{"id":43665,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/stock-purchase-agreement-e-trade-group-inc-and-softbank.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"stock-purchase-agreement-e-trade-group-inc-and-softbank","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/stock-purchase-agreement-e-trade-group-inc-and-softbank.html","title":{"rendered":"Stock Purchase Agreement &#8211; E*Trade Group Inc. and Softbank Holdings Inc."},"content":{"rendered":"<pre>================================================================================\n\n                            STOCK PURCHASE AGREEMENT\n\n                                     among\n\n                              E*TRADE GROUP, INC.\n\n                                      and\n\n                             SOFTBANK HOLDINGS INC.\n\n\n                              --------------------\n                              Dated:  June 6, 1996\n                              --------------------\n\n\n================================================================================\n\n \n                               TABLE OF CONTENTS\n\n\n                                                                            Page\n                                                                            ----\nARTICLE 1 DEFINITIONS.......................................................   1\n              1.1    Definitions............................................   1\n              1.2    Accounting Terms; Financial Statements.................   4\n              1.3    Knowledge of the Company...............................   4\n\nARTICLE 2 PURCHASE AND SALE OF PREFERRED STOCK..............................   4\n              2.1    Purchase and Sale of Preferred Stock...................   4\n              2.2    Closing................................................   4\n\nARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.... ................   5\n              3.1   Corporate Existence and Power...........................   5\n              3.2   Corporate Authorization; No Contravention...............   5\n              3.3   Governmental Authorization; Third Party Consents........   5\n              3.4   Binding Effect..........................................   5\n              3.5   Litigation..............................................   5\n              3.6   Compliance with Laws....................................   6\n              3.7   Capitalization..........................................   6\n              3.8   No Default or Breach....................................   7\n              3.9   Financial Statements....................................   7\n              3.10  No Material Adverse Change; Ordinary Course of Business.   7\n              3.11  Investment Company......................................   7\n              3.12  Private Offering........................................   7\n              3.13  Title to Assets.........................................   7\n              3.14  Intellectual Property...................................   7\n              3.15  Liabilities.............................................   8\n              3.16  Broker's, Finder's or Similar Fees......................   8\n              3.17  Disclosure in this Agreement and Other Documents........   8\n\n\nARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER...................   8\n              4.1   Existence and Power.....................................   8\n              4.2   Authorization; No Contravention.........................   8\n              4.3   Governmental Authorization; Third Party Consents........   8\n              4.4   Binding Effect..........................................   8\n              4.5   Purchase Entirely for Own Account.......................   9\n              4.6   Restricted Securities...................................   9\n              4.7   Further Limitations on Disposition......................   9\n              4.8   Disclosure of Information...............................   9\n              4.9   Investment Experience...................................   9\n              4.10  Legends.................................................   9\n              4.11  Broker's, Finder's or Similar Fees......................  10\n              4.12  Nature of Transaction...................................  10\n\nARTICLE 5 BLUE SKY..........................................................  10\n              5.1   Corporate Securities Law................................  10\n\n\n                                      i.\n\n \n                                                                            Page\n                                                                            ----\n\n<font size=\"2\">ARTICLE 6 CONDITIONS TO THE OBLIGATION OF THE PURCHASER TO CLOSE............  11\n              6.1   Secretary's Certificate.................................  11\n              6.2   Certificate.............................................  11\n              6.3   Documents...............................................  11\n              6.4   Stockholders Agreement Supplement and Amendment.........  11\n              6.5   Restated Articles of Incorporation......................  11\n              6.6   Consents and Approvals..................................  11\n\nARTICLE 7 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY TO CLOSE....... .....  12\n              7.1   Restated Articles of Incorporation......................  12\n              7.2   Purchaser's Certificate.................................  12\n              7.3   Stockholders Agreement Supplement and Amendment.........  12\n              7.4   California Qualification................................  12\n\nARTICLE 8 INDEMNIFICATION...................................................  12\n              8.1   Indemnification of Purchaser............................  12\n              8.2   Indemnification of the Company..........................  13\n              8.3   Notification............................................  13\n\nARTICLE 9 AFFIRMATIVE COVENANTS.............................................  14\n              9.1   Preservation of Corporate Existence.....................  14\n              9.2   Financial Statements and Other Information..............  14\n              9.3   Inspection..............................................  14\n              9.4   Back-Ups of Computer Software...........................  15\n              9.5   Books and Records.......................................  15\n              9.6   Conversion of Preferred Stock...........................  15\n\nARTICLE 10 MISCELLANEOUS....................................................  15\n              10.1  Lock-Up Period..........................................  15\n              10.2  Survival of Representations and Warranties..............  15\n              10.3  Notices.................................................  15\n              10.4  Successors and Assigns..................................  16\n              10.5  Amendment and Waiver....................................  16\n              10.6  Counterparts............................................  17\n              10.7  Headings................................................  17\n              10.8  Governing Law...........................................  17\n              10.9  Severability............................................  17\n              10.10 Entire Agreement........................................  17\n              10.11 Fees....................................................  17\n              10.12 Further Assurances......................................  17\n\n                                      ii.\n\n \n<\/font>                            STOCK PURCHASE AGREEMENT\n\n\n\n          This AGREEMENT, dated June 6, 1996 (this 'Agreement'), among E*Trade\nGroup, Inc., a California corporation (the 'Company'), and SOFTBANK Holdings\nInc., a Delaware corporation ('SOFTBANK' or the 'Purchaser').\n\n          WHEREAS, the Company proposes to sell to the Purchaser, for an\naggregate purchase price of $8,999,900, an aggregate of 11,180 shares of Series\nC Preferred Stock, par value $.15 per share, of the Company (the 'Preferred\nStock').\n\n          NOW, THEREFORE, in consideration of the mutual covenants and\nagreements set forth herein and for good and valuable consideration the receipt\nand adequacy of which is hereby acknowledged, the parties hereto agree as\nfollows:\n\n\n                                   ARTICLE 1\n\n                                  DEFINITIONS\n                                  -----------\n\n          1.1  Definitions.  As used in this Agreement, and unless the context\n               -----------                                                    \nrequires a different meaning, the following terms have the meanings indicated:\n\n          'Affiliate' shall mean any Person who is an 'affiliate' as defined in\n           ---------                                                           \nRule 12b-2 under the Exchange Act.\n\n          'Agreement' means this Agreement as the same may be amended,\n           ---------                                                  \nsupplemented or modified in accordance with the terms hereof.\n\n          'Balance Sheet Date' means March 31, 1996.\n           ------------------                       \n\n          'Business Day' means any day other than a Saturday, Sunday or other\n           ------------                                                      \nday on which commercial banks in the State of California are authorized or\nrequired by law or executive order to close.\n\n          'Bylaws' means the amended and restated bylaws of the Company as in\n           ------                                                            \neffect as of the Closing Date substantially in the form attached hereto as\n                                                                          \nExhibit B.\n- --------- \n\n          'Capital Lease Obligation' of any Person shall mean, as of the date of\n           ------------------------                                             \ndetermination, any obligation of such Person to pay rent or other amounts under\nany lease of (or other arrangement conveying the right to use) real or personal\nproperty, or a combination thereof, which obligation is required to be\nclassified and accounted for as capital leases on a balance sheet of such Person\nunder GAAP and, for the purposes of this Agreement, the amount of such\nobligations, as of the date of determination, shall be the capitalized amount\nthereof at such time determined in accordance with GAAP consistently applied.