1
Exhibit 4.8
THIS NOTE IS BEING ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. THIS NOTE MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR UNLESS THE HOLDER THEREOF RECEIVES AN OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO THE COMPANY STATING THAT SUCH SALE, TRANSFER OR
ASSIGNMENT IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS
OF SAID ACT.
October 20, 1995
$
_________
PROBUSINESS, INC.
PROMISSORY NOTE
WHEREAS, ProBusiness, Inc. (the "Borrower") and the Lenders, as defined
in the Loan Agreement (defined hereinafter) have entered into a Loan Agreement
dated October 20, 1995 (the "Loan Agreement") pursuant to which Lenders will
make up to $2,500,000 available to Borrower;
WHEREAS, Borrower requires funds to continue the operation of its
business; and
WHEREAS, the Lenders desire to provide funds to Borrower on the terms
and under the conditions set forth below;
NOW, THEREFORE, in consideration of the promises, conditions and
representations herein contained, the parties agree as follows:
For value received, the undersigned, PROBUSINESS, INC., a California
corporation (the "Borrower") promises to pay ____________________________ (the
"Lender") the principal sum of __________________ ($_______), plus accrued
interest. The principal amount of this Note and interest accrued thereon shall
be due and payable on demand on the earlier of (i) three years from the date of
the Loan Agreement or (ii) at the option of Lender or Borrower within thirty
days after the closing of a public offering of the Company that triggers the
conversion of the Company's outstanding Preferred Stock into the Company's
Common Stock under the Company's Articles of Incorporation, as amended. The
principal amount shall accrue interest at the rate of 8% per annum or if less,
the maximum rate permitted by applicable law commencing on the date of the Loan
Agreement. Borrower shall make quarterly payments to Lender for the amount of
interest accrued on the principal sum outstanding under this Note beginning on
December 31, 1995. All payments on this Note will be credited first against
accrued interest and then against the remaining principal. This Note may be
prepaid at any time without penalty after one year from the date of the Loan
Agreement, pursuant to the terms of the Loan Agreement.
2
1. Events of Default; Remedies.
1.1 Events of Default. The occurrence of any one or more of
the following events after the date of the Loan Agreement shall constitute an
"Event of Default":
(a) Xxxxxxxx fails to make timely payment of any principal,
interest, fees or other charges when due hereunder;
(b) Any material warranty, representation or other statement
made to Lender by Borrower under the Loan Agreement proves to have been false or
misleading in any material respect when made or furnished;
(c) Borrower fails or neglects to perform, keep or observe any
other material term, provision, condition, covenant, warranty or representation
contained in the Loan Agreement, which is required to be performed, kept or
observed by Borrower;
(d) Borrower shall commence any proceeding or other action
relating to it in bankruptcy or seek reorganization, arrangement, readjustment
of its debts, dissolution, liquidation, winding-up, composition or any other
relief under the Bankruptcy Act, as amended, or under any other insolvency,
reorganization, liquidation, dissolution, arrangement, composition, readjustment
of debt or any other similar act or law, of any jurisdiction, domestic or
foreign, now or hereafter existing;
(e) Borrower shall admit the material allegations of any
petition or pleading in connection with any such proceeding;
(f) Borrower shall apply for, or consent to or acquiesce in,
the appointment of a receiver, conservator, trustee or similar officer for it or
for all or a substantial part of its property;
(g) Borrower shall make a general assignment for the benefit
of creditors; or
(h) Borrower shall admit in writing its inability to pay its
debts as they mature.
1.2 Acceleration of the Obligations. Upon the occurrence of an
Event of Default as above provided, all or any portion of the obligations due or
to become due from Borrower to Lender shall, at the option of Lender, and
without notice or demand by Lender, become at once due and payable. Borrower
will forthwith pay to Lender, in addition to any and all sums and charges due,
the entire outstanding principal balance and interest accrued thereon.
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2. Subordination. To the extent there is any conflict between the
provisions of this Section 2 and the other provisions of this Note, the
provisions of this Section 2 shall control.
(a) Lender hereby subordinates to Silicon Valley Bank ("Bank") any
security interest or lien that Lender may have or in the future obtain in any
property of Borrower. Notwithstanding any respective dates of attachment or
perfection of the security interest of Xxxxxx and the security interest of Bank,
the security interest of Bank in the property of Borrower shall at all times be
prior to the security interest of Lender.
