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EXHIBIT 10.20
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PROBUSINESS, INC.
SERIES F PREFERRED STOCK PURCHASE AGREEMENT
MARCH 12, 1997
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TABLE OF CONTENTS
PAGE
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SECTION 1 Authorization and Sale of Preferred Stock.............................................................. 4
1.1 Authorization................................................................................... 4
1.2 Sale of Series F Preferred...................................................................... 4
1.3 Use of Proceeds................................................................................. 4
SECTION 2 Closing Date; Delivery................................................................................. 4
2.1 Closing Date.................................................................................... 4
2.2 Delivery........................................................................................ 5
SECTION 3 Representations and Warranties of the Company.......................................................... 5
3.1 Organization and Standing; Articles of Incorporation and Bylaws................................. 5
3.2 Corporate Power................................................................................. 5
3.3 Subsidiaries.................................................................................... 5
3.4 Capitalization.................................................................................. 5
3.5 Authorization................................................................................... 6
3.6 No Contravention................................................................................ 7
3.7 Financial Statements............................................................................ 7
3.8 Employees....................................................................................... 7
3.9 Governmental Consent, etc....................................................................... 8
3.10 Brokers or Finders; Other Offers................................................................ 8
3.11 No Material Liabilities......................................................................... 8
3.12 FIRPTA.......................................................................................... 8
3.13 Registration Rights............................................................................. 8
3.14 Environmental Matters........................................................................... 8
3.15 Litigation...................................................................................... 9
3.16 Compliance with Laws............................................................................ 9
3.17 No Default or Breach; Contractual Obligations................................................... 9
3.18 Taxes........................................................................................... 9
3.19 No Material change; Ordinary Course of Business................................................. 10
3.20 Investment Company.............................................................................. 10
3.21 Labor Relations................................................................................. 10
3.22 Employee Benefit Plans.......................................................................... 10
3.23 Title to Assets................................................................................. 10
3.24 Intellectual Property........................................................................... 10
3.25 Year 2000 Compliance............................................................................ 11
3.26 Potential Conflicts of Interest................................................................. 11
3.27 Trade Relations................................................................................. 11
3.28 Insurance....................................................................................... 11
3.29 Disclosure...................................................................................... 11
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TABLE OF CONTENTS
(CONTINUED)
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SECTION 4 Representations and Warranties of the Purchasers....................................................... 12
4.1 Investment Representations and Covenants of the Purchasers...................................... 12
4.2 No Public Market................................................................................ 13
4.3 Receipt of Information.......................................................................... 13
4.4 Authorization................................................................................... 13
4.5 Brokers or Finders.............................................................................. 14
4.6 Tax Advisors.................................................................................... 14
4.7 Investor Counsel................................................................................ 14
SECTION 5 Conditions to Closing of the Purchasers................................................................ 14
5.1 Representations and Warranties Correct.......................................................... 14
5.2 Covenants....................................................................................... 14
5.3 Compliance Certificate.......................................................................... 14
5.4 Opinion of Company's Counsel.................................................................... 15
5.5 Blue Sky........................................................................................ 15
5.6 Legal Matters................................................................................... 15
5.7 Registration Rights Agreement. ................................................................ 15
5.8 Secretary's Certificate......................................................................... 15
5.9 Documents....................................................................................... 15
5.10 Filing of Amendment to Certificate of Incorporation............................................. 15
5.11 Shares.......................................................................................... 15
5.12 Shareholders Agreement.......................................................................... 15
SECTION 6 Conditions to Closing of Company....................................................................... 16
6.1 Representations and Warranties.................................................................. 16
6.2 Blue Sky........................................................................................ 16
6.3 Legal Matters................................................................................... 16
6.4 Board and Shareholder Approval.................................................................. 16
6.5 Registration Rights Agreements.................................................................. 16
6.6 Shareholders Agreement.......................................................................... 16
6.7 Lockup.......................................................................................... 16
SECTION 7 Affirmative Covenants of the Company and the Purchasers................................................ 17
7.1 Financial Information........................................................................... 17
7.2 Rights of Inspection............................................................................ 17
7.3 Assignment of Rights to Financial Information................................................... 18
7.4 Termination of Covenants........................................................................ 18
7.5 Reservation of Common Stock and Preferred Stock................................................. 18
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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SECTION 8 Miscellaneous.......................................................................................... 18
8.1 Governing Law................................................................................... 18
8.2 Survival........................................................................................ 18
8.3 Successors and Assigns.......................................................................... 18
8.4 Entire Agreement; Amendment..................................................................... 19
8.5 Notices, etc.................................................................................... 19
8.6 Delays or Omissions............................................................................. 19
8.7 California Corporate Securities Law............................................................. 20
8.8 Expenses........................................................................................ 20
8.9 Counterparts.................................................................................... 20
8.10 Severability.................................................................................... 20
8.11 Further Assurances.............................................................................. 20
8.12 Publicity....................................................................................... 20
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EXHIBITS
A. Schedule of Purchasers
B. Certificate of Amendment of Articles of Incorporation
C. Schedule of Exceptions
D. Employee Confidential Information Agreement
E. Compliance Certificate
F. Opinion of Company's Counsel
G. Amended and Restated Registration Rights Agreement
H. Stockholders' Agreement
I. Lock-up Agreement
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PROBUSINESS, INC.
SERIES F PREFERRED STOCK PURCHASE AGREEMENT
This Series F Preferred Stock Purchase Agreement (the "AGREEMENT") is
made as of the 12th day of March 1997 by and between ProBusiness, Inc., a
California corporation (the "COMPANY"), with its principal office at ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the persons listed on the
Schedule of Purchasers attached hereto as Exhibit A (the "PURCHASERS").
In consideration of the mutual promises, covenants and conditions
hereinafter set forth, the parties hereto mutually agree as follows:
DEFINITIONS
As used in this Agreement, and unless the context requires a different
meaning, the following terms have the meanings indicated:
"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" shall have the meaning as defined above.