\n\n          'Closing' has the meaning set forth in Section 2.2 of this Agreement.\n           -------                                                             \n\n          'Closing Date' means the date specified in Section 2.2 of this\n           ------------                                                 \nAgreement.\n\n                                      1.\n\n \n          'Code' means the Internal Revenue Code of 1986, as amended, or any\n           ----                                                             \nsuccessor statute thereto.\n\n          'Commission' means the Securities and Exchange Commission or any\n           ----------                                                     \nsimilar agency then having jurisdiction to enforce the Securities Act.\n\n          'Common Stock' means the Common Stock, par value $.10 per share, of\n           ------------                                                      \nthe Company.\n\n          'Common Stock Equivalents' means any security or obligation which is\n           ------------------------                                           \nby its terms convertible into shares of capital stock of the Company and any\noption, warrant or other subscription or purchase right with respect to capital\nstock of the Company.\n\n          'Company' means E*Trade Group, Inc., a California corporation.\n           -------                                                      \n\n          'Condition of the Company' means the assets, business, properties,\n           ------------------------                                         \noperations or financial condition of the Company, taken as a whole.\n\n          'Contingent Obligation' means, as applied to any Person, any direct or\n           ---------------------                                                \nindirect liability of that Person with respect to any Indebtedness, lease,\ndividend, guaranty, letter of credit or other obligation, contractual or\notherwise (the 'primary obligation') of another Person (the 'primary obligor'),\n                ------------------                           ---------------   \nwhether or not contingent, (a) to purchase, repurchase or otherwise acquire such\nprimary obligations or any property constituting direct or indirect security\ntherefor, or (b) to advance or provide funds (i) for the payment or discharge of\nany such primary obligation, or (ii) to maintain working capital or equity\ncapital of the primary obligor or otherwise to maintain the net worth or\nsolvency or any balance sheet item, level of income or financial condition of\nthe primary obligor or (c) to purchase property, securities or services\nprimarily for the purpose of assuring the beneficiary of any such primary\nobligation of the ability of the primary obligor to make payment of such primary\nobligation, or (d) otherwise to assure or hold harmless the beneficiary of any\nsuch primary obligation against loss in respect thereof.  The amount of any\nContingent Obligation shall be deemed to be an amount equal to the stated or\ndeterminable amount of the primary obligation in respect of which such\nContingent Obligation is made or, if not stated or determinable, the maximum\nreasonably anticipated liability in respect thereof.\n\n          'Contractual Obligations' means as to any Person, any provision of any\n           -----------------------                                              \nsecurity issued by such Person or of any agreement, undertaking, contract,\nindenture, mortgage, deed of trust or other instrument to which such Person is a\nparty or by which it or any of its property is bound.\n\n          'Defined Benefit Plan' means a defined benefit plan within the meaning\n           --------------------                                                 \nof Section 3(35) of ERISA or Section 414(j) of the Code, whether funded or\nunfunded, qualified or nonqualified (whether or not subject to ERISA or the\nCode).\n\n          'Environmental Laws' means federal, state and local laws, principles\n           ------------------                                                 \nof common law, regulations and codes, as well as orders, decrees, judgments or\ninjunctions issued, promulgated, approved or entered thereunder relating to\npollution, protection of the environment or public health and safety.\n\n          'ERISA' means the Employee Retirement Income Security Act of 1974, as\n           -----                                                               \namended (or any successor statute thereto).\n\n          'ERISA Affiliate' means any Person that is treated as a single\n           ---------------                                              \nemployer with the Company under Section 414(b), (c), (m) or (o) of the Code.\n\n                                      2.\n\n \n          'Exchange Act' means the Securities Exchange Act of 1934, as amended,\n           ------------                                                        \n(or any successor statute thereto) and the rules and regulations of the\nCommission promulgated thereunder.\n\n          'Financial Statements' has the meaning set forth in Section 3.9 of\n           --------------------                                             \nthis Agreement.\n\n          'GAAP' means United States generally accepted accounting principles in\n           ----                                                                 \neffect from time to time.\n\n          'Governmental Authority' means the government of the United States,\n           ----------------------                                            \nany state, city, locality or other political subdivision thereof, any entity\nexercising executive, legislative, judicial, regulatory or administrative\nfunctions of or pertaining to government, and any corporation or other entity\nowned or controlled, through stock or capital ownership or otherwise, by any of\nthe foregoing.\n\n          'Indebtedness' means as to any Person (a) all obligations of such\n           ------------                                                    \nPerson for borrowed money (including, without limitation, reimbursement and all\nother obligations with respect to surety bonds, letters of credit and bankers'\nacceptances, whether or not matured), (b) all obligations of such Person\nevidenced by notes, bonds, debentures or similar instruments, (c) all\nobligations of such Person to pay the deferred purchase price of property or\nservices, except (i) trade accounts payable and accrued commercial or trade\nliabilities arising in the ordinary course of business and (ii) compensation,\npension obligations and other obligations arising out of employee benefits and\nemployee arrangements, (d) all interest rate and currency swaps, caps, collars\nand similar agreements or hedging devices under which payments are obligated to\nbe made by such Person, whether periodically or upon the happening of a\ncontingency, (e) all indebtedness created or arising under any conditional sale\nor other title retention agreement with respect to property acquired by such\nPerson (even though the rights and remedies of the seller or lender under such\nagreement in the event of default are limited to repossession or sale of such\nproperty), (f) all obligations of such Person under leases which have been or\nshould be, in accordance with GAAP, recorded as capital leases, (g) all\nindebtedness secured by any Lien on any property or asset owned or held by that\nPerson regardless of whether the indebtedness secured thereby shall have been\nassumed by that Person or is non recourse to the credit of that Person, and (h)\nany Contingent Obligation of such Person.\n\n          'Liabilities' has the meaning set forth in Section 3.15 of this\n           -----------                                                   \nAgreement.\n\n          'Lien' means any mortgage, deed of trust, pledge, hypothecation,\n           ----                                                           \nassignment, encumbrance, lien (statutory or other) or preference, priority,\nright or other security interest or preferential arrangement of any kind or\nnature whatsoever (excluding preferred stock and equity related preferences)\nincluding, without limitation, those created by, arising under or evidenced by\nany conditional sale or other title retention agreement, the interest of a\nlessor under a Capital Lease Obligation, or any financing lease having\nsubstantially the same economic effect as any of the foregoing.\n\n          'NASD' means the National Association of Securities Dealers, Inc.\n           ----                                                            \n\n          'Outstanding Borrowings' means all Indebtedness of the Company or its\n           ----------------------                                              \nSubsidiary for money borrowed that is outstanding on the relevant date of\ndetermination.\n\n          'Permits' has the meaning assigned to such term in Section 3.6 of the\n           -------                                                             \nAgreement.\n\n          'Person' means any individual, firm, corporation, limited liability\n           ------                                                            \ncompany, partnership, trust, incorporated or unincorporated association, joint\nventure, joint stock company, Governmental\n\n                                      3.\n\n \nAuthority or other entity of any kind, and shall include any successor (by\nmerger or otherwise) of such entity.\n\n          'Preferred Stock' means Series C Preferred Stock, par value $.15 per\n           ---------------                                                    \nshare, of the Company.\n\n          'Purchased Shares' has the meaning set forth in Section 2.1 of this\n           ----------------                                                  \nAgreement.\n\n          'Purchaser' means SOFTBANK Holdings Inc..\n           ---------                               \n\n          'Requirements of Law' means as to any Person, any law, treaty, rule,\n           -------------------                                                \nregulation, right, privilege, qualification, license or franchise or\ndetermination of an arbitrator or a court or other Governmental Authority, in\neach case applicable or binding upon such Person or any of its property or to\nwhich such Person or any of its property is subject or pertaining to any or all\nof the transactions contemplated or referred to herein.