(b) All indebtedness hereunder (the "Subordinated Debt") is
subordinated in right of payment to all obligations of Borrower to Bank now
existing or hereafter arising, together with all costs of collecting such
obligations (including attorneys' fees), including, without limitation, all
interest accruing after the commencement by or against Borrower of any
bankruptcy, reorganization or similar proceeding (the "Senior Debt").
(c) Lender will not demand or receive from Borrower (and Borrower will
not pay to Lender) all or any part of the Subordinated Debt, by way of payment,
prepayment, setoff, lawsuit or otherwise, nor will Lender exercise any remedy
with respect to any of Bank's collateral, nor will Lender commence, or cause to
commence, prosecute or participate in any administrative, legal or equitable
action against Borrower, for so long as any portion of the Senior Debt remains
outstanding. The foregoing notwithstanding, Lender shall be entitled to receive
each regularly scheduled payment of interest that constitutes Subordinated Debt,
provided that an event of default, as defined in the financing agreements
between Borrower and Bank, has not occurred and is not continuing and would not
exist immediately after such payment.
(d) Lender shall promptly deliver to Bank in the form received (except
for endorsement or assignment by Lender where required by Bank) for application
to the Senior Debt any payment, distribution, security or proceeds received by
Lender with respect to the Subordinated Debt other than in accordance with this
Section 2.
(e) In the event of Xxxxxxxx's insolvency, reorganization or any case
or proceeding under any bankruptcy or insolvency law or laws relating to the
relief of debtors, the provisions of this Section 2 shall remain in full force
and effect, and Bank's claims against Borrower and the estate of Borrower shall
be paid in full before any payment is made to Lender.
(f) For so long as any of the Senior Debt remains unpaid, Lender
irrevocably appoints Bank as Xxxxxx's attorney-in-fact, and grants to Bank a
power of attorney with full power of substitution, in the name of Lender or in
the name of Bank, for the use and benefit of Bank, without notice to Lender, to
perform at Bank's option the following acts in any bankruptcy, insolvency or
similar proceeding involving Borrower:
(i) To file the appropriate claim or claims in respect of the
Subordinated Debt on behalf of Xxxxxx if Xxxxxx does not do so prior to
30 days before the expiration of the time to
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4
file claims in such proceeding and if Bank elects, in its sole
discretion, to file such claim or claims; and
(ii) To accept or reject any plan of reorganization or
arrangement on behalf of Xxxxxx and to otherwise vote Xxxxxx's claims
in respect of any Subordinated Debt in any manner that Bank deems
appropriate for the enforcement of its rights hereunder.
(g) This Section 2 shall remain effective for so long as Borrower owes
any amounts to Bank. If, at any time after payment in full of the Senior Debt
any payments of the Senior Debt must be disgorged by Bank for any reason
(including, without limitation, the bankruptcy of Borrower), this Section 2 and
the relative rights and priorities set forth herein shall be reinstated as to
all such disgorged payments as though such payments had not been made and Lender
shall immediately pay over to Bank all payments received with respect to the
Subordinated Debt to the extent that such payments would have been prohibited
hereunder. At any time and from time to time, without notice to Lender, Bank may
take such actions with respect to the Senior Debt as Bank, in its sole
discretion, may deem appropriate, including, without limitation, terminating
advances to Borrower, increasing the principal amount, extending the time of
payment, increasing applicable interest rates, renewing, compromising or
otherwise amending the terms of any documents affecting the Senior Debt and any
collateral securing the Senior Debt, and enforcing or failing to enforce any
rights against Borrower or any other person. No such action or inaction shall
impair or otherwise affect Bank's rights hereunder. Lender waives the benefits,
if any, of California Civil Code Sections 2809, 2810, 2819, 2845, 2847, 2848,
2849, 2850, 2899 and 3433.
(h) The provisions of this Section 2 shall bind any successors or
assignees of Lender and shall benefit any successors or assigns of Bank, and, if
Borrower refinances a portion of the Senior Debt with a new lender, such new
lender shall be deemed a successor of Bank for the purposes of this Section 2.
This Section 2 is solely for the benefit of Lender and Bank and not for the
benefit of Borrower or any other party.
(i) The provisions of this Section 2 may be amended only by written
instrument signed by Xxxxxx and Bank.
(j) In the event of any legal action to enforce the rights of a party
under this Section 2, the party prevailing in such action shall be entitled, in
addition to such other relief as may be granted, all reasonable costs and
expenses, including reasonable attorneys' fees, incurred in such action.
