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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )*
IA Corporation I
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
449194 10 9
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(CUSIP Number)
Stephen Distler
E.M. Warburg Pincus & Co., LLC
466 Lexington Avenue
New York, NY 10017
(212) 878-0600
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
September 4 , 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box[_].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
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CUSIP NO. 449194 10 9 |
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1 | NAME OF REPORTING PERSON
| S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
|
| Warburg, Pincus Investors, L.P.
|
| 13-354-9187
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2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)(a)[_]
| (b)[_]
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3 | SEC USE ONLY
|
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4 | SOURCE OF FUNDS (See Instructions)
| WC
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5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
| ITEMS 2(d) OR 2(e)[_]
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6 | CITIZENSHIP OR PLACE OF ORGANIZATION
| Delaware
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NUMBER OF | 7 | SOLE VOTING POWER
SHARES | | -0-
BENEFICIALLY |-----|---------------------------------------------------------
OWNED BY | 8 | SHARED VOTING POWER
EACH | | 4,592,708
REPORTING |-----|---------------------------------------------------------
PERSON | 9 | SOLE DISPOSITIVE POWER
WITH | | -0-
|-----|---------------------------------------------------------
| 10 | SHARED DISPOSITIVE POWER
| | 4,592,708
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11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
| 4,592,708
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12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
| (See Instructions) [_]
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13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
| 49.62%
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14 | TYPE OF REPORTING PERSON (See Instructions)
| PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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SCHEDULE 13D
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CUSIP NO. 449194 10 9 |
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1 | NAME OF REPORTING PERSON
| S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
|
| Warburg, Pincus & Co.
|
| 13-635-8475
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2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)(a)[_]
| (b)[_]
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3 | SEC USE ONLY
|
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4 | SOURCE OF FUNDS (See Instructions)
| N/A
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5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
| ITEMS 2(d) OR 2(e)[_]
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6 | CITIZENSHIP OR PLACE OF ORGANIZATION
| New York
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NUMBER OF | 7 | SOLE VOTING POWER
SHARES | | -0-
BENEFICIALLY |-----|---------------------------------------------------------
OWNED BY | 8 | SHARED VOTING POWER
EACH | | 4,592,708
REPORTING |-----|---------------------------------------------------------
PERSON | 9 | SOLE DISPOSITIVE POWER
WITH | | -0-
|-----|---------------------------------------------------------
| 10 | SHARED DISPOSITIVE POWER
| | 4,592,708
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11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
| 4,592,708
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12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
| (See Instructions) [_]
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13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
| 49.62%
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14 | TYPE OF REPORTING PERSON (See Instructions)
| PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
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CUSIP NO. 449194 10 9 |
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1 | NAME OF REPORTING PERSON
| S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
|
| E.M. Warburg, Pincus & Co., LLC
|
| 13-353-6050
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2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)(a)[_]
| (b)[_]
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3 | SEC USE ONLY
|
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4 | SOURCE OF FUNDS (See Instructions)
| N/A
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5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
| ITEMS 2(d) OR 2(e)[_]
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6 | CITIZENSHIP OR PLACE OF ORGANIZATION
| New York
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NUMBER OF | 7 | SOLE VOTING POWER
SHARES | | -0-
BENEFICIALLY |-----|---------------------------------------------------------
OWNED BY | 8 | SHARED VOTING POWER
EACH | | 4,592,708
REPORTING |-----|---------------------------------------------------------
PERSON | 9 | SOLE DISPOSITIVE POWER
WITH | | -0-
|-----|---------------------------------------------------------
| 10 | SHARED DISPOSITIVE POWER
| | 4,592,708
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11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
| 4,592,708
- -----|--------------------------------------------------------------------------
12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
| (See Instructions) [_]
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13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
| 49.62%
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14 | TYPE OF REPORTING PERSON (See Instructions)
| OO
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*SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
This Schedule 13D is being filed on behalf of Warburg, Pincus Investors,
L.P., a Delaware limited partnership ("Investors"), Warburg, Pincus & Co., a New
York general partnership ("WP"), and E.M. Warburg, Pincus & Co., LLC, a New York
limited liability company ("EMW") relating to the common stock, par value $0.01
per share (the "Common Stock") of IA Corporation I, a Delaware corporation (the
"Company").
