EXHIBIT 4.3
GENESYS TELECOMMUNICATIONS LABORATORIES
0000 Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
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SERIES A PREFERRED STOCK PURCHASE AGREEMENT
March 29, 1996
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TABLE OF CONTENTS
Page
SECTION 1 - Authorization and Sale of Preferred Stock....................... 1
1.1 Authorization.................................................. 1
1.2 Sale of Preferred.............................................. 1
SECTION 2 - Closing Dates; Delivery......................................... 1
2.1 Closing Date................................................... 1
2.2 Delivery....................................................... 1
SECTION 3 - Representations and Warranties of the Company................... 2
3.1 Organization and Standing; Articles and Bylaws................. 2
3.2 Corporate Power................................................ 2
3.3 Subsidiaries................................................... 2
3.4 Capitalization................................................. 2
3.5 Authorization.................................................. 3
3.6 Material Contracts and Other Commitments....................... 3
3.7 Title to Properties and Assets; Liens, etc..................... 4
3.8 Compliance with Other Instruments, None Burdensome, etc........ 4
3.9 Litigation, etc................................................ 4
3.10 Employees...................................................... 4
3.11 Franchises, Licenses, Trademarks, Patent and Other Rights...... 4
3.12 Governmental Consent, etc...................................... 5
3.13 Offering....................................................... 5
3.14 Brokers or Finders; Other Offers............................... 5
SECTION 4 - Representations and Warranties of the Purchasers................ 5
4.1 Experience..................................................... 6
4.2 Investment..................................................... 6
4.3 Rule 144....................................................... 6
4.4 No Public Market............................................... 6
4.5 Access to Data................................................. 6
4.6 Authorization.................................................. 6
4.7 Brokers or Finders............................................. 7
4.8 Investor Counsel............................................... 7
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TABLE OF CONTENTS
(continued)
4.9 Tax Liability.................................................. 7
4.10 Additional Representations of Foreign Investors................ 7
SECTION 5 - Conditions to Closing of Purchasers............................. 8
5.1 Representations and Warranties Correct......................... 8
5.2 Covenants...................................................... 9
5.3 Opinion of Company's Counsel................................... 9
5.4 Compliance Certificate......................................... 9
5.5 Blue Sky....................................................... 9
5.6 Restated Articles of Incorporation............................. 9
5.7 Legal Matters.................................................. 9
5.8 Registration Rights Agreement.................................. 9
SECTION 6 - Conditions to Closing of Company................................ 9
6.1 Representations................................................ 9
6.2 Blue Sky....................................................... 9
6.3 Restated Articles of Incorporation............................. 10
6.4 Legal Matters.................................................. 10
6.5 Payment of Purchase Price...................................... 10
6.6 Registration Rights Agreement.................................. 10
SECTION 7 - Covenants of the Company and the Purchasers..................... 10
7.1 Financial Information.......................................... 10
7.2 Additional Information......................................... 10
7.3 Confidentiality................................................ 11
7.4 Availability of Common Stock for Conversion.................... 11
7.5 Confidential Information and Invention Assignment Agreement.... 11
7.6 Termination of Covenants....................................... 11
SECTION 8 - Miscellaneous................................................... 11
8.1 Governing Law.................................................. 11
8.2 Survival....................................................... 12
8.3 Successors and Assigns......................................... 12
8.4 Entire Agreement; Amendment.................................... 12
8.5 Notices, etc................................................... 12
8.6 Delays or Omissions............................................ 12
8.7 California Corporate Securities Law............................ 13
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TABLE OF CONTENTS
(continued)
8.8 Expenses....................................................... 13
8.9 Counterparts................................................... 13
8.10 Severability................................................... 13
8.11 Titles and Subtitles........................................... 13
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TABLE OF CONTENTS
(continued)
EXHIBITS
A. Schedule of Purchasers
B. Amended and Restated Articles of Incorporation
C. Schedule of Exceptions
D. Registration Rights Agreement
E. Form of Legal Opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
F. Form of Compliance Certificate
G. Form of Confidential Information and Inventions Assignment Agreement
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GENESYS TELECOMMUNICATIONS LABORATORIES
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
This Agreement is made as of March 29, 1996 among Genesys
Telecommunications Laboratories, a California corporation (the "COMPANY"), and
the persons and entities listed on the Schedule of Purchasers attached hereto as
Exhibit A (the "PURCHASERS").