\n\n          'Restated Articles of Incorporation' means the Restated Articles of\n           ----------------------------------                                \nIncorporation of the Company (including a Certificate of Determination or other\namendments establishing the Series C Preferred Stock), as the same may have \nbeen amended and as in effect as of the Closing Date substantially in the form \nattached hereto as Exhibit A.\n                   --------- \n\n          'Securities Act' means the Securities Act of 1933, as amended, (or any\n           --------------                                                       \nsuccessor statute thereto) and the rules and regulations of the Commission\npromulgated thereunder.\n\n          'Stockholders Agreement'  means the Stockholders Agreement among the\n           ----------------------                                             \nCompany, General Atlantic Partners II, L.P., GAP Coinvestment Partners, L.P.,\nWilliam A. Porter and Bernard A. Newcomb, dated September 28, 1995, as amended\nby the Stockholders Agreement Supplement and Amendment.\n\n          'Stockholders Agreement Supplement and Amendment' means the\n           -----------------------------------------------           \nStockholders Agreement Supplement and Amendment, substantially in the form\nattached hereto as Exhibit C, which supersedes and replaces Supplement No. 1 to\n                   ---------                                                   \nthe Stockholders Agreement dated April 10, 1996 by and among General Atlantic\nPartners II, L.P., GAP Coinvestment Partners, L.P., William A. Porter, Bernard\nA. Newcomb, Richard S. Braddock and the Cotsakos Group.\n\n          'Subsidiary' means E*Trade Securities, Inc., a California corporation.\n           ----------                                                           \n\n          'Transaction Documents' means collectively, this Agreement and any\n           ---------------------                                            \nmaterials or documents delivered pursuant hereto, including the Stockholders\nAgreement Supplement.\n\n          1.2  Accounting Terms; Financial Statements.  All accounting terms\n               --------------------------------------                       \nused herein not expressly defined in this Agreement shall have the respective\nmeanings given to them in accordance with sound accounting practice.  The term\n'sound accounting practice' shall mean such accounting practice as, in the\nopinion of the independent certified public accountants regularly retained by\nthe Company, conforms at the time to GAAP applied on a consistent basis except\nfor changes with which such accountants concur.\n\n          1.3  Knowledge of the Company.  All references to the knowledge of the\n               ------------------------                                         \nCompany shall mean the actual knowledge of any executive officer of the Company\nor any executive officer of its Subsidiary.\n\n                                      4.\n\n \n                                   ARTICLE 2\n\n                      PURCHASE AND SALE OF PREFERRED STOCK\n                      ------------------------------------\n\n          2.1  Purchase and Sale of Preferred Stock.  Subject to the terms and\n               ------------------------------------                           \nconditions herein set forth, the Company agrees to sell to the Purchaser, and\nthe Purchaser agrees to purchase from the Company on the Closing Date, 11,180\nshares of Preferred Stock, for the purchase price of $805 per share (all of the\nshares of Preferred Stock being purchased pursuant hereto being referred to\nherein as 'Purchased Shares').\n\n          2.2  Closing.  The purchase and issuance of the Purchased Shares (the\n               -------                                                         \n'Closing') shall take place on the date hereof (the 'Closing Date') and shall be\nconsummated in accordance with arrangements reasonably acceptable to counsel for\nthe Purchaser and counsel for the Company.  On the Closing Date, (a) the Company\nand the Purchaser shall execute and deliver the Transaction Documents, and (b)\nthe Company shall deliver to the Purchaser certificates representing the\nPurchased Shares against delivery by the Purchaser to the Company, of the\naggregate purchase price therefor by wire transfer of immediately available\nfunds or certified check.  Notwithstanding the foregoing, the Purchaser\nacknowledges and agrees that the Certificate of Determination of Preferences,\ndesignating and creating the Series C Preferred Stock, may not be accepted for\nfiling by the California Secretary of State on the Closing Date.  The Company\nagrees that the $8,999,900 (the 'Proceeds') delivered to the Company pursuant to\nthis Agreement shall be held in a non-interesting bearing segregated account of\nthe Company and shall not be drawn upon or utilized until such time as the\nCertificate of Determination of Preferences is accepted by the California\nSecretary of State for filing and is in full force and effect.  Upon delivery of\nthe Proceeds to the Company, the transactions contemplated hereby shall be\ndeclared closed. As a condition subsequent to the Closing, the Company agrees to\nrefund the Proceeds (without interest) to the Purchaser if the Certificate of\nDetermination of Preferences is not accepted for filing by the California\nSecretary of State and in full force and effect within four (4) weeks of the\nClosing Date. Purchaser acknowledges that the form of Certificate of\nDetermination of Preferences initially submitted for filing with the California\nSecretary of State may be altered or amended in response to comments received\nfrom the Secretary of State which alterations or amendments shall not materially\nalter the rights, preferences and privileges of the Series C Preferred Stock.\n\n\n                                   ARTICLE 3\n\n                              REPRESENTATIONS AND\n                           WARRANTIES OF THE COMPANY\n                           -------------------------\n\n          The Company represents and warrants to the Purchaser, as follows\n(except as set forth in the attached Schedule of Exceptions which includes a\nsupplemental disclosure entitled 'Risk Factors').\n\n          3.1  Corporate Existence and Power.  Each of the Company and its\n               -----------------------------                              \nSubsidiary (a) is a corporation duly organized, validly existing and in good\nstanding under the Laws of the State of California; (b) has all requisite\ncorporate power and authority to own and operate its property, to lease the\nproperty it operates as lessee and to conduct the business in which it is\ncurrently engaged; and (c) is duly qualified as a foreign corporation, licensed\nand in good standing under the laws of each jurisdiction in which its ownership,\nlease or operation of property or the conduct of its business requires such\nqualification, except to the extent that the failure to do so or be so would not\nhave a material adverse effect on the Condition of the Company.  The Company has\nthe requisite corporate power and authority \n\n                                      5.\n\n \nto execute, deliver and perform its obligations under this Agreement and each of\nthe other Transaction Documents to which it is a party.\n\n          3.2  Corporate Authorization; No Contravention.  The execution,\n               -----------------------------------------                 \ndelivery and performance by the Company of this Agreement and each of the other\nTransaction Documents to which it is a party and the transactions contemplated\nhereby and thereby, including, without limitation, the sale, issuance and\ndelivery of the Purchased Shares (a) have been duly authorized by all necessary\ncorporate action of the Company; (b) do not contravene the terms of the Restated\nArticles of Incorporation or Bylaws, or any amendment of either thereof, and (c)\ndo not violate, conflict with or result in any breach or contravention of or the\ncreation of any Lien under, any Contractual Obligation of the Company, or any\nRequirement of Law applicable to the Company.\n\n          3.3  Governmental Authorization; Third Party Consents.  No approval,\n               ------------------------------------------------               \nconsent, compliance, exemption, authorization, or other action by, or notice to,\nor filing with, any Governmental Authority or any other Person in respect of any\nRequirement of Law or Contractual Obligation is necessary or required in\nconnection with the execution, delivery or performance (including, without\nlimitation, the sale, issuance and delivery of the Purchased Shares), by the\nCompany of this Agreement and each of the other Transaction Documents to which\nit is a party or the transactions contemplated hereby or thereby, except for the\nfiling of a Notice of Transaction pursuant to Section 25102(f) of the California\nCorporation Code and a Form D pursuant to the Securities Act, which filings will\nbe made by the Company immediately following the Closing.\n\n          3.4  Binding Effect.  This Agreement and each of the other Transaction\n               --------------                                                   \nDocuments to which the Company is a party have been duly executed and delivered\nby the Company and constitute the legal, valid and binding obligation of the\nCompany, enforceable against the Company in accordance with their terms, except\nas enforceability may be limited by applicable bankruptcy, insolvency,\nreorganization, fraudulent conveyance or transfer, moratorium or similar laws\naffecting the enforcement of creditors' rights generally and by general\nprinciples of equity relating to enforceability (regardless of whether\nconsidered in a proceeding at law or in equity).\n\n          3.5  Litigation.  There are no legal actions, suits, proceedings,\n               ----------                                                  \nclaims, complaints, disputes or investigations pending, or to the knowledge of\nthe Company threatened, at law, in equity, in arbitration or before any\nGovernmental Authority against the Company or its Subsidiary or any of the\nproperty or assets of the Company or its Subsidiary.\n\n          3.6  Compliance with Laws.\n               -------------------- \n\n               (a)  To the knowledge of the Company, the Company and its \nSubsidiary are in compliance with all Requirements of Law in all respects.