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EXHIBIT 4.4 STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of the 22nd
day of April, 1999, by and among SALESLOGIX CORPORATION, a Delaware corporation
(the "Company"), and The Xxxxxxx Xxxxx Group, L.P., Stone Street Fund 1998, L.P.
and Bridge Street Fund 1998, L.P. (collectively, the "Buyer").
WHEREAS, the Company desires to effect an initial public offering of
its Common Stock (an "IPO"), and for that purpose filed on March 31, 1999 a
registration statement, Registration No. 333-75353, with the Securities and
Exchange Commission ("SEC") (the "Proposed IPO");
WHEREAS, Buyer desires to purchase, and the Company is willing to sell
to Buyer, either shares of Common Stock concurrently with the closing of the
Proposed IPO, or shares of Series F Preferred Stock of the Company under certain
other circumstances, (collectively, the "Securities") on the terms and
conditions set forth in this Agreement,
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Securities. The Buyer's acquisition of the
Securities shall occur at the Closing, as defined in Section 1.3 below:
1.1 Sale and Issuance of Securities.
(a) If the Closing occurs concurrently with the closing of an
IPO and, in connection therewith, each share of outstanding Series A, B, C, D
and E Preferred Stock of the Company is converted into shares of the Company's
Common Stock (a "Qualified IPO"), the Company will issue and sell to Buyer and
Buyer will purchase from the Company a number of shares of Common Stock (the
"Common Shares") equal to the quotient of (A) $3,500,000 divided by (B) the IPO
Price, as defined in the next sentence (the "Common Share Number"). In
consideration for the issuance of the Common Shares, Buyer will pay a purchase
price (the "IPO Price") in cash per Common Share equal to the price to the
public per share of Common Stock in the IPO less a discount of 3.5%.
(b) Subject to Section 1.1(c) below, if the Closing occurs
prior to the closing of a Qualified IPO, the Company will issue and sell to
Buyer and Buyer will purchase from the Company a number of shares of Series F
Preferred Stock (the "Preferred F Shares") as follows:
(i) if the Closing occurs concurrently with the closing of a
non-Qualified IPO, that number of Preferred F Shares
that is convertible into a number of shares of Common
Stock equal to the Common Share Number; or
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(ii) if the Closing occurs prior to an IPO, 666,667 Preferred
F Shares (subject to adjustment for any change in
capitalization other than in respect of the Company's
acquisition of Enact Incorporated or in respect of the
issuance or exercise of stock options under the
Company's Business Partner Stock Option Plan or 1996
Equity Incentive Plan (collectively, "Exempt
Issuances")).
The Series F Preferred Stock shall have the rights, privileges, designations and
preferences set forth in the form of the Fifth Restated Certificate of
Incorporation attached hereto as Exhibit A (the "Fifth Restated Certificate").
The purchase price for each share of Series F Preferred Stock (the "Purchase
Price") will be as follows:
(A) the IPO Price if the Closing occurs simultaneously with
a non-Qualified IPO; or
(B) Nine Dollars ($9.00) per share of Series F Preferred if
the Closing occurs prior to an IPO (an aggregate
Purchase Price of $6,000,000), subject to adjustment for
any change in the capital stock of the Company (other
than in respect of Exempt Issuances).
(c) If Buyer purchases Series F Preferred Stock prior to an
IPO and thereafter the Company issues any shares of Common Stock or Common Stock
equivalents (a "Subsequent Issue") at a price per share of Common Stock (the
"Subsequent Issue Price") that is less than $9.00 (adjusted for any subsequent
stock splits, stock dividends, combinations or other recapitalizations), the
Company will, concurrently with the closing of such issuance, issue to Buyer for
no additional consideration shares of (1) Common Stock if the transaction is a
qualified public offering (as defined in the Fifth Restated Certificate) or (2)
Series F Preferred Stock in all other cases. The number of shares issued
pursuant to this Section 1.1(c) to Buyer shall equal, or if Series F Preferred
Stock is issued shall be convertible into a number of shares of Common Stock
that equals, the difference between (i) 6,000,000 divided by the greater of (A)
7.00 (adjusted for any subsequent stock splits, stock dividends, combinations or
other recapitalizations) and (B) the Subsequent Issue Price, and (ii) the number
of shares of Common Stock into which the Series F Preferred Stock initially
purchased by Buyer convert (or are convertible) upon consummation of the
Subsequent Issue. The adjustment provided for in this Section 1.1(c) shall (x)
terminate upon the closing of a Qualified IPO (after giving effect to such
adjustment if the adjustment is required pursuant to the first sentence of this
Section 1.1(c)), and (y) not apply to any Exempt Issuances.
1.2 Put Notice. The Company may put the Preferred F Shares to
Buyer, in whole and not in part, at any time prior to the earlier of the closing
of an IPO and July 31, 1999, upon three business days' prior written notice to
Buyer (the "Put Notice"). In the event the Company delivers to Buyer a Put
Notice, then the Closing shall occur pursuant to Section 1.1(b) above.
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1.3 Closing. The purchase and sale of the Securities shall take
place at the offices of Xxxxxx Xxxxxxx, P.A., 0000 X. Xxxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx xx the later to occur of: (a) satisfaction or waiver of the
conditions set forth in Sections 4 and 5 and (b) the earliest to occur of (i)
the closing of an IPO, (ii) the third business day following the Company's
delivery of a Put Notice to Buyer, and (iii) July 31, 1999, or at such other
time and place as the Company and Buyer mutually agree upon orally or in writing
(which time and place are designated as the "Closing"). The pro rata amounts of
the Securities to be purchased by each Buyer are set forth on Schedule A
attached hereto. At the Closing the Company shall deliver to each Buyer a
certificate representing the Securities that such Buyer is purchasing against
payment of the purchase price therefor by check or wire transfer.
