Exhibit 10.13
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SECURITIES PURCHASE AGREEMENT
DATED AS OF SEPTEMBER 3, 1999
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TABLE OF CONTENTS
PAGE
ARTICLE I FILING; ISSUANCE AND RESERVATION; SALE OF THE SECURITIES.............1
1.1 Filing of Amended and Restated Certificate of Incorporation...........1
1.2 Authorization of Issuance and Sale of Securities and Reservation of
Shares................................................................1
1.3 The Closings of the Sale of the Securities............................1
ARTICLE II CLOSING; DELIVERIES AT CLOSINGS.....................................2
2.1 Closings..............................................................2
2.2 Deliveries at the Closings............................................2
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................3
3.1 Organization; Good Standing; Qualification............................3
3.2 Authorization.........................................................3
3.3 Non-contravention.....................................................3
3.4 Capitalization of the Company.........................................4
3.5 Equity Investment and Acquisitions....................................4
3.6 Financial Statements..................................................5
3.7 Bankruptcy, Etc.......................................................5
3.8 Legal Compliance......................................................5
3.9 Intellectual Property.................................................5
3.10 Offering Exemption....................................................6
3.11 Properties............................................................6
3.12 Material Adverse Changes..............................................6
3.13 Brokers...............................................................7
3.14 Registration Rights...................................................7
3.15 Use of Proceeds.......................................................7
3.16 Year 2000.............................................................7
3.17 Section 1202 Compliance...............................................7
3.18 No Actions............................................................8
3.19 Disclosure............................................................8
3.20 Related Transactions..................................................8
3.21 Agreements............................................................8
3.22 Tax Matters...........................................................8
3.23 Insurance.............................................................9
3.24 Amendments to Stockholders' Agreement and Registration Rights
Agreement.............................................................9
3.25 ERISA Plans...........................................................9
3.26 Environmental Matters.................................................9
3.27 Employees............................................................10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS...................10
4.1 Experience...........................................................10
4.2 Investment...........................................................10
4.3 Rule 144.............................................................10
4.4 No Public Market.....................................................11
4.5 Brokers or Finders...................................................11
4.6 Access to Data.......................................................11
ARTICLE V ADDITIONAL AGREEMENTS...............................................11
5.1 Affirmative Covenants of the Company.................................11
5.2 Legal Existence; Compliance, Etc.....................................13
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PAGE
5.3 Stockholders' Agreement; Registration Rights Agreement...............13
5.4 Preemptive Rights....................................................13
5.5 Survival of Representations, Warranties and Agreements, Etc..........15
5.6 Transaction Expenses and Taxes.......................................15
ARTICLE VI MISCELLANEOUS......................................................15
6.1 No Third Party Beneficiaries.........................................15
6.2 Entire Agreement.....................................................15
6.3 Successors and Assigns...............................................16
6.4 Counterparts.........................................................16
6.5 Notices..............................................................16
6.6 Governing Law........................................................17
6.7 Consent to Jurisdiction..............................................17
6.8 Amendments and Waivers...............................................17
6.9 Certain Definitions..................................................18
6.10 Incorporation of Schedules and Exhibits..............................20
6.11 Construction.........................................................20
6.12 Interpretation.......................................................20
6.13 Independence of Covenants and Representations and Warranties.........20
6.14 Remedies.............................................................21
6.15 Severability.........................................................21
6.16 Exchanges: Lost, Stolen or Mutilated Certificates....................21
6.17 Indemnity............................................................21
6.18 Waiver of Jury Trial.................................................22
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ANNEXES
Annex I - Preferred Shares to be Purchased by the Purchasers
SCHEDULES
Schedule 3.4 - Agreements Relating to Capital Stock of Company
Schedule 3.5 - Subsidiaries
Schedule 3.6 - Financial Statements
Schedule 3.8 - Permits
Schedule 3.9(a) - Intellectual Property
Schedule 3.9(b) - Infringement of Intellectual Property
Schedule 3.13 - Brokers
Schedule 3.20 - Related Transactions
Schedule 3.21 - Agreements
EXHIBITS
Exhibit A - Form of Amended and Restated Certificate of Incorporation
Exhibit B - Form of legal opinion of X'Xxxxxxxx Graev & Karabell, LLP
Exhibit C - Registration Rights Agreement
Exhibit D - Stockholders' Agreement
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SECURITIES PURCHASE AGREEMENT dated
as of September 3, 1999, among OPUS360
CORPORATION, a Delaware Corporation (the
"Company"), and the purchasers (the
"Purchasers") identified on ANNEX I.
The Company desires to sell to Purchasers and Purchasers desire to
purchase from the Company shares as set forth on ANNEX I hereto (the "Preferred
Shares") of Series B Convertible Preferred Stock, $.001 par value of the Company
(the "Series B Preferred Stock"), having the designations, preferences and
rights set forth in the Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") of the Company attached hereto as EXHIBIT A.
In consideration of the mutual promises herein made and in
consideration of the representations, warranties, and covenants herein
contained, the parties agree as follows:
ARTICLE I
FILING; ISSUANCE AND RESERVATION;
SALE OF THE SECURITIES
1.1 FILING OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION.
Immediately prior to the execution and delivery of this Agreement, the
Company will file with the Secretary of State of the State of Delaware the
Second Amended and Restated Certificate of Incorporation which, among other
things, (i) designates 8,700,000 shares of the Company's capital stock as Series
B Preferred Stock, and (ii) sets forth the terms, designations, powers,
preferences and relative, participating, optional and other special rights, and
the qualifications, limitations and restrictions, of the Series B Preferred
Stock.
1.2 AUTHORIZATION OF ISSUANCE AND SALE OF SECURITIES AND RESERVATION OF
SHARES.
Subject to the terms and conditions hereof, the Company has authorized (i)
the issuance and sale to the Purchasers of the Preferred Shares at the Closing,
and (ii) the reservation of an aggregate of 8,700,000 shares (the "Reserved
Shares") of Common Stock for issuance upon any conversions of any of the
Preferred Shares.
1.3 THE CLOSINGS OF THE SALE OF THE SECURITIES.
At the Closing or a Subsequent Closing (as defined in Section 2.1 below),
as the case may be, on the terms and subject to the conditions contained herein,
the Company shall issue, sell and deliver to each Purchaser, and each Purchaser
shall severally purchase from the Company, the Preferred Shares set forth
opposite its name on ANNEX I and each Purchaser shall deliver to the Company, by
wire transfer of immediately available funds to an account designated by the
Company, the purchase price for such Preferred Shares set forth opposite each
Purchaser's name on ANNEX I.
ARTICLE II
CLOSING; DELIVERIES AT CLOSINGS
2.1 CLOSINGS.
The initial closing hereunder with respect to the issuance, sale and
delivery of the Preferred Shares (the "Closing") shall take place on September
3, 1999 (the "Closing Date"). Subsequent closings (each a "Subsequent Closing")
may take place up to forty-five (45) days after the Closing.
