EXHIBIT 2
to AMENDMENT NO. 2
to SCHEDULE 13D
PROBUSINESS SERVICES, INC.
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (this "AGREEMENT") is made and
entered into as of December 20, 2001, by and between ProBusiness Services, Inc.,
a Delaware corporation (the "COMPANY"), and each of the purchasers listed on
EXHIBIT A attached hereto (collectively, the "PURCHASERS" and individually, a
"PURCHASER").
RECITALS
WHEREAS, the Company desires to sell to the Purchasers, and the
Purchasers desire to purchase from the Company, shares of Common Stock, par
value $0.001 per share, of the Company (the "COMMON STOCK") on the terms and
conditions set forth in this Agreement; and
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. AGREEMENT TO PURCHASE AND SELL STOCK.
(a) AUTHORIZATION. The Company's Board of Directors has authorized
the issuance, pursuant to the terms and conditions of this Agreement, of up to
3,733,334 shares of Common Stock (the "PURCHASED SHARES").
(b) AGREEMENT TO PURCHASE AND SELL SECURITIES. Subject to the
terms and conditions of this Agreement, each Purchaser severally agrees to
purchase, and the Company agrees to sell and issue to each Purchaser, at the
Closing (as defined below), in the case of all Purchasers other than General
Atlantic Partners 74, L.P., GAP Star, LLC, GAPCO Germany, L.P. and GAP
Coinvestment Partners II, L.P. (which are collectively referred to herein as the
"GAP PURCHASERS"), and at the Subsequent Closing (as defined below), in the case
of the GAP Purchasers, that number of Purchased Shares set forth opposite the
appropriate Purchaser's name on EXHIBIT A attached hereto. The purchase price of
each Purchased Share (the "PER SHARE PRICE") shall be $15.00.
(c) ESCROW ACCOUNT. As soon as practicable after the Closing, but
prior to December 28, 2001, the Company and the GAP Purchasers agree to enter
into an escrow agreement (the "ESCROW AGREEMENT"), in substantially the form
attached hereto as EXHIBIT C, with such changes requested by an escrow agent to
be agreed upon by the parties that are mutually acceptable to both parties,
pursuant to which the parties thereto agree to deposit in escrow the GAP
Purchasers Shares (as defined below) and the GAP Purchasers Purchase Price (as
defined below) with such escrow agent (the "ESCROW AGENT"). On or prior to
December 28, 2001, the Company agrees to deposit with the Escrow Agent, to be
held in escrow in accordance with the terms of the Escrow Agreement and, subject
to the satisfaction of the conditions set forth in Sections 9 and 10 hereto, to
be distributed to the GAP Purchasers in accordance with the terms of the Escrow
Agreement on the Subsequent Closing Date (as defined below), the aggregate
number of Purchased Shares set forth opposite all of the GAP Purchasers' names
on EXHIBIT A attached hereto (such Purchased Shares are referred to
herein as the "GAP PURCHASERS SHARES"), registered in the name of each GAP
Purchaser representing the number of shares set forth opposite such GAP
Purchaser's name on EXHIBIT A hereto. On or prior to December 28, 2001, each GAP
Purchaser agrees to deposit with the Escrow Agent, to be held in escrow in
accordance with the terms of the Escrow Agreement and, subject to the
satisfaction of the conditions set forth in Sections 9 and 10 hereto, to be
distributed to the Company in accordance with the terms of the Escrow Agreement
on the Subsequent Closing Date, the aggregate cash purchase price set forth
opposite such GAP Purchaser's name on EXHIBIT A (the "GAP PURCHASERS PURCHASE
PRICE").
(d) USE OF PROCEEDS. The Company intends to apply the net proceeds
from the sale of the Purchased Shares for general corporate purposes.
2. CLOSINGS.
(a) INITIAL CLOSING. The initial purchase and sale of the
Purchased Shares shall take place at the offices of Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, Professional Corporation, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx, at
10:00 a.m. California time, on December __, 2001, or at such other time and
place as the Company and the Purchasers (other than the GAP Purchasers) mutually
agree upon (which time and place are referred to in this Agreement as the
"CLOSING"). At the Closing, the Company shall authorize its transfer agent to
issue to each Purchaser (other than the GAP Purchasers), against delivery of
payment for the Purchased Shares, one or more stock certificates (the
"CERTIFICATES") registered in the name of each Purchaser, representing the
number of shares set forth opposite such Purchaser's name on EXHIBIT A hereto,
and bearing the legend set forth in Section 4(j) herein. Closing documents may
be delivered by facsimile with original signature pages sent by overnight
courier. The date of the Closing is referred to herein as the Closing Date.
(b) SUBSEQUENT CLOSING. On the latest to occur of (i) December 28,
2001, (ii) the Closing Date or (iii) the business day that (A) the conditions
set forth in Sections 9 and 10 of this Agreement have either been satisfied or
waived and (B) the Escrow Agent is required pursuant to the Escrow Agreement to
distribute the GAP Purchasers Shares and the GAP Purchasers Purchase Price
pursuant to the Escrow Agreement, the subsequent purchase and sale of the GAP
Purchasers Shares shall take place at the offices of Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, Professional Corporation, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx, at
10:00 a.m. California time (which time and place are referred to in this
Agreement as the "SUBSEQUENT CLOSING"). At the Subsequent Closing, the Escrow
Agent will distribute (i) to the GAP Purchasers, stock certificates representing
the GAP Purchasers Shares and (ii) to the Company, the GAP Purchasers Purchase
Price. The date of the Subsequent Closing is referred to herein as the
Subsequent Closing Date.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to each Purchaser that the statements in this Section 3
are true and correct, except as set forth in the SEC Documents (as defined
below) or in the Disclosure Letter delivered to the Purchasers concurrently
herewith:
(a) 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 and has all corporate power and authority required to
(a) carry on its business as presently
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conducted and (b) enter into this Agreement and the other agreements,
instruments and documents contemplated hereby, and to consummate the
transactions contemplated hereby and thereby. The Company is qualified to do
business and is in good standing in each jurisdiction in which the failure to so
qualify would have a Material Adverse Effect. As used in this Agreement,
"MATERIAL ADVERSE EFFECT" means a material adverse effect on, or a material
adverse change in, or a group of such effects on or changes in, the business,
operations, financial condition, results of operations, assets or liabilities of
the applicable party and its subsidiaries, taken as a whole.
