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EXHIBIT 4.2
PROBUSINESS, INC.
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"Agreement") is made as of this 12th day of March, 1997, by and among
ProBusiness, Inc., a California corporation (the "Company"), General Atlantic
Partners 39, L.P. ("GAP L.P.") and GAP Coinvestment Partners, L.P. ("GAP
Coinvestment") (collectively, the "Purchasers"), and the Holders (as defined in
the Registration Rights Agreement, dated December 1, 1989, as amended, between
the Company and the Original Holders) (the "Original Holders").
RECITALS
A. The Company and the Original Holders entered into the Original
Agreement which provided the Original Holders with certain registration rights
on the Common Stock issued or issuable to such Original Holders upon conversion
of Preferred Stock or warrants to purchase Preferred Stock of the Company held
by such Original Holders.
B. In connection with the purchase and sale of the Company's
Series F Preferred Stock to the Purchasers pursuant to the Series F Preferred
Stock Purchase Agreement (the "Stock Purchase Agreement") dated the date hereof
between the Company and the Purchasers, the Company and the Purchasers desire
to provide for certain registration rights on the Common Stock issuable to the
Purchasers upon conversion of the Series F Preferred Stock issued to them under
the Stock Purchase Agreement.
C. Pursuant to Section 2.4 of the Original Agreement, the
Original Agreement can be amended by a writing signed by the Company and the
Original Holders of a majority of the Registerable Securities (as defined in
the Original Agreement).
D. The Company, the Purchasers and the Original Holders of a
majority of the Registerable Securities (as defined in the Original Agreement)
wish to amend and restate the Original Agreement.
In consideration of the mutual covenants set forth herein, the parties
hereby agree to amend and restate the Original Agreement as follows:
1. Restrictions on Transferability of Securities; Compliance with
Securities Act.
1.1 Restrictions on Transferability. The Registrable
Securities (as defined herein) shall not be transferable except upon the
conditions specified in this Section 1, which conditions are
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intended to ensure compliance with the provisions of the Securities Act. Each
Holder (as defined herein) will cause any proposed transferee of the
Registrable Securities held by a Holder to agree to take and hold such
securities subject to the provisions and upon the conditions specified in this
Section 1.
1.2 Certain Definitions. As used in this Agreement, the
following terms shall have the following respective meanings:
"Affiliate" shall mean, with respect to any Person,
any other Person who controls, is controlled by or is under common control with
such Person. In addition, the following shall be deemed to be Affiliates of
GAP L.P.: (a) General Atlantic Partners, L.L.C. ("GAP LLC"), the members of GAP
LLC and the limited partners of GAP L.P.; (b) any Affiliate of GAP LLC, the
members of GAP LLC and the limited partners of GAP L.P.; and (c) any limited
liability company or partnership a majority of whose members or partners, as
the case may be, are members of GAP LLC. In addition, GAP L.P. and GAP
Coinvestment shall be deemed to be Affiliates of one another.
"Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
"Holder" shall mean (i) the Purchasers; (ii) the
holders of Series A, Series B, Series C, Series D and Series E Preferred Stock
or warrants to purchase Series E Preferred Stock except for Silicon Valley Bank
and Coast Business Credit; (iii) any transferee under Section 1.15 hereof; or
(iv) any person made a party to this Agreement pursuant to Section 2.6 hereof,
as long as the aforementioned hold outstanding Registrable Securities or
Registrable Securities that have not been transferred without complying with
Section 1.15 hereof or of the Original Agreement, or have not been sold to the
public.
"Initial Public Offering" shall have the meaning as set
forth in Section 1.11.2.
"Person" means any individual, firm, corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, limited liability company, governmental authority or other
entity of any kind, and shall include any successor (by merger or otherwise) of
such entity.
