no longer be entitled to designate a director pursuant to
Section 6.3.
6.5 Removal and Replacement of Directors.
6.5.1 Removal of General Atlantic Directors.
If at any time the General Atlantic Stockholders notify the other Stockholders
of their wish to remove at any time and for any reason (or no reason) the GAP
Director, then each Stockholder shall vote all of its or his Shares so as to
remove such GAP Director.
6.5.2 Replacement of Directors.
(a) If at any time, a vacancy is created on
the Board of Directors by reason of the incapacity, death, removal or
resignation of the GAP Director, then the General Atlantic Stockholders shall
designate an individual who shall be appointed to fill such vacancy until the
next Stockholders Meeting.
(b) Upon receipt of notice of the
designation of a nominee, each Stockholder shall, as soon as practicable after
the date of such notice, take action, including the voting of its or his
Shares, to elect the director designated by the General Atlantic Stockholders,
as the case may be, to fill such vacancy.
6.6 Reimbursement of Expenses. Notwithstanding
anything to the contrary contained in this Agreement, the Company shall
reimburse GAP LP and GAP Coinvestment, or their respective designee, for all
reasonable travel and accommodation expenses incurred by the GAP Director in
connection with his attendance at a meeting of the Board of Directors or any
committee thereof.
7. Stock Certificate Legend. A copy of this Agreement
shall be filed with the Secretary of the Company and kept with the records of
the Company. Each certificate representing Shares now held or hereafter
acquired by any Stockholder shall for as long as this Agreement is effective
bear legends substantially in the following forms:
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
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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 REASONABLY
SATISFACTORY TO 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 MARCH __, 1997, AMONG PROBUSINESS, INC.,
GENERAL ATLANTIC PARTNERS 39, L.P., GAP COINVESTMENT PARTNERS, L.P.
AND SINTON (AS DEFINED THEREIN), 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.
8. Miscellaneous.
8.1 Notices. All notices, demands or 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, overnight mail or personal delivery:
(a) if the Company:
ProBusiness, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy:
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(b) if to any of the Sinton Stockholders:
c/o ProBusiness, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy:
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(c) if to any of the General Atlantic
Stockholders:
c/o General Atlantic Service Corporation
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
(d) if to any other Stockholder, at its address
as it appears on the record books of the
Company.
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Any party may by notice given in accordance with this Section 8.1 designate
another address or Person for receipt of notices hereunder. All such notices
and communications shall be deemed to have been duly given when delivered by
hand, if personally delivered; when delivered by courier or overnight mail, if
delivered by commercial courier service or overnight mail; five (5) Business
Days after being deposited in the mail, postage prepaid, if mailed; and when
receipt is mechanically acknowledged, if telecopied.
8.2 Amendment and Waiver.
(a) No failure or delay on the part of
any party hereto 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 parties hereto 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 any party from
the terms of any provision of this Agreement, shall be effective only if it is
made or given in writing and signed by (i) (x) the Company, (y) the Sinton
Stockholders holding Shares representing (after giving effect to any
adjustments) at least 60% of the Shares owned by all of the Sinton Stockholders
and (z) the General Atlantic Stockholders holding Shares representing (after
giving effect to any adjustments) at least 60% of the Shares owned by all of
the General Atlantic Stockholders and (ii) only in the specific instance and
for the specific purpose for which made or given. Any such amendment,
supplement, modification, waiver or consent shall be binding upon the Company
and all of the Stockholders.
8.3 Specific Performance. The parties hereto
intend that each of the parties have the right to seek damages or specific
performance in the event that any other party hereto fails to perform such
party's obligations hereunder. Therefore, if any party shall institute any
action or proceeding to enforce the provisions hereof, any party against whom
such action or proceeding is brought hereby waives any claim or defense therein
that the plaintiff party has an adequate remedy at law.
8.4 Headings. The headings in this Agreement
are for convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
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23
8.5 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 unenforceable shall
substantially impair the benefits of the remaining provisions hereof.
8.6 Entire Agreement. This Agreement, together
with the exhibits and schedules hereto, and the other Transaction Documents (as
defined the Stock Purchase Agreement) 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.
8.7 Term of Agreement. This Agreement shall
become effective upon the execution hereof and shall terminate upon the IPO
Effectiveness Date; except that the provisions contained in Section 6 shall
terminate on the earlier of (i) the date the General Atlantic Stockholders are
no longer entitled to designate a director pursuant to Section 6.4 and (ii) the
date of the third annual Stockholder's Meeting occurring after the IPO
Effectiveness Date (the "THIRD STOCKHOLDER'S MEETING"). It is understood by
the parties hereto that the Sinton Stockholders shall not be obligated to take
any action or vote pursuant to Section 6 at the Third Stockholder's Meeting.
8.8 Variations in Pronouns. All pronouns and
any variations thereof refer to the masculine, feminine or neuter, singular or
plural, as the context may require.
8.9 GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
8.10 Further Assurances. Each of the parties
shall, and shall cause their respective Affiliates to, execute such instruments
and take such action as may be reasonably required or desirable to carry out
the provisions hereof and the transactions contemplated hereby.