\n\n               (b)  (i)    The Company and its Subsidiary have all licenses,\npermits, orders or approvals of any Governmental Authority and self-regulating\norganization, including the NASD (collectively, 'Permits') that are material to\nor necessary for the conduct of the business or proposed business of the Company\nand its Subsidiary.\n\n                    (ii)   Such Permits are in full force and effect.\n\n                    (iii)  No violations are or have been recorded in respect of\nany Permit.\n\n                                      6.\n\n \n               (c) The Subsidiary is registered as a broker-dealer with the\nCommission, is a duly qualified member in good standing of the NASD and has\nprovided to the Purchaser true and correct copies of all its filings with the\nCommission and amendments thereto during the last three years.  It is duly\nqualified and registered as a broker-dealer in each jurisdiction where failure\nto be so qualified or registered could have a material adverse effect on the\nCondition of the Company and the Subsidiary, and, to the knowledge of the\nCompany, is in compliance with all applicable laws, rules and regulations of the\nCommission, the NASD and any such jurisdiction.\n\n               (d) To the knowledge of the Company, no material expenditure is\npresently required by the Company or its Subsidiary to comply with any existing\nRequirement of Law.\n\n               (e) To the knowledge of the Company, the property, assets and\noperations at any time owned or leased by the Company or its Subsidiary have\nbeen in compliance in all material respects with all applicable Environmental\nLaws, while owned or leased.\n\n          3.7  Capitalization.  The authorized capital stock of the Company,\n               --------------                                               \nafter giving effect to the transactions contemplated hereby, is set forth on\n                                                                            \nSchedule 3.7 which lists the number of (a) authorized, issued and outstanding\n- ------------                                                                 \nshares of Common Stock, (b) authorized, issued and outstanding shares of Series\nA Preferred Stock, and (c) the authorized, issued and outstanding shares of\nSeries B Preferred Stock.  Schedule 3.7 also sets forth a true and complete list\n                           ------------                                         \nof the stockholders of the Company and, opposite the name of each stockholder,\nthe amount of all outstanding capital stock and Common Stock Equivalents owned\nby such stockholder.  All sales of stock to such stockholders were properly made\nunder the Securities Act to an accredited investor (as such term is defined in\nthe Securities Act) or were otherwise exempt from registration under the\nSecurities Act.  Schedule 3.7 also sets forth the number of (a) shares of Common\n                 ------------                                                   \nStock the Company has reserved for issuance to employees, directors and\nconsultants upon exercise of stock options, (b) shares reserved by the Company\nauthorized for future options, and (c) shares of Common Stock reserved by the\nCompany for issuance upon conversion of the Preferred Stock.  Except as\ndescribed herein, there are no options, warrants, conversion privileges or other\nrights presently outstanding to purchase or otherwise acquire any authorized but\nunissued shares of the Company's capital stock or Common Stock Equivalents and\nthe Company is under no obligation (whether contingent or otherwise) to issue,\ncall, repurchase, redeem or transfer any securities of the Company.  The\nPurchased Shares to be issued to the Purchaser hereunder have been duly and\nvalidly authorized and, when issued and delivered against payment therefor as\nprovided herein, will be duly and validly issued and fully paid and non-\nassessable and entitled to the rights, preferences and terms set forth in the\nCertificate of Determination of Preferences.  The shares of Common Stock\nissuable upon conversion of the Purchased Shares (the 'Conversion Shares') have\nbeen duly and validly authorized and reserved for issuance upon such conversion\nand, when issued upon such conversion will be validly issued, fully paid and\nnonassessable. The issued and outstanding shares of Common Stock and Preferred\nStock, including, without limitation, the Purchased Shares, are all duly\nauthorized, validly issued, fully paid and nonassessable, and were issued in\ncompliance with the registration and qualification requirements of all\napplicable federal securities laws.\n\n          3.8  No Default or Breach.  Neither the Company nor its Subsidiary is\n               --------------------                                            \nin default under or with respect to any provision of their respective articles\nof incorporation or bylaws or any Contractual Obligation, and no event has\noccurred and is continuing under any such provision, which with lapse of time or\nthe giving of notice or both, would constitute a material default thereunder.\n\n          3.9  Financial Statements.  The Company has delivered to the Purchaser\n               --------------------                                             \nits audited consolidated financial statements (balance sheet and statements of\noperations, cash flows and shareholders' equity, together with the notes\nthereto) for the fiscal year ended and as at September 30, 1995, and its\n\n                                      7.\n\n \nunaudited consolidated balance sheet and statements of operations for the six\nmonth period ending March 31, 1996 (the 'Financial Statements').  The Financial\nStatements have been prepared in accordance with GAAP applied on a consistent\nbasis throughout the periods indicated and with each other, except that the\nunaudited financial statements do not contain full footnotes or typical year-end\nadjustments.  The Financial Statements fairly present the financial condition,\noperating results and cash flows of the Company as of the respective dates and\nfor the respective periods indicated in accordance with GAAP, subject, in the\ncase of the unaudited financial statements, to normal year-end adjustments.\n\n          3.10 No Material Adverse Change; Ordinary Course of Business.  Since\n               -------------------------------------------------------        \nthe Balance Sheet Date (a) there has not been any material adverse change in the\nCondition of the Company, (b) neither the Company nor its Subsidiary has\nparticipated in any transaction or acted outside the ordinary course of\nbusiness, including, without limitation, declaring or paying any dividend or\ndeclaring or making any distribution to its shareholders, except out of the\nearnings of the Company or its Subsidiary and (c) neither the Company nor its\nSubsidiary has increased the compensation of any of its officers or the rate of\npay of any of its employees, except as part of regular compensation increases in\nthe ordinary course of its business.\n\n          3.11 Investment Company.  Neither the Company nor its Subsidiary is an\n               ------------------                                               \n'investment company' within the meaning of the Investment Company Act of 1940,\nas amended.\n\n          3.12 Private Offering.  No form of general solicitation or general\n               ----------------                                             \nadvertising was used by the Company or its representatives in connection with\nthe offer or sale of the Purchased Shares.  No registration of the Purchased\nShares, pursuant to the provisions of the Securities Act or any state securities\nor 'blue sky' laws, will be required by the offer, sale or issuance of the\nPurchased Shares.\n\n          3.13 Title to Assets.  The Company or its Subsidiary has good and\n               ---------------                                             \nmarketable title to all of the properties and assets used in their business in\neach case free and clear of any Lien, except for Liens not material to the\nCondition of the Company.\n\n          3.14 Intellectual Property.\n               --------------------- \n\n               (a)  (i)    To the knowledge of the Company, the Company or its\nSubsidiary owns or is licensed or otherwise has the right to use all trademarks,\nservice marks, trade names, copyrights, code secrets, licenses, franchises and\nother rights, all products, processes and methods, computer software, computer\nprograms and similar intangible assets of the Company and its Subsidiary\n(collectively, 'Intellectual Property') that are necessary for the operation of\nits business as presently conducted and or contemplated in its business plan.\n\n                    (ii)   To the knowledge of the Company, none of the \nIntellectual Property currently sold to third parties by or used by the Company\nor its Subsidiary infringes upon or otherwise violates any Intellectual Property\nrights of others.\n\n                    (iii)  No litigation is pending and no claim has been made\nagainst the Company or its Subsidiary or, to the knowledge of the Company, is\nthreatened, contesting the right of the Company or its Subsidiary to sell or\nlicense to third parties or use the Intellectual Property presently sold or\nlicensed to third parties or used by the Company or its Subsidiary.\n\n               (b)  To the knowledge of the Company, no Person is infringing \nupon or otherwise violating the Intellectual Property rights of the Company or\nits Subsidiary.\n\n                                      8.\n\n \n          3.15 Liabilities.  Neither the Company nor its Subsidiary has any\n               -----------                                                 \ndirect or indirect obligation or liability (the 'Liabilities'), other than (i)\nLiabilities fully and adequately reflected or reserved against on the Financial\nStatements, (ii) Liabilities not required by GAAP to be set forth on the\nFinancial Statements and (iii) Liabilities incurred since the Balance Sheet Date\nin the ordinary course of business.\n\n          3.16 Broker's, Finder's or Similar Fees.  There are no brokerage\n               ----------------------------------                         \ncommissions, finder's fees or similar fees or commissions payable by the Company\nor its Subsidiary in connection with the transactions contemplated hereby based\non any agreement, arrangement or understanding with the Company or any action\ntaken by any such entity.