ITEM 1. SECURITY AND ISSUER.
This statement on Schedule 13D relates to the Common Stock of the Company,
and is being filed pursuant to Rule 13d-1 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The address of the principal executive
offices of the Company is 1900 Powell Street, Suite 600, Emeryville, California
94608.
ITEM 2. IDENTITY AND BACKGROUND.
INFORMATION RELATING TO EACH OF THE REPORTING PERSONS:
(a) This statement is filed by Investors, WP and EMW. The sole general
partner of Investors is WP. EMW manages Investors. Lionel I. Pincus is the
managing partner of WP and the managing member of EMW and may be deemed to
control both WP and EMW. WP has a 20% interest in the profits of Investors.
Investors, WP and EMW are hereinafter collectively referred to as the "Reporting
Persons." Stewart K.P. Gross ("Gross") and Henry Kressel ("Kressel"), directors
of the Company, are Managing Directors of EMW and general partners of WP. As
such, Gross and Kressel may be deemed to have an indirect pecuniary interest
(within the meaning of Rule 16a-1 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) in an indeterminate portion of the shares of
Common Stock beneficially owned by Investors, WP and EMW. Each of Gross and
Kressel disclaims beneficial ownership of the shares owned by Investors, WP and
EMW within the meaning of Rule 13d-3 under the Exchange Act. The general
partners of WP and the members of EMW are described in Schedule I hereto.
(b) The address of the principal business and principal office of each of
the Reporting Persons is 466 Lexington Avenue, New York, New York 10017.
(c) The principal business of Investors is that of a partnership engaged in
making venture capital and related investments. The principal business of WP is
acting as general partner of Investors, Warburg, Pincus Equity Partners, L.P.,
Warburg, Pincus Ventures International, L.P., Warburg, Pincus Ventures, L.P. and
Warburg, Pincus Capital Company, L.P. The principal business of EMW is acting as
manager of Investors, Warburg, Pincus Equity Partners, L.P., Warburg, Pincus
Ventures International, L.P., Warburg, Pincus Ventures, L.P. and Warburg, Pincus
Capital Company, L.P.
(d) None of the Reporting Persons, nor, to the best of their knowledge, any
of the directors, executive officers, general partners or members referred to in
paragraph (a) has, during the
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last five years, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) None of the Reporting Persons nor, to the best of their knowledge, any
of the directors, executive officers, general partners or members referred to in
paragraph (a) above has, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
(f) Except as otherwise indicated on Schedule I hereto, each of the
individuals referred to in paragraph (a) above is a United States citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER COMPENSATION.
Prior to the Company's initial public offering in November of 1996 (the
"Initial Public Offering"), Investors purchased an aggregate of 3,678,374 shares
of Common Stock and an additional 116,300 shares of the Company's Series A
Preferred Stock in private equity transactions for an aggregate consideration of
approximately $11,682,000. Concurrent with the closing of the Initial Public
Offering, Investors entered into a Share Exchange Agreement with the Company
pursuant to which Investors exchanged its shares of Series A Preferred Stock
for 464,334 shares of Common Stock and 2,417,112 shares of the Company's non-
voting Class B Common Stock.
On September 4, 1998 Investors purchased 450,000 shares of Common Stock
from Dr. Chakravarthi V. Ravi, an officer and former President and Chief
Executive Officer of the Company, for an aggregate consideration of $1,350,000
(the "Purchase"). As a result of the Purchase, the Reporting Persons
beneficially own an aggregate of 4,592,708 shares of Common Stock/1/.
ITEM 4. PURPOSE OF TRANSACTION.