2.2 DELIVERIES AT THE CLOSINGS.
(a) At the Closing, the Company shall deliver to the Purchasers
purchasing Preferred Shares at such time:
(i) one stock certificate registered in the name of each Purchaser,
representing that number of Preferred Shares being purchased by such
Purchaser as set forth on ANNEX I;
(ii) an opinion dated as of the date hereof of X'Xxxxxxxx Graev &
Karabell, LLP, counsel to the Company as to the matters set forth in
EXHIBIT B attached hereto; and
(iii) a certificate of the Secretary of the Company dated as of the
date hereof, certifying (A) that true and complete copies of the Company's
Fundamental Documents (as hereinafter defined), as in effect on the date
hereof, are attached to such certificate; (B) as to the incumbency and
genuineness of the signatures of each officer of the Company executing any
of the Documents; and (C) the genuineness of the resolutions of the Board
of Directors (the "Board") of the Company authorizing the execution,
delivery and performance of the Documents to which the Company is a party
and the consummation of the transactions contemplated thereby.
(b) At the Closing, each Purchaser shall deliver to the Company the
purchase price for the Preferred Shares being purchased by such Purchaser on
such date.
(c) At each Subsequent Closing, the Company shall deliver to the
Purchasers purchasing Preferred Shares at such time:
(iv) one stock certificate registered in the name of each such
Purchaser, representing that number of Preferred Shares being purchased by
such Purchaser as set forth on ANNEX I; and
(v) the items referenced in Section 2.2(a)(ii) and (iii) above.
(d) At each Subsequent Closing, each Purchaser purchasing Preferred
Shares at such time shall deliver to the Company the purchase price for the
Preferred Shares being purchased by such Purchaser on such date.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As a material inducement to the Purchasers to enter into and perform
their respective obligations under this Agreement, the Company represents and
warrants to each Purchaser as follows as of the Closing Date:
3.1 ORGANIZATION; GOOD STANDING; QUALIFICATION.
Each of the Company and its Subsidiary is duly organized, validly existing
and in good standing under the Laws of its jurisdiction of formation, has all
requisite power to own, lease and operate its assets and to carry on its
business as presently being conducted, and is qualified to do business and in
good standing in every jurisdiction in which the failure to so qualify or be in
good standing could have, individually or in the aggregate, a Material Adverse
Effect on the Company. The Company has delivered to the Purchasers true and
complete copies of its Fundamental Documents as in effect on the date hereof.
3.2 AUTHORIZATION.
(a) The Company has all requisite power and authority to execute and
deliver each Document to which it is a party and any and all instruments
necessary or appropriate in order to effectuate fully the terms and conditions
of each such Document and all related transactions and to perform its
obligations under each such Document. Each Document to which the Company is a
party has been duly authorized by all necessary action (corporate or otherwise)
on the part of the Company and each Document to which the Company is a party has
been duly executed and delivered by the Company, and constitutes the legal,
valid and legally binding obligation of the Company, enforceable in accordance
with its terms, except as enforceability thereof may be limited by any
applicable bankruptcy, reorganization, insolvency or other Laws affecting
creditors' rights generally or by general principles of equity.
(b) The authorization, issuance, sale and delivery of the Preferred
Shares and the reservation of the Reserved Shares have been duly authorized by
all requisite action of the Company's Board and stockholders. As of the Closing,
the Preferred Shares and, upon their issuance, the Reserved Shares, will be
validly issued and outstanding, fully paid and nonassessable, with no personal
liability attaching to the ownership thereof, free and clear of any Liens
whatsoever and with no restrictions on the voting rights thereof and other
incidents of record and beneficial ownership pertaining thereto, in each case
other than pursuant to the Documents. The issuance of the Preferred Shares, and,
when issued, the Reserved Shares, shall be free of all statutory or contractual
pre-emptive rights or rights of first refusal, if any.
3.3 NON-CONTRAVENTION.
The execution, delivery and performance by the Company of the Documents to
which it is a party, the consummation of the transactions contemplated thereby
and compliance with the provisions thereof, including the issuance, sale and
delivery of the Preferred Shares and the Reserved Shares, shall not (a) violate
any Law to which the Company or any of its assets is
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subject, (b) violate any provision of the Fundamental Documents of the Company,
(c) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify or cancel, or require any notice under any contract to which the Company
is a party or by which any of the assets of the Company is bound or (d) result
in the imposition of any Lien upon any of the assets of the Company. Other than
federal and state securities filings, the Company has not been or is not
required to give any notice to, make any filing with, or obtain any
authorization, consent or approval of any Governmental Entity or any other
Person for the valid authorization, issuance and delivery of the Preferred
Shares or any other Documents or for the valid authorization, reservation,
issuance and delivery of the Reserved Shares.
3.4 CAPITALIZATION OF THE COMPANY.
(a) Immediately prior to consummation of the Closing, the authorized
capital stock of the Company shall consist of:
(i) 25,000,000 shares of preferred stock ("Preferred Stock") of
which (1) 8,400,000 shares will be designated Series A Preferred Stock,
$.001 par value, (the "Series A Preferred Stock"), of which 8,284,000
shares of Series A Preferred Stock will be outstanding, fully paid and
nonassessable, with no liability attaching to the ownership thereof and
(2) 8,700,000 shares shall be designated Series B Preferred Stock, of
which up to 8,700,000 shares of Series B Preferred Stock will be reserved
for issuance to the Purchasers at the Closing and Subsequent Closings
hereunder; and
(ii) 45,000,000 shares of the Company's common stock ("Common
Stock"), of which (A) 7,233,890 shares will be issued and outstanding,
fully paid and nonassessable, (B) 4,000,000 shares will be reserved for
issuance pursuant to the Company's 1998 Stock Option Plan (the "Stock
Option Plan"), (C) 968,325 shares will be reserved for issuance upon
exercise of warrants to purchase Common Stock, and (D) 8,400,000 shares
will be reserved for issuance upon conversion of the Series A Preferred
Stock and 8,700,000 shares will be reserved for issuance upon conversion
of the Series B Preferred Stock.
(b) Except as contemplated by the Documents or otherwise set forth on
SCHEDULE 3.4, there are, and immediately after consummation of the Closing there
will be, no (i) outstanding warrants, options, agreements, convertible
securities or other commitments or instruments pursuant to which the Company is
or may become obligated to issue or sell any shares of its capital stock or
other securities, or (ii) preemptive or similar rights to purchase or otherwise
acquire shares of the capital stock or other securities of the Company pursuant
to any provision of Law, the Company's Fundamental Documents or any contract to
which the Company is a party.
3.5 EQUITY INVESTMENT AND ACQUISITIONS.
Except as set forth on SCHEDULE 3.5 hereto, the Company does not have any
Subsidiaries, nor does it own any capital stock or other proprietary interest,
directly or indirectly, in any Person.