"Articles of Incorporation" means the Articles of
Incorporation of the Company, as amended and as in effect as of the Closing
Date.
"Board of Directors" means the Board of Directors of the
Company.
"Bylaws" means the bylaws of the Company as amended and as in
effect as of the Closing Date.
"Certificate" shall have the meaning as defined in Section
1.1.
"Closing" shall have the meaning as defined in Section 2.1.
"Closing Date" shall have the meaning as defined in Section
2.1.
"Code" means the Internal Revenue Code of 1986, as amended, or
any successor statute thereto.
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"Commission" shall have the meaning as defined in Section
4.1(c).
"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 and
Preferred Stock.
"Condition of the Company and the Subsidiary" means the
assets, business, properties, operations or financial condition of the Company
and the Subsidiary, taken as a whole.
"Contractual Obligations" means any agreement, note, contract,
indenture, mortgage, deed of trust or other instrument to which the Company or
the Subsidiary is a party or by which it or the Subsidiary or any of their
respective properties are bound.
"Copyrights" means any foreign or United States copyright
registrations and applications for registration thereof and any non-registered
copyrights.
"Environmental Laws" means federal, state, local and foreign
laws, principles of common law, civil law, regulations and codes relating to
pollution, protection of the environment or public health and safety.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Financial Statements" shall have the meaning set forth in
Section 3.7.
"GAAP" means generally accepted accounting principles in
effect from time to time.
"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.
"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.
"Intellectual Property" shall have the meaning as defined in
Section 3.24.
"Internet Assets" 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.
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"Lien" means any mortgage, deed of trust, pledge, assignment,
encumbrance, lien (statutory or other) or other charge.
"Mask Works" means any mask works and registrations and
applications for registrations thereof.
"Orders" shall have the meaning as set forth in Section 3.6
hereof.
"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.
"Permits" shall have the meaning as defined in Section
3.16(b)(i).
"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.
"Preferred Stock" shall have the meaning as defined in Section
3.4.
"Registration Rights Agreement" shall mean the Amended and
Restated Registration Rights Agreement dated the date hereof between the
Company, the Purchasers and the Original Holders (as defined therein).
"Requirements of Law" means any law, statute, treaty, rule, or
regulation of a court or other Governmental Authority, in each case applicable
or binding upon the Company, the Subsidiary or any of their respective property
or to which the Company, the Subsidiary or any of their respective properties
are bound.
"Securities Act" shall have the meaning as defined in Section
3.13.
"Securities Exchange Act" shall have the meaning as defined in
Section 4.1(c).
"Series F Preferred" shall have the meaning as defined in
Section 1.1.
"Software" means any computer software programs, source code,
object code and manuals and other written material with respect thereto.
"Stockholders' Agreement" shall mean the Stockholders'
Agreement dated the date hereof between the Company, the Purchasers and the
Sinton Stockholders (as defined therein).
"Subsidiary" means BeneSphere Administrators, Inc.
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"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 the Agreement, the Stockholders'
Agreement and the Registration Rights Agreement.
SECTION 1
AUTHORIZATION AND SALE OF PREFERRED STOCK
1.1 AUTHORIZATION. The Company has authorized the sale and
issuance of up to 574,733 shares (the "SHARES") of its Series F Preferred Stock
(the "SERIES F PREFERRED"), having rights, privileges and preferences as set
forth in the Certificate of Amendment to the Articles of Incorporation (the
"CERTIFICATE") in the form attached to this Agreement as Exhibit B. The
Company's Certificate authorizes the issuance of up to 574,733 shares of Series
F Preferred.
1.2 SALE OF SERIES F PREFERRED. Subject to the terms and
conditions hereof, the Company will severally issue and sell to the Purchasers
and the Purchasers will severally purchase from the Company, at the Closing, the
respective number of shares of Series F Preferred indicated on the Schedule of
Purchasers at a purchase price of $17.40 per share, for the aggregate purchase
price for each Purchaser as indicated thereon.
1.3 USE OF PROCEEDS. Company intends to use the net proceeds
received by it from the sale of the Shares contemplated hereby to repay a
portion of its outstanding indebtedness and, the remainder will be used for
other general working capital purposes.
SECTION 2
CLOSING DATE; DELIVERY
2.1 CLOSING DATE. The closing of the execution of this Agreement
and the sale and purchase of the Shares hereunder shall be held at the offices
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ at 5:00 p.m., local time, on March 12, 1997 (the "CLOSING") or at such
other time and place upon which the Company and the Purchasers shall agree (the
date of the Closing is hereinafter referred to as the "CLOSING DATE").
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2.2 DELIVERY. At the Closing, the Company will deliver to each
Purchaser an executed counterpart of this Agreement together with a certificate,
registered in such Purchaser's name, representing the number of Shares to be
issued on the Closing Date as set forth beside such Purchaser's name on the
Schedule of Purchasers, against delivery of an executed counterpart of this
Agreement, together with payment of the purchase price for the Shares by check
payable to the Company or wire transfer per the Company's instructions.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the "Schedule of Exceptions" attached hereto as
Exhibit C, the Company hereby represents and warrants to the Purchasers as of
the Closing Date as follows:
3.1 ORGANIZATION AND STANDING; ARTICLES OF INCORPORATION AND
BYLAWS. Each of the Company and the Subsidiary is a corporation duly organized
and validly existing under, and by virtue of, the laws of the state of its
incorporation and is in good standing under such laws. Each of the Company and
the Subsidiary has requisite corporate power and authority to own, lease and
operate its respective properties and assets and to carry on its respective
business as presently conducted and as proposed to be conducted. Neither the
Company, nor the Subsidiary is presently qualified to do business as a foreign
corporation in any jurisdiction where the failure to be so qualified would have
a material adverse effect on the Condition of the Company and the Subsidiary. No
jurisdiction has claimed in writing or otherwise, that either the Company or the
Subsidiary is required to qualify as a foreign corporation therein. Except as
set forth on Schedule 3.1, the Company does not own, lease or operate property
in any jurisdiction other than its jurisdiction of incorporation. The Company
has furnished to the Purchasers or their special counsel copies of its Articles
of Incorporation, as amended, and Bylaws, as amended. Said copies are true,
correct and complete and contain all amendments through the Closing Date.