(b) CAPITALIZATION. The capitalization of the Company, without
giving effect to the transactions contemplated by this Agreement, is as follows.
As of October 16, 2001, the authorized stock of the Company consisted of (i)
60,000,000 shares of Common Stock, of which 24,255,843 shares were issued and
outstanding; and (ii) 5,000,000 shares of Preferred Stock, of which 1,800,000
shares were designated as 6.9% Senior Convertible Preferred Stock, 1,132,075 of
which were issued and outstanding, and 60,000 shares were designated Series A
Participating Preferred Stock, none of which were issued and outstanding. All
such shares of Common Stock and Preferred Stock have been duly authorized, and
all such issued and outstanding shares of Common Stock and Preferred Stock have
been validly issued, are fully paid and nonassessable. No such outstanding
shares of Common Stock and Preferred Stock were issued in violation of any
pre-emptive rights.
As of October 16, 2001, the Company had also reserved: (i) 6,943,658
shares of Common Stock for issuance upon exercise of options granted under the
Company's 1996 Stock Option Plan plus any shares which were forfeited after the
Company's initial public offering and which were issued or subject to issuance
pursuant to options granted under the Company's 1989 Stock Option Plan; (ii)
556,955 shares of Common Stock for issuance to employees of the Company under
the Company's Employee Stock Purchase Plan; (iii) 1,132,075 shares of Common
Stock for issuance upon conversion of the 6.9% Senior Convertible Preferred
Stock; and (iv) 50,961 shares of Common Stock for issuance upon exercise of
outstanding warrants. All shares of Common Stock subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable. Except as provided in this
Agreement and set forth in the Disclosure Letter, and except for the (i)
conversion privileges of the 6.9% Senior Convertible Preferred Stock, (ii)
accrued but unpaid dividends on the 6.9% Senior Convertible Preferred Stock,
(iii) shares of Common Stock subject to outstanding options issued under the
Company's Stock Option Plan(s) and Employee Stock Purchase Plan, (iv) shares of
Common Stock reserved for future issuance pursuant to the Company's Stock Option
Plan(s) and Employee Stock Purchase Plan, (v) the rights to purchase Series A
Participating Preferred Stock issued pursuant to the Company's Preferred Stock
Rights Agreement dated as of August 8, 2001 (the "RIGHTS AGREEMENT") and (vi)
shares of Common Stock subject to outstanding warrants, there are no other
equity securities, options, warrants, calls, rights, commitments or agreements
of any character to which the Company is a party or by which it is bound
obligating the Company to issue, deliver, sell, repurchase or redeem, or cause
to be issued, delivered, sold, repurchased or redeemed, any shares of the
capital stock of the Company or obligating the Company to grant, extend or enter
into any such equity security, option, warrant, call, right, commitment or
agreement. Except for ProBusiness Holding Company, Inc., the Company does not
have any subsidiaries, nor does the Company own any capital stock, assets
comprising the
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business of, obligations of, or any other interest (including any equity or
partnership interest) in, or any outstanding loan or advance to or from, any
person or entity.
(c) DUE AUTHORIZATION. All corporate actions on the part of the
Company necessary for the authorization, execution, delivery of, and the
performance of all obligations of the Company under this Agreement and the
Escrow Agreement and the authorization, issuance, reservation for issuance and
delivery of all of the Purchased Shares being sold under this Agreement have
been taken, and this Agreement constitutes, and the Escrow Agreement when
executed will constitute, the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
(a) as may be limited by (i) applicable bankruptcy, insolvency, reorganization
or others laws of general application relating to or affecting the enforcement
of creditors' rights generally and (ii) the effect of rules of law governing the
availability of equitable remedies and (b) as rights to indemnity or
contribution may be limited under federal or state securities laws or by
principles of public policy thereunder.
(d) VALID ISSUANCE OF STOCK.
(i) VALID ISSUANCE. The shares of Common Stock to be
issued pursuant to this Agreement will be, upon payment therefor by the
Purchasers in accordance with this Agreement, duly authorized, validly issued,
fully paid and non-assessable.
(ii) COMPLIANCE WITH SECURITIES LAWS. Subject to the
accuracy of the representations made by the Purchasers in Section 4 hereof, the
Purchased Shares (assuming no change in applicable law and no unlawful
distribution of Purchased Shares by the Purchasers or other parties), will be
issued to the Purchasers in compliance with applicable exemptions from (i) the
registration and prospectus delivery requirements of the Securities Act of 1933,
as amended (the "SECURITIES ACT") and (ii) the registration and qualification
requirements of all applicable securities laws of the states of the United
States.
(e) GOVERNMENTAL CONSENTS. Except as set forth in the Disclosure
Letter, no consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, or notice to, any
federal, state or local governmental authority on the part of the Company is
required in connection with the issuance of the Purchased Shares, as of the date
hereof, to the Purchasers, or the consummation of the other transactions
contemplated by this Agreement, except (i) such filings as have been made prior
to the date hereof, (ii) the filing of a notification form with The Nasdaq Stock
Market, Inc. ("Nasdaq") and (iii) such additional post-Closing filings as may be
required to comply with applicable state and federal securities laws.
(f) NON-CONTRAVENTION. Except as set forth in the Disclosure
Letter, the execution, delivery and performance of this Agreement by the
Company, and the consummation by the Company of the transactions contemplated
hereby (including issuance of the Purchased Shares), do not (i) contravene or
conflict with the Amended and Restated Certificate of Incorporation or Bylaws of
the Company; (ii) constitute a material violation of any provision of any
federal, state, local or foreign law binding upon or applicable to the Company;
or (iii) constitute a default or require any consent under, give rise to any
right of termination, cancellation or acceleration of, or to a loss of any
material benefit to which the Company is entitled under, or result in the
creation or imposition of
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any lien, claim or encumbrance on any assets of the Company under, any material
contract to which the Company is a party or any material permit, license or
similar right relating to the Company or by which the Company may be bound or
affected.
(g) LITIGATION. There is no action, suit, proceeding, claim,
arbitration or investigation ("ACTION") pending or, to the Company's knowledge,
threatened: (a) against the Company, its activities, properties or assets, or
any officer, director or employee of the Company in connection with such
officer's, director's or employee's relationship with, or actions taken on
behalf of, the Company, that is reasonably likely to have a Material Adverse
Effect on the Company, or (b) that seeks to prevent, enjoin, alter or delay the
transactions contemplated by this Agreement (including issuance of the Purchased
Shares). The Company is not a party to or subject to the provisions of, any
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality. No Action by the Company is currently pending nor does the
Company intend to initiate any Action that is reasonably likely to have a
Material Adverse Effect.