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3.6 FINANCIAL STATEMENTS.
SCHEDULE 3.6 sets forth the following financial statements (the "Financial
Statements"): (A) unaudited balance sheet and statements of income and changes
in stockholders' equity as of and for the fiscal year ended December 31, 1998
for the Company and (B) internally prepared unaudited consolidated balance sheet
(the "Latest Balance Sheet") and statements of income and changes in
stockholders' equity as of and for the six months ended June 30, 1999 for the
Company and its Subsidiaries. The Financial Statements: (i) present fairly the
financial position of the Company at the dates and for the periods indicated,
except that the Financial Statements are subject to normally recurring year-end
adjustments, (ii) are in accordance with the books and records of the Company
and (iii) have been prepared in accordance with GAAP consistently applied.
3.7 BANKRUPTCY, ETC.
The Company is not involved in any Proceeding by or against the Company as
a debtor before any Governmental Entity under Title 11 of the United States Code
or any other insolvency or debtors' relief act, whether state or Federal, or for
the appointment of a trustee, receiver, liquidator, assignee, sequestrator or
other similar official for any part of the property of the Company.
3.8 LEGAL COMPLIANCE.
The Company has not violated any provisions of its Fundamental Documents,
and has complied in all material respects with all applicable Laws, Orders and
Permits, and no Proceeding is pending or, to the knowledge of the Company,
threatened, alleging any failure to so comply. SCHEDULE 3.8 sets forth a list of
all Permits under which the Company is operating or bound, the failure of which
to have in effect is reasonably likely to cause a Material Adverse Effect on the
Company and its Subsidiaries, taken as a whole. The Company has furnished or
made available to the Purchasers true and complete copies of such Permits. Such
Permits (a) are in full force and effect, (b) have not been violated in any
material respect and (c) are not subject to any pending or, to the knowledge of
the Company, threatened Proceeding seeking their revocation or limitation.
3.9 INTELLECTUAL PROPERTY.
(a) SCHEDULE 3.9(A) identifies all material Intellectual Property used
by the Company in connection with the business of the Company. The Company has
sufficient title and ownership of all Intellectual Property necessary for its
business as currently conducted.
(b) Except as specifically set forth on SCHEDULE 3.9(B):
(i) the Company has not infringed upon or misappropriated any
Intellectual Property rights of third parties, and the Company has not
received any charge, complaint, claim, demand or notice alleging any such
infringement or misappropriation;
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(ii) the Company has the right to use, sell, license and dispose of,
and has the right to bring actions for the infringement of, all
Intellectual Property owned by the Company and necessary or required for
the conduct of its business as currently conducted and as proposed to be
conducted;
(iii) no activity, service or procedure currently conducted or
proposed to be conducted by the Company violates or will violate any
agreement governing the use of Intellectual Property;
(iv) the Company is not aware of any infringement of its
Intellectual Property by any third party; and
(v) all of the Company's employees and consultants have executed and
delivered to the Company an agreement with respect to inventions and
nondisclosure of confidential information, standard forms of which have
been delivered to counsel for the Purchasers, as requested.
3.10 OFFERING EXEMPTION.
Based in part upon and assuming the accuracy of the representations of the
Purchasers in Article IV, the offering, sale and issuance of the Preferred
Shares have been, are, and will be, exempt from registration under the
Securities Act, and such offering, sale and issuance is also exempt from
registration under applicable state securities and "blue sky" laws. The Company
has made all requisite filings and has taken or will take all action necessary
to be taken to comply with such federal and state securities or "blue sky" laws.
The outstanding shares of Common Stock and Series A Preferred Stock are duly
authorized and issued, fully paid and non-assessable and were issued in
compliance with all applicable federal and state securities laws.
3.11 PROPERTIES.
To the knowledge of the Company, the Company has good and marketable title
to its material properties and assets, other than those for which the Company
has a lease. All leases pursuant to which the Company leases real or personal
property material to the business are, to its knowledge, valid and effective in
accordance with their respective terms and the Company has not received written
notification of the existence of any material default or occurrence or condition
which could result in a noncurable default under the provisions of any lease.
3.12 MATERIAL ADVERSE CHANGES.
Since the Latest Balance Sheet, there has not been any change in the
assets, liabilities, financial condition or operations of the Company, except
changes in the ordinary course of business which have not been, either
individually or in the aggregate, materially adverse to the Company or any
damage, destruction or loss, whether or not covered by insurance, materially and
adversely affecting the properties or business of the Company.
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3.13 BROKERS.
SCHEDULE 3.13 sets forth a true and complete list of each agent, broker,
investment banker, Person or firm who or which has acted on behalf, or under the
authority, of the Company (or its predecessors) or any of its stockholders or
will be entitled to any fee or commission directly or indirectly from the
Company or any of its stockholders in connection with any of the transactions
contemplated hereby.
3.14 REGISTRATION RIGHTS.
Immediately following the Closing, except as contemplated by the
Documents, no Person has any right to cause the Company to effect the
registration under the Securities Act of any securities (including debt
securities) of the Company.
3.15 USE OF PROCEEDS.
The proceeds received by the Company from the sale of the Preferred Shares
shall be used by the Company for working capital and other general corporate
purposes.
3.16 YEAR 2000.
All of the Company's products, devices and programs are designed to be
used prior to, during and after the calendar year 2000 A.D., and such products,
devices and programs will operate during each such time period without error
relating to date data and date-dependent data, specifically including any error
relating to, or the program of, date data which represents or references
different centuries or more than one century, other than such errors which have
not had nor could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company's business as presently
conducted or as proposed to be conducted. Other than any of the following which
has not had nor could reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate, on the Company's business as presently
conducted or as proposed to be conducted, without limiting the generality of the
foregoing:
(a) Each such product, device or program will not abnormally end or
provide invalid or incorrect results as a result of date data, specifically
including date data which represents or references different centuries or more
than one century; and
(b) Each such product, device or program has been designed to ensure
year 2000 compatibility, including, but not limited to, date data century
recognition, calculations which accommodate same century and multi-century
formulas and date values and date data interface values that reflect the
century.
3.17 SECTION 1202 COMPLIANCE.
The Preferred Shares issuable hereunder and the Common Stock issuable upon
conversion thereof will constitute "qualified small business stock" within the
meaning of Section 1202 of the Code, as of the date of issuance.
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3.18 NO ACTIONS.
There is no action, suit, investigation or proceeding (or any basis
therefor) pending against or, to the knowledge of the Company, threatened
against or affecting the Company or any of its properties before any court or
arbitrator or any governmental body, agency, official or authority.