"Registrable Securities" means (i) shares of the
Company's Common Stock issued or issuable pursuant to the conversion of the
Company's Preferred Stock and (ii) any Common Stock of the Company issued or
issuable in respect of the shares of the Company's Common Stock or other
securities issued or issuable pursuant to the conversion of the Company's
Preferred Stock, upon any stock split, stock dividend, recapitalization, or
similar event; provided, however, Registerable Securities shall not include any
such shares that were transferred by a Holder to a transferee that did not
comply with Section 1.15 hereof or of the Original Agreement.
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The terms "register," "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the declaration or
ordering of the effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses
incurred in complying with Sections 1.5, 1.6 and 1.7 hereof, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses, and the expense of any special audits incident to or required by
any such registration (but excluding the compensation of regular employees of
the Company which shall be paid in any event by the Company).
"Restricted Securities" shall mean the securities of
the Company required to bear the legend set forth in Section 1.3 hereof (or any
similar legend).
"Securities Act" shall mean the Securities Act of
1933, as amended, or any similar federal statute and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting
discounts, selling commissions and stock transfer taxes applicable to the
securities registered by the Holders and all fees and disbursements of counsel
for any Holder.
1.3 Restrictive Legend. Each certificate representing
shares of Registrable Securities shall (unless otherwise permitted by the
provisions of Section 1.4 below) be stamped or otherwise imprinted with a
legend in the following form (in addition to any legend required under
applicable state securities laws):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH,
THE SALE OR DISTRIBUTION THEREOF, AND HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT BE SOLD
OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF
SAID ACT. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF
THESE SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT
NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF
THIS CERTIFICATE TO THE SECRETARY OF THE CORPORATION AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION."
1.4 Notice of Proposed Transfers. The Holder of each
certificate representing Restricted Securities by acceptance thereof agrees to
comply in all respects with the provisions of this
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Section 1.4. Prior to any proposed transfer of any Restricted Securities,
unless there is in effect a registration statement under the Securities Act
covering the proposed transfer, the Holder thereof shall give written notice to
the Company of such Holder's intention to effect such transfer. Each such
notice shall describe the manner and circumstances of the proposed transfer in
sufficient detail, and shall, if the Company so requests, be accompanied
(except in transactions in compliance with Rule 144) by either (i) an
unqualified written opinion of legal counsel who shall be reasonably
satisfactory to the Company addressed to the Company and reasonably
satisfactory in form and substance to the Company's counsel, to the effect that
the proposed transfer of the Restricted Securities may be effected without
registration under the Securities Act, or (ii) a "no action" letter from the
Commission to the effect that the transfer of such securities without
registration will not result in a recommendation by the staff of the Commission
that action be taken with respect thereto, whereupon the Holder of such
Restricted Securities shall be entitled to transfer such Restricted Securities
in accordance with the terms of the notice delivered by the Holder to the
Company; provided, however, that no opinion or no action letter need be
obtained with respect to a transfer to (A) a partner, active or retired, of a
Holder, (B) the estate of any such partner, or (C) an Affiliate of a Purchaser,
if the transferee agrees to be subject to the terms hereof. Each certificate
evidencing the Restricted Securities transferred as above provided shall bear
the appropriate restrictive legend set forth in Section 1.3 above, except that
such certificate shall not bear such restrictive legend if in the opinion of
counsel for the Company such legend is not required in order to establish
compliance with any provisions of the Securities Act.
