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EXHIBIT 10.14
CREDENTIALS SERVICES INTERNATIONAL, INC.
FORM OF COMMON STOCK AGREEMENT
THIS AGREEMENT is dated as of _______________ among CREDENTIALS
SERVICES INTERNATIONAL, INC., a Delaware corporation (the "Corporation"), CSI
INVESTMENT PARTNERS II, L.P., ("Partnership") and _________________
("Restricted Shareholder").
W I T N E S S E T H:
WHEREAS, the Restricted Shareholder is a Class B Limited Partner in
the Partnership. By virtue of Section 4.2.1 of the Second Amended and Restated
Agreement of the Partnership as of the same date of this Agreement, the
Restricted Shareholder withdraws from the Partnership and pursuant to Section
4.2.1, is entitled to receive common stock ("Stock") of the Corporation,
subject to the terms of this Agreement:
NOW, THEREFORE, it is agreed among the parties as follows:
1. (a) In consideration for the Restricted Shareholder's withdrawal
from the Partnership and the Restricted Shareholder's execution of the
promissory note attached hereto as Exhibit D, the Partnership shall distribute
_______________________________ ____________________ hundredths (_____.__)
shares of Stock to Restricted Shareholder in satisfaction of all rights, claims
or interest Restricted Shareholder shall have as a partner in the Partnership.
2. All shares of the Stock acquired by the Restricted Shareholder
pursuant to this Agreement (the "Option Stock")
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shall be subject to the same restrictions applicable under Section 3.5.3 of the
agreement of the Partnership, now provided in the following option (the
"Forfeiture Option"):
(a) In the event the Restricted Shareholder ceases to be
continuously employed by the Corporation, or a parent or subsidiary of the
Corporation, for any reason, with or without cause, the Corporation may
exercise the Forfeiture Option. For the purposes of this Agreement, Restricted
Shareholder's "continuous employment" shall cease when Restricted Shareholder
ceases to be actively employed by, or a consultant or adviser to, the
Corporation or a parent or subsidiary of the Corporation as determined by and
in the sole discretion of the Board of Directors of the Corporation. A leave
of absence, regardless of the reason therefor, shall be deemed to constitute
the cessation of Restricted Shareholder's active employment unless such leave
is authorized by the Corporation in writing upon approval of the Corporation's
Board of Directors, and Restricted Shareholder returns within the time
specified in such authorization; provided, however, that if the Restricted
Shareholder dies or becomes totally and permanently disabled during any such
leave of absence, the Restricted Shareholder's continuous employment will be
deemed to have terminated as of the date of Restricted Shareholder's death or
the date the Board of Directors determines Restricted Shareholder to be totally
and permanently disabled.
(b) Accordingly, the Corporation shall have the right at any time
within 60 days after the later of said termination or
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the date any approved leave terminates (if Restricted Shareholder fails to
return within the time specified) to receive from Restricted Shareholder the
number of shares equal to the number of shares of Option Stock less the product
(rounded to the nearest integer) of the number of shares of Option Stock times
the following percentage, as applicable:
If termination occurs: Then percentage is:
on or before April 30, 1998 0%, or if later,
but on or before April 30, 1999 33 1/3%, or if later,
but on or before April 30, 2000 66 2/3%, or
if on or after May 1, 2000 100%.
(c) Nothing in this Agreement shall affect in any manner
whatsoever the right or power of the Corporation, or a parent or subsidiary of
the Corporation, to terminate Restricted Shareholder's employment, for any
reason, with or without cause.
3. The Forfeiture Option shall be exercised by written notice
signed by an officer of the Corporation and delivered or mailed as provided in
Section 16 of this Agreement and to the Escrow Agent as provided in Section 16
of the Joint Escrow Instructions attached as Exhibit A to this Agreement.
4. If the Corporation waives or fails to exercise the Forfeiture
Option as to all of the shares subject thereto, the Corporation may, in the
discretion of its Board of Directors, assign the Forfeiture Option to any other
holder or holders of preferred or common stock of the Corporation in such
proportions as such Board of Directors may determine. In the event of such an
assignment, the assignee shall pay to the Corporation in cash
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an amount equal to the fair market value of the Forfeiture Option. The
Corporation shall promptly, upon expiration of the 60-day period referred to in
Section 2 above, notify Restricted Shareholder of the number of shares subject
to the Forfeiture Option assigned to such stockholders and shall notify both
the Restricted Shareholder and the assignees of the time, place and date for
settlement of such purchase, which must be made within 90 days from the date of
cessation of continuous employment. In the event that the Corporation and/or
such assignees do not elect to exercise the Forfeiture Option as to all or part
of the shares subject to it, the Forfeiture Option shall expire as to all
shares which the Corporation and/or such assignees have not elected to
purchase.