(h) COMPLIANCE WITH LAW AND CHARTER DOCUMENTS. The Company is not
in violation or default of any provisions of its Amended and Restated
Certificate of Incorporation or Bylaws, both as amended. To the Company's
knowledge, the Company has complied in all respects and is in compliance with
all applicable statutes, laws, rules, regulations and orders of the United
States of America and all states thereof, foreign countries and other
governmental bodies and agencies having jurisdiction over the Company's business
or properties, except for any instance of non-compliance that has not had, and
would not reasonably be expected to have, a Material Adverse Effect.
(i) SEC DOCUMENTS.
(1) REPORTS. The Company has made available to the
Purchasers prior to the date hereof copies of its Annual Report on Form 10-K for
the fiscal year ended June 30, 2001, its quarterly report on Form 10-Q for the
fiscal quarter ended September 30, 2001 and its Proxy Statement for its 2001
Annual Meeting of Stockholders filed by the Company with the Securities and
Exchange Commission ("SEC") (the Form 10-K, Form 10-Q and Proxy Statement are
collectively referred to herein as the "SEC DOCUMENTS"). Each of the SEC
Documents, as of the respective date thereof (or if amended or superseded by a
filing prior to the Closing Date, then on the date of such filing), did not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The Company has filed
all material contracts that were required to be filed as exhibits to the SEC
Documents. The Company has not been notified by any other party to a material
contract that such party intends to terminate the material contract.
(2) FINANCIAL STATEMENTS. The financial statements of the
Company in the SEC Documents present fairly, in accordance with generally
accepted accounting principles, the financial position of the Company as of the
dates indicated, and the results of its operations and cash flows for the period
therein specified, subject, in the case of unaudited financial statements for
interim periods, to normal year-end audit adjustments.
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(j) ABSENCE OF CERTAIN CHANGES SINCE BALANCE SHEET DATE. Since
September 30, 2001, the business and operations of the Company have been
conducted in the ordinary course consistent with past practice, and there has
not been, except as set forth in the Disclosure Letter:
(i) any declaration, setting aside or payment of any
dividend or other distribution of the assets of the Company with respect to any
shares of capital stock of the Company or any repurchase, redemption or other
acquisition by the Company or any subsidiary of the Company of any outstanding
shares of the Company's capital stock;
(ii) any damage, destruction or loss, whether or not
covered by insurance, except for such occurrences, individually and
collectively, that have not had, and would not reasonably be expected to have, a
Material Adverse Effect;
(iii) any waiver by the Company of a valuable right or of a
material debt owed to it, except for such waivers, individually and
collectively, that have not had, and would not reasonably be expected to have, a
Material Adverse Effect;
(iv) any material change or amendment to, or any waiver of
any material right under a material contract or arrangement by which the Company
or any of its assets or properties is bound or subject, except for changes,
amendments or waivers that are expressly provided for or disclosed in this
Agreement;
(v) any change by the Company in its accounting
principles, methods or practices or in the manner it keeps its accounting books
and records, except any such change required by a change in GAAP or by the
Securities and Exchange Commission; or
(vi) any other event or condition of any character, except
for such events and conditions that have not resulted, and are not expected to
result, either individually or collectively, in a Material Adverse Effect.
(k) INTELLECTUAL PROPERTY. The Company owns or possesses adequate
rights to use all patents, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names, copyrights or other information
(collectively, "INTELLECTUAL PROPERTY"), which are necessary to conduct its
businesses as currently conducted, except where the failure to currently own or
possess would not result, either individually or in the aggregate, in a Material
Adverse Effect. The Company has not received any notice of, and has no knowledge
of, any infringement of or conflict with asserted rights of others with respect
to any Intellectual Property which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would reasonably be expected to
have a Material Adverse Effect, and to the Company's knowledge, none of the
patent rights owned or licensed by the Company are unenforceable or invalid. The
Company has entered into proprietary rights agreements with its key employees to
protect its Intellectual Property. The Company has not received notice that any
of its employees is infringing the proprietary rights of others.
(l) REGISTRATION RIGHTS. Except as provided in Section 5 herein
and the Amended and Restated Registration Rights Agreement made as of March 12,
1997, by and among ProBusiness, Inc., a California company and predecessor to
the Company, General Atlantic Partners
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39, L.P., GAP Coinvestment Partners, L.P., Xxxxxx X. Xxxxxx
and the Holders, as amended, effective upon the Closing, the Company is not
currently subject to any agreement providing any person or entity any rights
(including piggyback registration rights) to have any securities of the Company
registered with the SEC or registered or qualified with any other governmental
authority.
(m) TITLE TO PROPERTY AND ASSETS. Except as set forth in the
Disclosure Letter, the properties and assets of the Company are owned by the
Company free and clear of all mortgages, deeds of trust, liens, charges,
encumbrances and security interests except for statutory liens for the payment
of current taxes that are not yet delinquent and liens, encumbrances and
security interests that arise in the ordinary course of business and do not in
any material respect affect the properties and assets of the Company. With
respect to the property and assets it leases, the Company is in compliance with
such leases in all material respects.
(n) TAXES. The Company has filed all necessary federal, state, and
foreign income and franchise tax returns due prior to the date hereof and has
paid or accrued all taxes shown as due thereon, and the Company has no knowledge
of any material tax deficiency which has been or might be asserted or threatened
against it.
(o) INSURANCE. The Company maintains and will continue to maintain
insurance of the types and in the amounts that the Company reasonably believes
is prudent and adequate for its business, all of which insurance is in full
force and effect.
(p) GENERAL SOLICITATION. Neither the Company nor any other person
or entity authorized by the Company to act on its behalf has engaged in a
general solicitation or general advertising (within the meaning of Regulation D
of the Securities Act) of investors with respect to offers or sales of the
Purchased Shares.
(q) S-3 ELIGIBILITY. The Company meets the eligibility
requirements for use of a Form S-3 Registration Statement.
4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF THE PURCHASER.
Each Purchaser hereby represents and warrants to the Company severally and not
jointly, and agrees that:
(a) ORGANIZATION GOOD STANDING AND QUALIFICATION. The Purchaser
has all corporate, membership or partnership power and authority required to
enter into this Agreement and the other agreements, instruments and documents
contemplated hereby, and to consummate the transactions contemplated hereby and
thereby.
