EXHIBIT 10.18
PREDICTIVE SYSTEMS, INC.
COMMON STOCK PURCHASE AGREEMENT
SEPTEMBER 16, 1999
TABLE OF CONTENTS
Page
1. Purchase and Sale of Stock...............................................................................1
1.1. Sale and Issuance of Common Stock...............................................................1
1.2. Closing.........................................................................................1
2. Representations and Warranties of the Company............................................................1
2.1. Organization, Good Standing and Qualification...................................................1
2.2. Capitalization and Voting Rights................................................................1
2.3. Subsidiaries....................................................................................2
2.4. Authorization...................................................................................2
2.5. Valid Issuance of Common Stock..................................................................2
2.6. Governmental Consents...........................................................................3
2.7. Offering........................................................................................3
2.8. Litigation......................................................................................3
2.9. Patents and Trademarks..........................................................................3
2.10. Compliance with Other Instruments...............................................................4
2.11. Financial Statements............................................................................4
2.12. Changes.........................................................................................4
2.13. Tax Returns.....................................................................................5
2.14. Permits.........................................................................................5
2.15. Environmental and Safety Laws...................................................................5
2.16. Disclosure......................................................................................5
2.17. Title to Property and Assets....................................................................5
2.18. Employee Benefit Plans..........................................................................5
2.19. Labor Agreements and Actions....................................................................5
3. Representations and Warranties of the Investor...........................................................6
3.1. Authorization...................................................................................6
3.2. Purchase Entirely for Own Account...............................................................6
3.3. Disclosure of Information.......................................................................6
3.4. Investment Experience...........................................................................7
3.5. Accredited Investor.............................................................................7
3.6. Restricted Securities...........................................................................7
3.7. Further Limitations on Disposition..............................................................7
3.8. Legends.........................................................................................8
3.9. Tax Advisors....................................................................................8
4. California Commissioner of Corporations..................................................................8
4.1. Corporate Securities Law........................................................................8
5. Conditions of Investor's Obligations at Closing..........................................................8
5.1. Representations and Warranties..................................................................8
5.2. Performance.....................................................................................9
5.3. Compliance Certificate..........................................................................9
5.4. Qualifications..................................................................................9
5.5. Proceedings and Documents.......................................................................9
5.6. Opinion of Company Counsel......................................................................9
5.7. Investor's Rights Agreement.....................................................................9
6. Conditions of the Company's Obligations at Closing.......................................................9
6.1. Representations and Warranties..................................................................9
6.2. Payment of Purchase Price.......................................................................9
6.3. Qualifications..................................................................................9
6.4. Investor's Rights Agreement.....................................................................9
7. Miscellaneous............................................................................................10
7.1. Survival........................................................................................10
7.2. Successors and Assigns..........................................................................10
7.3. Governing Law...................................................................................10
7.4. Titles and Subtitles............................................................................10
7.5. Notices.........................................................................................10
7.6. Finder's Fee....................................................................................10
7.7. Amendments and Waivers..........................................................................10
7.8. Severability....................................................................................11
7.9. Aggregation of Stock............................................................................11
7.10. Entire Agreement................................................................................11
7.11. Counterparts....................................................................................11
SCHEDULE A Schedule of Investors
SCHEDULE B Schedule of Exceptions
EXHIBIT A Opinion of Counsel for the Company
EXHIBIT B INVESTOR'S Rights Agreement
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is
made on the 16th day of September, 1999, by and between Predictive Systems,
Inc., a Delaware corporation (the "Company"), and Cisco Systems, Inc., a
California corporation (the "Investor").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF STOCK.
1.1. SALE AND ISSUANCE OF COMMON STOCK. Subject to the terms
and conditions of this Agreement, the Investor agrees to purchase at the Closing
and the Company agrees to sell and issue to the Investor at the Closing, that
number of shares of the Company's Common Stock set forth opposite the Investor's
name on Schedule A hereto for the purchase price set forth thereon.