1.5 Requested Registration.
1.5.1 Request for Registration. In case the
Company shall receive from any Holder or Holders of greater than fifty percent
(50%) of the Registrable Securities then outstanding a written request that the
Company effect any registration, qualification or compliance with respect to
thirty percent (30%) or more of the Registrable Securities, or with respect to
a lesser number of shares of Registrable Securities if the reasonably
anticipated aggregate sales price to the public of the shares proposed to be
sold, net of underwriting discounts and commissions, exceeds $7,000,000, the
Company will:
(i) promptly give written notice of the
proposed registration, qualification or compliance to all other Holders; and
(ii) as soon as practicable, use its
diligent efforts to effect such registration, qualification or compliance
(including, without limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualification under applicable blue sky
or other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act and any other governmental
requirements or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Registrable
Securities as are specified in such request, together with all or such portion
of the Registrable Securities of any Holder or Holders joining in such request
as are specified in a written request received by the Company within twenty
(20) days after receipt of such written notice from the
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Company; provided, however, that the Company shall not be obligated to take any
action to effect any such registration, qualification or compliance pursuant to
this Section 1.5.1:
(A) In any particular jurisdiction
in which the Company would be required to execute a general consent to service
of process in effecting such registration, qualification or compliance, unless
the Company is already subject to service in such jurisdiction and except as
may be required by the Securities Act, Blue Sky or other state securities laws;
(B) After the Company has effected
two such registrations pursuant to this subparagraph 1.5.1, such registrations
have been declared or ordered effective and the securities offered pursuant to
such registrations have been sold;
(C) During the period starting with
the date sixty (60) days prior to the Company's estimated date of filing of,
and ending on the date one hundred eighty (180) days immediately following the
effective date of, any registration statement pertaining to securities of the
Company (other than a registration of securities in a Rule 145 transaction or
with respect to an employee benefit plan), provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective;
(D) If the Company shall furnish to
such Holders a certificate signed by the President of the Company stating that
in the good faith judgment of the Board of Directors it would be seriously
detrimental to the Company or its shareholders for a registration statement to
be filed in the near future, then the Company's obligation to use its best
efforts to register, qualify or comply under this Section 1.5.1 shall be
deferred for a period not to exceed 180 days from the date of receipt of
written request from the Holders referred to in Section 1.5.1 above; or
(E) If the Company and the Holders
are unable to obtain the commitment of the underwriter selected by the Holders
(subject to the consent of the Company, which shall not be unreasonably
withheld) to firmly underwrite the offer.
Subject to the foregoing clauses (A) through (E), the Company shall
file a registration statement covering the Registrable Securities so requested
to be registered as soon as practicable, after receipt of the request or
requests of the Holder or Holders.
1.5.2 Purchasers' Request for Registration. In case
the Company shall receive from any Purchaser or Purchasers holding Registerable
Securities then outstanding a written request that the Company effect any
registration, qualification or compliance with respect to Registrable
Securities with a reasonably anticipated aggregate sales price to the public of
shares proposed to be sold, net of underwriting discounts and commissions,
exceeding $7,000,000, the Company will:
(i) promptly give written notice of the
proposed registration, qualification or compliance to all other Holders; and
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(ii) as soon as practicable, use its
diligent efforts to effect such registration, qualification or compliance
(including, without limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualification under applicable blue sky
or other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act and any other governmental
requirements or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Registrable
Securities as are specified in such request, together with all or such portion
of the Registrable Securities of any Holder or Holders joining in such request
as are specified in a written request received by the Company within twenty
(20) days after receipt of such written notice from the Company;
Provided, however, that the Company shall not be obligated to take any
action to effect any such registration, qualification or compliance pursuant to
this Section 1.5.2:
(A) In any particular jurisdiction
in which the Company would be required to execute a general consent to service
of process in effecting such registration, qualification or compliance, unless
the Company is already subject to service in such jurisdiction and except as
may be required by the Securities Act, Blue Sky or other state securities laws;
(B) Prior to two (2) years after
an Initial Public Offering of the Company;
(C) After the Company has effected
one (1) such registration pursuant to this subparagraph 1.5.2, such
registration has been declared or ordered effective and the securities offered
pursuant to such registration have been sold;
(D) During the period starting with
the date sixty (60) days prior to the Company's estimated date of filing of,
and ending on the date one hundred eighty (180) days immediately following the
effective date of any registration statement pertaining to securities of the
Company (other than a registration of securities in a Rule 145 transaction or
with respect to an employee benefit plan), provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective;
(E) If the Company shall furnish to
Purchasers a certificate signed by the President of the Company stating that in
the good faith judgment of the Board of Directors it would be seriously
detrimental to the Company or its shareholders for a registration statement to
be filed in the near future, then the Company's obligation to use its best
efforts to register, qualify or comply under this Section 1.5.2 shall be
deferred for a period not to exceed 180 days from the date of receipt of
written request from Purchasers; or
(F) If the Company and the
Purchasers are unable to obtain the commitment of the underwriter selected by
Purchasers (subject to the consent of the Company, which shall not be
unreasonably withheld) to firmly underwrite the offer.