(b) AUTHORIZATION. The execution of this Agreement has been duly
authorized by all necessary corporate, membership or partnership action on the
part of the Purchaser. This Agreement constitutes the Purchaser's legal, valid
and binding obligation, enforceable in accordance with its terms, except (a) as
may be limited by (i) applicable bankruptcy, insolvency, reorganization or other
laws of general application relating to or affecting the enforcement of
creditors' rights generally and (ii) the effect of rules of law governing the
availability of equitable remedies and
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(b) as rights to indemnity or contribution may be limited under federal or state
securities laws or by principles of public policy thereunder.
(c) LITIGATION. There is no Action pending that seeks to prevent,
enjoin, alter or delay the transactions contemplated by this Agreement.
(d) PURCHASE FOR OWN ACCOUNT. The Purchased Shares are being
acquired for investment for the Purchaser's own account, not as a nominee or
agent, and not with a view to the public resale or distribution thereof within
the meaning of the Securities Act, and the Purchaser has no present intention of
selling, granting any participation in, or otherwise distributing the same. The
Purchaser also represents that it has not been formed for the specific purpose
of acquiring the Purchased Shares and that, as of the date hereof, and except as
disclosed in a disclosure letter to the Company, it does not own any shares of
Common Stock of the Company.
(e) INVESTMENT EXPERIENCE. The Purchaser understands that the
purchase of the Purchased Shares involves substantial risk. The Purchaser has
experience as an investor in securities of companies and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment in the
Purchased Shares and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of this investment
in the Purchased Shares and protecting its own interests in connection with this
investment.
(f) ACCREDITED PURCHASER STATUS. The Purchaser is an "accredited
investor" within the meaning of Regulation D promulgated under the Securities
Act.
(g) RELIANCE UPON PURCHASER'S REPRESENTATIONS. The Purchaser
understands that the issuance and sale of the Purchased Shares to it will not be
registered under the Securities Act on the ground that such issuance and sale
will be exempt from registration under the Securities Act pursuant to Section
4(2) thereof, and that the Company's reliance on such exemption is based on each
Purchaser's representations set forth herein.
(h) RECEIPT OF INFORMATION. The Purchaser has had an opportunity
to ask questions and receive answers from the Company regarding the terms and
conditions of the issuance and sale of the Purchased Shares and the business,
properties, prospects and financial condition of the Company and to obtain any
additional information requested and has received and considered all information
it deems relevant to make an informed decision to purchase the Purchased Shares.
(i) RESTRICTED SECURITIES. The Purchaser will not sell, offer to
sell, assign, pledge, hypothecate or otherwise transfer any of the Purchased
Shares unless (i) pursuant to an effective registration statement under the
Securities Act, (ii) such holder provides the Company with an opinion of
counsel, in a generally acceptable form, to the effect that a public sale,
assignment or transfer of the Securities may be made without registration under
the Securities Act, or (iii) such holder provides the Company with reasonable
assurances that the Securities can be sold pursuant to Rule 144 under the
Securities Act without any restriction as to the number of securities acquired
as of a particular date that can be immediately sold. Notwithstanding anything
to the contrary contained in the Agreement, the Purchaser may transfer (without
restriction and without the need for an opinion of counsel) the Purchased Shares
to its affiliates provided that such affiliate is an
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"accredited investor" under Regulation D and such affiliate agrees to be bound
by the terms and conditions of the Agreement.
(j) LEGENDS. The Purchaser agrees that the certificates for the
Purchased Shares shall bear the following legend:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 or with any state
securities commission, and may not be transferred or disposed
of by the holder in the absence of a registration statement
which is effective under the Securities Act of 1933 and
applicable state laws and rules, or, unless, immediately prior
to the time set for transfer, such transfer may be effected
without violation of the Securities Act of 1933 and other
applicable state laws and rules."
In addition, the Purchaser agrees that the Company may place stop
transfer orders with its transfer agents with respect to such certificates. The
appropriate portion of the legend and the stop transfer orders will be removed
promptly upon delivery to the Company of such satisfactory evidence as
reasonably may be required by the Company that such legend or stop orders are
not required to ensure compliance with the Securities Act.
(k) HSR COMPLIANCE.
(i) Each Purchaser is its own "ultimate parent entity" as
defined in the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended
or the rules and regulations promulgated thereto (together, the "HSR ACT").
(ii) Each Investor will hold less than $50,000,000 in
voting securities of the Company following execution of this Agreement, as
valued under the HSR Act.
5. REGISTRATION; COMPLIANCE WITH THE SECURITIES ACT.
(a) REGISTRATION PROCEDURES AND EXPENSES. The Company hereby
agrees that it shall:
(i) subject to receipt of necessary information from the
Purchasers, prepare and file with the SEC as soon as practicable and in no event
later than thirty (30) days following the Closing, a registration statement on
Form S-3 (the "REGISTRATION STATEMENT"), to enable the resale of the Purchased
Shares (collectively, the "REGISTRABLE SHARES") by the Purchasers from time to
time on Nasdaq and use all reasonable efforts to cause such Registration
Statement to be declared effective as promptly as possible after filing and to
remain continuously effective until the earlier of (i) the second anniversary of
the Closing, or (ii) such time as all Registrable Shares purchased by the
Purchasers pursuant to this Agreement have been sold thereunder or pursuant to
Rule 144 under the Securities Act (the "REGISTRATION PERIOD"). In the event that
Form S-3 is unavailable for such registration, the Company shall use such other
form as is available for such a registration;
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(ii) prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the Registration
Statement and the prospectus used in connection therewith as may be necessary to
keep the Registration Statement effective at all times until the end of the
Registration Period;
(iii) furnish to the Purchasers with respect to the
Registrable Shares registered under the Registration Statement such reasonable
number of copies of any prospectus in conformity with the requirements of the
Securities Act and such other documents as the Purchaser may reasonably request,
in order to facilitate the public sale or other disposition of all or any of the
Registrable Shares by the Purchasers;
(iv) use its reasonable commercial efforts to file
documents required of the Company for normal blue sky clearance in states
specified in writing by the Purchasers; provided, however, that the Company
shall not be required to qualify to do business or consent to service of process
in any jurisdiction in which it is not now so qualified or has not so consented;
(v) use its reasonable commercial efforts to cause the
Registrable Shares to be listed on Nasdaq in connection with the filing of the
Registration Statement under Section 5(a)(i);
(vi) use its reasonable commercial efforts to cause the
Registration Statement to be declared effective on or prior to one hundred
twenty (120) days following the Closing and to promptly notify the Purchasers
when the Registration Statement has been declared effective; (vii) bear all
expenses in connection with the procedures in paragraph (i) through (vi) of this
Section 5(a) and the registration of the Registrable Shares pursuant to the
Registration Statement other than fees and expenses, if any, of legal counsel or
other advisers to the Purchasers or underwriting discounts, brokerage fees and
commissions incurred by the Purchasers, if any.