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SECTION 1
AUTHORIZATION AND SALE OF PREFERRED STOCK
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1.1 AUTHORIZATION. The Company has authorized the sale and issuance of up
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to 150,000 shares (the "SHARES") of its Series A Preferred Stock ("PREFERRED"),
having the rights, privileges and preferences as set forth in the Company's
Amended and Restated Articles of Incorporation (the "ARTICLES") in the form
attached to this Agreement as Exhibit B.
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1.2 SALE OF PREFERRED. Subject to the terms and conditions hereof, the
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Company hereby severally issues and sells to each Purchaser and each Purchaser
hereby severally buys from the Company the total number of Shares specified
opposite such Purchaser's name on the Schedule of Purchasers, at a purchase
price of Thirteen Dollars and Thirty Cents ($13.30) per Share. The Company's
agreement with each Purchaser is a separate agreement, and the sales of the
Preferred to each Purchaser is a separate sale.
SECTION 2
CLOSING DATES; DELIVERY
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2.1 CLOSING DATE. The first closing of the purchase and sale of the
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Preferred hereunder shall be held at the offices of Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, P.C., 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000 at 2:00 p.m.,
local time, on March 29, 1996 (the "CLOSING") or at such other time and place as
shall be mutually agreed upon by the Company and Purchasers who propose to
purchase a majority of the Shares proposed to be sold at the Closing (the date
of the Closing is hereinafter referred to as the "CLOSING DATE"). One or more
additional closings may occur within thirty (30) days following the Closing
Date, so long as the sale of Shares at such closings is pursuant to the terms of
this Agreement and at the price per share set forth in Section 1.2.
2.2 DELIVERY. At the Closing, the Company will deliver to each Purchaser
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a certificate or certificates, registered in such Purchaser's name, representing
the number of Shares listed opposite such Purchaser's name on the Schedule of
Purchasers, against
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(a) delivery to the Company of payment of the purchase price therefor, by check
payable to the Company or wire transfer per the Company's instructions or (b)
cancellation of indebtedness owed to Purchaser in the amount indicated on the
Schedule of Purchasers.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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Except as set forth on the Schedule of Exceptions attached hereto as
Exhibit C, the Company represents and warrants to the Purchasers, as of the
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Closing Date as follows:
3.1 ORGANIZATION AND STANDING; ARTICLES AND BYLAWS. The Company is a
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corporation duly organized and existing under, and by virtue of, the laws of the
State of California and is in good standing under such laws. The Company has
requisite corporate power and authority to own and operate its properties and
assets, and to carry on its business as presently conducted and as proposed to
be conducted. The Company is presently qualified to do business as a foreign
corporation in any jurisdiction, in which the failure to be so qualified would
have a material adverse affect on the Company's operations or conditions,
financial or otherwise. The Company has furnished the Purchasers with true,
correct and complete copies of its Articles and Bylaws (the "BYLAWS"), as
presently in effect.
3.2 CORPORATE POWER. The Company has or will have at the Closing Date all
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requisite legal and corporate power and authority to execute and deliver this
Agreement, to sell and issue the Shares hereunder, to issue the common stock
issuable upon conversion of the Preferred and to carry out and perform its
obligations under the terms of this Agreement.
3.3 SUBSIDIARIES. The Company has no subsidiaries or affiliated companies
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and does not otherwise own or control, directly or indirectly, any equity
interest in any corporation, association or business entity.
3.4 CAPITALIZATION. The authorized capital stock of the Company consists
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or, upon the filing of the Articles with the California Secretary of State will
consist of 20,000,000 shares of Common Stock (the "COMMON STOCK"), of which
1,689,500 shares are issued and outstanding as of the Closing Date and 150,000
shares of Preferred Stock, all of which have been designated "SERIES A
PREFERRED" and none of which is issued and outstanding prior to the Closing.