3. Conditions to Which Note is Subject. The acceptance of this Note by
Xxxxxx and the issuance of this Note by Borrower are subject to the fulfillment
of the following conditions:
3.1 Representations and Warranties Correct. The
representations and warranties made by Borrower and Lender in Section 4 and
Section 5, respectively, of the Loan Agreement shall be true and correct in all
material respects as of the Closing Date (as defined in the Loan Agreement).
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5
3.2 Covenants. All covenants, agreements and conditions
contained in the Loan Agreement to be performed by Xxxxxxxx and Lender,
respectively, on or prior to the Closing Date shall have been performed or
complied with in all material respects.
4. Governing Law. This Note is issued in and shall be interpreted under
the laws of the State of California.
5. Assignment. This Note may not be assigned or transferred without the
written consent of Xxxxxxxx. The terms and provisions of this Note shall inure
to the benefit of, and be binding upon, Borrower and its successors and assigns.
6. 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.
Issued this 20th day of October, 1995.
PROBUSINESS, INC.
By:
-----------------------------------
Xxxxxx X. Xxxxxx, President
--------------------------------------
(Lender)
By:
-----------------------------------
Title:
-------------------------------
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THIS NOTE IS BEING ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. THIS NOTE MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR UNLESS THE HOLDER THEREOF RECEIVES AN OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO THE COMPANY STATING THAT SUCH SALE, TRANSFER OR
ASSIGNMENT IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS
OF SAID ACT.
__________, 1995
$_________
PROBUSINESS, INC.
PROMISSORY NOTE
WHEREAS, ProBusiness, Inc. (the "Borrower") and the Lenders, as defined
in the Loan Agreement (defined hereinafter) have entered into a Loan Agreement
dated October 20, 1995 as amended by the First Amendment to the Loan Agreement
dated ___________, 1995 (collectively, the "Loan Agreement") pursuant to which
Lenders will make up to $4,000,000 available to Borrower;
WHEREAS, Borrower requires funds to continue the operation of its
business; and
WHEREAS, the Lenders desire to provide funds to Borrower on the terms
and under the conditions set forth below;
NOW, THEREFORE, in consideration of the promises, conditions and
representations herein contained, the parties agree as follows:
For value received, the undersigned, PROBUSINESS, INC., a California
corporation (the "Borrower") promises to pay _______________________________
(the "Lender") the principal sum of __________________ ($_______), plus accrued
interest. The principal amount of this Note and interest accrued thereon shall
be due and payable on demand on the earlier of (i) three years from the date of
the Loan Agreement or (ii) at the option of Lender or Borrower within thirty
days after the closing of a public offering of the Company that triggers the
conversion of the Company's outstanding Preferred Stock into the Company's
Common Stock under the Company's Articles of Incorporation, as amended. The
principal amount shall accrue interest at the rate of 8% per annum or if less,
the maximum rate permitted by applicable law commencing on the date of the Loan
Agreement. Borrower shall make quarterly payments to Lender for the amount of
interest accrued on the principal sum outstanding under this Note beginning on
December 31, 1995. All
7
payments on this Note will be credited first against accrued interest and then
against the remaining principal. This Note may be prepaid at any time without
penalty after the earlier of (i) one year from the date of the Loan Agreement,
or (ii) a public offering of the Borrower that triggers the conversion of Series
E Preferred Stock of the Company into Common Stock under the Company's Articles
of Incorporation (an "Initial Public Offering") pursuant to the terms of the
Loan Agreement.
7. Events of Default; Remedies.
7.1 Events of Default. The occurrence of any one or more of
the following events after the date of the Loan Agreement shall constitute an
"Event of Default":
(a) Xxxxxxxx fails to make timely payment of any
principal, interest, fees or other charges when due hereunder;
(b) Any material warranty, representation or other
statement made to Lender by Borrower under the Loan Agreement proves to have
been false or misleading in any material respect when made or furnished;
(c) Borrower fails or neglects to perform, keep or
observe any other material term, provision, condition, covenant, warranty or
representation contained in the Loan Agreement, which is required to be
performed, kept or observed by Borrower;
(d) Borrower shall commence any proceeding or other
action relating to it in bankruptcy or seek reorganization, arrangement,
readjustment of its debts, dissolution, liquidation, winding-up, composition or
any other relief under the Bankruptcy Act, as amended, or under any other
insolvency, reorganization, liquidation, dissolution, arrangement, composition,
readjustment of debt or any other similar act or law, of any jurisdiction,
domestic or foreign, now or hereafter existing;
(e) Borrower shall admit the material allegations of
any petition or pleading in connection with any such proceeding;
(f) Borrower shall apply for, or consent to or
acquiesce in, the appointment of a receiver, conservator, trustee or similar
officer for it or for all or a substantial part of its property;
(g) Borrower shall make a general assignment for the
benefit of creditors; or
(h) Borrower shall admit in writing its inability to
pay its debts as they mature.