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Section 5(a) that the Purchaser shall furnish
to the Company such information regarding itself, the Registrable Shares to be
sold by the Purchaser, and the intended method of disposition of such securities
as shall be required to effect the registration of the Registrable Shares.
(b) TRANSFER OF REGISTRABLE SHARES AFTER REGISTRATION; SUSPENSION.
(i) The Purchasers agree that they will not offer to sell
or make any sale, assignment, pledge, hypothecation or other transfer with
respect to the Registrable Shares that would constitute a sale within the
meaning of the Securities Act except pursuant to either (i) the Registration
Statement referred to in Section 5(a) or (ii) Rule 144, and that they will
promptly notify the Company of any changes in the information set forth in the
Registration Statement after it is prepared regarding the Purchaser or its plan
of distribution to the extent required by applicable law.
(ii) In addition to any suspension rights under paragraph
(iii) below, the Company may, upon the happening of any event, that, in the
judgment of Company's board of
-10-
directors, renders it advisable to suspend use of the prospectus for no more
than ninety (90) days in the aggregate in any twelve (12) month period of time
due to pending corporate developments, public filings with the SEC or similar
events, suspend use of the prospectus on written notice to each Purchaser (which
notice will not disclose the content of any material non-public information and
will indicate the date of the beginning and end of the intended suspension, if
known), in which case each Purchaser shall discontinue disposition of
Registrable Shares covered by the Registration Statement or prospectus until
copies of a supplemented or amended prospectus are distributed to the Purchasers
or until the Purchasers are advised in writing by the Company that the use of
the applicable prospectus may be resumed. The suspension and notice thereof
described in this Section 5(b)(ii) shall be held in strictest confidence and not
disclosed by the Purchasers.
(iii) Subject to paragraph (iv) below, in the event of: (i)
any request by the SEC or any other federal or state governmental authority
during the period of effectiveness of the Registration Statement for amendments
or supplements to a Registration Statement or related prospectus or for
additional information, (ii) the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
(iii) the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Shares for sale in any jurisdiction or the initiation of any
proceeding for such purpose, (iv) any event or circumstance which necessitates
the making of any changes in the Registration Statement or prospectus, or any
document incorporated or deemed to be incorporated therein by reference, so
that, in the case of the Registration Statement, it will not contain any untrue
statement of a material fact or any omission to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and that in the case of the prospectus, it will not contain any untrue statement
of a material fact or any omission to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, then the Company shall
deliver a certificate in writing to the Purchasers (the "SUSPENSION NOTICE") to
the effect of the foregoing (which notice will not disclose the content of any
material non-public information and will indicate the date of the beginning and
end of the intended suspension, if known), and, upon receipt of such Suspension
Notice, the Purchasers will refrain from selling any Registrable Shares pursuant
to the Registration Statement (a "SUSPENSION") until the Purchasers' receipt of
copies of a supplemented or amended prospectus prepared and filed by the
Company, or until it is advised in writing by the Company that the current
prospectus may be used, and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in any such prospectus. In the event of any Suspension, the Company will use its
reasonable commercial efforts to cause the use of the prospectus so suspended to
be resumed as soon as possible after delivery of a Suspension Notice to the
Purchasers. The Suspension and Suspension Notice described in this Section
5(b)(iii) shall be held in strictest confidence and not disclosed by the
Purchasers.
(iv) Provided that a Suspension is not then in effect, the
Purchasers may sell Registrable Shares under the Registration Statement,
provided that the selling Purchaser arranges for delivery of a current
prospectus to the transferee of such Registrable Shares.
(v) In the event of a sale of Registrable Shares by an
Purchaser, such Purchaser must also deliver to the Company's transfer agent,
with a copy to the Company, a
-11-
certificate of subsequent sale reasonably satisfactory to the Company, so that
ownership of the Registrable Shares may be properly transferred.
(c) INDEMNIFICATION. For the purpose of this Section 5(c), the
term "Registration Statement" shall include any preliminary or final prospectus,
exhibit, supplement or amendment included in or relating to the Registration
Statement referred to in Section 5(a).
(i) INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless each of the Purchasers and each person, if any, who
controls any Purchaser within the meaning of the Securities Act, against any
losses, claims, damages, liabilities or expenses, joint or several, to which
such Purchasers or such controlling person may become subject, under the
Securities Act, the Exchange Act, or any other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company, which consent shall not be unreasonably withheld), insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof
as contemplated below) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, as amended as of the time the Registration Statement was declared
effective by the SEC, the prospectus filed with the SEC pursuant to Rule 424(b)
under the Act, or if no such filing is required, as included in the Registration
Statement (the "Prospectus"), or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state in any of
them a material fact required to be stated therein or necessary to make the
statements in any of them, in light of the circumstances under which they were
made, not misleading, and will reimburse each Purchaser and each such
controlling person for any legal and other expenses as such expenses are
reasonably incurred by such Purchaser or such controlling person in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that the Company
will not be liable in any such case to the extent that any such loss, claim,
damage, liability or expense arises out of or is based upon (i) an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, the Prospectus or any amendment or supplement of the
Registration Statement or Prospectus in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the Purchaser
expressly for use in the Registration Statement or the Prospectus, (ii) the
failure of such Purchaser to comply with the covenants and agreements contained
in this Agreement respecting resale of the Purchased Shares, or (iii) any untrue
statement or omission of a material fact required to make such statement not
misleading in any Prospectus that is corrected in any subsequent Prospectus that
was delivered to the Purchaser before the pertinent sale or sales by the
Purchaser.