1.2. CLOSING. The purchase and sale of the Common Stock shall
take place at the offices of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 12:00 P.M., on September 14, 1999, or at
such other time and place as the Company and the Investor mutually agree upon
orally or in writing (which time and place are designated as the "Closing"). At
the Closing, the Company shall deliver to the Investor a certificate
representing the Common Stock that such Investor is purchasing against payment
of the purchase price therefor by check, wire transfer, cancellation of
indebtedness or any combination thereof. In the event that payment by the
Investor is made, in whole or in part, by cancellation of indebtedness, then
such Investor shall surrender to the Company for cancellation at the Closing any
evidence of such indebtedness or shall execute an instrument of cancellation in
form and substance acceptable to the Company.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Investor that, except as set forth on a Schedule
of Exceptions (the "Schedule of Exceptions") furnished the Investor and special
counsel for the Investor prior to execution hereof and attached hereto as
Schedule B, which exceptions shall be deemed to be representations and
warranties as if made hereunder:
2.1. ORGANIZATION, GOOD STANDING AND QUALIFICATION. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Company is duly qualified to
transact business and is in good standing in each jurisdiction in which the
failure to so qualify would have a material adverse effect on its business or
properties. The Company has all requisite power and authority necessary to own
and operate its property, to carry on its business as now conducted and as
currently proposed to be conducted and to carry out the transactions
contemplated by this agreement.
2.2. CAPITALIZATION AND VOTING RIGHTS.
The authorized capital of the Company consists of:
(a) PREFERRED STOCK. 6,512,316 shares of Preferred
Stock, par value $.001 (the "Preferred Stock"), all of which have been
designated Series A Convertible
Preferred Stock (the "Preferred Stock") and all of which are issued and
outstanding. The rights, privileges and preferences of the Preferred Stock are
stated in the Company's Certificate of Incorporation.
(b) COMMON STOCK. 50,000,000 shares of common stock,
par value $.001 ("Common Stock"), of which 10,674,964 shares are issued and
outstanding.
(c) The outstanding shares of Preferred Stock and
Common Stock are all duly and validly authorized and issued, fully paid and
nonassessable, and were issued in compliance with all applicable state and
federal laws concerning the issuance of securities.
(d) Except for (i) the conversion privileges of the
Preferred Stock, (ii) currently outstanding options to purchase 10,373,763
shares of Common Stock granted to employees pursuant to the Company's Stock
Incentive Plan (the "Option Plan"), and (iii) 750,000 shares available for
issuance under the Company's 1999 Employee Stock Purchase Plan, there are not
outstanding any options, warrants, rights (including conversion or preemptive
rights) or agreements for the purchase or acquisition from the Company of any
shares of its capital stock. In addition to the aforementioned options, the
Company has reserved an additional 2,626,237 shares of its Common Stock for
purchase upon exercise of options to be granted in the future under the Option
Plan. The Company is not a party or subject to any agreement or understanding,
and, to the Company's knowledge, there is no agreement or understanding between
any persons and/or entities, which affects or relates to the voting or giving of
written consents with respect to any security or by a director of the Company.
2.3. SUBSIDIARIES. The Company does not presently own or
control, directly or indirectly, any interest in any other corporation,
association, or other business entity. The Company is not a participant in any
joint venture, partnership, or similar arrangement.
2.4. AUTHORIZATION. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement and the Investor's
Rights Agreement, the performance of all obligations of the Company hereunder
and thereunder, and the authorization, sale and issuance of the Common Stock
being sold hereunder has been taken or will be taken prior to the Closing. This
Agreement and the Investor's Rights Agreement constitute valid and legally
binding obligations of the Company, enforceable in accordance with their
respective terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies, and (iii) to the extent the indemnification provisions contained in
the Investor's Rights Agreement may be limited by applicable federal or state
securities laws.
2.5. VALID ISSUANCE OF COMMON STOCK. The Common Stock that is
being purchased by the Investor hereunder, when issued, sold and delivered in
accordance with the terms of this Agreement for the consideration expressed
herein, will be duly and validly issued, fully paid and nonassessable and will
be free of restrictions on transfer, other than
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restrictions on transfer under this Agreement and the Investor's Rights
Agreement and under applicable state and federal securities laws.
2.6. GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for: (i) the filing of a Notice of
Transaction pursuant to Section 25102(f) of the California Corporate Securities
Law of 1968, as amended, and the rules thereunder (the "Law"), which filing will
be effected within the time prescribed by law, and (ii) such other filings
required pursuant to applicable federal and state securities laws and blue sky
laws, which filings will be effected within the required statutory period.
2.7. OFFERING. Subject in part to the truth and accuracy of
the Investor's representations set forth in Section 3 of this Agreement, the
offer, sale and issuance of the Common Stock as contemplated by this Agreement
are exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Act"), and the qualification or registration requirements of the
Law or other applicable blue sky laws. Neither the Company nor any authorized
agent acting on its behalf will take any action hereafter that would cause the
loss of such exemptions.