3.2 CORPORATE POWER. The Company has all requisite legal and
corporate power and authority to execute and deliver this Agreement, to sell and
issue the Shares hereunder, to issue the Common Stock issuable upon conversion
of the Shares and to carry out and perform its obligations under the terms of
the Transaction Documents.
3.3 SUBSIDIARIES. The Company has no subsidiaries or affiliated
companies and does not otherwise own or control, directly or indirectly, any
equity interest in any corporation, association or business entity except for
BeneSphere Administrators, Inc., a Washington Corporation.
3.4 CAPITALIZATION. The authorized capital stock of the Company
consists of 20,000,000 shares of Common Stock, par value $.01 per share,
1,518,868 of which are issued and outstanding as of the Closing Date, and
6,000,000 shares of Preferred Stock, par value $.01 per share (the "PREFERRED
STOCK"), 920,000 of which have been designated Series A Preferred Stock (the
"SERIES A PREFERRED"), all of which are issued and outstanding as of the Closing
Date, 1,500,000 of
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which have been designated Series B Preferred Stock (the "SERIES B PREFERRED"),
of which 919,400 are issued and outstanding as of the Closing Date, 1,500,000 of
which have been designated Series C Preferred Stock (the "SERIES C PREFERRED"),
of which 260,785 are issued and outstanding as of the Closing Date, 500,000 of
which have been designated Series D Preferred Stock (the "SERIES D PREFERRED"),
of which 300,000 are issued and outstanding as of the Closing Date, 500,000 of
which have been designated Series E Preferred Stock (the "SERIES E PREFERRED"),
of which 253,116 are issued and outstanding as of the Closing Date, and 574,733
of which have been designated Series F Preferred Stock (the "SERIES F
PREFERRED"), none of which are issued and outstanding immediately before the
Closing. No other series of Preferred Stock has been designated. The outstanding
shares have been duly authorized and validly issued, and are fully paid and
nonassessable and were issued in compliance with the registration and
qualification requirements of all applicable federal and state securities laws.
The Company has reserved 574,733 shares of Series F Preferred for issuance
hereunder, 1,149,466 shares of Common Stock for issuance upon conversion of the
Series F Preferred, 506,232 shares of Common Stock for issuance upon the
conversion of the Series E Preferred, 600,000 shares of Common Stock for
issuance upon the conversion of the Series D Preferred, 521,570 shares of Common
Stock for issuance upon conversion of the Series C Preferred, 1,838,800 shares
of Common Stock for issuance upon conversion of the Series B Preferred,
1,840,000 shares of Common Stock for issuance upon conversion of the Series A
Preferred, 777,787 shares of Common Stock for issuance upon exercise of options
granted and 1,440,593 shares of Common Stock for issuance upon exercise of
options not yet granted under the Company's 1989 Stock Option Plan and Executive
Stock Option Plan. The Series F Preferred shall have the rights, preferences,
privileges and restrictions set forth in the Certificate. The Company has
reserved 186,872 shares of Series E Preferred for issuance upon exercise of
warrants to purchase Series E Preferred and 373,744 shares of Common Stock for
issuance upon conversion of the Series E Preferred issued pursuant to exercise
of warrants. The Company has reserved 50,000 shares of Common Stock for issuance
upon exercise of warrants to purchase Common Stock. Schedule 3.4 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. Except as set forth in the Stockholders'
Agreement and on Schedule 3.4, there are no options, warrants or other rights,
including convertible debentures or notes, granted or issued by or binding upon
the Company to purchase any of the Company's capital stock or other conversion
or preemptive rights, co-sale rights or rights of first refusal or rights of
first offer granted by the Company to any Person, or voting, proxy or other
stockholder agreements granting such similar rights to any Person to which the
Company is a party. None of the rights set forth in Schedule 3.4 is in
preference to or in conflict with the rights granted to the Purchasers by the
Company in the Transaction Documents.
3.5 AUTHORIZATION. All corporate action on the part of the
Company, its directors and shareholders necessary for the authorization,
execution, delivery and performance of the Transaction Documents by the Company,
the authorization, sale, issuance and delivery of the Shares (and the Common
Stock issuable upon conversion of the Shares) and the performance of all of the
Company's obligations hereunder and thereunder have been taken or will be taken
prior to the Closing. Each of
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the Transaction Documents, when executed and delivered by the Company, shall
constitute a valid and binding obligation of the Company, enforceable in
accordance with its terms, except, (i) as limited by laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules of law
governing specific performance, injunctive relief or other equitable remedies
and (ii) to the extent that the enforceability of the indemnification provisions
of the Registration Rights Agreement and the involuntary transfers and corporate
governance provisions of the Stockholders' Agreement may be limited by
applicable law. The Shares, when issued in compliance with the provisions of
this Agreement, will be validly issued, fully paid and nonassessable and will
have the rights, preferences and privileges described in the Certificate. The
Common Stock issuable upon conversion of the Shares has been duly and validly
reserved and, when issued in compliance with the provisions of this Agreement
and the Certificate, will be validly issued, fully paid and nonassessable. The
Shares and such Common Stock will be issued in compliance with registration and
qualification requirements of all applicable federal and state securities laws
subject to restrictions on transfer under state and/or federal securities laws
as set forth herein and will be free of any liens or encumbrances, assuming the
Purchasers take the Shares with no notice thereof, and other than any liens or
encumbrances created by or imposed upon the holders through no action of the
Company. The Shares are not subject to any preemptive rights, co-sale rights,
rights of first refusal or rights of first offer.