(ii) INDEMNIFICATION BY THE PURCHASER. Each Purchaser will
severally and not jointly indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of the Securities
Act, against any losses, claims, damages, liabilities or expenses to which the
Company, each of its directors, each of its officers who signed the Registration
Statement or controlling person may become subject, under the Securities Act,
the Exchange Act, or any other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Purchaser, which consent
shall not be
-12-
unreasonably withheld) insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise out of or
are based upon (i) any failure on the part of such Purchaser to comply with the
covenants and agreements contained in this Agreement respecting the sale of the
Purchased Shares or (ii) any untrue or alleged untrue statement of any material
fact contained in the Registration Statement, the Prospectus, or any amendment
or supplement to the Registration Statement or Prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in the Registration Statement, the Prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Purchaser expressly for use therein;
PROVIDED, HOWEVER, that the Purchaser shall not be liable for any such untrue or
alleged untrue statement or omission or alleged omission of which the Purchaser
has delivered to the Company in writing a correction before the occurrence of
the transaction from which such loss was incurred, and the Purchaser will
reimburse the Company, each of its directors, each of its officers who signed
the Registration Statement or controlling person for any legal and other expense
reasonably incurred by the Company, each of its directors, each of its officers
who signed the Registration Statement or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action.
(iii) INDEMNIFICATION PROCEDURE.
(1) Promptly after receipt by an indemnified
party under this Section 5(c) of notice of the threat or commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 5(c), promptly notify the
indemnifying party in writing of the claim; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party for contribution or otherwise under the indemnity
agreement contained in this Section 5(c) or otherwise, to the extent it is not
prejudiced as a result of such failure.
(2) In case any such action is brought against
any indemnified party and such indemnified party seeks or intends to seek
indemnity from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with all other
indemnifying parties similarly notified, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; PROVIDED, HOWEVER, if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be a conflict between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it or other indemnified parties that are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 5(c) for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless:
-13-
a) the indemnified party shall have
employed such counsel in connection with the assumption of legal defenses in
accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by such indemnifying party representing
all of the indemnified parties who are parties to such action) or
b) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of action, in each of which cases the reasonable fees and expenses
of counsel shall be at the expense of the indemnifying party. Notwithstanding
the provisions of this Section 5(c), the Purchaser shall not be liable for any
indemnification obligation under this Agreement in excess of the aggregate
amount of gross proceeds received by the Purchaser from the sale of the
Purchased Shares pursuant to the Registration Statement.
(iv) CONTRIBUTION. If the indemnification provided for in
this Section 5(c) is required by its terms but is for any reason held to be
unavailable to or otherwise insufficient to hold harmless an indemnified party
under this Section 5(c) in respect to any losses, claims, damages, liabilities
or expenses referred to in this Agreement, then each applicable indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of any losses, claims, damages, liabilities or expenses referred to
in this Agreement
(1) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Purchaser from the
placement of Common Stock or
(2) if the allocation provided by clause (1)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (1) above but
the relative fault of the Company and the Purchaser in connection with the
statements or omissions or inaccuracies in the representations and warranties in
this Agreement that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations.
The respective relative benefits received by the Company on the one
hand and each Purchaser on the other shall be deemed to be in the same
proportion as the amount paid by such Purchaser to the Company pursuant to this
Agreement for the Purchased Shares purchased by such Purchaser that were sold
pursuant to the Registration Statement bears to the difference (the
"DIFFERENCE") between the amount such Purchaser paid for the Purchased Shares
that were sold pursuant to the Registration Statement and the amount received by
such Purchaser from such sale. The relative fault of the Company and each
Purchaser shall be determined by reference to, among other things, whether the
untrue or alleged statement of a material fact or the omission or alleged
omission to state a material fact or the inaccurate or the alleged inaccurate
representation or warranty relates to information supplied by the Company or by
such Purchaser and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 5(c)(iii), any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 5(c)(iii) with
-14-
respect to the notice of the threat or commencement of any threat or action
shall apply if a claim for contribution is to be made under this Section
5(c)(iv); PROVIDED, HOWEVER, that no additional notice shall be required with
respect to any threat or action for which notice has been given under Section
5(c) for purposes of indemnification. The Company and each Purchaser agree that
it would not be just and equitable if contribution pursuant to this Section 5(c)
were determined solely by pro rata allocation (even if the Purchasers were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in this
paragraph. Notwithstanding the provisions of this Section 5(c), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
Difference exceeds the amount of any damages that such Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Purchasers' obligations to contribute pursuant to this
Section 5(c) are several and not joint.
(d) RULE 144 INFORMATION. For two years after the date of this
Agreement, the Company shall use its best efforts to file all reports required
to be filed by it under the Securities Act, the Rules and Regulations and the
Exchange Act and shall take such further action to the extent required to enable
the Purchasers to sell the Purchased Shares pursuant to Rule 144 under the
Securities Act (as such rule may be amended from time to time).
6. ADVISORY FEE. The Purchasers acknowledge that the Company intends to
pay to Xxxxxxx Xxxxx Xxxxxx Inc., Xxxxxxx Xxxxx & Company and Xxxxxx X. Xxxxx &
Co., financial advisors, a fee in respect of the sale of the Purchased Shares.
Each of the parties to this Agreement hereby represents that, on the basis of
any actions and agreements by it, there are no other brokers or finders entitled
to compensation in connection with the sale of the Purchased Shares to the
Purchasers. The Company shall indemnify and hold harmless the Purchasers from
and against all fees, commissions or other payments owing by the Company to
Xxxxxxx Xxxxx Xxxxxx Inc., Xxxxxxx Xxxxx & Company and Xxxxxx X. Xxxxx & Co. or
any other person or firm acting on behalf of the Company hereunder.
7. CONDITIONS TO THE PURCHASER'S OBLIGATIONS AT CLOSING. The obligations
of the Purchasers under Section 2(a) of this Agreement are subject to the
fulfillment or waiver, on or before the Closing, of each of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. Each of the
representations and warranties of the Company contained in Section 3 shall be
true and correct in all material respects on and as of the date of the date
hereof and on and as of the date of the Closing, except as set forth in the
Disclosure Letter or the SEC Documents, with the same effect as though such
representations and warranties had been made as of the Closing.
(b) PERFORMANCE. The Company shall have performed and complied in
all material respects 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 and shall have obtained all approvals, consents and
qualifications necessary to complete the purchase and sale described herein.
-15-
(c) COMPLIANCE CERTIFICATE. The Company will have delivered to the
Purchasers at the Closing a certificate signed on its behalf by its Chief
Executive Officer or Chief Financial Officer certifying that the conditions
specified in Sections 7(a) and 7(b) hereof have been fulfilled.