\n\n          3.17 Disclosure in this Agreement and Other Documents.  This Agreement\n               ------------------------------------------------                 \nand the documents and certificates furnished to the Purchaser by the Company at\nor prior to the Closing, taken as a whole, do not contain any untrue statement\nof a material fact or, to the knowledge of the Company, omit to state a material\nfact necessary in order to make the statements contained herein or therein, in\nthe light of the circumstances under which they were made, not misleading.\n\n\n                                   ARTICLE 4\n\n                              REPRESENTATIONS AND\n                          WARRANTIES OF THE PURCHASER\n                          ---------------------------\n\n          The Purchaser hereby represents and warrants to the Company as\nfollows:\n\n          4.1  Existence and Power.  Purchaser (a) is a corporation duly\n               -------------------                                      \norganized and validly existing under the laws of the jurisdiction of its\nformation and (b) has the requisite power and authority to execute, deliver and\nperform its obligations under this Agreement and each of the other Transaction\nDocuments to which it is a party.\n\n          4.2  Authorization; No Contravention.  The execution, delivery and\n               -------------------------------                              \nperformance by Purchaser under the Transaction Documents to which it is a party\nand the transactions contemplated hereby and thereby, including, without\nlimitation, the purchase of the Purchased Shares, (a) have been duly authorized\nby all necessary action, (b) do not contravene the terms of the Purchaser's\norganizational documents, or any amendment thereof, and (c) do not violate,\nconflict with or result in any breach or contravention of or the creation of any\nLien under, any Contractual Obligation of the Purchaser, or any Requirement of\nLaw applicable to the Purchaser.\n\n          4.3  Governmental Authorization; Third Party Consents.  No approval,\n               ------------------------------------------------               \nconsent, compliance, exemption, authorization, or other action by, or notice to,\nor filing with, any Governmental Authority or any other Person in respect of any\nRequirement of Law, is necessary or required in connection with the execution,\ndelivery or performance (including, without limitation, the purchase of the\nPurchased Shares) by the Purchaser of the Transaction Documents to which the\nPurchaser is a party or the transactions contemplated hereby.\n\n          4.4  Binding Effect.  The Transaction Documents to which the Purchaser\n               --------------                                                   \nis a party have been duly executed and delivered by the Purchaser and constitute\nthe legal, valid and binding obligation of the Purchaser, enforceable against it\nin accordance with its terms, except as enforceability may be limited by\napplicable bankruptcy, insolvency, reorganization, fraudulent conveyance or\ntransfer, \n\n                                      9.\n\n \nmoratorium or similar laws affecting the enforcement of creditors' rights\ngenerally or by equitable principles relating to enforceability (regardless of\nwhether considered in a proceeding at law or in equity).\n\n          4.5  Purchase Entirely for Own Account.  Except as provided in this\n               ---------------------------------                             \nSection 4.5 and in 10.3, the Purchased Shares to be purchased by the Purchaser\nhereunder will be acquired for investment for the Purchaser's own account, not\nas nominee or agent, and not with a view to or for sale or resale in connection\nwith any distribution of any part thereof, and the Purchaser has no present\nintention of selling, granting any participation in, or otherwise distributing\nthe same.  The Purchaser does not have any contract, undertaking, agreement or\narrangement with any Person to sell, transfer or grant participations to any\nPerson, with respect to any of the Purchased Shares.  Notwithstanding the\nforegoing, the Purchaser shall be entitled to transfer all or part of the\nPurchased Shares to one or more affiliated partnerships managed by it.\n\n          4.6  Restricted Securities.  The Purchaser understands that the\n               ---------------------                                     \nPurchased Shares are characterized as 'restricted securities' under the federal\nsecurities laws inasmuch as they are being acquired from the Company in a\ntransaction not involving a public offering and that under such laws and\napplicable regulations such securities may be resold without registration under\nthe Securities Act only in certain limited circumstances.  In this connection\nthe Purchaser represents that it is familiar with the Commission's Section 4.5,\nSection 10.3, Rule 144, as presently in effect, and understands the resale\nlimitations imposed thereby and by the Securities Act.\n\n          4.7  Further Limitations on Disposition.  Except as provided in\n               ----------------------------------                        \nSection 10.3, without in any way limiting the representations set forth above,\nthe Purchaser further agrees not to make any disposition of all or any portion\nof the Purchased Shares until (a) there is then in effect an effective\nregistration statement under the Securities Act covering such proposed\ndisposition and such disposition is made in accordance with such registration\nstatement; or (b)(i) the Purchaser shall have notified the Company of the\nproposed disposition and shall have furnished the Company with a detailed\nstatement of the circumstances surrounding the proposed disposition, (ii) if\nreasonably requested by the Company, the Purchaser shall have furnished the\nCompany with an opinion of counsel, reasonably satisfactory to the Company, that\nsuch disposition will not require registration of such shares under the\nSecurities Act and (iii) if reasonably requested by the Company, the transferee\nshall have furnished to the Company its agreement to abide by its restrictions\non transfer set forth herein as if it were a purchaser hereunder.  It is agreed\nthat the Company will not require opinions of counsel for transactions made\npursuant to Section 4.5, Section 10.3 and Rule 144, as currently in existence,\nor Rule 144A except in unusual circumstances.\n\n          4.8  Disclosure of Information.  The Purchaser has had an opportunity\n               -------------------------                                       \nto ask questions and receive answers from the Company regarding the terms and\nconditions of the offering of the Purchased Shares and has received from the\nCompany all of the information it has requested.  The Purchaser has received a\ndraft registration statement on Form S-1 which the Company expects to file with\nthe Securities and Exchange Commission to register the initial public offering\nof the Company's Common Stock.  The draft registration statement includes a\ndescription of the Company's business and an indication of the risk factors\nassociated with purchase of the Company's securities.  The Purchaser\nacknowledges and agrees that the registration statement so received is a draft\nonly, is subject to change and understands and acknowledges that such changes\nmay be material.\n\n          4.9  Investment Experience.  The Purchaser is an investor in\n               ---------------------                                  \nsecurities of companies in the development stage and acknowledges that it has,\nby reason of its business or financial experience, the capacity to protect its\nown interests in connection with the transaction and that it is able to bear the\neconomic risk of its investment in the transaction.  The Purchaser is an\n'Accredited Investor' as defined in Commission Rule 501(a).  Purchaser has not\nbeen organized solely for the purpose of acquiring the \n\n                                      10.\n\n \nPurchased Shares, and its investment (including mandatory assessments) does not\nexceed 10% of its net worth.\n\n          4.10 Legends.  To the extent applicable, each certificate or other\n               -------                                                      \ndocument evidencing any of the Purchased Shares issued hereunder or any of the\nConversion Shares shall be endorsed with the legend set forth below, and the\nPurchaser covenants that, except to the extent such restrictions are waived by\nthe Company and except as set forth in Sections 4.5 and 10.3, the Purchaser\nshall not transfer the Purchased Shares or the Conversion Shares without\ncomplying with the restrictions on transfer described in the legend endorsed\nthereon:\n\n          'THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE\nUNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,\nTRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION\nTHEREOF UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR COMPLIANCE WITH\nRULE 144 OR RULE 144-A PROMULGATED UNDER SUCH ACT, OR, UNLESS THE COMPANY HAS\nRECEIVED AN OPINION OF COUNSEL, IF REASONABLY REQUESTED, SATISFACTORY TO ITS\nCOUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.'\n\n          The Company shall not be required (i) to transfer on its books any\nshares of the Purchased Shares or Conversion Shares which shall have been\ntransferred in violation of the provisions set forth in this Agreement, or (ii)\nto treat as owner of such shares or to accord the right to vote as such owner or\nto pay dividends to any transferee to whom such shares shall have been so\ntransferred in violation of the provisions set forth in this Agreement.\n\n          4.11 Broker's, Finder's or Similar Fees.  There are no brokerage\n               ----------------------------------                         \ncommissions, finder's fees or similar fees or commissions payable by the\nPurchaser, in connection with the transactions contemplated hereby based on any\nagreement, arrangement or understanding with the Purchaser or any action taken\nby the Purchaser.\n\n          4.12 Nature of Transaction.  Purchaser acknowledges that it was\n               ---------------------                                     \nintroduced to the Company by a present shareholder of the Company and not as a\nresult or in connection with any form of general solicitation or advertisement\nregarding an offering or sale of the Company's securities.  