3.19 DISCLOSURE.
To the Company's knowledge after reasonable investigation the information
provided to the Purchasers in the Private Placement Memorandum dated August 15,
1999 (the "Memoranda") and the Documents, taken as a whole, does not contain any
untrue statement of a material fact regarding the Company or its Subsidiary and
does not omit any material fact necessary to make the statements contained
herein or therein, in light of the circumstances in which they were made, not
misleading.
3.20 RELATED TRANSACTIONS.
Except as set forth on SCHEDULE 3.20, and except for compensation to
regular employees of the Company, since the formation of the Company, no current
or former director or officer of the Company or holder of any capital stock of
the Company or any of their respective affiliates has been (i) a party to any
transaction with the Company, or (ii) to the knowledge of the Company, the
direct or indirect owner of an interest (other than non-affiliated holdings in
publicly held companies) in any business organization that is or was a
competitor, supplier or customer of the Company.
3.21 AGREEMENTS.
Except as described or referred to in SCHEDULE 3.21 hereto or the
Financial Statements, there is no agreement to which the Company is a party or
by which the Company is bound which involves obligations (contingent or
otherwise) of, or payments to, the Company in excess of $250,000 per year (each,
a "Material Contract"). No default on the part of the Company exists under any
contract or agreement to which the Company is a party that would have a material
adverse effect on the Company. The Company is not a party to any employment
agreement or severance agreement, except as set forth on SCHEDULE 3.21.
3.22 TAX MATTERS.
The Company has filed all federal, state and local income, excise or
franchise tax returns, real estate and personal property tax returns, sales and
use tax returns and other tax returns required to be filed by it and has paid
all Taxes owed by it, except Taxes which have not yet accrued or otherwise
become due or for which adequate provision has been made in the Financial
Statements. The provision for Taxes on the Financial Statements is sufficient as
of its date for the payment of all accrued and unpaid federal, state, county and
local Taxes of any nature of the Company whether or not assessed or disputed.
All Taxes which the Company is required to withhold or collect have been
withheld and collected and have been paid over when due to the proper
governmental authorities. With regard to the income tax returns of the Company,
the Company has not received notice of any audit or of any proposed deficiencies
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from any taxing authority and no controversy with respect to Taxes of any type
is pending or, to the knowledge of the Company, threatened. There are in effect
no waivers of applicable statutes of limitations with respect to any Taxes owed
by the Company for any year.
3.23 INSURANCE.
The Company maintains valid and effective insurance policies, issued by
reputable insurers, to insure it against all risks usually insured against by
Persons conducting businesses similar to that of the Company in the locality in
which such businesses are conducted. The Company has paid all due premiums with
respect to all policies of insurance currently maintained by the Company.
3.24 AMENDMENTS TO STOCKHOLDERS' AGREEMENT AND REGISTRATION RIGHTS AGREEMENT.
Amendment No. 1 to the Registration Rights Agreement ("Amendment No.
1") and Amendment No. 3 to the Stockholders' Agreement ("Amendment No. 3"),
each attached to the applicable agreement in the Exhibits hereto, have been
executed by the requisite parties on or before the date hereof. Upon
execution and delivery of this Agreement by the Purchasers and the Company,
such Purchasers shall be Investors (as such term is defined in the
Registration Rights Agreement, as amended by Amendment No. 1) for purposes of
the Registration Rights Agreement and shall be Investors and Stockholders (as
such terms are defined in the Stockholders' Agreement, as amended by
Amendment No. 3) for purposes of the Stockholders' Agreement, and in each
case such Purchasers shall be entitled to the rights thereunder of an
Investor or an Investor and Stockholder, respectively.
3.25 ERISA PLANS.
Except as set forth on SCHEDULE 3.25, the Company does not maintain nor is
it a party to (or ever maintained or was a party to) any "employee welfare
benefit plan," as defined in Section 3(1) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or any other written, unwritten,
formal or informal plan or agreement involving direct or indirect compensation
other than workers' compensation, unemployment compensation and other government
programs, under which the Company has any present or future obligation or
liability. The Company does not maintain nor is it a party to (or has it or any
predecessor ever maintained or was it or any predecessor a party to) any
"employee pension benefit plan," as defined in Section 3(2) of ERISA which would
be subject to Title IV of ERISA, and the Company does not contribute to any
"multiemployer plan" as defined in Section 3(37) and Section 4001(a)(3) of
ERISA. The Company does not maintain a plan providing health or medical benefits
to retired employees of the Company or any predecessor or a welfare benefit fund
under Section 419 of the Internal Revenue Code.
3.26 ENVIRONMENTAL MATTERS.
The Company has not disposed of either hazardous substances (as defined
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended) or materials subject to regulation by the Nuclear
Regulatory Commission except in accordance with applicable law. The Company has
received no written inquiries from any governmental agency with respect to, and
to the best of the Company's knowledge, no governmental
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investigation with respect to the Company has been conducted for, the possible
storage or disposal of any such hazardous substances or any such material
subject to regulation by the Nuclear Regulatory Commission.
3.27 EMPLOYEES.
No officer or key employee of the Company has notified the Company that
such officer or key employee intends to terminate his or her employment with the
Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
As a material inducement to the Company to enter into and perform
its obligations under this Agreement, each Purchaser, severally and not jointly,
represents and warrants to the Company, as to itself only, as of the date
hereof, as follows:
4.1 EXPERIENCE.
Such Purchaser is an accredited investor within the meaning of Regulation
D promulgated by the Securities and Exchange Commission and, by virtue of its
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company, such Purchaser is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. Such Purchaser has had access to the
Company's senior management and has had the opportunity to conduct such due
diligence review as it has deemed appropriate.
4.2 INVESTMENT.
Such Purchaser has not been formed solely for the purpose of making this
investment and such Purchaser is acquiring the Preferred Shares for investment
for its own account, not as a nominee or agent, and not with the view to, or for
resale in connection with, any distribution of any part thereof. Such Purchaser
understands that the Preferred Shares and the related Reserved Shares, as
applicable, to be acquired have not been registered under the Securities Act or
applicable state and other securities laws by reason of a specific exemption
from the registration provisions of the Securities Act and applicable state and
other securities laws, the availability of which depends upon, among other
things, the bona fide nature of the investment intent and the accuracy of the
respective Purchaser's representations as expressed herein.
4.3 RULE 144.
Such Purchaser acknowledges and understands that it must bear the economic
risk of this investment for an indefinite period of time because the Preferred
Shares must be held indefinitely unless subsequently registered under the
Securities Act and applicable state and other securities laws or unless an
exemption from such registration is available. Such Purchaser understands that
any transfer agent of the Company will issue stop-transfer instructions with
respect to the Preferred Shares and the related Reserved Shares, as applicable,
unless any transfer thereof is
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subsequently registered under the Securities Act and applicable state and other
securities laws or unless an exemption from such registration is available.
4.4 NO PUBLIC MARKET.
Such Purchaser understands that no public market now exists for any of the
securities issued by the Company and that there is no assurance that a public
market will ever exist for the securities of the Company.