The outstanding shares have been duly authorized and validly issued, and are
fully paid and nonassessable. The Company has reserved 150,000 shares of
Preferred for issuance hereunder, 150,000 shares of Common Stock for issuance
upon conversion of the Preferred and 479,250 shares of Common Stock for issuance
by the Board of Directors to employees, consultants, or directors pursuant to
the Company's 1995 Stock Option Plan, of which stock options to purchase 316,500
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shares are outstanding as of the Closing Date. Except as set forth above, there
are no options, warrants or other rights to purchase any of the Company's
authorized and unissued capital stock.
3.5 AUTHORIZATION. All corporate action on the part of the Company, its
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directors and shareholders necessary for the authorization, execution, delivery
and performance of this Agreement by the Company, the authorization, sale,
issuance and delivery of the Preferred (and the Common Stock issuable upon
conversion of the Preferred) and the performance of all of the Company's
obligations hereunder has been taken or will be taken prior to the Closing.
This Agreement, when executed and delivered by the Company, shall constitute a
valid and binding obligation of the Company, enforceable in accordance with its
terms, except as subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies and limitations of
public policy as applied to Section 10 of the Registration Rights Agreement,
attached hereto as Exhibit D (the "REGISTRATION RIGHTS AGREEMENT"). The Shares,
when issued in compliance with the provisions of this Agreement and upon the
filing of the Articles with the office of the California Secretary of State,
will be validly issued, will be fully paid and nonassessable, and will have the
rights, preferences and privileges described in the Articles; the Common Stock
issuable upon conversion of the Shares has been duly and validly reserved and,
when issued in compliance with the provisions of this Agreement and the
Articles, will be validly issued, and will be fully paid and nonassessable; and
the Shares and such Common Stock will be free of any liens or encumbrances,
assuming the Purchasers take the Shares with no notice thereof, other than any
liens or encumbrances created by or imposed upon the Purchasers; provided,
however, that the Shares (and the Common Stock issuable upon conversion thereof)
may be subject to restrictions on transfer under state and/or federal securities
laws as set forth herein. The Shares are not subject to any preemptive rights
or rights of first refusal.
3.6 MATERIAL CONTRACTS AND OTHER COMMITMENTS. The Company does not have
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any contract, agreement, lease, or other commitment, written or oral, absolute
or contingent, other than (i) contracts for the purchase of supplies and
services that were entered into in the ordinary course of business and that do
not, as of the date hereof, involve more than $25,000 each; (ii) sales contracts
entered into in the ordinary course of business; (iii) license agreements
entered into in the ordinary course of business; and (iv) contracts terminable
at will by the Company on no more than sixty (60) days' notice without cost or
liability to the Company. For purposes of this Section 3.6, employment
contracts and contracts with labor unions and agreements pursuant to which the
Company licenses any of its Proprietary Information (as defined herein) to third
parties shall not be considered to be contracts entered into in the usual and
ordinary course of business.
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3.7 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC. The Company has good and
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marketable title to its properties and assets, and has good title to all its
leasehold interests, in each case subject to no mortgage, pledge, lien or
encumbrance, other than (i) the lien of current taxes not yet due and payable,
and (ii) possible minor liens and encumbrances which do not in any case
materially detract from the value of the property subject thereto or materially
impair the operations of the Company, and which have not arisen otherwise than
in the ordinary course of business.
3.8 COMPLIANCE WITH OTHER INSTRUMENTS, NONE BURDENSOME, ETC. The Company
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is not in violation of any term of its Articles or Bylaws, or in any material
respect of any term or provision of any material mortgage, indebtedness,
indenture, contract, agreement, instrument, judgment or decree, and to the best
of its knowledge is not in violation of any order, statute, rule or regulation
applicable to the Company where such violation would materially and adversely
affect the Company. The execution, delivery and performance of and compliance
with this Agreement, and the issuance of the Preferred and the Common Stock
issuable upon conversion of the Preferred, have not resulted and will not result
in any material violation of, or conflict with, or constitute a material default
under, the Company's Articles or Bylaws or any of its material agreements or
result in the creation of, any mortgage, pledge, lien, encumbrance or charge
upon any of the properties or assets of the Company, and there is no such
violation or default which materially and adversely affects the business of the
Company or any of its properties or assets.
