EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
dated as of
December 13, 2000
between
MARCHFIRST, INC.
and
FP-LION, L.L.C.
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TABLE OF CONTENTS
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PAGE
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ARTICLE 1 Definitions........................................................1
SECTION 1.1 Definitions.............................................1
ARTICLE 2 Purchase and Sale of Securities....................................5
SECTION 2.1 Commitment to Purchase..................................5
SECTION 2.2 The Closing.............................................5
ARTICLE 3 Representations and Warranties of the Issuer.......................6
SECTION 3.1 Corporate Existence and Power...........................6
SECTION 3.2 Corporate Authorization.................................6
SECTION 3.3 Governmental Authorization..............................6
SECTION 3.4 Noncontravention........................................7
SECTION 3.5 Capitalization..........................................7
SECTION 3.6 Subsidiaries............................................8
SECTION 3.7 Financial Statements....................................8
SECTION 3.8 Absence of Certain Changes..............................9
SECTION 3.9 No Material Undisclosed Liabilities.....................9
SECTION 3.10 Litigation.............................................9
SECTION 3.11 Compliance with Laws...................................9
SECTION 3.12 SEC Reports...........................................10
SECTION 3.13 Material Contracts....................................10
SECTION 3.14 Finders' Fees.........................................10
SECTION 3.15 Offering of Securities................................10
SECTION 3.16 Intellectual Property.................................10
SECTION 3.17 Environmental Compliance..............................11
SECTION 3.18 Employment Matters; ERISA.............................11
SECTION 3.19 Taxes.................................................12
SECTION 3.20 Regulatory Matters....................................12
SECTION 3.21 Property..............................................13
SECTION 3.22 Proxy Materials.......................................13
SECTION 3.23 State Takeover Statutes...............................13
ARTICLE 4 Representations and Warranties of the Purchaser...................14
SECTION 4.1 Corporate Existence and Power..........................14
SECTION 4.2 Authorization..........................................14
SECTION 4.3 Governmental Authorization.............................14
SECTION 4.4 Noncontravention.......................................14
SECTION 4.5 Finders' Fees..........................................14
SECTION 4.6 Purchase for Investment................................15
SECTION 4.7 Proxy Materials........................................15
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ARTICLE 5 Covenants of the Issuer...........................................15
SECTION 5.1 Access to Information..................................15
SECTION 5.2 Certificates of Designations...........................15
SECTION 5.3 Restrictions Pending the Closing.......................15
SECTION 5.4 Reservation of Shares..................................16
SECTION 5.5 Other Transfers of Restricted Securities...............17
ARTICLE 6 Covenants of the Purchaser........................................17
SECTION 6.1 Confidentiality........................................17
SECTION 6.2 Standstill.............................................18
SECTION 6.3 Hedging Restrictions...................................18
SECTION 6.4 Agreements Pending the Closing.........................18
ARTICLE 7 Covenants of the Issuer and the Purchaser.........................18
SECTION 7.1 Required Regulatory Approvals; Reasonable Best
Efforts; Further Assurances............................18
SECTION 7.2 Certain Filings........................................19
SECTION 7.3 Public Announcements...................................19
SECTION 7.4 Tax Consistency........................................19
ARTICLE 8 Conditions Precedent to Closing...................................19
SECTION 8.1 Conditions to Each Party's Obligations.................19
SECTION 8.2 Conditions to the Purchaser's Obligations..............20
SECTION 8.3 Conditions to Issuer's Obligations.....................20
ARTICLE 9 Miscellaneous.....................................................21
SECTION 9.1 Notices................................................21
SECTION 9.2 No Waivers; Amendments.................................21
SECTION 9.3 Survival...............................................21
SECTION 9.4 Indemnification........................................22
SECTION 9.5 Procedures.............................................22
SECTION 9.6 Expenses; Documentary Taxes............................23
SECTION 9.7 Termination............................................23
SECTION 9.8 Successors and Assigns.................................24
SECTION 9.9 Governing Law..........................................24
SECTION 9.10 Jurisdiction..........................................24
SECTION 9.11 Counterparts..........................................25
SECTION 9.12 Entire Agreement......................................25
SECTION 9.13 Waiver of Jury Trial..................................25
SECTION 9.14 Severability..........................................25
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EXHIBITS, ANNEX AND SCHEDULE
Exhibit A -- Form of Certificate of Designations for Series A Preferred
Exhibit B -- Form of Certificate of Designations for Series B Preferred
Exhibit C -- Form of Registration Rights Agreement
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STOCK PURCHASE AGREEMENT
AGREEMENT dated as of December 13, 2000 between marchFIRST, Inc., a Delaware
corporation (the "ISSUER"), and FP-Lion, L.L.C., a Delaware limited liability
company (the "PURCHASER").
WHEREAS, the Issuer desires to sell the Securities (as defined below)
to the Purchaser, and the Purchaser desires to purchase the Securities from the
Issuer, upon the terms and subject to the conditions hereinafter set forth.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE 1
Definitions
SECTION 1.1 DEFINITIONS.
(a) The following terms, as used herein, have the
following meanings:
"AFFILIATE" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such Person;
PROVIDED that neither the Purchaser nor any of its Subsidiaries shall be
considered an Affiliate of the Issuer.
"AGREEMENT" means this Agreement, as it may be amended from time to
time.
"APPLICABLE LAW" means any applicable constitution, treaty, statute,
rule, regulation, ordinance, order, directive, code, interpretation, judgment,
decree, injunction, writ, determination, award, permit, license, authorization,
requirement, ruling or decision of, agreement with, or by any Governmental
Authority.
"BALANCE SHEET" means the consolidated balance sheet of the Issuer and
its Subsidiaries as of the Balance Sheet Date.
"BALANCE SHEET DATE" means September 30, 2000.
"BENEFIT ARRANGEMENT" means any employee benefit plan within the
meaning of Section 3(3) of ERISA or any other employment or employee
arrangement, severance arrangement or employment agreement, which is maintained
or otherwise contributed to by any member of the ERISA Group and covers any
current or former employee of Issuer.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of New York are authorized by law to close.
"CERTIFICATES OF DESIGNATIONS" means the Series A Certificate of
Designations and the Series B Certificate of Designations.
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"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMISSION" means the U.S. Securities and Exchange Commission or any
governmental body succeeding to the functions thereof.
"COMMON STOCK" means the common stock, par value $.001 per share, of
the Issuer.
"ENVIRONMENTAL LAWS" means any federal, state, local or foreign law
(including, without limitation, common law), treaty, judicial decision,
regulation, rule, judgment, order, decree, injunction, permit or governmental
restriction or requirement or any agreement with any governmental authority or
other third party, whether now or hereafter in effect, relating to human health
and safety, the environment or to pollutants, contaminants, wastes or chemicals
or any toxic, radioactive, ignitable, corrosive, reactive or otherwise
hazardous substances, wastes or materials.
"ENVIRONMENTAL LIABILITIES" means all liabilities of the Issuer and
each of its Subsidiaries, whether contingent or fixed, known or unknown, which
(i) arise under or relate to matters covered by Environmental Laws and (ii)
relate to actions occurring or conditions existing on or prior to the Closing
Date.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA GROUP" means the Issuer and all members of a controlled group
of corporations and all trades or businesses (whether or not incorporated)
under common control which, together with the Issuer, are treated as a single
employer under Section 414 of the Code.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FEE AGREEMENT" means the fee agreement dated the date hereof between
the Issuer and Francisco Partners GP, LLC.
"GOVERNMENTAL AUTHORITY" means any governmental body, agency or
official of any country or political subdivision of any country, including, but
not limited to, federal, state, county and local governments, administrative
agencies and courts.
"HAZARDOUS SUBSTANCE" means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics, including, without
limitation, any substance regulated under Environmental Laws.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, any Person shall be deemed to own subject
to Lien any asset that it has acquired or
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holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.
"MATERIAL ADVERSE EFFECT" means any change or effect (or aggregation
of changes and effects) that is materially adverse to the business, assets,
condition (financial or otherwise) or results of operations of the Issuer and
its Subsidiaries, taken as a whole, excluding any such effects resulting solely
from (i) changes or conditions generally affecting the industries in which the
Issuer and its Subsidiaries currently operate or (ii) changes in general
economic, regulatory or political conditions.