7.2 Acceleration of the Obligations. Upon the occurrence of an
Event of Default as above provided, all or any portion of the obligations due or
to become due from Borrower to
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8
Lender shall, at the option of Lender, and without notice or demand by Lender,
become at once due and payable. Borrower will forthwith pay to Lender, in
addition to any and all sums and charges due, the entire outstanding principal
balance and interest accrued thereon.
8. Subordination. To the extent there is any conflict between the
provisions of this Section 2 and the other provisions of this Note, the
provisions of this Section 2 shall control.
(a) Lender hereby subordinates to Silicon Valley Bank ("Bank") any
security interest or lien that Lender may have or in the future obtain in any
property of Borrower. Notwithstanding any respective dates of attachment or
perfection of the security interest of Xxxxxx and the security interest of Bank,
the security interest of Bank in the property of Borrower shall at all times be
prior to the security interest of Lender.
(b) All indebtedness hereunder (the "Subordinated Debt") is
subordinated in right of payment to all obligations of Borrower to Bank now
existing or hereafter arising, together with all costs of collecting such
obligations (including attorneys' fees), including, without limitation, all
interest accruing after the commencement by or against Borrower of any
bankruptcy, reorganization or similar proceeding (the "Senior Debt").
(c) Lender will not demand or receive from Borrower (and Borrower will
not pay to Lender) all or any part of the Subordinated Debt, by way of payment,
prepayment, setoff, lawsuit or otherwise, nor will Lender exercise any remedy
with respect to any of Bank's collateral, nor will Lender commence, or cause to
commence, prosecute or participate in any administrative, legal or equitable
action against Borrower, for so long as any portion of the Senior Debt remains
outstanding. The foregoing notwithstanding, Lender shall be entitled to receive
each regularly scheduled payment of interest that constitutes Subordinated Debt,
provided that an event of default, as defined in the financing agreements
between Borrower and Bank, has not occurred and is not continuing and would not
exist immediately after such payment.
(d) Lender shall promptly deliver to Bank in the form received (except
for endorsement or assignment by Lender where required by Bank) for application
to the Senior Debt any payment, distribution, security or proceeds received by
Lender with respect to the Subordinated Debt other than in accordance with this
Section 2.
(e) In the event of Xxxxxxxx's insolvency, reorganization or any case
or proceeding under any bankruptcy or insolvency law or laws relating to the
relief of debtors, the provisions of this Section 2 shall remain in full force
and effect, and Bank's claims against Borrower and the estate of Borrower shall
be paid in full before any payment is made to Lender.
(f) For so long as any of the Senior Debt remains unpaid, Lender
irrevocably appoints Bank as Xxxxxx's attorney-in-fact, and grants to Bank a
power of attorney with full power of substitution, in the name of Lender or in
the name of Bank, for the use and benefit of Bank, without notice to Lender, to
perform at Bank's option the following acts in any bankruptcy, insolvency or
similar proceeding involving Borrower:
-8-
9
(i) To file the appropriate claim or claims in respect of the
Subordinated Debt on behalf of Lender if Xxxxxx does not do so prior to
30 days before the expiration of the time to file claims in such
proceeding and if Bank elects, in its sole discretion, to file such
claim or claims; and
(ii) To accept or reject any plan of reorganization or
arrangement on behalf of Xxxxxx and to otherwise vote Xxxxxx's claims
in respect of any Subordinated Debt in any manner that Bank deems
appropriate for the enforcement of its rights hereunder.