Purchaser further\nacknowledges that the Company is currently in the process of preparing a\nregistration statement on Form S-1 to effect the initial public offering of the\nCompany's Common Stock.  Purchaser acknowledges that it has had access to and an\nopportunity to ask questions of the Company's proposed underwriters for purposes\nof its due diligence review of the Company and its operations.  Purchaser\nfurther understands that there can be no assurance that the Company will be\nsuccessful in completing an initial public offering to the Company's Common\nStock or that any initial public offering price per share will be greater than\nthe amount paid per share by Purchaser in this transaction.\n\n\n                                   ARTICLE 5\n\n                                    BLUE SKY\n                                    --------\n\n          5.1  Corporate Securities Law.  THE SALE OF SECURITIES WHICH ARE THE\n               ------------------------                                       \nSUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF\nCORPORATIONS OF THE STATE OF CALIFORNIA AND ISSUANCE OF SUCH SECURITIES WITH\nPAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH \n\n                                      11.\n\n \nSECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF\nSECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE\nCALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE\nEXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS\nEXEMPT.\n\n\n                                   ARTICLE 6\n\n                         CONDITIONS TO THE OBLIGATION\n                           OF THE PURCHASER TO CLOSE\n                           -------------------------\n\n          The obligation of the Purchaser to purchase the Purchased Shares, to\npay the purchase price therefor at the Closing and to perform any obligations\nhereunder shall be subject to the satisfaction as determined by, or waived by,\nthe Purchaser of the following conditions on or before the Closing Date.\n\n          6.1  Secretary's Certificate.  The Purchaser shall have received a\n               -----------------------                                      \ncertificate from the Company, in form and substance satisfactory to the\nPurchaser, dated the Closing Date and signed by the Secretary or an Assistant\nSecretary of the Company, certifying that the attached copies of the Restated\nArticles of Incorporation, the Bylaws and resolutions of the Board of Directors\nof the Company approving this Agreement and the transactions contemplated\nhereby, are all true, complete and correct and remain unamended and in full\nforce and effect.\n\n          6.2  Certificate.  The Purchaser shall have received a certificate\n               -----------                                                  \nfrom the Company, in form and substance satisfactory to the Purchaser, dated the\nClosing Date and signed by its Chief Executive Officer and its Chief Financial\nOfficer, certifying that (a) the representations and warranties of the Company\ncontained in Article 3 hereof are true and correct on the Closing Date and (b)\nthe Company has performed and complied in all material respects with all of the\nagreements and conditions set forth or contemplated herein that are required to\nbe performed or complied with by the Company on or before the Closing Date.\n\n          6.3  Documents.  The Purchaser shall have received true, complete and\n               ---------                                                       \ncorrect copies of such documents and opinions as they may reasonably request in\nconnection with or relating to the sale of the Purchased Shares and the\ntransactions contemplated hereby, all in form and substance reasonably\nsatisfactory to the Purchaser.\n\n          6.4  Stockholders Agreement Supplement and Amendment.  The Company,\n               -----------------------------------------------               \nthe stockholders of the Company named in the Stockholders Agreement and the\nPurchaser shall have duly executed and delivered the Stockholders Agreement\nSupplement and Amendment, substantially in the form attached hereto as Exhibit\n                                                                       -------\nC.\n- -\n          6.5  Restated Articles of Incorporation.  Subject to the condition\n               ----------------------------------                           \nsubsequent set forth in Section 2.2, the Certificate of Determination of\nPreferences shall have been filed with the Secretary of State of the State of\nCalifornia.\n\n          6.6  Consents and Approvals.  All consents, exemptions,\n               ----------------------                            \nauthorizations, or other actions by, or notices to, or filings with,\nGovernmental Authorities and other Persons in respect of all Requirements of Law\nand with respect to those Contractual Obligations of the Company which are\nnecessary or required in connection with the execution, delivery or performance\nby the Company or enforcement against the Company of the Transaction Documents\nto which it is a party, except for the \n\n                                      12.\n\n \nfiling of a Notice of Transaction pursuant to Section 25102(f) of the California\nCorporation Code and a Form D pursuant to the Securities Act, shall have been\nobtained and be in full force and effect, and the Purchaser shall have been\nfurnished with appropriate evidence thereof.\n\n\n                                 ARTICLE 7\n\n                         CONDITIONS TO THE OBLIGATIONS\n                            OF THE COMPANY TO CLOSE\n                            -----------------------\n\n          The obligations of the Company to sell the Purchased Shares and to\nperform its other obligations hereunder, shall be subject to the satisfaction as\ndetermined by, or waived by, the Company of the following conditions on or\nbefore the Closing Date;\n\n          7.1  Restated Articles of Incorporation.  Subject to the condition\n               ----------------------------------                           \nsubsequent set forth in Section 2.2, the Certificate of Determination of\nPreferences shall have been filed with the Secretary of State of the State of\nCalifornia.\n\n          7.2  Purchaser's Certificate.  The Company shall have received a\n               -----------------------                                    \ncertificate from the Purchaser, in form and substance satisfactory to the\nCompany, dated the Closing Date certifying that (a) the representations and\nwarranties of the Purchaser contained in Article 4 hereof are true and correct\non the Closing Date and (b) the Purchaser has performed and complied in all\nmaterial respects with all of the agreements and conditions set forth or\ncontemplated herein that are required to be performed or complied with by the\nPurchaser on or before the Closing Date.\n\n          7.3  Stockholders Agreement Supplement and Amendment.  The Company,\n               -----------------------------------------------               \nthe stockholders of the Company named in the Stockholders Agreement and the\nPurchaser shall have duly executed and delivered the Stockholders Agreement\nSupplement and Amendment substantially in the form attached hereto as Exhibit C.\n                                                                      --------- \n\n          7.4  California Qualification.  The Commissioner of Corporations of\n               ------------------------                                      \nthe State of California and any other applicable state regulatory authority\nshall have issued permits qualifying the offer and sale to the Purchaser of the\nPurchased Shares or such offer and sale shall be exempt from such qualification\nunder the California Corporate Securities Law of 1968, as amended.\n\n\n                                   ARTICLE 8\n\n                                INDEMNIFICATION\n                                ---------------\n\n          8.1  Indemnification of Purchaser.  Except as otherwise provided in\n               ----------------------------                                  \nthis Article 8, the Company agrees to indemnify, defend and hold harmless the\nPurchaser and its Affiliates and its respective officers, directors, agents,\nemployees, subsidiaries, partners and controlling persons to the fullest extent\npermitted by law from and against any and all losses, claims (including any\nclaim by a third party), damages, expenses (including reasonable fees,\ndisbursements and other charges of counsel) or other liabilities (collectively,\n'Losses') resulting from, arising out of or relating to any breach of any\nrepresentation or warranty, covenant or agreement by the Company in this\nAgreement or the other Transaction Documents to which it is a party, including,\nwithout limitation, Losses arising out of or relating to any legal,\nadministrative or other actions (including actions brought by the Purchaser or\nderivative actions brought by any Person claiming through or in the Company's\nname), proceedings or \n\n                                      13.\n\n \ninvestigations (whether formal or informal), or written threats thereof, based\nupon, relating to or arising out of this Agreement or the other Transaction\nDocuments, the transactions contemplated hereby or thereby, or the Company's\nrole herein or therein or in transactions contemplated hereby or thereby;\nprovided, however, that the Company shall not be liable under this Section 8.1\n- --------  -------\nto such party to the extent that it is finally judicially determined that such\nLosses resulted primarily from the material breach by such party of any\nrepresentation, warranty, covenant or other agreement of such party contained in\nthis Agreement; and provided, further, that if and to the extent that such\n                    --------  -------\nindemnification is unenforceable for any reason, the Company shall make the\nmaximum contribution to the payment and satisfaction of such Losses which shall\nbe permissible under applicable laws. In connection with the obligation of the\nCompany to indemnify for expenses as set forth above, the Company shall, upon\npresentation of appropriate invoices containing reasonable detail, reimburse\neach indemnified party for all such expenses (including reasonable fees,\ndisbursements and other charges of counsel) as they are incurred by such party.\nThe provisions of this Section 8.1 shall not be deemed exclusive of any other\nrights of indemnification or other remedy to which the Purchaser may be\nentitled.