1.4 Termination. Notwithstanding any other provision of this
Agreement, this Agreement (except for Sections 6.3, 6.8 and 6.12, which shall
survive any termination) shall terminate if (a) it is mutually agreed in writing
by the parties that the consummation of the transactions contemplated hereby
will not occur, (b) at the Company's election if for any reason its acquisition
of Enact Incorporated ("Enact")is not consummated prior to July 31, 1999, (c) at
Buyer's election if the conditions set forth in Section 4 have not been
satisfied or waived on or before July 31, 1999, (d) at the Company's election if
the conditions set forth in Section 5 have not been satisfied or waived on or
before July 31, 1999, or (e) at Buyer's election if the conditions set forth in
Sections 5.4, 5.5 and 5.6 are not satisfied or waived on or before May 3, 1999.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Buyer that (with respect to Sections 2.4, 2.8
through 2.11 and 2.13 through 2.22, the term "Company" shall mean the Company,
together with its subsidiaries):
2.1 Organization, Good Standing and Qualification. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to carry on its business as now conducted and as proposed to be
conducted in the Registration Statement (including all financial statements and
exhibits) filed by the Company with the SEC in connection with the Proposed IPO,
as such Registration Statement is amended by the Company prior to the Closing
(collectively, the "Registration Statement"). Each of the Company and its
subsidiaries is duly qualified to transact business and is in good standing in
each jurisdiction in which the failure to so qualify would have a material
adverse effect on its business or properties. Complete and correct copies of the
Company's current Certificate of Incorporation and Restated Bylaws have been
delivered to Buyer. A complete and correct copy of the Registration Statement
has been delivered, and additional amendments prior to the Closing will be
delivered, to Buyer, and the Registration Statement (including any information
added by way of additional amendments thereto prior to the Closing) is
incorporated herein for the purposes of the Company's disclosures under this
Section 2; provided, however, that the Company shall not be deemed to warrant in
this Agreement that any uncompleted transactions described in or envisioned by
the Registration Statement shall be completed as described or envisioned
therein.
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2.2 Capitalization and Voting Rights.
(a) The authorized capital of the Company consists of: (A)
shares of Preferred Stock (the "Preferred Stock"), including shares designated
Series A Preferred Stock (the "Series A Preferred Stock"), shares designated
Series B Preferred Stock (the "Series B Preferred Stock"), shares designated
Series C Preferred Stock (the "Series C Preferred Stock"), shares designated
Series D Preferred Stock (the "Series D Preferred Stock"), and shares designated
Series E Preferred Stock (the "Series E Preferred Stock"), the aggregate
authorized and outstanding shares of which are described in the Registration
Statement as of the dates specified; and (B) shares of common stock (the "Common
Stock"), including shares designated Class A Common Stock (the "Class A Common
Stock"), and shares designated Class B Common Stock (the "Class B Common
Stock"), the authorized and outstanding shares of which are described in the
Registration Statement as of the dates specified. Material holdings by specific
shareholders of the outstanding shares of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock and Common Stock are specified in the Registration Statement as
of the dates specified. The rights, privileges and preferences of the Series F
Preferred Stock will be as stated in the Company's Fifth Restated Certificate.
(b) The outstanding shares of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock,
Series E Preferred Stock and Common Stock are all duly and validly authorized
and issued, fully paid and nonassessable, and were issued in accordance with the
registration or qualification provisions of the Securities Act of 1933, as
amended (the "Act"), and any relevant state securities laws or pursuant to valid
exemptions therefrom.
(c) Except for (A) the conversion privileges of the Preferred
Stock as set forth in the Fourth Restated Certificate of Incorporation, as
amended; (B) the rights provided in Section 2.4 of the Amended and Restated
Investors' Rights Agreement dated as of June 4, 1998 (the "Restated Investors'
Rights Agreement") to the parties thereto and Comdisco, Inc.; (C) that certain
Term Sheet dated March 18, 1999 between the Company and Enact Incorporated
("Enact") in respect of the acquisition by the Company of Enact as described
therein (the "Enact Acquisition"); and (D) the stock options and warrants
described in the Registration Statement, or granted by the Company subsequent to
the filing thereof to employees or directors in the ordinary course of the
Company's business, there are no outstanding options, warrants, rights
(including conversion or preemptive rights) or agreements for the purchase or
acquisition from the Company of any shares of its capital stock or "phantom
stock," stock appreciation rights or similar rights in respect of any shares of
the Company's capital stock. The Registration Statement describes arrangements
by which the Company has reserved shares of Class A Common Stock for purchase
upon exercise of options granted under various existing and proposed incentive
plans. Except for that certain Voting Trust Agreement dated as of January 17,
1996, by and among the Company, and certain other parties, as amended (the
"Voting Trust Agreement"); that certain Voting Agreement dated as of January 19,
1996, by and among the Company and certain other parties, as amended (the
"Voting Agreement"); that certain Stockholders' Agreement dated as of January
19, 1996, by and among the Company and certain other parties, as amended (the
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"Stockholders' Agreement"); that certain Series A, C & E Voting Agreement dated
as of June 4, 1998, by and among the Company, the holders of Series A Preferred
Stock (collectively, the "Series A Investors"), the holders of Series C
Preferred Stock (collectively, the "Series C Investors"), the holders of Series
E Preferred Stock (collectively, the "Series E Investors"), and certain other
parties (the "Series A, C & E Voting Agreement"); and that certain Series A, C &
E Sharing Agreement dated as of June 4, 1998, by and among the Company, the
Series A Investors, the Series C Investors, the Series E Investors and certain
other parties (the "Series A, C & E Sharing Agreement"), the Company is not a
party or subject to any agreement or understanding, and, to the best of the
Company's knowledge, there is no agreement or understanding between any persons
and/or entities that affects or relates to the voting or giving of written
consents with respect to any security or by a director of the Company.