27
24
8.11 Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors, heirs, legatees and legal representatives. This
Agreement is not assignable except in connection with a transfer of Shares in
accordance with this Agreement.
8.12 Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an
original, and all of which taken together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the undersigned have executed, or have
cause to be executed, this Agreement on the date first written above.
PROBUSINESS, INC.
By:________________________________________
Name:
Title:
GENERAL ATLANTIC PARTNERS 39, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
Its General Partner
By:____________________________________
Name:
Title: A Managing Member
GAP COINVESTMENT PARTNERS, L.P.
By:_________________________________________
Name:
Title: A General Partner
____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
____________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
29
26
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & ▇▇▇▇ ▇. ▇▇▇▇▇▇
1989 IRREVOCABLE TRUST
By:_________________________________________
Name:
Title:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ TRUST ESTATE
By:_________________________________________
Name:
Title:
SILAS ▇▇▇▇ ▇▇▇▇▇▇ FAMILY TRUST
By:_________________________________________
Name:
Title:
____________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇, custodian for
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
____________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇, custodian
for ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
30
27
IN WITNESS WHEREOF, the undersigned have executed, or have
cause to be executed, this Agreement on the date first written above.
PROBUSINESS, INC.
By:________________________________________
Name:
Title:
GENERAL ATLANTIC PARTNERS 39, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
Its General Partner
By:____________________________________
Name:
Title: A Managing Member
GAP COINVESTMENT PARTNERS, L.P.
By:_________________________________________
Name:
Title: A General Partner
____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
____________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
31
28
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & ▇▇▇▇ ▇. ▇▇▇▇▇▇
1989 IRREVOCABLE TRUST
By:_________________________________________
Name:
Title:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ TRUST ESTATE
By:_________________________________________
Name:
Title:
SILAS ▇▇▇▇ ▇▇▇▇▇▇ FAMILY TRUST
By:_________________________________________
Name:
Title:
____________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇, custodian for
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
____________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇, custodian for
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
32
29
IN WITNESS WHEREOF, the undersigned have executed, or have
cause to be executed, this Agreement on the date first written above.
PROBUSINESS, INC.
By:________________________________________
Name:
Title:
GENERAL ATLANTIC PARTNERS 39, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
Its General Partner
By:____________________________________
Name:
Title: A Managing Member
GAP COINVESTMENT PARTNERS, L.P.
By:_________________________________________
Name:
Title: A General Partner
____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
____________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
33
30
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & ▇▇▇▇ ▇. ▇▇▇▇▇▇
1989 IRREVOCABLE TRUST
By:_________________________________________
Name:
Title:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ TRUST ESTATE
By:_________________________________________
Name:
Title:
SILAS ▇▇▇▇ ▇▇▇▇▇▇ FAMILY TRUST
By:_________________________________________
Name:
Title:
____________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇, custodian for
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
____________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇, custodian for
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
34
Exhibit A (1)
ACKNOWLEDGMENT AND AGREEMENT
The undersigned wishes to receive from __________
("Transferor") certain shares or certain options, warrants or other rights to
purchase _____ shares, par value $.01 per share, of Common Stock or Preferred
Stock, as the case may be (the "Shares"), of ProBusiness, Inc., a California
corporation (the "Company");
The Shares are subject to the Stockholders Agreement, dated
March __, 1997 (the "Agreement"), among the Company, General Atlantic Partners
39, L.P., GAP Coinvestment Partners, L.P., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & ▇▇▇▇ ▇. ▇▇▇▇▇▇ 1989 Irrevocable Trust, June ▇. ▇▇▇▇▇▇ as
Custodian for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇ as Custodian for ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust Estate and Silas ▇▇▇▇ ▇▇▇▇▇▇ Family
Trust;
The undersigned has been given a copy of the Agreement and
afforded ample opportunity to read it, and the undersigned is thoroughly
familiar with its terms;
Pursuant to terms of the Agreement, the Transferor is
prohibited from transferring such Shares and the Company is prohibited from
registering the transfer of the Shares unless and until the recipient of such
Shares acknowledges the terms and conditions of the Agreement and agrees to be
bound thereby; and
The undersigned wishes to receive such Shares and have the
Company register the transfer of such Shares.
NOW, THEREFORE, in consideration of the mutual premises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and to induce the Transferor to
transfer such Shares to the undersigned and the Company to register such
transfer, the undersigned does hereby acknowledge and agree that (i) he has
been given a copy of the Agreement and ample opportunity to read it, and the
undersigned is thoroughly familiar with its terms, (ii) the Shares are subject
to the terms and conditions set forth in the Agreement, and (iii) the
undersigned does hereby agree fully to be bound thereby as [a "Sinton
Stockholder"](2) or [a "General Atlantic Stockholder"](3) [an "Other
Stockholder"].(4)
This _____ day of ____________, 19__.
___________________________________
____________________
(1) For transfers of previously issued stock.
(2) For transfers made by a Sinton Stockholder (as defined in
the Agreement).
(3) For transfers made by a General Atlantic Stockholder (as
defined in the Agreement).
(4) To be used for all other transfers.