(g) This Section 2 shall remain effective for so long as Borrower owes
any amounts to Bank. If, at any time after payment in full of the Senior Debt
any payments of the Senior Debt must be disgorged by Bank for any reason
(including, without limitation, the bankruptcy of Borrower), this Section 2 and
the relative rights and priorities set forth herein shall be reinstated as to
all such disgorged payments as though such payments had not been made and Lender
shall immediately pay over to Bank all payments received with respect to the
Subordinated Debt to the extent that such payments would have been prohibited
hereunder. At any time and from time to time, without notice to Lender, Bank may
take such actions with respect to the Senior Debt as Bank, in its sole
discretion, may deem appropriate, including, without limitation, terminating
advances to Borrower, increasing the principal amount, extending the time of
payment, increasing applicable interest rates, renewing, compromising or
otherwise amending the terms of any documents affecting the Senior Debt and any
collateral securing the Senior Debt, and enforcing or failing to enforce any
rights against Borrower or any other person. No such action or inaction shall
impair or otherwise affect Bank's rights hereunder. Lender waives the benefits,
if any, of California Civil Code Sections 2809, 2810, 2819, 2845, 2847, 2848,
2849, 2850, 2899 and 3433.
(h) The provisions of this Section 2 shall bind any successors or
assignees of Lender and shall benefit any successors or assigns of Bank, and, if
Borrower refinances a portion of the Senior Debt with a new lender, such new
lender shall be deemed a successor of Bank for the purposes of this Section 2.
This Section 2 is solely for the benefit of Lender and Bank and not for the
benefit of Borrower or any other party.
(i) The provisions of this Section 2 may be amended only by written
instrument signed by Xxxxxx and Bank.
(j) In the event of any legal action to enforce the rights of a party
under this Section 2, the party prevailing in such action shall be entitled, in
addition to such other relief as may be granted, all reasonable costs and
expenses, including reasonable attorneys' fees, incurred in such action.
9. Conditions to Which Note is Subject. The acceptance of this Note by
Xxxxxx and the issuance of this Note by Borrower are subject to the fulfillment
of the following conditions:
9.1 Representations and Warranties Correct. The
representations and warranties made by Borrower and Lender in Section 4 and
Section 5, respectively, of the Loan Agreement shall
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10
be true and correct in all material respects as of the Closing Date (as defined
in the Loan Agreement).
9.2 Covenants. All covenants, agreements and conditions
contained in the Loan Agreement to be performed by Xxxxxxxx and Lender,
respectively, on or prior to the Closing Date shall have been performed or
complied with in all material respects.
10. Governing Law. This Note is issued in and shall be interpreted
under the laws of the State of California.
11. Assignment. This Note may not be assigned or transferred without
the written consent of Xxxxxxxx. The terms and provisions of this Note shall
inure to the benefit of, and be binding upon, Borrower and its successors and
assigns.
12. 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.
Issued this ___ day of _______, 1995.
PROBUSINESS, INC.
By:
--------------------------------
Xxxxxx X. Xxxxxx, President
LENDER
-----------------------------------
(Lender)
By:
--------------------------------
Title:
-----------------------------
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PROBUSINESS, INC.
FIRST AMENDMENT TO NOTE
This First Amendment to the note issued on October 20, 1995 (the
"Note") by ProBusiness, Inc., a California corporation (the "Borrower") to
__________________ (the "Lender") is made as of December 12, 1995 between the
Borrower and the Lender.
WHEREAS, the Borrower and the Lenders, as defined in the Loan Agreement
(defined hereinafter) have entered into a Loan Agreement dated October 20, 1995,
as amended by the First Amendment to the Loan Agreement dated December 12, 1995
(collectively, the "Loan Agreement");
WHEREAS, the Borrower issued the Note to the Lender for good and
valuable consideration;
WHEREAS, the Lender possesses certain rights under the Note;
NOW, THEREFORE, pursuant to the terms of the Note, and in consideration
of the mutual promises, covenants and conditions hereinafter set forth, the
parties hereto mutually agree to amend the last sentence of the first paragraph
of the Note to read in its entirety as follows:
"This Note may be prepaid at any time without penalty after the earlier
of (i) one year from the date of the Loan Agreement, or (ii) a public offering
of the Borrower that triggers the conversion of Series E Preferred Stock of the
Company into Common Stock under the Company's Articles of Incorporation (an
"Initial Public Offering") pursuant to the terms of the Loan Agreement."
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IN WITNESS WHEREOF, the parties have duly executed this First Amendment
to Note on the day and year first above written.
LENDER PROBUSINESS, INC.
___________________________
By: _______________________ By: _____________________________________
Xxxxxx X. Xxxxxx,
Title: ____________________ President and Chief Executive Officer