(d) SECURITIES EXEMPTIONS. The offer and sale of the Purchased
Shares to the Purchasers pursuant to this Agreement shall be exempt from the
registration requirements of the Securities Act and the registration and/or
qualification requirements of all applicable state securities laws.
(e) OPINION OF COMPANY COUNSEL. The Purchasers will have received
an opinion on behalf of the Company, dated as of the date of the Closing, from
Wilson, Sonsini, Xxxxxxxx & Xxxxxx, counsel to the Company, in the form attached
as EXHIBIT B.
(f) OTHER ACTIONS. The Company shall have executed such
certificates, agreements, instruments and other documents, and taken such other
actions as shall be customary or reasonably requested by the Purchasers in
connection with the transactions contemplated hereby.
8. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations of
the Company to the Purchasers under this Agreement are subject to the
fulfillment or waiver, on or before the Closing, of each of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of the Purchasers contained in Section 4 shall be true and correct in
all material respects on and as of the date hereof and on and as of the date of
the Closing with the same effect as though such representations and warranties
had been made as of the Closing.
(b) PERFORMANCE. The Purchasers shall have performed and complied
in all material respects 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 and shall have obtained all approvals, consents
and qualifications necessary to complete the purchase and sale described herein.
(c) SECURITIES EXEMPTIONS. The offer and sale of the Purchased
Shares to the Purchasers pursuant to this Agreement shall be exempt from the
registration requirements of the Securities Act and the registration and/or
qualification requirements of all applicable state securities laws.
(d) PAYMENT OF PURCHASE PRICE. The Purchasers shall have delivered
to the Company same day funds in full payment of the purchase price as specified
in Section 1(b).
(e) PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings
in connection with the transactions contemplated at the Closing and all
documents incident thereto will be reasonably satisfactory in form and substance
to the Company and to the Company's legal counsel, and the Company will have
received all such counterpart originals and certified or other copies of such
documents as it may reasonably request.
-16-
(f) OTHER ACTIONS. The Purchasers shall have executed such
certificates, agreements, instruments and other documents, and taken such other
actions as shall be customary or reasonably requested by the Company in
connection with the transactions contemplated hereby.
9. CONDITIONS TO THE GAP PURCHASERS' OBLIGATIONS AT SUBSEQUENT CLOSING.
The obligations of the GAP Purchasers under Section 2(b) of this Agreement are
subject to the fulfillment by the Company or waiver by the GAP Purchasers, on or
before the date that is 150 days after the Closing Date, of the following
condition: The Company shall have received either (i) written confirmation from
Nasdaq that the approval of a majority of the Company's stockholders, present in
person or proxy at a properly convened meeting of the Company's stockholders
("STOCKHOLDER APPROVAL") of the issuance of the GAP Purchasers Shares is not
required under the applicable Nasdaq rules and regulations or (ii) Stockholder
Approval of the issuance to the GAP Purchasers of the GAP Purchasers Shares
("APPLICABLE STOCKHOLDER APPROVAL").
10. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT SUBSEQUENT CLOSING. The
obligations of the Company to the GAP Purchasers under this Agreement are
subject to the fulfillment by the GAP Purchasers or waiver by the Company, on or
before the date that is 150 days after the Closing Date, of the following
condition: The Company shall have received either (i) written confirmation from
Nasdaq that Stockholder Approval of the issuance of the GAP Purchasers Shares is
not required under the applicable Nasdaq rules and regulations or (ii)
Applicable Stockholder Approval.
11. AFFIRMATIVE COVENANTS.
(a) NASDAQ MATTERS. The Company hereby covenants and agrees with
the GAP Purchasers as follows:
(i) The Company shall take all action required and shall
make all submissions that are reasonably necessary to obtain written
confirmation reasonably satisfactory to the Company and the GAP Purchasers from
Nasdaq that the approval of a majority of the Company's stockholders of the
issuance of the GAP Purchasers Shares is not required under the applicable
Nasdaq rules and regulations in order to satisfy the conditions for the
Subsequent Closing in Sections 9 and 10. If the Company cannot obtain such
written confirmation by February 15, 2002, it shall take all action required by
Nasdaq and applicable Delaware law (including the actions referred to in Section
11(a)(ii)) to obtain Applicable Stockholder Approval. The Board of Directors
shall recommend that the Company's stockholders vote in favor of the Applicable
Stockholder Approval.
(ii) If required pursuant to Section 11(a)(i) of this
Agreement, promptly after February 15, 2002, the Company will prepare and file
with the SEC a proxy statement to be distributed to the Company's stockholders
in connection with the solicitation of votes in favor of the Applicable
Stockholder Approval, including any amendments or supplements thereto (the
"PROXY STATEMENT"). The Company will use all reasonable commercial efforts to
have or cause the Proxy Statement to be cleared by the SEC as promptly as
practicable. The Company agrees to provide the GAP Purchasers and their
respective counsel with any written comments the Company or its counsel
-17-
may receive from the SEC with respect to the Proxy Statement promptly after the
receipt of such comments. The Company will use all reasonable commercial efforts
to cause the Proxy Statement (A) not to contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading and (B) to comply as to
form in all material respects with the applicable provisions of the Exchange Act
and the rules and regulations thereunder. Following clearance by the Commission
of the Proxy Statement, the Company shall promptly distribute the Proxy
Statement to its stockholders and call and arrange for a special meeting of
stockholders and take such other actions as are required or necessary in order
to obtain the Applicable Stockholder Approval as promptly as practicable.
(b) VOTING. The Purchasers agree that if it is necessary for the
Company to seek Applicable Stockholder Approval, each of the Purchasers will
vote any shares beneficially owned by such entities in "favor" of the proposal.
12. MISCELLANEOUS.
(a) SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement will inure to the benefit of and be binding upon the respective
successors and permitted assigns of the parties.
(b) GOVERNING LAW. This Agreement will be governed by and
construed under the internal laws of the State of California, without reference
to principles of conflict of laws or choice of laws.
(c) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
(d) HEADINGS. The headings and captions used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to sections,
paragraphs, exhibits and schedules will, unless otherwise provided, refer to
sections and paragraphs hereof and exhibits and schedules attached hereto, all
of which exhibits and schedules are incorporated herein by this reference.