2.8. LITIGATION. There is no action, suit, proceeding or
investigation pending, or to the Company's knowledge, currently threatened
against the Company or its officers or directors that questions the validity of
this Agreement or the right of the Company to enter into such agreement or to
consummate the transactions contemplated hereby, or that might result, either
individually or in the aggregate, in any material adverse changes in the
business, assets or condition of the Company, financially or otherwise, or any
change in the current equity ownership of the Company. The Company is not a
party or subject to the provisions of any order, writ, injunction, judgment or
decree of any court or government agency or instrumentality. There is no action,
suit, proceeding or investigation by the Company currently pending or that the
Company intends to initiate.
2.9. PATENTS AND TRADEMARKS. To its knowledge (but without
having conducted any special investigation or patent search), except for the
disclosures made in the Company's Registration Statement on Form S-1 (File No.
333-84045), as amended (the "Registration Statement"), the Company possesses all
patents, patent rights, trademarks, trademark rights, service marks, service
xxxx rights, trade names, trade name rights and copyrights (collectively, the
"Intellectual Property") necessary for its business without any conflict with or
infringement of the valid rights of others and the lack of which could
materially and adversely affect the operations or condition, financial or
otherwise, of the Company, and the Company has not received any notice of
infringement upon or conflict with the asserted rights of others. The Company
has a valuable body of trade secrets, including know-how, concepts, computer
programs and other technical data (the "Proprietary Information") for the
development, manufacture and sale of its products. To its knowledge, the Company
has the right to use the Proprietary Information free and clear of any rights,
liens, encumbrances or claims of others, except that the possibility exists that
other persons may have independently developed trade secrets or technical
information similar or identical to those of the Company. The Company is
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not aware of any such independent development nor of any misappropriation of its
Proprietary Information. The Company is not aware that any of its employees is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with the use of his or
her best efforts to promote the interests of the Company or that would conflict
with the Company's business. The Company does not believe it is or will be
necessary to utilize any inventions of any of its employees (or people it
currently intends to hire) made prior to their employment by the Company, except
for inventions that have been assigned or licensed to the Company as of the date
hereof.
2.10. COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in
violation in any material respect of any provision of its Certificate of
Incorporation, as amended to date, or Bylaws, as amended to date, nor in any
material respect of any instrument, judgment, order, writ, decree or contract,
statute, rule or regulation to which the Company is subject and a violation of
which would have a material adverse effect on the condition, financial or
otherwise, or operations of the Company. The execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby
will not result in any such violation, or be in conflict with or constitute,
with or without the passage of time and giving of notice, either a default under
any such provision or an event that results in the creation of any lien, charge
or encumbrance upon any assets of the Company or the suspension, revocation,
impairment, forfeiture or nonrenewal of any material permit, license,
authorization or approval applicable to the Company, its business or operations
or any of its assets or properties.
2.11. FINANCIAL STATEMENTS. The Company has delivered to the
Investor its audited financial statements (balance sheet and statement of
operations, statement of stockholders' equity and statement of cash flows,
including notes thereto) at December 31, 1998 and for the fiscal year then
ended, and its unaudited financial statements (balance sheet and statement of
operations) as, at and for the six-month period ended June 30, 1999 (the
"Financial Statements"). The Financial Statements have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods indicated and with each other, except that
unaudited Financial Statements may not contain all footnotes required by
generally accepted accounting principles. The Financial Statements fairly
present the financial condition and operating results of the Company as of the
dates, and for the periods, indicated therein, subject in the case of unaudited
Financial Statements to normal year-end audit adjustments. Except as set forth
in the Financial Statements, the Company has no material liabilities, contingent
or otherwise, other than (i) liabilities incurred in the ordinary course of
business subsequent to June 30, 1999 and (ii) 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, which, in both cases, individually or in the aggregate, are not
material to the financial condition or operating results of the Company. Except
as disclosed in the Financial Statements, the Company is not a guarantor or
indemnitor of any indebtedness of any other person, firm or corporation. The
Company maintains and will continue to maintain a standard system of accounting
established and administered in accordance with generally accepted accounting
principles.
2.12. CHANGES. To the Company's knowledge, since June 30, 1999
there has not been any change in the assets, liabilities, financial condition or
operating results of the
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Company from that reflected in the Financial Statements, except changes in the
ordinary course of business that have not been, in the aggregate, materially
adverse.