3.9 LITIGATION, ETC. There are no actions, suits, proceedings or
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investigations pending against the Company or its properties before any court or
governmental agency (nor, to the best of the Company's knowledge, is there any
reasonable basis therefor or threat thereof).
3.10 EMPLOYEES. To the best of the Company's knowledge, no employee of the
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Company is in violation of any term of any employment contract, patent
disclosure agreement or any other contract or agreement relating to the
relationship of such employee with the Company or any other party because of the
nature of the business conducted or to be conducted by the Company. There is,
to the Company's knowledge and belief, no pending nor threatened actions suits,
proceedings or claims, or to its knowledge any basis therefor or threat thereof
with respect to any contract, agreement, covenant or obligation referred to in
the preceding sentence.
3.11 FRANCHISES, LICENSES, TRADEMARKS, PATENT AND OTHER RIGHTS. The
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Company has all franchises, permits, licenses and other similar authority
necessary for the conduct of its business, the lack of which could materially
and adversely affect the operations or condition, financial or otherwise, of the
Company, and it is not in default in any material respect under any of such
franchises, permits, liens or other similar authority. To the best of the
Company's knowledge, the Company possesses all patents, patent rights,
trademarks, trademark rights, trade names, trade name rights and
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copyrights necessary to conduct its business without conflict with or
infringement upon any valid rights of others and the lack of which could
materially and adversely affect the operations or condition, financial or
otherwise, of the Company, and the Company has not received any notice of
infringement upon or conflict with the asserted rights of others. The Company
has a valuable body of trade secrets, including know-how, concepts, computer
programs and other technical data (the "PROPRIETARY INFORMATION") for the
development, manufacture and sale of its products. To the Company's knowledge,
the Company has the right to use the Proprietary Information, free and clear of
any rights, liens, encumbrances or claims of others, except that the possibility
exists that other persons may have independently developed trade secrets or
technical information similar or identical to those of the Company. Reasonable
security measures have been taken by the Company to protect the secrecy,
confidentiality and value of the Proprietary Information referred to in this
Section 3.11.
3.12 GOVERNMENTAL CONSENT, ETC. No consent, approval or authorization of
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or designation, declaration or filing with any governmental authority on the
part of the Company is required in connection with the valid execution and
delivery of this Agreement, or the offer, sale or issuance of the Preferred (and
the Common Stock issuable upon conversion of the Preferred), or the consummation
of any other transaction contemplated hereby, except (a) filing of the Articles
with the office of the California Secretary of State (b) qualification (or
taking such action as may be necessary to secure an exemption from
qualification, if available) of the offer and sale of the Preferred (and the
Common Stock issuable upon conversion of the Preferred) under the California
Corporate Securities Law of 1968, as amended and other applicable Blue Sky laws,
which filings and qualifications, if required, will be accomplished in a timely
manner.
3.13 OFFERING. Subject to the accuracy of the Purchasers' representations
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in Section 4 hereof, the offer, sale and issuance of the Preferred to be issued
in conformity with the terms of this Agreement, and the issuance of the Common
Stock to be issued upon conversion of the Preferred, constitute transactions
exempt from the registration requirements of the Securities Act.
3.14 BROKERS OR FINDERS; OTHER OFFERS. The Company has not incurred, and
--------------------------------
will not incur, directly or indirectly, as a result of any action taken by the
Company, any liability for brokerage or finders' fees or agents' commissions or
any similar charges in connection with this Agreement.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
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Each Purchaser hereby severally represents and warrants to the Company with
respect to the purchase of the Shares as follows:
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4.1 EXPERIENCE. By reason of his business or financial experience, or
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that of his professional advisor, Purchaser has the capacity to protect his own
interests in connection with the purchase of the Shares hereunder and has the
ability to bear the economic risk (including the risk of total loss) of his
investment.