\n\n          8.2  Indemnification of the Company.  Except as otherwise provided in\n               ------------------------------                                  \nthis Article 8, the Purchaser agrees to indemnify, defend and hold harmless the\nCompany and its Affiliates and their respective officers, directors, agents,\nemployees, subsidiaries, partners and controlling persons to the fullest extent\npermitted by law from and against any and all Losses resulting from, arising out\nof or relating to any breach of any representation or warranty, covenant or\nagreement by the Purchaser in this Agreement, or the other Transaction Documents\nto which it is a party, including, without limitation, Losses arising out of or\nrelating to any legal, administrative or other actions, proceedings or\ninvestigations (whether formal or informal), or written threats thereof, based\nupon, relating to or arising out of the Transaction Documents, the transactions\ncontemplated thereby, or the Purchaser's role therein or in transactions\ncontemplated thereby; provided, however, that the Purchaser shall not be liable\n                      --------  -------                                        \nfor any payments pursuant to this Section 8.2 in excess of the purchase price\npaid for the Purchased Shares; provided, further, that the Purchaser shall not\n                               --------  -------                              \nbe liable under this Section 8.2 to any party to the extent that it is finally\njudicially determined that such losses resulted primarily from the material\nbreach by such party of any representation, warranty, covenant or other\nagreement of such party contained in this Agreement; and provided, further, that\n                                                         --------  -------      \nif and to the extent that such indemnification is unenforceable for any reason,\nthe Purchaser shall make the maximum contribution to the payment and\nsatisfaction of such Losses which shall be permissible under applicable laws.\nIn connection with the obligation of the Purchaser to indemnify for expenses set\nforth above, the Purchaser shall, upon presentation of appropriate invoices\ncontaining reasonable detail, reimburse each indemnified party for all such\nexpenses (including reasonable fees, disbursements and other charges of counsel)\nas they are incurred by such party.  The provisions of this Section 8.2 shall\nnot be deemed exclusive of any other rights of indemnification or other remedy\nto which the Company may be entitled.\n\n          8.3  Notification.  Each Person entitled to indemnification pursuant\n               ------------                                                   \nto this Article 8 (each, an 'Indemnified Party') will, promptly after the\noccurrence of any event, or after the receipt of notice of the commencement of\nany action, investigation, claim or other proceeding against such Indemnified\nParty in respect of which indemnity may be sought from the indemnifying party\nunder this Article 8 (each, an 'Indemnifying Party'), notify the Indemnifying\nParty in writing thereof.  The omission of any Indemnified Party to so notify\nthe Indemnifying Party of any such action shall not relieve the Indemnifying\nParty from any liability which they may have to such Indemnified Party under\nthis Article 8 unless, and only to the extent that, such omission results in the\nIndemnifying Party's forfeiture of substantive rights or defenses.  In case any\nsuch action, claim or other proceeding shall be brought against any Indemnified\nParty, it shall notify the Indemnifying Party of the commencement thereof, and\nthe Indemnifying Party shall be entitled to assume the defense thereof at its\nown expense, with counsel satisfactory to such Indemnified Party in its\nreasonable judgment; provided, however, that any \n                     --------  -------                                        \n\n                                      14.\n\n \nIndemnified Party may, at its own expense, retain separate counsel to\nparticipate in such defense at its own expense. Notwithstanding the foregoing,\nin any action, claim or proceeding in which both the Indemnifying Party and an\nIndemnified Party, are, or are reasonably likely to become, a party, such\nIndemnified Party shall have the right to employ separate counsel at the expense\nof the Indemnifying Party and to control its own defense of such action, claim\nor proceeding if, in the reasonable opinion of counsel to such Indemnified\nParty, a conflict or potential conflict exists between the Indemnifying Party\nand such Indemnified Party that would make such separate representation\nadvisable; provided, however, that the Indemnifying Party shall not be liable\n           --------  -------\nfor the fees and expenses of more than one counsel (plus local counsel) to all\nIndemnified Parties. The Indemnifying Party agrees that it will not, without the\nprior written consent of the Indemnified Party, settle, compromise or consent to\nthe entry of any judgment in any pending or threatened claim, action or\nproceeding relating to the matters contemplated hereby (if any Indemnified Party\nis a party thereto or has been actually threatened to be made a party thereto)\nunless such settlement, compromise or consent (i) includes an unconditional\nrelease of the Indemnified Party and each other Indemnified Party from all\nliability arising or that may arise out of such claim, action or proceeding and\n(ii) does not include a statement as to or an admission of fault, culpability or\na failure to act, by or on behalf of any Indemnified Party. The Indemnifying\nParty shall not be liable for any settlement of any claim, action or proceeding\neffected against an Indemnified Party without its written consent, which consent\nshall not be unreasonably withheld.\n\n\n                                   ARTICLE 9\n\n                             AFFIRMATIVE COVENANTS\n                             ---------------------\n\n          Until the consummation of an initial public offering of equity\nsecurities of the Company pursuant to a registration statement under the\nSecurities Act (at which time the provisions of this Article 9 shall become null\nand void), the Company hereby covenants and agrees with the Purchaser as\nfollows:\n\n          9.1  Preservation of Corporate Existence.  The Company shall and shall\n               -----------------------------------                              \ncause its Subsidiary to:\n\n               (a) preserve and maintain in full force and effect its corporate\nexistence and good standing under the laws of its jurisdiction of incorporation\nor organization; and\n\n               (b) use its best efforts to file or cause to be filed in a timely\nmanner all reports, applications and licenses that shall be required by a\nGovernmental Authority and that, if not timely filed, would have a material\nadverse effect on the Condition of the Company.\n\n          Notwithstanding the foregoing, the Company intends to effect a\nreincorporation into the State of Delaware prior to and in connection with its\ninitial public offering.  Purchaser hereby consents to such reincorporation and\nfurther agrees to take all reasonable actions requested by the Company to cause\nsuch reincorporation to be consummated.\n\n          9.2  Financial Statements and Other Information.  The Company shall\n               ------------------------------------------                    \ndeliver to the Purchaser, in form and substance satisfactory to the Purchaser:\n\n               (a) as soon as available, but not later than ninety (90) days \nafter the end of each fiscal year of the Company, a copy of the audited\nconsolidated balance sheet of the Company as of the end of such year and the\nrelated statements of operations and cash flows for such fiscal year, setting\nforth in each case in comparative form the figures for the previous year, all in\nreasonable detail and \n\n                                      15.\n\n \naccompanied by a management summary and analysis of the operations of the\nCompany for such fiscal year and by the opinion of a nationally recognized\nindependent certified public accounting firm which report shall not contain a\nqualification based on the records of the Company, its accounting controls or\nprocedures or the scope of the audit, and which report shall state that such\nfinancial statements present fairly the financial condition of the Company as of\nsuch date and the results of operations and cash flows for the periods indicated\nin conformity with GAAP applied on a consistent basis;\n\n               (b) commencing with the fiscal period ending on September 30, \n1996, as soon as available, but in any event not later than forty-five (45) days\nafter the end of each of the first three fiscal quarters of each year, the\nunaudited balance sheet of the Company, and the related statements of operations\nand cash flows for such quarter and for the period commencing on the first day\nof the fiscal year and ending on the last day of such quarter, all certified by\nan appropriate officer of the Company as presenting fairly the financial\ncondition as of such date and results of operations and cash flows for the\nperiods indicated in conformity with GAAP applied on a consistent basis, subject\nto normal year-end audit adjustments and the absence of footnotes required by\nGAAP; and\n\n               (c) annual budgets and such other financial and operating data \nwhich are customarily prepared by the Company, as the Purchaser reasonably may\nrequest.\n\n          9.3  Inspection.  The Company shall and shall cause its Subsidiary to\n               ----------                                                      \npermit a representative of the Purchaser to visit and inspect any of its\nproperties, to examine its corporate, financial and operating records and make\ncopies thereof or abstracts therefrom, and to discuss its affairs, finances and\naccounts with their respective directors, officers and independent public\naccountants, all at such reasonable times during normal business hours and as\noften as may be reasonably requested upon reasonable advance notice to the\nCompany.\n\n          9.4  Back-Ups of Computer Software.  The Company shall and shall cause\n               -----------------------------                                    \nits Subsidiary reasonably frequently to make back-ups of all material computer\nsoftware programs and databases and shall maintain such software programs and\ndatabases at a secure off-site location.