3.6 NO CONTRAVENTION. Except as set forth in Section 3.6, the
execution, delivery and performance by the Company of each of the Transaction
Documents and the transactions contemplated hereunder and thereunder (a) do not
contravene the terms of the Articles of Incorporation or the Bylaws; (b) do not
violate, conflict with or result in any breach or contravention of, or the
creation of any Lien under, any Contractual Obligation, or any Requirement of
Law, except where the violation, conflict, breach, contravention or Lien would
not have a material adverse effect on the Condition of the Company and the
Subsidiary; and (c) do not violate any material provision of any judgment,
injunction, writ, award, decree or order of any nature (collectively, "ORDERS")
of any Governmental Authority against, or binding upon, the Company.
3.7 FINANCIAL STATEMENTS. The Company has delivered to each
Purchaser the Company's unaudited financial statements (balance sheet and
statement of operations) for the six months ended December 31, 1996, and the
audited financial statements for the twelve-month periods ending June 30, 1995
and June 30, 1996 (the "FINANCIAL STATEMENTS"), which are complete and correct
in all material respects and were prepared in accordance with generally accepted
accounting principles applied on a consistent basis except that the unaudited
financial statements do not contain footnotes or typical year end adjustments.
The Financial Statements accurately set out in all material respects and
describe the financial condition, operating results and cash flows of the
Company as of the respective dates and for the respective periods indicated
except that the unaudited financial statements do not contain typical year end
adjustments.
3.8 EMPLOYEES. To the best of the Company's knowledge, no employee
of the Company or the Subsidiary is in violation of any term of any employment
contract, patent disclosure agreement or any other contract or agreement
relating to the relationship of such employee with the Company or the Subsidiary
or any other party because of the nature of the business conducted or to be
conducted by the Company or the Subsidiary. Each employee of the Company and the
Subsidiary with access to
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confidential or proprietary information has executed an Employee Confidential
Information Agreement in a form substantially similar to the agreement attached
hereto as Exhibit D.
3.9 GOVERNMENTAL CONSENT, ETC. No consent, approval,
qualification, order or authorization of, or filing with, any Governmental
Authority on the part of the Company is required in connection with the valid
execution, delivery or performance by, or enforcement against the Company of any
of the Transaction Documents, or the offer, sale or issuance of the Shares (and
the Common Stock issuable upon conversion of the Shares), or the consummation of
any other transaction contemplated hereby (or thereby), except the qualification
(or taking such action as may be necessary to secure an exemption from
qualification, if available) of the offer and sale of the Shares (and the Common
Stock issuable upon conversion of the Shares) under applicable Blue Sky laws,
which filings and qualifications, if required, will be accomplished in a timely
manner.
3.10 BROKERS OR FINDERS; OTHER OFFERS. The Company has not
incurred, and will not incur, directly or indirectly, as a result of any action
taken by the Company, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with any of the Transaction
Documents.
3.11 NO MATERIAL LIABILITIES. Neither the Company nor the
Subsidiary has liabilities or obligations in excess of $100,000, other than: (a)
liabilities and obligations disclosed in the Financial Statements; (b)
liabilities incurred in the ordinary course of business since December 31, 1996;
(c) obligations under contracts and commitments incurred in the ordinary course
of business and not required under generally accepted accounting principles to
be reflected in the Financial Statements; and (d) leases for operating
headquarters and branches of the Company.
3.12 FIRPTA. The Company is not a "foreign person" within the
meaning of Section 1445 of the Code.
3.13 REGISTRATION RIGHTS. Except as set forth in Schedule 3.13 and
provided in the Registration Rights Agreement attached hereto as Exhibit G, the
Company is not obligated to register under the Securities Act of 1933, as
amended (the "Securities Act") any of its presently outstanding securities or
any of its securities that may subsequently be issued.
3.14 ENVIRONMENTAL MATTERS. To the Company's knowledge, each of the
Company and the Subsidiary 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 and the Subsidiary. 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 or the Subsidiary 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 the Subsidiary; 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
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give rise to liability under, Environmental Laws that would have a material
adverse effect on the Condition of the Company and the Subsidiary.
3.15 LITIGATION. There are no actions, suits, proceedings, claims,
complaints, disputes, arbitrations or investigations pending or, to the
knowledge of the Company, threatened, at law, in equity, in arbitration or
before any Governmental Authority against the Company or the Subsidiary which
would, if adversely determined, have a material adverse effect on (a) the
Condition of the Company and the Subsidiary or (b) the ability of the Company to
perform its obligations under any of the 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 any
of the Transaction Documents.
3.16 COMPLIANCE WITH LAWS.
(a) To its knowledge, each of the Company and the
Subsidiary is in compliance with all Requirements of Law and Orders issued by
any court or Governmental Authority against the Company or the Subsidiary, as
the case may be, 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 and the Subsidiary.
(b) Except as set forth on Schedule 3.16, (i) Each of the
Company and the Subsidiary have all licenses, permits, orders and approvals of
any Governmental Authority (collectively, "PERMITS") that are necessary for the
conduct of its respective business as now being conducted by it, except to the
extent that the failure to have such Permits would not have a material adverse
effect on the Condition of the Company and the Subsidiary; (ii) such Permits are
in full force and effect; and (iii) no violations have been recorded in respect
of any such Permit.
3.17 NO DEFAULT OR BREACH; CONTRACTUAL OBLIGATIONS. Except as set
forth in Schedule 3.17, neither the Company nor the Subsidiary has received
notice of, or is in default under, any Contractual Obligation which, could have
a material adverse effect on (i) the Condition of the Company and the Subsidiary
or (ii) the ability of the Company to perform its obligations under the
Transaction Documents. Schedule 3.17 lists all of the Contractual Obligations to
which the Company and/or the Subsidiary is a party, other than the Transaction
Documents and Contractual Obligations which would not be required to be filed by
the Company as an exhibit under Item 601 of Regulation S-K promulgated under the
Securities Act to a registration statement filed with the Commission to register
shares of Common Stock of the Company.