2.13. TAX RETURNS. The Company has timely filed all tax
returns (federal, state and local) required to be filed by it and all taxes,
assessments and other government changes imposed upon the Company, or upon any
of the assets, income or franchises of the Company, have been timely paid or, if
not yet payable, are adequately accrued on the Company's books and records.
There are no actual or proposed tax deficiencies, assessments or adjustments
with respect to the Company or any assets or operations of the Company. The
Company has not been advised that any of its returns have been or are being
audited.
2.14. PERMITS. The Company has all franchises, permits,
licenses and any similar authority necessary for the conduct of its business,
the lack of which could materially and adversely affect the business, properties
or financial condition of the Company. The Company is not in default in any
material respect under any of such franchises, permits, licenses or other
similar authority.
2.15. ENVIRONMENTAL AND SAFETY LAWS. To its knowledge, the
Company is not in violation of any applicable statute, law or regulation
relating to the environment or occupational health and safety, and to its
knowledge, no material expenditures are or will be required in order to comply
with any such existing statute, law or regulation.
2.16. DISCLOSURE. The Company has fully provided each Investor
with all the information that such Investor has requested for deciding whether
to purchase the Common Stock. Neither this Agreement (including all the exhibits
and schedules hereto) nor any other statements or certificates made or delivered
in connection herewith contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements herein or therein not
misleading in light of the circumstances under which they were made.
2.17. TITLE TO PROPERTY AND ASSETS. The property and assets
the Company owns are owned by the Company free and clear of all mortgages,
liens, loans and encumbrances, except (i) as reflected in the Financial
Statements, (ii) for statutory liens for the payment of current taxes that are
not yet delinquent, and (iii) for liens, encumbrances and security interests
that arise in the ordinary course of business and minor defects in title, none
of which, individually or in the aggregate, materially impair the Company's
ownership or use of such property or assets. With respect to the property and
assets it leases, the Company is in material compliance with such leases and, to
its knowledge, holds a valid leasehold interest free of any liens, claims or
encumbrances, subject to clauses (i)-(iii).
2.18. EMPLOYEE BENEFIT PLANS. The Company does not have any
Employee Benefit Plan as defined in the Employee Retirement Income Security Act
of 1974.
2.19. LABOR AGREEMENTS AND ACTIONS. The Company is not bound
by or subject to (and none of its assets or properties is bound by or subject
to) any written or oral, express or implied, contract, commitment or arrangement
with any labor union, and no labor union has requested or, to the Company's
knowledge, has sought to represent any of the employees, representatives or
agents of the Company. There is no strike or other labor dispute
5
involving the Company pending, or to the Company's knowledge, threatened, that
could have a material adverse effect on the assets, properties, financial
condition, operating results or business of the Company, nor is the Company
aware of any labor organization activity involving its employees. The Company is
not aware that any officer or key employee, or that any group of key employees,
intends to terminate their employment with the Company, nor does the Company
have a present intention to terminate the employment of any of the foregoing.
2.20. PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTS. Each
employee, officer and consultant of the Company has executed a Proprietary
Information and Inventions Agreement in the form provided to special counsel to
the Investor. The Company, after reasonable investigation, is not aware that any
of its employees, officers or consultants are in violation thereof, and the
Company will use commercially reasonable efforts to prevent any such violation.
2.21. AGREEMENTS; ACTIONS; RELATED-PARTY TRANSACTIONS. The
Registration Statement accurately discloses all agreements, understandings or
proposed transactions required to be disclosed pursuant to Regulation S-K. There
are no agreements, understandings or proposed transactions, judgements, orders,
writs or decrees to which the Company is a party or by which it is bound that
would be required to be filed as part of the Registration Statement that are not
filed as part of the Registration Statement.
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. The Investor hereby
represents, warrants and covenants that:
3.1. AUTHORIZATION. The Investor has full power and authority
to enter into this Agreement and the Investor's Rights Agreement, and each such
agreement constitutes its valid and legally binding obligation, enforceable in
accordance with its terms.
3.2. PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made
with such Investor in reliance upon such Investor's representation to the
Company, which by such Investor's execution of this Agreement such Investor
hereby confirms, that the Common Stock to be received by such Investor
(collectively, the "Securities") will be acquired for investment for such
Investor's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that such Investor has no
present intention of selling, granting any participation in or otherwise
distributing the same. By executing this Agreement, the Investor further
represents that such Investor 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 Securities.