Investors effected the purchases of Common Stock because of the Reporting
Persons' belief that the Company represented, and that the Company continues to
represent, an attractive investment, and in connection with certain management
changes at the Company. The Reporting Persons presently expect to limit their
involvement in the management of the Company to representation on the Board.
The Reporting Persons may from time to time acquire shares of Common Stock
or dispose of shares of Common Stock through open-market or privately negotiated
transactions or otherwise, depending on existing market conditions and other
considerations discussed below. The Reporting Persons intend to review their
investment in the Company on a continuing basis and, depending
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/1/ Does not include 2,417,112 shares of non-voting Class B Common Stock of
the Company held of record by Investors which represents all outstanding Class B
Common Stock.
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<PAGE>
upon the price and availability of shares of Common Stock, subsequent
developments affecting the Company, the Company's business and prospects, other
investment and business opportunities available to the Reporting Persons,
general stock market and economic conditions, tax considerations and other
factors considered relevant, may decide at any time not to increase, or to
decrease, the size of their investment in the Company.
None of the Reporting Persons nor, to the best of their knowledge, any
person listed in Schedule I hereto, has any plans or proposals which relate to
or would result in: (a) the acquisition by any person of additional securities
of the Company, or the disposition of securities of the Company; (b) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Company or any of its subsidiaries; (c) a sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries; (d) any change in the present Board of Directors or management of
the Company, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board; (e) any material
change in the present capitalization or dividend policy of the Company; (f) any
other material change in the Company's business or corporate structure; (g)
changes in the Company's charter, By-Laws or instruments corresponding thereto
or other actions which may impede the acquisition of control of the Company by
any person; (h) causing a class of securities of the Company to be delisted from
a national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) a class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or
(j) any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of September 4, 1998, Investors beneficially owned 4,592,708 shares
of Common Stock. By reason of their respective relationships with Investors,
each of the Reporting Persons may be deemed under Rule 13d-3 under the Exchange
Act to own beneficially all of the shares of Common Stock which Investors
beneficially owns. As of September 4, 1998, 4,592,708 shares of Common Stock
represented approximately 49.62% of the outstanding shares of Common Stock,
based on information contained in the Company's Quarterly Report on Form 10-Q
filed with the Securities and Exchange Commission on August 14, 1998 and
excluding the 2,417,112 shares of the Company's non-voting Class B Common Stock.
See footnote 1.
(b) The Reporting Persons together share the power to vote or to direct the
vote, and to dispose or to direct the disposition, of the Common Stock held by
Investors.
(c) None of the Reporting Persons has effected any transactions in the
Common Stock during the preceding 60 days.
(d) Except as set forth in this Item 5, no person other than each
respective record owner referred to herein of Common Stock is known to have the
right to receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, such securities.
(e) Not applicable.
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<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Pursuant to Rule 13d-1(f) promulgated under the Exchange Act, the Reporting
Persons have entered into an agreement with respect to the joint filing of this
statement, and any amendment or amendments hereto.
The information set forth in Items 3 and 4 above is incorporated herein by
reference.
Except as described herein and by reference to Items 3 and 4 above, there
are no contracts, arrangements, understandings or relationships among the
persons named in Item 2 or between such persons and any other person with
respect to any securities of the Company.
By virtue of the relationships among the Reporting Persons as described in
Item 2, the Reporting Persons may be deemed to be a "group" under the Federal
securities laws. Lionel I. Pincus disclaims any beneficial ownership of the
Common Stock reported herein as being beneficially owned by the Reporting
Persons.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1: Joint Filing Agreement.
Joint Filing Agreement, dated as of September 13, 1998, by and among
the Reporting Persons. See page 6.
Exhibit 2: Stock Purchase Agreement
Stock Purchase Agreement, dated as of August 1, 1998 between Chakravarthi
V. Ravi and Warburg, Pincus Investors, L.P.
-4-
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
Dated: September 13, 1998 WARBURG, PINCUS INVESTORS, L.P.