3.18 TAXES. Each of the Company and the Subsidiary has paid all
taxes and assessments due and required to be paid by it by law through the date
hereof. Each of the Company and the Subsidiary has filed all tax returns and
reports as required by law to be filed by it on and through the date hereof. The
returns and reports are true and correct in all material respects. The provision
for taxes of the Company and the Subsidiary as shown in the Financial Statements
is adequate for taxes due or accrued as of the date hereof. To the knowledge of
the Company, there is no unassessed tax deficiency proposed or, to the knowledge
of the Company, threatened against the Company or the
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Subsidiary and no audit is in progress with respect to any tax return filed by
the Company or the Subsidiary.
3.19 NO MATERIAL CHANGE; ORDINARY COURSE OF BUSINESS. Since
December 31, 1996, 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 and the Subsidiary from that reflected in the Financial Statements,
except changes in the ordinary course of business. Except as set forth in the
Financial Statements, since December 31, 1996, neither the Company nor the
Subsidiary have participated in any material transaction outside the ordinary
course of business, including, without limitation, declaring or paying dividends
or declaring or making any distribution to its stockholders, except out of the
earnings of the Company.
3.20 INVESTMENT COMPANY. The Company is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
3.21 LABOR RELATIONS. There is (i) no grievance or arbitration
proceeding pending or arising out of or under any collective bargaining
agreements or, to the knowledge of the Company, threatened against the Company
or the Subsidiary, and (ii) no strike, labor dispute, slowdown or stoppage
pending or, to the knowledge of the Company, threatened against the Company or
the Subsidiary. Neither the Company nor the Subsidiary is a party to any
collective bargaining agreement or similar contract. To the knowledge of the
Company, no union organizing activities are taking place with respect to the
Company or the Subsidiary.
3.22 EMPLOYEE BENEFIT PLANS. The Company has no actual or
contingent, direct or indirect, liability in respect of any employee benefit
plan or arrangement, employment contract, severance arrangement or executive
compensation arrangement, including any plan subject to ERISA, except as set
forth in the Financial Statements and other than to make contributions under or
pay benefits pursuant to the plans listed on Schedule 3.22 (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 and the
Subsidiary.
3.23 TITLE TO ASSETS. Except as set forth on Schedule 3.23, each of
the Company and the Subsidiary owns and has good and marketable title to all of
its respective properties and assets and has good title to all of its respective
leasehold interests used in its respective business and reflected as owned or
leased, respectively, on the Financial Statements, in each case free and clear
of all Liens, except for (a) Liens specifically described in the Financial
Statements, (b) Liens of current taxes not yet due and payable, and (c) Liens
not material to the Condition of the Company and the Subsidiary.
3.24 INTELLECTUAL PROPERTY. Each of the Company and the Subsidiary
has sufficient ownership 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") necessary for its respective business as presently
conducted. Schedule 3.24 sets forth all of the Intellectual Property owned by,
and applications for
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any of the above filed by, the Company or the Subsidiary. Schedule 3.24 sets
forth all Intellectual Property licenses, sublicenses and other agreements under
which the Company or the Subsidiary is either a licensor or licensee of any
Intellectual Property, except such licenses, sublicenses and other agreements
relating to (i) Software licensed to clients of the Company or the Subsidiary,
pursuant to a standard end-user license agreement, (ii) used solely on the
computers of the Company or the Subsidiary or (iii) end user license agreements
for third party software generally available through commercial channels. The
Company has not received any communications alleging that either the Company or
the Subsidiary has violated or, by conducting its business as now conducted,
would violate or infringe upon any Intellectual Property of any third party. To
the knowledge of the Company, but without independent investigation, no Person
is infringing upon or otherwise violating the Intellectual Property rights of
the Company. None of the Intellectual Property listed on Schedule 3.24 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 Intellectual Property listed on Schedule
3.24.
3.25 YEAR 2000 COMPLIANCE. The Software used by the Company and/or
its Subsidiary will accurately process date information after January 1, 2000
without having a material adverse effect on the Condition of the Company and the
Subsidiary.
3.26 POTENTIAL CONFLICTS OF INTEREST. Except for the transactions
contemplated by the Transaction Documents and except as set forth on Schedule
3.26, no officer, director or 5% shareholder of the Company has entered into any
transaction with the Company that would be required to be described in a
registration statement filed with the Commission under Item 404 of Regulation
S-K promulgated under the Securities Act.
3.27 TRADE RELATIONS. 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 Subsidiary with any client or clients, which individually, or in the
aggregate would have a material adverse effect on the Condition of the Company
and the Subsidiary.
3.28 INSURANCE. Each of the Company and the Subsidiary 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 and the Subsidiary, respectively. Such
policies are in full force and effect.
3.29 DISCLOSURE. This Agreement and the documents and certificates
furnished to the Purchasers by the Company (including, without limitation, the
Form S-1 Registration Statement, dated March 11, 1997, prepared by the Company
but not filed with the SEC as of the date hereof), 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.
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SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser hereby represents and warrants (severally as to itself
and not jointly) to the Company with respect to its purchase of the Shares as
follows:
4.1 INVESTMENT REPRESENTATIONS AND COVENANTS OF THE PURCHASERS.
(a) This Agreement is made by the Company with the
Purchaser in reliance upon such Purchaser's representations and covenants made
in this Section 4, which by its execution of this Agreement the Purchaser hereby
confirms. The Purchaser represents that the Series F Preferred to be received
will be acquired for investment for its own account, not as a nominee or agent,
and not with a view to the sale or distribution of any part thereof, and that it
has no present intention of selling, granting any participation in or otherwise
distributing the same. The Purchaser further represents that it does not have
any contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person, with
respect to any of the Series F Preferred or any Common Stock acquired on
conversion thereof.
(b) The Purchaser understands and acknowledges that the
offering of the Series F Preferred pursuant to this Agreement will not, and any
issuance of Common Stock on conversion thereof may not, be registered under the
Securities Act on the ground that the sale provided for in this Agreement and
the issuance of securities hereunder is exempt pursuant to Section 4(2) of the
Securities Act, and that the Company's reliance on such exemption is predicated
on the Purchasers' representations set forth herein.