"PERSON" means an individual or a corporation, partnership, limited
liability company, association, trust, or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"PREFERRED STOCK" means the preferred stock, par value $.001 per
share, of the Issuer.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, substantially in the form attached as Exhibit C hereto.
"REGULATED ACTIVITY" means any generation, treatment, storage,
recycling, transportation or disposal of any Hazardous Substance.
"SEC REPORTS" means the forms, reports and documents required to be
filed with the Commission by the Issuer pursuant to the Exchange Act or the
Securities Act from and after January 1, 2000.
"SECURITIES" means the Series A Preferred and the Series B Preferred.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SERIES A CERTIFICATE OF DESIGNATIONS" means the Certificate of
Designations, Preferences and Rights of Series A 8% Senior Convertible
Participating Preferred Stock, substantially in the form attached as Exhibit A
hereto.
"SERIES B CERTIFICATE OF DESIGNATIONS" means the Certificate of
Designations, Preferences and Rights of Series B 12% Senior Participating
Preferred Stock, substantially in the form attached as Exhibit B hereto.
"SERIES A PREFERRED" means the Issuer's Series A 8% Senior
Participating Convertible Preferred Stock, par value $.001 per share.
"SERIES B PREFERRED" means the Issuer's Series B 12% Senior
Participating Preferred Stock, par value $.001 per share.
"SIGNIFICANT SUBSIDIARY" shall have the meaning assigned to such term
in Rule 1-02 of Regulation S-X under the Securities Act and the Exchange Act.
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"SUBSIDIARY" means, with respect to any Person, any other Person of
which a majority of the capital stock or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions are at the time directly or indirectly
owned by such Person.
"TAX" (and, with correlative meaning, "TAXES") means (i) any net
income, alternative or add-on minimum tax, gross income, gross receipts, sales,
use, ad valorem, value added, transfer, franchise, profits, license,
withholding on amounts paid by the Issuer or any of its Subsidiaries, payroll,
employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom, duty or other tax, governmental
fee or other like assessment or charge of any kind whatsoever, together with
any interest or any penalty, addition to tax or additional amount due from, or
in respect of the Issuer or any of its Subsidiaries, as the case may be,
imposed by any Governmental Authority (a "TAXING AUTHORITY") responsible for
the imposition of any such tax (domestic or foreign), (ii) in the case of the
Issuer or any of its Subsidiaries, liability for the payment of any amount of
the type described in clause (i) as a result of being or having been before the
Closing Date a member of an affiliated, consolidated, combined or unitary
group, or a party to any agreement or arrangement, as a result of which
liability of the Issuer or any of its Subsidiaries to a Taxing Authority is
determined or taken into account with reference to the activities of any other
Person, and (iii) any liability of the Issuer or any of its Subsidiaries for
the payment of any amount as a result of being a party to any tax sharing
agreement or with respect to the payment of any amount of the type described in
(i) or (ii) as a result of any existing express or implied agreement or
arrangement (including, but not limited to, an indemnification agreement or
arrangement).
Each of the following terms is defined in the Section set forth
opposite such term:
TERM SECTION
10-K 3.9
10-Qs 3.9
Agreements 3.2
Agreed Disclosure 7.3
Authorizations 3.20
Closing 2.2(a)
Closing Date 2.2(a)
Closing Failure 9.7(a)
Damages 9.4(a)
Indemnified Party 9.5
Indemnifying Party 9.5
Intellectual Property 3.16
Issuer Preamble
Issuer Securities 3.5(b)
Material Contract 3.13
Proxy Statement 3.21
Purchase Price 3.21
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TERM SECTION
Purchaser Preamble Regulatory
Authorities 3.3
Representatives 6.1
Returns 3.19
Series A Preferred Price 2.1
Series B Preferred Price 2.1
Signing 8-K 7.3
Signing Release 7.3
Subsidiary Securities 3.6(b)
Warranty Breach 9.4(a)
ARTICLE 2
Purchase and Sale of Securities
SECTION 2.1 COMMITMENT TO PURCHASE. Upon the basis of the
representations and warranties of the Purchaser herein contained, but subject
to the terms and conditions hereinafter stated, the Issuer agrees to sell to
the Purchaser, and the Purchaser, upon the basis of the representations and
warranties of the Issuer herein contained, but subject to the terms and
conditions hereinafter stated, agrees to purchase from the Issuer at the
Closing (a) 63,053 shares of Series A Preferred for an aggregate purchase price
of $63,053,000 (the "SERIES A PREFERRED PRICE") and (b) 86,947 shares of Series
B Preferred for an aggregate purchase price of $86,947,000 (the "SERIES B
PREFERRED PRICE," together with the Series A Preferred Price, the "PURCHASE
PRICE").
SECTION 2.2 THE CLOSING.
(a) The closing (the "CLOSING") of the purchase and sale of
the Securities hereunder shall take place at 10:00 a.m., Central Time,
at the offices of Katten Muchin Zavis, 525 West Monroe Street,
Chicago, Illinois 60661, as soon as possible after satisfaction of the
conditions set forth in Article 8, or at such other time or place as
the Purchaser and the Issuer may agree. Each of the Purchaser and the
Issuer shall use their reasonable best efforts to cause such Closing
to occur on or before December 29, 2000. The date and time of closing
are referred to herein as the "CLOSING DATE."
(b) At the Closing, the Purchaser shall deliver to the
Issuer, by wire transfer to an account designated by the Issuer, an
amount, in immediately available funds, equal to the aggregate
purchase price of the Securities being purchased by the Purchaser from
the Issuer.
(c) At the Closing, the Issuer shall deliver to the
Purchaser, against payment of the purchase price by the Purchaser to
the Issuer, duly executed certificates evidencing the shares of Series
A Preferred and Series B Preferred being purchased by the Purchaser
from the Issuer, in each case in definitive form and registered in
such name or names as
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the Purchaser shall request not later than two Business Days prior to
the Closing Date.
(d) At the Closing, the Issuer shall deliver to Francisco
Partners GP, LLC, a Delaware limited liability company, by wire
transfer to an account designated by the Purchaser, an amount, in
immediately available funds, equal to the fee and reimbursement of
expenses to be paid or reimbursed to the Purchaser by the Issuer
pursuant to the Fee Agreement.
ARTICLE 3
Representations and Warranties of the Issuer
The Issuer represents and warrants to the Purchaser as of the date hereof and
as of the Closing Date that, except as set forth in the Disclosure Letter
delivered by the Issuer to the Purchaser contemporaneously herewith:
SECTION 3.1 CORPORATE EXISTENCE AND POWER. The Issuer is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate power and all material
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted. The Issuer is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where such qualification is necessary, except for those jurisdictions where
failure to be so qualified or in good standing would not have, individually or
in the aggregate, a Material Adverse Effect. The Issuer has heretofore made
available to the Purchaser or its counsel true and complete copies of the
certificate of incorporation and bylaws of the Issuer as currently in effect.
The Issuer currently has no stockholders' rights plan or similar plan in
effect.
SECTION 3.2 CORPORATE AUTHORIZATION. The execution, delivery and
performance by the Issuer of this Agreement, the Fee Agreement and the
Registration Rights Agreement (collectively, the "AGREEMENTS") and the
consummation of the transactions contemplated hereby and thereby are within the
Issuer's corporate powers and have been duly authorized by all necessary
corporate action on the part of the Issuer. The execution, delivery and
performance by the Issuer of the Agreements, and the consummation of the
transactions contemplated hereby and thereby do not require the approval of the
stockholders of the Issuer. The Agreements constitute legal, valid and binding
agreements of the Issuer, enforceable against the Issuer in accordance with
their respective terms, except (i) as such enforcement is limited by
bankruptcy, insolvency and other similar laws affecting the enforcement of
creditors' rights generally, (ii) for limitations imposed by general principles
of equity and (iii) as enforcement with respect to indemnification and
contribution may be limited by applicable securities laws or public policy. The
shares of Common Stock issuable upon conversion of, or exercise of any right of
the holder to require the Issuer to redeem, the Securities will, when issued,
be validly issued and outstanding, fully paid and nonassessable, and free and
clear of any Liens other than Liens arising as a result of the status or
actions of the Purchaser.