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Subject to the foregoing clauses (A) through (F), the Company shall
file a registration statement covering the Registrable Securities so requested
to be registered as soon as practicable, after receipt of the request of the
Purchasers.
1.5.3 Underwriting. In the event a registration
pursuant to Section 1.5 is for a registered public offering involving an
underwriting, the Company shall so advise the Holders in the written notice
referred to in Sections 1.5.1(i) and 1.5.2(i). The right of any Holder to
registration pursuant to Section 1.5 shall be conditioned upon such Holder's
participation in such underwriting, and the inclusion of such Holder's
Registrable Securities in the underwriting shall be limited to the extent
provided herein.
The Company shall (together with all Holders proposing to distribute
their securities through such underwriting) enter into an underwriting
agreement in customary form with the managing underwriter selected for such
underwriting by (i) a majority in interest of the Holders (subject to the
consent of the Company which shall not be unreasonably withheld) in connection
with a registration pursuant to Section 1.5.1, or (ii) the Purchasers (subject
to the consent of the Company which shall not be unreasonably withheld) in
connection with a registration pursuant to Section 1.5.2. Notwithstanding any
other provision of this Section 1.5, if the managing underwriter advises the
Holders or Purchasers, as the case may be, initiating the registration in
writing that marketing factors require a limitation of the number of shares to
be underwritten, then, subject to the provisions of Sections 1.5.1 and 1.5.2,
the Company shall so advise all Holders and the number of shares that may be
included in the registration and underwriting shall be allocated (i) in the
case of a registration pursuant to Section 1.5.1, among all Holders thereof in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities held by such Holders at the time of filing the registration
statement and (ii) in the case of a registration pursuant to Section 1.5.2, (A)
first among the Purchasers in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Purchasers at the
time of filing the registration statement and (B) second to the extent
available, to any Holder other than a Purchaser in proportion, as nearly as
practicable, to the respective amounts of Registerable Securities held by such
Holders at the time of filing the registration statement. No Registrable
Securities excluded from the underwriting by reason of the managing
underwriter's marketing limitation shall be included in such registration. To
facilitate the allocation of shares in accordance with the above provisions,
the Company may round the number of shares allocated to any Holder or holder to
the nearest 100 shares.
If any Holder disapproves of the terms of the underwriting, such
person may elect to withdraw therefrom by written notice to the Company, the
managing underwriter and the other Holders. The Registrable Securities and/or
other securities so withdrawn shall also be withdrawn from registration;
provided, however, that, if by the withdrawal of such Registrable Securities a
greater number of Registrable Securities held by other Holders may be included
in such registration (up to the maximum of any limitation imposed by the
underwriters), then the Company shall offer to all Holders who have included
Registrable Securities in the registration the right to include additional
Registrable Securities in the same proportion used in determining the
underwriter limitation in this Section 1.5.3. Any securities excluded or
withdrawn from such underwriting shall be withdrawn from
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such registration, and shall not be transferred in a public distribution prior
to one hundred eighty (180) days after the effective date of the registration
statement relating thereto, or such other shorter period of time as the
underwriters may require; provided however, with respect to any Purchaser, for
any registration after the date two years after an Initial Public Offering of
the Company, such Purchaser shall only be subject to the transfer restrictions
contained in this Section 1.5.3 if they register shares in such registration.
1.6 Company Registration.
1.6.1 Notice of Registration. If at any time after
the completion of the Company's initial public offering the Company shall
determine to register any of its securities, either for its own account or the
account of a security holder or holders exercising their respective demand
registration rights, other than (i) a registration relating solely to employee
benefit plans, or (ii) a registration relating solely to a Commission Rule 145
transaction, the Company will:
(i) promptly give to each Holder written
notice thereof; and
(ii) include in such registration (and
any related qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified in a
written request or requests, made within 20 days after receipt of such written
notice from the Company, by any Holder or Holders, or by any other holders of
the securities granted registration rights by the Company.