(c) The Purchaser covenants that in no event will it make
any disposition of any of the Series F Preferred, or any Common Stock acquired
upon the conversion thereof, except in accordance with the Registration Rights
Agreement and the Stockholders' Agreement. The Purchaser further covenants that
it will not make any sale, transfer or other disposition of the Series F
Preferred or the Common Stock issuable upon conversion thereof in violation of
the Securities Act, the Securities and Exchange Act of 1934 (the "SECURITIES
EXCHANGE ACT"), or the rules of the Securities and Exchange Commission (the
"COMMISSION") promulgated thereunder.
(d) The Purchaser represents that it is experienced in
evaluating companies similar to the Company, is able to fend for itself in
transactions such as the one contemplated by this Agreement, has such knowledge
and experience in financial and business matters that it is capable of
evaluating the merits and risks of its prospective investment in the Company,
has the ability to bear the economic risks of the investment and is an
"accredited investor" as defined by Regulation E promulgated under the
Securities Act of 1933, as amended.
(e) The Purchaser acknowledges and understands that the
Series F Preferred, and any Common Stock acquired upon the conversion thereof,
must be held indefinitely unless it is
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subsequently registered under the Securities Act or an exemption from such
registration is available, and that, except as otherwise provided in the
Registration Rights Agreement and Schedule 3.13, the Company is under no
obligation to register either the Series F Preferred or Common Stock.
(f) The Purchaser acknowledges that it has reviewed a
copy of Rule 144 promulgated under the Securities Act, which permits limited
public resales of securities acquired in a nonpublic offering, subject to the
satisfaction of certain conditions. The Purchaser understands that before the
Series F Preferred, or any Common Stock issued upon conversion thereof, may be
sold under Rule 144 as in effect on April 29, 1997, the following conditions
must be fulfilled: (i) certain public information about the Company must be
available, (ii) the sale must occur at least one year after the Purchaser
purchased and paid for the Series F Preferred, (iii) the sale must be made in a
broker's transaction and (iv) the number of shares of Series F Preferred sold
must not exceed certain volume limitations. The Purchaser understands that the
current information referred to above is not now available and the Company has
no present plans to make such information available.
(g) The Purchaser acknowledges that in the event the
applicable requirements of Rule 144 are not met, registration under the
Securities Act, compliance with the Commission's Regulation A or another
exemption from registration will be required for any disposition of its stock.
The Purchaser understands that although Rule 144 is not exclusive, the
Commission has expressed its opinion that persons proposing to sell restricted
securities received in a private offering other than in a registered offering or
pursuant to Rule 144 will have a substantial burden of proof in establishing
that an exemption from registration is available for such offers or sales and
that such persons and the brokers who participate in the transactions do so at
their own risk.
4.2 NO PUBLIC MARKET. The Purchaser understands that no public
market now exists for any of the securities issued by the Company and that it is
unlikely that a public market will ever exist for the Series F Preferred.
4.3 RECEIPT OF INFORMATION. The Purchaser has received and
reviewed the Transaction Documents and all exhibits hereto and thereto and the
draft of the Registration Statement on Form S-1 which has not been filed with
the Commission. The Purchaser and its counsel have had access to and an
opportunity to review all documents and other materials requested of the
Company; the Purchaser and its counsel have been given an opportunity to ask any
and all questions of, and receive answers from, the Company concerning the terms
and conditions of the offering and to obtain all information it or they believe
necessary or appropriate to evaluate the suitability of an investment in the
Series F Preferred; and, in evaluating the suitability of an investment in the
Series F Preferred, it and they have not relied upon any representations or
other information (whether oral or written) other than as set forth in the
documents and answers referred to above.
4.4 AUTHORIZATION. The Transaction Documents when executed and
delivered by the Purchaser will constitute a valid and legally binding
obligation of the Purchaser, enforceable in accordance with its terms, except
(i) as limited by laws of general application relating to bankruptcy, insolvency
and the relief of debtors and rules of law governing specific performance,
injunctive relief or other equitable remedies and (ii) to the extent that the
enforceability of the indemnification
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provisions of the Registration Rights Agreement and the involuntary transfers
and corporate governance provisions of the Stockholders' agreement may be
limited by applicable law.
4.5 BROKERS OR FINDERS. The Purchasers have not, and will not,
incur, directly or indirectly, as a result of any action taken by any Purchaser,
any liability for brokerage or finders' fees or agents' commissions or any
similar charges in connection with this Agreement.
4.6 TAX ADVISORS. The Purchaser has reviewed with its own tax
advisors the federal, state, local and foreign tax consequences of this
investment, where applicable, and the transactions contemplated by this
Agreement. The Purchaser is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents and
understands that it (and not the Company) shall be responsible for the
Purchaser's own tax liability that may arise as a result of this investment or
the transactions contemplated by this Agreement.
4.7 INVESTOR COUNSEL. The Purchaser acknowledges that it has had
the opportunity to review the Transaction Documents, the exhibits and the
schedules attached hereto and thereto and the transactions contemplated by the
Transaction Documents with its own legal and investment counsel. The Purchaser
is relying solely on such counsel and not on any statements or representations
of the Company or any of its agents for legal or investment advice with respect
to this investment or the transactions contemplated by the Transaction
Documents.
SECTION 5
CONDITIONS TO CLOSING OF THE PURCHASERS
The Purchasers' obligations to purchase the Shares at the Closing and
to perform any obligations hereunder are, at the option of the Purchasers,
subject to the fulfillment of the following conditions:
5.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations
and warranties made by the Company in Section 3 hereof shall be true and correct
in all material respects on the Closing Date as if made on such date.
5.2 COVENANTS. All covenants, agreements and conditions contained
in this Agreement to be performed by the Company on or prior to the Closing Date
shall have been performed or complied with in all material respects.
5.3 COMPLIANCE CERTIFICATE. The Company shall have delivered to
the Purchasers a certificate of the Company in the form of Exhibit E hereto,
executed by the President of the Company, dated the Closing Date, and
certifying, among other things, to the fulfillment of the conditions specified
in Sections 5.1 and 5.2 of this Agreement.