2.3 Subsidiaries. Except as disclosed in the Registration
Statement, the Company does not presently own or control, directly or
indirectly, any interest in any other corporation, association, or other
business entity. The Company is not a participant in any joint venture,
partnership, or similar arrangement.
2.4 Authorization. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement, the agreements
described in Section 4.6, 4.7 and 4.8 hereof, as applicable (the "Governance
Agreements"), the performance of all obligations of the Company hereunder and
thereunder, and the authorization, issuance (or reservation for issuance), sale
and delivery of the Common Shares being sold hereunder pursuant to Section
1.1(a) or the Preferred F Shares being sold hereunder pursuant to Section 1.1(b)
and the Common Stock issuable upon conversion of the Preferred F Shares has been
taken or will be taken prior to the Closing, and this Agreement, and the
Governance Agreements to which the Company is a party constitute valid and
legally binding obligations of the Company, enforceable in accordance with their
respective terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief, or other equitable
remedies, and (iii) to the extent the indemnification provisions contained in
Governance Agreements, may be limited by applicable federal or state securities
laws.
2.5 Valid Issuance of Preferred and Class A Common Stock. The
Common Shares that are being purchased by the Buyer pursuant to Section 1.1(a)
hereunder, or the Preferred F Shares that are being purchased by the Buyer
pursuant to Section 1.1(b) hereunder, when issued, sold and delivered in
accordance with the terms of this Agreement for the consideration expressed
herein, will be duly and validly issued, fully paid, and nonassessable, and will
be free of restrictions on transfer other than restrictions on transfer under
this Agreement, the Governance Agreements, and under applicable state and
federal securities laws. The Class A Common Stock issuable upon conversion of
any Preferred F Shares purchased under this Agreement has been duly and validly
reserved for issuance and, upon issuance in accordance with the terms of the
Fifth Restated Certificate, will be duly and validly issued, fully paid, and
nonassessable and will be free of restrictions on transfer other than
restrictions on
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transfer under this Agreement, the Governance Agreements, and under applicable
state and federal securities laws.
2.6 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except (A) with respect to a Closing pursuant to
Section 1.1(a), all the required consents, approvals, orders, authorizations, or
registrations, qualifications, designations, declarations or filings
(collectively, "Consents"), necessary or appropriate for consummation of the
Qualified IPO, which Consents shall be obtained or waived by the date thereof;
and (B) with respect to a Closing pursuant to Section 1.1(b), (i) the filing of
the Fifth Restated Certificate with the Secretary of State of the State of
Delaware, and (ii) the notice filing with the Securities and Exchange Commission
("SEC") pursuant to Rule 506 of Regulation D under the Act, and the notice
filings required by state securities laws in accordance with Section 18(b)(4)(D)
of the Act, which notice filings will be effected within 15 days of the sale of
the Preferred F Shares hereunder.
2.7 Offering. Subject in part to the truth and accuracy of each
Buyer's representations set forth in Section 3 of this Agreement, the offer,
sale and issuance of the Securities as contemplated by this Agreement are exempt
from the registration requirements of the Act, and neither the Company nor any
authorized agent acting on its behalf will take any action hereafter that would
cause the loss of such exemption.
2.8 Litigation. There is no action, suit, proceeding or
investigation pending or currently threatened against the Company that questions
the validity of this Agreement, the Governance Agreements or the right of the
Company to enter into such agreements, or to consummate the transactions
contemplated hereby or thereby, or that would result, either individually or in
the aggregate, in any material adverse changes in the assets, condition, affairs
or prospects of the Company, financially or otherwise, or any change in the
current equity ownership of the Company, nor is the Company aware that there is
a basis for the foregoing. The foregoing includes, without limitation, actions,
suits, proceedings or investigations pending or threatened, involving the prior
employment of any of the Company's employees, their use in connection with the
Company's business of any information or techniques allegedly proprietary to any
of their former employers, or their obligations under any agreements with prior
employers. The Company is not a party or subject to the provisions of any order,
writ, injunction, judgment or decree of any court or government agency or
instrumentality.
2.9 Proprietary Information Agreements. Each employee, officer
and consultant of the Company has executed a Proprietary Information and
Inventions Agreement in substantially the form provided to special counsel to
the Buyer. The Company, after reasonable investigation, is not aware that any of
their employees, officers or consultants are in violation thereof, and the
Company will use its best efforts to prevent any such violation.
2.10 Patents and Trademarks. The Company has sufficient title and
ownership of, or adequate rights to use, all material patents, trademarks,
service marks, trade names,
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copyrights, trade secrets, information, proprietary rights and processes
necessary for its business as now conducted and as proposed to be conducted as
described in the Registration Statement without any conflict with or
infringement of the rights of others. The Company's material options, licenses
or agreements relating to its patents, trademarks, service marks, trade names,
copyrights, trade secrets, information, manufacturing rights, marketing rights,
proprietary rights and processes of any other person or entity are or will be
filed as Exhibits to or described in the Registration Statement. The Company is
not aware that any of its employees is obligated under any contract (including
licenses, covenants or commitments of any nature) or other agreement, or subject
to any judgment, decree or order of any court or administrative agency, that
would interfere with the use of his or her best efforts to promote the interests
of the Company or that would conflict with the Company's business. Neither the
execution nor delivery of this Agreement or the Governance Agreements, nor the
carrying on of the Company's business by the employees of the Company, will to
the best of the Company's knowledge, conflict with or result in a breach of the
terms, conditions or provisions of, or constitute a default under, any contract,
covenant or instrument under which any of such employees is now obligated. The
Company does not believe it is or will be necessary to utilize any inventions of
any of its employees (or people it currently intends to hire) made prior to
their employment by the Company.