4.2 INVESTMENT. Purchaser is acquiring the Preferred and the underlying
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Common Stock for investment for his own account, not as a nominee or agent, and
not with the view to, or for resale in connection with, any distribution
thereof. Purchaser understands that the Preferred to be purchased (and the
Common Stock issuable upon conversion thereof) have not been, and will not be,
registered under the Securities Act by reason of a specific exemption from the
registration provisions of the Securities Act, the availability of which depends
upon, among other things, the bona fide nature of the investment intent and the
accuracy of such Purchaser's representations as expressed herein.
4.3 RULE 144. Purchaser acknowledges that the Preferred (and the Common
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Stock issuable upon conversion thereof) must be held indefinitely unless
subsequently registered under the Securities Act or unless an exemption from
such registration is available. Purchaser is aware of the provisions of Rule
144 promulgated under the Securities Act which permit limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things, the existence of a public market for
the shares, the availability of certain current public information about the
Company, the resale occurring not less than two years after a party has
purchased and paid for the security to be sold, the sale being effected through
a "broker's transaction" or in transactions directly with a "market maker" and
the number of shares being sold during any three-month period not exceeding
specified limitations.
4.4 NO PUBLIC MARKET. Purchaser understands that no public market now
----------------
exists for any of the securities issued by the Company and that the Company has
made no assurances that a public market will ever exist for the Company's
securities.
4.5 ACCESS TO DATA. Purchaser has had an opportunity to discuss the
--------------
Company's business, management and financial affairs with its management and the
opportunity to review the Company's facilities. Purchaser has also had an
opportunity to ask questions of officers of the Company, which questions were
answered to his satisfaction. Purchaser understands that such discussions, as
well as any written information issued by the Company, were intended to describe
certain aspects of the Company's business and prospects but were not a thorough
or exhaustive description.
4.6 AUTHORIZATION. This Agreement when executed and delivered by such
-------------
Purchaser will constitute a valid and legally binding obligation of the
Purchaser, enforceable in accordance with its terms, except as subject to laws
of general application relating to bankruptcy, insolvency and the relief of
debtors and rules of law governing
6
specific performance, injunctive relief or other equitable remedies and
limitations of public policy as applied in Section 10 of the Registration Rights
Agreement.
4.7 BROKERS OR FINDERS. The Company has not, and will not, incur,
------------------
directly or indirectly, as a result of any action taken by such Purchaser, any
liability for brokerage or finders' fees or agents' commissions or any similar
charges in connection with this Agreement.
4.8 INVESTOR COUNSEL. Bach Purchaser acknowledges that it has had the
----------------
opportunity to review this Agreement, the exhibits and the schedules attached
hereto and the transactions contemplated by this Agreement with its own legal
counsel. Each Purchaser is relying solely on such counsel and not on any
statements or representations of the Company or any of its agents for legal
advice with respect to this investment or the transactions contemplated by this
Agreement.
4.9 TAX LIABILITY. Purchaser has reviewed with its own tax advisors the
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federal, state, local and foreign tax consequences of this investment and the
transactions contemplated by this Agreement. Purchaser relies solely on such
advisors and not on any statements or representations of the Company or any of
its agents. Purchaser understands that he (and not the Company) shall be
responsible for his own tax liability that may arise as a result of this
investment or the transactions contemplated by this Agreement.
4.10 ADDITIONAL REPRESENTATIONS OF FOREIGN INVESTORS. If the Purchaser
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does not reside in and is not a citizen of the United States, for the purpose of
this Section 4 the Purchaser shall be deemed a "FOREIGN INVESTOR." Such Foreign
Investor hereby represents, warrants and covenants to the Company, in addition
to the other representations, warranties and covenants set forth in this Section
4, the following:
(a) Neither the Foreign Investor nor any person for the account of
whom such Foreign Investor is acting, including the estate of any such person, a
trust of which any such person is a beneficiary, or a corporation, partnership,
trust or other entity organized under the laws of the United States of America,
its territories and possessions and all areas under the jurisdiction of the
United States of America, is a citizen or resident of the United States of
America (a "U.S. PERSON").
(b) Such Foreign Investor will not sell, transfer or otherwise dispose
of the Shares for a period of at least ninety (90) days after the closing, and
such Foreign Investor will not thereafter sell or otherwise transfer the Shares
to a U.S. Person unless the Company has received an unqualified written opinion
of legal counsel, who shall be and whose legal opinion shall be reasonably
satisfactory to the Company, addressed to the Company, to the effect that such
transfer may be effected without any violation of the Securities Act or any
applicable state securities laws.