By: Warburg, Pincus & Co.,
General Partner
By: /s/ Stephen Distler
Partner
Dated: September 13, 1998 WARBURG, PINCUS & CO.
By: /s/ Stephen Distler
Partner
Dated: September 13, 1998 E.M. WARBURG, PINCUS & CO., LLC
By: /s/ Stephen Distler
Member
-5-
<PAGE>
JOINT FILING AGREEMENT
The undersigned hereby agree that this statement on Schedule 13D is, and
any amendment thereto signed by each of the undersigned shall be, filed on
behalf of each undersigned pursuant to and in accordance with the provisions of
Rule 13d-1(f)(1) under the Securities Exchange Act of 1934.
Dated: September 13, 1998
WARBURG, PINCUS INVESTORS, L.P.
By: Warburg, Pincus & Co.,
General Partner
By: /s/ Stephen Distler
Partner
WARBURG, PINCUS & CO.
By: /s/ Stephen Distler
Partner
E.M. WARBURG, PINCUS & CO., LLC
By: /s/ Stephen Distler
Member
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<PAGE>
SCHEDULE I
Set forth below is the name, position and present principal occupation of each
of the general partners of Warburg, Pincus & Co. ("WP") and each of the members
of E.M. Warburg, Pincus & Co., LLC ("EMW"). The sole general partner of Warburg,
Pincus Investors, L.P. ("Investors") is WP. WP, EMW and Investors are
hereinafter collectively referred to as the "Reporting Entities." Except as
otherwise indicated, the business address of each of such persons is 466
Lexington Avenue, New York, New York 10017, and each of such persons is a
citizen of the United States.
GENERAL PARTNERS OF WP
Present Principal Occupation
in Addition to Position with
WP, and Positions with the
Name Reporting Entities
Joel Ackerman Managing Director and Member,
EMW
Susan Black Managing Director and Member,
EMW
Christopher W. Brody Managing Director and Member,
EMW
Harold Brown Senior Managing Director and Member,
EMW
Errol M. Cook Managing Director and Member,
EMW
W. Bowman Cutter Managing Director and Member,
EMW
Elizabeth B. Dater Managing Director and Member,
EMW
Stephen Distler Managing Director, Member and Treasurer,
EMW
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<PAGE>
Harold W. Ehrlich Managing Director and Member,
EMW
John L. Furth Vice Chairman of the Board and Member,
EMW
Stewart K.P. Gross Managing Director and Member,
EMW
Patrick T. Hackett Managing Director and Member,
EMW
Jeffrey A. Harris Managing Director and Member,
EMW
William H. Janeway Managing Director and Member,
EMW
Douglas M. Karp Managing Director and Member,
EMW
Charles R. Kaye Managing Director and Member,
EMW
Henry Kressel Managing Director and Member,
EMW
Joseph P. Landy Managing Director and Member,
EMW
Sidney Lapidus Managing Director and Member,
EMW
Kewsong Lee Managing Director and Member,
EMW
Reuben S. Leibowitz Managing Director and Member,
EMW
S. Joshua Lewis Managing Director and Member,
EMW
David E. Libowitz Managing Director and Member,
EMW
-8-
<PAGE>
Brady T. Lipp Managing Director and Member,
EMW
Stephen J. Lurito Managing Director and Member,
EMW
Spencer S. Marsh III Managing Director and Member,
EMW
Lynn S. Martin Managing Director and Member,
EMW
Edward J. McKinley Managing Director and Member,
EMW
Rodman W. Moorhead III Senior Managing Director and Member,
EMW
Maryanne Mullarkey Managing Director and Member,
EMW
Howard H. Newman Managing Director and Member,
EMW
Gary D. Nusbaum Managing Director and Member,
EMW
Sharon B. Parente Managing Director and Member,
EMW
Dalip Pathak Managing Director and Member,
EMW
Daphne D. Philipson Managing Director and Member,
EMW
Lionel I. Pincus Chairman of the Board, CEO, and Managing
Member, EMW; and Managing Partner,
Pincus & Co.