1.6.2 Underwriting. In the event the Company gives
notice of a registered public offering pursuant to Section 1.6 involving an
underwriting, the Company shall so advise the Holders as a part of the written
notice given pursuant to Section 1.6.1. In such event the right of any Holder
to registration pursuant to Section 1.6 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting shall be subject to the limitations
provided herein. All Holders proposing to distribute their securities through
such underwriting shall (together with the Company and the other holders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company. Notwithstanding any other
provision of this Section 1.6, if the underwriter determines that marketing
factors require a limitation of the number of shares to be underwritten, the
managing underwriter may limit the number of securities to be included in the
secondary portion of such registration. The Company shall so advise all
Holders and the other holders distributing their securities through such
underwriting, and the number of shares of Registrable Securities and other
securities that may be included in the registration and underwriting shall be
allocated among all holders thereof in proportion, as nearly as practicable, to
the respective amounts of securities entitled to inclusion in such registration
held by all such holders at the time of filing the registration statement. To
facilitate the allocation of shares in accordance with the above provisions,
the Company may round the number of shares allocated to any Holder or holder to
the nearest 100 shares. If any Holder or holder disapproves of the terms of
any such underwriting, he may elect to withdraw therefrom by written notice to
the Company and the managing underwriter. Any securities excluded or withdrawn
from such underwriting shall be
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withdrawn from such registration, and shall not be transferred in a public
distribution prior to one hundred eighty (180) days after the effective date of
the registration statement relating thereto, or such other shorter period of
time as the underwriters may require; provided however, with respect to any
Purchaser, for any registration after the date two years after an Initial
Public Offering of the Company, such Purchaser shall only be subject to the
transfer restrictions contained in this Section 1.6.2 if they register shares
in such registration.
1.6.3 Right to Terminate Registration. The Company
shall have the right to terminate or withdraw any registration initiated by it
under this Section 1.6 prior to the effectiveness of such registration whether
or not any Holder or holder has elected to include securities in such
registration.
1.7 Registration on Form S-3.
1.7.1 If any Holder or Holders request that the
Company file a registration statement on Form S-3 (or any successor form to
Form S-3) for a public offering of shares of Registrable Securities the
reasonably anticipated aggregate price to the public of which would exceed
$1,500,000 and the Company is entitled to use Form S-3 to register the
Registrable Securities for such an offering, the Company shall use its best
efforts to cause such Registrable Securities to be registered for the offering
on such form and to cause such Registrable Securities to be qualified in such
jurisdictions as the Holder or Holders may reasonably request; provided,
however, that the Company shall not be required to effect more than one
registration pursuant to this Section 1.7 in any twelve (12) month period or in
excess of two registrations under this Section 1.7.
1.7.2 Notwithstanding the foregoing, the Company
shall not be obligated to take any action pursuant to this Section 1.7: (i) in
any particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting such registration,
qualification or compliance unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities Act, Blue Sky
or other state securities laws; (ii) during the period starting with the date
sixty (60) days prior to the Company's estimated date of filing of, and ending
on the date six (6) months immediately following the effective date of, any
registration statement pertaining to securities of the Company (other than a
registration of securities in a Rule 145 transaction or with respect to an
employee benefit plan), provided that the Company is actively employing in good
faith all reasonable efforts to cause such registration statement to become
effective; or (iii) if the Company shall furnish to such Holder a certificate
signed by the President of the Company stating that in the good faith judgment
of the Board of Directors it would be seriously detrimental to the Company or
its shareholders for registration statements to be filed in the near future, in
which event the Company's obligation to use its best efforts to file a
registration statement shall be deferred for a period not to exceed one hundred
eighty (180) days from the receipt of the request to file such registration by
such Holder.