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(c) The Foreign Investor understands and acknowledges that the Company
will not allow any transfer or other disposition of the Shares unless the
proposed transferee shall have executed an instrument containing the
representations set forth in the foregoing paragraphs (a) and (b) of this
Section 4. 10 or the Company shall have received an unqualified written legal
opinion of counsel, who shall be and whose legal opinion shall be reasonably
satisfactory to the Company to the effect that such proposed transfer may be
effected without any violation of the Securities Act or any applicable state
securities law.
(d) The share certificate(s) of a Foreign Investor evidencing the
Shares shall bear the following legend in addition to any other legend required
under this Agreement:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED ("ACT"), OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES ("STATE ACT") AND MAY NOT
BE TRANSFERRED OR OTHERWISE DISPOSED OF FOR A PERIOD OF NINETY (90) DAYS
AFTER THE DATE ON THE FACE HEREOF, AND THEREAFTER MAY NOT BE TRANSFERRED TO
A CITIZEN OR RESIDENT OF THE UNITED STATES OF AMERICA, INCLUDING THE ESTATE
OF ANY SUCH PERSON, A TRUST OF WHICH ANY SUCH PERSON IS A BENEFICIARY, OR A
CORPORATION, PARTNERSHIP, TRUST OR OTHER ENTITY ORGANIZED UNDER THE LAWS OF
THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS AND ALL AREAS
UNDER THE JURISDICTION OF THE UNITED STATES OF AMERICA, UNLESS THE ISSUER
HAS RECEIVED AN OPINION OF COUNSEL, SATISFACTORY TO THE ISSUER, THAT SUCH
TRANSFER WILL NOT BE IN VIOLATION OF THE ACT OR ANY APPLICABLE STATE ACT.
SECTION 5
CONDITIONS TO CLOSING OF PURCHASERS
-----------------------------------
The Purchasers' obligations to purchase the Shares at the Closing are, at
the option of the Purchasers, subject to the fulfillment of the following
conditions:
5.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
--------------------------------------
warranties made by the Company in Section 3 hereof shall be true and correct in
all material respects as of the Closing Date.
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5.2 COVENANTS. All covenants, agreements and conditions contained in this
---------
Agreement to be performed by the Company on or prior to the Closing Date shall
have been performed or complied with in all material respects.
5.3 OPINION OF COMPANY'S COUNSEL. The Purchasers shall have received from
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Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C., counsel to the Company, an opinion
addressed to them, dated the Closing Date, in substantially the form attached
hereto as Exhibit E.
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5.4 COMPLIANCE CERTIFICATE. The Company shall have delivered to the
----------------------
Purchasers a certificate of the Company in the form of Exhibit F hereto,
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executed by the President of the Company, dated the Closing Date, and
certifying, among other things, to the fulfillment of the conditions specified
in Sections 5.1 and 5.2 of this Agreement.
5.5 BLUE SKY. The Company shall have obtained all necessary Blue Sky law
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permits and qualifications, or have the availability of exemptions therefrom,
required by any state for the offer and sale of the Preferred and the Common
Stock issuable upon conversion of the Preferred.
5.6 RESTATED ARTICLES OF INCORPORATION. The Articles shall have been
----------------------------------
filed with the California Secretary of State.
5.7 LEGAL MATTERS. All material matters of a legal nature which pertain
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to this Agreement and the transactions contemplated hereby, shall have been
reasonably approved by counsel to the Purchasers.
5.8 REGISTRATION RIGHTS AGREEMENT. The Company and the Purchasers shall
-----------------------------
have entered into the Registration Rights Agreement.
SECTION 6
CONDITIONS TO CLOSING OF COMPANY
--------------------------------
The Company's obligation to sell and issue the Shares at the Closing Date
is, at the option of the Company, subject to the fulfillment as of the Closing
Date of the following conditions:
6.1 REPRESENTATIONS. The representations made by the Purchasers in
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Section 4 hereof shall be true and correct when made, and shall be true and
correct on the Closing Date.