2.11 Compliance with Other Instruments.
(a) The Company is not (and upon filing of the Fifth Restated
Certificate, will not be) in violation or default of any provision of its
certificate of incorporation or Bylaws, as amended, or in any material respect
of any instrument, judgment, order, writ, decree or contract to which it is a
party or by which it is bound, or, to the best of its knowledge, of any
provision of any federal or state statute, rule or regulation applicable to the
Company; except that the Company has not held an annual shareholders' meeting
within the prescribed time period but will do so prior to the Closing. The
execution, delivery and performance of this Agreement, the Governance Agreements
to which it is a party, and the consummation of the transactions contemplated
hereby and thereby will not result in any such violation or be in conflict with
or constitute, with or without the passage of time and giving of notice, either
a default under any such provision, instrument, judgment, order, writ, decree or
contract or an event that results in the creation of any lien, charge or
encumbrance upon any assets of the Company or the suspension, revocation,
impairment, forfeiture, or nonrenewal of any material permit, license,
authorization, or approval applicable to the Company, its business or operations
or any of its assets or properties.
(b) The Company has avoided every condition, and has not
performed any act, the occurrence of which would result in the Company's loss of
any material right granted under any license, distribution or other agreement
which would materially and adversely affect the business, properties, prospects,
or financial condition of the Company.
2.12 Agreements; Action.
(a) Except for agreements explicitly contemplated hereby and
by the Governance Agreements, there are no material agreements, understandings
or proposed
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transactions between the Company and any of its officers, directors, affiliates,
or any, affiliate thereof that have not been previously disclosed to Buyer.
(b) There are no contracts or documents of a character
required to be described in the Registration Statement or the related
prospectus, or required to be filed as exhibits thereto, that are not, or will
not be, described and filed as required.
2.13 Permits. The Company has all franchises, permits, licenses,
and any similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which could materially and adversely affect the
business, properties, prospects, or financial condition of the Company, and the
Company believes it can obtain, without undue burden or expense, any similar
authority for the conduct of its business as planned to be conducted. The
Company is not in default in any material respect under any of such franchises,
permits, licenses, or other similar authority.
2.14 Environmental and Safety Laws. To the best of its knowledge,
the Company is not in violation of any applicable statute, law or regulation
relating to the environment or occupational health and safety, and to the best
of its knowledge, no material expenditures are or will be required in order to
comply with any such existing statute, law or regulation.
2.15 Disclosure. The Company has fully provided each Buyer with
the Registration Statement, including all amendments thereto filed prior to the
Closing. Neither the representations and warranties set forth in Section 2 of
this Agreement, nor the Registration Statement, contains any untrue statement of
a material fact or omits to state a material fact necessary to make the
statements herein or therein not misleading. When the Registration Statement and
any further amendments thereto shall become effective, (i) the Registration
Statement and any such amendments will comply in all material respects with the
requirements of the Act and the regulations promulgated thereunder; (ii) neither
the Registration Statement nor any such amendment will contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
Neither the prospectus nor any amendment or supplement thereto will, as of their
respective issue dates, at the Closing, include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
2.16 Title to Property and Assets. The Company does not own any
real property. It owns its personal property and assets free and clear of all
mortgages, liens, loans and encumbrances, except statutory landlord liens or
such other encumbrances and liens that are disclosed in the Registration
Statement or arise in the ordinary course of business and do not materially
impair the Company's ownership or use of such property or assets. With respect
to the property and assets it leases, the Company is in compliance with such
leases and, to the best of its knowledge, holds a valid leasehold interest free
of any liens, claims or encumbrances other than statutory landlord liens and
liens, claims or encumbrances disclosed in the Registration Statement.
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2.17 Financial Statements. The consolidated financial statements
of the Company, together with related notes and schedules as set forth in the
Registration Statement ("Company Financial Statements"), present fairly the
financial position and the results of operations of the Company and its
subsidiaries, taken as a whole, at the indicated dates and for the indicated
periods. The financial statements of Opis Corporation (a wholly owned subsidiary
of the Company) ("Opis"), together with related notes and schedules as set forth
in the Registration Statement ("Opis Financial Statements"), present fairly the
financial position and the results of operations of Opis, at the indicated dates
and for the indicated periods. To the Company's knowledge, the financial
statements of Enact, together with related notes and schedules as set forth on
the Registration Statement ("Enact Financial Statements"), present fairly the
financial position and results of operations of Enact, at the indicated dates
and for the indicated periods. The pro forma condensed consolidated financial
statements of the Company, together with related notes and schedules as set
forth in the Registration Statement (herein collectively called the "Financial
Statements") present fairly the consolidated financial position and the results
of operations of the Company and its subsidiaries, taken as a whole and assuming
consummation of the Enact Acquisition, at the indicated dates and for the
indicated periods. The Financial Statements, schedules and related notes have
been prepared in accordance with generally accepted accounting principles,
consistently applied through the period involved, except as may be otherwise
stated therein, and all adjustments necessary for a fair presentation of results
for such periods have been made. Except as set forth in the Financial
Statements, the Company has no material liabilities, contingent or otherwise,
other than (i) liabilities incurred in the ordinary course of business
subsequent to December 31, 1998, and (ii) obligations under contracts and
commitments incurred in the ordinary course of business and not required under
generally accepted accounting principles to be reflected in the Financial
Statements which, in both cases, individually or in the aggregate, are not
material to the financial condition or operating results of the Company. Except
as disclosed on the Financial Statements, the Company is not a guarantor or
indemnitor of any indebtedness of any other person, firm or corporation. The
Company will maintain a standard system of accounting established and
administered in accordance with generally accepted accounting principles.