4.5 BROKERS OR FINDERS.
Such Purchaser has not retained any investment banker, broker or finder in
connection with the purchase of the Preferred Shares. Such Purchaser will
severally and not jointly indemnify and hold the Company harmless against any
liability, settlement or expense arising out of, or in connection with, any such
claim.
4.6 ACCESS TO DATA.
Prior to the execution and delivery of this Agreement, such Purchaser
received from the Company and read the Memorandum. Such Purchaser has had an
opportunity to ask questions of, and receive answers from, Persons acting on
behalf of the Company concerning the terms and conditions of this investment,
and answers have been provided to all of such questions to the full satisfaction
of such Purchaser. No oral representations have been made or furnished to, or
relied on by, such Purchaser or his or its representatives in connection with
his or its investment in the Preferred Shares. Such Purchaser has such knowledge
and experience in financial and business matters that he, she or it is capable
of evaluating the risks and merits of his, her or its investment in the
Preferred Shares.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 AFFIRMATIVE COVENANTS OF THE COMPANY.
The Company agrees as follows:
(a) FINANCIAL INFORMATION. Until the consummation of a Qualified
Offering (as such term is defined in the Certificate), the Company will deliver
the following reports to each Qualified Purchaser:
(i) As soon as practicable after the end of each fiscal year, and in
any event within 120 days thereafter, consolidated balance sheets of the
Company, if any, as of the end of such fiscal year, and consolidated
statements of income and consolidated statements of changes in cash flow
of the Company and its Subsidiaries, if any, for such fiscal year,
prepared in accordance with GAAP and setting forth in each case in
comparative form the figures for the previous fiscal year and the budgeted
figures for the current fiscal year, all in reasonable detail and audited
by independent public accountants of national standing commonly known as
"Big 5" accountants selected by the Company,
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together with a certificate of the Company executed by the chief executive
officer or principal financial or accounting officer of the Company
certifying that all covenants to be complied with by the Company hereunder
have been complied with (or setting forth in reasonable detail any
covenants that have not been so complied with).
(ii) 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 change in cash flow of the Company for such period and for
the current fiscal year to date, prepared in accordance with GAAP (other
than for accompanying notes), subject to changes resulting from normal
year-end audit adjustments, and setting forth in each case in comparative
form the figures for the same periods of the previous fiscal year and the
budgeted figures for the current periods, all in reasonable detail and
signed by the principal financial or accounting officer of the Company.
(b) GENERAL INFORMATION. The Company will deliver the following
information to each Qualified Purchaser:
(iii) Promptly after the commencement or threatened commencement
thereof, notice of all actions, suits, investigations, and proceedings
before any court or governmental department, arbitration panel,
commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting the Company or any of its Subsidiaries other than ordinary and
routine litigation covered under the limits of existing insurance
policies.
(iv) Copies of all amendments to the Fundamental Documents of the
Company.
(c) ADDITIONAL INFORMATION. The Company will deliver or provide to each
Qualified Purchaser such other information and data, including access to books
and records of the Company as any such holder may from time to time reasonably
request.
(d) RIGHTS OF INSPECTION. Each Qualified Purchaser shall have the right
to visit and inspect any of the properties of the Company and to discuss its
affairs, finances and accounts with its officers and auditors, all at such
reasonable times during normal business hours and as often as may be reasonably
requested.
(e) KEY-MAN INSURANCE. The Company, at its own expense, shall maintain
term life insurance in adequate amounts on key management employees in
accordance with the directions of the Board.
(f) INSURANCE. The Company shall maintain such other insurance with
such coverages and in such amounts as shall be determined by the Board of the
Company, including such insurance as the Board of the Company shall deem
necessary to protect the assets of the Company.
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5.2 LEGAL EXISTENCE; COMPLIANCE, ETC.
(a) The Company shall maintain its existence as a corporation duly
incorporated, validly existing and in good standing under the laws of the state
of its incorporation.
(b) The Company shall conduct its business in compliance in all
material respects with all permits and licenses issued by, and all statutes,
rules, regulations and orders of, and all restrictions imposed by, all
governmental authorities, domestic or foreign, federal or state, applicable to
the conduct of its business and the ownership of its property (including,
without limitation, applicable statutes, rules, regulations, orders and
restrictions relating to environmental, safety and other similar standards or
controls).
(c) The Company shall conduct its business in compliance in all
material respects with all Permits, agreements and contracts to which it is a
party.
5.3 STOCKHOLDERS' AGREEMENT; REGISTRATION RIGHTS AGREEMENT.
Each Purchaser by his or its execution of this Agreement agrees to be
bound by and comply with the terms and provisions of the Stockholders' Agreement
and the Registration Rights Agreement, in each case as an Investor (as such term
is defined therein) and as a Stockholder under the Stockholders' Agreement (as
such term is defined therein).
5.4 PREEMPTIVE RIGHTS.
(a) Except in the case of any issuance of Excluded Stock (as defined
below), the Company shall not after the date hereof issue, sell or exchange,
agree to issue, sell or exchange, or reserve or set aside for issuance, sale or
exchange, any (i) Stock (as such term is defined in the Stockholders Agreement),
(ii) any other equity security of the Company, (iii) any debt security of the
Company which by its terms is convertible into or exchangeable for any equity
security of the Company or has any other equity feature, (iv) any security of
the Company that is a combination of a debt and equity security or (v) any
option, warrant or other right to subscribe for, purchase or otherwise acquire
any security of the Company specified in the foregoing clauses (i) through (iv),
unless in each case the Company shall have first offered to sell to such
securities (the "Offered Securities") to the Designated Investors (as defined
below). Each Designated Investor shall have the option of acquiring such
Designated Investor's Proportionate Percentage of the Offered Securities at a
price and on such other terms and conditions as shall have been specified by the
Company in writing (the "Offer") delivered to such Designated Investor, which
Offer by its terms shall remain open and irrevocable for a period of 10 business
days from the date it is delivered by the Company to the Designated Investor. As
used herein, the term "Designated Investor" means any holder of the Company's
securities that, together with its affiliates, has invested in excess of
$15,000,000 in the Company since the date of its formation through the purchase
of equity securities of the Company.
(b) The Company may specify in the Offer that all or a minimum amount
of the Offered Securities must be sold in such Offering (to the Designated
Investors and/or any third parties pursuant to paragraph (d) below), in which
case any Notice of Acceptance (as defined below) shall be deemed conditioned
upon (i) receipt of Notices of Acceptance of all or such minimum amount, as
applicable, of the Offered Securities and/or (ii) the sale of all or the
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remainder of such minimum amount, as applicable, of the Offered Securities
pursuant to paragraph (d) below.