5. (a) As security for Restricted Shareholder's faithful performance
of the terms of this Agreement and to ensure the availability for delivery of
Restricted Shareholder's shares upon exercise of the Forfeiture Option herein
provided for, Restricted Shareholder agrees at the Closing hereunder, to
deliver to and deposit with the Escrow Agent named in the Joint Escrow
Instructions attached hereto as Exhibit A, the certificate or certificates
evidencing the Option Stock and two Assignments Separate from Certificate duly
executed (with date and number of shares in blank) in the form attached hereto
as Exhibit C. Such documents are to be held by the Escrow Agent and delivered
by the Escrow Agent pursuant to the Joint Escrow Instructions, which
instructions shall also be delivered to the Escrow Agent at the Closing
hereunder.
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(b) Within 30 days after the last day of each successive completed
calendar quarter after the Closing Date, if Restricted Shareholder so requests,
the Escrow Agent will deliver to Restricted Shareholder certificates
representing so many shares of Stock as are no longer subject to the Forfeiture
Option (less such shares as have been previously delivered). Sixty days after
cessation of Restricted Shareholder's continuous employment the Corporation
will direct the Escrow Agent to deliver to Restricted Shareholder a certificate
or certificates representing the number of shares of Option Stock not
repurchased by the Corporation or its assignees pursuant to exercise of the
Forfeiture Option (less such shares as have been previously delivered).
6. Subject to the provisions of the Certificate of Incorporation
of the Corporation, if, from time to time during the term of the Forfeiture
Option:
(a) there is any stock dividend or liquidating dividend of
cash and/or property, stock split or other change in the character or
amount of any of the outstanding securities of the Corporation, or
(b) there is any consolidation, merger or sale of all or
substantially all, of the assets of the Corporation,
then, in such event, any and all new, substituted or additional securities or
other property to which Restricted Shareholder is entitled by reason of
Restricted Shareholder's ownership of the Option Stock shall be immediately
subject to such Forfeiture
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Option and be included in the term "Option Stock" for all purposes of the
Forfeiture Option with the same force and effect as the shares of Option Stock
from time to time subject to the Forfeiture Option. While the total Option
Price shall remain the same after each such event, the Option Price per share
of Option Stock upon exercise of the Forfeiture Option shall be appropriately
and equitably adjusted as determined by the Board of Directors of the
Corporation.
7. Before any shares of Stock registered in the name of
Restricted Shareholder and not subject to the Forfeiture Option may be sold or
transferred, such shares shall first be offered to the Corporation as follows:
(a) Restricted Shareholder shall promptly deliver a notice
("Notice") to the Corporation stating (i) Restricted Shareholder's bona fide
intention to sell or transfer such shares, (ii) the number of such shares to be
sold or transferred, and the basic terms and conditions of such sale or
transfer, (iii) the price for which Restricted Shareholder proposes to sell or
transfer such shares, (iv) the name of the proposed purchaser or transferee,
and (v) proof satisfactory to the Corporation that the proposed sale or
transfer will not violate any applicable federal or state securities laws. The
Notice shall be signed by both Restricted Shareholder and the proposed
purchaser or transferee and must constitute a binding commitment subject to the
Corporation's rights of first offer as set forth herein.
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(b) Within 30 days after receipt of the Notice, the Corporation
may elect to purchase all or none of the shares to which the Notice refers, at
the price per share specified in the Notice. The Corporation may elect to
purchase some but not all of such shares if the Corporation assigns its right
to purchase the remaining shares so that all of the shares to which the Notice
refers are purchased within 30 days after receipt by the Corporation of the
Notice at the price per share specified in the Notice. An election to purchase
shall be made by written notice to Restricted Shareholder. Payment for all
shares elected to be purchased pursuant to this Section 7 shall be made within
30 days of the receipt by the Corporation of the Notice.