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5.4 OPINION OF COMPANY'S COUNSEL. The Purchasers shall have
received from Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., counsel to the Company,
an opinion addressed to the Purchasers, dated the Closing Date, in substantially
the form attached as Exhibit F.
5.5 BLUE SKY. The Company shall have obtained all necessary Blue
Sky law permits and qualifications, or have the availability of exemptions
therefrom, required by any state for the offer and sale of the Series F
Preferred and the Common Stock issuable upon conversion of the Series F
Preferred.
5.6 LEGAL MATTERS. All material matters of a legal nature that
pertain to the Transaction Documents and the transactions contemplated hereby
and thereby, shall have been reasonably approved by special counsel to the
Purchasers.
5.7 REGISTRATION RIGHTS AGREEMENT. The Company, each Purchaser and
a majority of the Original Holders (as defined therein) shall have entered into
the Registration Rights Agreement in substantially the form attached hereto as
Exhibit G.
5.8 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
Articles of Incorporation, the Bylaws and resolutions of the Board of Directors
of the Company approving each of the Transaction Documents to which the Company
is a party, are 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 each Transaction Document and any other
document delivered at the Closing on behalf of the Company.
5.9 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 Shares and the transactions
contemplated hereby, all in form and substance reasonably satisfactory to the
Purchasers.
5.10 FILING OF AMENDMENT TO CERTIFICATE OF INCORPORATION. The
Amendment to the Articles of Incorporation shall have been filed by the Company
with the Secretary of State of the State of California in accordance with the
General Corporation Law of the State of California.
5.11 SHARES. The Company shall have delivered to the Purchasers
certificates in definitive form representing the number of Shares set forth
opposite such Purchaser's name on Exhibit A hereto, registered in the name of
such Purchaser.
5.12 SHAREHOLDERS AGREEMENT. The Company, each Purchaser and Sinton
(as defined therein) shall have entered into the Stockholders' Agreement,
substantially in the form attached hereto as Exhibit H.
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SECTION 6
CONDITIONS TO CLOSING OF COMPANY
The Company's obligation to sell and issue the Shares pursuant to
Section 1.2 hereof and to perform any obligations hereunder, is, at the option
of the Company, subject to the fulfillment as of the Closing Date of the
following conditions:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Purchasers in Section 4 hereof shall be true and correct
when made, and shall be true and correct on the Closing Date.
6.2 BLUE SKY. The Company shall have obtained all necessary Blue
Sky law permits and qualifications, or have the availability of exemptions
therefrom, required by any state for the offer and sale of the Shares and the
Common Stock issuable upon conversion of the Shares.
6.3 LEGAL MATTERS. All material matters of a legal nature that
pertain to the Transaction Documents and the transactions contemplated hereby
and thereby, shall have been reasonably approved by counsel to the Company. At
the time of the Closing, the purchase of the Shares shall be legally permitted
by all laws and regulations to which each Purchaser and the Company are subject.
6.4 BOARD AND SHAREHOLDER APPROVAL. All approvals of the Company's
Board of Directors and shareholders necessary for performance of the
transactions contemplated by the Transaction Documents shall have been obtained.
6.5 REGISTRATION RIGHTS AGREEMENTS. The Company, each Purchaser
and a majority of the Original Holders (as defined therein) shall have entered
into the Registration Rights Agreement in substantially the form attached hereto
as Exhibit G.
6.6 SHAREHOLDERS AGREEMENT. The Company, each Purchaser and Sinton
(as defined therein) shall have entered into the Stockholders' Agreement,
substantially in the form attached hereto as Exhibit H.
6.7 LOCKUP. Purchasers shall have signed a Lock-up agreement in
the form attached hereto as Exhibit I.
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SECTION 7
AFFIRMATIVE COVENANTS OF THE COMPANY AND THE PURCHASERS
The Company hereby covenants and agrees as follows:
7.1 FINANCIAL INFORMATION. The Company will furnish to each
Purchaser for so long as such Purchaser holds any shares of Series F Preferred
or Common Stock issued upon conversion thereof:
(a) As soon as practicable after the end of each fiscal
year, and in any event within 120 days thereafter, consolidated balance sheets
of the Company and its subsidiaries, if any, as of the end of such fiscal year,
and consolidated statements of income and cash flows of the Company and its
subsidiaries, if any, for such year, prepared in accordance with generally
accepted accounting principles and setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail and
certified by independent public accountants of reputable standing selected by
the Company.
(b) With reasonable promptness, such other information
and data with respect to the Company and its subsidiaries as any such holder may
from time to time reasonably request; provided, however, that the Company shall
not be obligated pursuant to this Section 7.1(b) to disclose or provide any
information that it reasonably considers to be a trade secret or to contain
confidential proprietary information.
(c) So long as such Purchaser holds 25,000 shares of
Series F Preferred or Common Stock issued upon conversion thereof, as
appropriately adjusted for recapitalization, stock splits, stock dividends and
the like, as soon as practicable after the end of the first, second and third
quarterly accounting periods in each fiscal year of the Company and in any event
within 60 days thereafter, unaudited consolidated statements of income of the
Company and its subsidiaries for such period and for the current fiscal year to
date, prepared in accordance with generally accepted accounting principles, with
the exception of footnotes, all in reasonable detail and signed, subject to
changes resulting from year-end audit adjustments, by the principal financial or
accounting officer of the Company.
(d) So long as such Purchaser holds shares of Series F
Preferred or Common Stock issued upon conversion thereof, the Company shall
provide to a Purchaser, upon its written request as promptly as practicable but
no later than 5 days after the end of such fiscal year of the Company, a
certification signed by the President of the Company in customary form
certifying that the Company is not a "foreign person" within the meaning of
Section 1445 of the Code.