1.8 Expenses of Registration. All Registration Expenses
incurred in connection with two registrations, qualifications or compliance
pursuant to Section 1.5.1 or pursuant to Sections 1.6 and 1.7, shall be borne
by the Company. Registration Expenses incurred in connection
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with a registration, qualification or compliance pursuant to Section 1.5.2
shall be borne by the Purchasers unless either (i) the Company registers shares
for its own account or (ii) Holders (other than the Purchasers) holding greater
than 20% of the Registerable Securities register shares in connection with such
registration, qualification or compliance, in which case the Company shall bear
all Registration Expenses associated with the registration, qualification or
compliance. Unless otherwise stated, all Selling Expenses relating to
securities registered by the Holders shall be borne by the Holders of such
securities pro rata on the basis of the number of shares so registered.
1.9 Registration Procedures. In the case of each
registration, qualification or compliance effected by the Company pursuant to
this Section 1, the Company will keep each Holder advised in writing as to the
initiation of each registration, qualification and compliance and as to the
completion thereof. At its expense the Company will:
1.9.1 Keep such registration,
qualification or compliance effective for a period of one hundred twenty (120)
days or until the Holder or Holders have completed the distribution described
in the registration statement relating thereto, whichever first occurs; and
1.9.2 Furnish such number of prospectuses
and other documents incident thereto as a Holder from time to time may
reasonably request.
1.10 Termination of Registration Rights. The registration
rights granted pursuant to this Section 1 shall terminate as to each Holder at
such time as all Registrable Securities acquired by such Holder pursuant to
this Agreement can be sold within a given three-month period without compliance
with the registration requirements of the Securities Act pursuant to Rule 144
or other applicable exemption supported by a written opinion of legal counsel
for the Company which shall be reasonably satisfactory in form and substance to
legal counsel for such Holder.
1.11 Lock-up Agreement.
1.11.1 In consideration for the Company agreeing to
its obligations under this Section 1, each Holder, other than a Purchaser, and
each transferee of any such Holder pursuant to Section 1.15 hereof agrees (but
only if each officer, director, shareholder owning beneficially ten percent
(10%) or more of the Company's equity securities, and each shareholder selling
shares in such offering also agrees), in connection with any registration of
the Company's securities, not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any Registrable Securities
or other securities of the Company (other than those included in the
registration) without the prior written consent of the underwriters, for one
hundred eighty (180) days from the date of the final prospectus related to the
offering. The Company may impose stop-transfer instructions with respect to
such securities subject to the foregoing restriction until the end of said
period.
1.11.2 In consideration for the Company agreeing to
its obligations under this Section 1, each Purchaser and each transferee of
such Purchaser pursuant to Section 1.15 hereof agrees (but only if each
officer, director, shareholder owning beneficially ten percent (10%) or more
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of the Company's equity securities, and each shareholder selling shares in such
offering also agrees), in connection with the first registration (an "Initial
Public Offering") of the Company's securities for its own account to be offered
to the general public (other than a registration relating to a Rule 145
transaction or with respect to an employee benefit plan) and in connection with
any subsequent registration of the Company's securities that occurs within the
two-year period after the closing of an Initial Public Offering, not to sell,
make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of any Registrable Securities or other securities of the
Company (other than those included in the registration) without the prior
written consent of the underwriters, for one hundred eighty (180) days from the
date of the final prospectus related to the offering. The Company may impose
stop-transfer instructions with respect to such securities subject to the
foregoing restriction until the end of said period.
1.12 Indemnification.
1.12.1 The Company will indemnify each Holder, each
of its officers, directors and partners, such Holder's legal counsel and
independent accountants, and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, with respect to which
registration, qualification or compliance has been effected pursuant to this
Section 1, and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act, against all
expenses, claims, losses, damages and liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading, or any violation by the Company of the Securities Act or
of any rule or regulation promulgated under the Securities Act applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification or compliance, and will
reimburse each such Holder, each of its officers, directors and partners, each
person controlling such Holder, and each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, provided that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder or underwriter and stated to be specifically for
use therein.