(c) If all of the shares to which the Notice refers are not
elected to be purchased, as provided in subparagraph 7(b) hereof, Restricted
Shareholder may sell the shares to any person named in the Notice at the price
specified in the Notice, provided that such sale or transfer is consummated
within three months of the date of said Notice to the Corporation, and
provided, further, that any such sale is made in compliance with applicable
federal and state securities laws and any other law, and with restrictions
imposed by the Corporation's underwriters, if any, and not in violation of any
other contractual restrictions to which Restricted Shareholder is bound. The
third-party purchaser shall acquire the shares of stock free and clear of the
Corporation's rights of first offer.
(d) Any proposed transfer on terms and conditions different from
those set forth in the Notice, as well as any
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subsequent proposed transfer shall again be subject to the Corporation's rights
of first offer and shall require compliance with the procedures described in
this Section 7.
(e) Restricted Shareholder agrees to cooperate affirmatively with
the Corporation, to the extent reasonably requested by the Corporation, to
enforce rights and obligations pursuant to this Agreement.
(f) Notwithstanding the above, neither the Corporation nor any
assignee of the Corporation under this Section 7 shall have any right under
this Section 7 at any time subsequent to the closing of a public offering of
the common stock of the Corporation pursuant to a registration statement
declared effective under the Securities Act of 1933, as amended (the
"Securities Act").
(g) This Section 7 shall not apply to a transfer by will or
intestate succession, provided that the transferee shall execute a copy of the
attached Exhibit B and file the same with the Secretary of the Corporation.
8. If the Corporation makes available, at the time and place and
in the amount and form provided in this Agreement, the consideration for the
Stock to be repurchased in accordance with the provisions of Sections 2 and 7
of this Agreement, then from and after such time the person from whom such
shares are to be repurchased shall no longer have any rights as a holder of
such shares (other than the right to receive payment of such consideration in
accordance with this Agreement). Such shares shall be deemed to have been
repurchased in accordance with the
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applicable provisions hereof, whether or not the certificate(s) therefor have
been delivered as required by this Agreement.
9. Restricted Shareholder shall have the right to transfer all or
any portion of Restricted Shareholder's interest in the shares issued under
this Agreement which have been delivered to Restricted Shareholder under the
provisions of Section 5 of this Agreement, to a trust established by Restricted
Shareholder for the benefit of Restricted Shareholder, Restricted Shareholder's
spouse or Restricted Shareholder's children, without being subject to the
provisions of Section 7 hereof, provided that the trustee on behalf of the
trust shall agree in writing to be bound by the terms and conditions of this
Agreement. The transferee shall execute a copy of the attached Exhibit B and
file the same with the Secretary of the Corporation.
10. All certificates representing the Stock purchased under this
Agreement shall, where applicable, have endorsed thereon the following legends:
(a) "The shares represented by this Certificate are subject to
certain restrictions on transfer and options to purchase such shares set forth
in an agreement between CREDENTIALS SERVICES INTERNATIONAL, INC. and the
registered holder, or such holder's predecessor in interest. Such agreement
imposes certain transfer restrictions and grants certain repurchase rights and
rights of first offer to the Corporation (or its assigns) upon the sale of the
shares or upon termination of service with the Corporation. A copy of such
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agreement is on file at the principal office of the Corporation and will be
furnished upon written request to the Secretary of the Corporation by the
holder of record of the shares represented by this Certificate."
(b) "The securities represented by this Certificate have not been
registered under the Securities Act of 1933. These securities have been
acquired for investment and not with a view to distribution or resale, and may
not be transferred without an effective registration statement for such shares
under the Securities Act of 1933, or pursuant to Rule 144 under such Act or an
opinion of counsel satisfactory to the Corporation that registration is not
required under such Act."
(c) Any legend required to be placed thereon by the California
Commissioner of Corporations and any state securities law.
11. (a) This Agreement is made with Restricted Shareholder in
reliance upon Restricted Shareholder's representation to the Corporation, which
by Restricted Shareholder's acceptance hereof Restricted Shareholder confirms,
that the Stock which Restricted Shareholder will receive will be acquired with
Restricted Shareholder's own funds for investment for an indefinite period for
Restricted Shareholder's own account, not as a nominee or agent, and not with a
view to the sale or distribution of any part thereof, and that Restricted
Shareholder has no present intention of selling, granting participation in, or
otherwise distributing the same, but subject, nevertheless, to any requirement
of law that the
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disposition of Restricted Shareholder's property shall at all times be within
Restricted Shareholder's control. By executing this Agreement, Restricted
Shareholder further represents that Restricted Shareholder does not have any
contract, understanding or agreement with any person to sell, transfer, or
grant participation, to such person or to any third person, with respect to any
of the Stock.