Eugene L. Podsiadlo Managing Director and Member,
EMW
-9-
<PAGE>
Ernest H. Pomerantz Managing Director and Member,
EMW
Brian S. Posner Managing Director and Member,
EMW
Arnold M. Reichman Managing Director and Member,
EMW
Roger Reinlieb Managing Director and Member,
EMW
John D. Santoleri Managing Director and Member,
EMW
Steven G. Schneider Managing Director and Member,
EMW
Sheila N. Scott Managing Director and Member,
EMW
Harold Sharon Managing Director and Member,
EMW
Eugene J. Siembieda Managing Director and Member,
EMW
James E. Thomas Managing Director and Member,
EMW
John L. Vogelstein Vice Chairman of the Board and Member,
EMW
Elizabeth H. Weatherman Managing Director and Member,
EMW
John A. Zaro, III Managing Director and Member,
EMW
Pincus & Co.*
NL & Co.**
* New York limited partnership; its primary activity is ownership in WP and
EMW.
** New York limited partnership; its primary activity is ownership in WP.
-10-
<PAGE>
MEMBERS OF EMW
Present Principal Occupation
in Addition to Position with
EMW, and Positions with the
Name Reporting Entities
Joel Ackerman Partner, WP
Susan Black Partner, WP
Christopher W. Brody Partner, WP
Harold Brown Partner, WP
Dale C. Christensen(1)
Errol M. Cook Partner, WP
W. Bowman Cutter Partner, WP
Elizabeth B. Dater Partner, WP
Stephen Distler Partner, WP
P. Nicholas Edwards(2) Partner, WP
Harold W. Ehrlich Partner, WP
John L. Furth Partner, WP
Stewart K.P. Gross Partner, WP
Patrick T. Hackett Partner, WP
Jeffrey A. Harris Partner, WP
William H. Janeway Partner, WP
Douglas M. Karp Partner, WP
Charles R. Kaye Partner, WP
-11-
<PAGE>
Richard H. King(2)
Henry Kressel Partner, WP
Joseph P. Landy Partner, WP
Sidney Lapidus Partner, WP
Kewsong Lee Partner, WP
Reuben S. Leibowitz Partner, WP
S. Joshua Lewis Partner, WP
David E. Libowitz Partner, WP
Brady T. Lipp Partner, WP
Stephen J. Lurito Partner, WP
John W. MacIntosh(1)
Spencer S. Marsh III Partner, WP
Lynn S. Martin Partner, WP
Edward J. McKinley Partner, WP
Rodman W. Moorhead III Partner, WP
Maryanne Mullarkey Partner, WP
Howard H. Newman Partner, WP
Gary D. Nusbaum Partner, WP
Sharon B. Parente Partner, WP
Dalip Pathak Partner, WP
Daphne D. Philipson Partner, WP
-12-
<PAGE>
Lionel I. Pincus Managing Partner, WP; Chairman
of the Board and CEO, EMW;
Managing Partner, Pincus & Co.
Eugene L. Podsiadlo Partner, WP
Ernest H. Pomerantz Partner, WP
Brian S. Posner Partner, WP
Arnold M. Reichman Partner, WP
Roger Reinlieb Partner, WP
John D. Santoleri Partner, WP
Steven G. Schneider Partner, WP
Sheila N. Scott Partner, WP
Harold Sharon Partner, WP
Dominic H. Shorthouse(2)
Eugene J. Siembieda Partner, WP
Chang Q. Sun(3)
James E. Thomas Partner, WP
John L. Vogelstein Partner, WP
Elizabeth H. Weathermen Partner, WP
Jeremy S. Young(2)
John A. Zaro, III Partner, WP
Pincus & Co.*
(1) Citizen of Canada
(2) Citizen of United Kingdom
(3) Citizen of People's Republic of China
* New York limited partnership; its primary activity is ownership in WP.