SECTION 3.3 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by the Issuer of the Agreements and the consummation by the Issuer
of the transactions contemplated hereby and thereby require no consent,
approval, authorization or other action by or in respect of any Governmental
Authority or other party except (i) compliance with any
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applicable filing requirements of the Exchange Act, (ii) the filing of the
Certificates of Designations in accordance with the law of the State of
Delaware, (iii) compliance with the applicable requirements of the HSR Act,
(iv) the filing of the notice of listing referred to in Section 8.1(e) and (v)
other filings, notifications and consents that are immaterial to the
consummation of the transactions contemplated hereby.
SECTION 3.4 NONCONTRAVENTION. The execution, delivery and performance
by the Issuer of the Agreements, and the consummation by the Issuer of the
transactions contemplated hereby and thereby do not and will not (i) violate
the certificate of incorporation or bylaws of the Issuer or any Subsidiary of
the Issuer, (ii) assuming compliance with the matters referred to in Section
3.3, violate any Applicable Law, (iii) require any consent or other action by
any Person under, constitute a default under, or give rise to any right of
termination, cancellation or acceleration of any material right or obligation
of the Issuer or any Subsidiary of the Issuer or to a loss of any material
benefit to which the Issuer or any Subsidiary of the Issuer is entitled under
any provision of any agreement or other instrument binding upon the Issuer or
any Subsidiary of the Issuer or (iv) result in the creation or imposition of
any Lien on any material asset of the Issuer or any Subsidiary of the Issuer,
except for, in the case of clauses (ii), (iii) and (iv), such matters that
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
SECTION 3.5 CAPITALIZATION.
(a) The authorized capital stock of the Issuer consists of
500,000,000 shares of Common Stock and 3,000,000 shares of Preferred
Stock. As of the date hereof, there were issued and outstanding the
following shares of such stock: 158,426,177 shares of Common Stock and
no shares of Preferred Stock.
(b) All of the outstanding shares of Common Stock are duly
authorized, were validly issued and are fully paid and nonassessable.
There are no preemptive or other similar rights available to the
existing holders of the capital stock of the Issuer. As of the date
hereof and other than in connection with the transactions contemplated
by this Agreement, there are no outstanding options, warrants, rights,
puts, calls, commitments, or other contracts, arrangements, or
understandings issued by or binding upon the Issuer requiring, and
there are no outstanding debt or equity securities of the Issuer which
upon the conversion, exchange or exercise thereof would require, the
issuance, sale or transfer by the Issuer of any new or additional
equity interests in the Issuer (or any other securities of the Issuer)
or any of its Subsidiaries which, whether after notice, lapse of time
or payment of monies, are or would be convertible into or exercisable
or exchangeable for equity interests in the Issuer. There are no
voting trusts, stockholder agreements, material proxies or other
agreements or understandings to which the Issuer or any of its
Subsidiaries is a party with respect to the voting or transfer or
registration of shares of capital stock of the Issuer. Neither the
offer nor the issuance or sale of the Securities constitutes or will
constitute an event under any capital stock or convertible security or
any anti-dilution or similar provision of any agreement or instrument
to which the Issuer is a party or by which it is bound or affected,
which shall either increase the number of shares of capital stock
issuable upon conversion of any securities or upon
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exercise of any warrant or right to subscribe to or purchase any stock
or similar security, or decrease the consideration per share of
capital stock to be received by the Issuer upon such conversion or
exercise.
(c) The issuance, sale and delivery of the Securities has
been duly authorized by all requisite corporate action on the part of
the Issuer and the Securities when issued and delivered in accordance
with the terms of the applicable Certificate of Designations and this
Agreement will be validly issued and outstanding, fully paid and
nonassessable, free and clear of any Liens and delivered and not
subject to preemptive or other similar rights of the stockholders of
the Issuer.
SECTION 3.6 SUBSIDIARIES.
(a) Each of the Issuer's material Subsidiaries including,
without limitation, any Significant Subsidiary of the Issuer, is a
corporation or limited liability company duly incorporated or formed,
validly existing and in good standing under the laws of its
jurisdiction of incorporation or formation and has all powers
(corporate or otherwise) and all material governmental licenses,
authorizations, permits, consents and approvals required to carry on
its business as now conducted. Each such Subsidiary of the Issuer is
duly qualified to do business as a foreign corporation or limited
liability company and is in good standing in each jurisdiction where
such qualification is necessary, except for those jurisdictions where
failure to be so qualified or in good standing would not have,
individually or in the aggregate, a Material Adverse Effect.
(b) All of the outstanding capital stock or other voting
securities or other equity interests of each Subsidiary of the Issuer
(other than directors' qualifying shares) is owned by the Issuer,
directly or indirectly, free and clear of any Lien and free of any
other limitation or restriction (including any restriction on the
right to vote, sell or otherwise dispose of such capital stock or
other voting securities or other equity interests). There are no
outstanding (i) securities of the Issuer or any Subsidiary of the
Issuer convertible into or exchangeable for shares of capital stock or
voting securities or other equity securities of any Subsidiary of the
Issuer or (ii) options or other rights to acquire from the Issuer or
any Subsidiary of the Issuer, or other obligation of the Issuer or any
Subsidiary of the Issuer to issue, any capital stock, voting
securities, other equity interests or securities convertible into or
exchangeable for capital stock or voting securities or other equity
interests of any Subsidiary of the Issuer (the items in clauses
3.6(b)(i) and 3.6(b)(ii) being referred to collectively as the
"SUBSIDIARY SECURITIES"). There are no outstanding obligations of the
Issuer or any Subsidiary of the Issuer to repurchase, redeem or
otherwise acquire any outstanding Subsidiary Securities.
SECTION 3.7 FINANCIAL STATEMENTS. The consolidated financial statements
of the Issuer contained in the SEC Reports (or, in the case of any amended SEC
Report, in the SEC Report as so amended) complied as to form in all material
respects with the published rules and regulations of the Commission with
respect thereto, were prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto) and fairly presented in conformity with
generally accepted accounting principles (except as may be indicated in the
notes thereto), the consolidated
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financial position of the Issuer and its consolidated subsidiaries as of the
dates thereof and their consolidated results of operations and changes in
financial position for the periods then ended (subject to normal year-end
adjustments in the case of any unaudited interim financial statements, which
adjustments will not be material either individually or in the aggregate).
SECTION 3.8 ABSENCE OF CERTAIN CHANGES. Since the Balance Sheet Date
through the date of this Agreement, the business of the Issuer and its
Subsidiaries has been conducted in the ordinary course consistent with past
practices and there has not been any event, occurrence, development or state of
circumstances or facts which has had or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect or an adverse
effect on the ability of the Issuer to perform its obligations under this
Agreement.
SECTION 3.9 NO MATERIAL UNDISCLOSED LIABILITIES. Through the date of
this Agreement, there are no liabilities of the Issuer or any Subsidiary of the
Issuer of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, and there is no existing condition,
situation or set of circumstances which could reasonably be expected,
individually or in the aggregate, to result in such a liability, other than:
(i) liabilities provided for in the Balance Sheet or
disclosed in the notes thereto or in the Form 10-K of the
Issuer for the year ended December 31, 1999 (the "10-K"), or
in the Forms 10-Q of the Issuer for the quarters ended March
31, 2000, June 30, 2000 and September 30, 2000 (the "10-Qs");
(ii) liabilities incurred since the Balance Sheet
Date in the ordinary course of business consistent with past
practices;
(iii) liabilities under the Agreements or incurred in
connection with the transactions contemplated by the
Agreements; and
(iv) other undisclosed liabilities which,
individually or in the aggregate, are not material to the
Issuer and its Subsidiaries, taken as a whole.
SECTION 3.10 LITIGATION. Through the date of this Agreement, except as
disclosed in the SEC Reports, there is no action, suit, investigation or
proceeding (or, to the knowledge of the Issuer, any basis therefor) pending
against, or to the knowledge of the Issuer, threatened against or affecting,
the Issuer or any Subsidiary of the Issuer or any of their respective
properties before any court or arbitrator or any governmental body, agency or
official which could have, individually or in the aggregate, a Material Adverse
Effect or which in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the transactions contemplated by the Agreements.
SECTION 3.11 COMPLIANCE WITH LAWS. Neither the Issuer nor any
Subsidiary of the Issuer is in violation of, or has violated or been threatened
to be charged with or given notice of any violation of, or to the best
knowledge of the Issuer, is under investigation with respect to any Applicable
Law, in each case other than any such violations that could not reasonably be
expected to have, individually or in the aggregate, have a Material Adverse
Effect.
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SECTION 3.12 SEC REPORTS. The Issuer has filed all required SEC
Reports when due (or within permitted extension periods) in accordance with the
Exchange Act. As of their respective dates (or, in the case of any amended SEC
Report, as of the date of the amendment), the SEC Reports complied in all
material respects with all applicable requirements of the Exchange Act or the
Securities Act, as the case may be. As of their respective dates (or, in the
case of any amended SEC Report, as of the date of the amendment), none of the
SEC Reports contained any untrue statement of a material fact or omitted to
state a material fact required to be stated or incorporated by reference
therein or necessary in order to make the statements made therein, in light of
the circumstances under which they were made, not misleading.
SECTION 3.13 MATERIAL CONTRACTS. Except to the extent fully performed
or terminated pursuant to its terms, each of the agreements, contracts, leases
and commitments listed as an exhibit to the 10-K, any of the 10-Qs or any Form
8-K filed by the Issuer with the Commission since January 1, 1999 (each, a
"MATERIAL CONTRACT") is a legal, valid and binding agreement of the Issuer or a
Subsidiary of the Issuer, as the case may be, and is in full force and effect,
and none of the Issuer, such Subsidiary or, to the knowledge of the Issuer, any
other party thereto is in default or breach, in each case except for any such
default or breach that could not have, individually or in the aggregate, a
Material Adverse Effect, and, to the best knowledge of the Issuer, no event or
circumstance has occurred that, with notice or lapse of time or both, would
constitute any event of default thereunder, except for an event of default that
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
SECTION 3.14 FINDERS' FEES. Except for Credit Suisse First Boston,
there is no investment banker, broker, finder or other intermediary which has
been retained by or is authorized to act on behalf of the Issuer who might be
entitled to any fee or commission in connection with the transactions
contemplated by this Agreement.
SECTION 3.15 OFFERING OF SECURITIES. Neither Issuer nor any Person
acting on Issuer's behalf has taken or will take any action (including, without
limitation, any offering of any securities of the Issuer under circumstances
which would require, under the Securities Act, the integration of such offering
with the offering and sale of the Securities) which might subject the offering,
issuance or sale of the Securities to the registration requirements of Section
5 of the Securities Act.
SECTION 3.16 INTELLECTUAL PROPERTY. The Issuer and each of its
Subsidiaries owns, or has the legal right to use, all material patents, patent
applications, trademarks, trademark applications, tradenames, copyrights,
technology, know-how and processes and other intellectual property rights
necessary for each of them to conduct its business as currently conducted (the
"INTELLECTUAL PROPERTY"). No claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does the
Issuer know of any facts or circumstances that could provide a reasonable basis
for any such claim, except in each case for such claims which could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. To the best knowledge of the Issuer, the use of such
Intellectual Property by the Issuer and its Subsidiaries does not infringe on
the rights of any Person, except for such infringements which
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could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
SECTION 3.17 ENVIRONMENTAL COMPLIANCE.
(a) No notice, notification, demand, request for information,
citation, summons, complaint or order has been issued, no complaint
has been filed, no penalty has been assessed and no investigation or
review is pending, or to the Issuer's best knowledge, threatened by
any governmental or other entity (i) with respect to any alleged
material violation by the Issuer or any of its Subsidiaries of any
Environmental Law, (ii) with respect to any alleged failure by the
Issuer or any of its Subsidiaries to have any material permit,
certificate, license, approval, registration or authorization required
under any Environmental Law in connection with the conduct of their
businesses or (iii) with respect to any Regulated Activity or any
release, as defined in 42 U.S.C. 9601(22), of any Hazardous Substance
which could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(b) (i) Neither the Issuer nor any of its Subsidiaries has
engaged in any Regulated Activity other than in compliance in all
material respects with all applicable Environmental Laws and (ii) to
the best knowledge of the Issuer, no release, as defined in 42 U.S.C.
9601(22), of any Hazardous Substance has occurred at or on any
property now or previously owned or leased by the Issuer or any of its
Subsidiaries which could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
(c) To the best knowledge of the Issuer, there are no
Environmental Liabilities that could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. SECTION
3.18 EMPLOYMENT MATTERS; ERISA.
(a) Issuer has made available to the Purchaser copies of the
material Benefit Arrangements (and, if applicable, related trust
agreements) and all amendments thereto and written interpretations
thereof together with the most recent annual report (Form 5500
including, if applicable, schedule B thereto). Each material Benefit
Arrangement that is intended to be qualified under Section 401(a) of
the Code has been determined by the Internal Revenue Service to be so
qualified if so required and, to the knowledge of the Issuer, there
has been no event since the date of such determination which would
adversely affect such qualification. Each material Benefit Arrangement
has been maintained in substantial compliance with its terms and with
the requirements prescribed by any and all applicable statutes,
orders, rules and regulations, including but not limited to ERISA and
the Code, except to the extent that it would not have a Material
Adverse Effect.
(b) Neither the Issuer nor any member of the ERISA Group
maintains or contributes to or has maintained or contributed to any
plan subject to Title IV of ERISA or any multiemployer plan within the
meaning of Section 4001(a)(3) of ERISA.
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(c) Issuer has no current or projected liability in respect
of post-employment or post-retirement health or medical or life
insurance benefits for its retired, former or current employees,
except as required to avoid excise tax under Section 4980B of the
Code.
(d) No employee of Issuer shall become entitled to any
payments or accelerated vesting of any awards merely as a result of
this transaction.
SECTION 3.19 TAXES. The Issuer and each of its Subsidiaries has filed
in accordance with Applicable Law, all material Tax returns, statements,
reports and forms (collectively, "RETURNS") required to be filed with any
Taxing Authority when due (taking into account any extension of a required
filing date); (b) at the time filed, such Returns were true, correct and
complete in all material respects; (c) the Issuer and each of its Subsidiaries
has timely paid all Taxes shown as due and payable on the Returns that have
been filed; (d) the charges, accruals and reserves for Taxes reflected on the
Balance Sheet (excluding any provision for deferred income taxes) are adequate
under United States generally accepted accounting principles, consistently
applied, to cover the Tax liabilities accruing through the date thereof; (e)
since the Balance Sheet Date, neither the Issuer nor any of its Subsidiaries
has engaged in any transaction, or taken any other action, other than in the
ordinary course of business, which would reasonably be expected to result in a
material Tax on the Issuer or any of its Subsidiaries; (f) there is no action,
suit, proceeding, investigation, audit or claim pending or, to the knowledge of
the Issuer, threatened against or with respect to it or any of its Subsidiaries
in respect of any Tax; (g) neither the Issuer nor any of its Subsidiaries has
any obligation under any Tax sharing agreement, Tax allocation agreement or Tax
indemnity agreement or any other agreement or arrangement in respect of any Tax
with any Person other than the Issuer or its Subsidiaries; (h) neither the
Issuer nor any of its Subsidiaries has been a member of an affiliated,
consolidated, combined or unitary group other than one of which the Issuer was
the common parent; (i) proper and adequate amounts have been withheld by the
Issuer and its Subsidiaries from their respective employees and other Persons
for all periods in compliance in all material respects with the Tax, social
security and unemployment, excise and other withholding provisions of all
federal, state, local and foreign laws; (j) there is no lien in respect of any
material Tax outstanding against the assets, properties or business of the
Issuer or any of its Subsidiaries; and (k) the Issuer is not now, has never
been and does not contemplate becoming a "United States Real Property Holding
Corporation" as defined in Section 897(c)(2) of the Code and Section 1.897-2(b)
of the Treasury regulations thereunder.
SECTION 3.20 REGULATORY MATTERS. The Issuer has all necessary
franchises, approvals, authorizations, permits, licenses, registrations,
qualifications and similar rights obtained from any federal, state or local
regulatory authority ("AUTHORIZATIONS") to conduct and operate the businesses
of the Issuer, except any such Authorizations which the failure to have would
not, either individually or in the aggregate, have a Material Adverse Effect.
The Authorizations are currently in full force and effect, are not in default,
and are valid under all applicable rules and regulations according to their
terms, except as would not, either individually or in the aggregate, have a
Material Adverse Effect. The Issuer is in compliance with the terms and
conditions of the Authorizations, including requirements for notifications,
filing, reporting, posting and
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maintenance of logs and records, except where any failure to so comply would
not, individually or in the aggregate, have a Material Adverse Effect.
SECTION 3.21 PROPERTY. The material properties held by the Issuer and
its Subsidiaries conform to the description thereof in the Issuer's SEC
Reports. The Issuer and its Subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all personal
property owned by them which is material to the business of the Issuer and its
Subsidiaries, taken as a whole, in each case free and clear of all Liens,
encumbrances and defects except such as are disclosed in the Issuer's SEC
Reports or as would not in the aggregate reasonably be expected to have a
Material Adverse Effect; and any real property and buildings held under lease
by the Issuer and its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Issuer and its Subsidiaries.
SECTION 3.22 PROXY MATERIALS. If the Issuer seeks the approval of the
Issuer's stockholders in connection with the issuance of securities
contemplated hereby, the proxy or information statement of the Issuer to be
filed with the Commission in connection with the related shareholders meeting
(the "PROXY STATEMENT") and any amendments or supplements thereto will, when
filed, comply as to form in all material respects with the applicable
requirements of the Exchange Act. At the time the Proxy Statement or any
amendment or supplement thereto is first mailed to stockholders of the Issuer,
and at the time such stockholders vote on approval of the issuance of
securities hereunder, the Proxy Statement, as supplemented or amended, if
applicable, will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
The representations and warranties contained in this Section 3.22 will not
apply to statements or omissions included in the Proxy Statement based upon
information furnished in writing to the Issuer by the Purchaser specifically
for use therein.
SECTION 3.23 STATE TAKEOVER STATUTES. The Board of Directors of the
Issuer, at a meeting duly called (or for which notice was duly waived by all
directors of the Issuer) and held on December 13, 2000, has approved the terms
of this Agreement, the Certificates of Designations, the Registration Rights
Agreement and the other documents contemplated by this Agreement, and the
consummation of the transactions contemplated hereby and thereby (including
without limitation the sale and issuance to the Purchaser of the Securities
pursuant to this Agreement, and the Purchaser's acquisition of shares of Common
Stock upon conversion of the Securities), and such approval constitutes
approval of such transactions by the Board of Directors of the Issuer under the
provisions of Section 203 of the Delaware General Corporation Law (the "DGCL"),
and constitutes all actions necessary to ensure that the restrictions contained
in Section 203 of the DGCL will not apply to the Purchaser in connection with
or as a result of such transactions. To its knowledge, no other state takeover
statute is applicable to the transactions contemplated by this Agreement and
the other documents contemplated hereby.
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ARTICLE 4
Representations and Warranties of the Purchaser
The Purchaser hereby represents and warrants to the Issuer as of the
date hereof and as of the Closing Date that:
SECTION 4.1 CORPORATE EXISTENCE AND POWER. The Purchaser is an entity
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has all corporate or partnership powers and
all material governmental licenses, authorizations, permits, consents and
approvals required to carry on its business as now conducted. The Purchaser is
duly qualified to do business and is in good standing in each jurisdiction
where such qualification is necessary, except for those jurisdictions where
failure to be so qualified would not have, individually or in the aggregate, a
material adverse effect on the Purchaser.
SECTION 4.2 AUTHORIZATION. The execution, delivery and performance by
the Purchaser of this Agreement and the consummation of the transactions
contemplated hereby are within the Purchaser's corporate or partnership powers
and have been duly authorized by all necessary corporate or partnership action
on the part of the Purchaser. This Agreement constitutes a legal, valid and
binding agreement of the Purchaser, enforceable against the Purchaser in
accordance with its terms, except (i) as such enforcement is limited by
bankruptcy, insolvency and other similar laws affecting the enforcement of
creditors' rights generally, (ii) for limitations imposed by general principles
of equity and (iii) as enforcement with respect to indemnification and
contribution may be limited by applicable securities laws or public policy.
SECTION 4.3 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by the Purchaser of this Agreement and the consummation by the
Purchaser of the transactions contemplated hereby require no action by or in
respect of, or filing with, any governmental body, agency or official other
than (i) compliance with any applicable requirements of the Exchange Act, (ii)
compliance with the applicable requirements of the HSR Act and (iii) other
filings, notifications and consents that are immaterial to the consummation of
the transactions contemplated hereby.
SECTION 4.4 NONCONTRAVENTION. The execution, delivery and performance
by the Purchaser of this Agreement and the consummation by the Purchaser of the
transactions contemplated hereby do not and will not (i) violate the
organizational documents of the Purchaser, (ii) assuming compliance with the
matters referred to in Section 4.3, violate any Applicable Law, except for any
such violation which would not have a material adverse effect on the ability of
the Purchaser to consummate the transactions contemplated hereby or (iii)
require any consent or other action by any Person, or constitute a default,
under any provision of any agreement or other instrument binding upon the
Purchaser, except as to matters which would not be material to the Purchaser.
SECTION 4.5 FINDERS' FEES. Except for Morgan Stanley Dean Witter,
there is no investment banker, broker, finder or other intermediary which has
been retained by or is authorized to act on behalf of the Purchaser who might
be entitled to any fee or commission in connection with the transactions
contemplated by this Agreement.
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SECTION 4.6 PURCHASE FOR INVESTMENT. The Purchaser is an "accredited
investor" as defined in Rule 501 under the Securities Act. The Purchaser is
purchasing the Securities for investment for its own account and not with a
view to, or for sale in connection with, any distribution thereof. The
Purchaser has sufficient knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks of its
investment in the Securities and is capable of bearing the economic risks of
such investment. The Purchaser acknowledges that the Securities will not be
registered under the Securities Act and will bear a legend indicating the same.
SECTION 4.7 PROXY MATERIALS. If the Issuer seeks the approval of the
Issuer's stockholders in connection with the issuance of securities
contemplated hereby, the proxy or information statement of the Issuer to be
filed with the Commission in connection with the related shareholders meeting
(the "PROXY STATEMENT") and any amendments or supplements thereto will, when
filed, comply as to form in all material respects with the applicable
requirements of the Exchange Act. At the time the Proxy Statement or any
amendment or supplement thereto is first mailed to stockholders of the Issuer,
and at the time such stockholders vote on approval of the issuance of
securities hereunder, the Proxy Statement, as supplemented or amended, if
applicable, will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
The representations and warranties contained in this Section 4.7 will apply
only to statements or omissions included in the Proxy Statement based upon
information furnished in writing to the Issuer by the Purchaser specifically
for use therein.
ARTICLE 5
Covenants of the Issuer
The Issuer agrees that:
SECTION 5.1 ACCESS TO INFORMATION. From the date hereof until the
Closing Date, the Issuer will (i) furnish to the Purchaser and its authorized
representatives such financial and operating data and other information
relating to the Issuer and its Subsidiaries as such Persons may reasonably
request and (ii) instruct its counsel, independent accountants and financial
advisors to cooperate with the Purchaser and its authorized representatives in
its investigation of the Issuer and its Subsidiaries. Any investigation
pursuant to this Section shall be conducted in a manner that does not interfere
unreasonably with the conduct of the business of the Issuer and its
Subsidiaries.
SECTION 5.2 CERTIFICATES OF DESIGNATIONS. Prior to the Closing, the
Issuer shall cause to be duly executed and filed the Certificates of
Designations as required pursuant to the DGCL.
SECTION 5.3 RESTRICTIONS PENDING THE CLOSING. From and after the date
hereof and prior to the Closing Date, except as expressly provided for in this
Agreement or as consented to in writing by the Purchaser, the Issuer:
(i) will not amend its certificate of incorporation
or bylaws;
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(ii) will not split, combine or reclassify any
shares of its capital stock without appropriately adjusting
the conversion price and/or ratio applicable to the
Securities prior to their issuance at the Closing;
(iii) will not declare or pay any dividend or
distribution (whether in cash, stock or property) in respect
of its Common Stock;
(iv) will not issue any shares of capital stock or
grant or enter into any options, warrants, rights, puts,
calls, commitments or other contracts, arrangements or
understandings which may require the Issuer to do the same,
nor will it issue or enter into any agreement, commitment,
contract, arrangement or understanding to issue securities
which are convertible into or exchangeable or exercisable for
shares of capital stock, except for any which may be issued
pursuant to those plans, agreements and arrangements
disclosed in the Disclosure Letter;
(v) will operate its business in the ordinary course
and in a manner consistent with past practices and such as
not to impair its ability to perform its obligations under
this Agreement;
(vi) will not act, or fail to act, in a manner as
would cause it to incur liabilities (contingent or otherwise)
outside of the ordinary course of its business;
(vii) will not take any action, or knowingly omit to
take any action, that could reasonably be expected to result
in (A) any of the representations and warranties of the
Issuer set forth in Article 3 becoming untrue or (B) any of
the conditions to the obligations of the Purchaser set forth
in Section 8.1 or 8.2 not being satisfied; or
(viii) will not enter into any agreement or
commitment to do any of the foregoing.
Notwithstanding the foregoing, the Issuer may:
(i) sell one or more businesses or business units
which the Board of Directors of the Issuer has determined are
not strategic to the Issuer's business, PROVIDED the
aggregate proceeds from such sales do not exceed $30,000,000;
(ii) borrow funds from a bank, finance company or
similar entity after consultation with the Purchaser; and
(iii) borrow funds pursuant to that certain letter
agreement dated the date hereof between the Issuer and
Francisco Partners, L.P.
SECTION 5.4 RESERVATION OF SHARES. For so long as any of the Securities
are outstanding, the Issuer shall keep reserved for issuance a sufficient number
of shares of Common
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Stock, Series A Preferred and Series B Preferred to satisfy its obligations
under the Certificates of Designations.
SECTION 5.5 OTHER TRANSFERS OF RESTRICTED SECURITIES. The Issuer shall
take all actions reasonably necessary to enable holders of the Series A
Preferred or Series B Preferred to sell such stock and the Common Stock
issuable in exchange for such stock pursuant to the Certificates of
Designations without registration under the Securities Act pursuant to Rule 144
under the Securities Act or any successor rule or regulation, subject in each
case to the provisions of this Agreement and, specifically, the filing on a
timely basis of all reports required to be filed under the Exchange Act.
ARTICLE 6
Covenants of the Purchaser
SECTION 6.1 CONFIDENTIALITY. The Purchaser will hold, and will use its
reasonable best efforts to cause its officers, directors, employees,
accountants, counsel, consultants, advisors, financing sources, financial
institutions, and agents (the "REPRESENTATIVES") to hold, in confidence, unless
compelled to disclose by judicial, regulatory or administrative process or by
other requirements of law or a national stock exchange or over-the-counter
securities market, all confidential documents and information concerning the
Issuer or any of its Affiliates that are furnished to the Purchaser, except to
the extent that such information can be shown to have been (i) previously known
on a nonconfidential basis by the Purchaser or such Representatives, (ii) in
the public domain through no fault of the Purchaser or its Representatives
(with respect to information received in their capacity as such) or (iii) later
acquired by the Purchaser or such Representatives from sources other than the
Issuer or any of its Affiliates not known by the Purchaser or such
Representatives, as applicable, to be bound by any confidentiality obligation;
PROVIDED that the Purchaser may disclose such information to any of its
Representatives (or its co-investors, if applicable) in connection with the
transactions contemplated by this Agreement so long as such Persons are
informed by the Purchaser of the confidential nature of such information and
are directed by the Purchaser to treat such information confidentially. If the
Purchaser or any of its Representatives is requested to disclose any
confidential information by judicial, regulatory or administrative process or
by other requirements of law or a national stock exchange or over-the-counter
securities market, the Purchaser will promptly notify the Issuer of such
request so that the Issuer may seek an appropriate protective order. The
Purchaser agrees that it will not, and will use its reasonable best efforts to
cause its Representatives not to, use any confidential documents or information
for any purpose other than monitoring and evaluating its investment in the
Issuer and in connection with the transactions contemplated by this Agreement.
If this Agreement is terminated, the Purchaser will, and will use its
reasonable best efforts to cause its Representatives to, destroy all documents
and other materials, and all copies thereof, obtained by the Purchaser or on
its behalf from the Issuer, or any of the Representatives, in connection with
this Agreement (including documents which incorporate material therefrom) that
are subject to such confidence; PROVIDED, HOWEVER, that the Purchaser and its
Representatives may retain any documents or materials if advised by counsel
that the same may be useful or necessary in the conduct of any legal or
regulatory proceeding, but which documents or materials shall remain subject to
the confidentiality requirements of this Section 6.1.
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SECTION 6.2 STANDSTILL. The Purchaser agrees that from the date hereof
until the date upon which the Purchaser holds less than 75,000,000 shares of
Common Stock (as adjusted for any stock splits, stock dividends,
recapitalizations or the like), assuming the conversion of all of the
outstanding shares of the Series A Preferred into Common Stock and also
assuming the conversion of all of the outstanding shares of the Series B
Preferred into Common Stock as if it were convertible into Common Stock on the
same basis as the Series A Preferred, will not without the prior written
consent of the Issuer or the Issuer's Board of Directors: (i) acquire, offer to
acquire, or agree to acquire, directly or indirectly, by purchase or otherwise,
any voting securities or direct or indirect rights to acquire any voting
securities of the Issuer or any wholly-owned Subsidiary thereof, or of any
successor corporation; (ii) make, or in any way participate in, directly or
indirectly, any "solicitation" of "proxies" (as such terms are used in the
Rules of the Commission) to vote, or seek to advise or influence any other
person or entity with respect to the voting of, any voting securities of the
Issuer; (iii) make any public announcement with respect to, or make an
unsolicited proposal for, or offer of any extraordinary transaction involving
the acquisition of the Issuer or its securities or assets; (iv) form, join or
in any way participate in a "group" (as defined in Section 13(d)(3) of the
Exchange Act) in connection with any of the foregoing; (v) transfer any voting
securities to any person or "group" in connection with any of the foregoing or
(vi) request the Issuer or any of the Issuer's representatives to amend or
waive any provision of this Section 6.2.
SECTION 6.3 HEDGING RESTRICTIONS. The Purchaser agrees to comply, and
to cause its Affiliates to comply, with the Issuer's restrictions on hedging
activities applied to members of its Board of Directors and which have been
provided to the Purchaser on or prior to the date hereof.
SECTION 6.4 AGREEMENT PENDING THE CLOSING. The Purchaser will not take
any action, or knowingly omit to take any action, that could reasonably be
expected to result in (A) any of the representations and warranties of the
Purchaser set forth in Article 4 becoming untrue or (B) any of the conditions
to the obligations of the Issuer set forth in Section 8.1 or 8.3 not being
satisfied.
ARTICLE 7
Covenants of the Issuer and the Purchaser
SECTION 7.1 REQUIRED REGULATORY APPROVALS; REASONABLE BEST EFFORTS;
FURTHER ASSURANCES. The Issuer and the Purchaser acknowledge that certain
regulatory or governmental approvals may be required to lawfully consummate the
transactions contemplated by this Agreement. Subject to the terms and
conditions of this Agreement, the Issuer and the Purchaser will, and will cause
their Affiliates to, use their reasonable best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary or
desirable under applicable laws and regulations to consummate the transactions
contemplated by this Agreement. The Issuer and the Purchaser agree to execute
and deliver such other documents, certificates, agreements and other writings
and to take such other actions as may be necessary or desirable in order to
consummate or implement expeditiously the transactions contemplated by this
Agreement.
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SECTION 7.2 CERTAIN FILINGS. The Issuer and the Purchaser will, and
will cause their Affiliates to, cooperate with one another (i) in determining
whether any action by or in respect of, or filing with, any governmental body,
agency, official or authority is required, or any actions, consents, approvals
or waivers are required to be obtained from parties to any material contracts,
in connection with the consummation of the transactions contemplated by the
Agreements or the conversion by the Purchaser of the Purchaser's Securities and
(ii) in taking such actions or making any such filings, furnishing information
required in connection therewith and seeking timely to obtain any such actions,
consents, approvals or waivers. The Issuer and the Purchaser shall (A) give the
other parties prompt notice of the commencement of any action, suit,
litigation, arbitration, preceding or investigation by or before any
governmental body with respect to the transactions contemplated by the
Agreements and (B) keep the other parties informed as to the status of any such
action, suit, litigation, arbitration, preceding or investigation.
SECTION 7.3 PUBLIC ANNOUNCEMENTS. Each of the parties agrees to
consult with the other before issuing any press release or making any public
statement with respect to any of the Agreements or the transactions
contemplated hereby or thereby and, except as may be required by applicable law
or any listing agreement with any national securities exchange or quotation
system, will not issue any such press release or make any such public statement
prior to receiving the consent of the other party.
SECTION 7.4 TAX CONSISTENCY. The Issuer and Purchaser acknowledge that
the Securities are intended to be treated as "common stock" for Tax purposes,
and the Issuer agrees not to take any action inconsistent with such intention.
ARTICLE 8
Conditions Precedent to Closing
SECTION 8.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The obligation of
each party hereto to consummate the Closing is subject to the satisfaction, at
or prior to the Closing Date, of the following conditions:
(a) All filings with, notifications to and consents from
Regulatory Authorities required for the consummation of the Closing
shall have been made or obtained, as applicable, and any applicable
waiting period under the HSR Act relating to the transactions
contemplated hereby shall have expired or been terminated;
(b) No provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation
of the Closing;
(c) The Certificates of Designations shall have been filed
with the Secretary of State of the State of Delaware in accordance
with the law of the State of Delaware;
(d) The Registration Rights Agreement, substantially in the
form attached as Exhibit C, shall have been executed and delivered by
the parties thereto; and
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(e) The Nasdaq Stock Market shall have been provided with a
notice of issuance for shares of Common Stock initially issuable upon
conversion of the Series A Preferred; and
(f) No proceeding challenging the Agreements or the
transactions contemplated hereby or thereby, or seeking to prohibit,
alter, prevent or materially delay the Closing shall have been
instituted by any Governmental Authority before any court, arbitrator
or governmental body, agency or official binding on any party hereto
and be pending.
SECTION 8.2 CONDITIONS TO THE PURCHASER'S OBLIGATIONS. The obligation
of the Purchaser to consummate the Closing is further subject to the
satisfaction, at or prior to the Closing Date, of the following additional
conditions:
(a) (i) The Issuer shall have performed in all material
respects all of its obligations hereunder required to be performed by
it on or prior to the Closing; (ii) the representations and warranties
of the Issuer contained herein that are qualified as to materiality or
Material Adverse Effect shall be true and correct in all respects on
and as of the Closing Date and the representations and warranties of
the Issuer contained herein that are not so qualified shall be true
and correct in all material respects on and as of the Closing Date, in
each case as if made on and as of such date (in each case except to
the extent such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties shall
be true and correct, or true and correct in all material respects, as
the case may be, on and as of such earlier date); the Issuer shall
have performed and complied in all material respects with all
covenants and agreements required by this Agreement to be performed or
complied with by it at or prior to the Closing Date; and (iii) and the
Purchaser shall have received a certificate dated the Closing Date
signed by an authorized officer of the Issuer to the foregoing effect;
(b) The Fee Agreement shall have been executed and delivered
by the Issuer to the Purchaser;
(c) The Purchaser shall have received an opinion, dated the
Closing Date, of counsel to the Issuer, in form and substance
reasonably satisfactory to the Purchaser; and
(d) The Purchaser shall have received all documents
reasonably requested by it relating to the existence of the Issuer,
the corporate authority for the Issuer's entering into, and the
validity of, the Agreements and the Securities, all in form and
substance reasonably satisfactory to it.
SECTION 8.3 CONDITIONS TO ISSUER'S OBLIGATIONS. The obligation of the
Issuer to consummate the Closing is further subject to the satisfaction, at or
prior to the Closing Date, of the following additional conditions:
(a) (i) The Purchaser shall have performed in all material
respects all of its obligations hereunder required to be performed by
it at or prior to the Closing Date; (ii) the representations and
warranties of the Purchaser contained herein that are qualified as
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to materiality or material adverse effect shall be true and correct in
all respects on and as of the Closing Date and the representations and
warranties of the Purchaser contained herein that are not so qualified
shall be true and correct in all material respects on and as of the
Closing Date, in each case as if made on and as of such date (in each
case except to the extent such representations and warranties
expressly relate to an earlier date, in which case such
representations and warranties shall be true and correct, or true and
correct in all material respects, as the case may be, on and as of
such earlier date); the Purchaser shall have performed and complied in
all material respects with all covenants and agreements required by
this Agreement to be performed or complied with by the Purchaser at or
prior to the Closing Date; and (iii) the Issuer shall have received a
certificate dated the Closing Date signed by an authorized officer of
the Purchaser to the foregoing effect; and
(b) The Issuer shall have received all documents reasonably
requested by it relating to the existence of the Purchaser, the
authority for its entering into, and the validity of, this Agreement,
all in form and substance reasonably satisfactory to it.
ARTICLE 9
Miscellaneous
SECTION 9.1 NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including telecopier or similar
writing) and shall be given to such party at its address or telecopier number
set forth on the signature page hereof, or such other address or telecopier
number as such party may hereinafter specify for the purpose to the party
giving such notice. Each such notice, request or other communication shall be
effective (i) if given by telecopy, when such telecopy is transmitted to the
telecopy number specified pursuant to this Section 9.1 and the appropriate
confirmation is received, (ii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when delivered at
the address specified in this Section 9.1.
SECTION 9.2 NO WAIVERS; AMENDMENTS.
(a) No failure or delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
(b) Any provision of this Agreement may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed
by all the parties hereto.
SECTION 9.3 SURVIVAL. The representations and warranties contained in
this Agreement shall survive the Closing until April 1, 2002 except that (i)
the representations and warranties contained in Sections 3.1, 3.2, 3.3, 3.5,
4.1, 4.2, and 4.3 shall survive indefinitely and (ii) the representations and
warranties contained in Sections 3.17, 3.18, 3.19 and 3.22 shall
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survive until the expiration of the statute of limitations applicable to the
matters covered thereby (giving effect to any waiver, mitigation or extension
thereof, if applicable). Notwithstanding the preceding sentence, any
representation or warranty in respect of which indemnity may be sought under
this Agreement shall survive the time at which it would otherwise terminate
pursuant to the preceding sentence, if notice of the inaccuracy or breach
thereof giving rise to such right of indemnity shall have been given in
reasonable detail to the party against whom such indemnity may be sought prior
to such time. The covenants and agreements of the parties contained in this
Agreement shall survive the Closing in accordance with their terms or, if no
term is specified, indefinitely.
SECTION 9.4 INDEMNIFICATION.
(a) The Issuer hereby indemnifies the Purchaser and its
Affiliates against and agrees to hold each of them harmless from any
and all damage, loss, liability, expense and claims of any kind
(including, without limitation, reasonable expenses of investigation
and reasonable attorneys' fees and expenses in connection with any
action, suit or proceeding) ("DAMAGES") incurred or suffered by the
Purchaser or any of its Affiliates arising out of any
misrepresentation or breach of warranty (each such misrepresentation
and breach of warranty a "WARRANTY BREACH") of the Issuer or breach of
covenant or agreement made or to be performed by the Issuer pursuant
to this Agreement regardless of whether such Damages arise as a result
of the negligence, strict liability or any other liability under any
theory of law or equity of the Purchaser or any of its Affiliates;
PROVIDED that with respect to indemnification by the Issuer for any
Warranty Breach pursuant to this Section, (i) the Issuer shall not be
liable unless the aggregate amount of Damages with respect to such
Warranty Breaches exceeds $2,500,000 and then only to the extent of
such excess and (ii) the Issuer's maximum liability shall not exceed
the amount of the Purchase Price.
(b) The Purchaser hereby indemnifies the Issuer and its
Affiliates against and agrees to hold each of them harmless from any
and all Damages incurred or suffered by the Issuer or any of its
Affiliates arising out of any Warranty Breach of the Purchaser or
breach of covenant or agreement made or to be performed by the
Purchaser pursuant to this Agreement regardless of whether such
Damages arise as a result of the negligence, strict liability or any
other liability under any theory of law or equity of the Issuer or any
of its Affiliates; PROVIDED that with respect to indemnification by
the Purchaser for any Warranty Breach pursuant to this Section, (i)
the Purchaser shall not be liable unless the aggregate amount of
Damages with respect to such Warranty Breaches exceeds $2,500,000 and
then only to the extent of such excess and (ii) the Purchaser's
maximum liability shall not exceed the amount of the Purchase Price.
SECTION 9.5 PROCEDURES. The party seeking indemnification under
Section 9.4 (the "INDEMNIFIED PARTY") agrees to give prompt notice to the party
against whom indemnity is sought (the "INDEMNIFYING PARTY") of the assertion of
any claim, or the commencement of any suit, action or proceeding in respect of
which indemnity may be sought under such Section. The Indemnifying Party may at
its election participate in and control the defense of any such suit, action or
proceeding at its own expense. The Indemnifying Party shall not be liable under
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Section 9.4 for any settlement effected without its consent of any claim,
litigation or proceeding in respect of which indemnity may be sought hereunder.
SECTION 9.6 EXPENSES; DOCUMENTARY TAXES. Each party shall bear its own
expenses in connection with the consummation of the transactions contemplated
by this Agreement. The Issuer shall pay any and all stamp, transfer and other
similar Taxes payable or determined to be payable in connection with the
execution and delivery of the Agreements or the issuance of the Securities.
SECTION 9.7 TERMINATION.
(a) This Agreement may be terminated at any time prior to
the Closing:
(i) by mutual written agreement of the Issuer and
the Purchaser;
(ii) by the Issuer or the Purchaser if the Closing
shall not have been consummated on or before January 31,
2001; PROVIDED, HOWEVER, that the right to terminate this
Agreement under this Section 9.7(a)(ii) shall not be
available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or
resulted in, the failure of the Closing to occur on or before
January 31, 2001;
(iii) by the Issuer or the Purchaser if there shall
be any law or regulation that makes consummation of the
transactions contemplated hereby illegal or otherwise
prohibited or if consummation of the transactions
contemplated hereby would violate any nonappealable, final
order, decree or judgment of any court or governmental body
having competent jurisdiction;
(iv) by the Purchaser upon a breach of any material
representation, warranty, covenant or agreement on the part
of the Issuer set forth in this Agreement, or if any
representation or warranty of the Issuer shall have become
untrue, in either case such that the condition set forth in
Section 8.2(a) would not be satisfied ("TERMINATING ISSUER
BREACH"); PROVIDED, HOWEVER, that, if such Terminating Issuer
Breach is curable by the Issuer and for so long as the Issuer
continues to exercise its reasonable best efforts to cure
such Terminating Issuer Breach, the Purchaser may not
terminate this Agreement under this Section 9.7(a)(iv) unless
such breach is not cured within 30 days after notice thereof
is provided by the Purchaser to the Issuer; or
(v) by the Issuer upon a breach of any material
representation, warranty, covenant or agreement on the part
of the Purchaser set forth in this Agreement, or if any
representation or warranty of Buyer shall have become untrue,
in either case such that the condition set forth in Section
8.3(a) would not be satisfied ("TERMINATING PURCHASER
BREACH"); PROVIDED, HOWEVER, that, if such Terminating
Purchaser Breach is curable by the Purchaser and for so long
as the Purchaser continues to exercise its reasonable best
efforts to cure such Terminating Purchaser Breach, the Issuer
may not terminate this Agreement
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under this Section unless such breach is not cured within 30
days after notice thereof is provided by the Issuer to the
Purchaser.
The party desiring to terminate this Agreement pursuant to clauses (ii), (iii),
(iv) or (v) above shall give notice of such termination to the other party.
(b) If this Agreement is terminated as permitted by Section
9.7(a), such termination shall be without liability of either party
(or any stockholder, director, officer, employee, agent, consultant or
representative of such party) to the other party to this Agreement;
PROVIDED that if such termination shall result from the willful (i)
failure by any party to fulfill a condition to the performance of the
obligations of the other parties, (ii) failure by any party to perform
a covenant of this Agreement or (iii) breach by any party hereto of
any representation, warranty, covenant or agreement contained herein,
such party shall be fully liable for any and all Damages incurred or
suffered by the other parties as a result of such failure or breach.
The provisions of Sections 6.1, 9.1, 9.6, 9.7, 9.8, 9.9, 9.10, 9.11,
9.12, 9.13 and 9.14 shall survive any termination hereof pursuant to
Section 9.7(a).
SECTION 9.8 SUCCESSORS AND ASSIGNS. No party may assign any of its
rights and obligations hereunder without the prior written consent of the other
parties hereto. This Agreement shall be binding upon the parties hereto and
their respective successors and permitted assigns.
SECTION 9.9 GOVERNING LAW. ALL ISSUES CONCERNING THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION
OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD
CAUSE THE APPLICATION OF THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF
NEW YORK.
SECTION 9.10 JURISDICTION. The parties hereto agree that any suit,
action or proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby may only be brought in the United States District Court for
the Southern District of New York or any New York State court sitting in New
York City, and each of the parties hereby consents to the exclusive
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to
the laying of the venue of any such suit, action or proceeding in any such
court or that any such suit, action or proceeding which is brought in any such
court has been brought in an inconvenient forum. Process in any such suit,
action or proceeding may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court. Without limiting the
foregoing, each party agrees that service of process on such party as provided
in Section 9.1 shall be deemed effective service of process on such party.
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SECTION 9.11 COUNTERPARTS. This Agreement may be executed in any
number of counterparts each of which shall be an original with the same effect
as if the signatures thereto and hereto were upon the same instrument.
SECTION 9.12 ENTIRE AGREEMENT. This Agreement, the Registration Rights
Agreement, the Certificates of Designations, the Fee Agreement, and any other
documents executed concurrently herewith or referred to herein constitute the
entire agreement and understanding among the parties hereto with respect to the
subject matter hereof and supersede any and all prior agreements and
understandings, written or oral, relating to the subject matter hereof.
SECTION 9.13 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THE AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
SECTION 9.14 SEVERABILITY. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof so
long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to any party. If any provision
of this Agreement, or the application thereof to any person or entity or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons, entities or circumstances shall not be affected by
such invalidity or unenforceability so long as the economic or legal substance
of the transactions contemplated is not affected in any manner materially
adverse to any party, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in
any other jurisdiction.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized signatories as of the date
first above written.
MARCHFIRST, INC.
By: /s/ ROBERT F. BERNARD
-----------------------------------
Name: Robert F. Bernard
-----------------------------
Title: Chief Executive Officer
-----------------------------
ADDRESS FOR NOTICES:
311 South Wacker Drive, Suite 3500
Chicago, Illinois 60606
Facsimile: 312/913-6650
Attention: David P. Shelow, General
Counsel
with a copy to:
Katten Muchin Zavis
525 West Monroe Street, Suite 1600
Chicago, Illinois 60661
Facsimile: 312/902-1061
Attention: Matthew S. Brown
and
McDermott Will & Emery
227 West Monroe Street
Chicago, Illinois 60606
Facsimile: 312/984-3669
Attention: Neal J. White
<PAGE>
FP-LION, L.L.C.
By: /s/ NEIL GARFINKEL
--------------------------------
Name: Neil Garfinkel
--------------------------
Title: Member
--------------------------
ADDRESS FOR NOTICES:
c/o Francisco Partners, L.P.
Two Embarcadero Center, Suite 420
San Francisco, CA 94111
Facsimile: 415/986-1320
Attention: Gerry Morgan
with a copy to:
Davis Polk & Wardwell
1600 El Camino Real
Menlo Park, CA 94025
Facsimile: 650/752-2111
Attention: Alan F. Denenberg
Francisco Partners, L.P. hereby fully and unconditionally guarantees
the obligations of the Purchaser under this Agreement to the same extent as if
Francisco Partners, L.P. were the Purchaser, subject to all of the conditions
to such obligations contained herein, and shall have available to it all of the
defenses that are available to the Purchaser.
FRANCISCO PARTNERS, L.P.
By: /s/ NEIL GARFINKEL
-------------------------------
Name: Neil Garfinkel
----------------------------
Title: Partner
----------------------------