7.2 RIGHTS OF INSPECTION. For so long as a Purchaser is eligible
to receive reports under Section 7.1(c), such Purchaser shall also have the
right, at the Purchaser's expense, to visit and inspect any of the properties of
the Company and to discuss its affairs, finances and accounts with its officers,
all at such reasonable times and as often as may be reasonably requested,
provided that the
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Company shall not be required at any time to disclose any manufacturing or trade
secret or secret process or other data of a proprietary nature the disclosure of
which the Company reasonably believes may adversely affect its business,
provided, further, that the Company shall not be required at any time to
disclose any customer data to any Purchaser or any transferee of a Purchaser, as
provided in Section 7.3, engaged in a business similar to the business in which
the Company is engaged at such time, and provided, further, that the Company
shall not be required at any time to disclose any information or data that is
classified by any governmental agency.
7.3 ASSIGNMENT OF RIGHTS TO FINANCIAL INFORMATION. The rights
granted pursuant to Sections 7.1 and 7.2 may not be assigned or otherwise
conveyed by a Purchaser or by any subsequent transferee of any such rights
without the prior written consent of the Company; provided, however, that a
Purchaser may assign such rights to any transferee, other than a competitor of
the Company, and after giving notice to the Company, who acquires at least
25,000 shares (subject to appropriate adjustment for stock splits, dividends,
subdivisions, combinations, recapitalizations and the like) of the Series F
Preferred and/or Common Stock issued upon conversion thereof.
7.4 TERMINATION OF COVENANTS. The covenants set forth in Sections
7.1, 7.2 and 7.3 shall terminate and be of no further force or effect at such
time as the Company is required to file reports pursuant to Section 13 or 15(d)
of the Securities Exchange Act.
7.5 RESERVATION OF COMMON STOCK AND PREFERRED STOCK. The Company
shall at all times reserve and keep available out of its authorized shares of
Common Stock, solely for the purpose of issue or delivery upon conversion of the
Shares, as provided in the Articles of Incorporation, the maximum number of
shares of Common Stock that may be issuable or deliverable upon such conversion.
The Company shall issue such shares of Common Stock in accordance with the terms
of the Articles of Incorporation and otherwise comply with the terms thereof.
SECTION 8
MISCELLANEOUS
8.1 GOVERNING LAW. This Agreement shall be governed in all
respects by the laws of the State of California. The parties expressly stipulate
that any litigation under this Agreement shall be brought in the state courts of
the County of Alameda, California and in the United States District Court for
the Northern District of California. The parties agree to submit to the
jurisdiction and venue of those courts.
8.2 SURVIVAL. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by a Purchaser and
the closing of the transactions contemplated hereby.
8.3 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and
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administrators of the parties hereto, provided, however, that the rights of a
Purchaser to purchase the Series F Preferred shall not be assignable without the
consent of the Company, except subject to applicable securities laws, the
Purchasers may assign any of their rights under any of the Transaction Documents
to any of their respective Affiliates; provided however, the Company shall not
be obligated to register transfers to more than 15 such transferees, without
prior written consent.
8.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other
documents delivered pursuant hereto at the Closing constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof, and no party shall be liable or bound to any other
party in any manner by any warranties, representations or covenants except as
specifically set forth herein or therein. Except as expressly provided herein,
neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought;
provided, however, that any provisions hereof may be amended, waived, discharged
or terminated, on behalf of all holders, upon the written consent of the Company
and the holders of a majority of the Common Stock issued or issuable upon the
conversion of the Series F Preferred.
8.5 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger,
addressed (a) if to a Purchaser, to such Purchaser's address set forth on the
Schedule of Purchasers, or at such other address as the Purchaser shall have
furnished to the Company in writing with a copy to: ▇▇▇▇, Weiss, Rifkind,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 1285 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq., or (b) if to any
other holder of any Shares, at such address as such holder shall have furnished
the Company in writing, or, until any such holder so furnishes an address to the
Company, then to and at the address of the last holder of such Shares who has so
furnished an address to the Company, or (c) if to the Company, one copy should
be sent to its address set forth at the beginning of this Agreement and
addressed to the attention of the President of the Company, or at such other
address as the Company shall have furnished to the Purchasers with a copy to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or 72
hours after the same has been deposited in a regularly maintained receptacle for
the deposit of the United States mail, addressed and mailed as aforesaid.
8.6 DELAYS OR OMISSIONS. Except as expressly provided herein, no
delay or omission to exercise any right, power or remedy accruing to any holder
of any Shares, upon any breach or default of the Company under this Agreement,
shall impair any such right, power or remedy of such holder nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any
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waiver, permit, consent or approval of any kind or character on the part of any
holder of any breach or default under this Agreement or any waiver on the part
of any holder of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or otherwise
afforded to any holder, shall be cumulative and not alternative.
8.7 CALIFORNIA CORPORATE SECURITIES LAW. THE SALE OF THE
SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF
SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS AN EXEMPTION FROM SUCH
QUALIFICATION IS AVAILABLE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, OR SUCH EXEMPTION
BEING AVAILABLE.
8.8 EXPENSES. Each of the Company and the Purchasers shall bear
its own expenses and legal fees incurred with respect to this Agreement and the
transactions contemplated hereby.
8.9 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be enforceable against the party actually
executing such counterpart, and all of which together shall constitute one
instrument.
8.10 SEVERABILITY. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that no such severability shall be
effective if it materially changes the economic benefit of this Agreement to any
party.
8.11 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.
8.12 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; (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; and (d) orally to
business partners. 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.
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IN WITNESS WHEREOF, the foregoing Agreement is hereby executed as of
the date first above written.
PROBUSINESS, INC.
By: ______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
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PROBUSINESS, INC.
SERIES F PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS' SIGNATURE PAGE
___________________________________
(Printed Name of Purchaser)
___________________________________
(Signature)
___________________________________
(Title, if Applicable)
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EXHIBIT A
PROBUSINESS, INC.
SCHEDULE OF PURCHASERS
Name and Address Number of Shares Total Purchase Price
---------------------------------------- ---------------- --------------------
General Atlantic Partners 39, L.P. 489,184 $ 8,511,801.60
General Atlantic Service Corporation
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
GAP Coinvestment Partners, L.P. 85,549 1,488,552.60
c/o General Atlantic Service Corporation
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------- --------------
Total 574,733 $10,000,354.20