1.12.2 Each Holder will, if Registrable Securities
held by such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers, its legal counsel and independent
accountants, each underwriter, if any, of the Company's securities covered by
such a registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act, and each
other such Holder, each of such Holder's officers and directors and each person
controlling such Holder within the meaning of
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Section 15 of the Securities Act, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Company, such Holders, such directors,
officers, persons, underwriters and control persons for any legal or any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder and stated to be specifically for use therein;
provided, however, that the obligations of such Holders hereunder shall be
limited to an amount equal to the proceeds to each such Holder of Registrable
Securities sold as contemplated herein, unless such liability arises out of or
is based upon willful conduct of such Holder.
1.12.3 Each party entitled to indemnification under
this Section 1.12 (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided that counsel for
the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall
not unreasonably be withheld), and the Indemnified Party may participate in
such defense at such party's expense, and provided further that the failure of
any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement unless the failure
to give such notice is materially prejudicial to an Indemnifying Party's
ability to defend such action and provided further, that the Indemnifying Party
shall not assume the defense for matters as to which there is a conflict of
interest or separate and different defenses. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
1.13 Information by Holder. The Holder or Holders of
Registrable Securities included in any registration shall furnish to the
Company such information regarding such Holder or Holders, the Registrable
Securities held by them and the distribution proposed by such Holder or Holders
as the Company may request in writing and as shall be required in connection
with any registration, qualification or compliance referred to in this Section
1.
1.14 Rule 144 Reporting. With a view to making available
the benefits of certain rules and regulations of the Commission which may at
any time permit the sale of the Restricted Securities to the public without
registration, after such time as a public market exists for the Common Stock of
the Company, the Company agrees to use its best efforts to:
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1.14.1 Make and keep public information available,
as those terms are understood and defined in Rule 144 under the Securities Act,
at all times after the effective date of the first registration under the
Securities Act filed by the Company for an offering of its securities to the
general public;
1.14.2 Use its best efforts then to file with the
Commission in a timely manner all reports and other documents required of the
Company under the Securities Act and the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (at any time after it has become subject to such
reporting requirements);
1.14.3 So long as a Holder owns any Restricted
Securities, to furnish to the Holder forthwith upon request a written statement
by the Company as to its compliance with the reporting requirements of said
Rule 144 (at any time after ninety (90) days after the effective date of an
Initial Public Offering) and of the Securities Act and the Exchange Act (at any
time after it has become subject to such reporting requirements), a copy of the
most recent annual or quarterly report of the Company, and such other reports
and documents of the Company as a Holder may reasonably request in availing
itself of any rule or regulation of the Commission allowing a Holder to sell
any such securities without registration.
1.15 Transfer of Registration Rights. The rights to cause
the Company to register securities granted Holders under Sections 1.5, 1.6 and
1.7 may be assigned to a transferee or assignee in connection with transfer or
assignment of not less than twenty percent (20%) of the Restricted Securities
originally acquired by a Holder pursuant to this Agreement, provided that (i)
the Company is given written notice of such assignment at least thirty (30)
days prior to such assignment, and (ii) such proposed transferee or assignee is
acceptable to the Company, which acceptance shall not be unreasonably withheld.
In addition, rights to cause the Company to register securities may be freely
assigned to any constituent partner of a Holder, where such Holder is a
partnership, or to any parent or subsidiary corporation or any officer,
director or principal shareholder thereof, where such Holder is a corporation,
or to any Affiliate of a Holder. For the purposes of this Section 1.15, all
shares of Restricted Securities transferred to former partners or Affiliates of
any Holder that is an institutional investor may be aggregated in meeting any
minimum number of shares required to be held by such Holder, or partners,
former partners or Affiliates thereof.
2. Miscellaneous.
2.1 No Inconsistent Agreements. The Company shall not,
after the date hereof, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement
or grant any additional registration rights to any Person or with respect to
any securities which are not Registrable Securities which are prior in right to
or inconsistent with the rights granted in this Agreement, except as provided
in Section 2.6.