(c) Notice of a Designated Investor's intention to accept, in whole or
in part, an Offer shall be evidenced by a writing signed by such Designated
Investor and delivered to the Company on or prior to the end of the 10-day
period of such Offer, setting forth such portion of the Offered Securities as
the Designated Investor elects to purchase (the "Notice of Acceptance").
(d) In the event that Notices of Acceptance are not given by the
Designated Investors in respect of all the Offered Securities, the Company shall
have 120 days from the expiration of the foregoing 10-day period to sell all or
any part of such Offered Securities as to which Notices of Acceptance have not
been given by the Designated Investors (the "Refused Securities") to any other
Person or Persons, but only upon terms and conditions in all material respects,
including, without limitation, unit price and interest rates, which are no more
favorable to such other Person or Persons and no less favorable to the Company
than those set forth in the Offer. Upon the closing, which shall include full
payment to the Company, of the sale to such other Person or Persons of all the
Refused Securities, the Designated Investors shall purchase from the Company,
and the Company shall sell to the Designated Investors, the Offered Securities
in respect of which Notices of Acceptance were delivered to the Company by the
Designated Investors, on the terms specified in the Offer.
(e) In each case, any Offered Securities not purchased by the
Designated Investors or any other Person or Persons in accordance with paragraph
(d) above may not be sold or otherwise disposed of until they are again offered
to the Designated Investors under the procedures specified in the Section 5.4,
subject to the provisions of paragraph (g) below.
(f) The rights of the Designated Investors under this Section 6 shall
not apply to the sale or issuance of any Excluded Stock. As used herein,
"Excluded Stock" means (i) up to 4,000,000 shares (as adjusted equitably for
stock dividends, stock splits, combinations, etc.) of Common Stock issuable upon
exercise of stock options granted to officers and employees of the Company or
its subsidiaries as approved by the Board (or a committee thereof), (ii) shares
of Common Stock issued upon conversion of shares of Series A Preferred Stock or
Series B Preferred Stock, including in the case of (i) and (ii) above and (viii)
below, any additional shares of Common Stock as may be issued by virtue of
antidilution provisions, if any, applicable to such options, warrants or shares,
as the case may be, (iii) shares of the Company's stock issued in connection
with acquisitions of any person or entity, (iv) equity kickers issued in
connection with bona fide debt offerings, joint ventures or technology licensing
arrangements, (v) shares of the Company's stock issued in connection with
equipment financing transactions, (vi) stock issued in connection with a
Qualified Offering, (vii) shares of the Company's stock issued upon stock splits
or other subdivisions or combination of shares of Stock, (viii) shares of Common
Stock issuable upon exercise of warrants and options outstanding as of the date
hereof and (ix) shares of Series B Preferred Stock issued by the Company in
Subsequent Closings.
(g) Notwithstanding anything contained herein to the contrary, in the
event any Designated Investor shall fail to purchase its respective
Proportionate Percentage of any Offered Securities pursuant to the terms of this
Section 5.4 (each such Designated Investor, a "Non-
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Participating Investor"), the provisions of this Section 5.4 shall thereafter be
null and void with respect to such Non-Participating Investor and such
Non-Participating Investor shall not have any rights under this Section 5.4 to
participate in any subsequent offering by the Company of its securities.
(h) The provisions of this Section 5.4 are intended to be for the
benefit of any Person that owns equity securities of the Company and that
qualifies as a Designated Investor, including any applicable Purchasers
hereunder.
5.5 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS, ETC.
All representations and warranties hereunder of the Company and the
Purchasers shall survive the Closing for a period of one year and shall in no
way be affected by any investigation of the subject matter hereof made by or on
behalf of the Purchasers or the Company. Except as otherwise provided herein,
all agreements and/or covenants contained herein shall survive indefinitely
until, by their respective terms, they are no longer operative.
5.6 TRANSACTION EXPENSES AND TAXES.
(a) The Company agrees to pay promptly up to an aggregate of $50,000 of
the reasonable out-of-pocket expenses, including reasonable attorneys' fees and
expenses, of the Purchasers arising in connection with the negotiation and
execution of this Agreement and the other Documents, the related due diligence
and the consummation of the transactions contemplated hereby and thereby.
(b) All sales, use, transfer, stamp (including documentary stamp taxes,
if any), excise, recording, income, capital gain, franchise and other similar
Taxes or governmental charges with respect to the securities issued pursuant
hereto shall be borne by the Company.
ARTICLE VI
MISCELLANEOUS
6.1 NO THIRD PARTY BENEFICIARIES.
Except as expressly provided herein, this Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns, personal representatives, heirs and estates,
as the case may be.
6.2 ENTIRE AGREEMENT.
This Agreement and the other Documents constitute the entire agreement
among the Parties and supersede any prior understandings, agreements or
representations by or among the Parties, written or oral, that may have related
in any way to the subject matter of any Document including, without limitation,
any letter of intent dated as of or prior to the date hereof, between the
Company and any Purchaser.
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6.3 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors and permitted assigns. No Party may
assign either this Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the other Parties; PROVIDED,
HOWEVER, that each Purchaser may assign any of its rights under any of the
Documents to (i) any Affiliate of such Purchaser, (ii) any Person who shall
acquire substantially all of the assets of such Purchaser or a majority in
voting power of the capital stock of such Purchaser (whether pursuant to a
merger, consolidation, stock sale or otherwise), (iii) any lender of such
Purchaser (or any agent therefor) for security purposes and the assignment
thereof by any such lender or agent to any Purchaser in connection with the
exercise by any such lender or agent of all of its rights and remedies as a
secured creditor with respect thereto and (iv) any Person to whom such Purchaser
shall transfer any Preferred Shares in accordance with the terms of the
Documents.
6.4 COUNTERPARTS.
This Agreement may be executed in one 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 NOTICES.
All notices, requests, demands, claims, and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered
personally, telecopied, sent by nationally recognized overnight courier or
mailed by registered or certified mail (return receipt requested), postage
prepaid, to the Parties at the following addresses (or at such other address for
a Party as shall be specified by like notice) or by E-mail:
If to the Company, to:
OPUS360 Corporation
000 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
Attention: Xxx Xxxxxxxx
with a copy to:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
Attention: Xxxx X. Xxxxxx, Esq.
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If to a Purchaser, to its E-mail address shown on ANNEX I:
All such notices and other communications shall be deemed to have been
given and received (i) in the case of personal delivery, on the date of such
delivery, (ii) in the case of delivery by telecopy, on the date of such
delivery, (iii) in the case of delivery by nationally recognized overnight
courier, on the third business day following dispatch, (iv) in the case of
mailing, on the seventh business day following such mailing and (v) in the case
of E-mail, 24 hours after sending.
6.6 GOVERNING LAW.
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
DOMESTIC LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF
LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK, OR ANY
OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF NEW YORK TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL
LAW OF THE STATE OF NEW YORK WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF
THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION'S CHOICE OF LAW OR CONFLICT OF
LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY
APPLY.