6.2 BLUE SKY. The Company shall have obtained all necessary Blue Sky law
--------
permits and qualifications, or have the availability of exemptions therefrom,
required by any state for the offer and sale of the Preferred and the Common
Stock issuable upon conversion of the Preferred.
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6.3 RESTATED ARTICLES OF INCORPORATION. The Articles shall have been
----------------------------------
filed with the California Secretary of State.
6.4 LEGAL MATTERS. All material matters of a legal nature which pertain
-------------
to this Agreement, and the transactions contemplated hereby, shall have been
reasonably approved by counsel to the Company.
6.5 PAYMENT OF PURCHASE PRICE. Each Purchaser (i) shall have delivered to
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the Company the purchase price for such Purchaser's Shares, or (ii) shall have
cancelled indebtedness owed by the Company to such Purchaser, in either case in
the amount set forth opposite such Purchaser's name on the Schedule of
Purchasers.
6.6 REGISTRATION RIGHTS AGREEMENT. The Company and the Purchasers shall
-----------------------------
have entered into the Registration Rights Agreement.
SECTION 7
COVENANTS OF THE COMPANY AND THE PURCHASERS
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The Company hereby covenants and agrees as follows:
7.1 FINANCIAL INFORMATION. As soon as practicable after the end of each
---------------------
fiscal year, and in any event within 90 days thereafter, the Company will mail
to each Purchaser consolidated balance sheets of the Company and its
subsidiaries, if any, as of the end of such fiscal year, consolidated statements
of income and consolidated statements of changes in financial position of the
Company and its subsidiaries, if any, for such year, prepared in accordance with
generally accepted accounting principles and setting forth in each case in
comparative form the figures for the previous fiscal year (or, at the election
of the Company, setting forth in comparative form the budgeted figures for the
fiscal year then reported), all in reasonable detail and audited by independent
public accountants of national standing selected by the Company.
7.2 ADDITIONAL INFORMATION. As long as a Purchaser holds not less than
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15,000 shares of Preferred and/or Common Stock issued upon conversion of the
Preferred, as adjusted for recapitalizations, stock splits, stock dividends and
the like ("RECAPITALIZATIONS"), the Company will deliver or provide to such
Purchaser (i) as soon as practicable after the end of the first, second and
third quarterly accounting periods in each fiscal year of the Company and in any
event within 45 days thereafter, a consolidated balance sheet of the Company and
its subsidiaries, if any, as of the end of each such quarterly period, and
consolidated statements of income and consolidated statements of changes in
financial condition of the Company and its subsidiaries for such period and for
the current fiscal year to date, prepared in accordance with generally accepted
accounting principles (other than for accompanying notes), subject to changes
resulting from year-end audit adjustments, all in reasonable detail and signed
by the
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principal financial or accounting officer of the Company, (ii) an annual budget
for the Company as soon as it is available and (iii) visitation rights to attend
Board of Directors meetings including advance notice thereof; provided, however,
that the Company shall not be obligated to provide any information that it
considers in good faith to be a trade secret or to contain confidential or
classified information.
7.3 CONFIDENTIALITY. Each Purchaser agrees that any information obtained
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by such Purchaser pursuant to this Section 7 which may be proprietary to the
Company or otherwise confidential will not be disclosed without the prior
written consent of the Company. If a Purchaser requests in writing, the Company
will identify in writing all information obtained by such Purchaser under this
Section 7 which the Company considers confidential and which a Purchaser may not
disclose without the Company's prior written consent. Purchaser further
acknowledges and understands that any information so obtained which may be
considered "inside" non-public information will not be utilized by such
Purchaser in connection with purchases and/or sales of the Company's securities
except in compliance with applicable state and federal anti-fraud statutes. The
provisions of this Section 7.3 shall not be in limitation of any rights which
Purchaser may have with respect to the books and records of the Company, or to
inspect its properties or discuss its affairs, finances and accounts, under the
laws of the jurisdictions in which it is incorporated.