3.3. DISCLOSURE OF INFORMATION. Such Investor believes it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Common Stock. Such Investor further represents that it
has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Common Stock and the
business, properties, prospects and financial condition of the Company. The
foregoing, however, does not limit or modify the representations and warranties
of the Company in Section 2 of this Agreement or the right of the Investor to
rely thereon.
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3.4. INVESTMENT EXPERIENCE. Such Investor is an investor in
securities of similarly situated companies and acknowledges that it is able to
fend for itself, can bear the economic risk of its investment, and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in the Common Stock. Such
Investor also represents it has not been organized for the purpose of acquiring
the Common Stock.
3.5. ACCREDITED INVESTOR. Such Investor is an "accredited
investor" within the meaning of Securities and Exchange Commission ("SEC") Rule
501 of Regulation D, as presently in effect.
3.6. RESTRICTED SECURITIES. Such Investor understands that the
Securities it is purchasing are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such Securities may be resold without registration under
the Act only in certain limited circumstances. In the absence of an effective
registration statement covering the Securities or an available exemption from
registration under the Act, the Common Stock must be held indefinitely. In this
connection, such Investor represents that it is familiar with SEC Rule 144, as
presently in effect, and understands the resale limitations imposed thereby and
by the Act, including without limitation the Rule 144 condition that current
information about the Company be available to the public. Such information is
not now available and the Company has no present plans to make such information
available.
3.7. FURTHER LIMITATIONS ON DISPOSITION. Without in any way
limiting the representations set forth above, such Investor further agrees not
to make any disposition of all or any portion of the Securities unless and until
the transferee has agreed in writing for the benefit of the Company to be bound
by this Section 3 and the Investor's Rights Agreement, and:
(a) There is then in effect a registration statement
under the ct covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) (i) Such Investor shall have notified the Company
of the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
requested by the Company, such Investor shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company that such disposition
will not require registration of such shares under the Act. It is agreed that
the Company will not require opinions of counsel for transactions made pursuant
to Rule 144 except in unusual circumstances.
(c) Notwithstanding the provisions of subsections (a)
and (b) above, no such registration statement or opinion of counsel shall be
necessary for a transfer by an Investor that is a partnership to a partner of
such partnership or a retired partner of such partnership who retires after the
date hereof, or to the estate of any such partner or retired partner or the
transfer by gift, will or intestate succession of any partner to his or her
spouse or to the siblings, lineal descendants or ancestors of such partner or
his or her spouse, if the transferee
7
agrees in writing to be subject to the terms hereof to the same extent as if he
or she were an original Investor hereunder.
3.8. LEGENDS. It is understood that the certificates
evidencing the Securities may bear one or all of the following legends:
(a) "These securities have not been registered under
the Securities Act of 1933, as amended. They may not be sold, offered for sale,
pledged or hypothecated in the absence of a registration statement in effect
with respect to the securities under such Act or an opinion of counsel
satisfactory to the Company that such registration is not required or unless
sold pursuant to Rule 144 of such Act."
(b) Any legend required by the laws of the State of
California, including any legend required by the California Department of
Corporations and Sections 417 and 418 of the California Corporations Code.
3.9. TAX ADVISORS. Such Investor has reviewed with such
Investor's own tax advisors the federal, state and local tax consequences of
this investment, where applicable, and the transactions contemplated by this
Agreement. Such Investor is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents and
understands that each such Investor (and not the Company) shall be responsible
for such Investor's own tax liability that may arise as a result of this
investment or the transactions contemplated by this Agreement.
4. CALIFORNIA COMMISSIONER OF CORPORATIONS.
4.1. CORPORATE SECURITIES LAW. THE SALE OF THE SECURITIES THAT
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 FOR SUCH SECURITIES
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO
EXEMPT.
5. CONDITIONS OF INVESTOR'S OBLIGATIONS AT CLOSING. The obligations of
the Investor under subsection 1.1 of this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions, unless
waived in writing by the Investor:
5.1. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 2 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the date of such Closing.
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5.2. PERFORMANCE. The Company shall have performed and
complied with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing.
5.3. COMPLIANCE CERTIFICATE. The Chief Executive Officer or
President of the Company shall deliver to Investor at the Closing a certificate
stating that the conditions specified in Sections 5.1 and 5.2 have been
fulfilled.