-13-
<PAGE>
EXHIBIT 2
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of August 1, 1998 between Chakravarthi V. Ravi
(the "Holder") and Warburg, Pincus Investors, L.P. (the "Purchaser").
The parties agree as follows:
1. Sale of Stock. The Holder hereby agrees to sell to the Purchaser and the
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Purchaser hereby agrees to purchase from the Holder 450,000 shares (the
"Shares") of the Common Stock of IA Corporation I, a Delaware corporation (the
"Company"), for an aggregate purchase price of $1,350,000 (the "Purchase
Price").
2. Payment of Purchase Price. The Purchase Price shall be paid in cash.
-------------------------
3. Purchaser Representations. In connection with the purchase of the
-------------------------
Shares, the Purchaser represents to the Holder the following:
(a) Purchaser is aware of the Company's business affairs and financial
condition, and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Shares. Purchaser is
acquiring these Shares for its own account for investment purposes only and not
with a view to, or for the resale in connection with, any "distribution" thereof
for purposes of the Securities Act of 1933, as amended ("Securities Act").
(b) Purchaser understands that the Shares have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein. In this connection, Purchaser understands
that, in the view of the Securities and Exchange Commission ("SEC"), the
statutory basis for such exemption may be unavailable if Purchaser's
representation was predicated solely upon a present intention to hold these
Shares for the minimum capital gains period specified under tax statutes, for a
deferred sale, for or until an increase or decrease in the market price of the
Shares, or for a period of one year or any other fixed period in the future.
(c) Purchaser further understands that the Shares must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from registration is otherwise available. In addition, Purchaser
understands that the certificate evidencing the Shares will be imprinted with a
legend which prohibits the transfer of the Shares unless they are registered or
such registration is not required in the opinion of counsel for the Company.
(d) Purchaser is aware of the provisions of Rule 144, promulgated
under the Securities Act, which, in substance, permits limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non-public offering subject
to the satisfaction of certain conditions, including, among other things: (1)
The availability of certain public information about the Company; (2) the resale
occurring not less than one year after the
<PAGE>
party has purchased and paid for the securities to be sold; and, in the case of
an affiliate, or of a non-affiliate who has held the securities less than two
years, (3) the sale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934, as amended) and the amount of
securities being sold during any three-month period not exceeding the specified
limitations stated therein.
(e) Purchaser further understands that at the time it wishes to sell
the Shares there may be no public market upon which to make such a sale, and
that, even if such a public market then exists, the Company may not be
satisfying the current public information requirements of Rule 144, and that, in
such event, Purchaser would be precluded from selling the Shares under Rule 144
even if the one-year minimum holding period had been satisfied.
(f) Purchaser further understands that in the event all of the
applicable requirements of Rule 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rule 144 is
not exclusive, the Staff of the SEC has expressed its opinion that persons
proposing to sell private placement securities other than in a registered
offering and otherwise than pursuant to Rule 144 will have a substantial burden
of proof in establishing that an exemption from registration is available for
such offers or sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk.
4. Holder Representations. In connection with the sale of the Shares,
----------------------
the Holder represents to the Purchaser the following:
(a) This Agreement has been duly authorized, executed and delivered by
or on behalf of Holder and constitutes a valid and binding obligation upon
Holder.
(b) The execution and delivery by Holder of, and the performance by
Holder of his obligations under, this Agreement, will not contravene any
provision of applicable law, or any agreement or other instrument binding upon
Holder or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over Holder, and no consent, approval, authorization
or order of or qualification with any governmental body or agency is required
for the performance by Holder of his obligations under this Agreement.
(c) Holder has valid, marketable title to the Shares to be sold by him
and the legal right and power, and all authorization and approval required by
law, to enter into this Agreement and to sell, transfer and deliver the Shares
to be sold by him.