(e) NOTICES. Any notice required or permitted under this Agreement
shall be given in writing, shall be effective when received, and shall in any
event be deemed received and effectively given upon personal delivery to the
party to be notified or three (3) business days after deposit with the United
States Post Office, by registered or certified mail, postage prepaid, or one (1)
business day after deposit with a nationally recognized courier service such as
Federal Express for next business day delivery under circumstances in which such
service guarantees next business day delivery, or one (1) business day after
facsimile with copy delivered by registered or certified mail, in any case,
postage prepaid and addressed to the party to be notified at the address
indicated for
-18-
such party on the signature page hereof or at such other address as the
Purchaser or the Company may designate by giving at least ten (10) days advance
written notice pursuant to this Section 12(e).
(f) AMENDMENTS AND WAIVERS. 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 Purchased Shares representing
at least a majority of the total aggregate number of Purchased Shares then
outstanding (excluding any of such shares that have been sold in a transaction
in which registration rights are not assigned in accordance with this Agreement
or sold to the public pursuant to SEC Rule 144 or otherwise); provided, however,
that any amendment or waiver of Sections 1(c), 2(b), 9, 10 and 11 of this
Agreement shall also require the written consent of the GAP Purchasers. Any
amendment or waiver effected in accordance with this Section 12(f) will be
binding upon the Purchasers, the Company and their respective successors and
assigns.
(g) SEVERABILITY. If any provision of this Agreement is held to be
unenforceable under applicable law, such provision will be excluded from this
Agreement and the balance of the Agreement will be interpreted as if such
provision were so excluded and will be enforceable in accordance with its terms.
(h) ENTIRE AGREEMENT. This Agreement, together with all exhibits
and schedules hereto and thereto constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes any and all prior negotiations, correspondence, agreements,
understandings, duties or obligations between the parties with respect to the
subject matter hereof.
(i) FURTHER ASSURANCES. From and after the date of this Agreement
upon the request of the Company or the Purchasers, the Company and the
Purchasers will execute and deliver such instruments, documents or other
writings, and take such other actions, as may be reasonably necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement.
(j) MEANING OF INCLUDE AND INCLUDING. Whenever in this Agreement
the word "include" or "including" is used, it shall be deemed to mean "include,
without limitation" or "including, without limitation," as the case may be, and
the language following "include" or "including" shall not be deemed to set forth
an exhaustive list.
(k) FEES, COSTS AND EXPENSES. All fees, costs and expenses
(including attorneys' fees and expenses) incurred by any party hereto in
connection with the preparation, negotiation and execution of this Agreement and
the exhibits and schedules hereto and the consummation of the transactions
contemplated hereby and thereby (including the costs associated with any filings
with, or compliance with any of the requirements of, any governmental
authorities), shall be the sole and exclusive responsibility of such party.
(l) STOCK SPLITS, DIVIDENDS AND OTHER SIMILAR EVENTS. The
provisions of this Agreement (including the number of shares of Common Stock and
other securities described herein) shall be appropriately adjusted to reflect
any stock split, stock dividend, reorganization or other similar event that may
occur with respect to the Company after the date hereof.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
PROBUSINESS SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------------
Title: President
----------------------------------------
[PURCHASER SIGNATURE PAGES TO FOLLOW]
SIGNATURE PAGE TO
COMMON STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 20, 2001
BY AND AMONG
PROBUSINESS SERVICES, INC.
AND EACH PURCHASER NAMED THEREIN
The undersigned hereby executes and delivers to ProBusiness Services,
Inc. the Common Stock Purchase Agreement (the "Agreement") to which this
Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Purchasers named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.
Number of Shares: 1,095,667
---------
GENERAL ATLANTIC PARTNERS 74, L.P..
By: General Atlantic Partners, LLC,
its General Partner
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: A Managing Member
SIGNATURE PAGE TO
COMMON STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 20, 2001
BY AND AMONG
PROBUSINESS SERVICES, INC.
AND EACH PURCHASER NAMED THEREIN
The undersigned hereby executes and delivers to ProBusiness Services,
Inc. the Common Stock Purchase Agreement (the "Agreement") to which this
Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Purchasers named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.
Number of Shares: 83,333
------
GAPSTAR, LLC
By: General Atlantic Partners, LLC,
its Managing Member
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: A Managing Member
SIGNATURE PAGE TO
COMMON STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 20, 2001
BY AND AMONG
PROBUSINESS SERVICES, INC.
AND EACH PURCHASER NAMED THEREIN
The undersigned hereby executes and delivers to ProBusiness Services,
Inc. the Common Stock Purchase Agreement (the "Agreement") to which this
Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Purchasers named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.
Number of Shares: 2,027
-----
GAPCO GMBH & CO. KG
By: GAPCO Management GmbH,
its General Partner
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: A Managing Member
SIGNATURE PAGE TO
COMMON STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 20, 2001
BY AND AMONG
PROBUSINESS SERVICES, INC.
AND EACH PURCHASER NAMED THEREIN
The undersigned hereby executes and delivers to ProBusiness Services,
Inc. the Common Stock Purchase Agreement (the "Agreement") to which this
Signature Page is attached effective as of the date of the Agreement, which
Agreement and Signature Page, together with all counterparts of such Agreement
and signature pages of the other Purchasers named in such Agreement, shall
constitute one and the same document in accordance with the terms of such
Agreement.
Number of Shares: 152,307
-------
GAP COINVESTMENT PARTNERS II, L.P.
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: A Managing Member
EXHIBIT A
---------
Schedule of Purchasers
--------------------------------------------------------------------------------
NAME NUMBER OF SHARES PRICE AGGREGATE
OF OF COMMON STOCK PER PURCHASE
PURCHASER PURCHASED SHARE PRICE
--------------------------------------------------------------------------------
1,095,667 $15.00
General Atlantic
Partners 74, L.P. $16,435,005
GAP Star, LLC 83,333 $15.00 $1,249,995
GAPCO Germany, L.P. 2,027 $15.00 $30,405
GAP Coinvestment
Partners II, L.P. 152,307 $15.00 $2,284,605
Lone Price 500,000 $15.00 $7,500,000
Xxxx Xxxx 100,000 $15.00 $1,500,000
Blue Ridge 200,000 $15.00 $3,000,000
Aesop 600,000 $15.00 $9,000,000
Xxxxx Capital 205,000 $15.00 $3,075,000
Far West 170,000 $15.00 $2,550,000
X. Xxxx Price 625,000 $15.00 $9,375,000
--------------------------------------------------------------------------------
TOTAL 3,733,334 $56,000,010
========= ===========
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EXHIBIT B
---------
Form of Legal Opinion
EXHIBIT C
---------
Form of Escrow Agreement