2.2 Remedies. The Holders, in addition to being entitled
to exercise all rights granted by law, including recovery of damages, shall be
entitled to specific performance of their rights under this Agreement. The
Company agrees that monetary damages would not be adequate
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compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive in any action for
specific performance the defense that a remedy at law would be adequate.
2.3 Governing Law. This Agreement shall be governed in
all respects by and construed in all respects in accordance with the laws of
the State of California.
2.4 Successors and Assigns. Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit of,
and be binding upon, the successors, assigns, heirs, transferees, executors and
administrators of the parties hereto. 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. The Company shall use commercially reasonable efforts to
attempt to cause its successors or assigns (whether by merger, consolidation or
otherwise) to enter into a new registration rights agreement with the Holders
on terms substantially similar to this Agreement as a condition of such
transaction.
2.5 Entire Agreement. This Agreement constitutes the
full and entire understanding and agreement between the parties with regard to
registration rights and shall supersede all previous registration rights
contained in any agreement(s) previously entered into between the parties
hereto.
2.6 Amendment and Waiver. This Agreement, or any
provision hereof, may be amended or waived only in writing signed by (i) the
Company, (ii) each Purchaser and (iii) Holders of a majority of the Registrable
Securities, and any amendment or waiver so approved shall be binding upon all
Holders (including any transferee of Registerable Securities); provided,
however, that during any twelve-month period, the Company may, upon approval by
the Board of Directors of the Company, at any time and from time to time, amend
this Agreement, without the consent of the Purchasers and the Holders of a
majority of the Registrable Securities, to add as parties to and Holders under
this Agreement any holders of the Company's Registrable Securities as long as
(i) the number of securities held by such holders, in the aggregate does not
exceed one percent (1%) of the Company's outstanding capital stock and (ii)
such new Holder shall be granted identical rights provided to the Holders that
are not Purchasers. Outstanding capital stock of the Company shall be
calculated as if all of the Company's outstanding convertible securities
(including preferred stock, options and warrants) had been exercised or
converted into Common Stock.
2.7 Delays or Omissions. No delay or omission to
exercise any right, power or remedy accruing to the Company or to any Holder
upon any breach or default of any party hereto under this Agreement shall
impair any such right, power or remedy of the Company or such Holder nor shall
it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of the
Company or any Holder of any breach or default under this Agreement or any
waiver on the part of the Company or
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any Holder of any provisions or conditions of this Agreement must be in writing
and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or otherwise
afforded to the Company or any Holder, shall be cumulative and not alternative.
2.8 Notices, etc. All notices and other communications
required or permitted under this Agreement shall be in writing and shall be
mailed by registered or certified mail, postage prepaid, or otherwise delivered
by hand or by messenger, addressed (a) if to a Holder or any other holder of
any Registrable Securities, at such address as such Holder or holder shall have
furnished the Company in writing, or, until any such Holder or holder so
furnishes an address to the Company, then to and at the address of the last
Holder or holder who has so furnished an address to the Company, (b) if to the
Company, at the address of its principal executive officers and addressed to
the attention of the Corporate Secretary, or at such other address as the
Company shall have furnished to the Holder and (c) if to a Purchaser, at the
address set forth in the Stock Purchase Agreement (including a copy to counsel
as indicated therein).
2.9 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.
2.10 Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
2.11 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
PROBUSINESS CENTERS, INC.
By:
-----------------------
Xxxxxx X. Xxxxxx
President and Chief Executive Officer
17
PROBUSINESS, INC.
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
PURCHASERS' SIGNATURE PAGE
GENERAL ATLANTIC PARTNERS, 39, L.P.
GAP COINVESTMENT PARTNERS, L.P.
General Atlantic Service Corporation
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
---------------------------------------------------
(Printed Name of Purchaser)
---------------------------------------------------
(Signature)
---------------------------------------------------
(Title, if Applicable)
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PROBUSINESS, INC.
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
ORIGINAL HOLDERS' SIGNATURE PAGE
---------------------------
(Printed Name of Holder)
---------------------------
(Signature)
---------------------------
(Title, if Applicable)
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