(d) Delivery of the certificates for the Shares to be sold by Holder
pursuant to this Agreement, together with a duly executed stock power
transferring such Shares to the Purchaser, will, upon receipt of payment for
such Shares, pass marketable title to such Shares to the Purchaser free and
clear of any security interests, claims, liens, equities and other encumbrances.
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<PAGE>
It is expressly understood and agreed between the parties that Holder
makes no representations as to compliance with provisions of Rule 144 and
Section 4(1) and comparable state provisions for the transfer of such
securities.
5. Stock Certificate Legends. The share certificate evidencing the
-------------------------
Shares issued hereunder shall be endorsed with the following legends:
(a) THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO
THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
(b) Any legend required by any applicable state securities laws.
6. Adjustment for Stock Split. All references to the number of Shares
--------------------------
and the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock split, reverse stock split or stock dividend or
other similar change in the Shares which may be made by the Company after the
date of this Agreement.
7. Market Standoff Agreement. Purchaser hereby agrees that if so
-------------------------
requested by the Company or any representative of the underwriters in connection
with any registration of the offering of any Shares of the Company under the
Securities Act, Purchaser shall not sell or otherwise transfer any Shares or
other securities of the Company during the 180-day period following the date of
the final prospectus contained in a registration statement of the Company filed
under the Securities Act. The Company may impose stop-transfer instructions
with respect to securities subject to the foregoing restrictions until the end
of such 180-day period.
8. General Provisions.
------------------
(a) This Agreement shall be governed by the laws of the State of
California. This Agreement represents the entire agreement between the parties
with respect to the purchase of Common Stock by the Purchaser and may only be
modified or amended in a writing signed by both parties.
(b) The rights and benefits of the Holder under this Agreement shall
be transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Holder's successors and assigns. The rights and obligations of the Purchaser
under this Agreement may only be assigned with the prior written consent of the
Holder and any purported transfer otherwise shall be null and void.
(c) The rights and obligations of the Purchaser under this Agreement,
subject to the restrictions on transfer herein set forth, shall be binding upon
Purchaser, his heirs, executors, administrators, successors and assigns.
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<PAGE>
(d) Either party's failure to enforce any provision or provisions of
this Agreement shall not in any way be construed as a waiver of any such
provision or provisions, nor prevent that party thereafter from enforcing each
and every other provision of this Agreement. The rights granted both parties
herein are cumulative and shall not constitute a waiver of either party's right
to assert all other legal remedies available to it under the circumstances.
(e) The Purchaser agrees upon request to execute any further documents
or instruments necessary or desirable to carry out the purposes or intent of
this Agreement.
(f) Purchaser has reviewed this Agreement in its entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Agreement
and fully understands all provisions of this Agreement.
(h) This Agreement may be executed in one or more counterparts, each
of which shall be an original and all of which, taken together, shall constitute
one and the same instrument.
[This space left blank intentionally]
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<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first set forth above.
HOLDER: PURCHASER:
/s/ Chakravarthi V. Ravi Warburg, Pincus Investors, L.P.
- ------------------------
Chakrarthi V. Ravi
Signature: /s/ Henry Kressel
-------------------
Name: Henry Kressel
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Title:
----------------------------
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<PAGE>
CONSENT OF SPOUSE
-----------------
I, Anna von Hellens-Ravi, spouse of Chakrarthi V. Ravi, have read and
approve the foregoing Agreement. In consideration of granting of the right to
my spouse to purchase shares of Pacific Peninsula Group as set forth in the
Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the
exercise of any rights under the Agreement and agree to be bound by the
provisions of the Agreement insofar as I may have any rights in said Agreement
or any shares issued pursuant thereto under the community property laws of the
State of California or similar laws relating to marital property in effect in
the state of our residence as of the date of the signing of the foregoing
Agreement.
Dated: August 7, 1998
/s/ Anna von Hellens-Ravi
-------------------------