6.7 CONSENT TO JURISDICTION.
Each of the Company and the Purchasers agrees that any action or
proceeding to enforce any right arising out of this Agreement, may be commenced
in the Supreme Court of New York in New York County or in the United States
District Court for the Southern District of New York, and each of the Company
and the Purchasers consents to such jurisdiction, agrees that venue will be
proper in such courts in any such matter, agrees that New York County is the
most convenient forum for litigation in any such suit, action or legal
proceeding, and agrees that a summons and complaint commencing an action or
proceeding in any such court shall be properly served and shall confer personal
jurisdiction if served by registered or certified mail to the Company or such
Purchaser, or as otherwise provided by the laws of the State of New York or the
United States. Each of the Company and the Purchasers agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
6.8 AMENDMENTS AND WAIVERS.
No amendment of any provision of this Agreement shall be valid unless the
same shall be in writing and signed by the Company and the holders of at least
51% of the then outstanding Preferred Shares or Common Stock issued upon
conversion of the Preferred Shares. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
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6.9 CERTAIN DEFINITIONS.
"AFFILIATE" means, with respect to any Person, any of (a) a
director, officer or stockholder holding 5% or more of the capital stock (on a
fully diluted basis) of such Person, (b) a spouse, parent, sibling or descendant
of such Person (or a spouse, parent, sibling or descendant of any director or
officer of such Person) and (c) any other Person that, directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, another Person. The term "control" includes, without
limitation, the possession, directly or indirectly, of the power to direct the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"CLOSING" shall have the meaning given in Article II.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"DOCUMENTS" means this Agreement, the Registration Rights
Agreement and the Stockholders' Agreement.
"FUNDAMENTAL DOCUMENTS" means the documents by which any Person
(other than an individual) establishes its legal existence or which govern its
internal affairs. For example, the "Fundamental Documents" of a Company would be
its charter and by-laws.
"GAAP" means United States Generally Accepted Accounting
Principles, consistently applied.
"GOVERNMENTAL ENTITY" means any court, administrative agency,
tribunal, department, bureau or commission or other governmental authority or
instrumentality, domestic or foreign, Federal, state or local.
"INTELLECTUAL PROPERTY" means all industrial and intellectual
property, including, without limitation, (i) patents, patent applications,
patent rights, trademarks, trademark applications, copyrights, copyright
applications, know-how, certificates of public convenience and necessity,
franchises, licenses, proprietary processes and formulae, layouts, processes,
inventions, and (ii) all proprietary rights pertaining to any product or service
manufactured, sold, distributed or marketed, or used, employed or exploited in
the development, manufacture, license, sale, distribution, marketing or
maintenance thereof, and all documentation and media constituting, describing or
relating to the foregoing.
"LAW" means any constitution, law, statute, treaty, rule, directive,
requirement or regulation or Order of any Governmental Entity.
"LIABILITY" means any liability or obligation, whether known or
unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated and whether due or to become due, regardless of when
asserted.
"LIEN" means any security interest, pledge, bailment (in the nature
of a pledge or for purposes of security), mortgage, deed of trust, the grant of
a power to confess judgment,
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conditional sale or title retention agreement (including any lease in the nature
thereof), charge, encumbrance, easement, reservation, restriction, cloud, right
of first refusal or first offer, option, or other similar arrangement or
interest in real or personal property.
"MATERIAL ADVERSE EFFECT" means, with respect to any Person, a
material adverse effect on the business, operations, assets, condition
(financial or otherwise), operating results, liabilities or prospects of such
Person and its Subsidiaries, if any, taken as a whole.
"MEMORANDA" has the meaning given to such term in Section 3.19.
"ORDERS" means judgments, writs, decrees, injunctions, orders,
compliance agreements or settlement agreements of or with any Governmental
Entity or arbitrator.
"PARTY" or "PARTIES" means the signatories hereto.
"PERMITS" means all permits, licenses, authorizations,
registrations, franchises, approvals, consents, certificates, variances and
similar rights obtained, or required to be obtained, from Governmental Entities.
"PERSON" shall be construed broadly and shall include an individual,
a partnership, a Company, a limited liability company, an association, a joint
stock company, a trust, a joint venture, an unincorporated organization, or a
Governmental Entity (or any department, agency, or political subdivision
thereof).
"PROCEEDING" means any action, suit, proceeding, complaint, charge,
hearing, inquiry or investigation before or by a Governmental Entity or an
arbitrator.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated as of December 24, 1998, as amended, among the Company and the
other parties thereto, a copy of which is attached hereto as EXHIBIT C.
"QUALIFIED PURCHASER" means any Person who acquires more than
$500,000 worth of Series B Preferred Stock pursuant to this Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"SUBSIDIARY" means any company, partnership, limited liability
company or other business entity, with respect to which the Company (or any
Subsidiary thereof) has the power to vote or direct the voting of sufficient
securities to elect a majority of the directors.
"STOCKHOLDERS' AGREEMENT" means the Stockholders' Agreement dated as
of December 24, 1998, as amended, among the Company and the other parties
thereto, a copy of which is attached hereto as EXHIBIT D.
"TAX" as used in this Agreement, means any of the Taxes, and "Taxes"
means, with respect to any Person, (a) all income taxes (including any tax on or
based upon net income, gross income, income as specially defined, earnings,
profits or selected items of income,
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earnings or profits) and all gross receipts, sales, use, ad valorem, transfer,
franchise, license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property or windfall profits taxes, alternative or add-on
minimum taxes, customs duties and other taxes, fees, assessments or charges of
any kind whatsoever, together with all interest and penalties, additions to tax
and other additional amounts imposed by any taxing authority (domestic or
foreign) on such Person (if any) and (b) any liability for the payment of any
amount of the type described in the clause (a) above as a result of being a
"transferee" (within the meaning of Section 6901 of the Code or any other
applicable Law) of another entity or a member of an affiliated or combined
group.
6.10 INCORPORATION OF SCHEDULES AND EXHIBITS.
The Schedules and Exhibits identified in this Agreement are incorporated
herein by reference and made a part hereof.
6.11 CONSTRUCTION.
Where specific language is used to clarify by example a general statement
contained herein, such specific language shall not be deemed to modify, limit or
restrict in any manner the construction of the general statement to which it
relates. The language used in this Agreement shall be deemed to be the language
chosen by the Parties to express their mutual intent, and no rule of strict
construction shall be applied against any Party.
6.12 INTERPRETATION.
Accounting terms used but not otherwise defined herein shall have the
meanings given to them under GAAP. As used in this Agreement (including all
Schedules, Exhibits and amendments hereto), the masculine, feminine and neuter
gender and the singular or plural number shall be deemed to include the others
whenever the context so requires. References to Articles and Sections refer to
articles and sections of this Agreement. Similarly, references to Schedules and
Exhibits refer to schedules and exhibits, respectively, attached to this
Agreement. Unless the content requires otherwise, words such as "hereby,"
"herein," "hereinafter," "hereof," "hereto," "hereunder" and words of like
import refer to this Agreement. The article and section headings contained in
this Agreement are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement.