2.18 Changes. Since the respective dates as of which information
is given in the Registration Statement, there has not been any materially
adverse change in the business, properties, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, other than as set
forth in the Registration Statement, and since such dates, except in the
ordinary course of business, neither the Company nor any of its subsidiaries has
entered into any material transaction not referred to in the Registration
Statement.
2.19 Employee Benefit Plans. The Company is in compliance, in all
material respects, with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for with the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV or ERISA with
respect to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of
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the Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension plan" for
which the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified and nothing has occurred,
whether by action or failure to act, that would cause the loss of such
qualification.
2.20 Tax Returns, Payments and Elections. The Company has timely
filed all tax returns and reports as required by law. These returns and reports
are true and correct in all material respects. The Company has paid all taxes
and other assessments due, except those contested by it in good faith. The
provision for taxes of the Company as shown in the Financial Statements is
adequate for taxes due or accrued as of the date thereof. The Company has not
elected pursuant to the Internal Revenue Code of 1986, as amended (the "Code"),
to be treated as a Subchapter S corporation or a collapsible corporation
pursuant to Section 1362(a) or Section 341(f) of the Code, nor have they made
any other elections pursuant to the Code (other than elections that relate
solely to methods of accounting, depreciation or amortization) that would have a
material effect on the Company, its financial condition, its business or any of
its properties or material assets. The Company has never had any tax deficiency
proposed or assessed against it and has not executed any waiver of any statute
of limitations on the assessment or collection of any tax or governmental
charge. None of the Company's federal income tax returns and none of its state
income or franchise tax or sales or use tax returns has ever been audited by
governmental authorities. Since the date of the Financial Statements, the
Company has made adequate provisions on its books of account for all taxes,
assessments and governmental charges with respect to its business, properties
and operations for such period. The Company has withheld or collected from each
payment made to each of its employees, the amount of all taxes (including, but
not limited to, federal income taxes, Federal Insurance Contribution Act taxes
and Federal Unemployment Tax Act taxes) required to be withheld or collected
therefrom, and have paid the same to the proper tax receiving officers or
authorized depositaries.
2.21 Insurance. The Company has in full force and effect fire and
casualty insurance policies, with extended coverage, sufficient in amount
(subject to reasonable deductibles) to allow it to replace any of its properties
that might be damaged or destroyed. The Company has in full force and effect
term life insurance, payable to the Company, on the life of Xxxxxxx X. Xxxxxxxx
("Xxxxxxxx") in the amount of $2,500,000. To the best of the Company's
knowledge, there is no known reason for Xxxxxxxx to be denied coverage of such
life insurance. The Company has in full force and effect products liability and
errors and omissions insurance in amounts customary for companies similarly
situated.
2.22 Minute Books. The Company has provided to special counsel to
the Buyers accurate copies of all portions of the minute books of the Company
requested.
2.23 Labor Agreements and Actions. The Company is not bound by or
subject to (and none of its assets or properties is bound by or subject to) any
written or oral, express or implied, contract, commitment or arrangement with
any labor union, and no labor union has requested or, to the best of the
Company's knowledge, has sought to represent any of the
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employees, representatives or agents of the Company. There is no strike or other
labor dispute involving the Company pending, or to the best of the Company's
knowledge, threatened, nor is the Company aware of any labor organization
activity involving its employees. The Company is not aware that any officer or
key employee, or that any group of key employees, intends to terminate their
employment with the Company, nor does the Company have a present intention to
terminate the employment of any of the foregoing. The employment of each officer
and employee of the Company is terminable at the will of the Company. To the
best of its knowledge, the Company has complied in all material respects with
all applicable state and federal equal employment opportunity and other laws
related to employment.
3. Representations and Warranties of the Buyers. Each Buyer hereby
represents and warrants that:
3.1 Authorization. Such Buyer has full power and authority to
enter into this Agreement and the Governance Agreements, and each such agreement
constitutes its valid and legally binding obligation, enforceable in accordance
with their respective terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors' rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies, and (iii) to the extent the indemnification provisions
contained in the Governance Agreements, may be limited by applicable federal or
state securities laws.
3.2 Purchase Entirely for Own Account. This Agreement is made with
such Buyer in reliance upon such Buyer's representation to the Company, which by
such Buyer's execution of this Agreement such Buyer hereby confirms, that the
Securities will be acquired for investment for such Buyer's own account, not as
a nominee or agent, and not with a view to the resale or distribution of any
part thereof, and that such Buyer has no present intention of selling, granting
any participation in, or otherwise distributing the same. By executing this
Agreement, such Buyer further represents that such Buyer does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person, with
respect to any of the Securities.
3.3 Disclosure of Information. Such Buyer has received the
Registration Statement, including exhibits thereto. Such Buyer further
represents that such Buyer has had an opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of the offering of
the Securities and the business, properties, prospects and financial condition
of the Company. Such Buyer further represents that it is relying solely upon the
Registration Statement and the representations and warranties of the Company in
Section 2 of this Agreement.
3.4 Investment Experience. Such Buyer is an investor in securities
of companies in the development stage and acknowledges that it is able to fend
for itself, can bear the economic risk of its investment, and has such knowledge
and experience in financial or business matters that it is capable of evaluating
the merits and risks of the investment in the
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Securities. If other than an individual, such Buyer also represents it has not
been organized for the purpose of acquiring the Securities.
3.5 Accredited Investor. Such Buyer is an "accredited investor" within
the meaning of SEC Rule 501 of Regulation D promulgated under the Act, as
presently in effect.
3.6 Restricted Securities. Such Buyer understands that the Securities
it is purchasing are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Act, only in certain limited circumstances. In this connection, such Buyer
represents that it is familiar with Rule 144 promulgated under the Act, as
presently in effect, and understands the resale limitations imposed thereby and
by the Act.
3.7 Further Limitations on Disposition. Without in any way limiting
the representations set forth above, such Buyer further agrees not to make any
disposition of all or any portion of the Securities unless and until the
transferee has agreed in writing for the benefit of the Company to be bound by
this Section 3 and the Restated Investors' Rights Agreement, provided and to the
extent this Section and such agreement are then applicable, and:
(a) There is then in effect a Registration Statement under the Act
covering such proposed disposition and such disposition is made in accordance
with such Registration Statement; or
(b) (i) Such Buyer shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, and (ii) if reasonably
requested by the Company, such Buyer shall have furnished the Company with an
opinion of counsel reasonably satisfactory to the Company that such disposition
will not require registration of such shares under the Act.
(c) Notwithstanding the provisions of paragraphs (a) and (b)
above, to the extent permissible under law, no such registration statement or
opinion of counsel shall be necessary for a transfer by Buyer which is a
partnership to a partner of such partnership or a retired partner of such
partnership who retires after the date hereof, or to the estate of any such
partner or retired partner or the transfer by gift, will or intestate succession
of any partner to his or her spouse or to the siblings, lineal descendants or
ancestors of such partner or his or her spouse, if the transferee agrees in
writing to be subject to the terms hereof to the same extent as if he or she
were an original Buyer hereunder.
3.8 Legends. It is understood that the certificates evidencing
the Securities may bear the following legend in substantially the following
form:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
OR HYPOTHECATED IN
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THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO
THE SECURITIES UNDER SUCH ACT OR QUALIFICATION UNDER SUCH LAWS OR
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION AND QUALIFICATION IS NOT REQUIRED."
4. Conditions of Buyers' Obligations at Closing. The obligations of
each Buyer under Section 1.1 of this Agreement are subject to the fulfillment on
or before the Closing of each of the following conditions, the waiver of which
shall not be effective against any Buyer who does not consent in writing
thereto:
4.1 Representations and Warranties. The representations and
warranties of the Company contained in Section 2 shall be true on and as of the
Closing.
4.2 Performance. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing.
4.3 Compliance Certificate. The President of the Company shall
deliver to each Buyer at the Closing a certificate stating that the conditions
specified in Sections 4.1 and 4.2 have been fulfilled and stating that there
shall have been (i) no change in the capital stock (other than in respect of
Exempt Issuances, or a two-for-three reverse stock split effected on March 23,
1999) or long-term debt (other than paydowns of existing long-term debt pursuant
to mandatory payment provisions) and (ii) no material adverse change in the
business, financial condition, assets, stockholders' equity, management or
prospects of the Company since the date of the Company's unaudited financial
statements for the year ending December 31, 1998 furnished by the Company to
Buyer prior hereto.
4.4 Qualifications. All material authorizations, approval, or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the lawful issuance
and sale of the Securities pursuant to this Agreement shall be duly obtained and
effective as of the Closing.
4.5 Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated at the Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to Buyers' special counsel, and they shall have received all such
counterpart original and certified or other copies of such documents as they may
reasonably request. If the Closing occurs pursuant to Section 1.1(b), the
Company shall have filed with the Secretary of State of the State of Delaware,
the Fifth Restated Certificate of Incorporation in the form attached hereto as
Exhibit A, which shall have been effectively filed with the Secretary of State
of Delaware.
4.6 Amendment to Restated Investors' Rights Agreement. The
Company, and a majority in interest of the Series A Preferred Stock, Series C
Preferred Stock and Series E Preferred Stock, each as a separate class, shall
have entered into the Amendment to Restated Investors' Rights Agreement in the
form attached hereto as Exhibit B.
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4.7 Amended and Restated Series A, C, E & F Voting Agreement. If
the Closing occurs pursuant to Section 1.1(b), the Company, and a majority in
interest of the Series A Preferred Stock, Series C Preferred Stock and Series E
Preferred Stock, each as a separate class, shall have entered into the Amended
and Restated Series A, C, E & F Voting Agreement in the form attached hereto as
Exhibit C.
4.8 Amended and Restated Series A, C, E & F Sharing Agreement. If
the Closing occurs pursuant to Section 1.1(b), the Company, Xxxxxxx X. Xxxxxxxx,
and a majority in interest of the Series A Preferred Stock, Series C Preferred
Stock and Series E Preferred Stock, each as a separate class, shall have entered
into the Amended and Restated Series A, C, E & F Sharing Agreement in the form
attached hereto as Exhibit D.
4.9 Opinion of Company Counsel. Each Buyer shall have received
from Xxxxxx Xxxxxxx, PA, counsel for the Company, an opinion reasonably
acceptable to each such Buyer.
4.10 Closing of the Proposed IPO. If the Closing occurs pursuant
to Section 1.1(a), the closing of the Proposed IPO shall have occurred.
5. Conditions of the Company's Obligations at Closing. The
obligations of the Company to each Buyer under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions by that
Buyer:
5.1 Representations and Warranties. The representations and
warranties of the Buyers contained in Section 3 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the Closing.
5.2 Payment of Purchase Price. Each Buyer shall have delivered the
purchase price specified in Section 1.2.
5.3 Qualifications. All material authorizations, approvals, or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the lawful issuance
and sale of the Securities pursuant to this Agreement shall be duly obtained and
effective as of the Closing.
5.4 Shareholder Approval. If the Closing occurs pursuant to
Section 1.1(b), the Company shall have received the necessary approval from the
Stockholders of the Company of the Fifth Restated Certificate of Incorporation.
5.5 Amendment to Restated Investors' Rights Agreement. Each Buyer,
and a majority in interest of the Series A Preferred Stock, Series C Preferred
Stock and Series E Preferred Stock, each as a separate class, shall have entered
into the Amendment to Restated Investors' Rights Agreement in the form attached
hereto as Exhibit B.
5.6 Amended and Restated Series A, C, E & F Voting Agreement. If
the Closing occurs pursuant to Section 1.1(b), each Buyer, and a majority in
interest of the Series A
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Preferred Stock, Series C Preferred Stock and Series E Preferred Stock, each as
a separate class, shall have entered into the Amended and Restated Series A, C,
E & F Voting Agreement in the form attached hereto as Exhibit C.
5.7 Closing of Enact Acquisition. The Company's acquisition of
Enact Incorporated shall have been consummated.
6. Miscellaneous.
6.1 Survival of Warranties. The warranties, representations and
covenants of the Company and Buyers contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Buyers or the Company.
6.2 Successors and Assigns. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any Securities). Nothing in this Agreement, express or implied,
is intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
6.3 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Delaware.
6.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
6.5 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
6.6 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
receipt if sent by telecopy, nationally recognized overnight courier or by
registered or certified mail, postage prepaid and addressed to the party to be
notified at the address indicated for such party on the signature page hereof,
or at such other address as such party may designate by ten (10) days' advance
written notice to the other parties.
6.7 Finder's Fee. Except for the fee payable by the Company to
Xxxxxxxxx & Xxxxx LLC, BancBoston Xxxxxxxxx Xxxxxxxx Inc. and U.S. Bancorp Xxxxx
Xxxxxxx pursuant to that certain letter agreement dated April 19, 1999, in
connection with a Closing pursuant to Section 1.1(a), each party represents that
it neither is nor will be obligated for any finders' fee or commission in
connection with this transaction. Each Buyer agrees to indemnify and to hold
harmless the Company from any liability for any commission or compensation in
the nature of a
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finders' fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Buyer or any of its officers, partners,
employees, or representatives is responsible. The Company agrees to indemnify
and hold harmless each Buyer from any liability for any commission or
compensation in the nature of a finders' fee (and the costs and expenses of
defending against such liability or asserted liability) for which the Company or
any of its officers, employees or representatives is responsible.
6.8 Expenses. Irrespective of whether the Closing is effected,
the Company shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this Agreement. The Company
agrees to reimburse Buyer at the Closing (and periodically thereafter or if the
Closing does not occur for any reason) for its reasonable out-of-pocket
expenses, including the reasonable fees and disbursements of Buyer's attorneys
plus any sales, use, transfer or similar taxes arising in connection with any
matters referred to in this Agreement, provided such reimbursement shall not
exceed $15,000. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the Amendment to Restated Investors'
Rights Agreement, the Amended and Restated Series A, C, E & F Voting Agreement,
or the Fifth Restated Certificate, the prevailing party shall be entitled to
reasonable attorney's fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
6.9 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
a majority in interest of the Securities. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each holder of any
securities purchased under this Agreement at the time outstanding (including
securities into which such securities are convertible), each future holder of
all such securities, and the Company.
6.10 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.
6.11 Aggregation of Stock. All shares of the Securities held or
acquired by affiliated entities or persons shall be aggregated together for the
purpose of determining the availability of any rights under this Agreement.
6.12 Indemnity. The Company agrees to the terms and conditions set
forth in Annex A hereto, which is incorporated by reference in this Agreement
and which shall be subject to the provisions of Sections 1.10(c) and 1.10(d) of
the Restated Investors' Rights Agreement to which the Company and Buyer, among
others, are parties.
6.13 Continued Operations. Prior to the Closing, the Company will
continue to manage and operate all aspects of the business of the Company (the
"Business") in the ordinary course in a manner consistent with prior practice.
Prior to the Closing, the Company will keep Buyer informed of significant
developments concerning the Business or other major
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developments which may materially interfere with the consummation of the
transactions contemplated by this Agreement.
6.14 Approvals; Governmental Filings. The Company shall use its
best efforts to obtain any consents and approvals from governmental, regulatory
and administrative entities and any third parties necessary to consummate the
transactions contemplated by this Agreement. The parties shall cooperate in the
preparation and filing of any amendments to the Registration Statement and any
required governmental or regulatory notices and filings and any necessary third
party consents.
6.15 Access. Until the Closing or termination of this Agreement,
the Company will give Buyer and its appropriate officers, employees, attorneys
and other advisors full access at reasonable times for purposes of this
Agreement to employees, officers, facilities, contracts, books, records and
other information of the Company.
6.16 Entire Agreement. This Agreement and the documents referred
to herein constitute the entire agreement among the parties and supersede all
prior agreements and understandings between the parties on the subject matter
hereof, and no party shall be liable or bound to any other party in any manner
by any warranties, representations, or covenants except as specifically set
forth herein or there.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
[SIGNATURES APPEAR ON FOLLOWING PAGES]
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THE COMPANY:
SALESLOGIX CORPORATION, a Delaware
corporation
By: /s/ Xxxx Xxxxx
-------------------------------------------
Xxxx Xxxxx, Vice President
Address: 0000 X. Xxxxxx Xxxxxx Xx., Xxxxx 000
Xxxxxxxxxx, XX 00000
BUYER:
THE XXXXXXX SACHS GROUP, L.P.
By: The Xxxxxxx Xxxxx Corporation, its
General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Executive Vice President
Address: 00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
STONE STREET FUND 1998, L.P.
By: Stone Street Advantage Corp.
Its: General Partner
By: /s/ Xxx Xxxxxxxx
--------------------------------------
Name: Xxx Xxxxxxxx
Its: Vice President
Address: 00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
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00
XXXXXX XXXXXX XXXX 0000, L.P.
By: Bridge Street Advantage Corp.
Its: Managing General Partner
By: /s/ Xxx Xxxxxxxx
--------------------------------------
Name: Xxx Xxxxxxxx
Its: Vice President
Address: 00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
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LIST OF EXHIBITS, SCHEDULES AND ANNEXES
SCHEDULES
Schedule A Schedule of Buyers
ANNEXES
Annex A Indemnity
EXHIBITS
Exhibit A Form of Fifth Restated Certificate of Incorporation
Exhibit B Form of Amendment to Restated Investors' Rights Agreement
Exhibit C Form of Amended and Restated Series A, C, E & F Voting Agreement
Exhibit D Form of Amended and Restated Series A, C, E & F Sharing Agreement
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SCHEDULE A
SCHEDULE OF BUYERS
For a Closing pursuant to Section 1.1(a):
--------------------------------------------------------------------------------
Pro Rata Share of Purchase Price for
Common Stock to be Shares of Common
Name of Buyer Purchased Stock
--------------------------------------------------------------------------------
The Xxxxxxx Xxxxx Group, L.P. 83.333423556% $2,916,669.82
--------------------------------------------------------------------------------
Xxxxx Xxxxxx Xxxx 0000, X.X. 12.802808438% $ 448,098.30
--------------------------------------------------------------------------------
Xxxxxx Xxxxxx Xxxx 0000, X.X. 3.863768006% $ 135,231.88
--------------------------------------------------------------------------------
TOTALS: 100.0% $3,500,000.00
--------------------------------------------------------------------------------
For a Closing pursuant to Section 1.1(b):
--------------------------------------------------------------------------------
Pro Rata Share of Purchase Price for
Series F Preferred Stock Shares of Series F
Name of Buyer to be Purchased Preferred Stock
--------------------------------------------------------------------------------
The Xxxxxxx Xxxxx Group, L.P. 83.333423556% $5,000,005.41
--------------------------------------------------------------------------------
Xxxxx Xxxxxx Xxxx 0000, X.X. 12.802808438% $768,168.51
--------------------------------------------------------------------------------
Xxxxxx Xxxxxx Xxxx 0000, X.X. 3.863768006% $231,826.08
--------------------------------------------------------------------------------
TOTALS: 100.0% $6,000,000.00
--------------------------------------------------------------------------------
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ANNEX A
(a) The Company agrees to indemnify, to the fullest extent permitted by law,
Buyer(s), its (their) officer(s), director(s), managing directors, employees,
shareholders, general partner(s) and any partners of such general partner(s)
(collectively "Indemnitees") against any costs, claims and liabilities that any
Indemnitee incurs as a result of any claim (a) made by any other shareholder of
the Company against an Indemnitee and arising out of or related to any round of
financing of the Company (including but not limited to claims regarding
non-participation, or non-pro rata participation, in such round by any such
shareholder); provided, however, that the Company shall have no indemnification
obligation with respect to (i) actions by Indemnitees other than good faith
actions in their capacity as shareholders of the Company or (ii) any claims
arising out of or related to the transaction contemplated by the Letter of
Intent to which this Annex A is attached or any other agreement or alleged
agreement between or among two or more Series F Investors other than agreements
to which the Company is a party; or (b) made by a third party against an
Indemnitee based on any misstatement or omission of a material fact by the
Company in violation of any duty of disclosure imposed on the Company by federal
or state securities laws to the third party claimant; provided, however, that
the Company shall not be liable in any such case for any such claim to the
extent that it arises out of or is based upon a misstatement or omission which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such disclosure by any such Indemnitee; and
provided further that the Company shall not, without the written consent of the
Indemnitees (which consent shall not be unreasonably withheld), effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification may be sought hereunder (whether or not any of the Indemnitees
is an actual or potential party to such claim), other than to the extent such
settlement, compromise or judgment (A) includes an unconditional release of the
Indemnitees from all liability arising out of such action or claim and (B) does
not include a statement as to or an admission of fault, culpability or a failure
to act, by or on behalf of such Indemnitees.
(b) Promptly after receipt by an Indemnitee of notice of the commencement of
any action (including any governmental action) such Indemnitee will, if a claim
in respect thereof is to be made against the Company under this Annex A, deliver
to the Company a written notice of the commencement thereof, and the Company
shall have the right to participate in, and, to the extent the Company so
desires, to assume the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that the Indemnitees shall have the right to retain
one (1) separate counsel with the fees and expenses to be paid by the Company if
representation of the Indemnitees by the counsel retained by the Company would
be inappropriate due to actual or potential differing interests between such
Indemittee and any other party represented by Company-retained counsel in such
proceeding.
(c) The provisions of this Annex A shall survive any termination or
completion of the Stock Purchase Agreement to which this Annex A is attached,
and this Annex A shall be governed by and construed in accordance with the laws
of the State of New York without regard to principles of conflicts of laws.
22