(b) Restricted Shareholder understands that the Stock will not be
registered under the Securities Act on the ground that the sale provided for in
this Agreement is exempt from registration under the Securities Act, and that
the Corporation's reliance on such exemption is predicated on Restricted
Shareholder's representations set forth herein.
(c) Restricted Shareholder agrees that in no event will Restricted
Shareholder make a disposition of any of the Stock (including a disposition
under Section 9 of this Agreement), unless and until (i) Restricted Shareholder
shall have notified the Corporation of the proposed disposition and shall have
furnished the Corporation with a statement of the circumstances surrounding the
proposed disposition and (ii) Restricted Shareholder shall have furnished the
Corporation with an opinion of counsel satisfactory to the Corporation to the
effect that (A) such disposition will not require registration of such Stock
under the Securities Act or (B) appropriate action necessary for compliance
with the Securities Act has been taken or (iii) the Corporation shall have
waived, expressly and in writing, its rights under clauses (i) and (ii) of this
section.
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(d) In connection with the investment representations made herein,
Restricted Shareholder represents that Restricted Shareholder is able to fend
for himself or herself in the transactions contemplated by this Agreement, has
such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of Restricted Shareholder's
investment, has the ability to bear the economic risks of Restricted
Shareholder's investment and has been furnished with and has had access to such
information as would be made available in the form of a registration statement
together with such additional information as is necessary to verify the
accuracy of the information supplied and to have all questions answered by the
Corporation.
(e) Restricted Shareholder understands that if the Corporation
does not register with the Securities and Exchange Commission pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") or if a registration statement covering the Stock (or a filing pursuant
to the exemption from registration under Regulation A of the Securities Act)
under the Securities Act is not in effect when Restricted Shareholder desires
to sell the Stock, Restricted Shareholder may be required to hold the Stock for
an indeterminate period. Restricted Shareholder also acknowledges that
Restricted Shareholder understands that any sale of the Stock which might be
made by Restricted Shareholder in reliance upon Rule 144 under the Securities
Act may be made only in limited amounts in accordance with the terms and
conditions of that Rule.
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12. The Corporation covenants and agrees that (a) at all times
after it first becomes subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, it will use its best efforts to comply with the
current public information requirements of Rule 144(c)(1) under the Securities
Act, and that if prior to becoming subject to such reporting requirements an
over-the-counter market develops for the Stock, it will make publicly available
the information required by Rule 144(c)(2); (b) it will furnish Restricted
Shareholder, upon request, with all information required for the preparation
and filing of Form 144; and (c) it will on a timely basis use its best efforts
to file all reports required to be filed and make all disclosures, including
disclosures of materially adverse information, required to permit Restricted
Shareholder to make the required representations in Form 144.
13. The Corporation shall not be required (a) to transfer on its
books any shares of Stock of the Corporation which shall have been sold or
transferred in violation of any of the provisions set forth in this Agreement
or (b) to treat as owner of such shares or to accord the right to vote as such
owner or to pay dividends to any transferee to whom such shares shall have been
so transferred.
14. Except as otherwise provided herein, Restricted Shareholder
shall, during the term of this Agreement, exercise all rights and privileges of
a stockholder of the Corporation with respect to the Stock.
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15. The parties agree to execute such further instruments and to
take such further action as may reasonably be necessary to carry out the intent
of this Agreement.
16. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon the earliest of personal
delivery, receipt or the third full day following deposit in the United States
Post Office with postage and fees prepaid, addressed to the other party hereto
at the address hereinafter shown below such party's signature or at such other
address as such party may designate by 10 days' advance written notice to the
other party hereto.
17. This Agreement shall inure to the benefit of the successors
and assigns of the Corporation and, subject to the restrictions on transfer
herein set forth, be binding upon Restricted Shareholder and Restricted
Shareholder's heirs, executors, administrators, successors and assigns. The
failure of the Corporation in any instance to exercise the Forfeiture Option or
rights of first offer described herein shall not constitute a waiver of any
other Forfeiture Option or right of first offer that may subsequently arise
under the provisions of this Agreement. No waiver of any breach or condition
of this Agreement shall be deemed to be a waiver of any other or subsequent
breach or condition, whether of a like or different nature.
18. This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of California, except with
respect to choice of law.
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19. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS
AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE
STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR
RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION
IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY
SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS
OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH
QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
20. No modification of this Agreement shall be valid unless made
in writing and signed by the parties hereto.
21. This Agreement constitutes the entire complete and final
agreement between the Corporation and Restricted Shareholder regarding the
Stock. Any and all prior agreements and negotiations are merged herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
CREDENTIALS SERVICES
INTERNATIONAL, INC. Restricted Shareholder
By
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Address: Address:
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EXHIBIT A
JOINT ESCROW INSTRUCTIONS
___________
Secretary
CREDENTIALS SERVICES INTERNATIONAL, INC.
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Dear Sir:
As Escrow Agent for both CREDENTIALS SERVICES INTERNATIONAL, INC., a
Delaware corporation (the "Corporation"), and __________________ ("Restricted
Shareholder"), you are hereby authorized and directed to hold the documents
delivered to you pursuant to the terms of that certain Common Stock Purchase
Agreement (the "Agreement") of even date herewith, to which a copy of these
Joint Escrow Instructions is attached as Exhibit A, in accordance with the
following instructions:
1. In the event the Corporation shall elect to exercise the
Forfeiture Option set forth in the Agreement, the Corporation shall give to
Restricted Shareholder and you a written notice as provided in the Agreement.
Restricted Shareholder and the Corporation hereby irrevocably authorize and
direct you to close the transaction contemplated by such notice, including
prompt delivery of stock certificates.
2. At the closing, you are directed (a) to date the stock
assignment form or forms necessary for the transfer in question, (b) to fill in
the number of shares being transferred, and (c) to deliver same, together with
the certificate or certificates evidencing the shares to be transferred, to the
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Corporation against the simultaneous delivery to you of the purchase price (by
certified or bank cashier's check) for the number of shares being purchased
pursuant to the exercise of the Forfeiture Option.
3. Restricted Shareholder irrevocably authorizes the Corporation
to deposit with you any certificates evidencing shares to be held by you
hereunder and any additions and substitutions to said shares as defined in the
Agreement. Restricted Shareholder does hereby irrevocably constitute and
appoint you as Restricted Shareholder's attorney-in-fact and agent for the term
of this escrow to execute with respect to such securities all documents
necessary or appropriate to make such securities negotiable and to complete any
transaction herein contemplated. Subject to the provisions of this Section 3,
Restricted Shareholder shall exercise all rights and privileges, including but
not limited to, the right to vote and to receive dividends (if any), of a
stockholder of the Corporation while the shares are held by you.
4. In accordance with the terms of Section 5 of the Agreement,
you may from time to time deliver to Restricted Shareholder a certificate or
certificates representing so many shares as are no longer subject to the
Forfeiture Option.
5. This escrow shall terminate upon the release of all shares
held under the terms and provisions hereof.
6. If at the time of termination of this escrow you should have
in your possession any documents, securities or other property belonging to
Restricted Shareholder, you shall
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deliver all of same to Restricted Shareholder and shall be discharged from all
further obligations hereunder.
7. Your duties hereunder may be altered, amended, modified or
revoked only by a writing signed by all of the parties hereto.
8. You shall be obligated only for the performance of such duties
as are specifically set forth herein and may rely and shall be protected in
relying or refraining from acting on any instrument reasonably believed by you
to be genuine and to have been signed or presented by the proper party or
parties. You shall not be personally liable for any act you may do or omit to
do hereunder as Escrow Agent or as attorney-in-fact of Restricted Shareholder
while acting in good faith and in the exercise of your own good judgment, and
any act done or omitted by you pursuant to the advice of your own attorneys
shall be conclusive evidence of such good faith.
9. You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law, and are hereby
expressly authorized to comply with and obey orders, judgments or decrees of
any court. In case you obey or comply with any such order, judgment or decree
of any court, you shall not be liable to any of the parties hereto or to any
other person, firm or corporation by reason of such compliance, notwithstanding
any such order, judgment or decree being subsequently reversed, modified,
annulled, set
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aside, vacated or found to have been entered without jurisdiction.
10. You shall not be liable in any respect on account of the
identity, authority or rights of the parties executing or delivering or
purporting to execute or deliver the Agreement or any documents or papers
deposited or called for hereunder.
11. You shall not be liable for the outlawing of any rights under
any statute of limitations with respect to these Joint Escrow Instructions or
any documents deposited with you.
12. You shall be entitled to employ such legal counsel and other
experts as you may deem necessary properly to advise you in connection with
your obligations hereunder and may rely upon the advice of such counsel.
13. Your responsibilities as Escrow Agent hereunder shall
terminate if you shall cease to be Secretary of the Corporation or if you shall
resign by written notice of each party. In the event of any such termination,
the Corporation shall appoint any officer of the Corporation as successor
Escrow Agent.
14. If you reasonably require other or further instruments in
connection with these Joint Escrow Instructions or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.
15. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain in
your possession without liability to anyone all or any part of said securities
until
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such dispute shall have been settled either by mutual written agreement of the
parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or
defend any such proceedings.
16. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid, addressed to each of the other parties thereunto
entitled at the following addresses, or at such other addresses as a party may
designate by 10 days' advance written notice to each of the other parties
hereto.
Corporation: CREDENTIALS SERVICES
INTERNATIONAL, INC.
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Restricted Shareholder: Notices to Restricted Shareholder
shall be sent to the address set
forth below Restricted Shareholder's
signature on the Agreement.
Escrow Agent: Secretary
CREDENTIALS SERVICES
INTERNATIONAL, INC.
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17. By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not
become a party to the Agreement.
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18. This instrument shall be governed by and construed in
accordance with the laws of the State of California, except with respect to
choice of law.
19. This instrument shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
Very truly yours,
CREDENTIALS SERVICES
INTERNATIONAL, INC.
By
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ESCROW AGENT: Restricted Shareholder:
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Secretary
Address:
CREDENTIALS SERVICES
INTERNATIONAL, INC.
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EXHIBIT B
ACKNOWLEDGMENT OF AND AGREEMENT TO BE BOUND
BY THE COMMON STOCK PURCHASE AGREEMENT OF
CREDENTIALS SERVICES INTERNATIONAL, INC.
A DELAWARE CORPORATION
The undersigned, as transferee of shares of CREDENTIALS SERVICES
INTERNATIONAL, INC., hereby acknowledges that he or she has read and reviewed
the terms of the Common Stock Purchase Agreement of CREDENTIALS SERVICES
INTERNATIONAL, INC. and hereby agrees to be bound by the terms and conditions
thereof, as if the undersigned had executed said Agreement as an original party
thereto.
Dated: ____________________, 199_.
By _____________________________
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EXHIBIT C
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED _________________________________ hereby sells, assigns
and transfers unto _________________________ ________________________
(________) shares of the Common Stock of CREDENTIALS SERVICES INTERNATIONAL,
INC., a Delaware corporation (the "Corporation"), standing in __________ name
on the books of the Corporation represented by Certificate No. ___________
herewith and hereby irrevocably constitutes and appoints ________________
Attorney to transfer said stock on the books of the Corporation with full power
of substitution in the premises.
Dated: ____________________, 199_.
____________________________________
__________________________
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EXHIBIT D
PROMISSORY NOTE
$_______.__ Orange, California
Dated November __, 1997
FOR VALUE RECEIVED, ____________________, an Individual ("Maker"),
promises to pay CSI Investment Partners II, L.P., a Delaware limited
partnership ("Holder"), at Orange, California the principal sum of
__________________________________________ DOLLARS U.S. ($_______.__) plus
interest thereon on the terms set forth below. This note is being given in
connection with the Restricted Stock Agreement among the Maker, Holder and
Credentials Services International, Inc.
Maturity Date. The unpaid balance of this Note and all accrued but
unpaid interest shall be due and payable on May 1, 2000.
Interest. The unpaid balance outstanding under this Note shall bear
monthly compounded interest at the rate of six and sixty-four one- hundredths
percent (6.64%) per annum.
Payment. Payment of principal and interest by Maker under this Note
shall be due and payable as follows:
(i) All payments shall be made in United States dollars;
(ii) On each December 31, while any unpaid balance remains
outstanding on this Note, all accrued but unpaid interest shall be due
and payable; and
(iii) On May 1, 2000 all unpaid principal and all accrued but unpaid
interest shall be due and payable.
Prepayment. Maker reserves the right to prepay the unpaid principal
balance and any accrued interest, or any portion thereof, at any time without
penalty. Each such prepayment shall be credited first to interest then accrued
and the remainder to principal, and the charge of interest shall thereupon
cease upon the principal so credited.
Default. This Note shall be in default upon any of the following:
(a) Failure of Maker to pay any principal, interest or other
amount due under this Note when due should such default not be
cured within thirty (30) days after written notice thereof is
delivered to Maker at its last known address;
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(b) Failure of Maker to perform or observe any other term,
covenant or agreement to be performed or observed by it
pursuant to this Note should such failure not be cured within
thirty (30) days after written notice thereof is delivered to
Maker at its last known address;
(c) (i) A court having jurisdiction in the premises shall
enter a decree or order for relief in respect of Maker in an
involuntary case under Title 7 or 13 of the United States Code
entitled "Bankruptcy" (as now or hereafter in effect, or any
successor thereto, the "Bankruptcy Code") or any applicable
bankruptcy, insolvency or other similar law now or hereafter
in effect, which decree or order is not stayed; or any other
similar relief shall be granted under any applicable federal
or state law; or (ii) an involuntary case shall be commenced
against Maker under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect; or a decree or
order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over Maker or
over all or a substantial part of Maker's property shall have
been entered; or the involuntary appointment of an interim
receiver, trustee or other custodian of Maker for all or a
substantial part of Maker's property shall have occurred; or a
warrant of attachment, execution or similar process shall have
been issued against any substantial part of the property of
Maker, and, in the case of any event described in this clause
(ii), such event shall have continued for 60 days unless
dismissed, bonded or discharged; or
(d) An order for relief shall be entered with respect to
Maker, or Maker shall commence a voluntary case under the
Bankruptcy Code or any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or shall consent
to the entry of an order for relief in an involuntary case, or
to the conversion of an involuntary case to a voluntary case,
under any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian
for all or a substantial part of Maker's property; or Maker
shall make an assignment for the benefit of creditors; or
Maker shall be unable or fail, or shall admit in writing
Maker's inability, to pay Maker's debts as such debts become
due; or the Board of Directors of Maker (or any committee
thereof) shall adopt any resolution or otherwise authorize
action to approve any of the foregoing.
At such time as this Note becomes in default, the then unpaid
principal and interest shall, at the election of Holder, be immediately due and
payable, all without demand, presentment or
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notice, each of which is hereby waived by Maker, and Holder shall have all
other rights accorded under this Note. All sums remaining unpaid on an
accelerated maturity date shall bear interest at the rate specified above.
Non-Assignability. Neither Maker nor Holder may assign any of its
obligations without the prior written consent of the other (which consent may
be withheld in such other party's sole discretion).
No Waiver. No failure or delay on the part of Holder to exercise any
right, power or privilege under this Note and no course of dealing between
Maker and Holder shall impair such right, power or privilege or operate as a
waiver of any default or an acquiescence therein, nor shall any single or
partial exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.
Attorneys' Fees. Maker agrees to indemnify Holder against any losses,
claims, damages and liabilities and related expenses, including reasonable
counsel fees and expenses, incurred by Holder arising out of or in connection
with the transactions contemplated by this Note. In particular, Maker promises
to pay all costs and expenses, including reasonable attorneys' fees, incurred
in connection with the collection and enforcement of this Note.
Limit on Interest Rate. This Note is hereby limited so that in no
event shall the amount of interest paid or agreed to be paid by Maker exceed
the maximum amount permissible under applicable law. If, for any reason, any
interest in excess of the maximum amount permitted by law is paid, such amount
shall be applied to the reduction of the principal amount owing under this
Note.
Governing Law. This Note shall be governed by, and construed in
accordance with, the laws of the State of California.
Severability. In the event that any provision of this Note shall be
declared to be void or unenforceable by any arbitrator or court of competent
jurisdiction, the remainder of this Note shall continue to be in full force and
effect.
MAKER:
___________________________________
___________________________________
DO NOT DESTROY THIS ORIGINAL NOTE: WHEN PAID, SAID ORIGINAL NOTE SHOULD BE
SURRENDERED TO MAKER FOR CANCELLATION AND RETENTION.