5.4. QUALIFICATIONS. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale
of the Securities pursuant to this Agreement shall be duly obtained and
effective as of the Closing.
5.5. PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to Investor's special counsel, and they shall have received all such
counterpart original and certified or other copies of such documents as they may
reasonably request.
5.6. OPINION OF COMPANY COUNSEL. The Investor shall have
received from Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, counsel for the Company, an
opinion, dated as of the Closing, in the form attached hereto as Exhibit A.
5.7. INVESTOR'S RIGHTS AGREEMENT. The Company and the Investor
shall have entered into the Investor's Rights Agreement in the form attached as
Exhibit B.
6. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations
of the Company to Investor under this Agreement are subject to the fulfillment
on or before the Closing of each of the following conditions by that Investor:
6.1. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Investor contained in Section 3 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the Closing.
6.2. PAYMENT OF PURCHASE PRICE. The Investor shall have
delivered the purchase price specified in Section 1.
6.3. QUALIFICATIONS. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale
of the Securities pursuant to this Agreement shall be duly obtained and
effective as of the Closing.
6.4. INVESTOR'S RIGHTS AGREEMENT. The Company and Investor
shall have entered into the Investor's Rights Agreement in the form attached as
EXHIBIT B.
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7. MISCELLANEOUS.
7.1. SURVIVAL. The warranties, representations and covenants
of the Company and Investor contained in or made pursuant to this Agreement
shall survive the execution and delivery of this Agreement and the Closing for a
period of one year after the Closing and shall in no way be affected by any
investigation of the subject matter thereof made by or on behalf of the Investor
or the Company.
7.2. SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties
(including transferees of any Securities). Nothing in this Agreement, express or
implied, is intended to confer upon any party, other than the parties hereto or
their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
7.3. GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of New York as applied to agreements among
State of New York residents entered into and to be performed entirely within the
State of New York.
7.4. TITLES AND SUBTITLES. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.5. NOTICES. All notices required or permitted hereunder
shall be in writing and shall be deemed effectively given: (i) upon personal
delivery to the party to be notified, (ii) when sent by confirmed telex or
facsimile if sent during normal business hours of the recipient, if not, then on
the next business day; (iii) five days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (iv) one day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All communications shall be sent
to the address as set forth on the signature page hereof or at such other
address as such party may designate by ten days advance written notice to the
other parties hereto.
7.6. FINDER'S FEE. Each party represents that it neither is
nor will be obligated for any finders' fee or commission in connection with this
transaction. Investor agrees to indemnify and to hold harmless the Company from
any liability for any commission or compensation in the nature of a finders' fee
(and the costs and expenses of defending against such liability or asserted
liability) for which Investor or any of its officers, partners, employees or
representatives is responsible. The Company agrees to indemnify and hold
harmless Investor from any liability for any commission or compensation in the
nature of a finders' fee (and the costs and expenses of defending against such
liability or asserted liability) for which the Company or any of its officers,
employees or representatives is responsible.
7.7. AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
a majority of the Common Stock not previously sold to the
10
public that is issued hereunder. Any amendment or waiver effected in accordance
with this paragraph shall be binding upon each holder of any securities
purchased under this Agreement at the time outstanding (including securities
into which such securities are convertible), each future holder of all such
securities and the Company.
7.8. SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
7.9. AGGREGATION OF STOCK. All shares of the Common Stock
issued hereunder or acquired by affiliated entities or persons shall be
aggregated together for the purpose of determining the availability of any
rights under this Agreement.
7.10. ENTIRE AGREEMENT. This Agreement and the documents
referred to herein constitute the entire agreement among the parties 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.
7.11. COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
PREDICTIVE SYSTEMS, INC.
By: /s/ Xxxxxx Xxxxx
----------------------------------
Xxxxxx Xxxxx,President
Address: 000 Xxxxxx Xxxxxx
-------------------------------------
Xxx Xxxx, XX 00000
-------------------------------------
CISCO SYSTEMS INC.
By: /s/ Xxxxxx Xxxxxx
----------------------------------
Address: 000 Xxxx Xxxxxx Xxxxx
-------------------------------------
Xxx Xxxx, XX 00000-0000
-------------------------------------
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SCHEDULE A
Name of Investor Number of Shares Total Purchase Price
---------------- ---------------- --------------------
Cisco Systems Inc. 1,378,052 $16,536,624