\n\n          9.5  Books and Records.  The Company shall and shall cause its\n               -----------------                                        \nSubsidiary to keep books of record and account, in which accurate entries shall\nbe made of all financial transactions and the assets and business of the Company\nin accordance with GAAP consistently applied to the Company.\n\n          9.6  Conversion of Preferred Stock.  In the event that the authorized\n               -----------------------------                                   \nnumber of shares of Common Stock is not sufficient to permit the conversion of\nthe issued and outstanding shares of the Preferred Stock, the Company shall use\nits best efforts to cause the Board of Directors and shareholders to approve an\namendment of the Articles of Incorporation of the Company to increase the\nauthorized number of shares of Common Stock to a number sufficient to permit\nsuch conversion.\n\n                                      16.\n\n \n                                   ARTICLE 10\n\n                                 MISCELLANEOUS\n                                 -------------\n\n          10.1 Lock-Up Period.  Purchaser agrees to sign a lock-up agreement in\n               --------------                                                  \na form substantially similar to that attached hereto as Exhibit D.  Purchaser\n                                                        ---------            \nunderstands that the form of lock-up agreement is the same as that presented to\nother of the Company's shareholders in connection with the Company's initial\npublic offering of Common Stock.\n\n          10.2 Survival of Representations and Warranties.  All of the\n               ------------------------------------------             \nrepresentations and warranties made herein shall survive the execution and\ndelivery of this Agreement, any investigation by or on behalf of the Purchaser,\nacceptance of the Purchased Shares or termination of this Agreement.\n\n          10.3 Notices.  All notices, demands and other communications provided\n               -------                                                         \nfor or permitted hereunder shall be made in writing and shall be by registered\nor certified first-class mail, return receipt requested, telecopier, courier\nservice, overnight mail or personal delivery:\n\n               (a)  if to SOFTBANK:\n\n                    SOFTBANK Holdings Inc.\n                    10 Langley Road, Suite 403\n                    Newton Centre, MA  02159-1972\n                    Telecopy:  (617) 928-9301\n                    Attention:  Charles R. Lax\n\n               with a copy to:\n\n                    Sullivan &amp; Cromwell\n                    125 Broad Street\n                    New York, NY  10004\n                    Telecopy:  (212) 558-3588\n                    Attention:  Stephen A. Grant, Esq.\n\n               (b)  if to the Company;\n\n                    E*Trade Group, Inc.\n                    Four Embarcadero Place\n                    2400 Geng Road\n                    Palo Alto, CA 94306\n                    Telecopy:  (415) 324-3044\n                    Attention:  President\n\n               with a copy to:\n\n                    Brobeck, Phleger &amp; Harrison\n                    Two Embarcadero Place\n                    2200 Geng Road\n                    Palo Alto, CA  94303\n                    Telecopy:  (415) 496-2885\n                    Attention:  Thomas A. Bevilacqua, Esq.\n\n                                      17.\n\n \n          All such notices and communications shall be deemed to have been duly\ngiven when delivered by hand, if personally delivered; when delivered by courier\nor overnight mail, if delivered by commercial courier service or overnight mail\nfive (5) Business Days after being deposited in the mail, postage prepaid, if\nmailed; and when receipt is mechanically acknowledged, if telecopied.\n\n          10.4 Successors and Assigns.  This Agreement shall inure to the\n               ----------------------                                    \nbenefit of and be binding upon the successors and permitted assigns of the\nparties hereto.  Subject to applicable securities laws, the Purchaser may assign\nany of its rights under this Agreement to any of its Affiliates or affiliated\npartnerships managed by it.  The Company may not assign any of its rights under\nthis Agreement, except to a successor-in-interest to the Company, without the\nprior written consent of the Purchaser.  Except as provided in Article 8, no\nPerson other than the parties hereto and their successors and permitted assigns\nis intended to be a beneficiary of any of the Transaction Documents.\n\n          10.5 Amendment and Waiver.\n               -------------------- \n\n               (a) No failure or delay on the part of the Company or the  \nPurchaser in exercising any right, power or remedy hereunder shall operate as a\nwaiver thereof, nor shall any single or partial exercise of any such right,\npower or remedy preclude any other or further exercise thereof or the exercise\nof any other right, power or remedy. The remedies provided for herein are\ncumulative and are not exclusive of any remedies that may be available to the\nCompany or the Purchaser at law, in equity or otherwise.\n\n               (b) Any amendment, supplement or modification of or to any \nprovision of this Agreement, any waiver of any provision of this Agreement, and\nany consent to any departure by the Company or the Purchaser from the terms of\nany provision of this Agreement, shall be effective only if it is made or given\nin writing and signed by the Company and the Purchaser. Except where notice is\nspecifically required by this Agreement, no notice to or demand on the Company\nin any case shall entitle the Company to any other or further notice or demand\nin similar or other circumstances.\n\n          10.6 Counterparts.  This Agreement may be executed in any number of\n               ------------                                                  \ncounterparts and by the parties hereto in separate counterparts, each of which\nwhen so executed shall be deemed to be an original and all of which taken\ntogether shall constitute one and the same agreement.\n\n          10.7 Headings.  The headings in this Agreement are for convenience of\n               --------                                                        \nreference only and shall not limit or otherwise affect the meaning hereof.\n\n          10.8  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND\n                -------------                                          \nCONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD\nTO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.\n\n          10.9 Severability.  If any one or more of the provisions contained\n               ------------                                                 \nherein, or the application thereof in any circumstance, is held invalid, illegal\nor unenforceable in any respect for any reason, the validity, legality and\nenforceability of any such provision in every other respect and of the remaining\nprovisions hereof shall not be in any way impaired, unless the provisions held\ninvalid, illegal or unenforceable shall substantially impair the benefits of the\nremaining provisions hereof.\n\n          10.10  Entire Agreement.  This Agreement, together with the exhibits\n                 ----------------                                             \nand schedules hereto and the other Transaction Documents, is intended by the\nparties to be a final expression of their agreement and intended to be a\ncomplete and exclusive statement of the agreement and understanding of the\nparties hereto in respect of the subject matter contained herein and therein.\nThere are no restrictions, \n\n                                      18.\n\n \npromises, warranties or undertakings other than those set forth or referred to\nherein or therein. This Agreement, together with the exhibits hereto, and the\nother Transaction Documents supersede all prior agreements and understandings\nbetween the parties with respect to such subject matter.\n\n          10.11  Fees.  Except as agreed between the Company and the Purchaser,\n                 ----                                                          \neach party will be responsible for the fees and expenses of its own counsel.  If\nthe Closing does not take place, each party shall bear its own expenses.\n\n          10.12  Further Assurances.  Each of the parties shall execute such\n                 ------------------                                         \ndocuments and perform such further acts (including, without limitation,\nobtaining any consents, exemptions, authorizations or other actions by, or\ngiving any notices to, or making any filings with, any Governmental Authority or\nany other Person) as may be reasonably required or desirable to carry out or to\nperform the provisions of this Agreement.\n\n          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as\nof the date first above written.\n\n\n                                       E*TRADE GROUP INC.\n\n\n                                       By:\n                                          --------------------------------------\n                                             Name:\n                                             Title:\n\n\n                                       SOFTBANK HOLDINGS INC.\n\n\n                                       By:\n                                          --------------------------------------\n                                             Name:\n                                             Title:\n\n\n                                      19.\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7386,8854],"corporate_contracts_industries":[9417],"corporate_contracts_types":[9622,9627],"class_list":["post-43665","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-e-trade-group-inc","corporate_contracts_companies-softbank-corp","corporate_contracts_industries-financial__holding","corporate_contracts_types-planning","corporate_contracts_types-planning__purchase"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43665","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43665"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43665"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43665"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43665"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}