7.4 AVAILABILITY OF COMMON STOCK FOR CONVERSION. The Company will from
-------------------------------------------
time to time, in accordance with the laws of the State of California, increase
the authorized amount of Common Stock if at any time the number of shares of
Common Stock remaining unissued and available for issuance shall be insufficient
to permit conversion of all the then outstanding shares of Preferred.
7.5 CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENT. The
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Company and each person now or hereafter employed in any technical capacity by
it or any subsidiary with access to confidential information will enter into a
Confidential Information and Invention Assignment Agreement in substantially the
form of Exhibit G hereto.
---------
7.6 TERMINATION OF COVENANTS. The covenants of the Company set forth in
------------------------
this Section 7 shall terminate in all respects on the date of the closing of an
initial firm commitment underwritten public offering pursuant to an effective
registration statement under the Securities Act, covering the offer and sale of
the Company's Common Stock.
SECTION 8
MISCELLANEOUS
-------------
8.1 GOVERNING LAW. This Agreement shall be governed in all respects by
-------------
the internal laws of the State of California. The parties expressly stipulate
that any litigation
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under this Agreement shall be brought in the state courts of the Counties of
Santa Clara, California and in the United States District Court for the Northern
District of California. The parties agree to submit to the jurisdiction and
venue of those courts.
8.2 SURVIVAL. The representations, warranties, covenants and agreements
--------
made herein shall survive any investigation made by any Purchaser and the
closing of the transactions contemplated hereby.
8.3 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
----------------------
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto,
provided, however, that the rights of a Purchaser to purchase the Preferred
shall not be assignable without the consent of the Company.
8.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other documents
---------------------------
delivered pursuant hereto at the Closing constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof, and no party shall be liable or bound to any other party in
any manner by any warranties, representations or covenants except as
specifically set forth herein or therein. Except as expressly provided herein,
neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought;
provided, however, that holders of a majority of the Preferred (or the Common
Stock issued or issuable upon conversion of the Preferred) may, with the
Company's prior written consent, waive, modify or amend on behalf of all
holders, any provisions hereof.
8.5 NOTICES, ETC. All notices and other communications required or
------------
permitted hereunder shall be in writing, shall be effective when given, and
shall in any event be deemed to be given upon receipt or, if earlier, (a) five
(5) days after deposit with the U.S. Postal Service or other applicable postal
service, if delivered by first class mail, postage prepaid, (b) upon delivery,
if delivered by hand, (c) one business day after the business day of deposit
with Federal Express or similar overnight courier, freight prepaid or (d) one
business day after the business day of facsimile transmission, if delivered by
facsimile transmission with copy by first class mail, postage prepaid, and shall
be addressed (i) if to the Purchaser, at the Purchaser's address as set forth in
Exhibit A and (ii) if to the Company, at the address of its principal corporate
---------
offices (attention: Secretary), or at such other address as a party may
designate by ten days' advance written notice to the other party pursuant to the
provisions above.
8.6 DELAYS OR OMISSIONS. Except as expressly provided herein, no delay or
-------------------
omission to exercise any right, power or remedy accruing to any holder of any
Shares, upon any breach or default of the Company under this Agreement, shall
impair any such right, power or remedy of such holder nor shall it be construed
to be a waiver of any
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such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any holder of any breach or default under this
Agreement, or any waiver on the part of any holder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
8.7 CALIFORNIA CORPORATE SECURITIES LAW. 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.
8.8 EXPENSES. The Company and each Purchaser shall bear its own expenses
--------
incurred on its behalf with respect to this Agreement and the transactions
contemplated hereby.
8.9 COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts, each of which may be executed by less than all of the Purchasers,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
8.10 SEVERABILITY. In the event that any provision of this Agreement
------------
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any party.
8.11 TITLES AND SUBTITLES. The titles and subtitles used in this Agreement
--------------------
are used for convenience only and are not considered in construing or
interpreting this Agreement.
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The foregoing agreement is hereby executed as of the date first above
written.
"COMPANY"
GENESYS TELECOMMUNICATIONS LABORATORIES
a California corporation
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Xxxxxxx Xxxxxxxx, President and Chief
Executive Officer
"PURCHASERS"
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By:
-------------------------------------
Title:
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