6.13 INDEPENDENCE OF COVENANTS AND REPRESENTATIONS AND WARRANTIES.
All covenants hereunder shall be given independent effect so that if a
certain action or condition constitutes a default under a certain covenant, the
fact that such action or condition is permitted by another covenant shall not
affect the occurrence of such default, unless expressly permitted under an
exception to such initial covenant. In addition, all representations and
warranties hereunder shall be given independent effect so that if a particular
representation or warranty proves to be incorrect or is breached, the fact that
another representation or warranty concerning the same or similar subject matter
is correct or is not breached will not affect the incorrectness of or a breach
of a representation and warranty hereunder.
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6.14 REMEDIES.
The Parties shall each have and retain all other rights and remedies
existing in their favor at Law or equity, including, without limitation, any
actions for specific performance and/or injunctive or other equitable relief
(including, without limitation, the remedy of rescission) to enforce or prevent
any violations of the provisions of this Agreement. Without limiting the
generality of the foregoing, the Company hereby agrees that in the event the
Company fails to convey any number of Preferred Shares or Reserved Shares, as
the case may be, to the Purchasers in accordance with the provisions of this
Agreement, the Purchasers' remedy at law may be inadequate. In such event, each
Purchaser shall have the right, in addition to all other rights and remedies it
may have, to specific performance of the obligations of the Company to convey
such number of Preferred Shares or Reserved Shares, as the case may be.
6.15 SEVERABILITY.
It is the desire and intent of the Parties that the provisions of this
Agreement be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular provision of this Agreement shall be adjudicated
by a court of competent jurisdiction to be invalid, prohibited or unenforceable
for any reason, such provision, as to such jurisdiction, shall be ineffective,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not to be
invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
6.16 EXCHANGES: LOST, STOLEN OR MUTILATED CERTIFICATES.
Upon surrender by a holder of Series B Preferred Stock to the Company of
any certificate representing Series B Preferred Stock purchased or acquired
hereunder, the Company at its expense will issue in exchange therefor, and
deliver to the holder of Series B Preferred Stock, a new certificate or
certificates representing such shares, in such denominations as may be requested
by the holder of Series B Preferred Stock. Upon receipt of evidence satisfactory
to the Company of the loss, theft, destruction or mutilation of any certificate
representing any Series B Preferred Stock purchased or acquired by a holder of
Series B Preferred Stock hereunder, and in case of any such loss, theft or
destruction, upon delivery of any indemnity agreement satisfactory to the
Company, or in case of any such mutilation, upon surrender and cancellation of
such certificate, the Company at its expense will issue and deliver to such
holder a new certificate for such Series B Preferred Stock of like tenor, in
lieu of such lost, stolen or mutilated certificate.
6.17 INDEMNITY.
The Company shall, for a period of one year, with respect to the
representations, warranties, covenants and agreements made by the Company herein
indemnify, defend and hold the Purchasers (and their respective shareholders,
directors, officers, employees, agents, affiliates and controlling parties)
(each, an "Indemnified Party") harmless from and against all liability,
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loss or damage, together with all reasonable costs and expenses related thereto
(including legal and accounting fees and expenses), arising from the untruth,
inaccuracy or breach of any such representations, warranties, covenants or
agreements of the Company contained in this Agreement or the assertion of any
claims relating to the foregoing. Without limiting the generality of the
foregoing, each Indemnified Party shall be deemed to have suffered liability,
loss or damage as a result of the untruth, inaccuracy or breach of any such
representations, warranties, covenants or agreements if such liability, loss or
damage shall be suffered by the Indemnified Party as a result of, or in
connection with, such untruth, inaccuracy or breach or any facts or
circumstances constituting such untruth, inaccuracy or breach. The Company shall
indemnify and hold harmless each Indemnified Party against any losses, claims,
damages or liabilities, joint or several, to which any of the foregoing persons
may become subject, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any violations by the
Company of the Securities Act or state securities or "blue sky" laws applicable
to the Company relating to action or inaction required of the Company in
connection with the Securities Act or registration or qualification under such
state securities or blue sky laws; and shall reimburse each such Indemnified
Party for any legal or any other expenses reasonably incurred by any of them in
connection with investigating or defending any such loss, claim, damage,
liability or action. In case any such action is brought against an Indemnified
Party, the Company will be entitled to participate in and assume the defense
thereof with counsel reasonably satisfactory to such Indemnified Party, and
after notice from the Company to such Indemnified Party of its election to
assume the defense thereof, the Company shall be responsible for any legal or
other expenses subsequently incurred by the latter in connection with the
defense thereof, provided that if any Indemnified Party shall have reasonably
concluded that there may be one or more legal defenses available to such
Indemnified Party which conflict in any material respect with those available to
the Company, or that such claim or litigation involves or could have an effect
upon matters beyond the scope of the indemnity agreement provided in this
Section 6.17 the Company shall reimburse such Indemnified Party and shall not
have the right to assume the defense of such action on behalf of such
Indemnified Party and the Company shall reimburse such Indemnified Party and any
person controlling such Indemnified Party for that portion of the fees and
expenses of any counsel retained by the indemnified party which are reasonably,
related to the matters covered by the indemnity agreement provided in this
Section 6.17. The Company shall not make any settlement of any claims
indemnified against hereunder without the written consent of the Indemnified
Party or Parties, which consent shall not be unreasonably withheld.
6.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER DOCUMENT.
* * * * *
-22-
IN WITNESS WHEREOF, the Parties have executed this Securities
Purchase Agreement as of the date first above written.
OPUS360 CORPORATION
By: _____________________________________
Name: Xxx Xxxxxxxx
Title: Chairman & CEO
CROSSPOINT VENTURE PARTNERS 1997, L.P.
By: _____________________________________
Name: Xxxxxx Xxxx
Title: General Partner
SAFEGUARD 99 CAPITAL L.P.,
a Delaware limited partnership
By: Safeguard Delaware, Inc., its
general partner
By: _____________________________________
Name:
Title:
COUNTERPART SIGNATURE PAGE
TO
SECURITIES PURCHASE AGREEMENT
CROSSPOINT VENTURE PARTNERS
LS 1999, L.P.
Date: September 3, 1999 By: _____________________________________
Name: Xxxxxx Xxxx
Title: General Partner
COUNTERPART SIGNATURE PAGE
TO
SECURITIES PURCHASE AGREEMENT
ARISTA CAPITAL PARTNERS, LP
By: Arista Capital Management LLC, a
Delaware limited liability company
Date: September __, 1999 By: _____________________________________
Name:
Title:
