<PAGE>
As filed with the Securities and Exchange Commission on April 13, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-1
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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GREENWICH TECHNOLOGY PARTNERS, INC.
(Exact name of registrant as specified in its charter)
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Delaware 7371 13-3944171
(State or other (Primary standard industrial (I.R.S. employer
jurisdiction of classification code number) identification number)
incorporation or
organization)
123 Main Street
White Plains, NY, 10601
Telephone: (914) 289-8000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
----------------
Joseph P. Beninati
Chief Executive Officer
Greenwich Technology Partners, Inc.
123 Main Street
White Plains, NY 10601
(914) 289-8000
(Name, address, including zip code, and telephone number, including area code
of agent for service)
----------------
Copies to:
Kevin M. Barry, Esq. Stephen L. Burns, Esq.
Laurie A. Cerveny, Esq. Cravath, Swaine & Moore
Testa, Hurwitz & Thibeault, LLP Worldwide Plaza
125 High Street 825 Eighth Avenue
Boston, MA 02110 New York, NY 10019-7475
(617) 248-7000 (212) 474-1000
----------------
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule
434, check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
Proposed Maximum
Title of Each Class of Aggregate Amount of
Securities to be Registered Offering Price(1) Registration Fee
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<S> <C> <C>
Common stock, par value
$0.01 per share....... $55,000,000 $14,520
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(o) under the Securities Act.
----------------
Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until Registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED , 2000
Shares
[LOGO OF GREENWICH TECHNOLOGY PARTNERS]
Common Stock
--------
Prior to this offering, there has been no public market for our common stock.
The initial public offering price of the common stock is expected to be between
$ and $ per share. We have applied to list our common stock on The
Nasdaq Stock Market's National Market under the symbol "GTPI".
The underwriters have an option to purchase a maximum of additional shares
to cover over-allotments of shares.
Investing in the common stock involves risks. See "Risk Factors" on page 8.
<TABLE>
<CAPTION>
Underwriting Proceeds to
Discounts Greenwich
Price to and Technology
Public Commissions Partners
------------ ------------ ------------
<S> <C> <C> <C>
Per Share.................................. $ $ $
Total...................................... $ $ $
</TABLE>
Delivery of the shares of common stock will be made on or about , 2000.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
Credit Suisse First Boston
First Union Securities, Inc.
Friedman Billings Ramsey
ING Barings
The date of this prospectus is , 2000.
<PAGE>
[INSIDE FRONT COVER ARTWORK]
The color artwork will be a half circle of elipses containing
client logos around the words "The Greenwich Technology
Partners Solution."
<PAGE>
------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary....................................................... 4
Risk Factors............................................................. 8
Note Regarding Forward-Looking Statements................................ 17
Use of Proceeds.......................................................... 18
Dividend Policy.......................................................... 18
Capitalization........................................................... 19
Dilution................................................................. 20
Selected Financial Data.................................................. 21
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 22
Business................................................................. 30
Management............................................................... 42
</TABLE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Certain Relationships and Related Transactions........................... 52
Principal Stockholders................................................... 54
Description of Capital Stock............................................. 56
Shares Eligible for Future Sale.......................................... 60
Certain United States Federal Tax Considerations for Non-United States
Holders................................................................. 62
Underwriting............................................................. 66
Notice to Canadian Residents............................................. 69
Legal Matters............................................................ 70
Experts.................................................................. 70
Where You Can Find Additional Information................................ 70
Index to Financial Statements............................................ F-1
</TABLE>
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You should rely only on the information contained in this document or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. This document may only be used where it is legal
to sell these securities. The information in this document may only be accurate
on the date of this document.
Dealer Prospectus Delivery Obligation
Until , 2000 (25 days after the commencement of this offering), all
dealers that effect transactions in these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This
is in addition to the dealer's obligation to deliver a prospectus when acting
as an underwriter and with respect to unsold allotments or subscriptions.
3
<PAGE>
PROSPECTUS SUMMARY
Because this is only a summary, it does not contain all of the information
that may be important to you. You should read the entire prospectus, including
"Risk Factors" and the financial statements and the notes to those financial
statements, before deciding to invest in our common stock. References in this
prospectus to "Greenwich Technology Partners," "GTP", "we," "our" and "us"
refer to Greenwich Technology Partners, Inc.
Greenwich Technology Partners, Inc.
We are a provider of a new category of network-focused professional services
called infrastructure architecture. Our highly trained consultants and
engineers provide sophisticated network services that enable our clients'
communications, Internet and e-business related strategies. As an independent
service provider, we offer our clients objective, vendor-neutral expertise and
assist them in implementing technology solutions that ensure secure, reliable
and scalable networks.
As infrastucture architects, we focus on six key areas of network
infrastructures: performance, security, internetworking, directory services,
network management and systems engineering. Our consultants and engineers
specialize in these practice areas to gain in-depth expertise with relevant
best practices, methodologies and technologies. We recruit experienced, highly
skilled consultants and engineers and expand their skills with focused training
in leading-edge technologies.
Using our proprietary consulting methodology, NetValue, our professionals
assess a client's needs, design a solution, then integrate and optimize the
enabling network infrastructure. We manage the entire delivery cycle and
provide quality assurance and post-project assessment. We believe that NetValue
enables our clients to make informed technology investments. We have also
created a number of productized services that have pre-defined delivery and
pricing structures and that are replicable across a variety of industries.
Our clients are Global 2000 enterprises such as Bear Stearns, Chase
Manhattan Bank, CK Witco, Morgan Stanley Dean Witter and Unilever,
telecommunications and Internet service providers such as UUNET, an MCI
Worldcom company, and select Internet companies such as Telemedia Accelerator.
Our service offerings are enhanced through technical alliances with network
equipment and software manufacturers, which help us maintain leadership in
network infrastructure technologies.
The tremendous recent growth of e-business has increased the importance,
complexity and size of networks. The implementation and maintenance of these
networks requires sophisticated technological skills and focused expertise,
which many businesses lack internally. We believe that a new category of
professional service firms, infrastructure architects, has emerged to provide
effective solutions to these complex network issues. According to estimates
from International Data Corporation, the worldwide market for network
consulting and integration services will grow from $15.5 billion in 1999 to
$32.8 billion in 2004.
4
<PAGE>
Our goal is to become the recognized leader in providing infrastructure
architecture services to support e-business applications. To achieve this goal,
we have adopted the following strategies:
. Expand relationships with existing and new clients
. Attract and retain experienced professionals and expand recruiting
efforts
. Enhance our technological expertise
. Continue to strengthen our service offerings
. Bolster our brand as a leader in the development of infrastructure
architecture
. Continue to invest in internal systems
. Expand geographically
We commenced operations on May 1, 1997. On August 22, 1997, we changed our
name to Greenwich Technology Partners, Inc. As of March 31, 2000, we had 209
employees. Our principal executive offices are located at 123 Main Street,
White Plains, New York 10601. Our telephone number is (914) 289-8000. Our web
site address is www.greenwichtech.com. Information contained on our web site is
not a part of this prospectus.
Greenwich Technology Partners and GTP NetValue are trademarks of Greenwich
Technology Partners, Inc. Other trademarks and service marks appearing in this
prospectus are the property of their respective holders.
5
<PAGE>
The Offering
Common stock offered by GTP.........
shares
Common stock to be outstanding
after the offering................. shares
Use of proceeds..................... For general corporate purposes, including
working capital, and potential strategic
alliances and acquisitions.
Proposed Nasdaq National Market
symbol............................. GTPI
----------------
The number of shares of common stock to be outstanding after the offering is
based on our shares outstanding as of , 2000 and excludes:
. 6,144,978 shares of common stock issuable upon the exercise of stock
options outstanding as of April 11, 2000 with a weighted average exercise
price of $0.49 per share that have been granted under our 1997 Stock
Plan;
. 1,048,010 shares of common stock reserved for issuance under our 1997
Stock Plan;
. 2,136,752 shares of common stock issuable upon the exercise of warrants
at an exercise price of $1.17 per share;
. 850,000 shares of common stock reserved for issuance under our 2000
Employee Stock Purchase Plan; and
. 6,000,000 shares of common stock issuable upon exercise of options to be
granted under our 2000 Stock Option and Incentive Plan.
----------------
Unless otherwise indicated, all information in this prospectus:
. reflects the conversion of all outstanding shares of preferred stock into
29,288,560 shares of our common stock immediately prior to completion of
this offering;
. assumes no exercise of the underwriters' over-allotment option; and
. assumes the filing of our amended and restated certificate of
incorporation and by-laws.
6
<PAGE>
Summary Financial Data
(in thousands, except per share data)
The following tables summarize financial data and certain pro forma
financial data for our business during the years and as of the date indicated.
The summary financial data do not purport to be indicative of future operations
and should not be construed as representative of future operations. You should
read this information together with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and our audited financial
statements and accompanying notes included elsewhere in this prospectus.
<TABLE>
<CAPTION>
Year ended
Inception December 31,
through -----------------
Dec. 31, 1997 1998 1999
------------- ------- --------
<S> <C> <C> <C>
Statement of Operations Data:
Revenues...................................... $ 829 $ 6,028 $ 14,195
Gross profit.................................. 215 2,193 5,232
Operating loss................................ (616) (1,905) (6,657)
Net loss...................................... (616) (1,874) (6,350)
Basic and diluted net loss per share.......... $(3.51) $(11.92) $ (21.34)
Weighted average common shares used to compute
basic and diluted net loss per share......... 177 177 316
Pro forma basic and diluted net loss per share
(1).......................................... $(0.67) $ (0.16) $ (0.29)
Weighted average common shares used to compute
pro forma basic and diluted net loss per
share........................................ 917 11,974 21,601
</TABLE>
- --------
(1) Pro forma basic and diluted net loss per share assumes the conversion of
all shares of preferred stock into common stock as of the original date of
preferred stock issuance.
<TABLE>
<CAPTION>
December 31, 1999
-------------------------------------
Pro forma
as adjusted (3)
Actual Pro forma (2)
------- ------------- ---------------
<S> <C> <C> <C>
Balance Sheet Data:
Cash and cash equivalents............... $17,568 $18,471
Working capital......................... 19,546 20,449
Total assets............................ 23,422 24,325
Total debt including borrowing under
installment loan and capitalized lease
agreement.............................. 44 44
Total shareholders' equity.............. $21,054 $21,957
</TABLE>
- --------
(2) The pro forma data reflect the sale of 428,049 shares of series E preferred
stock at $2.11 per share on January 14, 2000.
(3) The pro forma as adjusted data give further effect to:
. the conversion of 29,288,560 shares of preferred stock into 29,288,560
shares of common stock immediately prior to completion of this offering;
and
. the sale of shares of common stock at an assumed initial public
offering price of $ per share, after deducting underwriting discounts
and commissions and estimated offering expenses payable by us.
7
<PAGE>
RISK FACTORS
Any investment in our common stock involves a high degree of risk. You
should consider carefully the following information about these risks, together
with the other information contained in this prospectus, before you decide to
buy our common stock. If any of the following events actually occurs, our
business and financial results may suffer. In this case, the market price of
our common stock could decline, and you could lose all or part of your
investment in our common stock.
Risks Related To Our Business
Our limited operating history makes evaluating our business prospects and
results of operations difficult
We commenced operations in May 1997 and therefore have only a limited
operating history for you to evaluate our business. Because of our limited
operating history, recent growth, recent acquisitions and the fact that many of
our competitors have longer operating histories than we do, we believe that the
prediction of our future success is difficult. You should evaluate our changes
of financial and operational success in light of the risks, uncertainties,
expenses, delays and difficulties associated with operating a new business,
many of which are beyond our control. You should not rely on our historical
results of operations as indications of future performance. The uncertainty of
our future performance and the uncertainties of our operating in a new and
expanding market increase the risk that the value of your investment will
decline.
We have a history of losses and expect to continue to incur losses for the
foreseeable future and may need additional financing
We have incurred substantial losses since we were founded, and we anticipate
we will continue to incur substantial losses for the foreseeable future. We
incurred net losses of $1.9 million and $6.4 million in 1998 and 1999,
respectively. If we do achieve profitability, we may not be able to sustain or
increase profitability on a quarterly or annual basis in the future. We expect
to continue to incur increasing sales and marketing, hiring and training,
infrastructure development and general and administrative expenses. As a
result, we will need to generate significant revenues to achieve profitability.
We cannot be certain whether or when we will achieve profitability because of
the significant risks and uncertainties that affect our business. If we fail to
generate sufficient cash from our operations to pay our expenses, our
management will need to identify other sources of funds. We may not be able to
borrow money or issue more shares of common stock to meet our cash needs on
terms favorable to us, or at all.
Competition in our industry for experienced personnel is intense and our
inability to attract, develop and retain qualified personnel could interrupt
our business and adversely affect our growth
Our business involves the delivery of professional services and is labor
intensive. Our success depends in large part on our ability to attract, develop
and retain highly skilled employees, particularly consultants and engineers and
other technical personnel, and we cannot assure you we will be able to do so.
We typically offer our employees options to purchase our common stock. A
decline in the price of our common stock could adversely affect our ability to
attract and retain employees. The loss of a significant number of our personnel
or the failure to attract new, highly
8
<PAGE>
skilled employees could have a material adverse impact on us, including on our
ability to secure and complete engagements. Individuals with management
experience and consulting and technical skills are in short supply.
Accordingly, we may not be able to hire or retain the necessary number or mix
of personnel to implement our business strategy. Competition to hire from this
limited pool of qualified personnel is intense. In addition, we have
experienced, and may continue to experience, increasing compensation costs for
consultants and engineers. Our inability to recover increases in compensation
of consultants and engineers through higher billing rates, or to reduce other
expenses to offset such increases, could have an adverse effect on our
business.
The loss of executive management or other key personnel may harm our ability to
obtain and retain client engagements and to compete effectively
Our ability to continue to implement our business strategy and our future
success depends in large part on the continued services of a number of our key
personnel, including our founder, Chairman, Chief Executive Officer and
President, Joseph P. Beninati. The loss of the services of Mr. Beninati or any
of our other key personnel who have critical industry or client experience and
relationships could have a material adverse effect on our operating results. We
might not be able to prevent key personnel, who may leave our employ in the
future, from disclosing or using our technical knowledge, practices or
procedures. One or more of our key personnel might resign and join a competitor
or form a competing company. As a result, we might lose existing or potential
clients.
Because a large portion of our revenues to date has been generated from a small
number of clients, our revenues are difficult to predict and the loss of a
major client could significantly reduce our revenues
A small number of clients has accounted for a significant portion of our net
revenues to date, and we expect that this trend will continue for the
foreseeable future. In 1999, CK Witco and Bear Stearns accounted for 18% and
11% of our total revenues, respectively, and in 1998, Unilever and CK Witco
accounted for 39% and 14% of our total revenues, respectively. In 1999 and
1998, our five largest clients represented 51% and 68% of our total revenues,
respectively. Our dependence on a limited number of clients makes the
relationship between us and each client critically important to our business.
If one of our major clients discontinues or significantly reduces the use of
our services, we may not generate sufficient revenues to offset this loss of
revenues and our net income will decrease. In addition, the non-payment or late
payment of amounts due from a major client could adversely affect us.
Because we generally have short-term service contracts and clients can cancel
or modify these arrangements without penalty and with little or no notice, our
revenue stream is uncertain
Our services are often delivered pursuant to short-term arrangements and
most clients can reduce or cancel their contracts for our services without
penalty and with little or no notice. If a major client or a number of small
clients terminate our contracts or significantly reduce or modify their
business relationships with us, we may not be able to replace the shortfall in
revenues in a timely fashion due to our relatively long sales cycle or minimize
the underutilization of employees and the resulting adverse impact on our
operating results. Consequently, you should not predict or
9
<PAGE>
anticipate our future revenues based upon the number of clients we have
currently or the number and size of our existing projects. Any errors in the
implementation of our services or failure to meet a client's expectations could
result in:
. our inability to receive payment from the client;
. requirements to provide additional services to a client at no charge;
. negative publicity about us and our services, which could adversely
affect our ability to attract or retain clients; and
. claims for substantial damages against us, regardless of our
responsibility for the failure, which may not be covered by our insurance
policies and which may not be limited by the contractual terms of our
engagement.
Our operating results may vary from quarter to quarter in future periods, and,
as a result, we may fail to meet the expectations of our investors and
analysts, which may cause our stock price to fluctuate or decline
We expect our quarterly revenues and operating results to be volatile and
difficult to predict. They are likely to vary significantly from quarter to
quarter. Factors that may cause our results to fluctuate include:
. the loss of key employees;
. an inability to hire and retain sufficient numbers of employees,
including consultants, engineers and account managers;
. reductions in our billing rates;
. unanticipated delays, deferrals or cancellations of major client
engagements;
. write-offs of billings or services performed at no charge as a result of
a failure to meet client expectations;
. claims by clients for the actions of our employees arising from damages
to clients' businesses or otherwise;
. the efficiency with which we utilize our billable professionals;
. the ability of our internal sales force to solicit engagements from new
and existing clients;
. the loss of billable workdays due to severe weather conditions, or other
factors;
. a decrease in the growth of the networking industry as a whole;
. seasonality;
. general economic conditions; and
. ongoing market acceptance of our services.
Any decline in revenues or earnings or a greater than expected loss for any
quarter could reduce the market price of our common stock, even if not
reflective of any long-term problems with our business.
10
<PAGE>
We derive a portion of our professional services revenues from fixed-fee
projects, under which we assume greater financial risk if we fail to accurately
estimate the costs of the projects
We derive a portion of our professional services revenues from fixed-fee
projects. For the year ending December 31, 1999, fixed-fee projects accounted
for almost 19% of our professional services revenues. We assume greater
financial risks on a fixed-fee project than on a time-and-materials based
project. If we miscalculate the resources or time we need to complete these
fixed-fee projects, the costs of completing these projects may exceed the fee
we charge, which could result in a loss on the project. Further, the average
size of our contracts has increased in recent quarters, resulting in a
corresponding increase in our exposure to the financial risks of fixed-fee
projects.
We may have difficulty managing our expanding operations, which may harm our
business
A key part of our strategy is to grow our business. From March 1997 through
March 31, 2000 our staff increased from 2 to 209 employees. Our rapid growth
has placed a significant strain on our managerial, financial and operational
resources. To manage our growth, we must continue to improve our financial and
management controls, reporting systems and procedures, and to train and manage
our employees. If we are unable to manage growth effectively and new employees
are unable to achieve anticipated performance levels, it will affect our
revenues.
We compete in a new and highly competitive industry that has low barriers to
entry; if we cannot effectively compete our revenues will decline
The network technology consulting industry is comprised of many
participants, is highly competitive and is subject to rapid technological
change. Many of our competitors have greater name recognition, longer operating
histories, more relationships with large and established clients and greater
financial, technical and managerial resources than we do. Furthermore, we
expect that our competitors may in the future form alliances with technology
vendors, which may give them an advantage in managing networks that use that
vendor's equipment.
Most of our current clients and prospective clients have internal
information technology departments and could choose to satisfy their network
technology needs through these internal resources rather than by outsourcing
them to third-party service providers such as ourselves. The decision by
clients or prospective clients to rely on their own information technology
departments could harm our business. Moreover, as the domestic and global
markets for information technology services continue to grow, we expect to face
intense competition from new entrants into the network technology consulting
industry.
We believe that we compete with or in the future could compete with
organizations in the following categories:
. other infrastructure architects;
. information technology services firms;
. vendor affiliates;
. Internet professional services firms; and
. internal information technology departments.
11
<PAGE>
There are relatively few barriers preventing competitors from entering the
network technology consulting industry. As a result, new market entrants pose a
threat to our business. We do not own any patented technology that precludes or
inhibits competitors from entering the network technology consulting industry.
Existing or future competitors may develop or offer services that are
comparable or superior to ours at a lower price, which could have a material
adverse effect on our business.
If we are unable to integrate our recent acquisitions of Aspire Technology
Group, Inc., NetGain LLC and Navigator Technologies, Inc. and other future
acquisitions, our business may be disrupted
We recently acquired Aspire Technology Group, Inc., a directory services
consulting company based in Virginia, NetGain LLC, a network performance
consulting company based in New York, and Navigator Technologies, Inc., a
company focused on converged voice and data solutions based in New Jersey. The
integration of these and any future acquisitions presents us with significant
financial, managerial and operational challenges. We may not be able to meet
these challenges effectively. To the extent our management is required to
devote significant time and attention to integrating the technology, operations
and personnel of acquired businesses, we may not be able to serve properly our
current clients or to attract new clients. Any difficulties in integrating
acquisitions could disrupt our ongoing business, distract our management and
employees, increase our expenses and otherwise adversely affect our business.
Commencing our international expansion efforts, which is a key part of our
growth strategy, may not be successful, and our business will be exposed to the
numerous risks associated with international operations
We expect to commence our international operations and international sales
and marketing efforts this year. We have had little experience in marketing,
selling and distributing our services internationally. We may not be able to
maintain and expand our international operations or successfully market our
services internationally. International operations are also subject to many
risks, including:
. the impact of recessions in economies outside the United States;
. unexpected changes in regulatory requirements;
. reduced protection for intellectual property rights in some countries;
. potentially adverse tax consequences, including restrictions on
repatriation of earnings;
. difficulties and costs of staffing and managing foreign operations, as a
result of, among other things, distance, language and cultural
differences;
. political and economic instability;
. the burdens of complying with a wide variety of foreign laws;
. fluctuations in currency exchange rates; and
. seasonal reductions in business activity, especially during the summer
months, in Europe and certain other parts of the world.
Failure to successfully expand into international markets may negatively
affect our business, as well as our ability to grow.
12
<PAGE>
If we do not keep pace with technological changes, our services may become less
competitive and our business will suffer
Our market is characterized by rapidly changing technologies, frequent new
product and service offerings and evolving industry standards. As a result of
the complexities inherent in today's computing environments, we face
significant challenges in remaining abreast of such changes and new product
introductions. If we cannot keep pace with these changes, we will not be able
to meet our clients' increasingly sophisticated network technology consulting
needs, and our services will become less competitive.
Our future success will depend on our ability to:
. keep pace with continuing changes in industry standards, information
technology and client preferences;
. respond effectively to these changes; and
. develop new services or enhance our existing services.
We may be unable to develop and introduce new services or enhancements to
existing services in a timely manner or in response to changing market
conditions or client requirements.
If the use of large-scale, complex networks does not continue to grow, we may
not successfully increase or maintain our client base and revenues
To date, a majority of our revenues has been from network technology
consulting services related to large-scale, complex networks. As a result, our
future success is highly dependent on the continued growth and acceptance of
large-scale, complex networks and the continued trend among our clients to use
third-party service providers. If the growth of the use of these networks does
not continue or declines, our business and our revenues may decline.
Our business depends on continued growth in the use of the Internet
The growing demand for network technology consulting services has been
driven in part by the growth of the Internet. The Internet may not prove to be
a viable commercial marketplace because of:
. inadequate development of the infrastructure necessary to support the
Internet;
. lack of development of complementary products (such as higher-speed
modems and higher-speed communication lines);
. implementation of competing technology;
. delays in the development or adoption of new standards and protocols
required to handle increased levels of Internet activity; or
. government regulation.
Significant issues concerning the commercial use of Internet technologies
include security, reliability, cost, ease of use and quality of service. These
issues may inhibit the growth of Internet businesses that utilize large
networks.
13
<PAGE>
Industry analysts and others have made many predictions concerning the
growth of the Internet as a business medium. You should not rely upon these
predictions. If the market for network infrastructure architects fails to
develop, or develops more slowly than expected, or if our services do not
achieve market acceptance, our business will not succeed and the value of your
investment in our common stock will decline.
Unauthorized use of our intellectual property by third parties may damage us
We regard our trade secrets and other intellectual property as critical to
our success. Unauthorized use of our intellectual property by third parties may
damage our brand and our reputation. We rely on trademark law and trade secret
protection and confidentiality and license and other agreements with our
employees, clients, partners and others to protect our intellectual property
rights. However, we do not have any patents or patent applications pending or
any registered copyrights, and existing trade secret and trademark laws afford
us only limited protection. Despite our precautions, it may be possible for
third parties to obtain and use our intellectual property without our
authorization. Furthermore, the validity, enforceability and scope of
protection of intellectual property in Internet-related industries is uncertain
and still evolving. The laws of some foreign countries are also uncertain or do
not protect intellectual property rights to the same extent as do the laws of
the United States.
We may have to defend intellectual property infringement claims, which could be
expensive and, if we are not successful, could disrupt our business
We cannot be certain that our services or materials provided to us by our
clients for use in finished products do not or will not infringe valid patents,
copyrights, trademarks or other intellectual property rights held by third
parties. As a result, we may be subject to legal proceedings and claims from
time to time relating to the intellectual property of others in the ordinary
course of our business. We may incur substantial expenses in defending against
these third-party infringement claims, regardless of their merit. Successful
infringement claims against us may result in substantial monetary liability or
may materially disrupt the conduct of our business.
Because our services are often critical to our clients' operations, we may be
subject to significant claims if our services do not meet our clients'
expectations
Many of our projects are critical to the operations of our clients'
businesses. If we cannot complete these projects to our clients' expectations,
we could materially harm our clients' operations. Any failure to meet our
clients' expectations could damage our reputation, subject us to increased risk
of litigation or result in our having to provide additional services to a
client at no charge, which could adversely affect our ability to attract new
business from that client or others. If we fail to perform adequately on a
project, a client could sue us for damages. Although we carry general liability
insurance, our insurance may not cover all potential claims to which we are
exposed or may not be adequate to indemnify us for all liability that may be
imposed.
Our business may suffer if we have disputes with clients over our right to
reuse intellectual property developed during client engagements
Part of our business involves the development of software applications for
discrete client engagements. Ownership of client-specific software is generally
held by the client, although we
14
<PAGE>
typically retain the right to reuse some of the processes and other
intellectual property developed in connection with a client engagement. Issues
relating to the right to use intellectual property can be complicated.
Accordingly, disputes may arise that could adversely affect our ability to
reuse applications, processes and other intellectual property that result from
particular client engagements. Such disputes could damage our relationships
with our clients and our business reputation, divert our management's attention
and have an adverse effect on our ability to grow our business.
Risks Related to this Offering
The net proceeds of this offering may be allocated in ways with which you and
other stockholders may not agree, and they may not be allocated effectively
Our management has significant flexibility in applying the proceeds we
receive in this offering. Because the proceeds are not required to be allocated
to any specific investment or transaction, you cannot determine at this time
the value or propriety of our management's application of the proceeds on our
behalf and you and other stockholders may not agree with our management's
decisions. In addition, our management may not allocate or invest these
proceeds effectively.
The market price of our common stock may be less than the initial public
offering price, or may be volatile, and you may not be able to resell your
shares at or above the initial public offering price
Prior to this offering there was no public market for our common stock. The
initial public offering price for our common stock will be determined through
negotiations between the underwriters and us. This initial public offering
price may vary from the market price of our common stock after the offering. If
you purchase shares of common stock, you may not be able to resell those shares
at or above the initial public offering price.
We are controlled by a small group of our existing stockholders, whose
interests may differ from other stockholders
As of April 11, 2000, our directors, executive officers and affiliates
beneficially owned approximately 85.3% of the outstanding shares of our common
stock, and after the offering will beneficially own approximately % of the
outstanding shares of common stock. As a result, if these persons act together,
they will have the ability to exercise substantial control over our affairs and
corporate actions requiring stockholder approval, including the election of
directors, a sale of substantially all of our assets, a merger with another
entity or an amendment to our certificate of incorporation. The ownership
position of these stockholders could delay, deter or prevent a change in
control and could adversely affect the price that investors might be willing to
pay in the future for shares of our common stock. In addition, the interests of
these stockholders may differ from the interests of our other stockholders.
Shares eligible for public sale after this offering could adversely affect our
stock price
The market price of our common stock could decline as a result of sales by
our existing stockholders of shares of common stock in the market after this
offering, or the perception that these sales could occur. In addition, we have
a significant number of shares that are subject to outstanding
15
<PAGE>
options and warrants. The exercise of these options or warrants and the
subsequent sale of the underlying common stock also could cause a decline in
our stock price. These sales also might make it difficult for us to sell equity
securities in the future at a time and at a price that we deem appropriate.
Investors in this offering will suffer immediate and substantial dilution
The initial public offering price per share will significantly exceed the
pro forma net tangible book value per share of $0.75 as of December 31, 1999.
Accordingly, investors purchasing shares in this offering will suffer immediate
and substantial dilution of their investment. In addition, we had 6,144,978
shares subject to options outstanding as of April 11, 2000 at a weighted
average exercise price of $0.49 per share and outstanding warrants to purchase
2,136,752 shares of common stock issuable at an exercise price of $1.17 per
share. The exercise of these options and warrants will result in further
dilution of the value of the shares purchased in this offering.
Anti-takeover provisions of Delaware's General Corporation Law and our
certificate of incorporation could delay or deter a change in control
Provisions of our certificate of incorporation and by-laws, as well as
various provisions of the Delaware General Corporation Law, may make it more
difficult to effect a change in control of us. The existence of these
provisions may adversely affect the price of our common stock, discourage third
parties from making a bid for us or reduce any premiums paid to our
stockholders for their common stock. For example, our certificate of
incorporation authorizes our board of directors to issue up to 20,000,000
shares of "blank check" preferred stock and to attach special rights and
preferences to this preferred stock. The issuance of this preferred stock may
make it more difficult for a third party to acquire control of us. Our
certificate of incorporation provides for the division of our board of
directors into three classes as nearly equal in size as possible with staggered
three-year terms. This classification of the board of directors could have the
effect of making it more difficult for a third party to acquire us, or of
discouraging a third party from acquiring control of us. A special meeting of
stockholders only may be called by a majority of the board of directors or by
our president, chief executive officer or chairman. In addition, a stockholder
proposal for an annual meeting must be received within a specified period of
time to be placed on the agenda. Because stockholders do not have the ability
to require the calling of a special meeting of stockholders and are subject to
timing requirements in submitting stockholder proposals for consideration at an
annual meeting, any third-party takeover not supported by the board of
directors would be subject to significant delays and difficulties.
16
<PAGE>
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and
uncertainties. These forward-looking statements, which are usually accompanied
by words such as "may," "might," "will," "should," "could," "intends,"
"estimates," "predicts," "potential," "continue," "believes," "anticipates,"
"plans," "expects" and similar expressions, relate to, without limitation,
statements about our market opportunities, our strategy, our competition, our
projected expense levels and the adequacy of our available cash resources. This
prospectus also contains forward-looking statements attributed to third parties
relating to their estimates regarding our industry and the growth of business-
to-business e-commerce activities. You should not place undue reliance on these
forward-looking statements which apply only as of the date of this prospectus.
Our actual results could differ materially from those expressed or implied by
these forward-looking statements as a result of various factors, including the
risks described above and elsewhere in this prospectus. Except as may be
required by federal securities laws, we undertake no obligation to update
publicly any forward-looking statements for any reason, even if new information
becomes available or other events occur in the future.
17
<PAGE>
USE OF PROCEEDS
We estimate that we will receive net proceeds from the sale of the shares of
common stock in this offering of $ million, assuming an initial public
offering price of $ per share and after deducting estimated underwriting
discounts and commissions and estimated offering expenses. If the underwriters
exercise their over-allotment option in full, we estimate that our net proceeds
will be $ million.
The primary purposes of this offering are to obtain additional equity
capital, create a public market for our common stock, and facilitate future
access to public markets. As of the date of this prospectus, we have not made
any specific expenditure plans with respect to the proceeds of this offering.
Accordingly, our management will have significant flexibility in applying the
net proceeds of this offering. We expect to use the net proceeds of this
offering for general corporate purposes, including working capital. A portion
of the net proceeds also may be used for the acquisition of complementary
businesses or technologies. Currently, we have no specific understandings,
commitments or agreements and are not currently engaged in any active
negotiations with respect to any such acquisitions.
Pending such uses, we intend to invest the net proceeds of this offering in
short-term, interest-bearing, investment-grade securities.
DIVIDEND POLICY
We have not declared or paid any cash dividends on our capital stock since
our inception. We intend to retain future earnings, if any, to finance the
operation and expansion of our business and do not anticipate paying any cash
dividends in the foreseeable future. Consequently, stockholders will need to
sell shares of common stock to realize a return on their investment, if any.
18
<PAGE>
CAPITALIZATION
(in thousands)
The following table sets forth our capitalization as of December 31, 1999:
. on an actual basis;
. on a pro forma basis after giving effect to the sale of 428,049 shares of
series E preferred stock at $2.11 per share on January 14, 2000 and the
receipt of the net proceeds therefrom; and
. on a pro forma as adjusted basis to further reflect (1) the conversion of
all outstanding shares of preferred stock into common stock immediately
prior to completion of this offering and (2) the sale of shares of common
stock at an assumed initial public offering price of $ per share,
after deducting underwriting discounts and commissions and estimated
offering expenses payable by us.
You should read this information together with our audited financial
statements and accompanying notes appearing elsewhere in this prospectus.
<TABLE>
<CAPTION>
December 31, 1999
-------------------------------
Pro forma
Actual Pro forma as adjusted
------- --------- ------------
<S> <C> <C> <C>
Cash and cash equivalents...................... $17,568 $18,471 $
======= ======= =====
Total debt including borrowing under
installment loan and capitalized lease
agreement..................................... 44 44 44
Shareholders' equity:
Convertible series A through E preferred
stock, $.01 par value, 35,175,218 authorized,
28,860,511 issued and outstanding, actual;
35,175,218 authorized, 29,288,560 issued and
outstanding, pro forma; and no shares
authorized issued and outstanding, pro forma
as adjusted.................................. 289 293
Preferred stock, $.01 par value, no shares
issued and outstanding, actual; no shares
issued and outstanding, pro forma; 20,000,000
authorized, no shares issued and outstanding,
pro forma as adjusted........................
Common stock, $.01 par value, 54,824,782
shares authorized, 1,019,849 issued, actual;
54,824,782 authorized, 1,019,849 issued, pro
forma; 300,000,000 authorized, issued,
pro forma as adjusted........................ 10 10
Additional paid-in capital..................... 29,648 30,547
Accumulated deficit............................ (8,840) (8,840)
Treasury stock................................. (53) (53)
------- ------- -----
Total shareholders' equity.................... 21,054 21,957
Total capitalization......................... $21,098 $22,001 $
======= ======= =====
</TABLE>
The number of shares of common stock to be outstanding after this offering
is based on the number of shares outstanding as of December 31, 1999 and
excludes:
. 6,144,978 shares subject to options outstanding as of April 11, 2000 at a
weighted average exercise price of $0.49 per share;
. 7,048,010 additional shares reserved for issuance under our stock option
plans;
. 850,000 additional shares available for issuance under our employee stock
purchase plan; and
. the exercise of 2,136,752 warrants to purchase shares of our common
stock.
19
<PAGE>
DILUTION
Our pro forma net tangible book value as of December 31, 1999 was
approximately $22 million, or approximately $0.75 per share of common stock.
Pro forma net tangible book value per share is determined by dividing the
amount of our total tangible assets less total liabilities by the number of
shares of common stock outstanding after giving effect to the sale of 428,049
shares of series E preferred stock at $2.11 per share on January 14, 2000, and
the conversion of each share of preferred stock into one share of common stock
immediately prior to completion of this offering. Dilution in pro forma net
tangible book value per share represents the difference between the amount per
share paid by purchasers of shares of common stock in this offering and the net
tangible book value per share of common stock immediately after the completion
of this offering.
After giving further effect to our sale of shares offered hereby at an
assumed initial public offering price of $ per share and after deducting
estimated underwriting discounts and estimated offering expenses payable by us,
and the application of the estimated net proceeds from the offering, our pro
forma net tangible book value as of December 31, 1999 would have been $ , or
$ per share. This represents an immediate increase in pro forma net tangible
book value of $ per share to existing stockholders and an immediate dilution
in net tangible book value of $ per share to new investors. The following
table illustrates this per share dilution:
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share..................... $
Pro forma net tangible book value per share as of December 31,
1999............................................................. $0.75
Increase per share attributable to new investors..................
-----
Pro forma net tangible book value per share after this offering.....
---
Dilution in pro forma net tangible book value per share to new
investors.......................................................... $
===
</TABLE>
The following table summarizes, on a pro forma basis after giving effect to
the sale of 428,049 shares of series E preferred stock at $2.11 per share on
January 14, 2000 and the conversion of each outstanding shares of preferred
stock into common stock immediately prior to this offering, the total number of
shares of common stock purchased from us, the total consideration paid to us
and the average price per share paid to us by existing stockholders and by new
investors before deducting the estimated underwriting discounts and commissions
and estimated offering expenses payable by us:
<TABLE>
<CAPTION>
Shares Purchased Total Consideration
------------------ ------------------- Average Price
Number Percent Amount Percent Per Share
---------- ------- ----------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders...... 30,308,409 % $32,513,461 % $1.07
New investors..............
---------- ----- ----------- -----
Total.................... 100.0% $ 100.0%
========== ===== =========== =====
</TABLE>
The foregoing tables and calculations assume no exercise of any stock
options or warrants outstanding as of December 31, 1999. As of April 11, 2000,
there were options outstanding to purchase a total of 6,144,978 shares of
common stock with a weighted average exercise price of $0.49 per share and
2,136,752 shares of common stock issuable upon the exercise of warrants at an
exercise price of $1.17 per share. To the extent the outstanding warrants and
options are exercised there will be further dilution to new investors.
20
<PAGE>
SELECTED FINANCIAL DATA
(in thousands, except per share amounts)
The selected statement of operations data for the period from March 14, 1997
(inception) through December 31, 1997 and for the years ended December 31, 1998
and 1999, and the selected balance sheet data as of December 31, 1998 and 1999
have been derived from our audited financial statements included in this
prospectus. Balance sheet data as of December 31, 1997 have been derived from
our audited financial statements not included in this prospectus. You should
read these selected financial data in conjunction with "Management's Discussion
and Analysis of Financial Condition and Results of Operations," and our audited
financial statements and the accompanying notes included elsewhere in this
prospectus.
<TABLE>
<CAPTION>
Fiscal year
ended
Inception December 31,
through ----------------
Dec. 31, 1997 1998 1999
------------- ------- -------
<S> <C> <C> <C>
Statement of Operations Data:
Revenues:
Professional services....................... $ 472 $ 4,252 $12,539
Provisioning................................ 357 1,776 1,656
------ ------- -------
Total revenues............................ 829 6,028 14,195
------ ------- -------
Cost of revenues:
Professional services....................... 306 2,473 7,704
Provisioning................................ 308 1,362 1,259
------ ------- -------
Total cost of revenues.................... 614 3,835 8,963
------ ------- -------
Gross profit:
Professional services....................... 166 1,779 4,835
Provisioning................................ 49 414 397
------ ------- -------
Total gross profit........................ 215 2,193 5,232
Expenses:
Sales and marketing expenses................ 174 1,762 5,734
General and administrative expenses......... 447 2,139 5,408
Depreciation and amortization expense....... 210 197 747
Operating loss................................ (616) (1,905) (6,657)
Other income, net............................. -- 31 307
------ ------- -------
Net loss...................................... $ (616) $(1,874) $(6,350)
====== ======= =======
Basic and diluted net loss per share.......... $(3.51) $(11.92) $(21.34)
====== ======= =======
Weighted average common shares used to compute
basic and diluted net loss per share......... 177 177 316
====== ======= =======
<CAPTION>
December 31,
------------------------------
1997 1998 1999
------------- ------- -------
<S> <C> <C> <C>
Balance Sheet Data:
Cash and cash equivalents..................... $ 700 $ 695 $17,568
Working capital............................... 635 1,296 19,546
Total assets.................................. 1,077 3,284 23,422
Total debt including borrowing under
installment loan and capitalized lease
agreement.................................... 25 55 44
Total shareholders' equity.................... $ 818 $ 2,090 $21,054
</TABLE>
21
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with
"Selected Financial Data" and our financial statements and the accompanying
notes included elsewhere in this prospectus. This discussion contains forward-
looking statements that involve risks and uncertainties. Our actual results
could differ materially from those anticipated in the forward-looking
statements as a result of certain factors including the risks discussed in
"Risk Factors" and elsewhere in this prospectus.
Overview
GTP is a provider of a new category of network-focused professional services
called infrastructure architecture. As infrastructure architects, we focus on
the design, implementation, security, performance and management of network
infrastructures that have become the foundation of the emerging e-business
economy. Our clients are Global 2000 enterprises such as Bear Stearns, Chase
Manhattan Bank, CK Witco, Morgan Stanley Dean Witter and Unilever,
telecommunications and Internet service providers such as UUNET, an MCI
Worldcom company, and select Internet companies such as Telemedia Accelerator.
We derive a majority of our revenues from professional services. We provide
professional services on both a time-and-materials and fixed-fee basis. Upon a
client's specific request, we also sell hardware and software, which we refer
to as provisioning revenues. During the year ended December 31, 1999, less than
12% of our total revenues were provisioning revenues. We expect provisioning
revenues to decline as a percentage of total revenues.
Revenue is only recognized when a contract arrangement exists, services have
been rendered, the fees are fixed or determinable and collectibility is
reasonably assured. Provisioning revenues are recognized when equipment is
delivered to a client. Revenues are recognized for time-and-materials contracts
as services are provided. Revenues from fixed-fee contracts are recognized as
services are provided upon the achievement of specified milestones. Revenue is
recognized on partially completed milestones in proportion to the costs
incurred for that milestone and only to the extent that an irrevocable right to
the revenue exists. Costs incurred under time-and-materials and fixed-fee
contracts are recognized as incurred which generally is in the same period that
revenue is recorded. Reimbursable expenses are not reported in revenues. For
the year ended December 31, 1999, we derived approximately 81% of our
professional services revenues from time-and-materials engagements. We believe
that fixed-fee revenues will increase in the future as a percentage of total
revenues as we increase sales of our productized services.
Revenues from several large clients historically have constituted a
significant portion of our total revenues in a particular quarter or year. In
1999, CK Witco and Bear Stearns accounted for 18% and 11% of our total
revenues, respectively, and in 1998, Unilever and CK Witco accounted for 39%
and 14% of our total revenues, respectively. In 1999 and 1998, our five largest
clients represented 51% and 68% of our total revenues, respectively. We expect
a relatively high level of client concentration to continue, although not
necessarily involving the same clients from period to period.
22
<PAGE>
Costs of professional services consist of compensation and benefits for our
consultants and engineers and project-related costs that are not billable to
our clients. We expect that salaries for our billable professionals will
increase over time due to the intense competition in our industry for qualified
individuals. Costs of provisioning consist of the cost of hardware and software
sold and related shipping costs.
Our gross profit is driven in large part by the overall utilization of
professionals in billable engagements and by the average bill rates we charge
our clients, both of which may vary from period to period.
Sales and marketing expenses consist primarily of compensation and benefit
costs for our sales and marketing personnel, travel expenses for our sales
personnel and certain advertising and promotional expenses. We believe that
continued expenditures for sales and marketing personnel and programs are
required to remain competitive and to promote awareness of our brand and
services. We therefore expect that these expenses will continue to increase for
the foreseeable future. However, we expect these expenses to decline as a
percentage of total revenues as we continue to grow our business.
General and administrative expenses consist primarily of compensation and
benefit costs and related expenses for general corporate functions, including
managerial, financial, personnel, facilities and other administrative expenses.
These expenses also include legal, accounting and other professional fees and
expenses. We expect our general and administrative expenses will increase for
the foreseeable future as we continue to hire personnel and incur expenses to
build our administrative infrastructure to support the growth of our business
and our operations. However, we expect these expenses to decline as a
percentage of total revenues as we continue to grow our business.
We intend to expand our presence in our current markets and to enter new
domestic and international markets. We currently have branches serving
Baltimore, Boston, Chicago, Hartford, New York City, Northern New Jersey and
Washington, D.C. During 2000, we plan to open branches serving Atlanta, Dallas,
Denver and San Francisco as well as two European branches. Since many of our
clients are large, geographically diverse businesses, we will continue to
review opportunities to enter new markets in response to our clients' needs.
Our number of billable employees increased from 55 at December 31, 1998 to
91 at December 31, 1999. Our total number of employees increased from 101 at
December 31, 1998 to 161 at December 31, 1999. We will continue to actively
recruit billable professionals and the staff required to support their
activities and we expect our total number of employees to increase
significantly in 2000.
23
<PAGE>
Results of Operations
The following table presents for the periods indicated, our selected
statements of operations data in dollars and as a percentage of our revenues.
<TABLE>
<CAPTION>
Inception Year ended Inception Year ended
through December 31, through December 31,
December 31, ---------------- December 31, -----------------
1997 1998 1999 1997 1998 1999
------------ ------- ------- ------------ ------ ------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Professional
services............. $ 472 $ 4,252 $12,539 57 % 71 % 88 %
Provisioning.......... 357 1,776 1,656 43 29 12
----- ------- ------- --- ------ ------
Total revenues...... 829 6,028 14,195 100 100 100
----- ------- -------
Cost of revenues:
Professional
services............. 306 2,473 7,704 65(1) 58(1) 61(1)
Provisioning.......... 308 1,362 1,259 86(2) 77(2) 76(2)
----- ------- -------
Total cost of
revenues........... 614 3,835 8,963 74 64 63
----- ------- -------
Gross profit:
Professional
services............. 166 1,779 4,835 35(1) 42(1) 39(1)
Provisioning.......... 49 414 397 14(2) 23(2) 24(2)
----- ------- -------
Total gross profit.. 215 2,193 5,232 26 36 37
Expenses:
Sales and marketing
expenses............. 174 1,762 5,734 21 29 40
General and
administrative
expenses............. 447 2,139 5,408 54 35 38
Depreciation and
amortization
expense.............. 210 197 747 25 3 5
Other income, net....... -- 31 307 -- 1 2
----- ------- ------- --- ------ ------
Net loss................ $(616) $(1,874) $(6,350) (74)% (30)% (44)%
===== ======= ======= === ====== ======
</TABLE>
- --------
(1) Percentage of professional services revenues
(2) Percentage of provisioning revenues
Years Ended December 31, 1998 and 1999
Revenues
Total revenues increased $8.2 million, or 135%, to $14.2 million in 1999
from $6.0 million in 1998. Revenues from professional services increased $8.3
million, or 195%, to $12.5 million in 1999 from $4.3 million in 1998. The
increase in professional services revenues was the result of an increase in the
number of active clients, which led to an increase in both the number of
professional services projects and the number of billable professionals engaged
in those projects.
The increase in total revenues in 1999 was offset in part by a $120,000
decrease in provisioning revenues as compared to the prior period. Provisioning
revenues decreased 7% to $1.7 million in 1999 from $1.8 million in 1998. This
decrease was the result of our decision to provide hardware and software resale
services only upon a client's specific request and in connection with a
professional services project.
Cost of Revenues
Cost of revenues for professional services increased 211% to $7.7 million in
1999 from $2.5 million in 1998. As a percentage of professional services
revenues, cost of professional services
24
<PAGE>
increased to 61% in 1999 from 58% in 1998. The increase in cost of revenues for
professional services was primarily due to the hiring of additional consultants
and engineers and their corresponding compensation and benefits. We strive to
hire in advance of new projects to ensure that we have the resources required
to respond quickly to our clients' needs.
Cost of provisioning revenues decreased 8% to $1.3 million in 1999 from $1.4
million in 1998. This decrease in cost of provisioning revenues was primarily
due to the corresponding reduction in provisioning sales. As a percentage of
provisioning revenues, cost of provisioning decreased to 76% in 1999 from 77%
in 1998.
Sales and Marketing Expenses
Sales and marketing expenses increased 225% to $5.7 million in 1999 from
$1.8 million in 1998. This increase was primarily attributable to a $2.0
million increase in compensation and benefits for additional staff and a $1.0
million increase in sales commissions earned as a result of increased revenues.
As a percentage of revenues, sales and marketing expenses increased to 40% in
1999 from 29% in 1998.
General and Administrative Expenses
General and administrative expenses increased 153% to $5.4 million in 1999
from $2.1 million in 1998. General and administrative expenses increased
primarily as a result of increases in our personnel, facilities and recruiting
costs to support the growth of our business. As a percentage of revenues,
general and administrative expenses increased to 38% in 1999 from 35% in 1998.
Depreciation and Amortization Expense
Depreciation and amortization expense consist of depreciation of property
and equipment and amortization of goodwill. Depreciation and amortization
expense increased 280% to $747,000 in 1999 from $197,000 in 1998. This increase
was primarily attributable to the depreciation associated with property and
equipment purchases in 1999 that were necessary to support our growth.
Additionally, in conjunction with upgrading our computer systems, we recorded a
charge of $207,000 in 1999 to reduce the carrying amount of certain computer
software assets that are to be disposed of to zero.
Other Income, Net
Net interest income increased 891% to $307,000 in 1999 from $31,000 in 1998.
This increase was primarily attributable to interest earned on the investment
of proceeds received from the issuance of series D preferred stock and series E
preferred stock sold during 1999.
Income Taxes
We did not incur any current U.S. Federal or State income tax provision for
any period presented because we have experienced operating losses since
inception. Utilization of our net operating loss carryforwards, which begin to
expire in 2002, may be subject to limitations under Section 382 of the Internal
Revenue Code of 1986. Due to the uncertainty regarding our ability to utilize
this deferred asset, we have recorded a valuation allowance to offset this
asset.
25
<PAGE>
Inception (March 14, 1997) through December 31, 1997 and Year Ended December
31, 1998
Revenues
Total revenues increased $5.2 million, or 627%, to $6.0 million in 1998 from
$829,000 in the period from inception through December 31, 1997. Revenues from
professional services increased $3.8 million, or 801%, to $4.3 million in 1998
from $472,000 in the period from inception through December 31, 1997. The
increase was primarily the result of an increase in the number of professional
services projects combined with an increase in the size of these projects.
Provisioning revenues increased $1.4 million, or 397%, to $1.8 million in
1998 from $357,000 in the period from inception through December 31, 1997. This
increase was primarily attributable to an increase in both the number of
clients to whom we provided hardware and software resale services and the
number of projects with related hardware and software requirements. As a
percentage of revenues, provisioning revenues accounted for 29% of our revenues
in 1998 and 43% of our revenues for the period from inception through December
31, 1997. This decrease was the result of our decision to provide hardware and
software resale services only upon a client's specific request and in
connection with a professional services project.
Cost of Revenues
Cost of revenues for professional services increased 709% to $2.5 million in
1998 from $306,000 in the period from inception through December 31, 1997. The
increase in cost of revenues for professional services was primarily
attributable to the hiring of consultants and engineers and their corresponding
compensation and benefits. As a percentage of professional services revenues,
these costs decreased to 58% in 1998 from 65% for the period from inception
through December 31, 1997.
The cost of provisioning revenues increased 342% to $1.4 million in 1998
from $308,000 in the period from inception through December 31, 1997. The
increase in provisioning costs was a result of increases in product sales. As a
percentage of provisioning revenues, these costs decreased to 77% in 1998 from
86% from inception through December 31, 1997.
Sales and Marketing Expenses
Sales and marketing expenses increased 909% to $1.8 million in 1998 from
$174,000 in the period from inception through December 31, 1997. The increase
was primarily attributable to a $1.2 million increase in compensation and
benefits for additional sales personnel and an increase of approximately
$330,000 in sales commissions earned as a result of increased revenues. As a
percentage of revenues, sales and marketing expenses increased to 29% in 1998
from 21% in the period from inception through December 31, 1997.
General and Administrative Expenses
General and administrative expenses increased 379% to $2.1 million in 1998
from $447,000 in the period from inception through December 31, 1997. General
and administrative expenses increased as a result of increases in personnel,
facilities and recruiting expenses. As a percentage of revenues, general and
administrative expenses decreased to 35% in 1998 from 54% in the period from
inception through December 31, 1997.
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Depreciation and Amortization Expense
Depreciation and amortization expense decreased 7% to $197,000 in 1998 from
$210,000 in the period from inception through December 31, 1997. Depreciation
and amortization decreased primarily as a result of a $101,000 decrease in the
amortization of goodwill. This decrease in goodwill was primarily attributable
to the value of a customer list acquired and substantially amortized in 1997.
This decrease was partially offset by the depreciation associated with
purchases of capital equipment in 1998 necessary to support our growth.
Other Income, Net
Net interest income increased to $31,000 in 1998. There was no net interest
income from inception to December 31, 1997. This increase was primarily
attributable to interest earned on the investment of proceeds received from the
issuance of series C preferred stock sold during 1998.
Quarterly Results of Operations
The following table presents our unaudited quarterly data for the periods
indicated. We derived these data from our unaudited consolidated interim
financial statements, and, in our opinion, these data include all necessary
adjustments, which consist only of normal recurring adjustments necessary to
present fairly the financial results for the periods presented. Our quarterly
operating results have varied significantly in the past and will continue to
vary in the future due to a number of factors including, but not limited to,
the number, size and scope of engagements, unanticipated delays, deferrals or
cancellation of significant engagements, unanticipated changes in the scope of
major engagements, utilization rates, realized hourly billing rates and general
economic conditions. Accordingly, our results for any given quarter or series
of quarters are not necessarily indicative of our results that may be expected
for any future period. However, our quarterly operating results may represent
trends that aid in understanding our business.
<TABLE>
<CAPTION>
Quarter Ended
-------------------------------------
Mar. 31, June 30, Sept. 30, Dec. 31,
1999 1999 1999 1999
-------- -------- --------- --------
(in thousands)
<S> <C> <C> <C> <C>
Statement of Operations:
Revenues:
Professional services................... $2,490 $ 2,893 $ 3,596 $ 3,560
Provisioning............................ 458 573 415 210
------ ------- ------- -------
Total revenues........................ 2,948 3,466 4,011 3,770
------ ------- ------- -------
Cost of revenues:
Professional services................... 1,448 1,823 2,157 2,276
Provisioning............................ 360 441 310 148
------ ------- ------- -------
Total cost of revenues................ 1,808 2,264 2,467 2,424
------ ------- ------- -------
Gross profit:
Professional services................... 1,042 1,070 1,439 1,284
Provisioning............................ 98 132 105 62
------ ------- ------- -------
Total gross profit.................... 1,140 1,202 1,544 1,346
Expenses:
Sales and marketing expenses............ 1,152 1,288 1,460 1,834
General and administrative expenses..... 901 923 1,633 1,951
Depreciation and amortization expense... 77 118 146 406
Other income, net......................... 13 50 63 181
------ ------- ------- -------
Net loss.................................. $ (977) $(1,077) $(1,632) $(2,664)
====== ======= ======= =======
</TABLE>
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We experienced continued growth in total revenue in each quarter during
1999, with the exception of the fourth quarter. Professional services revenues
followed this trend with a slight decrease in the fourth quarter. This decrease
was primarily the result of a delay in the start of new projects as clients
approached the year 2000 with caution. In conjunction with this expected delay,
we implemented a new, scalable branch business model, which also affected the
utilization rate of our billable professionals for the quarter. Provisioning
revenues declined to $210,000 by the fourth quarter. This decrease was the
result of our decision to provide hardware and software resale services only
upon a client's specific request and in connection with a professional services
project. Gross profit increased in all quarters with the exception of the
fourth quarter. The lower utilization of billable professionals in that period
and our continued hiring of billable professionals in advance of new projects
decreased our gross profit. Both sales and marketing and general and
administrative expenses increased in each quarter during 1999 as we continued
to add personnel, systems and infrastructure to support the growth of our
business and operations.
Liquidity and Capital Resources
Since inception in 1997, we have financed our operations through the
issuance of preferred stock, raising a total of $29.5 million through December
31, 1999, net of issuance costs. As of December 31, 1999, we had approximately
$17.6 million in cash and cash equivalents. Subsequent to December 31, 1999, we
sold 428,049 shares of preferred stock raising an additional $903,000 in net
proceeds.
Net cash used in operating activities was $7.0 million in 1999, $2.4 million
in 1998 and $374,000 for the period from inception through December 31, 1997.
Net cash used in operating activities resulted primarily from net losses for
the periods and increases in accounts receivable, and was partially offset by
increases in accounts payable and accrued expenses.
Net cash used in investing activities was $1.5 million in 1999, $817,000 in
1998, and $59,000 in 1997, primarily due to the purchase of property and
equipment.
Net cash provided by financing activities was $25.3 million in 1999. In
1999, we raised net proceeds of $25.3 million from the sale of 5.2 million
shares and 9.8 million shares of series D preferred stock and series E
preferred stock, respectively. Cash provided by financing activities was $3.2
million in 1998. In 1998, we raised net proceeds of $3.1 million from the sale
of 4.2 million shares of series C preferred stock. Net cash provided by
financing activities was $1.1 million in 1997. In 1997, we raised net proceeds
of $1.1 million from the issuance of 4.1 million shares and 5.7 million shares
of series A preferred stock and series B preferred stock, respectively. At the
completion of this offering, each preferred share will convert into one common
share.
We anticipate spending between $5.0 million and $8.0 million in capital
expenditures during 2000 as a result of expenditures to be incurred in
connection with enhancing our networking lab, moving to our new corporate
headquarters, opening new branch offices and upgrading our computer systems.
At our current rate of expenditure, we believe that our current cash and
cash equivalents will be sufficient to fund our working capital and capital
expenditure requirements for at least the next 12
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months. We believe our current cash and cash equivalents, combined with the
proceeds of this offering, will allow us to grow our business substantially. To
the extent we require additional funds to support our operations or the
expansion of our business, we may need to sell additional equity, issue debt or
convertible securities or obtain credit facilities through financial
institutions. If additional funds are raised through the issuance of debt
securities, these securities could have rights, preferences and privileges
senior to holders of common stock. The terms of any debt securities could
impose restrictions on our operations. If additional funds are raised through
the issuance of additional equity or convertible securities, our stockholders
could suffer dilution. We cannot assure you that additional funding, if
required, will be available to us in amounts or on terms acceptable to us. If
sufficient funds are not available or are not available on acceptable terms,
our ability to fund our expansion, take advantage of acquisition opportunities,
develop or enhance our services or products, or otherwise respond to
competitive pressures would be significantly limited. Those limitations would
materially and adversely affect our business, results of operations and
financial condition.
Recently Issued Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standard (SFAS) No. 133, Accounting for
Derivatives and Hedging Activities. This Statement establishes accounting and
reporting standards for derivatives instruments, including certain derivative
instruments embedded in other contracts, and hedging contracts. This Statement
is effective for all fiscal years beginning after June 15, 2000. We do not
expect adoption of this Standard to have a material effect on our results of
operations, financial position or cash flows.
Quantitative and Qualitative Disclosure About Market Risk
We have no derivative financial instruments in our cash and cash equivalents
and investments. We invest our cash and cash equivalents in short term,
investment-grade securities. We anticipate investing the net proceeds from this
offering in similar investment-grade securities pending their use as described
in this prospectus. Our transactions are conducted and all our accounts are
denominated in United States dollars. As a result, we are not exposed to
foreign currency risk. Further, we do not have any current borrowings that
require us to repay a variable interest rate and are therefore not currently
exposed to market risk from changes in interest rates.
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BUSINESS
Overview
GTP is a provider of a new category of network-focused professional services
called infrastructure architecture. As infrastructure architects, we focus on
the design, implementation, security, performance and management of network
infrastructures that have become the foundation of the emerging e-business
economy. Our clients are Global 2000 enterprises such as Bear Stearns, Chase
Manhattan Bank, CK Witco, Morgan Stanley Dean Witter and Unilever,
telecommunications and Internet service providers such as UUNET, an MCI
Worldcom company, and select Internet companies such as Telemedia Accelerator.
GTP commenced operations on May 1, 1997 and at March 31, 2000 employed 209
people, 118 of whom were billable professionals. Our headquarters are in White
Plains, New York. In addition to our branches in markets serving Boston,
Hartford, New York City and Northern New Jersey, we recently opened branches
serving Baltimore, Chicago and Washington, D.C. During 2000, we plan to open
branches serving markets in Atlanta, Dallas, Denver and San Francisco as well
as two European branches. In 1999, we generated revenues of $14.2 million.
Industry Background
The tremendous recent growth of e-business has increased the importance,
complexity and size of network infrastructures. The implementation and
maintenance of these networks requires sophisticated technological skills and
focused expertise, which many businesses lack internally. E-business involves
exchanging information electronically with outside organizations for the
purposes of conducting business. Examples of e-business activities include:
. business-to-business systems such as electronic supply chains;
. customer management solutions such as customer relationship management
applications and web-enabled call centers; and
. external applications that link with outside business partners, suppliers
and customers.
Global 2000 enterprises, telecommunications and Internet service providers
and Internet companies are all actively engaged in implementing these e-
business initiatives. Forrester Research, an independent research firm,
projects that business-to-business e-commerce activities in the United States
will grow from $406 billion in 2000 to $2.7 trillion in 2004, a compound annual
growth rate of 61%.
A robust, reliable and secure network infrastructure is critical to ensure
the availability, performance and scalability of e-business applications. Many
organizations now view networks as strategic assets rather than as cost centers
and have determined that having the right networking technologies, architecting
the most effective solutions and efficiently managing those solutions has
become critical to their operations. As e-business activities become central to
companies' operations, the consequences of network disruptions become more
severe. Therefore, companies are investing additional resources to improve
network infrastructures. In addition, many companies are increasingly focusing
on their core competencies and outsourcing functions considered to be outside
of their main business, such as network operations.
We believe that a new category of professional services firms is emerging to
provide effective solutions to complex network issues. These infrastructure
architects provide network services focused
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on infrastructure design, implementation, management and security. According to
estimates from International Data Corporation, the worldwide market for network
consulting and integration services will grow from $15.5 billion in 1999 to
$32.8 billion in 2004. We believe that infrastructure architects fill the gap
between management consulting firms, which provide e-business strategy but do
not address network infrastructures, and staff augmentation firms, which do not
provide project-based e-business solutions.
We believe that there are a limited number of professional services
companies that focus on infrastructure architecture. Large information
technology services companies such as CSC and EDS provide a broad range of
services, including technology investment strategic guidance, enterprise
business solution development, e-commerce applications and supply-chain
management. Other service providers, such as Hewlett-Packard, IBM and
Lucent/INS, are affiliated with a particular technology or product. Management
consulting firms such as Bain, Boston Consulting Group and McKinsey provide e-
business strategy services, but typically do not provide engineering expertise
to implement the required network infrastructures. Finally, Internet
professional services groups such as Proxicom, Razorfish, Scient and Viant
provide technology strategy consulting, operational process applications and
systems and application development, but typically do not focus on developing
underlying network infrastructures. We believe that a significant opportunity
exists for a service provider that delivers complex network infrastructure
architecture solutions.
The Greenwich Technology Partners Solution
We provide high quality infrastructure architecture solutions to meet our
clients' complex e-business needs. The key distinguishing elements of our
solution include:
Focus on Infrastructure Architecture. As infrastructure architects, we focus
on the design, implementation, security, performance and management of our
clients' network infrastructures. We believe that our focus on infrastructure
architecture enables us to provide better solutions to our clients.
Additionally, our focus enables us to forge a unique brand identity that
enhances our ability to establish new client relationships and attract talented
professionals.
Technology Expertise. Our expertise in complex network technology is the
cornerstone of our service offerings. This expertise enables us to deliver
sophisticated network design, integration and management services. Our
commitment to maintaining technology expertise is reflected in our investment
in attracting and retaining experienced, highly skilled professionals. We have
assembled a team of seasoned professionals that possesses in-depth knowledge in
a wide variety of advanced networking technologies, extensive field experience
and the leading industry certifications and credentials. On average, our
billable professionals have more than nine years of relevant technology
experience. We enhance the abilities of our professionals by providing them
with ongoing training and with the opportunity to work with the latest
developments in network technology. Through technical alliances with developers
of network equipment and software, we have preferred access to training,
equipment and information on advances in our alliance partners' respective
technologies.
Integrated Service Offering. We have organized our professionals into six
practice areas: performance, security, internetworking, directory services,
network management and systems engineering. Given the complex nature of our
clients' networking infrastructures, we often provide
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customized solutions that draw upon a number of our practice areas. Our
organizational framework is designed to balance in-depth expertise in a given
practice area with the ability to provide an integrated solution. We offer our
clients multi-disciplinary teams of consultants and engineers to address the
most complex and sophisticated networking requirements in an integrated and
cost-effective fashion.
Objective Approach. As an independent consulting firm, we provide our
clients with objective, vendor-neutral recommendations. We are committed to
delivering optimal technology solutions within the context of our clients'
strategic business objectives, technology requirements and existing network
infrastructures. In order to ensure our continued ability to deliver leading
technologies to our clients, we continually evaluate new technologies and
enhance our service offerings in response to new market developments.
Proprietary NetValue Methodology. Our NetValue methodology structures our
client engagements and service delivery process. NetValue leverages the
collective experience of our consultants and engineers, and distills their
knowledge into best practices that ensure consistent, predictable, high-quality
results. We believe that optimization of network infrastructures is an ongoing
process that continues throughout the life cycle of network technologies. As
shown in the figure below, we initiate each engagement by assessing a client's
needs and reviewing its existing operating environment. We then translate the
client's business objectives into technology strategies, and plan and design
the enabling network infrastructures. We work with our clients to integrate our
recommended design improvements with their existing infrastructures and to
optimize the performance of their networks. We manage the entire delivery cycle
and provide quality assurance and post-project assessment.
[GRAPHIC]
The graphic shows four circles labeled "Assess", "Design", "Integrate" and
"Optimize", with arrows connecting the circles into a large circle around the
word "NetValue".
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Strategy
Our goal is to become the recognized leader in providing infrastructure
architecture services to support e-business applications. To achieve this goal,
we have adopted the following strategies:
Expand Client Relationships. We intend to increase the strength of our
relationships with existing clients and to develop long-term relationships with
new clients. In addition to securing additional projects with existing clients,
we are focused on establishing new relationships with other Global 2000
enterprises, telecommunications and Internet service providers and select
Internet companies. Our goal is to become integral to the development and
ongoing implementation of our clients' network infrastructures to enable their
e-business objectives.
Attract and Retain Experienced Professionals and Expand Recruiting
Efforts. We focus on attracting and retaining experienced and talented network
technology professionals. We regularly provide our professionals the
opportunity to work on challenging and high-profile projects that involve
complex issues and leading-edge technologies. We offer our consultants and
engineers various opportunities to further develop their expertise, including
training in our lab with new technologies. We also offer competitive
compensation packages that include equity participation for all employees. As
of March 31, 2000, our recruiting team consisted of 14 full-time employees. We
will continue to expand our recruiting efforts.
Enhance our Technological Expertise. We will continue to enhance our
technological expertise to serve our clients better, and we are committed to
training and educating our professionals in leading-edge technologies. We have
developed a state-of-the-art lab in which we maintain current networking
technologies for our professionals to use for training and certification
purposes. We also have developed technical alliances with developers of network
equipment and software through which our professionals can become certified
experts in industry designations. In addition, we are investing resources in
our knowledge management systems to leverage the collective experience of our
professionals by promoting knowledge capture and transfer.
Continue to Strengthen our Service Offerings. We will continue to expand our
portfolio of service offerings in response to technological developments. For
example, we recently enhanced our service offerings to include our directory
services and voice data integration capabilities. We continue to develop new
productized service offerings, which are pre-defined, fixed-fee engagements. In
addition, we have recently hired an experienced Chief Technology Officer to
enhance our efforts in analyzing the evolving technologies and issues relating
to e-business infrastructures. We believe that our investment in expanding our
practice areas improves our ability to help our clients optimize the
performance and utility of their networks.
Bolster our Brand. We intend to raise GTP's profile and recognition as a
leader in the development of infrastructure architecture. Our professionals
speak regularly at industry conferences, host seminars and publish articles in
leading trade and business publications. We have established a public relations
program consisting of media relations and targeted communications. In addition,
we have established co-marketing campaigns with several of our technical
alliance partners. Finally, we promote our NetValue methodology as a standard,
replicable approach to achieve our clients' objectives.
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Continue to Invest in Internal Systems. We are committed to building a
sustainable infrastructure to ensure that our ability to deliver consistent,
quality services to our clients will not be compromised as we grow. We will
continue to invest substantial resources in developing our back office support
functions, including our human resources, recruiting and administrative
staffs. We continue to invest in technology systems, applications and network
infrastructures to support our professionals.
Expand Geographically. We intend to expand our presence in our current
markets and to enter new domestic and international markets. Our decentralized
branch model, under which a particular sales and technical management team has
responsibility for the operations and profitability of each branch,
facilitates this expansion. In addition to our branches in markets serving
Boston, Hartford, New York City and Northern New Jersey, we recently opened
branches serving Baltimore, Chicago and Washington, D.C. During 2000, we plan
to open branches serving markets in Atlanta, Dallas, Denver and San Francisco
as well as two European branches. Since many of our clients are large,
geographically diverse businesses, we will continue to review opportunities to
enter new markets in response to our clients' needs.
Our Consulting and Engineering Services
Our consulting and engineering services are organized into six practice
areas: performance, security, internetworking, directory services, network
management and systems engineering. Given the complex nature of our clients'
network infrastructures, we often provide customized solutions that draw upon
a number of our practice areas. We provide objective, vendor-neutral expertise
that ensures our clients the secure, reliable, scalable and manageable network
infrastructures necessary to enable their e-business objectives.
Performance
Our performance practice area focuses on maintaining optimal performance
through the measurement, collection and analysis of network and server data.
We use sophisticated, proprietary tools and techniques to gather, organize and
warehouse this data, which subsequently may be used for a number of related
performance analysis applications, including capacity planning and network
simulation modeling.
Our network performance consultants and engineers maintain expertise in the
following areas:
. network baselining--establishes the operational performance parameters of
the current network infrastructure to use as a benchmark to evaluate the
impact of changes to the network, particularly those involving additional
investment
. capacity planning--analyzes a client's network resources to identify
bandwidth constraints to avoid performance degradation, particularly
prior to the deployment of new applications
. network simulation--creates a virtual model of a defined network
environment to test new configurations and applications prior to
deployment on the network
. performance troubleshooting--diagnoses the root cause of an application's
suboptimal performance by analyzing and isolating faults within the
network
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Security
Our security practice focuses on protecting the confidentiality, integrity
and availability of our clients' networks and their component systems. By
translating the abstract objective of "security" into understandable terms such
as risks, costs and benefits, we enable our clients to make clear and informed
decisions regarding the protection of their networks.
Our security practice addresses challenges in the following areas:
. authorization and authentication--provides systems and devices that
support authentication and authorization of users and applications,
including secure web servers, authentication servers and public key
infrastructures, or PKIs. PKIs enable users to manage and administer the
cryptographic keys and identification certificates used to identify
users, applications and network devices
. policies, standards and guidelines--defines the levels of risk to our
clients' networks and promulgates rules and standards for the security
techniques and programs to be deployed
. security management and operations--provides for the continuous
monitoring of security controls deployed on all internal systems using
such technologies as intrusion detection and perimeter monitoring systems
. network security infrastructure--enables access control, encryption and
management, including firewalls and virtual private networks, or VPNs,
which enable users to communicate securely across a public network such
as the Internet
Internetworking
Our internetworking practice area focuses on the design and implementation
of network-enabled solutions that support our clients' geographically
distributed computing environments. Our consultants and engineers use hardware
and software to interconnect multiple, physically distributed networks into
large, uniform data communications systems. Our professionals use their
specialized technical skills and relevant industry experience to address the
challenges associated with building, integrating and operating heterogeneous
infrastructures.
Our internetworking practice area addresses challenges in the following
areas:
. packet-based routing and switching--configures network hardware devices
and their operating system software to transfer data traffic in various
formats
. network infrastructures architecture--assesses, designs and implements
network-enabled distributed computing environments and communications
systems
. remote access--provides secure, high-performance remote access and VPN
solutions for our clients and their geographically distributed employees,
supply-chain and other business associates
. voice, video and data integration--supports the convergence of all
traffic to a digital format providing for transport over enterprise-based
intranets and the public Internet
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Directory Services
Our directory services practice area focuses on enabling our clients to more
effectively control and manage information regarding their networked users and
resources. Directories are databases that store information about network
applications, users and devices. Directories are critical in enhancing access
to network resources, ensuring security and managing infrastructure, all of
which lower costs and increase reliability and functionality. Our directory
services practice area enables our clients to design, implement and manage
their directories. We believe that an effective directory design is essential
for the complex e-business applications that our clients are planning and
implementing.
Our directory services practice area specializes in the following:
. naming and addressing schema--creates a detailed definition of network
elements, users and resources and key attributes
. application integration--integrates critical applications such as
messaging, groupware and web services into the selected directory
. network impact assessment--ensures current and planned local and wide-
area networks and network operating systems will optimally support the
new directory design
. policy and procedure definition--develops the structural, behavioral and
functional relationships between applications and network devices, and
defines rights and privileges of individual users
. security integration--integrates security functionality, such as
identification certificates, simplified sign-on procedures and VPNs
Network Management
Our network management practice encompasses the operation, monitoring,
maintenance and measurement of large-scale, highly complex networks. We design,
implement and customize network management systems that provide network traffic
control, data collection, analysis and reporting services. These systems
translate network data into useable information that enables our clients to
manage their networks proactively. We institute operational processes that
allow our clients to identify, isolate, resolve and prevent network failures.
Our network management practice addresses challenges in the following areas:
. instrumentation and monitoring--designs and implements solutions to
collect, store and analyze network traffic data
. configuration management--provides the processes needed to store, update,
distribute and document network device configurations
. fault management--detects, diagnoses and corrects network performance
degradation and failure resulting from hardware or software issues
. change management--plans, tracks and documents changes to the network
infrastructures and associated management systems
. accounting management--measures network traffic, data collection and
storage, and analyzes bandwidth utilization which enables the client to
allocate costs based on usage
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Systems Engineering
Our systems engineering practice area provides comprehensive design and
integration services for our clients' distributed computing environments. Our
systems engineering professionals also develop and implement voice-enhanced
messaging applications to provide integrated voice and data solutions. The
focus of this practice area is on the processing and storage hardware and
operating system software that enable services such as e-business applications.
Our systems engineering practice addresses the following areas:
. systems infrastructure engineering--translates system availability and
scalability requirements into hardware and software specifications and
integrates web and application server systems into new or existing
computing environments
. systems administration--institutionalizes formal operating policies and
procedures and focuses on technical issues such as addressing and domain
management
. data management--addresses data availability and integrity issues,
including storage area networks and disaster prevention and recovery
programs
. data processing architecture--focuses on operating platforms, application
hosting, load balancing and server clusters
. messaging--develops and implements unified messaging systems that enhance
e-mail and messaging infrastructure with voice and fax capabilities
Productized Services
We have formulated standardized service offerings to address commonly
recurring network infrastructure needs. These productized services are
distinguished by pre-defined delivery and pricing structures and are replicable
across a wide variety of industries. Our productized services offer our sales
force an opportunity to market an easily understood, fixed-fee project to
potential clients. Furthermore, our productized services can be priced based on
the value offered to the client, rather than on the cost of providing the
service.
Our productized services currently consist of:
Internetwork Assessment
This productized solution involves an evaluation of the client's existing
network topology, including: WAN and LAN environments, naming, addressing,
routing, switching, performance, capacity, connectivity, redundancy and
management considerations. The report we generate from our assessment enables
the client to understand the performance and reliability of its network,
provides specific recommendations for improvements to the network and analyzes
the benefits that can be achieved through the recommended improvements.
Security Assessment
This assessment analyzes the security controls on our clients' Internet-
visible networks, including network devices, firewalls, applications and
servers, and documents vulnerabilities to
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external Internet-based assaults and intrusions. In addition, our report
explains how these vulnerabilities expose the client to service interruptions
and financial risks. We provide a prioritized set of recommendations for
reducing or eliminating identified vulnerabilities.
Virtual CIO
Through our virtual CIO service offering, one or more of our most senior
professionals provides high-level, strategic advice to help a client utilize
network-based technologies to leverage its existing competencies and business
model. After thoroughly analyzing the client's operating processes and legacy
technology assets, the virtual CIO uses our proprietary NetValue methodology to
develop solutions to meet the client's e-business objectives. The virtual CIO
then manages the implementation of these recommendations, often employing GTP
expertise and resources.
Usage-Based Cost Recovery
This service utilizes sophisticated hardware and software to generate
individual user bills that accurately reflect the utilization of network
resources. Our report details how, when, where and by whom network resources
are consumed. We collaborate with our clients to create an internal billing
policy for the allocation of costs associated with providing network bandwidth
and services consistent with the client's business objectives, ultimately
producing usage-based bills for each user on the network.
Thin-Client Enterprise Solution
Ensuring that application software is correctly configured, inventoried,
licensed, secured and managed has become a logistical challenge that consumes
an increasing amount of our clients' IT resources. In addition, many
client/server-based applications have not been optimized for utilization across
distributed networks. Our thin-client enterprise solution redesigns our
clients' systems architecture to provide centralized application services and
management. This centralization reduces administrative costs and challenges,
and improves application performance on LANs, WANs and remote access networks.
Voice-Enhanced Messaging
With this offering, GTP integrates voice and fax message-handling
capabilities into a client's e-mail platform. Once implemented, users can log
into an e-mail system and receive e-mail, voice mail and faxes through a
graphical user interface. Similarly, users can log into voice mail and get
access to e-mail and faxes through a telephone.
Windows 2000 Readiness Assessment
Microsoft's new Windows 2000 is a complex and feature-rich product,
including areas of high-availability, remote access, security, networking,
directory and administration services. However, many of our client's
environments are not currently configured to allow a seamless migration to
Windows 2000. In order to manage this migration risk, our consultants and
engineers evaluate all critical functional areas in our clients' environments.
The resulting report both details the client's readiness to migrate and
provides guidance on the use of new Windows 2000 features to achieve
operational objectives.
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Technical Alliances
Our service offerings are enhanced through technical alliances with or
certifications by network equipment and software manufacturers. These technical
alliances and certifications help us maintain technical leadership in network
infrastructures. We define technical alliances as mutually beneficial
relationships between ourselves and other organizations that include mutual
investments of resources such as time, people and money. Significant benefits
we derive from our technical alliances include enhanced expertise with popular
products, certification in a valuable technical area, an increased ability to
deploy end-to-end solutions, greater name recognition in the marketplace and
enhanced lead and revenue generation.
We undertake a comprehensive review of potential technical alliance partners
before entering into a technical alliance. We target partners that have
leading-edge technology, are aligned with GTP core competencies, have products
that require substantial professional services and can provide us access to new
client engagements.
Clients
We provide our services to a variety of clients across a variety of
industries. During the first quarter of 2000, we had active engagements with 76
clients. In 1999, CK Witco and Bear Stearns accounted for 18% and 11% of our
total revenues, respectively, and in 1998, Unilever and CK Witco accounted for
39% and 14% of our total revenues, respectively. In 1999 and 1998, our five
largest clients represented 51% and 68% of our total revenues, respectively.
Our clients include:
AIG E-commerce Solutions Phillips Group
Bear Stearns ESPN Sony Corporation
Boston Consulting Fleet Financial Starwood
Group GTECH Corporation St. John's University
Bristol Myers Squibb Guardian Life Insurance Telemedia Accelerator
Chase Manhattan Bank LivePerson Time Warner
CIT Group Maimonides Medical Unilever
Citizens Bank MCI Worldcom University of
Citizens Utilities Morgan Stanley Dean Witter Connecticut Health
CK Witco Corporation NASDAQ Stock Market Systems
Credit Suisse First Outpost.com UUNET
Boston Wellington Management
Dayton Hudson
Dow Jones
Representative Client Case Study
A Large Financial Services Company
Challenge: A large financial services company was alerted to possible
discrepancies between its security policies and current best practices, which
could have resulted in unauthorized access to the client's network.
Solution: A team of GTP security experts utilized our packaged security
assessment to analyze the client's security posture. We assessed the client's
policies and guidelines for its network infrastructure and compared them to the
actual network configurations. We analyzed internal and external detection
systems, and evaluated escalation and contingency planning procedures. As a
result
39
<PAGE>
of this analysis, our security team compiled a report detailing our findings,
identifying methods to improve the client's procedural, operational,
organizational, physical and technical plan. Additionally, this report
identified and prioritized recommended remediation procedures.
Result: We provided a full risk assessment and quantified the potential
impact on the client's business. Following this analysis, GTP implemented the
recommended policy changes and reconfigured the client's network to improve its
security.
Sales and Marketing
We have a sales and marketing team of 21 full-time professionals focused on
pursuing Global 2000 enterprises, telecommunications and Internet service
providers and Internet companies. We are continuing to expand our staff as we
open new locations and intensify our efforts toward particular industries. To
support our direct sales force, we have invested in, and will continue to
invest in, a wide range of training, sales lead generation, sales tracking and
contact management tools. Additionally, we support our direct sales efforts
with telemarketing campaigns to identify new business opportunities in new
markets. We complement our direct sales efforts with indirect sales leads
generated by our technical alliance affiliates, our clients and our advisory
board.
Our marketing efforts include ongoing public relations initiatives focused
on industry and general business publications. In addition, we have conducted
focused network technology seminars for industry constituents and we
participate in a wide range of technology events. Furthermore, we intend to
improve recognition of GTP as a leading provider of infrastructure architecture
through targeted marketing efforts.
Competition
The technology consulting industry is comprised of many participants, is
highly competitive and is subject to rapid technological change. Many of our
competitors or potential competitors have greater name recognition, longer
operating histories, more relationships with large and established clients and
greater financial, technical and managerial resources. Furthermore, we expect
that our competitors may in the future form alliances with other technology
vendors, which may give them an advantage in managing networks that use that
vendor's equipment.
We believe that our most direct competitors are other infrastructure
architects, such as Predictive Systems. Other competitors include large
information technology services firms and affiliates of product or technology
firms. Potential competitors include Internet professional services firms if
they decide to extend their capabilities in this area. In addition, most of our
current clients and prospective clients have internal information technology
departments and, if they are able to attract and retain qualified personnel,
could choose to satisfy their network management needs through internal
resources rather than by outsourcing them to third-party service providers such
as ourselves. The decision by clients or prospective clients to rely on their
own information technology departments could have a material adverse effect on
our business, results of operations and financial condition. Moreover, as the
domestic and global markets for infrastructure architecture services to
continue to grow, we expect to face competition from new entrants.
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<PAGE>
We believe that the principal competitive factors in the infrastructure
architecture market are the quality and breadth of services offered, the
ability to attract and retain qualified personnel, a focus on providing
infrastructure architecture, price and reliability of services provided and the
strength of client relationships. We believe we compete favorably with respect
to all of these factors.
Proprietary Rights
We regard our trade secrets and other intellectual property as critical to
our success. Unauthorized use of our intellectual property by third parties may
damage our brand and our reputation. We rely on trademark law and trade secret
protection and confidentiality and/or license and other agreements with our
employees, clients, partners and others to protect our intellectual property
rights. However, we do not have any patents or patent applications pending or
any registered copyrights, and existing trade secret and trademark laws afford
us only limited protection. Despite our precautions, it may be possible for
third parties to obtain and use our intellectual property without our
authorization. Furthermore, the validity, enforceability and scope of
protection of intellectual property in Internet-related industries is uncertain
and still evolving. The laws of some foreign countries are also uncertain or do
not protect intellectual property rights to the same extent as do the laws of
the United States.
Employees
At March 31, 2000, we had a total of 209 employees of whom 118 were billable
professionals. None of our employees is represented by a labor union. We have
not experienced any work stoppages, and we consider relations with our
employees to be satisfactory. Competition for qualified personnel in our
industry is intense. We believe that we will need to continue to attract, hire
and retain qualified personnel to be successful in the future.
Locations
We currently lease approximately 29,400 square feet of space at our
headquarters in White Plains, New York. We also lease office space in Andover,
MA; Chantilly, VA; Chicago, IL; Columbia, MD; East Berlin, CT; New York City;
and Parsippany, NJ.
We believe that our existing facilities are adequate for our current needs
and that additional space will be available as needed.
Legal Proceedings
We are not presently a party to any material legal proceedings.
41
<PAGE>
MANAGEMENT
The following table contains information with respect to the directors and
executive officers of Greenwich Technology Partners and their ages and
positions as of April 11, 2000.
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Joseph P. Beninati............. 36 Chief Executive Officer, President and Chairman of
the Board
Dennis M. Goett................ 51 Senior Vice President, Chief Financial Officer,
Treasurer and Director
Richard Haverly................ 51 Senior Vice President Operations
Johna Till Johnson............. 35 Senior Vice President and Chief Technology Officer
John Stopper................... 46 Senior Vice President Sales and Marketing
Ronald V. Davis(2)............. 53 Director
Edmund A. Hajim(1)............. 63 Director
Jonathan R. Lynch(1)(2)........ 32 Director
William Jefferson Marshall(2).. 43 Director
David H.W. Turner(1)........... 41 Director
</TABLE>
- --------
(1) Member of the audit committee.
(2) Member of the compensation committee.
Joseph P. Beninati founded Greenwich Technology Partners in May 1997 and has
served as Chief Executive Officer, President and Chairman of the Board since
that time. From 1992 through 1995, Mr. Beninati was at Telos Corporation, a
large technical services government contractor, where he served initially as
Chief Financial Officer from February 1992 through December 1993 and as
Chairman of the Board from January 1994 to January 1995. In February 1995, Mr.
Beninati co-founded Antares Investment Partners. Mr. Beninati has a B.A. from
Middlebury College.
Dennis M. Goett has been Senior Vice President, Chief Financial Officer,
Treasurer and director of GTP since December 1998. From February 1996 until
February 1998, Mr. Goett served as Chief Financial Officer of Claremont
Technology Group, an information technology services firm. Since February 1998,
Mr. Goett has been the sole shareholder and President of CrossRoads Strategy
Group, Inc., a private consulting services firm. In 1989, Mr. Goett founded
Gabriel Partners, a financial and management consulting company, and served as
its President until January 1996. Mr. Goett has a B.A. from Fordham University.
Richard Haverly joined GTP in January 2000 as Senior Vice President
Operations. Before joining GTP, Mr. Haverly was a Partner at Andersen
Consulting from September 1980 until November 1999. Mr. Haverly joined Andersen
Consulting in 1970 and, in addition to his duties as a Partner, served as a
Quality Assurance Partner for various engagements starting in 1991. Mr. Haverly
has a B.S. from Rensselaer Polytechnic Institute.
Johna Till Johnson has served as Senior Vice President and Chief Technology
Officer since April 2000. From September 1996 through March 2000, Ms. Johnson
served as Vice President and Director of the Global Networking Strategy Service
of META Group, Inc., a technology advisory firm. From 1990 until September
1996, Ms. Johnson served in various capacities at Data Communications Magazine,
most recently as Senior Technology Editor, where she oversaw the lab testing
program. Ms. Johnson has a B.S. in electrical engineering and computer science
from The John Hopkins University and performed graduate work at the University
of Rochester.
42
<PAGE>
John Stopper joined GTP in August 1999 and has served as Senior Vice
President Sales and Marketing since that time. Prior to joining GTP, Mr.
Stopper served from September 1997 until June 1999 as a vice president and
member of the worldwide management board of James Martin & Company, an IT
consulting firm. Prior to that time, Mr. Stopper founded the eastern division
of Paranet, a network consulting firm, where he served as Division Manager from
June 1995 until September 1997. Mr. Stopper has a B.A. from Wheeling Jesuit
University and has performed graduate work at the University of Bridgeport.
Ronald V. Davis has served as a director since December 1997. Mr. Davis has
served as the Chairman of Davis Capital, L.L.C., an investment firm, since
January 1994. Mr. Davis served as a President of Reid Plastics from December
1998 until July 1999, and has served as Chairman of the Executive Committee of
Consolidated Container Corporation since July 1999. Previously, Mr. Davis
founded the Perrier Group of America and served as its Chief Executive Officer
from October 1979 until January 1994. Mr. Davis is a member of the board of
directors of Celestial Seasonings and Consolidated Container Company. Mr. Davis
has a B.A. from California State University, Fullerton and an M.B.A. from the
University of Southern California.
Edmund A. Hajim has served as a director since October 1998. He has served
as Co-Chairman and Chief Executive Officer of ING Furman Selz Asset Management,
a division of ING Group, since July 1998. In addition, Mr. Hajim was Co-
Chairman of ING Barings, Americas Region, from December 1997 until February
1999. From October 1983 until December 1997, he served as Chairman and Chief
Executive Officer of Furman Selz LLC. Mr. Hajim is also a director of Tosco
Corporation and NFO Worldwide, Inc. Mr. Hajim has a B.S. from the University of
Rochester and an M.B.A. with distinction from the Harvard Business School.
Jonathan R. Lynch has served as a director since September 1999. He has
served as a Principal at Chase Capital Partners, a private equity fund, since
January 1997 and oversees the Information Technology Services Practice. Prior
to becoming a Principal, Mr. Lynch was an associate at Chase from August 1993
until January 1997. He has a B.S. from Georgetown University and an M.B.A. from
the Harvard Business School.
William Jefferson Marshall has served as a director since February 1999. He
has served as a Partner of VantagePoint Venture Partners, a venture capital
firm, since January 1998 and as a Senior Advisor to VantagePoint from January
1996 until December 1997. Prior to that time, he served as Senior Managing
Director, Chief Technology Officer and head of the Communications Technologies
Group at Bear Stearns from 1985 until 1996. Mr. Marshall has a B.S. from New
York University and completed the Harvard Management Program.
David H.W. Turner has served as a director since March 2000. He has served
as the Executive Vice President of Reuters America Holdings, Inc. since January
1995 and as the Chief Financial Officer of Reuterspace since January 2000. From
January 1999 until December 1999, Mr. Turner served as the Commercial Director
for Reuters Information. Mr. Turner also served as the Chief Financial Officer
for Reuters America from January 1996 to January 1999. Mr. Turner has a B.Sc.
with Honors, from Saint Andrews University in Scotland.
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<PAGE>
Composition of the Board
Prior to the closing of this offering, we intend to file a revised
certificate of incorporation pursuant to which our board of directors will be
divided into three classes, each of whose members will serve for a staggered
three-year term. Upon the expiration of the term of a class of directors,
directors for that class will be elected for three-year terms at the annual
meeting of stockholders in the year in which their term expires. Our board of
directors has resolved that William Jefferson Marshall and Ronald V. Davis will
be Class I Directors whose terms expire at the 2001 annual meeting of
stockholders, Dennis M. Goett and Edmund A. Hajim will be Class II Directors
whose terms expire at the 2002 annual meeting of stockholders and Joseph P.
Beninati, David H.W. Turner and Jonathan R. Lynch will be Class III Directors
whose terms expire at the 2003 annual meeting of stockholders.
Board Committees
The Audit Committee of the board of directors will review, act on and report
to the board of directors with respect to various auditing and accounting
matters, including the recommendation of our auditors, the scope of the annual
audits, fees to be paid to the auditors, the performance of our independent
auditors and our accounting practices. Messrs. Turner, Hajim and Lynch are
members of the Audit Committee.
The board of directors has a Compensation Committee consisting of Messrs.
Marshall, Lynch and Davis. The Compensation Committee was created in August
1999. The Compensation Committee will recommend, review and oversee the
salaries, benefits and stock option plans for our employees, consultants,
directors and other individuals whom we compensate. The Compensation Committee
will also administer our compensation plans.
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee serves as a member of the board of
directors or compensation committee of any entity that has one or more
executive officers serving as a member of Greenwich Technology Partners' board
of directors or Compensation Committee.
Director Compensation
Directors who are also employees of GTP receive no additional compensation
for their services as directors. Directors who are not employees of GTP will
not receive a fee for attendance at meetings of the board of directors or
committees of the board of directors, but they will be reimbursed for travel
expenses and other out-of-pocket costs incurred in connection with their
attendance at meetings. Pursuant to our 2000 Stock Option and Incentive Plan,
non-employee directors will be granted an option to purchase 25,000 shares of
common stock upon initial election to the board of directors, and an option to
purchase 10,000 shares of common stock upon each subsequent re-election to the
board of directors. The options will vest quarterly over two years.
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<PAGE>
Advisory Board
GTP has also created an informal advisory board. The advisory board's
purposes include assisting GTP with business development and providing counsel
and advice on technology and other business matters to GTP senior management.
The board of directors appoints new members to the advisory board and grants
the new members options to purchase shares of common stock. Existing advisory
board members have each been granted an option to purchase 10,000 shares of
common stock at an exercise price of $0.60 per share. The option grants vest
based on the individual member's attendance at advisory board meetings. The
current members of the advisory board are:
. James P. Cabrera, Managing Partner, Antares Investment Partners
. Kevin McGilloway, CIO and Managing Director, Lehman Brothers
. Graham Albutt, President of Reuters Trading Systems, Reuters America
Holdings Inc.
. Robert Garbarino, Senior Managing Director, Bear Stearns
. Stephen B. Siegel, Chairman and CEO, Insignia/ESG, Inc.
. Clint Heiden, President, Onlineofficesupplies.com
. Pablo Tapia, President and Founder, Apogee Networks, Inc.
. Jeffrey G. Dishner, Managing Director, Starwood Capital Group, LLC
. Anthony M. Carvette, President, StructureTone Inc.
. Joseph A. Cabrera, Executive Managing Director, Insignia/ESG, Inc.
. Greg Berger, President and CEO, Colin Services Systems, Inc.
. Terry Williams, President, T. Williams Consulting, Inc.
Employment Agreements and Severance Arrangements
On December 9, 1997, GTP entered into an employment agreement with Joseph P.
Beninati, GTP's Chief Executive Officer, President and Chairman. The initial
term of the agreement extends until December 31, 2002. The agreement will renew
automatically every year thereafter, unless GTP or Mr. Beninati gives notice of
termination ninety days prior to the end of the initial term or ninety days
prior to the end of any other successive yearly term. In addition, this
employment agreement will terminate automatically if GTP sells substantially
all of its assets, consolidates or merges with another company, dissolves or
liquidates, or upon the public offering of common stock at a price of at least
$5.00 per share and gross proceeds to GTP of at least $10.0 million. The
agreement provides for the payment of salary and of bonuses as GTP may
determine from time to time. The agreement contains a covenant by Mr. Beninati
not to compete with GTP during his employment with us or for three years after
his employment with us ends. GTP may increase Mr. Beninati's annual salary. At
February 1, 2000, Mr. Beninati's annual salary was $270,000. The employment
agreement provides for other benefits to Mr. Beninati including the payment of
finance payments for an automobile Mr. Beninati uses. The employment agreement
does not contain severance provisions.
45
<PAGE>
On December 1, 1998, GTP and Dennis M. Goett, GTP's Senior Vice President,
Chief Financial Officer and Treasurer entered into an employment letter
providing for the terms of Mr. Goett's employment with GTP at a salary of
$100,000 for the first year and $200,000 for the second year. Thereafter, Mr.
Goett's salary will be increased by a percentage equal to the consumer price
index for the New York metropolitan area. At February 1, 1999, Mr. Goett's
annual salary was $200,000. Mr. Goett's employment letter also provides for
reimbursement for car expenses and participation in a bonus plan. Mr. Goett's
employment letter also provides that he will be entitled to receive three
months of salary and benefits if his employment with GTP is terminated without
cause. In connection with his employment, Mr. Goett was issued options to
purchase 500,000 shares of common stock on December 1, 1998 that will vest over
a period ending on December 1, 2001. The corresponding stock option agreement
provides that any unvested options will vest in full upon the acquisition or
initial public offering of GTP or in the event GTP terminates Mr. Goett without
cause. In addition, any unvested shares vest in full upon the termination,
resignation or any other event resulting in Mr. Beninati no longer holding the
full-time position of Chief Executive Officer of GTP. Mr. Goett's employment
letter also states that GTP will issue immediately exercisable options to
purchase up to 33,333 shares of common stock on each of the first three
anniversaries of his employment. Mr. Goett has received additional stock option
awards since December 1, 1998. The employment letter also contains a covenant
by Mr. Goett not to compete with GTP during his employment and for a period of
one year after his employment with GTP ends.
On October 1, 1999, GTP and John Stopper, GTP's Senior Vice President Sales
and Marketing, entered into an employment letter providing for the terms of Mr.
Stopper's employment with GTP at an initial salary of $150,000. At February 1,
2000, Mr. Stopper's annual salary was $150,000. Mr. Stopper's employment letter
also provides for participation in a bonus plan. In connection with his
employment, Mr. Stopper was granted options to purchase 168,600 shares of
common stock. In addition, in 2000 Mr. Stopper also received 112,400 options to
purchase shares of common stock. If, following a change of control of GTP, Mr.
Stopper is terminated without cause within twelve months of starting his
employment with GTP, options to purchase 70,250 shares of common stock will
automatically vest and, in any event, at least 25% of the options granted to
Mr. Stopper will vest. If, following a change in control, Mr. Stopper is
terminated without cause within six months of starting his employment, he will
be entitled to six months' severance pay; if he has been with GTP between six
and twelve months, he will be entitled to nine months' severance pay; and, if
he has been with GTP over twelve months, he will be entitled to twelve months'
severance pay. The employment letter also contains a covenant by Mr. Stopper
not to compete with GTP during his employment and for a period of one year
after his employment with GTP ends.
On January 26, 2000, GTP and Richard Haverly, GTP's Senior Vice President
Operations, entered into an employment letter providing for the terms of Mr.
Haverly's employment with GTP at an initial base salary of $150,000. Mr.
Haverly's employment letter provides for a car allowance and participation in a
bonus plan. Mr. Haverly also was granted options to purchase up to 300,000
shares of common stock. Pursuant to Mr. Haverly's employment letter, if his
employment with GTP is terminated without cause or if Mr. Haverly cannot
continue his employment due to his death or permanent disability prior to his
first anniversary of employment with GTP, 25% of his options automatically will
vest. The employment letter contains a covenant by Mr. Haverly not to compete
with GTP during his employment and for a period of one year after his
employment with GTP ends.
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<PAGE>
Prior to, but in anticipation of, Mr. Haverly's employment with GTP, GTP
allowed Mr. Haverly to purchase 100,000 shares of its series E preferred stock
at $2.11 per share.
On March 13, 2000, GTP and Johna Till Johnson, GTP's Senior Vice President
and Chief Technology Officer, entered into an employment letter providing for
the terms of Ms. Johnson's employment with GTP at an initial base salary of
$150,000. Ms. Johnson will receive a yearly bonus of $12,500 with an additional
bonus of up to $50,000 based on merit. Ms. Johnson's employment letter also
provides for a computer allowance of $2,000 per year. Ms. Johnson was granted
an option to purchase 125,000 shares of common stock. If Ms. Johnson's
employment with GTP is terminated without cause or if Ms. Johnson resigns her
position with GTP for cause prior to her first anniversary with GTP, then 25%
of the options granted to her will automatically vest. The employment letter
also contains a covenant by Ms. Johnson not to compete with GTP during her
employment and for a period of ninety days after her employment with GTP ends.
Executive Compensation
The following table contains information concerning all compensation paid by
GTP during 1999 to our CEO and our two other most highly compensated executive
officers.
<TABLE>
<CAPTION>
Annual Compensation
--------------------
Name and All Other
Principal Position Salary Bonus Securities Underlying Options Compensation(1)
------------------ ---------- --------- ----------------------------- ---------------
<S> <C> <C> <C> <C>
Joseph P. Beninati...... $ 250,375 -- 25,000 $8,748
Chief Executive Officer
Dennis M. Goett(2)...... 108,333 -- 108,333 3,356
Chief Financial Officer
John Stopper(3)......... 61,875 $ 62,500 168,600 --
Senior Vice President
Sales and Marketing
</TABLE>
- --------
(1) These amounts consist of car allowances and 401(k) plan contributions.
(2) Mr. Goett joined GTP on December 1, 1998. Mr. Goett was paid his salary and
car allowance for December 1998 in February 1999.
(3) Mr. Stopper joined GTP in August of 1999 and did not receive salary prior
to that date.
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<PAGE>
Option Grants in 1999
The following table sets forth information regarding grants of stock options
for the year ended December 31, 1999 to our Chief Executive Officer and to each
executive officer named in the Summary Compensation Table. All options were
granted pursuant to our 1997 Stock Plan. We have never granted stock
appreciation rights. The percentage of total options granted to employees in
the last fiscal year is based on options to purchase an aggregate of 2,659,375
shares of common stock granted under our option plans.
<TABLE>
<CAPTION>
Individual Grants(1)
------------------------------------------
Potential Realizable
% of Total Value At Assumed
Number of Options Annual Rates of Stock
Securities Granted to Price Appreciation
Underlying Employees Exercise For Option Term(2)
Options in Fiscal Price Per Expiration ----------------------
Name Granted Year Share Date 5% 10%
- ---- ---------- ---------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Joseph P. Beninati(3)... 25,000 * $0.30 8/24/09 $ 4,750 $ 12,000
Dennis M. Goett(4)...... 50,000 1.9% 0.30 2/1/09 9,500 24,000
Dennis M. Goett(3)...... 25,000 * 0.30 8/24/09 4,750 12,000
Dennis M. Goett(4)...... 33,333 1.3 0.60 12/2/09 12,667 32,000
John Stopper(5)......... 145,000 5.5 0.30 8/24/09 27,550 69,600
John Stopper(5)......... 23,600 * 0.60 12/2/09 8,968 22,656
</TABLE>
- --------
* Less than 1%.
(1) Each option represents the right to purchase one share of common stock.
This table does not reflect GTP's grant of an option to purchase common
stock on February 15, 2000 to Dennis Goett for 66,667 shares. 33,333 of
these options vest on December 1, 2000 and 33,334 vest on December 1, 2001.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. The 5% and
10% assumed annual rates of compounded stock price appreciation are
mandated by rules of the Securities and Exchange Commission and do not
represent our estimate or projection of our future common stock prices.
These amounts represent certain assumed rates of appreciation in the value
of our common stock from the fair market value on the date of grant. Actual
gains, if any, on stock option exercises depend on the future performance
of the common stock. The amounts reflected in the table may not necessarily
be achieved.
(3) These options vest according to the following schedule: 12.5% of the
options vest at the end of each calendar quarter over a two-year period
beginning with the quarter ending on September 30, 1999.
(4) These options were immediately exercisable upon grant.
(5) These options vest according to the following schedule: 25% on the options
vest August 3, 2000, with an additional 2.08% of the option grant vesting
each month after that for 36 consecutive months.
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<PAGE>
Aggregated Option Exercises in Fiscal 1999 and Fiscal Year-End Option Values
The following table provides certain summary information concerning stock
options held as of December 31, 1999 by each of the named executive officers.
The value of unexercised in-the-money options at December 31, 1999, is based on
$ per share, the assumed fair market value of the common stock at December
31, 1999, less the exercise price of the share.
<TABLE>
<CAPTION>
Number of Securities
Underlying Options Value of Unexercised
Unexercised In-the-Money Options
Shares at December 31, 1999 at December 31, 1999(1)
Acquired on Value ------------------------- -------------------------
Name Exercise Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Joseph P. Beninati...... -- 6,250 18,750 $ $
Dennis M. Goett......... 256,250 -- 352,083
John Stopper............ -- -- 168,600
</TABLE>
- --------
(1) There was no public trading market for the common stock as of December 31,
1999. Accordingly, these values have been calculated on the basis of the
initial public offering price $ per share, less the applicable exercise
price per share, multiplied by the number of shares underlying such
options.
Stock Option Plans
2000 Stock Option and Incentive Plan
GTP's 2000 Stock Option and Incentive Plan was adopted by the board of
directors in April 2000 and approved by GTP's stockholders in , 2000, to be
effective upon the closing of this offering. The 2000 Stock Option and
Incentive Plan provides for the grant of stock-based awards to employees,
officers and directors of, and consultants or advisors to, GTP. Under the 2000
Stock Option and Incentive Plan, GTP may grant options that are intended to
qualify as incentive stock options within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended, options not intended to qualify as
incentive stock options, restricted stock and other stock-based awards.
Incentive stock options may be granted only to employees of GTP. A total of
6,000,000 shares of common stock may be issued upon the exercise of options or
other awards granted under the 2000 Stock Option and Incentive Plan after the
completion of this offering. The maximum number of shares with respect to which
awards may be granted to any employee under the 2000 Stock Option and Incentive
Plan may not exceed 1,000,000 shares of common stock during any calendar year.
The 2000 Stock Option and Incentive Plan is administered by the board of
directors and the compensation committee. Subject to the provisions of the 2000
Stock Option and Incentive Plan, each of the board of directors and the
compensation committee has the authority to select the persons to whom awards
are granted and to determine the terms of each award, including the number of
shares of common stock subject to the award. Payment of the exercise price of
an award may be made in cash, shares of common stock, a combination of cash and
stock, a promissory note, or by any other method approved by the board or
compensation committee, consistent with Section 422 of the Internal Revenue
Code and Rule 16b-3 under the Securities Exchange Act of 1934. Unless otherwise
permitted by the board of directors, awards are not assignable or transferable
except by will or the laws of descent and distribution, and, during the
participant's lifetime, may be exercised only by the participant.
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<PAGE>
The board of directors or compensation committee may, in its sole
discretion, amend, modify or terminate any award granted or made under the 2000
Stock Option and Incentive Plan, so long as the amendment, modification or
termination would not materially and adversely affect the participant. The
board of directors or compensation committee may also, in its sole discretion,
accelerate or extend the date on which any options granted under the 2000 Stock
Option and Incentive Plan may be exercised.
1997 Stock Plan
Our 1997 Stock Plan was adopted by the board of directors and approved by
our stockholders on May 1, 1997. We have authorized 9,150,000 shares of common
stock for issuance under this plan. We are authorized to grant to our employees
options to purchase common stock intended to qualify as incentive stock options
under Section 422 of the Internal Revenue Code. In addition, we are authorized
to grant non-qualified stock option to purchase shares of common stock to
employees, consultants and directors. In general, options granted pursuant to
the 1997 Stock Plan are exercisable within ten years of the original grant
date. The board of directors has the discretion to make each option immediately
exercisable or exercisable in installments. Options are not assignable or
transferable except by will or the laws of descent or distribution. As of April
11, 2000, an aggregate of 6,144,978 shares of common stock at a weighted
average price of $0.49 per share were outstanding under the 1997 Stock Plan. No
additional option grants will be made under the 1997 Stock Plan following this
offering.
2000 Employee Stock Purchase Plan
The 2000 Employee Stock Purchase Plan was adopted by the board of directors
in April 2000 and approved by GTP's stockholders in , 2000, to be effective
upon the closing of this offering. The 2000 Employee Stock Purchase Plan
provides for the issuance of a maximum of 850,000 shares of common stock.
The 2000 Employee Stock Purchase Plan is administered by the Compensation
Committee of the board of directors. All employees of GTP whose customary
employment is for more than 32 hours per week and for more than six months in
any calendar year and who have completed more than three months of employment
with GTP on or before the first day of any six-month payment period are
eligible to participate in the 2000 Employee Stock Purchase Plan. Employees who
would own 5% or more of the total combined voting power or value of GTP's stock
immediately after the grant may not participate in the 2000 Employee Stock
Purchase Plan. To participate in the 2000 Employee Stock Purchase Plan, an
employee must authorize GTP to deduct an amount (not less than 1% nor more than
10% of a participant's total cash compensation) from his or her pay during six-
month pay periods. The first payment period will commence following this
offering or a date determined by the board of directors and will end on March
31, 2001. Thereafter, the payment periods will commence on the six-month
periods commencing on July 1 and January 1, respectively, and ending on the
following December 31 and June 30, respectively, of each year, but in no case
will an employee be entitled to purchase more than 1,000 shares in any one
payment period. The exercise price for the option granted in each payment
period is 85% of the lesser of the average market price of the common stock on
the first or last business day of the payment period, in either event rounded
up to the nearest cent to avoid fractions of a dollar other than 1/4, 1/2 and
3/4. If an employee is not a
50
<PAGE>
participant on the last day of the payment period, the employee is not entitled
to exercise his or her option and the amount of his or her accumulated payroll
deductions will be refunded. Options granted under the 2000 Employee Stock
Purchase Plan may not be transferred or assigned. An employee's rights under
the 2000 Employee Stock Purchase Plan terminate upon his or her voluntary
withdrawal from the plan at any time or upon termination of employment. No
options have been granted to date under the 2000 Employee Stock Purchase Plan.
401(k) Plan
GTP has established a tax-qualified employee savings and retirement plan.
Employees must complete two months of service at GTP before they are eligible
to participate on the first day of the month following completion. Employees
may contribute a percentage of their pre-tax compensation and GTP may, in its
discretion from year-to-year, make matching contributions to employees. Amounts
matched by GTP vest over four years.
Limitation of Liability and Indemnification Matters
GTP's amended and restated certificate of incorporation and by-laws provide
that the directors and officers of GTP shall be indemnified by GTP to the
fullest extent permitted by Delaware law, as it now exists or may in the future
be amended, against all expenses and liabilities reasonably incurred in
connection with their service for or on behalf of GTP. In addition, the amended
and restated certificate of incorporation provides that the directors of GTP
will not be personally liable for monetary damages to GTP for breaches of their
fiduciary duty as directors, unless they violated their duty of loyalty to GTP
or its stockholders, acted in bad faith, knowingly or intentionally violated
the law, authorized illegal dividends or redemptions or derived an improper
personal benefit from their action as directors. GTP intends to obtain
insurance which insures the directors and officers of GTP against certain
losses and which insures GTP against certain of its obligations to indemnify
its directors and officers.
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<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We believe that all of the transactions set forth below were made on terms
no less favorable to us than could have been obtained from unaffiliated third
parties. We intend that all future transactions, including loans between us and
our officers, directors, principal stockholders and their affiliates will be
approved by a majority of the board of directors, including a majority of the
independent and disinterested members of the board of directors, and will be on
terms no less favorable to us than those that could be obtained from
unaffiliated third parties.
Sales of Stock and Warrants
Series D Preferred Stock and Warrant financing. On February 1, 1999, we sold
an aggregate of 5,128,205 shares of series D preferred stock for $1.17 per
share for an aggregate purchase price of $6.0 million to seven accredited
investors, and we issued two warrants, which are subject to vesting, to
purchase up to an aggregate of 4,273,504 shares of series D preferred stock at
an exercise price of $1.17 per share to two of those investors. Investors
owning five percent or more of our outstanding capital stock who invested over
$60,000 are as follows:
<TABLE>
<CAPTION>
Series D
Series D Preferred Stock
Investor Preferred Stock Warrant
- -------- --------------- ---------------
<S> <C> <C>
VantagePoint Communications Partners, LP....... 2,849,002 2,849,002
VantagePoint Venture Partners 1996, LP......... 1,424,502 1,424,502
</TABLE>
William Jefferson Marshall, one of our directors, is a partner of
VantagePoint Partners, an affiliate of the above-referenced VantagePoint
entities.
In addition, Dennis Goett, one of our directors and our Senior Vice
President, Chief Financial Officer and Treasurer was issued 85,470 shares of
series D preferred stock and was paid $200,000 for consulting services provided
by CrossRoads Strategy Group, Inc. to GTP in connection with GTP's series D
preferred stock financing.
Series E Preferred Stock financing. GTP issued an aggregate of 10,235,188
shares of its series E preferred stock for $2.11 per share for an aggregate
purchase price of $21.6 million, between September 10, 1999 and January 14,
2000. Dennis Goett invested over $60,000 in this financing as follows:
<TABLE>
<CAPTION>
Series E
Investor Date of Purchase Preferred Stock
- -------- ---------------- ---------------
<S> <C> <C>
Dennis Goett................................. 10/28/99 18,957
1/14/00 14,218
Dennis Goett (through IRA FBO Dennis M.
Goett)...................................... 10/28/99 28,435
</TABLE>
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<PAGE>
Investors owning five percent or more of our outstanding capital stock who
invested over $60,000 in this financing are as follows:
<TABLE>
<CAPTION>
Series E
Investor Date of Purchase Preferred Stock
- -------- ---------------- ---------------
<S> <C> <C>
Chase Venture Capital Associates, L.P......... 9/10/99 4,739,337
10/28/99 473,933
VantagePoint Communications Partners, L.P. ... 9/10/99 947,867
10/28/99 316,114
VantagePoint Venture Partners 1996, L.P....... 9/10/99 473,934
10/28/99 157,820
FG-GTPF....................................... 9/10/99 236,967
</TABLE>
FG-GTPF and four of its affiliates collectively own more than 25% of our
outstanding capital stock and are collectively referred to in this prospectus
as the FG II Entities.
Registration Rights. In connection with the issuance of series D preferred
stock and series E preferred stock, we granted registration rights to the
holders of such stock. See "Description of Capital Stock--Registration Rights."
Agreements with stockholders or their affiliates.
GTP has entered into a Master Services Agreement with Chase Capital
Partners, an affiliate of Chase Venture Capital Associates, L.P., dated
September 28 1999, requiring GTP to provide information technology services to
Chase.
GTP has also provided information technology consulting services to FG II,
an affiliate of the FG II Entities.
In addition, GTP has also entered into a Master Services Agreement with
VantagePoint Venture Partners, an affiliate of the VantagePoint Entities, dated
June 8, 1999, requiring GTP to provide information technology consulting
services to VantagePoint Venture Partners.
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<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information with respect to the beneficial
ownership of our common stock as of April 11, 2000, and as adjusted to reflect
the sale of the shares of common stock offered by us in this offering for:
. each person known by us to beneficially own more than 5% of our common
stock;
. each executive officer named in the Summary Compensation Table;
. each of our directors; and
. all of our executive officers and directors as a group.
Unless otherwise indicated, the address of each beneficial owner listed
below is c/o Greenwich Technology Partners, Inc., 123 Main Street, White
Plains, New York 10601.
The following table gives effect to the shares of common stock issuable
within 60 days of April 11, 2000 upon the exercise of all options and other
rights beneficially owned by the indicated stockholders on that date.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting and investment power
with respect to the shares. Unless otherwise indicated, the persons named in
the table have sole voting and sole investment control with respect to all
shares beneficially owned.
<TABLE>
<CAPTION>
Percentage of Shares
Beneficially Owned(1)
Number of Shares ------------------------------
Beneficial Owner Beneficially Owned Before Offering After Offering
- ---------------- ------------------ --------------- --------------
<S> <C> <C> <C>
Named Executive Officers and
Directors:
Joseph P. Beninati(2)....... 4,695,400 14.6% %
Ronald V. Davis(3).......... 9,962,930 31.0
Dennis M. Goett(4).......... 746,038 2.3
Edmund A. Hajim(5).......... 9,629,930 30.0
Jonathan R. Lynch(6)........ 5,222,645 16.3
William Jefferson
Marshall(7)................ 8,742,716 25.5
John Stopper................ 23,696 *
David H.W. Turner(8)........ 21,223 *
Other 5% Stockholders:
Chase Venture Capital
Associates, L.P.(6)........ 5,222,645 16.3
FG II Entities(9)........... 9,620,555 29.9
Persistence Partners,
L.P.(2).................... 4,486,025 14.0
VantagePoint Entities(10)... 8,733,341 25.5
All directors and executive
officers as a group:
(10 persons)(11)........... 29,524,023 85.3
</TABLE>
- --------
* Less than 1%.
(1) Percentage of beneficial ownership is based on 32,123,072 shares of common
stock outstanding as of April 11, 2000 and shares of common stock
outstanding after this offering.
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<PAGE>
(2) Includes 200,000 shares of common stock gifted to various family trusts
and 4,486,025 shares of common stock owned by Persistence Partners, L.P.
Mr. Beninati is the Chief Executive Officer and majority shareholder of
JoBen Equities, LTD., the general partner of Persistence Partners L.P. and
may be deemed to be a beneficial owner of all the shares held by
Persistence. Also includes 9,375 shares of common stock issuable upon the
exercise of options that are currently exercisable or that are exercisable
within 60 days.
(3) Includes 9,620,555 shares of common stock owned by the FG II Entities, as
described in note 9 below, 333,000 shares of common stock owned by Mr.
Davis and 9,375 shares of common stock issuable upon the exercise of
options that are currently exercisable or that are exercisable within 60
days. Mr. Davis' address is c/o of Davis Capital, L.L.C., 332 Forest
Avenue, Suite 22, Laguna Beach, California 92651.
(4) Includes 64,000 shares of common stock issued to the Dennis M. Goett
Children's Irrevocable Trust as to which Mr. Goett disclaims beneficial
ownership, and 28,435 shares issued to an individual retirement account
for the benefit of Mr. Goett. Also includes 301,041 shares of common stock
issuable upon the exercise of options that are currently exercisable or
that are exercisable within 60 days.
(5) Includes 9,620,555 shares of common stock owned by the FG II Entities, as
described in note 9 below, and 9,375 shares of common stock issuable upon
the exercise of options that are currently exercisable or that are
exercisable within 60 days. Mr. Hajim's address is c/o ING Furman Selz
Asset Management, 230 Park Avenue, 13th Floor, New York, New York 10169.
(6) Includes 9,375 shares of common stock issuable upon the exercise of
options that are currently exercisable or that are exercisable within 60
days. Mr. Lynch is a Principal of and may be deemed to beneficially own
all of the shares held by Chase Venture Capital Associates, L.P. Mr.
Lynch's address is c/o Chase Capital Partners, 380 Madison Avenue, 12th
Floor, New York, New York 10017.
(7) Includes 8,733,341 shares of common stock owned by the VantagePoint
Entities, as described in note 10 below, and 9,375 shares of common stock
issuable upon the exercise of options that are currently exercisable or
become exercisable within 60 days. Mr. Marshall's address is c/o
VantagePoint Venture Partners, One Stamford Landing, Suite 201, Stamford,
Connecticut 06902.
(8) Includes 9,375 shares of common stock issuable upon the exercise of
options that are currently exercisable or that are exercisable within 60
days. Mr. Turner's address is c/o Reuters American Holding Incorporated,
263 Tresser Boulevard, Stamford, Connecticut 06901.
(9) Includes 9,620,555 shares of common stock held by the various FG II
Entities. These entities are all affiliated with FG II. Messrs. Davis and
Hajim are both members of FG II. As a result, Messrs. Davis and Hajim may
be deemed to be beneficial owners of all of the shares held by the FG II
Entities. The address for the FG II Entities is c/o FG II, 20 Dayton
Avenue, Greenwich, Connecticut 06830.
(10) Includes 2,136,752 shares of common stock issuable upon the conversion of
warrants which are currently exercisable or will be exercisable within 60
days. The VantagePoint Entities are controlled by VantagePoint Venture
Partners. Mr. Marshall is a Managing Partner of VantagePoint Venture
Partners and may be deemed to beneficially own all of the shares held by
the VantagePoint Entities. Mr. Marshall has disclaimed beneficial
ownership as to all of the shares owned by the VantagePoint Entities. The
VantagePoint entities address is c/o VantagePoint Venture Partners, One
Stamford Landing, Suite 201, Stamford, Connecticut 06902.
(11) Includes 347,916 shares of common stock issuable upon the exercise of
options which are currently exercisable or which are exercisable within 60
days and 2,136,752 shares of common stock issuable upon the exercise, and
subsequent conversion, of warrants to purchase 2,136,752 shares of common
stock which will become exercisable immediately prior to the offering.
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<PAGE>
DESCRIPTION OF CAPITAL STOCK
General
The following description of our common stock and preferred stock and the
relevant provisions of our amended and restated certificate of incorporation
and by-laws to be effective upon the closing of this offering are summaries and
are qualified by reference to our amended and restated certificate of
incorporation and by-laws, copies of which have been filed with the Securities
and Exchange Commission as exhibits to our registration statement, of which
this prospectus forms a part.
Upon the closing of our offering, our authorized capital stock will consist
of 300,000,000 shares of common stock, par value $0.01 per share, and
20,000,000 shares of preferred stock, par value $0.01 per share.
Common Stock
As of April 11, 2000, there were 32,123,072 shares of our common stock
outstanding on an as- converted basis held of record by 143 stockholders.
Holders of shares of common stock are entitled to one vote for each share held
on all matters submitted to a vote of stockholders and do not have cumulative
voting rights. Accordingly, holders of a majority of the shares of common stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of common stock are entitled to receive ratably
those dividends, if any, as may be declared by our board of directors out of
funds legally available, subject to any preferential dividend rights of any
outstanding preferred stock. Upon the liquidation, dissolution or winding up of
GTP, the holders of our common stock are entitled to receive ratably our net
assets available, if any, after the payment of all debts and other liabilities
and subject to the prior rights of any outstanding preferred stock. Holders of
our common stock have no preemptive, subscription, redemption or conversion
rights. The outstanding shares of our common stock are, and the shares offered
in this offering will be, when issued in consideration for payment, fully paid
and nonassessable. The rights, preferences and privileges of holders of common
stock are subject to, and may be adversely affected by, the rights of the
holders of shares of any series of preferred stock which GTP may designate and
issue in the future.
Preferred Stock
Upon the closing of this offering, there will be no shares of preferred
stock outstanding. Our board of directors will be authorized, without further
stockholder approval, to issue from time to time up to an aggregate of
20,000,000 shares of preferred stock in one or more series and to fix or alter
the designations, preferences, rights and any qualifications, limitations or
restrictions of the shares of each series of preferred stock, including the
dividend rights, dividend rates, conversion rights, voting rights, terms of
redemption, including sinking fund provisions, redemption price or prices,
liquidation preferences and the number of shares constituting any series or
designation of series. For more information, see "--Anti-Takeover Effects of
Provisions of Delaware Law and Our Certificate of Incorporation and By-laws."
Options
We have 9,150,000 shares of our common stock reserved for issuance, upon
exercise of stock options, under our 1997 Stock Plan, 6,000,000 shares of
common stock reserved for issuance, upon
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<PAGE>
exercise of stock options under our 2000 Stock Option and Incentive Plan and
850,000 shares of common stock reserved for issuance under our 2000 Employee
Stock Purchase Plan. As of April 11, 2000, there were outstanding options to
purchase a total of 6,144,978 shares of common stock, of which options to
purchase approximately 2,377,575 will be exercisable upon the closing of this
offering. Since GTP intends to file a registration statement on Form S-8 as
soon as practicable following the closing of this offering, any shares issued
upon exercise of these options will be immediately available for sale in the
public market, subject to the terms of lock-up agreements entered into with the
underwriters. For more information, see "Management--Stock Option Plans" and
"Shares Eligible for Future Sale."
Warrants
We have two outstanding warrants. The warrants entitle the respective
holders the right to purchase up to 2,849,002 and 1,424,502 shares of Series D
preferred stock, convertible into shares of common stock, at an exercise price
of $1.17 per share. Both warrants expire on February 1, 2004. The warrants
become exercisable upon the earliest to occur of (i) the completion of an
initial public offering of GTP's common stock; (ii) the merger or acquisition
of the company where fifty percent of the outstanding capital stock of GTP or
fifty percent of the voting power in GTP is transferred; (iii) a sale or other
disposition of all or substantially all of GTP's assets; and (iv) January 1,
2001. Notwithstanding the above, fifty percent of the warrants vests if a
liquidity event with a value of greater than $4.68 occurs prior to June 30,
2000 and sixty percent of the warrants vests if the event occurs prior to
December 31, 2000, with the remaining rights pursuant to the warrants
terminating.
Registration Rights
Pursuant to the terms of a registration rights agreement, beginning six
months after the closing of this offering, the holders of 17,585,615 shares of
common stock and shares of common stock issuable upon the exercise of warrants
to purchase common stock will be entitled to demand registration rights with
respect to the registration of their shares under the Securities Act of 1933.
GTP is not required to effect more than one registration pursuant to these
demand registration rights. In addition, these holders will be entitled to
piggyback registration rights with respect to the registration of their shares
under the Securities Act of 1933, subject to various limitations. Further, at
any time after GTP becomes eligible to file a registration statement on Form S-
3, these holders may require us to file one or more registration statements
under the Securities Act of 1933 on Form S-3 with respect to their shares of
common stock. These registration rights are subject to conditions and
limitations, among them the right of the underwriters of an offering to limit
the number of shares of common stock held by security holders with registration
rights to be included in a registration. Generally, we are required to bear all
of the expenses of all of these registrations, except underwriting discounts
and selling commissions. Registration of any shares of common stock held by
security holders with registration rights would result in shares becoming
freely tradeable without restriction under the Securities Act of 1933
immediately upon effectiveness of the registration.
Anti-Takeover Effects of Provisions of Delaware Law and Our Certificate of
Incorporation and By-laws
Upon completion of this offering, GTP will be subject to the provisions of
Section 203 of the General Corporation Law of Delaware. Section 203 prohibits a
publicly held Delaware corporation
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<PAGE>
from engaging in a "business combination" with an "interested stockholder" for
a period of three years after the date of the transaction in which the person
became an interested stockholder, unless the business combination is approved
in a prescribed manner. A "business combination" includes mergers, asset sales
and other transactions resulting in a financial benefit to the interested
stockholder. Subject to certain exceptions, an "interested stockholder" is a
person who, together with affiliates and associates, owns, or within the last
three years did own, 15% or more of the corporation's voting stock.
GTP's amended and restated certificate of incorporation provides for the
division of the board of directors into three classes as nearly equal in size
as possible with staggered three-year terms. See "Management--Composition of
the Board." In addition, GTP's amended and restated certificate of
incorporation provides that directors may be removed only for cause by the
affirmative vote of the holders of 75% of the shares of capital stock of GTP
entitled to vote. Under the amended and restated certificate of incorporation,
any vacancy on the board of directors, including a vacancy resulting from an
enlargement of the board, may only be filled by vote of a majority of the
directors then in office. The likely effect of the classification of the board
of directors and the limitations on the removal of directors and filling of
vacancies is an increase in the time required for the stockholders to change
the composition of the board of directors. For example, in general, at least
two annual meetings of the stockholders will be necessary for stockholders to
effect a change in a majority of the members of the board of directors.
The amended and restated certificate of incorporation also provides that,
after the closing of this offering, any action required or permitted to be
taken by the stockholders of GTP at an annual meeting or special meeting of
stockholders may only be taken if it is properly brought before the meeting and
may not be taken by written action in lieu of a meeting. The amended and
restated certificate of incorporation further provides that special meetings of
stockholders may only be called by the board of directors, the Chairman of the
board of directors or the President of GTP. Under the restated by-laws, in
order for any matter to be considered "properly brought" before a meeting, a
stockholder must comply with certain requirements regarding advance notice to
GTP. These provisions could have the effect of delaying until the next
stockholders' meeting stockholder actions which are favored by the holders of a
majority of GTP's outstanding voting securities. These provisions may also
discourage another person or entity from making a tender offer for GTP's common
stock, because such person or entity, even if it acquired a majority of the
outstanding voting securities of GTP, would be able to take action as a
stockholder (such as electing new directors or approving a merger) only at a
duly called stockholders meeting, and not by written consent.
The Delaware General Corporation Law provides generally that the affirmative
vote of a majority of the shares entitled to vote on any matter is required to
amend a corporation's certificate of incorporation or by-laws, unless a
corporation's certificate of incorporation or by-laws, as the case may be,
require a greater percentage. The amended and restated certificate of
incorporation requires the affirmative vote of the holders of at least 75% of
the shares of capital stock of GTP issued and outstanding and entitled to vote
to amend or repeal any of the foregoing provisions of the amended and restated
certificate of incorporation, and to reduce the number of authorized shares of
common stock and preferred stock. The restated by-laws also may be amended or
repealed by a majority vote of the board of directors subject to any
limitations set forth in the restated by-laws, and amendment
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<PAGE>
by stockholders of provisions described above requires the affirmative vote of
the holders of at least 75% of the shares of capital stock of GTP issued and
outstanding and entitled to vote. The 75% stockholder vote would be in addition
to any separate class vote that might in the future be required pursuant to the
terms of any series preferred stock that might be outstanding at the time any
such amendments are submitted to stockholders.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock will be ChaseMellon
Shareholder Services, L.L.C.
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<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
Sales of substantial amounts of our common stock in the public market could
adversely affect prevailing market prices of our common stock. Furthermore,
since only 100,000 shares will be available for sale shortly after this
offering because of certain contractual and legal restrictions on resale
described below, sales of substantial amounts of common stock in the public
market after these restrictions lapse could adversely affect the prevailing
market price and our ability to raise equity capital in the future.
Upon the closing of this offering, we will have outstanding an aggregate of
shares of our common stock, assuming no exercise of outstanding options and
warrants. Of these shares, all shares sold in this offering will be freely
tradeable without restriction or further registration under the Securities Act
unless such shares are purchased by "affiliates" as that term is defined in
Rule 144 under the Securities Act. The following table illustrates the shares
eligible for sale in the public market:
<TABLE>
<CAPTION>
Number of Shares Date
---------------- ----
<C> <S>
100,000 After the date of this prospectus, freely tradeable shares
sold in this offering and shares saleable under Rule 144(k)
that are not subject to the 180-day lock-up
2,544,934 After 90 days from the date of this prospectus, shares
saleable under Rule 144 or Rule 701 that are not subject to
the 180-day lock-up
28,693,324 After 180 days from the date of this prospectus, the 180-
day lock-up is released and these shares are saleable under
Rule 144 (subject, in some cases, to volume limitations),
Rule 144(k) or Rule 701
3,429,748 After 180 days from the date of this prospectus, restricted
securities that are held for less than one year are not yet
saleable under Rule 144
</TABLE>
Lock-up Agreements
Holders of approximately 90% of our outstanding shares have signed lock-up
agreements under which they agreed not to transfer or dispose of, directly or
indirectly, any shares of our common stock or any securities convertible into
or exercisable or exchangeable for shares of our common stock for 180 days
after the date of this prospectus.
Rule 144
In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this prospectus, a person who has beneficially owned shares of our
common stock for at least one year would be entitled to sell within any three-
month period a number of shares that does not exceed the greater of:
. 1% of the number of shares of common stock then outstanding, which will
equal approximately shares immediately after the offering; or
. the average weekly trading volume of the common stock on the Nasdaq
National Market during the four calendar weeks preceding the filing of a
notice on Form 144 with respect to the sale.
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<PAGE>
Sales under Rule 144 are also subject to certain manner-of-sale provisions,
notice requirements and the availability of current public information about
us.
Rule 144(k)
Under Rule 144(k), a person who is not one of our affiliates at any time
during the 90 days preceding a sale and who has beneficially owned the shares
proposed to be sold for at least two years, including the holding period of any
prior owner other than an affiliate, is entitled to sell the shares without
complying with the manner of sale, public information, volume limitation or
notice provisions of Rule 144. Therefore, unless otherwise contractually
restricted, "144(k)" shares may be sold immediately upon completion of this
offering.
Rule 701
In general, under Rule 701 of the Securities Act as currently in effect,
each of our employees, consultants or advisors who purchased shares from us in
connection with a compensatory stock plan or other written agreement is
eligible to resell the shares 90 days after the effective date of this offering
in reliance on Rule 144, but without compliance with certain restrictions,
including the holding period, contained in Rule 144.
Registration Rights
After this offering, the holders 17,585,615 shares of common stock and
shares of common stock issuable upon the exercise of warrants to purchase
common stock will be entitled to certain rights with respect to the
registration of those shares under the Securities Act. For more information,
see "Description of Capital Stock--Registration Rights." Once registered, these
shares of our common stock become freely tradeable without restriction under
the Securities Act. These sales could have a material adverse effect on the
trading price of our common stock.
Stock Plans
We intend to file a registration statement under the Securities Act covering
16,000,000 shares of common stock reserved for issuance under our 1997 Stock
Plan, 2000 Stock Option and Incentive Plan and 2000 Employee Stock Purchase
Plan and the shares reserved for issuance upon exercise of outstanding non-plan
options. We expect this registration statement to be filed and to become
effective as soon as practicable after the effective date of this offering.
As of April 11, 2000, options to purchase 6,144,978 shares of common stock
were outstanding. All of these shares will be eligible for sale in the public
market from time to time, subject to vesting provisions, Rule 144 volume
limitations applicable to our affiliates and, in the case of some options, the
expiration of lock-up agreements.
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<PAGE>
CERTAIN UNITED STATES FEDERAL TAX
CONSIDERATIONS FOR NON-UNITED STATES HOLDERS
General
This section summarizes some of the material U.S. Federal tax consequences
to holders of common stock that are "non-U.S. holders." In general, you are a
non-U.S. holder if you are:
. an individual that is a nonresident alien of the U.S.;
. a corporation organized or created under non-U.S. law;
. an estate that is not taxable in the U.S. on its worldwide income; or
. a trust that is either not subject to primary supervision over its
administration by a U.S. Court or not subject to the control of a U.S.
person with respect to substantial trust decisions.
If a partnership holds common stock, the tax treatment of a partner will
generally depend upon the status of the partner and upon the activities of the
partnership. If you are a partner of a partnership holding common stock, we
suggest that you consult your tax advisor.
This discussion does not address all aspects of U.S. Federal taxation, and
in particular is limited in the following ways:
. The discussion only covers you if you hold your common stock as a capital
asset (that is, for investment purposes), and if you do not have a
special tax status, such as your status as an insurance company, tax-
exempt organization, financial institution, broker-dealer, U.S.
expatriate, or holder of our securities as part of a "straddle," "hedge"
or "conversion transaction."
. The discussion does not cover tax consequences that depend upon your
particular tax situation in addition to your ownership of the common
stock.
. The discussion is based on provisions of the United States Internal
Revenue Code of 1986, as amended (the "Code"), existing and proposed
Treasury regulations thereunder and administrative and judicial
interpretations thereof, all as of the date hereof. Changes in the law
may change the tax treatment of holding the common stock.
. The discussion does not cover state, local or foreign law.
. We have not requested a ruling from the IRS on the tax consequences of
owning the common stock. As a result, the IRS could disagree with
portions of this discussion.
If you are considering buying common stock, we suggest that you consult your
tax advisors about the United States Federal, state, local and non-U.S. income
and other tax consequences of holding the common stock in your particular
situation.
Distributions
Distributions paid on the shares of common stock generally will constitute
dividends for U.S. Federal income tax purposes to the extent paid from our
current or accumulated earnings and profits, as determined under U.S. Federal
income tax principles. Dividends paid to you generally will be subject to
United States withholding tax at a 30% rate or, if a tax treaty applies, a
lower rate specified by the treaty, unless you receive the dividends in
connection with a trade or business you
62
<PAGE>
conduct in the United States. To receive a reduced treaty rate, you must
furnish to us or our paying agent a duly completed Form 1001 or Form W-8BEN (or
substitute form) certifying to your qualification for the reduced rate.
Currently, withholding generally is imposed on the gross amount of a
distribution, regardless of whether we have sufficient earnings and profits to
cause the distribution to be a dividend for U.S. Federal income tax purposes.
However, withholding on distributions made after December 31, 2000, may be on
less than the gross amount of the distribution if the distribution exceeds a
reasonable estimate of our accumulated and current earnings and profits.
In order to claim an exemption from withholding on the ground that the
dividends are effectively connected with a U.S. trade or business that you
conduct in the United States, you must provide to us or our paying agent a duly
completed Form 4224 or Form W-8ECI (or substitute form) certifying your
exemption and complying with other applicable certification and disclosure
requirements. However, dividends exempt from U.S. withholding because they are
effectively connected generally are subject to U.S. Federal income tax on a net
income basis at the regular graduated United States Federal income tax rates.
These rules might be altered by an applicable tax treaty. You should consult
your tax advisors about your entitlement, if any, to benefits under an
applicable tax treaty. If you are a corporation, any effectively connected
dividends received by you may also, under certain circumstances, be subject to
an additional "branch profits tax" at a 30% rate or a lower rate specified by
an applicable income tax treaty.
Under current U.S. Treasury regulations, dividends paid before January 1,
2001, to an address outside the United States are presumed to be paid to a
resident of the country of address, unless the payor has knowledge to the
contrary, for purposes of the withholding discussed above and for purposes of
determining the applicability of a tax treaty rate. However, U.S. Treasury
regulations applicable to dividends paid after December 31, 2000 eliminate this
presumption, subject to certain transition rules.
For dividends paid after December 31, 2000, you generally will be subject to
U.S. backup withholding tax at a 31% rate under the backup withholding rules
described below, rather than at the 30% or reduced tax treaty rate, as
described above, unless you comply with certain Internal Revenue Service
("IRS") certification or documentary evidence procedures. Certain changes to
these rules apply to dividend payments made after December 31, 2000 to certain
non-U.S. holders or foreign intermediaries. You should consult your own tax
advisor concerning the effect, if any, of the rules affecting post-December 31,
2000 dividends on your possible investment in common stock.
You may obtain a refund of any excess amounts withheld by filing an
appropriate claim for refund along with the required information with the IRS.
Gain on Disposition of Common Stock
You generally will not be subject to U.S. Federal income tax with respect to
gain recognized on a sale or other disposition of the common stock unless one
of the following applies:
. If the gain is effectively connected with a trade or business you conduct
in the United States (and, if a tax treaty applies, is attributable to a
permanent establishment you maintain in the United States) you will,
unless an applicable treaty provides otherwise, be taxed on your net
63
<PAGE>
gain on the sale under regular graduated U.S. Federal income tax rates. If
you are a foreign corporation, you may also, under certain circumstances,
be subject to an additional branch profits tax at a 30% rate, unless an
applicable income tax treaty provides for a lower rate and you demonstrate
your qualification for such rate.
. If you are an individual and are present in the United States for 183 or
more days in the taxable year of the sale or other disposition and
certain other conditions are met, you will be subject to a flat 30% tax
on your gain from the sale, which may be offset by certain U.S. capital
losses.
. If we are or have been a "U.S. real property holding corporation" for
U.S. Federal income tax purposes at any time during the shorter of the
five-year period ending on the date of the disposition or the period
during which you held the common stock, and certain other conditions
apply, you may be taxable in the U.S. on your gain from a sale of the
common stock pursuant to the effectively connected rules described above.
We believe that we never have been, are not currently and are not likely
in the future to become a U.S. real property holding corporation for U.S.
Federal income tax purposes.
Federal Estate Tax
If you are an individual non-U.S. holder who is not a citizen or resident,
as defined for U.S. Federal estate tax purposes, common stock held by you at
the time of your death will be included in your gross estate for U.S. Federal
estate tax purposes, and may be subject to U.S. Federal estate tax, unless an
applicable estate tax treaty provides otherwise.
Information Reporting and Backup Withholding Tax
We must report annually to the IRS the amount of dividends paid to you and
the tax withheld with respect to the dividends. These requirements apply even
if withholding was not required on payments to you. Pursuant to an applicable
tax treaty, that information may also be made available to the tax authorities
in your country of residence.
Backup withholding tax generally may be imposed at the rate of 31% on
certain payments to holders that are not "exempt recipients", and that fail to
furnish certain required information. Backup withholding generally will not
apply to dividends paid before January 1, 2001 to a non-U.S. holders at an
address outside the United States (unless the payor has actual knowledge that
the payee is a U.S. holder) or to dividends paid to non-U.S. holders that are
subject to the 30% withholding discussed above, or that are not so subject
because a tax treaty reduces or eliminates such withholding. See the discussion
under "Distributions" above for rules regarding reporting requirements to avoid
backup withholding on dividends paid after December 31, 2000.
As a general matter, information reporting and backup withholding will not
apply to a payment to you by or through a foreign office of a foreign broker of
the proceeds of a sale of common stock effected outside the U.S. However,
information reporting requirements, but not backup withholding, will apply to a
payment by as through a foreign office of a broker of such proceeds if the
broker:
. is a U.S. person for U.S. Federal income tax purposes;
. is a foreign person that derives 50% or more of its gross income for
certain periods from the conduct of a trade or business in the U.S.;
64
<PAGE>
. is a "controlled foreign corporation" as defined in the Code; or
. is a foreign partnership with certain U.S. connections (for payments made
after December 31, 2000).
Information reporting requirements will not apply in the above cases if the
broker has documentary evidence in its records that you are a non-U.S. holder
and certain conditions are met or you otherwise establish an exemption.
Payment of the proceeds of a sale of common stock by or through a U.S.
office of a broker is subject to both backup withholding and information
reporting unless you certify to the payor in the manner required as to your
non-U.S. status under penalties of perjury or otherwise establish an exemption.
Amounts withheld under the backup withholding rules do not constitute a
separate U.S. Federal income tax. Rather, any amounts withheld under the backup
withholding rules will be refunded or allowed as a credit against your U.S.
Federal income tax liability, if any, provided the required information or
appropriate claim for refund is filed with the IRS.
The foregoing discussion is only a summary of certain U.S. Federal income
and estate tax consequences of the ownership, sale or other disposition of
common stock by non-U.S. holders. You are urged to consult your own tax advisor
with respect to the particular tax consequences to you of ownership and
disposition of common stock, including the effect of any state, local, foreign
or other tax laws and any applicable income or estate tax treaties.
65
<PAGE>
UNDERWRITING
Under the terms and subject to the conditions contained in an underwriting
agreement dated , 2000, we have agreed to sell to the underwriters named
below, for whom Credit Suisse First Boston Corporation, First Union Securities,
Inc., Friedman, Billings, Ramsey & Co., Inc. and ING Barings LLC are acting as
representatives, the following respective numbers of shares of common stock:
<TABLE>
<CAPTION>
Number
Underwriter of Shares
----------- ---------
<S> <C>
Credit Suisse First Boston Corporation............................
First Union Securities, Inc.......................................
Friedman, Billings, Ramsey & Co., Inc.............................
ING Barings LLC...................................................
---
Total...........................................................
===
</TABLE>
The underwriting agreement provides that the underwriters are obligated to
purchase all the shares of common stock in the offering if any are purchased,
other than those shares covered by the over-allotment option described below.
The underwriting agreement also provides that if an underwriter defaults, the
purchase commitments of non-defaulting underwriters may be increased or the
offering of common stock may be terminated.
We have granted to the underwriters a 30-day option to purchase on a pro
rata basis up to additional shares at the initial public offering price
less the underwriting discounts and commissions. The option may be exercised
only to cover any over-allotments of common stock.
The underwriters propose to offer the shares of common stock initially at
the public offering price on the cover page of this prospectus and to selling
group members at that price less a concession of $ per share. The
underwriters and selling group members may allow a discount of $ per share
on sales to other broker/dealers. After the initial public offering, the public
offering price and concession and discount to dealers may be changed by the
representatives.
The following table summarizes the compensation and estimated expenses we
will pay.
<TABLE>
<CAPTION>
Per Share Total
----------------------------- -----------------------------
Without With Without With
Over-allotment Over-allotment Over-allotment Over-allotment
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Underwriting Discounts
and Commissions paid by
us..................... $ $ $ $
Expenses payable by us.. $ $ $ $
</TABLE>
The underwriters have informed us that they do not expect discretionary
sales to exceed 5% of the shares of common stock being offered.
66
<PAGE>
We have agreed that we will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the Securities and
Exchange Commission a registration statement under the Securities Act of 1933
relating to, any shares of our common stock or securities convertible into or
exchangeable or exercisable for any of our common stock, or publicly disclose
the intention to make any such offer, sale, pledge, disposition or filing,
without the prior written consent of Credit Suisse First Boston Corporation for
a period of 180 days after the date of this prospectus except issuances
pursuant to the exercise of employee stock options outstanding on the date
hereof.
Our officers and directors and holders of approximately 85% of our
outstanding stock have agreed that they will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, any shares of our
common stock or securities convertible into or exchangeable or exercisable for
any shares of our common stock, enter into a transaction that would have the
same effect, or enter into any swap, hedge or other arrangement that transfers,
in whole or in part, any of the economic consequences of ownership of our
common stock, whether any such aforementioned transaction is to be settled by
delivery of our common stock or other such securities, in cash or otherwise, or
publicly disclose the intention to make any such offer, sale, pledge or
disposition, or enter into any such transaction, swap, hedge or other
arrangement, without, in each case, the prior written consent of Credit Suisse
First Boston Corporation for a period of 180 days after the date of this
prospectus.
The underwriters have reserved for sale at the initial public offering price
up to shares of the common stock for employees, directors and certain other
persons associated with us who have expressed an interest in purchasing common
stock in the offering. The number of shares available for sale to the general
public in the offering will be reduced to the extent these persons purchase
such reserved shares. Any reserved shares not so purchased will be offered by
the underwriters to the general public on the same terms as the other shares.
We have agreed to indemnify the underwriters against liabilities under the
Securities Act, or contribute to payments which the underwriters may be
required to make in that respect.
We have applied to list the shares of common stock on The Nasdaq Stock
Market's National Market under the symbol "GTPI".
Prior to this offering, there has been no public market for the common
stock. The initial public offering price will be determined by negotiation
between us and the underwriters. The principal factors to be considered in
determining the public offering price include the following:
. the information included in this prospectus and otherwise available to
the representatives;
. market conditions for initial public offerings;
. the history and the prospects for the industry in which we will compete;
. the ability of our management;
. the prospects for our future earnings;
. the present stage of our development and our current financial condition;
. the general condition of the securities markets at the time of this
offering; and
. the recent market prices of, and the demand for, publicly traded common
stock of generally comparable companies.
67
<PAGE>
The representatives may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids in accordance with Regulation
M under the Securities Exchange Act of 1934.
. Over-allotment involves syndicate sales in excess of the offering size,
which creates a syndicate short position.
. Stabilizing transactions permit bids to purchase the underlying security
so long as the stabilizing bids do not exceed a specified maximum.
. Syndicate covering transactions involve purchases of the common stock in
the open market after the distribution has been completed in order to
cover syndicate short positions.
. Penalty bids permit the representatives to reclaim a selling concession
from a syndicate member when the common stock originally sold by the
syndicate member is purchased in a stabilizing or syndicate covering
transaction to cover syndicate short positions.
These stabilizing transactions, syndicate covering transactions and penalty
bids may cause the price of the common stock to be higher than it would
otherwise be in the absence of these transactions. These transactions may be
effected on The Nasdaq National Market or otherwise and, if commenced, may be
discontinued at any time.
A prospectus in electronic format may be made available on the web sites
maintained by one or more of the underwriters participating in this offering.
The representatives may agree to allocate a number of shares to underwriters
for sale to their online brokerage account holders. Internet distributions will
be allocated by the underwriters that will make Internet distributions on the
same basis as other allocations.
68
<PAGE>
NOTICE TO CANADIAN RESIDENTS
Resale Restrictions
The distribution of the common stock in Canada is being made only on a
private placement basis exempt from the requirement that we prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of common stock are effected. Accordingly, any resale of the common
stock in Canada must be made in accordance with applicable securities laws
which will vary depending on the relevant jurisdiction, and which may require
resales to be made in accordance with available statutory exemptions or
pursuant to a discretionary exemption granted by the applicable Canadian
securities regulatory authority. Purchasers are advised to seek legal advice
prior to any resale of the common stock.
Representations of Purchasers
Each purchaser of common stock in Canada who receives a purchase
confirmation will be deemed to represent to us and the dealer from whom such
purchase confirmation is received that (i) such purchaser is entitled under
applicable provincial securities laws to purchase such common stock without the
benefit of a prospectus qualified under such securities laws, (ii) where
required by law, that such purchaser is purchasing as principal and not as
agent, and (iii) such purchaser has reviewed the text above under "Resale
Restrictions".
Rights of Action (Ontario Purchasers)
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers must rely on other
remedies that may be available, including common law rights of action for
damages or rescission or rights of action under the civil liability provisions
of the U.S. federal securities laws.
Enforcement of Legal Rights
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be
possible for Canadian purchasers to effect service of process within Canada
upon the issuer or such persons. All or a substantial portion of the assets of
the issuer and such persons may be located outside of Canada and, as a result,
it may not be possible to satisfy a judgment against the issuer or such persons
in Canada or to enforce a judgment obtained in Canadian courts against such
issuer or persons outside of Canada.
Notice to British Columbia Residents
A purchaser of common stock to whom the Securities Act (British Columbia)
applies is advised that such purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any
common stock acquired by such purchaser pursuant to this offering. Such report
must be in the form attached to British Columbia Securities Commission Blanket
Order BOR #95/17, a copy of which may be obtained from us. Only one such report
must be filed in respect of common stock acquired on the same date and under
the same prospectus exemption.
69
<PAGE>
Taxation and Eligibility for Investment
Canadian purchasers of common stock should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the common
stock in their particular circumstances and with respect to the eligibility of
the common stock for investment by the purchaser under relevant Canadian
legislation.
LEGAL MATTERS
The validity of the common stock will be passed upon for us by Testa,
Hurwitz & Thibeault, LLP, Boston, Massachusetts. Testa, Hurwitz & Thibeault,
LLP, using the name High Street Investors 2000, and attorneys at the firm hold
in the aggregate 70,631 shares common stock. Cravath, Swaine & Moore, New York,
New York, has represented the underwriters in this offering.
EXPERTS
The financial statements and schedule included in this prospectus and
elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission a registration
statement on Form S-1 (including exhibits and schedules), under the Securities
Act with respect to the common stock to be sold in this offering. This
prospectus does not contain all of the information set forth in that
registration statement. For further information about Greenwich Technology
Partners and the shares of common stock to be sold in the offering, please
refer to this registration statement. For additional information, please refer
to the exhibits that have been filed with our registration statement on Form S-
1.
You may read and copy all or any portion of the registration statement or
any other information Greenwich Technology Partners files at the Securities and
Exchange Commission's public reference room at 450 Fifth Street, N.W.,
Washington, D.C., 20549. You can request copies of these documents upon payment
of a duplicating fee, by writing to the Securities and Exchange Commission.
Please call the Securities and Exchange Commission at 1-800-SEC-0330 for
further information about the public reference rooms. Greenwich Technology
Partners' Securities and Exchange Commission filings, including the
registration statement, will also be available to you on the Securities and
Exchange Commission's web site (http://www.sec.gov). As a result of this
offering, we will become subject to the information and reporting requirements
of the Securities Exchange Act of 1934, and will file periodic reports, proxy
statements and other information with the Securities and Exchange Commission.
We intend to furnish our stockholders annual reports containing audited
financial statements and to make available to our stockholders quarterly
reports for the first three quarters of each year containing unaudited
financial information.
70
<PAGE>
GREENWICH TECHNOLOGY PARTNERS, INC.
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Public Accountants................................. F-2
Balance Sheets as of December 31, 1998 and 1999.......................... F-3
Statements of Operations for the period from inception (March 14, 1997)
through December 31, 1997 and for the years ended December 31, 1998 and
December 31, 1999....................................................... F-4
Statements of Shareholders' Equity for the period from inception (March
14, 1997) through December 31, 1997 and for the years ended December 31,
1998 and December 31, 1999.............................................. F-5
Statements of Cash Flows for the period from inception (March 14, 1997)
through December 31, 1997 and for the years ended December 31, 1998 and
December 31, 1999....................................................... F-6
Notes to Financial Statements............................................ F-7
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of
Greenwich Technology Partners, Inc.:
We have audited the accompanying balance sheets of Greenwich Technology
Partners, Inc. (a Delaware corporation) as of December 31, 1998 and 1999 and
the related statements of operations, shareholders' equity and cash flows for
the period from inception (March 14, 1997) through December 31, 1997 and for
the years ended December 31, 1998 and 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Greenwich Technology
Partners, Inc. as of December 31, 1998 and 1999, and the results of its
operations and its cash flows for the period from inception through December
31, 1997 and for the years ended December 31, 1998 and 1999 in conformity with
accounting principles generally accepted in the United States.
Arthur Andersen LLP
Stamford, Connecticut
February 2, 2000
F-2
<PAGE>
GREENWICH TECHNOLOGY PARTNERS, INC.
BALANCE SHEETS
As of December 31, 1998 and 1999
<TABLE>
<CAPTION>
1998 1999
----------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents
(Note 2)................. $ 695,182 $ 17,568,371
Accounts receivable (net
of allowance for doubtful
accounts of $97,038 in
1998 and $216,615 in 1999).. 1,644,636 4,244,590
Inventory................. 27,280 2,118
Advances and other current
assets................... 79,416 66,718
----------- ------------
Total current assets.... 2,446,514 21,881,797
Property, plant and equip-
ment, at cost.............. 921,474 1,927,275
Less:
Accumulated depreciation
and amortization......... (103,910) (496,519)
----------- ------------
Property, plant and equip-
ment, net (Note 4)......... 817,564 1,430,756
Other long-term assets...... 19,796 109,394
----------- ------------
Total assets............ $ 3,283,874 $ 23,421,947
=========== ============
LIABILITIES AND SHAREHOLD-
ERS' EQUITY
Current liabilities:
Current maturities of in-
stallment loan and capi-
talized lease obliga-
tion..................... $ 10,536 $ 11,569
Accounts payable.......... 573,480 610,359
Accrued expenses.......... 501,463 1,606,371
Other current liabili-
ties..................... 64,706 107,125
----------- ------------
Total current liabili-
ties................... 1,150,185 2,335,424
Installment loan and capi-
talized lease obligation... 43,994 32,426
Shareholders' equity:
Preferred Stock--Series A,
par value $.01,
Authorized and
outstanding shares
4,100,000, at par........ 41,000 41,000
Preferred Stock--Series B,
par value $.01,
Authorized and
outstanding shares
5,723,000 in 1998 and
5,533,031 in 1999, at
par...................... 57,230 55,330
Preferred Stock--Series C,
par value $.01,
Authorized and
outstanding shares
4,216,697 in 1998 and
4,206,666 in 1999, at
par...................... 42,167 42,067
Preferred Stock--Series D,
par value $.01,
Authorized shares
9,487,179, outstanding
5,213,675, at par........ -- 52,137
Preferred Stock--Series E,
par value $.01,
Authorized shares
11,848,342, outstanding
9,807,139, at par........ -- 98,072
Common stock--Par value
$.01, Authorized shares
54,824,782, issued
177,000 in 1998 and
1,019,849 in 1999, at
par...................... 1,770 10,198
Additional paid-in capi-
tal...................... 4,437,225 29,648,470
Accumulated deficit....... (2,489,697) (8,840,077)
Less--177,000 shares of
common stock held in
treasury in 1999, at
cost..................... -- (53,100)
----------- ------------
Total shareholders' eq-
uity................... 2,089,695 21,054,097
----------- ------------
Total liabilities and
shareholders' equity... $ 3,283,874 $ 23,421,947
=========== ============
</TABLE>
The accompanying notes to the financial statements are an integral part of
these statements.
F-3
<PAGE>
GREENWICH TECHNOLOGY PARTNERS, INC.
STATEMENTS OF OPERATIONS
For the period from inception (March 14, 1997) through December 31, 1997 and
for the
years ended December 31, 1998 and December 31, 1999
<TABLE>
<CAPTION>
1997 1998 1999
--------- ----------- -----------
<S> <C> <C> <C>
Revenues:
Professional services................... $ 471,844 $ 4,251,734 $12,539,406
Provisioning............................ 357,180 1,775,943 1,655,522
--------- ----------- -----------
Total revenues........................ 829,024 6,027,677 14,194,928
Cost of revenues:
Professional services................... 305,707 2,473,266 7,703,602
Provisioning............................ 307,983 1,361,295 1,259,149
--------- ----------- -----------
Total cost of revenues................ 613,690 3,834,561 8,962,751
--------- ----------- -----------
Gross profit.............................. 215,334 2,193,116 5,232,177
Sales and marketing expenses.............. 174,651 1,762,397 5,734,535
General and administrative expenses....... 446,684 2,138,862 5,407,923
Depreciation and amortization expense..... 210,297 196,603 747,146
--------- ----------- -----------
Operating loss............................ (616,298) (1,904,746) (6,657,427)
Other income, net......................... 377 30,970 307,047
--------- ----------- -----------
Loss before income taxes.................. (615,921) (1,873,776) (6,350,380)
Provision for income taxes................ -- -- --
Net loss.................................. $(615,921) $(1,873,776) $(6,350,380)
========= =========== ===========
Net loss per share
Basic................................... $ (3.51) $ (11.92) $ (21.34)
========= =========== ===========
Diluted................................. $ (3.51) $ (11.92) $ (21.34)
========= =========== ===========
Weighted average shares outstanding
Basic................................... 177,000 177,000 315,643
========= =========== ===========
Diluted................................. 177,000 177,000 315,643
========= =========== ===========
</TABLE>
The accompanying notes to the financial statements are an integral part of
these statements.
F-4
<PAGE>
GREENWICH TECHNOLOGY PARTNERS, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
For the period from inception (March 14, 1997) through December 31, 1997 and
for the years ended
December 31, 1998 and December 31, 1999
<TABLE>
<CAPTION>
Common
Stock Held in Additional Total
Preferred Preferred Preferred Preferred Preferred Common Treasury, at Paid-In Accumulated Shareholders'
Stock (A) Stock (B) Stock (C) Stock (D) Stock (E) Stock Cost Capital Deficit Equity
--------- --------- --------- --------- --------- ------- ------------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of
177,000 shares
of common
stock........... $ -- $ -- $ -- $ -- $ -- $ 1,770 $ -- $ 298,230 $ -- $ 300,000
Issuance of
4,100,000 shares
of preferred
stock (A)....... 41,000 -- -- -- -- -- -- 967,916 -- 1,008,916
Issuance of
5,723,000 shares
of preferred
stock (B)....... -- 57,230 -- -- -- -- -- 67,770 -- 125,000
Net loss........ -- -- -- -- -- -- -- -- (615,921) (615,921)
------- ------- ------- ------- ------- ------- -------- ----------- ----------- -----------
Balance December
31, 1997......... 41,000 57,230 -- -- -- 1,770 -- 1,333,916 (615,921) 817,995
Issuance of
4,216,697 shares
of preferred
stock (C)....... -- -- 42,167 -- -- -- -- 3,103,309 -- 3,145,476
Net loss........ -- -- -- -- -- -- -- -- (1,873,776) (1,873,776)
------- ------- ------- ------- ------- ------- -------- ----------- ----------- -----------
Balance December
31, 1998......... 41,000 57,230 42,167 -- -- 1,770 -- 4,437,225 (2,489,697) 2,089,695
Conversion of
189,969 shares
to common
stock........... -- (1,900) -- -- -- 1,900 -- -- -- --
Conversion of
10,031 shares to
common stock.... -- -- (100) -- -- 100 -- -- -- --
Issuance of
5,213,675 shares
of preferred
stock (D)....... -- -- -- 52,137 -- -- -- 5,644,926 -- 5,697,063
Issuance of
9,807,139 shares
of preferred
stock (E)....... -- -- -- -- 98,072 -- -- 19,468,044 -- 19,566,116
Options
Exercised....... -- -- -- -- -- 6,428 -- 198,264 -- 204,692
Purchase of
Treasury
shares.......... -- -- -- -- -- -- (53,100) -- -- (53,100)
Employee loans.. -- -- -- -- -- -- -- (99,989) -- (99,989)
Net loss........ -- -- -- -- -- -- -- -- (6,350,380) (6,350,380)
------- ------- ------- ------- ------- ------- -------- ----------- ----------- -----------
Balance December
31, 1999......... $41,000 $55,330 $42,067 $52,137 $98,072 $10,198 $(53,100) $29,648,470 $(8,840,077) $21,054,097
======= ======= ======= ======= ======= ======= ======== =========== =========== ===========
</TABLE>
The accompanying notes to the financial statements are an integral part of
these statements.
F-5
<PAGE>
GREENWICH TECHNOLOGY PARTNERS, INC.
STATEMENTS OF CASH FLOWS
For the period from inception (March 14, 1997) through December 31, 1997 and
for the years ended December 31, 1998 and December 31, 1999
<TABLE>
<CAPTION>
1997 1998 1999
---------- ----------- -----------
<S> <C> <C> <C>
Cash flows for operating activities
Net loss................................ $ (615,921) $(1,873,776) $(6,350,380)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization......... 210,297 196,603 747,146
Loss on asset sales................... -- -- 87,024
(Increase) in accounts receivable..... (109,483) (1,493,036) (2,599,954)
(Increase) /Decrease in advances...... (2,240) (77,176) 12,698
(Increase) /Decrease in inventory..... (16,789) (7,658) 25,162
(Increase) in other long term assets.. (2,079) (13,271) (89,598)
Increase in accounts payable.......... 44,365 492,706 36,878
Increase in other current liabili-
ties................................. 21,764 8,282 45,065
Increase in accrued expenses.......... 95,656 405,807 1,104,908
---------- ----------- -----------
Net cash used in operating activities... (374,430) (2,361,519) (6,981,051)
Cash flows from investing activities
Purchase of property, plant and
equipment.............................. (58,696) (817,203) (1,710,565)
Sale of assets.......................... -- -- 260,552
---------- ----------- -----------
Net cash used in investing activities... (58,696) (817,203) (1,450,013)
Cash flows from financing activities
Proceeds from installment loan.......... -- 33,989 --
Net proceeds from issuance of preferred
stock (A).............................. 1,008,916 -- --
Net proceeds from issuance of preferred
stock (B).............................. 125,000 -- --
Net proceeds from issuance of preferred
stock (C).............................. -- 3,145,476 --
Net proceeds from issuance of preferred
stock (D).............................. -- -- 5,697,063
Net proceeds from issuance of preferred
stock (E).............................. -- -- 19,566,116
Issuance of common stock................ -- -- 104,709
Purchase of treasury stock.............. -- -- (53,100)
Payments on capitalized lease obligation
and installment loan................... (682) (5,669) (10,535)
---------- ----------- -----------
Net cash provided by financing
activities............................. 1,133,234 3,173,796 25,304,253
---------- ----------- -----------
Net increase (decrease) in cash......... 700,108 (4,926) 16,873,189
Cash, beginning of period............... -- 700,108 695,182
---------- ----------- -----------
Cash, end of period..................... $ 700,108 $ 695,182 $17,568,371
========== =========== ===========
Supplemental cash flow information
Cash paid for interest.................. $ 1,486 $ 1,317 $ 6,230
Cash paid for income taxes.............. $ 1,200 $ 2,893 $ 10,747
</TABLE>
The accompanying notes to the financial statements are an integral part of
these statements.
F-6
<PAGE>
GREENWICH TECHNOLOGY PARTNERS, INC.
NOTES TO FINANCIAL STATEMENTS
For the period from inception (March 14, 1997) through December 31, 1997 and
for the years ended December 31, 1998 and December 31, 1999
1. THE COMPANY
Antares Networks, Inc. ("Antares"), a Delaware corporation, was incorporated
on March 14, 1997. During 1997, Antares acquired all of the assets and
liabilities of Datamax Inc. The acquisition was accounted for as a purchase
whereby all assets and liabilities were recorded at their fair values at the
date of purchase. Goodwill of approximately $300,000 from this purchase was
amortized over 12 months. On August 22, 1997, the name was changed to Greenwich
Technology Partners, Inc. ("GTP").
GTP is a provider of a new category of network-focused professional services
called infrastructure architecture. GTP is comprised of one business segment.
As infrastructure architects, GTP focuses on the design, implementation,
security, performance and management of network infrastructures that have
become the foundation of the emerging e-business economy.
GTP's headquarters is in Stamford, Connecticut, with offices serving markets
in Baltimore, Boston, Chicago, Hartford, New York City, Northern New Jersey and
Washington, D.C.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make various estimates
and assumptions. Actual results could differ from those estimates.
Revenue Recognition
We derive revenue from professional services and provisioning. Professional
services revenue is only recognized when a contract arrangement exists,
services have been rendered, the fees are fixed or determinable and
collectibility is reasonably assured. Revenues are recognized for time-and-
materials contracts as services are provided. Revenues from fixed-fee contracts
are recognized as services are provided upon the achievement of specified
milestones. Revenue is recognized on partially completed milestones in
proportion to the costs incurred for that milestone and only to the extent that
an irrevocable right to the revenue exists. Costs incurred under time-and-
materials and fixed-fee contracts are recognized as incurred which generally is
in the same period that revenue is recorded. Provisioning refers to the sale of
hardware and software. Revenue from provisioning is recognized when equipment
is delivered to customers. For the year ended December 31, 1998, 39% of the
total revenue was derived from one customer and for the year ended December 31,
1999, 18% of the total revenue was derived from a different customer. In 1998
and 1999, GTP's five largest clients represented 68% and 51% of total revenues,
respectively.
F-7
<PAGE>
GREENWICH TECHNOLOGY PARTNERS, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
For the period from inception (March 14, 1997) through December 31, 1997 and
for the years ended December 31, 1998 and December 31, 1999
Cash and Cash Equivalents
Cash and cash equivalents represents highly liquid investments with original
maturities of three months or less.
On July 30, 1999, GTP entered into a revolving $2.5 million credit facility
with First Union National Bank. This facility is available to finance working
capital requirements. The financing is collateralized by a pledge of $1.0
million held in a depository account with First Union. This amount represents
restricted cash. There were no amounts outstanding under this facility at
December 31, 1999. When borrowings are outstanding under the revolving credit
facility, interest rates are based upon the London Interbank Offered Rate plus
a premium ranging from 1.75% to 3.75%.
Inventories
Inventory represents non-client specific parts and hardware utilized in
installation and service. Inventories are valued at the lower of cost or
market, determined on the first in, first out (FIFO) basis.
Property, Plant and Equipment
Property, plant and equipment are carried at cost and depreciated and
amortized over their estimated useful lives using the straight-line method.
Leasehold improvements are depreciated over the term of the lease or the life
of the asset, as appropriate, using the straight-line method. GTP reviews the
carrying value of long lived assets for impairment when events indicate that
the carrying value may not be recoverable. GTP evaluates property, plant and
equipment for impairment by comparing the carrying value to undiscounted future
net pre-tax cash flows. If impairment is identified, the asset-carrying amount
is adjusted to fair value. Expenditures for maintenance and repairs are charged
to operations as incurred.
Deferred Income Taxes
Deferred income taxes are determined utilizing a liability approach. The
statement of operations effect is derived from changes in deferred income taxes
on the balance sheet. This approach gives consideration to future tax
consequences associated with differences between financial accounting and tax
bases of assets and liabilities. We reduce deferred income tax assets by a
valuation allowance when it is more likely than not that they will not be
realized.
Fair Value of Financial Instruments
The carrying amounts of cash and cash equivalents, accounts and other
receivables, and accounts payable approximate fair value due to the short-term
maturity of these instruments.
F-8
<PAGE>
GREENWICH TECHNOLOGY PARTNERS, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
For the period from inception (March 14, 1997) through December 31, 1997 and
for the years ended December 31, 1998 and December 31, 1999
Concentration of Credit Risk
Trade accounts receivable potentially subject the Company to a
concentration of credit risk. GTP performs an ongoing credit evaluation of
customers and generally does not require collateral on accounts receivable.
GTP maintains allowances for potential credit losses and such losses have been
assessed within management's expectations.
Reclassification
Certain prior year amounts have been reclassified to conform to the current
year presentation.
3. NET LOSS PER SHARE
Net loss per share is calculated in accordance with SFAS No. 128, "Earnings
per Share". Basic net loss per common share is computed based upon the average
number of common shares outstanding. Diluted net loss per common share
includes dilutive stock options, warrants and convertible securities. Dilutive
net loss per common share is equivalent to basic loss per share as stock
options, warrants and convertible preferred stock are antidilutive. The
following table summarizes the calculation of earnings per share:
<TABLE>
<CAPTION>
Inception to
December 31, Year Ended December 31,
------------ --------------------------
1997 1998 1999
------------ ------------ ------------
<S> <C> <C> <C>
Net loss........................... $ (615,921) $ (1,873,776) $ (6,350,380)
Preferred stock dividend require-
ments............................. (6,193) (236,131) (386,307)
---------- ------------ ------------
Net loss applicable to common
stockholders for basic and
diluted loss per share.......... (622,114) (2,109,907) (6,736,687)
Weighted average shares for basic
and diluted loss per share...... 177,000 177,000 315,643
Basic loss per share from net
loss.............................. (3.51) (11.92) (21.34)
Diluted loss per share from net
loss.............................. $ (3.51) $ (11.92) $ (21.34)
</TABLE>
In addition, the potential dilutive effect of 594,000, 2,002,025 and
3,744,626 employee stock options outstanding at December 31, 1997, 1998 and
1999 were not included in the calculation of loss per share as the effects
were antidilutive. The potential dilutive effect of preferred stock
convertible into common stock of 9,823,000, 14,039,700 and 28,860,511
outstanding at December 31, 1997, 1998 and 1999 were not included in the
calculation of loss per share as the effects were antidilutive.
F-9
<PAGE>
GREENWICH TECHNOLOGY PARTNERS, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
For the period from inception (March 14, 1997) through December 31, 1997 and
for the years ended December 31, 1998 and December 31, 1999
4. PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
December 31,
Estimated -------------------
Life (years) 1998 1999
------------ -------- ----------
<S> <C> <C> <C>
Furniture and fixtures...................... 10 $ 86,773 $ 155,219
Computers and software...................... 3 691,138 1,536,402
Office equipment............................ 5 39,252 66,017
Leasehold improvements...................... (lease term) 69,410 134,736
Autos....................................... 3 34,901 34,901
-------- ----------
921,474 1,927,275
Less: Accumulated depreciation and amortiza-
tion....................................... 103,910 496,519
-------- ----------
$817,564 $1,430,756
======== ==========
Capitalized lease amounts included in
above...................................... $ 19,864 $ 14,682
</TABLE>
In 1999, GTP recorded a charge of $207,000 to reduce the carrying amount of
certain computer software assets to be disposed of to zero. This charge was
recorded as depreciation expense in the Statement of Operations.
5. COMMITMENTS, INSTALLMENT LOANS AND CONTINGENCIES
Greenwich Technology Partners is obligated under various operating leases
and subleases for its corporate offices, operations facilities and various
equipment used in the business. The facilities leases and subleases are for
various terms and provide for escalations and landlord cost reimbursements
consistent with applicable market conditions. Capitalized lease commitments
relate to GTP's telephone system. The following is a schedule of the future
minimum lease payments under all operating leases and capitalized lease
commitments:
<TABLE>
<CAPTION>
Operating Capitalized
Fiscal Year Leases Leases
----------- --------- -----------
<S> <C> <C>
2000.................................................. $585,366 $ 6,406
2001.................................................. 297,762 6,406
2002.................................................. 48,550 5,106
2003.................................................. 8,261 --
-------- --------
$939,939 17,918
========
Less: interest factor................................. (2,127)
--------
Present value of total capitalized lease obligation... 15,791
Less: Current Portion................................. (5,195)
--------
Long term portion of capitalized lease obligation..... $ 10,596
========
</TABLE>
Payments associated with GTP's capitalized lease obligation for the years
ending December 31, 1998 and 1999 were $4,687 and $4,750, respectively. In
addition, payments associated with operating lease obligations for the year
ending December 1998 and 1999 totaled $179,877 and $698,515, respectively.
F-10
<PAGE>
GREENWICH TECHNOLOGY PARTNERS, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
For the period from inception (March 14, 1997) through December 31, 1997 and
for the years ended December 31, 1998 and December 31, 1999
At December 31, 1998 and 1999, GTP had an outstanding installment loan of
$33,987 and $28,204 relating to the purchase of automobiles. This installment
loan has an interest rate of 9.7%. The loan is payable monthly through 2002.
In the ordinary course of business, GTP is involved in various claims and
lawsuits. Ultimate liability with respect to such contingencies is not
presently determinable, but in the opinion of management it will not have a
material adverse effect on the results of operations or financial position of
GTP.
6. INCOME TAXES
The provision for income taxes represents only certain state and local
minimum amounts due to GTP's net operating loss. Deferred income taxes are
determined based on the temporary differences between the financial reporting
and tax bases of assets and liabilities. The current federal and state tax
rates in effect during the year are used to calculate the temporary
differences. At December 31, 1998 and 1999, temporary differences exist for the
allowance for doubtful accounts and depreciation expense. The net operating
loss ("NOL") carryforward is valued as a deferred tax asset. A valuation
allowance has been established to offset the net deferred tax asset, as the
realizability of the asset is uncertain. These carryforwards begin to expire in
2012 and 2002, for federal and state purposes, respectively. Future utilization
of the NOL may be subject to certain limitations imposed by the Internal
Revenue Code.
At December 31, 1998 and 1999, the federal and state NOL carryforwards are
as follows:
<TABLE>
<CAPTION>
1998 1999
----------- -----------
<S> <C> <C>
Federal.............................................. $ 2,031,647 $ 8,122,130
State................................................ 2,064,564 8,122,130
</TABLE>
7. CAPITAL STOCK
Greenwich Technology Partners has issued five classes of preferred stock
which include series A preferred stock, series B preferred stock, series C
preferred stock, series D preferred stock and series E preferred stock. The
preferred stockholders may, at the option of the holder, convert their
preferred shares into fully paid shares of GTP's common stock. All shares of
preferred stock automatically convert into shares of common stock immediately
upon the closing of a public offering of GTP pursuant to an effective
registration statement under the Securities Act of 1933 with a per share price
of at least $5.50 and at least $30.0 million in net proceeds to GTP. The number
of shares of common stock to which a holder of preferred stock shall be
entitled upon conversion is determined using the applicable "Conversion Rate"
for that series of preferred stock. As of December 31, 1999, each share of
preferred stock is convertible into one share of common stock. During 1999,
189,969 shares of series B preferred stock and 10,031 shares of series C
preferred stock were converted into 200,000 shares of GTP's common stock.
F-11
<PAGE>
GREENWICH TECHNOLOGY PARTNERS, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
For the period from inception (March 14, 1997) through December 31, 1997 and
for the years ended December 31, 1998 and December 31, 1999
In connection with the issuance of series D preferred stock, warrants for
the purchase of 4,273,504 additional shares of series D preferred stock at
$1.17 per share were issued. The fair value of these warrants was de minimus at
the date of issuance. These warrants vest at the earliest of the following: (i)
January 1, 2001 or (ii) the effective date on which GTP elects an initial
public offering or (iii) on the effective day of any consolidation or merger of
GTP with any other corporation, subject to certain provisions or (iv) the sale
of substantially all of GTP's assets. In the event GTP completes a public
offering of its shares before December 31, 2000, the number of shares the
warrant entitles the holder to purchase reduces by 40%. In the event offering
is completed on or before June 30, 2000, the reduction of shares is 50%.
Holders of series A, series B and series C preferred stock are entitled to
cumulative cash dividends at a rate of 9% of the original issue price. GTP has
not declared cumulative dividends on common stock and preferred stock from
inception through December 31, 1999. The amount of dividends undeclared on the
series A preferred stock, series B preferred stock and series C preferred stock
at December 31, 1999 were $190,060, $21,639 and $416,932, respectively. Upon
conversion of preferred stock into common stock, preferred stockholders are no
longer entitled to any of these undeclared dividends.
Greenwich Technology Partners has a share repurchase agreement with certain
of its stockholders by which GTP shall have an irrevocable option to purchase
the shares from certain terminated employee stockholders or the estate of
deceased stockholders. A stockholder voluntarily separated from GTP during 1998
and in accordance with the above agreement, during 1999 GTP purchased 177,000
shares from the individual for $53,100.
8. STOCK INCENTIVE PLAN
Greenwich Technology Partners' board of directors has authorized the
issuance of up to 7.0 million shares at December 31, 1999 that may be awarded
as stock options under GTP's 1997 Stock Plan (the "Plan") to employees,
directors and consultants of GTP. Stock options, granted at fair market value,
under the Plan extend for 10 years from the date of grant and generally vest
ratably over a two to four year period. The estimated fair market value of a
common share is determined by GTP as of the quarter-end immediately preceding
the date an employee elects to exercise the option.
F-12
<PAGE>
GREENWICH TECHNOLOGY PARTNERS, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
For the period from inception (March 14, 1997) through December 31, 1997 and
for the years ended December 31, 1998 and December 31, 1999
GTP accounts for stock options by applying the guidelines of the Accounting
Principles Board "Accounting for Stock Issued to Employees" (APB 25). No
compensation cost has been recognized for its employee stock option grants as
the options have been granted at fair market value as determined by GTP's board
of directors. Had stock options been accounted for based on the fair value
method of Statement of Financial Accounting Standards "Accounting for Stock-
Based Compensation" (SFAS 123), the impact on the net loss would have been as
follows:
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------
Inception to
date 1997 1998 1999
------------ ----------- -----------
<S> <C> <C> <C>
Net loss:
As reported........................... $(615,921) $(1,873,776) $(6,350,380)
Pro forma............................. (633,088) (1,960,178) (6,439,766)
Basic and Diluted net loss per share
As reported........................... $ (3.51) $ (11.92) $ (21.34)
Pro forma............................. $ (3.61) $ (12.41) $ (21.63)
</TABLE>
The fair market value of options is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted average
assumptions used for grants during the years ended December 31, 1997, 1998 and
1999, respectively, dividend yield of 0% for all periods; expected volatility
of 0% for all periods; risk-free interest rates ranging from 5.96% to 6.69% in
1997 and 4.17% to 5.73% in 1998 and 4.70% to 6.44% in 1999; and an expected
option life of four years for all periods.
Option award activity from the period of inception through December 31, 1997
and during 1998 and 1999 are summarized as follows:
<TABLE>
<CAPTION>
Weighted
Average
Shares Exercise Price
--------- --------------
<S> <C> <C>
Inception, March 14, 1997
Granted.......................................... 594,000 0.50
--------- ----
Outstanding at December 31, 1997................... 594,000 0.50
Granted.......................................... 1,413,525 0.30
Forfeited........................................ (5,500) 0.30
--------- ----
Outstanding at December 31, 1998................... 2,002,025 0.30
Granted.......................................... 2,659,375 0.35
Exercised........................................ (642,849) 0.32
Forfeited........................................ (273,925) 0.30
--------- ----
Outstanding at December 31, 1999................... 3,744,626 0.33
========= ====
Exercisable at December 31,1999.................... 1,471,410 0.31
========= ====
</TABLE>
F-13
<PAGE>
GREENWICH TECHNOLOGY PARTNERS, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
For the period from inception (March 14, 1997) through December 31, 1997 and
for the years ended December 31, 1998 and December 31, 1999
On December 3, 1998, GTP's Board of Director's elected to re-price the
exercise price of all 1997 option grants from $0.50 to $0.30. The purpose of
the re-pricing was to price options at the fair market value of the common
stock on the date of grant.
The following table summarizes information on stock options outstanding at
December 31, 1999:
<TABLE>
<CAPTION>
Weighted Average
Exercise Price Options Remaining Life of Options
(per share) Outstanding Options Outstanding Exercisable
-------------- ----------- ------------------- -----------
<S> <C> <C> <C>
$0.30 3,659,374 8.9 yrs 1,446,410
$0.60 85,252 9.9 yrs 25,000
--------- ---------
3,744,626 1,471,410
</TABLE>
9. EMPLOYEE BENEFIT PLAN
Greenwich Technology Partners established a salary deferral plan (the
"Plan") pursuant to Section 401(k) of the Internal Revenue Code, as amended.
Effective January 1, 1998, all employees that are at least age 21 are eligible
to join the Plan. After January 1, 1998, employees are eligible to join the
Plan if they are at least age 21 and have completed two months of service with
GTP. GTP will match 25% of the first 6% of pay the employee contributes to the
Plan through salary deferral. These matching contributions vest ratably over
four years. GTP's contributions to the Plan during 1998 and 1999 were $16,492
and $81,511, respectively.
10. RELATED PARTIES
During 1999, GTP paid fees of $200,000 and 85,470 shares of series D
preferred stock to a senior officer of GTP for his services rendered prior to
becoming an officer of GTP. The payments were made in connection with services
rendered as a consultant in the offering of the series D preferred stock.
In December 1999, GTP loaned certain employees $99,989 in connection with
the exercise of stock options. The employees have signed demand notes payable
to GTP in exchange for the loans, which bear a 5.5% rate of interest. The note
receivable is reported as a reduction of additional paid in capital.
11. SUBSEQUENT EVENT
On January 14, 2000, GTP completed the sale in a third closing of additional
shares of series E preferred stock with proceeds totaling $903,183. The
financing resulted in the issuance of 428,049 shares of series E preferred
stock at $2.11 per share.
F-14
<PAGE>
[INSIDE BACK COVER ARTWORK]
The color artwork will be a half circle of elipse:
containing technical alliance partner logos around the
words "The Greenwich Technology Partners Solution."
<PAGE>
[LOGO OF GREENWICH TECHNOLOGY PARTNERS]
<PAGE>
Schedule II--Valuation and Qualifying Accounts
Allowance for Doubtful Accounts
Greenwich Technology Partners, Inc.
<TABLE>
<CAPTION>
Inception
(March 14,
1997) Years ended
through December 31,
December 31, ----------------
1997 1998 1999
------------ ------- --------
(in thousands)
<S> <C> <C> <C>
Balance at beginning of period................... $ 0 $20,000 $ 97,038
Additions charged to Statement of Operations..... 25,204 95,433 166,194
Deductions....................................... 5,204 18,395 46,617
------- ------- --------
Balance at end of period......................... $20,000 $97,038 $216,615
======= ======= ========
</TABLE>
S-1
<PAGE>
PART II
Information Not Required in Prospectus
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth the estimated costs and expenses, other than
the underwriting discounts and commissions, payable by the registrant in
connection with the sale of the common stock being registered.
<TABLE>
<CAPTION>
Amount
to be
Paid
-------
<S> <C>
SEC registration fee................................................ $14,520
NASD filing fee..................................................... 6,000
Nasdaq National Market listing fee.................................. *
Legal fees and expenses............................................. *
Accounting fees and expenses........................................ *
Printing and engraving expenses..................................... *
Transfer agent and Registrar fees and expenses...................... *
Miscellaneous....................................................... *
-------
Total............................................................. $ *
=======
</TABLE>
--------
* To be provided by amendment
Item 14. Indemnification of Directors and Officers
The Delaware General Corporation Law and GTP's charter and by-laws provide
for indemnification of GTP's directors and officers for liabilities and
expenses that they may incur in such capacities. In general, directors and
officers are indemnified with respect to actions taken in good faith in a
manner reasonably believed to be in, or not opposed to, the best interests of
GTP, and with respect to any criminal action or proceeding, actions that the
indemnitee had no reasonable cause to believe were unlawful. Reference is made
to GTP's amended and restated charter and by-laws filed as Exhibits 3.3 and
3.5, respectively.
The Underwriting Agreement provides that the underwriters are obligated,
under certain circumstances, to indemnify directors, officers and controlling
persons of GTP against certain liabilities, including liabilities under the
Securities Act. Reference is made to the form of Underwriting Agreement filed
as Exhibit 1.1 hereto.
GTP intends to apply for a directors' and officers' insurance policy.
Item 15. Recent Sales of Unregistered Securities
Common Stock
GTP initially issued 3,000 shares of its common stock to Antares Networks,
Inc. for an aggregate consideration of $2,000 on April 30, 1997.
II-1
<PAGE>
On December 9, 1997, GTP issued 177,000 shares of its common stock to
Vincent Yenko, as described more fully below.
On February 1, 1999, Persistence Partners, L.P. converted 189,696 of its
Series B preferred stock and 10,031 shares of its Series C preferred stock into
common stock on a one-to-one basis for a total of 200,000 shares of common
stock.
On March 1, 2000, GTP issued 98,250 and 79,250 shares of its common stock to
John Rothenberger and G. Richard Rothenberger, respectively, in connection with
the acquisition of Aspire Technology Group, Inc. The fair market value of the
common stock at that time was $.60 per share.
On April 13, 2000, GTP issued 500,000 shares of its common stock to Michael
Waresk in connection with the merger of Navigator Technologies, Inc. into GTP.
Preferred Stock and Warrants.
On December 9, 1997, GTP issued 5,723,000 shares of its series B preferred
stock and 177,000 shares of its common stock to Persistence Partners, L.P. and
Vincent Yenko, respectively, in consideration of these two parties' ownership,
equal to all of the outstanding interests, in Antares Networks, Inc.
Also on December 9, 1997, GTP issued 4,100,000 shares of its series A
preferred stock to two investors for an aggregate purchase price of $1,025,000.
On June 25, 1998, GTP issued an aggregate of 3,060,000 shares of its series
C preferred stock to two investors for an aggregate purchase price of
$2,295,000. On August 7, 1998, GTP issued an aggregate of 823,364 shares of its
series C preferred stock to two investors for an aggregate purchase price of
$617,523. On October 26, 1998, GTP issued 333,333 shares of its series C
preferred stock to one investor for an aggregate purchase price of $249,999.75.
On February 1, 1999, GTP issued 5,213,675 shares of its series D preferred
stock to eight investors for an aggregate purchase price of $6,099,999.75.
Included in these figures is a grant of 85,470 shares of series D preferred
stock that GTP issued to Dennis M. Goett as partial payment for services
rendered by Mr. Goett's company, CrossRoads Strategy Group, Inc. to GTP in
connection with the financing. GTP also issued two warrants to purchase up to
an aggregate of 4,273,504 shares of series D preferred stock at $1.17 per
share. The warrants become exercisable upon the earliest to occur of (i) the
initial public offering of GTP's common stock below; (ii) the merger or
acquisition of the company where fifty percent of the outstanding capital stock
of GTP or fifty percent of the voting power in GTP is transferred; (iii) a sale
or other disposition of all or substantially all of GTP's assets; and (iv)
January 1, 2001. Notwithstanding the above, fifty percent of the warrants will
vest if a liquidity event with a value of greater than $4.68 occurs prior to
June 30, 2000 and sixty percent of the warrants will vest prior to December 21,
2000, with the remaining rights pursuant to the warrants terminating.
On September 10, 1999, GTP issued 7,582,940 shares of its series E preferred
stock to six investors for an aggregate purchase price of $16,000,003.40. On
October 28, 1999, GTP sold an additional 2,224,199 shares of its series E
preferred stock for an aggregate purchase price of $4,693,059.89. On January
14, 2000, GTP sold 428,049 shares of its series E preferred stock for an
aggregate purchase price of $903,183.39.
II-2
<PAGE>
No underwriters were used in the foregoing transactions. All sales of
securities described above were made in reliance upon the exemption from
registration provided by Section 3(a)(9) and Section 4(2) of the Securities Act
of 1933 (and/or Regulation D promulgated thereunder) for transactions by an
issuer not involving a public offering.
Grants and Exercises of Stock Options
Since April 21, 1997 through April 11, 2000, GTP has granted stock options
to purchase 8,499,891 shares of common stock with exercise prices ranging from
$.30 to $2.00 per share, to employees, directors, and consultants pursuant to
our 1997 Stock Plan. Of these options, 1,957,012 have been exercised for an
aggregate consideration of $767,254.60 as of April 11, 2000. The issuance of
these options and the common stock issuable upon the exercise of the options
was exempt either pursuant to Rule 701, as a transaction pursuant to a
compensatory benefit plan, or pursuant to Section 4(2), as a transaction by an
issuer not involving a public offering.
II-3
<PAGE>
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits.
<TABLE>
<CAPTION>
Number Description
------ -----------
<C> <S>
1.1* Form of Underwriting Agreement
2.1 Stock Purchase Agreement by and among the Registrant and Aspire
Technology Group, Inc. dated as of March 1, 2000
2.2 Asset Purchase Agreement by and among the Registrant and NetGain, LLC
dated as of March 31, 2000
2.3* Agreement and Plan of Merger and Reorganization by and between the
Registrant, Navigator Technologies, Inc. and Michael Waresk dated as of
April 13, 2000.
3.1 Amended and Restated Certificate of Incorporation
3.2 Certificate of Amendment to Amended and Restated Certificate of
Incorporation
3.3* Form of Amended and Restated Certificate of Incorporation to be in
effect upon the closing of this offering
3.4 By-laws
3.5* Certificate of Merger of Navigator and the Registrant dated as of April
13, 2000.
3.6* Form of Amended and Restated By-laws to be in effect upon the closing
of this offering
4.1* Specimen Common Stock certificate
4.2* See Exhibits 3.1, 3.2, 3.3, 3.4 and 3.5 for provisions defining the
rights of holders of common stock of the registrant
4.3* Form of Series D Preferred Stock Purchase Warrant
5.1* Opinion of Testa, Hurwitz & Thibeault, LLP
10.1 Loan Agreement with First Union National Bank dated July 30, 1999
10.2 Security Agreement with First Union National Bank dated July 30, 1999
10.3 Promissory Note to First Union National Bank dated July 30, 1999
10.4 1997 Stock Option Plan as amended
10.5* 2000 Stock Incentive Plan
10.6* 2000 Employee Stock Purchase Plan
10.7 Investment Agreement, dated December 9, 1997
10.8 Investment Agreement (Series C Preferred Stock), dated June 25, 1998
10.9 Investment Agreement (Series C Preferred Stock), dated August 7, 1998
10.10 Investment Agreement (Series D Preferred Stock), dated February 1, 1999
10.11 Series E Preferred Stock Investment Agreement, dated September 10, 1999
10.12 Amendment No. 1 to the Series E Preferred Stock Investment Agreement
dated January 14, 2000
10.13 Amended and Restated Shareholders' Agreement, dated September 10, 1999
10.14 Amended and Restated Registration Rights Agreement, dated September 10,
1999
10.15* Sublease Agreement for the Registrant dated March 22, 2000.
10.16 Employment Agreement dated December 9, 1997 with Joseph P. Beninati
10.17 Employment Letter dated December 1, 1998 with Dennis M. Goett
10.18 Amendment to Employment Letter with Dennis M. Goett
10.19 Employment Letter dated October 1, 1999 with John Stopper
10.20 Employment Letter dated January 26, 2000 with Richard Haverly
10.21 Employment Letter dated March 13, 2000 with Johna Till Johnson
10.22 Letter Agreement dated July 27, 1999 with Credit Suisse First Boston
Corporation
10.23 Letter Agreement regarding Indemnification dated July 27, 1999 with
Credit Suisse First Boston Corporation
10.24 Shareholders' Agreement between John Rothenberger and G. Richard
Rothenberger and the Registrant, dated March 1, 2000
10.25* Shareholders' Agreement between Michael Waresk and the Registrant dated
April 13, 2000.
10.26* Escrow Agreement between Michael Waresk, Navigator Technologies, Inc.
and the Registrant.
11.1* Statement re: Computation of Basic and Diluted Net Loss Per Share
21.1 Subsidiaries
23.1 Consent of Arthur Andersen, LLP
23.2* Consent of Testa, Hurwitz & Thibeault, LLP (included in Exhibit 5.1)
24.1 Power of Attorney (See Signature Page)
27.1 Financial Data Schedule
</TABLE>
- --------
* To be supplied by amendment.
+ Confidential treatment requested for certain portions of this Exhibit
pursuant to Rule 406 promulgated under the Securities Act.
II-4
<PAGE>
(b) Financial Statement Schedules.
Schedule II--Valuation and Qualifying Accounts
Item 17. Undertakings
The undersigned registrant hereby undertakes to provide to the underwriter
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424 (b)(1) or (4), or
497(h) under the Securities Act of 1933, shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in White Plains, New York,
on this 13th day of April, 2000.
Greenwich Technology Partners, Inc.
/s/ Joseph P. Beninati
By: _________________________________
Joseph P. Beninati
Chief Executive Officer and
President
POWER OF ATTORNEY
We, the undersigned directors and/or officers of Greenwich Technology
Partners, Inc. (the "Company"), hereby severally constitute and appoint Joseph
P. Beninati and Dennis M. Goett and each of them individually, with full powers
of substitution and resubstitution, our true and lawful attorneys, with full
powers to them and each of them to sign for us, in our names and in the
capacities indicated below, the Registration Statement on Form S-1 filed with
the Securities and Exchange Commission, and any and all amendments to said
Registration Statement (including post-effective amendments), and any
registration statement filed pursuant to Rule 462(b) under the Securities Act
of 1933, as amended, in connection with the registration under the Securities
Act of 1933, as amended, of equity securities of the Company, and to file or
cause to be filed the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as each of them
might or could do in person, and hereby ratifying and confirming all that said
attorneys, and each of them, or their substitute or substitutes, shall do or
cause to be done by virtue of this Power of Attorney.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title(s) Date
--------- -------- ----
<S> <C> <C>
/s/ Joseph P. Beninati Chief Executive Officer, April 13, 2000
______________________________________ President and Chairman of
Joseph P. Beninati the Board of Directors
(Principal Executive
Officer)
/s/ Dennis M. Goett Senior Vice President, April 13, 2000
______________________________________ Chief Financial Officer,
Dennis M. Goett Treasurer and Director
(Principal Financial and
Accounting Officer)
/s/ Ronald V. Davis Director April 13, 2000
______________________________________
Ronald V. Davis
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
Signature Title(s) Date
--------- -------- ----
<S> <C> <C>
/s/ Edmund A. Hajim Director April 13, 2000
______________________________________
Edmund A. Hajim
/s/ Jonathan R. Lynch Director April 13, 2000
______________________________________
Jonathan R. Lynch
/s/ William Jefferson Marshall Director April 13, 2000
______________________________________
William Jefferson Marshall
/s/ David H.W. Turner Director April 13, 2000
______________________________________
David H.W. Turner
</TABLE>
II-7
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Number Description
------ -----------
<C> <S>
1.1* Form of Underwriting Agreement
2.1 Stock Purchase Agreement by and among the Registrant and Aspire
Technology Group, Inc. dated as of March 1, 2000
2.2 Asset Purchase Agreement by and among the Registrant and NetGain, LLC
dated as of March 31, 2000
2.3* Agreement and Plan of Merger and Reorganization by and between the
Registrant, Navigator Technologies, Inc. and Michael Waresk dated as of
April 13, 2000.
3.1 Amended and Restated Certificate of Incorporation
3.2 Certificate of Amendment to Amended and Restated Certificate of
Incorporation
3.3* Form of Amended and Restated Certificate of Incorporation to be in
effect upon the closing of this offering
3.4 By-laws
3.5* Certificate of Merger of Navigator and the Registrant dated as of April
13, 2000.
3.5* Form of Amended and Restated By-laws to be in effect upon the closing
of this offering
4.1* Specimen Common Stock certificate
4.2* See Exhibits 3.1, 3.2, 3.3, 3.4 and 3.5 for provisions defining the
rights of holders of common stock of the registrant
4.3* Form of Series D Preferred Stock Purchase Warrant
5.1* Opinion of Testa, Hurwitz & Thibeault, LLP
10.1 Loan Agreement with First Union National Bank dated July 30, 1999
10.2 Security Agreement with First Union National Bank dated July 30, 1999
10.3 Promissory Note to First Union National Bank dated July 30, 1999
10.4 1997 Stock Option Plan as amended
10.5* 2000 Stock Incentive Plan
10.6* 2000 Employee Stock Purchase Plan
10.7 Investment Agreement, dated December 9, 1997
10.8 Investment Agreement (Series C Preferred Stock), dated June 25, 1998
10.9 Investment Agreement (Series C Preferred Stock), dated August 7, 1998
10.10 Investment Agreement (Series D Preferred Stock), dated February 1, 1999
10.11 Series E Preferred Stock Investment Agreement, dated September 10, 1999
10.12 Amendment No. 1 to the Series E Preferred Stock Investment Agreement
dated January 14, 2000
10.13 Amended and Restated Shareholders' Agreement, dated September 10, 1999
10.14 Amended and Restated Registration Rights Agreement, dated September 10,
1999
10.15* Sublease agreement for the Registrant dated March 22, 2000.
10.16 Employment Agreement dated December 9, 1997 with Joseph P. Beninati
10.17 Employment Letter dated December 1, 1998 with Dennis M. Goett
10.18 Amendment to Employment Letter with Dennis M. Goett
10.19 Employment Letter dated October 1, 1999 with John Stopper
10.20 Employment Letter dated January 26, 2000 with Richard Haverly
10.21 Employment Letter dated March 13, 2000 with Johna Till Johnson
10.22 Letter Agreement dated July 27, 1999 with Credit Suisse First Boston
Corporation
10.23 Letter Agreement regarding Indemnification dated July 27, 1999 with
Credit Suisse First Boston Corporation
10.24 Shareholders' Agreement between John Rothenberger and G. Richard
Rothenberger and the Registrant, dated March 1, 2000
10.25* Shareholders' Agreement between Michael Waresk and the Registrant dated
April 13, 2000.
10.26* Escrow Agreement between Michael Waresk, Navigator Technologies, Inc.
and the Registrant.
11.1* Statement re: Computation of Basic and Diluted Net Loss Per Share
21.1 Subsidiaries
23.1 Consent of Arthur Andersen, LLP
23.2* Consent of Testa, Hurwitz & Thibeault, LLP (included in Exhibit 5.1)
24.1 Power of Attorney (See Signature Page)
27.1 Financial Data Schedule
</TABLE>
- --------
* To be supplied by amendment.
+ Confidential treatment requested for certain portions of this Exhibit
pursuant to Rule 406 promulgated under the Securities Act.
<PAGE>
EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
among
ASPIRE TECHNOLOGY GROUP, INC.
THE STOCKHOLDERS LISTED ON THE SIGNATURE PAGES HERETO
AND
GREENWICH TECHNOLOGY PARTNERS, INC.
Dated as of March 1, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
TABLE OF CONTENTS........................................................ I
PAGE.................................................................... i
ARTICLE I - DEFINITIONS.................................................. 1
1.01. Definitions....................................................... 1
ARTICLE II - PURCHASE AND SALE........................................... 4
2.01. Purchase and Sale................................................. 4
2.02. Closing........................................................... 4
2.03. Adjustment of Purchase Price...................................... 5
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND
SELLERS.................................................................. 6
3.01. Corporate Existence and Power..................................... 6
3.02. Corporate Authorization........................................... 7
3.03. Governmental Authorization; Consents.............................. 7
3.04. Non-Contravention................................................. 7
3.05. Capitalization.................................................... 7
3.06. Subsidiaries...................................................... 8
3.07. Financial Statements.............................................. 8
3.08. Absence of Certain Changes........................................ 8
3.09. Property and Equipment............................................ 9
3.10. No Undisclosed Material Liabilities............................... 10
3.11. Litigation........................................................ 10
3.12. Material Contracts................................................ 10
3.13. Insurance Coverage................................................ 11
3.14. Compliance with Laws; No Defaults................................. 11
3.15. Finders Fees...................................................... 12
3.16. Intellectual Property............................................. 12
3.17. Receivables....................................................... 13
3.18. Taxes............................................................. 13
3.19. Employees......................................................... 14
3.20. Environmental Compliance.......................................... 15
3.21. Customers and Suppliers........................................... 15
3.22. Transactions with Affiliates...................................... 15
3.23. Other Information................................................. 15
3.24. Intercompany Arrangements......................................... 16
3.25. Representations................................................... 16
ARTICLE IV - ADDITIONAL REPRESENTATIONS AND WARRANTIES OF SELLERS........ 16
4.01. Title to and Validity of Shares................................... 16
4.02. Authority......................................................... 16
4.03. Power To Act as Trustee or Executor............................... 17
4.04. Securities Act Representations.................................... 17
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF BUYER...................... 18
5.01. Organization and Existence........................................ 18
5.02. Corporate Authorization........................................... 18
5.03. Governmental Authorization........................................ 18
5.04. Non-Contravention................................................. 18
5.05. Finders' Fees..................................................... 19
5.06. Purchase for Investment........................................... 19
5.07. Litigation........................................................ 19
ARTICLE VI - COVENANTS OF THE COMPANY AND SELLERS........................ 19
6.01. Conduct of the Company............................................ 19
6.02. Access to Information............................................. 20
6.03. Notices of Certain Events......................................... 20
6.04. Resignations...................................................... 20
6.05. No Negotiations with Third Parties................................ 21
6.06. Confidentiality................................................... 21
6.07. Continuing Disclosure............................................. 21
ARTICLE VII - COVENANTS OF BUYER......................................... 22
7.01. Confidentiality................................................... 22
ARTICLE VIII - COVENANTS OF ALL PARTIES.................................. 22
8.01. Best Efforts...................................................... 22
8.02. Certain Filings................................................... 23
8.03. Public Announcements.............................................. 23
ARTICLE IX - EMPLOYEE BENEFITS........................................... 23
9.01. Employee Benefits Definitions..................................... 23
9.02. ERISA Representations............................................. 24
9.03. No Third Party Beneficiaries...................................... 25
ARTICLE X - CONDITIONS TO CLOSING........................................ 25
10.01. Conditions to the Obligations of Each Party...................... 25
10.02. Conditions to Obligation of Buyer................................ 26
10.03. Conditions to Obligation of Sellers.............................. 27
ARTICLE XI - SURVIVAL; INDEMNIFICATION................................... 28
11.01. Survival......................................................... 28
11.02. Indemnification.................................................. 29
11.03. Procedures; No Waiver............................................ 29
11.04. Resolutions of Conflicts; Arbitration............................ 30
ARTICLE XII - TERMINATION................................................ 31
12.01. Grounds for Termination.......................................... 31
12.02. Effect of Termination............................................ 32
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
ARTICLE XIII............................................................. 32
ARTICLE XIII - MISCELLANEOUS............................................. 32
13.01. Notices.......................................................... 32
13.02. Amendments; No Waivers........................................... 33
13.03. Expenses......................................................... 33
13.04. Successors and Assigns........................................... 33
13.05. Further Assurances............................................... 34
13.06. Governing Law.................................................... 34
13.07. Counterparts; Effectiveness...................................... 34
13.08. Entire Agreement................................................. 34
13.09. Captions......................................................... 34
13.10. Jurisdiction..................................................... 34
Procedures:.............................................................. 2
</TABLE>
Schedules
- ---------
Schedule 2.01 List of Sellers
Schedule 2.03 Example Calculation of Retained Earnings
Schedule 3.03(b) Company Consents
Schedule 3.07 Financial Statements
Schedule 3.08 Certain Changes
Schedule 3.10 Liabilities
Schedule 3.12 Material Contracts
Schedule 3.14 Permits
Schedule 3.16 Intellectual Property
Schedule 3.18(b) Tax Matters
Schedule 3.19 Employees
Schedule 3.20 Environmental Matters
Schedule 3.22 Transactions with Affiliates
Schedule 5.03(b) Buyer Consents
Schedule 9.02 Employee Plans
Schedule 10.02(e) Former Employees
Schedule 10.02(l) Bonuses
Schedule 10.03(c) Employees Offered Employment
-iii-
<PAGE>
STOCK PURCHASE AGREEMENT
AGREEMENT dated as of March 1, 2000 among Aspire Technology Group, Inc., a
Virginia corporation (the "Company"); the shareholders of the Company listed on
-------
the signature pages hereto (collectively, the "Sellers" and individually, a
-------
"Seller"); and Greenwich Technology Partners, Inc., a Delaware corporation
- -------
("Buyer").
- -------
W I T N E S S E T H :
WHEREAS, the Company owns and operates an information technology consulting
services business (the "Business");
--------
WHEREAS, Buyer wishes to acquire the Company from Sellers by purchasing all
of the outstanding capital stock of the Company from Sellers (the "Shares"),
------
upon the terms and subject to the conditions hereinafter set forth; and
WHEREAS, each Seller desires to sell to Buyer all of the Shares owned by
such Seller;
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements herein contained, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
1.01. Definitions. (a) The following terms, as used herein, have the
-----------
following meanings:
"Affiliate" means, with respect to any Person, any Person directly or
---------
indirectly controlling, controlled by, or under common control with such Person.
"Ancillary Agreements" means, collectively, the Earn-out Agreement
--------------------
attached hereto as Exhibit A (the "Earn-out Agreement"), the Shareholders'
--------- ------------------
Agreement attached hereto as Exhibit B (the "Shareholders' Agreement"), the
--------- -----------------------
Employment, Nondisclosure and Noncompetition Letters to be executed by each
Employee listed in Schedule 10.03(c) in the form attached hereto as Exhibit C
---------------- ---------
(the "Employment Letters"), the Non-competition and Non-Solicitation Agreement
------------------
by and between the Company, Rothenberger and the Staffing Company attached
hereto as Exhibit D (the "Non-competition Agreement"), the Escrow Agreement
--------- -------------------------
attached hereto as Exhibit E (the "Escrow Agreement"), the Sublease Agreement
---------- ----------------
attached hereto as Exhibit F (the "Sublease") and the Promissory Note attached
--------- --------
hereto as Exhibit G (the "Note").
--------- ----
"Balance Sheet" means the balance sheet of the Company as of
-------------
December 31, 1999 referred to in Section 3.07.
<PAGE>
-2-
"Balance Sheet Date" means December 31, 1999.
------------------
"Buyer Stock" means the common stock, $0.01 par value per share, of
-----------
Buyer.
"Buyer's Counsel" means the law firm of Testa, Hurwitz & Thibeault,
---------------
LLP, Boston, Massachusetts.
"Closing Date" means the date of the Closing.
------------
"Common Stock" means the common stock, $1.00 par value per share, of
------------
the Company.
"Company's Proprietary Rights" means all Proprietary Rights which are
----------------------------
owned or licensed by the Company or any Affiliate of the Company and used or
held for use by the Company.
"Final Closing Balance Sheet" means the Balance Sheet of the Company
---------------------------
as of the Reconciliation Date, reconciled in accordance with Section 2.03
hereof.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
----
charge, security interest, restriction or encumbrance of any kind in respect of
such asset.
"Material Adverse Change" means a material adverse change in the
-----------------------
business, assets, condition (financial or otherwise), results of operations or
prospects of the Company.
"Material Adverse Effect" means a material adverse effect on the
-----------------------
business, assets, condition (financial or otherwise), results of operations or
prospects of the Company.
"Person" means an individual, corporation, partnership, association,
------
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Proprietary Rights" means all (A) patents, patent applications,
------------------
patent disclosures and all related continuation, continuation-in-part,
divisional, reissue, re-examination, utility, model, certificate of invention
and design patents, patent applications, registrations and applications for
registrations, (B) trademarks, service marks, trade dress, logos, trade names,
service names and corporate names and registrations and applications for
registration thereof, (C) copyrights and registrations and applications for
registration thereof, (D) mask works and registrations and applications for
registration thereof, (E) computer software, data and documentation, (F) trade
secrets and confidential business information, whether patentable or
nonpatentable and whether or not reduced to practice, know-how, manufacturing
and product processes and techniques, research and development information,
copyrightable works, financial, marketing and business data, pricing and cost
information, business and marketing plans and customer and supplier lists and
information, (G) other proprietary rights relating to any of the
<PAGE>
-3-
foregoing (including without limitation associated goodwill and remedies against
infringements thereof and rights of protection of an interest therein under the
laws of all jurisdictions) and (H) copies and tangible embodiments thereof.
"Reconciliation Date" means the date which is six months following the
-------------------
Closing Date.
"Retained Earnings" means the accumulated net income of the Company as
-----------------
determined on the Reconciliation Date in accordance with generally accepted
accounting principles as applied on a consistent basis ("GAAP"). Without
----
limiting the foregoing, the following expenses and accruals shall be taken into
account when calculating Retained Earnings: (i) expenses relating to legal and
accounting matters incurred in connection with this Agreement and the
transactions contemplated hereby, (ii) expenses arising from severance payments
made to the employees listed on Schedule 10.02(e), (iii) expenses in connection
-----------------
with the payment in full of the Note (which liabilities the parties recognize
will be paid to the extent possible with Company receivables after the Closing
Date), (iv) leasehold improvement costs incurred in connection with the
construction of separate office space for the Staffing Company in the Chantilly,
VA office, (v) expenses in connection with an automobile lease and a loan to
purchase an automobile, each to be transferred by the Company to Rothenberger
(vi) expenses for bonuses to Mr. Lee Fahrner ($10,000), Mr. Charles Boise
($20,000) and Mr. Jay White ($10,000), (vii) accruals for net income tax benefit
of any net operating loss carrybacks, and (viii) accruals (if any) for cash
received from the Staffing Company upon the purchase of certain assets of the
Company. For purposes of this definition, any action taken by Buyer to write
down the value of any asset of the Company on or after the Closing Date as a
result of a change in ownership will not be taken into account for purposes of
calculating Retained Earnings.
"Rothenberger" means John Rothenberger, a Seller hereunder
------------
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Sellers' Counsel" means the law firm of Jackson & Campbell, P.C.,
----------------
Washington D.C.
"Subsidiary" means any entity of which securities or other ownership
----------
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are owned directly or
indirectly by the Company.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
---- -------
Benefit Arrangement 9.01
Closing 2.02
Code 3.18
Company Securities 3.05
<PAGE>
-4-
Damages 11.02
Employee Plans 9.01
ERISA 9.01
ERISA Affiliate 9.01
Financial Statements 3.07
Indemnified Party 11.03
Indemnifying Party 11.03
Multiemployer Plan 9.01
Post-Closing Adjustment 2.03
Purchase Price 2.01
Permit 3.14
Staffing Company 10.02
ARTICLE II
PURCHASE AND SALE
2.01. Purchase and Sale. Upon the terms and subject to the conditions of
-----------------
this Agreement, each Seller, severally but not jointly, shall sell to Buyer, and
Buyer shall purchase from each Seller, at the Closing, that number of Shares as
is set forth opposite such Seller's name on Schedule 2.01. The aggregate
-------------
purchase price (the "Purchase Price") for the Shares is as follows:
--------------
(i) an aggregate of $644,375;
(ii) an aggregate of 177,500 shares of Buyer Stock; and
(iii) the Earn-out Payments (paid in accordance with Exhibit A
---------
hereto).
The Purchase Price (other than the Earn-out Payments) shall be paid as provided
in Section 2.02. Sellers acknowledge and agree that Rothenberger will be the
only person eligible to receive the Earn-out Payments.
2.02. Closing. The closing (the "Closing") of the purchase and sale of
------- -------
the Shares hereunder shall take place at the offices of Buyer's Counsel in
Boston, Massachusetts on or prior to March 1, 2000, or at such other time or
place as Buyer and Sellers may agree. At the Closing,
(a) Buyer shall deliver to Sellers an aggregate of $644,375 by wire
transfer to accounts designated by Sellers by written notice to Buyer at least
two business days prior to the Closing Date and for each Seller in the
individual amount specified on Schedule 2.01.
-------------
<PAGE>
-5-
(b) Buyer shall hold in escrow pursuant to the terms of the Escrow
Agreement certificates for the Buyer Stock equal to 177,500 shares of Buyer
Stock, registered in the names of Sellers for the number of shares shown in
Schedule 2.01.
- -------------
(c) Sellers shall deliver to Buyer certificates for the Shares duly
endorsed or accompanied by stock powers duly endorsed in blank, with any
required transfer stamps affixed thereto in the share amounts specified for each
Seller on Schedule 2.01.
-------------
(d) The appropriate parties shall enter into the Ancillary
Agreements.
(e) The Company and Sellers shall deliver to Buyer revised
schedules, if any, to this Agreement updating the information shown thereon as
of the Closing Date.
(f) The parties shall execute and deliver any other instruments,
documents and certificates that are required to be delivered pursuant to this
Agreement or as may be reasonably requested by any party in order to consummate
the transactions contemplated by this Agreement.
2.03. Adjustment of Purchase Price. (a) Promptly following the
----------------------------
Reconciliation Date, Buyer will cause the Final Closing Balance Sheet to be
prepared and will prepare a certificate based on such Final Closing Balance
Sheet setting forth Buyer's calculation of Retained Earnings. Buyer will cause
the Final Closing Balance Sheet together with its certificate to be delivered to
Rothenberger. The Final Closing Balance Sheet shall (x) fairly present the
consolidated financial position of the Company and its consolidated subsidiaries
as at the close of business on the Closing Date in accordance with generally
accepted accounting principles applied on a basis consistent with those used in
the preparation of the Balance Sheet, (y) include line items substantially
consistent with those in the Balance Sheet, and including but not limited to the
expenses listed in Section 1.01 under the definition of Retained Earnings and
(z) be prepared in accordance with accounting policies and practices consistent
with those used in the preparation of the Balance Sheet.
(b) If Rothenberger disagrees with Buyer's calculation of Retained
Earnings delivered pursuant to Section 2.03(a), Rothenberger may, within 7
business days after delivery of the documents referred to in Section 2.03(a),
deliver a notice to Buyer disagreeing with such calculation and setting forth
Rothenberger's calculation of such amount. Any such notice of disagreement
shall specify those items or amounts as to which Rothenberger disagrees, and
Rothenberger shall be deemed to have agreed with all other items and amounts
contained in the Closing Balance Sheet and the calculation of Retained Earnings
delivered pursuant to Section 2.03(a).
(c) If a notice of disagreement shall be duly delivered pursuant to
Section 2.03(b), the parties shall, during the 7 business days following such
delivery, use their best efforts to reach agreement on the disputed items or
amounts in order to determine, as may be required, the amount of Retained
Earnings, which amount shall not be less than the amount shown in Buyer's
calculations delivered pursuant to Section 2.03(a) nor more than the amount
shown in
<PAGE>
-6-
Rothenberger's calculation delivered pursuant to Section 2.03(b). If, during
such period, the parties are unable to reach such agreement, they shall promptly
thereafter cause Arthur Andersen to review this Agreement and the disputed items
or amounts for the purpose of calculating Retained Earnings. In making such
calculation, Arthur Andersen shall consider only those items or amounts in the
Final Closing Balance Sheet or Buyer's calculation of Retained Earnings as to
which Rothenberger has disagreed. Arthur Andersen shall deliver to Rothenberger
and Buyer, as promptly as practicable, a report setting forth such calculation.
Such report shall be final and binding upon the parties hereto. The cost of such
review and report shall be borne by Buyer if the difference between Retained
Earnings as set forth in Buyer's calculation delivered pursuant to Section
2.03(a) and that determined by Arthur Andersen is greater than the difference
between Retained Earnings as set forth in Rothenberger's calculation delivered
pursuant to 2.03(b) and that determined by Arthur Andersen; otherwise the cost
of such review and report shall be borne by Rothenberger.
(d) If the Retained Earnings determined in accordance with this Section
2.03 is less than $210,000, Sellers shall deliver to Buyer within ten (10) days
a certified check payable to Buyer in an amount equal to $210,000 less the
Retained Earnings (the "Post-Closing Adjustment"). If Sellers shall fail to
-----------------------
deliver such Post-Closing Adjustment within such ten-day period, Buyer shall
within thirty (30) days acquire from escrow Buyer Stock issued in the name of
Sellers (together with a valid stock power) in an amount equal to the Post-
Closing Adjustment (based on the fair market value of such Buyer Stock as
determined pursuant to the Escrow Agreement). If, in such case, the aggregate
fair market value of such Buyer Stock shall be less than the Post-Closing
Adjustment, Sellers shall within two days deliver a certified check to Buyer in
an amount equal to the Post-Closing Adjustment less the fair market value of
such Buyer Stock. If Sellers shall fail to deliver such certified check within
such two-day period, Buyer shall set-off the Post-Closing Adjustment against any
amounts owed by Buyer to Sellers (including, without limitation, any salary,
bonus, other compensation and the Earn-out Payments). By way of example,
attached hereto as Schedule 2.03 is a calculation of Retained Earnings.
-------------
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND SELLERS
The Company and each Seller hereby jointly and severally represent and
warrant to Buyer as of the date hereof and as of the Closing Date that each of
the following statements is true and correct, except as disclosed in the
disclosure schedules hereto (which shall reference the particular section of
this Agreement to which the disclosure relates).
3.01. Corporate Existence and Power. The Company is a corporation duly
-----------------------------
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted. The Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction
<PAGE>
-7-
where the character of the property owned or leased by it or the nature of its
activities make such qualification necessary, except for those jurisdictions
where failure to be so qualified would not, individually or in the aggregate,
have a Material Adverse Effect. The Company has heretofore delivered to Buyer
true and complete copies of the corporate charter and bylaws of the Company as
currently in effect.
3.02. Corporate Authorization. The execution, delivery and performance by
-----------------------
the Company of this Agreement and each Ancillary Agreement to which it is a
party, and the consummation by the Company of the transactions contemplated
hereby and thereby are within the Company's corporate powers and have been duly
authorized by all necessary corporate action on the part of the Company. This
Agreement and the Ancillary Agreements to which the Company is a party
constitute valid and binding agreements of the Company enforceable in accordance
with their terms.
3.03. Governmental Authorization; Consents. (a) To the best of the
------------------------------------
Company's and the Sellers' knowledge after due inquiry, the execution, delivery
and performance by the Company and Sellers of this Agreement and the Ancillary
Agreements to which the Company is a party require no action by or in respect
of, or filing with, any governmental body, agency, official or authority.
(b) Except as set forth on Schedule 3.03(b), no consent, approval,
----------------
waiver or other action by any Person under any contract, agreement, indenture,
lease, instrument or other document to which the Company is a party or by which
the Company is bound is required or necessary for the execution, delivery and
performance of this Agreement and the Ancillary Agreements to which the Company
is a party by the Company or the consummation of the transactions contemplated
hereby.
3.04. Non-Contravention. The execution, delivery and performance by the
-----------------
Company of this Agreement and the Ancillary Agreements to which it is a party
and the consummation of the transactions contemplated hereby and thereby do not
and will not (i) contravene or conflict with the corporate charter or bylaws of
the Company, (ii) to the best of the Company's and the Sellers' knowledge after
due inquiry contravene or conflict with or constitute a violation of any
material provision of any law, regulation, judgment, injunction, order or decree
binding upon or applicable to the Company; (iii) assuming the receipt of all
required consents, constitute a default under or give rise to any right of
termination, cancellation or acceleration of any right or obligation of the
Company or to a loss of any material benefit to which the Company is entitled
under any provision of any agreement, contract or other instrument binding upon
the Company or any permit held by the Company or (iv), assuming the receipt of
all required consents, result in the creation or imposition of any Lien on any
asset of the Company.
3.05. Capitalization. The authorized capital stock of the Company
--------------
consists of 1,000 shares of Common Stock. As of the date hereof, there were
outstanding 1,000 shares of Common Stock. All outstanding shares of capital
stock of the Company have been duly authorized, validly issued, fully paid and
nonassessable and are owned by Sellers as shown on Schedule 2.01. Other than
-------------
the 1,000 shares of Common Stock, there are no outstanding (i) shares
<PAGE>
-8-
of capital stock, other securities or phantom or other equity interests of the
Company, (ii) securities of the Company convertible into or exchangeable for
shares of capital stock or other securities of the Company or (iii) options or
other rights to acquire from the Company any capital stock, other securities or
phantom or other equity interests of the Company (the items in clauses (i), (ii)
and (iii) being referred to collectively as the "Company Securities"). There
------------------
are no outstanding obligations of the Company, actual or contingent, to issue or
deliver or to repurchase, redeem or otherwise acquire any Company Securities.
3.06. Subsidiaries. The Company does not have and never has had any
------------
Subsidiaries or any ownership or equity interest in or control of (direct or
indirect) any other Person.
3.07. Financial Statements. The Company has previously furnished Buyer
--------------------
with a true and complete copy of (i) the interim balance sheet of the Company as
of December 31, 1999 and (ii) the balance sheet of the Company at February 28,
1999, the statements of income and retained earnings and cash flows of the
Company for the fiscal year ended February 28, 1999 (collectively, the
"Financial Statements" which are attached hereto as Schedule 3.07). Each of the
- --------------------- -------------
balance sheets included in the Financial Statements fairly presents in all
material respects the financial position of the Company as of its date, and the
other statements included in the Financial Statements fairly present in all
material respects the results of operations, cash flows and stockholders'
equity, as the case may be, of the Company for the periods therein set forth.
3.08. Absence of Certain Changes. Since the Balance Sheet Date, except as
--------------------------
reflected in the Financial Statements or in Schedule 3.08, the Company has
-------------
conducted its business in the ordinary course consistent with past practices and
there has not been:
(a) any Material Adverse Change or any event, occurrence,
development or state of circumstances or facts which could reasonably be
expected to result in a Material Adverse Change;
(b) any declaration, setting aside or payment of any dividend or
other distribution with respect to any Company Securities or any repurchase,
redemption or other acquisition by the Company of any outstanding shares of
capital stock or other securities of, or other ownership interests in, the
Company;
(c) any amendment of any outstanding security of the Company;
(d) any incurrence, assumption or guarantee by the Company of any
indebtedness for borrowed money (other than in the ordinary course of business
and in amounts and on terms consistent with past practices);
(e) any creation or assumption by the Company of any material Lien
on any asset;
(f) any making of any loan, advance or capital contributions to or
investment in any Person;
<PAGE>
-9-
(g) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of the Company which,
individually or in the aggregate, has had or would reasonably be expected to
have a Material Adverse Effect;
(h) any transaction or commitment made, or any contract or agreement
entered into, by the Company relating to its assets or business (including the
acquisition or disposition of any assets) or any relinquishment by the Company
of any contract or other right, in either case, material to the Company other
than those contemplated by this Agreement;
(i) any change in any method of accounting or accounting practice by
the Company;
(j) any (i) grant of any severance or termination pay to any
director, officer or employee of the Company, (ii) entering into of any
employment, deferred compensation or other similar agreement (or any amendment
to any such existing agreement) with any director, officer or employee of the
Company, (iii) change in benefits payable under existing severance or
termination pay policies or employment agreements or (iv) change in
compensation, bonus or other benefits payable to directors, officers or
employees of the Company;
(k) any labor dispute, other than routine individual grievances, or
any activity or proceeding by a labor union or representative thereof to
organize any employees of the Company, which employees were not subject to a
collective bargaining agreement at the Balance Sheet Date, or any lockouts,
strikes, slowdowns, work stoppages or threats thereof by or with respect to any
employees of the Company;
(l) any legally binding agreement, undertaking or commitment to do
any of the foregoing.
3.09. Property and Equipment. (a) The Company has good and valid title
----------------------
to, or in the case of leased property has valid leasehold interests in, all
property and assets (whether real or personal, tangible or intangible) reflected
on the Balance Sheet or acquired after the Balance Sheet Date. None of such
properties or assets is subject to any Liens, except:
(i) Liens disclosed on the Balance Sheet; or
(ii) Liens which do not materially detract from the value of such
property or assets as now used, or materially interfere with any present or
intended use of such property or assets.
(b) There are no developments affecting any of such properties or
assets pending, or to the knowledge of the Company and Sellers, threatened,
which might materially detract from the value of such property or assets,
materially interfere with any present or intended
<PAGE>
-10-
use of any such property or assets or materially adversely affect the
marketability of such property or assets.
(c) To the best of Sellers' knowledge, the equipment owned by the
Company has no material defects, is in good operating condition and repair
(ordinary wear and tear excepted), and is substantially adequate for the uses to
which it is being put.
(d) The assets owned or leased by the Company, or which it otherwise
has the right to use, constitute all of the assets held for use or used in
connection with the Business and are generally adequate to conduct such
Business.
3.10. No Undisclosed Material Liabilities. There are no material
-----------------------------------
liabilities of the Company of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise, and, to the best of Sellers'
knowledge, there is no existing condition, situation or set of circumstances
which could reasonably be expected to result in such a liability, other than:
(i) liabilities disclosed on Schedule 3.10 or provided for in
-------------
the Balance Sheet; and
(ii) liabilities incurred in the ordinary course of business
consistent with past practice since the Balance Sheet Date, which in the
aggregate are not material to the Company.
3.11. Litigation. There is no action, suit, investigation or proceeding
----------
pending against, or to the knowledge of the Sellers, threatened against or
affecting, the Company or any of its properties or the transactions contemplated
hereby before any court or arbitrator or any governmental body, agency, official
or authority, nor, to the knowledge of the Sellers, is there any basis therefor.
3.12. Material Contracts. (a) Except for agreements, contracts, plans,
------------------
leases, arrangements or commitments disclosed in Schedule 3.12, the Company is
--------------
not a party to or subject to:
(i) any lease;
(ii) any contract for the purchase of materials, supplies, goods,
services, equipment or other assets;
(iii) any sales, distribution, service or other similar agreement
providing for the sale or provision by the Company of materials, supplies,
goods, services, equipment or other assets;
(iv) any partnership, joint venture or other similar contract,
arrangement or agreement;
<PAGE>
-11-
(v) any contract relating to indebtedness for borrowed money or
the deferred purchase price of property (whether incurred, assumed,
guaranteed or secured by any asset);
(vi) any license agreement, franchise agreement or agreement in
respect of similar rights granted to or held by the Company;
(vii) any agency, dealer, sales representative or other similar
agreement;
(viii) any contract or other document that limits the freedom of the
Company to compete in any line of business or with any Person or in any
area or which would so limit the freedom of the Company after the Closing
Date; or
(ix) any other contract or commitment that is material to the
Company.
(b) Each agreement, contract, plan, lease, arrangement and
commitment disclosed in any schedule to this Agreement or required to be
disclosed pursuant to Section 3.12(a) is a valid and binding agreement of the
Company and is in full force and effect, except as may be limited by bankruptcy
and other laws affecting creditors' rights generally, and by general principles
of equity (whether considered in a proceeding in equity or at law), and neither
the Company nor, to the knowledge of the Company and Sellers, any other party
thereto is in default in any material respect under the terms of any such
agreement, contract, plan, lease, arrangement or commitment.
3.13. Insurance Coverage. The Company has furnished to Buyer a list of,
------------------
and true and complete copies of, all insurance policies and fidelity bonds
covering the assets, business, equipment, properties, operations, employees,
officers and directors of the Company. There is no claim by the Company pending
under any of such policies or bonds as to which coverage has been questioned,
denied or disputed by the underwriters of such policies or bonds. All premiums
payable under all such policies and bonds have been paid and the Company is
otherwise in full compliance with the terms and conditions of all such policies
and bonds. Such policies of insurance and bonds (or other policies and bonds
providing substantially similar insurance coverage) remain in full force and
effect. The Company and Sellers do not know of any threatened termination of,
or any material premium increase with respect to, any of such policies or bonds.
3.14. Compliance with Laws; No Defaults. (a) To the best of the
---------------------------------
Company's and the Sellers' knowledge after due inquiry, the Company is not in
violation of, and has not violated, any applicable provisions of any laws,
statutes, ordinances or regulations.
(b) Schedule 3.14 correctly describes each license and permit (a
-------------
"Permit") material to the business of the Company, together with the name of the
- -------
governmental agency or entity issuing such Permit. Such Permits are valid and
in full force and effect, and none of such
<PAGE>
-12-
Permits will be terminated or impaired or become terminable as a result of the
transactions contemplated hereby.
(c) To the best of the Company's and the Sellers' knowledge after
due inquiry, the Company is not in default under, and no condition exists that
with notice or lapse of time or both would constitute a default under, (i) any
mortgage, loan agreement, indenture or evidence of indebtedness for borrowed
money to which the Company is a party or by which the Company or any material
amount of its assets is bound or (ii) any judgment, order or injunction of any
court, arbitrator or governmental body, agency, official or authority.
3.15. Finders' Fees. There is no investment banker, broker, finder or
-------------
other intermediary which has been retained by or is authorized to act on behalf
of Sellers or the Company who might be entitled to any fee or commission from
Buyer, the Company or any of their respective Affiliates upon consummation of
the transactions contemplated by this Agreement.
3.16. Intellectual Property. (a) Schedule 3.16 includes a list of all of
--------------------- -------------
the Company's patents, copyrights, trademarks, trade names and service marks,
and all pending applications for any of the foregoing, including the
jurisdictions by or in which such right has been issued or registered. The
Company does not license any of its Proprietary Rights to any third party and is
not subject to or bound by any agreements providing for the payment of any
royalty. The Company has sufficient right, title, and interest in, or license
to, its Proprietary Rights to conduct its business as presently conducted.
(b)(i) The Company has not been sued or charged in writing with or
been a defendant in any claim, suit, action or proceeding relating to its
business that has not been finally terminated prior to the date hereof and that
involves a claim of infringement of any patents, trademarks, service marks or
copyrights, and (ii) the Company and Sellers have no knowledge of any other
claim or infringement by the Company, and no knowledge of any continuing
infringement by any other Person of any of the Company's Proprietary Rights. No
Company Proprietary Right is subject to any outstanding order, judgment, decree,
stipulation or agreement restricting the use thereof by the Company or
restricting the licensing thereof by the Company to any Person. Except in the
ordinary course of business or as set forth in Schedule 3.16(b), the Company has
----------------
not entered into any agreement to indemnify any other Person against any charge
of infringement of any patent, trademark, service mark or copyright.
(c) None of the processes and formulae, research and development
results and other know-how of the Company, the value of which to the Company is
contingent upon maintenance of the confidentiality thereof, has been disclosed
by the Company to any Person other than Persons that are parties to
confidentiality agreements with the Company.
(d) To the knowledge of the Company and Sellers, no third party has
asserted any claim, or has any reasonable basis to assert any valid claim,
against the Company with respect to (i) the continued employment by, or
association with, the Company of any of the present officers, employees of or
consultants to the Company or (ii) the use by the Company or any of such Persons
in connection with their activities for or on behalf of the Company of any
<PAGE>
-13-
information which the Company or any of such Persons would be prohibited from
using under any prior agreements or arrangements or any laws applicable to
unfair competition, trade secrets or proprietary information.
3.17. Receivables. All accounts, notes receivable and other receivables
-----------
(other than receivables collected since the Balance Sheet Date) reflected on the
Balance Sheet are, and all accounts, notes receivable and other receivables of
the Company at the Closing Date will be valid and genuine, subject to normal and
customary trade discounts, less any reserves for doubtful accounts recorded on
the Balance Sheet. To the best of Sellers' knowledge, there are no defenses to
the collectibility of any such receivables. All accounts, notes receivable and
other receivables of the Company at the Balance Sheet Date have been included in
the Balance Sheet.
3.18. Taxes. (a) The term "Taxes" as used herein means all federal,
----- -----
state, local, foreign net income, alternative or add-on minimum tax, estimated,
gross income, gross receipts, sales, use, ad valorem, value added, transfer,
franchise, capital profits, lease, service, license, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit taxes, customs, duties and other taxes,
governmental fees and other like assessments and charges of any kind whatsoever,
together with all interest, penalties, additions to tax and additional amounts
with respect thereto, and the term "Tax" means any one of the foregoing Taxes.
---
The term "Tax Returns" as used herein means all returns, declarations, reports,
-----------
claims for refund, information statements and other documents relating to Taxes,
including all schedules and attachments thereto, and including all amendments
thereof, and the term "Tax Return" means any one of the foregoing Tax Returns.
----------
The term "Code" means the Internal Revenue Code of 1986, as amended.
----
(b) The Company has timely filed all Tax Returns required to be
filed and has paid all Taxes owed (whether or not shown as due on such Tax
Returns), including, without limitation, all Taxes which the Company is
obligated to withhold for amounts owing or paid to employees, creditors and
third parties. All Tax Returns filed by the Company were complete and correct in
all material respects, and such Tax Returns appropriately reflected the facts
regarding the income, business, assets, liabilities, operations, activities,
status and other matters of the Company and any other information required to be
shown thereon. Except as set forth on Schedule 3.18(b), none of the Tax Returns
----------------
filed by the Company or Taxes payable by the Company have been the subject of an
audit, action, suit, proceeding, claim, examination, deficiency or assessment by
any governmental authority, and no such audit, action, suit, proceeding, claim,
examination, deficiency or assessment is currently pending or, to the knowledge
of the Company, threatened. The Company is not currently the beneficiary of any
extension of time within which to file any Tax Return, and the Company has not
waived any statute of limitation with respect to any Tax or agreed to any
extension of time with respect to a Tax assessment or deficiency. None of the
Tax Returns filed by the Company contain a disclosure statement under former
Section 6661 of the Code or Section 6662 of the Code (or any similar provision
of state, local or foreign Tax law).
(c) The Company is not a party to any agreement, contract,
arrangement or plan that has resulted or would result, separately or in the
aggregate, in the payment of (i) any
<PAGE>
-14-
"excess parachute payments" within the meaning of Section 280G of the Code
(without regard to the exceptions set forth in Sections 280G(b)(4) and
280G(b)(5) of the Code) or (ii) any amount for which a deduction would be
disallowed or deferred under Section 162 or Section 404 of the Code. The Company
has not agreed to make any adjustment under Section 481(a) of the Code (or any
corresponding provision of state, local or foreign law) by reason of a change in
accounting method or otherwise. The Company does not have and has not had a
permanent establishment in any foreign country, as defined in any applicable Tax
treaty or convention between the United States and such foreign country. No
portion of the Purchase Price is subject to the Tax withholding provisions of
Section 3406 of the Code, or of Subchapter A of Chapter 3 of the Code or of any
other provision of law. No claim has ever been made by a Tax Authority in a
jurisdiction where the Company does not file Tax Returns that it is or may be
subject to Tax in that jurisdiction. None of the shares of outstanding capital
stock of the Company are subject to a "substantial risk of forfeiture" within
the meaning of Section 83 of the Code.
(d) There are no liens for Taxes (other than for ad valorem Taxes
not yet due and payable) upon the assets of the Company. The unpaid Taxes of the
Company did not, as of the Balance Sheet Date, exceed the reserve for actual
Taxes (as opposed to any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) as shown on the Balance Sheet,
and will not exceed such reserve as adjusted for the passage of time through the
Closing Date in accordance with the past custom and practice of the Company in
filing their Tax Returns (taking into account any Taxes incurred as a result of
the transactions contemplated by this Agreement). The Company has not incurred
any liability for Taxes from the Balance Sheet Date through the Closing Date
other than in the ordinary course of business and consistent with past practice.
(e) The Company has never filed a consent pursuant to Section
341(f) of the Code, relating to collapsible corporations.
(f) The Company is not a party to any Tax sharing agreement or
similar arrangement. The Company has never been a member of a group filing a
consolidated federal income Tax Return (other than a group the common parent of
which was the Company), and the Company does not have any liability for the
Taxes of any Person (other than the Company) under Treasury Regulation Section
1.1502-6 (or any corresponding provision of state, local or foreign Tax law), as
a transferee or successor, by contract, or otherwise. The Company has no net
operating losses or other tax attributes presently subject to limitation under
Sections 382, 383, 384 of the Code, or the federal consolidated return
regulations (other than limitations imposed as a result of the transactions
contemplated pursuant to this Agreement).
3.19. Employees. Schedule 3.19 sets forth a true and complete list of (a)
--------- -------------
the names, titles, annual salaries and other compensations of all salaried
employees of the Company and (b) the names, titles and wage rates for all non-
salaried employees of the Company. Except as set forth on such schedule, none
of such employees has indicated to the Company or a Seller that he or she
intends to resign or retire from the Company as a result of the transactions
contemplated by this Agreement or otherwise.
<PAGE>
-15-
3.20. Environmental Compliance. Except as set forth in Schedule 3.20, and
------------------------ -------------
except in all cases as, in the aggregate, have not had and could not reasonably
be expected to have a Material Adverse Effect, the Company: (i) has obtained
all approvals which are required to be obtained under all applicable federal,
state, foreign or local laws or any regulation, code, plan, order, decree,
judgment, notice or demand letter issued, entered, promulgated or approved
thereunder relating to pollution or protection of the environment, including
laws relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants, or hazardous or toxic materials or wastes into ambient
air, surface water, ground water, or land or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or hazardous or toxic
materials or wastes by the Company or its agents ("Environmental Laws"); (ii) is
------------------
in compliance in all material respects with all terms and conditions of such
required approvals, and also is in compliance in all material respects with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in applicable
Environmental Laws; (iii) as of the date hereof, is not aware of nor has
received notice of any past or present violations of Environmental Laws or any
event, condition, circumstance, activity, practice, incident, action or plan
which is reasonably likely to interfere with or prevent continued compliance
with or which would give rise to any material common law or statutory liability,
or otherwise form the basis of any material claim, action, suit or proceeding,
against the Company based on or resulting from the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling, or the
emission, discharge or release into the environment, of any pollutant,
contaminant or hazardous or toxic material or waste; and (iv) has taken all
actions necessary under applicable Environmental Laws to register any products
or materials required to be registered by the Company (or any of their
respective agents) thereunder.
3.21. Customers and Suppliers. The Company has not received notice from
-----------------------
and is not otherwise aware that any customer of products and services furnished
by the Company during the past 18 months has stopped or intends to stop
purchasing the Company's products or services or to reduce the amount of its
business with the Company in the future, nor has the Company lost any supplier,
or group of suppliers that are under common ownership or control, that accounted
for a material percentage of the aggregate supplies purchased by the Company
during the past 18 months.
3.22. Transactions with Affiliates. Except as set forth on Schedule 3.22,
---------------------------- -------------
there are no loans, leases, royalty agreements or other continuing transactions
of a similar nature between the Company and any Seller, any Affiliate of any
Seller, or any member of any Seller's family. To the knowledge of the Company
and Sellers, none of the officers or directors of the Company or Sellers (a) has
any material direct or indirect interest in any entity which does business with
the Company; (b) has any direct or indirect interest in any property, asset or
right which is used by the Company in the conduct of its business; or (c) has
any contractual relationship with the Company other than such relationships
which occur from being an officer, director or stockholder of the Company.
3.23. Other Information. None of the documents or information delivered
-----------------
to Buyer in connection with the transactions contemplated by this Agreement
contains any untrue statement
<PAGE>
-16-
of a material fact or omits to state a material fact necessary in order to make
the statements contained therein not misleading. The financial projections
relating to the Company delivered to Buyer constitute the Company's and the
Sellers' best estimate of the information purported to be shown therein, and
neither the Company nor any Seller is aware of any fact or information that
would lead it to believe that such projections are incorrect or misleading in
any material respect.
3.24. Intercompany Arrangements. The Company does not own any note, bond,
-------------------------
debenture or other indebtedness, or is not otherwise a creditor, of any Seller
or any of its Affiliates. Since the Balance Sheet Date, there has not been any
payment by the Company to any Seller or any of its Affiliates, charge by any
Seller or any of its Affiliates to the Company or other transaction between the
Company and a Seller or any of its Affiliates, except in any such case in the
ordinary course of business of the Company consistent with past practice.
3.25. Representations. Each of the joint representations and warranties
---------------
of the Company and Sellers contained in this Agreement is true and correct in
all material respects.
ARTICLE IV
ADDITIONAL REPRESENTATIONS
AND WARRANTIES OF SELLERS
Each Seller, severally but not jointly, represents and warrants to, and
agrees with, Buyer as follows:
4.01. Title to and Validity of Shares. Such Seller now has, and on the
-------------------------------
Closing Date will have, good and valid title to and unrestricted power to vote
and sell (such sale being subject to applicable securities laws) the Shares
designated as owned by such Seller opposite such Seller's name on Schedule 2.01,
-------------
free and clear of any Lien and, upon purchase and payment therefor and delivery
to Buyer thereof in accordance with the terms of this Agreement, Buyer will
obtain good and valid title to such Shares free and clear of any Lien. All
Shares owned by such Seller have been duly authorized and validly issued and are
fully paid and non-assessable. All Shares to be sold by such Seller are
registered in the name of such Seller.
4.02. Authority. Such Seller has the legal power, right and authority to
---------
enter into and perform this Agreement and each Ancillary Agreement to which such
Seller is a party, and to perform each of his obligations hereunder and
thereunder. The execution, delivery and performance of this Agreement and each
Ancillary Agreement to which such Seller is a party by such Seller (a) require
no action by or in respect of, or filing with, or consent of, any governmental
body, agency or official or any other Person and (b) to the best of the
Company's and the Seller's knowledge after due inquiry, do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
any agreement, judgment, injunction, order, decree or any other instrument
binding upon such Seller. This Agreement and each Ancillary Agreement to which
such Seller is a party have been duly executed and delivered by such Seller
<PAGE>
-17-
and constitute valid and binding obligations of such Seller, enforceable in
accordance with their terms.
4.03. Power To Act as Trustee or Executor. If such Seller is serving as
-----------------------------------
trustee or executor with respect to its Shares, such Seller is duly authorized
and empowered by the instruments creating such trust or trusts or by the will of
which such Seller is acting as executor and under applicable law to enter into
this Agreement with respect to the Shares held by such Seller and to consummate
the transactions contemplated herein.
4.04. Securities Act Representations. (a) Seller has substantial experience
------------------------------
in evaluating and investing in private placement transactions of securities in
companies similar to the Buyer such that Seller is capable of evaluating the
merits and risks of its investment in the Buyer and has the capacity to protect
its own interest. Seller is an "accredited investor" as that term is defined in
Rule 501 promulgated under the Securities Act.
(b) Seller is acquiring the Buyer Stock for investment for Seller's own
account, not as a nominee or agent, and not with a view to, or for resale in
connection with, any distribution thereof. Seller understands that the Buyer
Stock has not been, and will not be when issued, registered under the Securities
Act and is being issued pursuant to a specific exemption from the registration
provisions of the Securities Act, the availability of which depends upon, among
other things, the bona fide nature of the investment intent and the accuracy of
the representations expressed herein.
(c) Seller acknowledges that the Buyer Stock must be held indefinitely
unless subsequently registered under the Securities Act or unless an exemption
from such registration is available. Seller is aware of the provisions of Rule
144 promulgated under the Securities Act which permit limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions.
(d) Seller understands that no public market now exists and that a market
may never exist for the Buyer Stock.
(e) Seller acknowledges that the certificates representing Buyer Stock
will bear a legend substantially as follows:
"The securities represented hereby have not been registered under
the Securities Act of 1933, as amended, and may not be sold,
transferred or otherwise disposed of except in accordance with the
terms thereof and unless registered with the Securities and Exchange
Commission of the United States and the securities regulatory
authorities of certain states or unless an exemption from
registration is available."
<PAGE>
-18-
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to the Company and Sellers that:
5.01. Organization and Existence. Buyer is a corporation duly
--------------------------
incorporated, validly existing and in good standing under the laws of Delaware
and has all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted. Buyer is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction where the character of the property
owned or leased by it or the nature of its activities make such qualification
necessary, except for those jurisdictions where failure to be so qualified would
not, individually or in the aggregate, have a Material Adverse Effect.
5.02. Corporate Authorization. The execution, delivery and performance by
-----------------------
Buyer of this Agreement and the Ancillary Agreements to which it is a party, and
the consummation by Buyer of the transactions contemplated hereby and thereby
are within the corporate powers of Buyer and have been duly authorized by all
necessary corporate action on the part of Buyer. This Agreement and the
Ancillary Agreements to which Buyer is a party constitute valid and binding
agreements of Buyer, enforceable in accordance with their terms.
5.03. Governmental Authorization; Consents. (a) To the best of Buyer's
------------------------------------
knowledge after due inquiry, the execution, delivery and performance by Buyer of
this Agreement and the Ancillary Agreements to which Buyer is a party require no
action by or in respect of, or filing with, any governmental body, agency,
official or authority.
(b) Except as set forth on Schedule 5.03(b), no consent, approval,
----------------
waiver or other action by any Person under any material contract, agreement,
indenture, lease, instrument or other document to which the Buyer is a party or
by which the Buyer is bound is required or necessary for the execution, delivery
and performance of this Agreement and the Ancillary Agreements to which the
Buyer is a party by the Buyer or the consummation of the transactions
contemplated hereby.
5.04. Non-Contravention. The execution, delivery and performance by Buyer
-----------------
of this Agreement and the Ancillary Agreements to which Buyer is a party do not
and will not (i) contravene or conflict with the corporate charter or bylaws of
Buyer, (ii) to the best of Buyer's knowledge after due inquiry, contravene or
conflict with any provision of any law, regulation, judgment, injunction, order
or decree binding upon Buyer or (iii) assuming the receipt of all required
consents, constitute a material default under or give rise to any right of
termination, cancellation or acceleration of any right or obligation of Buyer to
a loss of any material benefit to which Buyer is entitled under any provision of
any material agreement, contract or other instrument binding upon Buyer.
<PAGE>
-19-
5.05. Finders' Fees. There is no investment banker, broker, finder or
-------------
other intermediary which has been retained by or is authorized to act on behalf
of Buyer who might be entitled to any fee or commission from the Company or
Sellers or any Affiliate thereof upon consummation of the transactions
contemplated by this Agreement.
5.06. Purchase for Investment. Buyer is purchasing the Shares for
-----------------------
investment for its own account and not with a view to, or for sale in connection
with, any distribution thereof.
5.07. Litigation. There is no action, suit, investigation or proceeding
----------
material to the business of the Buyer pending against, or to the knowledge of
Buyer, threatened against or affecting, Buyer or any of its properties or the
transactions contemplated hereby before any court or arbitrator or any
governmental body, agency or official, nor to the knowledge of Buyer, is there
any basis therefore.
ARTICLE VI
COVENANTS OF THE COMPANY AND SELLERS
The Company and each Seller agree that:
6.01. Conduct of the Company. From the date hereof until the Closing
----------------------
Date, the Company shall conduct its business in the ordinary course consistent
with past practices and shall use its best efforts to preserve intact its
business organization and relationships with third parties and to keep available
the services of its present officers and employees. Without limiting the
generality of the foregoing, from the date hereof until the Closing Date,
without written permission from Buyer the Company will not:
(a) adopt or propose any change in its corporate charter or bylaws;
(b) merge or consolidate with any other Person or acquire a
material amount of assets of any other Person;
(c) sell, lease, license or otherwise dispose of any material
assets or property except (i) pursuant to existing contracts or commitments and
(ii) in the ordinary course consistent with past practices;
(d) effect any direct or indirect redemption, purchase or other
acquisition of any Company Securities, or declare, set aside or pay any dividend
or make any other distribution of assets of any kind whatsoever with respect to
any Company Securities;
(e) issue any securities;
(f) lend to or borrow any money from any Person;
<PAGE>
-20-
(g) make any single capital expenditure in excess of $5,000;
(h) terminate or amend any material contract; or
(i) agree or commit to do any of the foregoing.
The Company will not (i) take or agree or commit to take any action that would
make any representation and warranty of the Company or Sellers under this
Agreement on the date of its execution and delivery inaccurate in any respect
at, or as of any time prior to, the Closing Date or (ii) omit or agree or commit
to omit to take any action necessary to prevent any such representation or
warranty from being inaccurate in any respect at any such time.
6.02. Access to Information. From the date hereof until the Closing Date,
---------------------
the Company (a) will give Buyer, its counsel, financial advisors, financing
sources, auditors and other authorized representatives (at reasonable times and
upon reasonable notice) full access to the offices, properties, books and
records of the Company (b) will furnish and will cause its counsel, financial
advisors, auditors and other authorized representatives to furnish to Buyer, its
counsel, financial advisors, auditors and other authorized representatives, such
financial and operating data and other information relating to the Company as
such Persons may reasonably request and (c) will instruct the employees, counsel
and financial advisors of the Company to cooperate with Buyer in its
investigation of the Company. Buyer acknowledges that it has had adequate
opportunity to review the business and affairs of the Company and to speak with
and ask questions of Sellers and other key employees of the Company. As of the
date hereof, Buyer does not have any knowledge of any breach of representation
or warranty of the Company or Sellers contained herein.
6.03. Notices of Certain Events. The Company will promptly notify Buyer
-------------------------
of:
(i) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection with
the transactions contemplated by this Agreement;
(ii) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
(iii) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge threatened against, relating to or involving
or otherwise affecting the Company disclosed pursuant to Section 3.11 or
that relate to the consummation of the transactions contemplated by this
Agreement.
6.04. Resignations. The Company will deliver to Buyer the resignations of
------------
all officers and directors of the Company from their positions with the Company
at or prior to the Closing Date, unless otherwise specified by Buyer.
<PAGE>
-21-
6.05. No Negotiations with Third Parties. From the date hereof until the
----------------------------------
earlier of the Closing Date or the date on which this Agreement is terminated,
neither the Company, Sellers nor any of their respective agents or
representatives, shall, directly or indirectly, encourage, solicit or engage in
any discussions or negotiations with, or provide any information to, any Person
or group concerning the possible acquisition by such third party of all or any
part of the business of the Company, whether by purchase of assets, stock,
merger or otherwise, other than as contemplated or permitted by this Agreement.
The Company and each Seller agree promptly to notify Buyer of interest by any
Person with respect to any such possible acquisition.
6.06. Confidentiality. The Company, Sellers and their Affiliates, will
---------------
hold, and will use their best efforts to cause their respective officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and
information concerning Buyer furnished to the Company, or to Sellers or their
Affiliates, in connection with the transactions contemplated by this Agreement,
and (after the Closing Date) all confidential documents and information
concerning the Company, except to the extent that such information can be shown
to have been (i) previously known on a nonconfidential basis by Sellers, (ii) in
the public domain through no fault of Sellers or (iii) later lawfully acquired
by Sellers from sources other than the Company or Buyer; provided that Sellers
--------
may disclose such information to their respective officers, directors,
employees, accountants, counsel, consultants, advisors and agents in connection
with the transactions contemplated by this Agreement so long as such persons are
informed by Sellers of the confidential nature of such information and are
directed by Sellers to treat such information confidentially. The obligation of
the Company, and Sellers and their Affiliates, to hold any such information in
confidence shall be satisfied if they exercise the same care with respect to
such information as they would take to preserve the confidentiality of their own
similar information. If this Agreement is terminated, the Company, and Sellers
and their Affiliates, will, and will use their best efforts to cause their
respective officers, directors, employees, accountants, counsel, consultants,
advisors and agents to, destroy or deliver to Buyer, upon request, all documents
and other materials, and all copies thereof, obtained by the Company, or by
Sellers or their Affiliates, or on their behalf from Buyer in connection with
this Agreement that are subject to such confidence.
6.07. Continuing Disclosure. Prior to the Closing, the Company and
---------------------
Sellers shall have the continuing obligation promptly to advise Buyer with
respect to any matter hereafter arising or discovered that, if existing or known
at the date of this Agreement, would have been required to be set forth or
described in a schedule to this Agreement, or that constitutes a breach or
prospective breach of this Agreement by the Company or a Seller. The delivery
of any such notice shall not affect Buyer's remedies hereunder.
6.08. Termination of Security Interest. Within ten (10) business days
--------------------------------
following the Closing Date, the Stockholders shall have obtained and had filed
on behalf of the Company UCC-3 financing statements terminating any security
interest of Finova Capital Corporation or IBM Credit Corporation in the assets
of the Company.
<PAGE>
-22-
6.09. Automobile Leases. If not done prior to the Closing Date, within
-----------------
thirty (30) days following the Closing Date, the Company shall transfer to
Rothenberger that certain automobile lease (BMW) and that certain loan to
purchase an automobile (Yukon), each listed on Schedule 3.12 hereto.
-------------
ARTICLE VII
COVENANTS OF BUYER
7.01. Confidentiality. Buyer agrees that prior to the Closing Date and
---------------
after any termination of this Agreement, Buyer and its Affiliates will hold, and
will use their best efforts to cause their respective officers, directors,
employees, accountants, counsel, consultants, advisors and agents to hold, in
confidence, unless compelled to disclose by judicial or administrative process
or by other requirements of law, all confidential documents and information
concerning the Company furnished to Buyer or its Affiliates in connection with
the transactions contemplated by this Agreement, except to the extent that such
information can be shown to have been (i) previously known on a nonconfidential
basis by Buyer, (ii) in the public domain through no fault of Buyer or (iii)
later lawfully acquired by Buyer from sources other than the Company; provided
--------
that Buyer may disclose such information to its officers, directors, employees,
accountants, counsel, consultants, advisors and agents in connection with the
transactions contemplated by this Agreement and to its financing sources in
connection with obtaining the financing for the transactions contemplated by
this Agreement (unless the Company or Sellers in their transmittal of such
information reasonably expressly identify a narrower class of recipients, in
which case the dissemination of such information shall be limited to such
designated recipients) so long as such Persons are informed by Buyer of the
confidential nature of such information and are directed by Buyer to treat such
information confidentially. The obligation of Buyer and its Affiliates to hold
any such information in confidence shall be satisfied if the exercise the same
care with respect to such information as they would take to preserve the
confidentiality of their own similar information. If this Agreement is
terminated, Buyer and its Affiliates will, and will use their best efforts to
cause their respective officers, directors, employees, accountants, counsel,
consultants, advisors and agents to, destroy or deliver to Sellers, upon
request, all documents and other materials, and all copies thereof, obtained by
Buyer or its Affiliates or on their behalf from a Seller or the Company in
connection with this Agreement that are subject to such confidence.
ARTICLE VIII
COVENANTS OF ALL PARTIES
The parties hereto agree that:
8.01. Best Efforts. Subject to the terms and conditions of this
------------
Agreement, each party will use its best efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all
<PAGE>
-23-
things reasonably necessary or desirable under applicable laws and regulations
to consummate the transactions contemplated by this Agreement. Sellers and Buyer
each agree, and Sellers, prior to the Closing, and Buyer, after the Closing,
agree to cause the Company, to execute and deliver such other documents,
certificates, agreements and other writings and to take such other actions as
may be reasonably necessary or desirable in order to consummate or implement
expeditiously the transactions contemplated by this Agreement.
8.02. Certain Filings. The Company, Sellers and Buyer shall cooperate
---------------
with each other (a) 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 this Agreement and (b) 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.
8.03. Public Announcements. The parties agree to consult with each other
--------------------
before issuing any press release or making any public statement with respect to
this Agreement or the transactions contemplated hereby and, except as may be
required by applicable law or any listing agreement with any national securities
exchange, will not issue any such press release or make any such public
statement prior to such consultation; provided however that the foregoing
restrictions shall not apply to any press release or public statement made by
Buyer following the Closing Date.
ARTICLE IX
EMPLOYEE BENEFITS
9.01. Employee Benefits Definitions. The following terms, as used herein,
-----------------------------
having the following meanings:
"Benefit Arrangement" means each employment, severance or other similar
-------------------
contract, arrangement or policy (written or oral) and each plan or arrangement
(written or oral) providing for severance benefits, insurance coverage
(including any self-insured arrangements), workers' compensation, disability
benefits, supplemental unemployment benefits, vacation benefits, retirement
benefits or for deferred compensation, profit-sharing, bonuses, stock options,
stock appreciation rights or other forms of incentive compensation or post-
retirement insurance, compensation or benefits which (i) is not an Employee
Plan, (ii) is entered into, maintained or contributed to, as the case may be, by
the Company or any of its ERISA Affiliates and (iii) covers any employee or
former employee of the Company.
"Employee Plans" means each "employee benefit plan", as such term is
--------------
defined in Section 3(3) of ERISA, that (i) is subject to any provision of ERISA
and (ii) is maintained or contributed to by the Company or any of its ERISA
Affiliates, as the case may be.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended.
<PAGE>
-24-
"ERISA Affiliate" of any entity means any other entity that, together with
---------------
such entity, would be treated as a single employer under Section 414 of the
Code.
"Multiemployer Plan" means each Employee Plan that is a multiemployer plan,
------------------
as defined in Section 3(37) of ERISA.
9.02. ERISA Representations. The Company and each Seller, jointly and
---------------------
severally, hereby represent and warrant to Buyer that:
(a) Schedule 9.02 lists each Employee Plan that covers any employee
-------------
of the Company, copies or descriptions of all of which have previously been made
available or furnished to Buyer. With respect to each Employee Plan, the Company
has provided the most recently filed Form 5500 and an accurate summary
description of such plan. The Company has provided Buyer with complete age,
salary, service and related data as of the most recent practicable date for
employees of the Company.
(b) Schedule 9.02 lists each Benefit Arrangement of the Company,
-------------
copies or descriptions of which have been made available or furnished previously
to Buyer.
(c) None of the Employee Plans or other arrangements listed on
Schedule 9.02 covers any non-United States employee or former employee of the
- -------------
Company.
(d) No non-exempt "prohibited transaction", as defined in Section
406 of ERISA or Section 4975 of the Code, has occurred with respect to any
Employee Plan which prohibited transaction would cause a Material Adverse
Effect.
(e) No Employee Plan is a Multiemployer Plan and no Employee Plan is
subject to Title IV of ERISA. The Company and its Affiliates have not incurred,
nor do they reasonably expect to incur, any liability under Title IV of ERISA
arising in connection with the termination of any plan covered or previously
covered by Title IV of ERISA.
(f) Each Employee Plan which is intended to be qualified under
Section 401(a) of the Code is so qualified and has been so qualified during the
period from its adoption to date (except for the adoption of amendments for
which the required adoption date has not passed), and each trust forming a part
thereof is exempt from tax pursuant to Section 501(a) of the Code. The Company
has furnished to Buyer a copy of the most recent Internal Revenue Service
determination letter with respect to each such plan. Each Employee Plan has been
maintained in material compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations, including but
not limited to ERISA and the Code, which are applicable to such plan.
(g) Each Benefit Arrangement has been maintained in substantial
compliance with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations which are applicable to such Benefit
Arrangement, as applicable.
<PAGE>
-25-
(h) With respect to the employees and former employees of the
Company, there are no employee post-retirement medical or health plans in
effect, except as required by Section 4980B of the Code, or if applicable, state
law.
(i) All contributions and payments accrued under each Employee Plan
and Benefit Arrangement, determined in accordance with prior funding and accrual
practices, as adjusted to include proportional accruals for the period ending on
the Closing Date, will be discharged and paid on or prior to the Closing Date.
Except as disclosed in writing to Buyer prior to the date hereof, there has been
no amendment to, written interpretation of or announcement (whether or not
written) by the Company or any of its ERISA Affiliates relating to, or change in
employee participation or coverage under, any Employee Plan or Benefit
Arrangement that would increase materially the expense of maintaining such
Employee Plan or Benefit Arrangement above the level of the expense incurred in
respect thereof for the fiscal year ended prior to the date hereof.
(j) No tax under Section 4980B or Section 4980D of the Code has been
incurred in respect of any Employee Plan that is a group health plan, as defined
in Section 5000(b)(1) of the Code.
(k) No employee of the Company will become entitled to any bonus,
retirement, severance or similar benefit or enhanced benefit solely as a result
of the transactions contemplated hereby.
9.03. No Third Party Beneficiaries. No provision of this Article IX shall
----------------------------
create any third party beneficiary or other rights in any employee or former
employee (including any beneficiary or dependent thereof) of the Company in
respect of continued employment (or resumed employment) with the Company and no
provision of this Article IX shall create any such rights in any such Persons in
respect of any benefits that may be provided, directly or indirectly, under any
Employee Plan or Benefit Arrangement or any plan or arrangement that may be
established by Buyer or any of its Affiliates. No provision of this Agreement
shall constitute a limitation on rights to amend, modify or terminate after the
Closing Date any Employee Plan or Benefit Arrangement.
ARTICLE X
CONDITIONS TO CLOSING
10.01. Conditions to the Obligations of Each Party. The obligations of
-------------------------------------------
Buyer, the Company and Sellers to consummate the Closing are subject to the
satisfaction of the following conditions:
(a) No proceeding challenging this Agreement or the transactions
contemplated hereby or seeking to prohibit, alter, prevent or materially delay
the Closing shall
<PAGE>
-26-
have been instituted by any Person before any court, arbitrator, or governmental
body, agency, or official and be pending.
(b) Each other party shall have executed and delivered each of the
Ancillary Agreements to be entered into by it at Closing, in each case
substantially in the form attached as an exhibit to this Agreement.
10.02. Conditions to Obligation of Buyer. The obligation of Buyer to
---------------------------------
consummate the Closing is subject to the satisfaction of the following further
conditions:
(a)(i) the Company and each Seller shall have performed in all
material respects all of his or its obligations hereunder required to be
performed on or prior to the Closing Date, (ii) the representations and
warranties of the Company and each Seller contained in this Agreement at the
time of its execution and delivery and in any certificate or other writing
delivered by the Company or a Seller pursuant hereto, shall be true at and as of
the Closing Date, as if made at and as of such date and (iii) Buyer shall have
received a certificate signed by the President of the Company and by each Seller
to the foregoing effect.
(b) No court, arbitrator or governmental body, agency or official
shall have issued any order, and there shall not be any statute, rule or
regulation, restraining the effective operation by Buyer of the business of the
Company after the Closing Date, and no proceeding challenging this Agreement or
the transactions contemplated hereby or seeking to prohibit, alter, prevent or
materially delay the Closing shall have been instituted by any Person before any
court, arbitrator or governmental body, agency or official and be pending.
(c) Buyer shall have received an opinion of Sellers' Counsel, dated
the Closing Date, reasonably satisfactory to Buyer's Counsel.
(d) The Company shall have received all consents, authorizations
and approvals referred to in Section 3.03(b), in each case in form and substance
reasonably satisfactory to Buyer, and no such consent, authorization or approval
shall have been revoked.
(e) The Company shall present evidence to Buyer that the Company
has made severance payments to the former employees listed in Schedule 10.02(e)
-----------------
in the amounts set forth on such schedule.
(f) The Company shall have either (i) paid for and completed to the
reasonable satisfaction of Buyer the construction of partitioning walls at the
Concorde Parkway, Chantilly, VA office space to provide for separate office
space for The FahrMak Group, Inc. (the "Staffing Company"), or (ii) have
----------------
adequately reserved liabilities to cover the cost of such construction, such
cost to be documented by a reasonable estimate from bona fide contractor.
(g) Buyer's Board of Directors shall have authorized Buyer's
execution of this Agreement and the Ancillary Agreements to which it is a party
and the consummation of the transactions contemplated hereby and thereby.
<PAGE>
-27-
(h) The Company shall have paid in full all amounts due to IBM
Credit Corporation ("IBM") pursuant to that certain Agreement for Wholesale
---
Financing by and between the Company and IBM Credit Corporation and shall have
terminated such agreement and shall have requested UCC-3 termination statements
from IBM terminating any security interest granted in connection therewith.
(i) The Company shall have delivered to Buyer the resignations of
all officers and directors of the Company from their positions with the Company
unless otherwise specified by Buyer.
(j) The Company shall have either (i) delivered to Buyer a properly
executed statement satisfying the requirements of Treasury Regulation Sections
1.897-2(h) and 1.1445-2(c)(3) in a form reasonably acceptable to Buyer or (ii)
caused each Seller to have executed and delivered to Buyer certificates of non-
foreign status satisfying the requirements of Treasury Regulations Section
1.1445-2(b).
(k) Buyer shall have received all other closing documents specified
in Section 2.02 of this Agreement and all other closing documents that it may
reasonably request, all in form and substance reasonably satisfactory to Buyer.
(l) The Company shall have paid the bonuses listed on Schedule
--------
10.02(l) to the persons listed on such Schedule.
- --------
(m) The Company shall have passed resolutions satisfactory to
Buyer's Counsel effectively terminating the Company's 401(k) plan prior to the
Closing Date.
(n) The Company shall have paid its legal and accounting expenses
incurred in connection with this transaction.
(o) The Company shall have paid to Finova Capital Corporation
("Finova") $55,000 pursuant to that certain Agreement for Wholesale Financing by
------
and between the Company and Finova.
(p) The Company shall have paid to Finova $749,186.13 as payment in
full for all amounts due and owing pursuant to the Agreement for Wholesale
Financing, such agreement shall be terminated, and the Company shall have
requested UCC-3 termination statements from Finova terminating any security
interest granted in connection therewith.
10.03. Conditions to Obligation of Sellers. The obligation of Sellers to
-----------------------------------
consummate the Closing is subject to the satisfaction of the following further
conditions:
(a)(i) Buyer 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 Buyer contained in this
Agreement at the time of its execution and delivery and
<PAGE>
-28-
in any certificate or other writing delivered by Buyer pursuant hereto shall be
true in all material respects at and as of the Closing Date, as if made at and
as of such date and (iii) Sellers shall have received a certificate signed by
the Chief Financial Officer of Buyer to the foregoing effect.
(b) No court, arbitrator or governmental body, agency or official
shall have issued any order, and there shall not be any statute, rule or
regulation, restraining the effective operation by Buyer of the Business of the
Company after the Closing Date and no proceeding challenging this Agreement or
the transactions contemplated hereby or seeking to prohibit, alter, prevent or
materially delay the Closing shall have been instituted by any Person before any
court, arbitrator or governmental body, agency or official and be pending.
(c) Buyer shall have offered employment to the Employees listed on
Schedule 10.03(c).
- -----------------
(d) Sellers shall have received all items specified in Section 2.02
of this Agreement and all other closing documents that they may reasonably
request, all in form and substance reasonably satisfactory to them.
(e) Buyer shall have loaned to the Company $749,186.13 which
payment shall be used by the Company to pay in full for all amounts due and
owing pursuant to the Agreement for Wholesale Financing by and between the
Company and Finova and such agreement shall be terminated.
(f) [Omitted]
(g) Seller shall have received an opinion of Buyer's Counsel, dated
the Closing Date, reasonably satisfactory to Seller's Counsel.
(h) Buyer shall have received all consents, authorizations and
approvals referred to in Section 5.03(b), in each case in form and substance
reasonably satisfactory to Sellers, and no such consent, authorization or
approval shall have been revoked.
(i) The Company's Board of Directors shall have authorized the
Company's execution of this Agreement and the Ancillary Agreements to which it
is a party and the consummation of the transactions contemplated hereby and
thereby.
ARTICLE XI
SURVIVAL; INDEMNIFICATION
11.01. Survival. The covenants, agreements, representations and warranties
--------
of the parties hereto contained in this Agreement or in any certificate or other
writing delivered pursuant hereto or in connection herewith shall survive the
Closing until March 1, 2002, in the case of Section 6.06 and Section 7.01,
indefinitely, and in the case of the covenants, agreements,
<PAGE>
-29-
representations and warranties contained in Sections 3.18 and Article IX, until
expiration of the applicable statutory period of limitations (giving effect to
any waiver, mitigation or extension thereof), if later. Notwithstanding the
preceding sentence, any covenant, agreement, representation or warranty in
respect of which indemnity may be sought under Section 11.02 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 to
indemnity shall have been given to the party against whom such indemnity may be
sought prior to such time.
11.02. Indemnification. (a) Each Seller, jointly and severally, hereby
---------------
indemnifies Buyer and, effective at the Closing, without duplication, the
Company against and agrees to hold them harmless from any and all damage, loss,
liability and expense (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 Buyer or the
-------
Company proximately caused by any misrepresentation, inaccuracy or breach of
representation or warranty, covenant or agreement made or to be performed by the
Company prior to the Closing or a Seller pursuant to this Agreement (including
failure to deliver the Post-Closing Adjustment in accordance with Section
2.03(d)); provided however that Sellers shall not be liable under this
subsection unless either (i) the Damages arise from a failure to deliver the
Post-Closing Adjustment in accordance with Section 2.03(d) or (ii) the amount of
any Damages exceeds $25,000, and then only to the extent of such excess.
(b) Buyer hereby indemnifies Sellers against and agrees to hold
them harmless from any and all Damages incurred or suffered by Sellers
proximately caused by any misrepresentation, inaccuracy or breach of
representation or warranty, covenant or agreement made or to be performed by
Buyer pursuant to this Agreement; provided however that Buyer shall not be
liable under this subsection unless the amount of any Damages exceeds $25,000,
and then only to the extent of such excess.
(c) Sellers shall have no right of indemnification, contribution
or subrogation against the Company with respect to any indemnification by any
Seller or Sellers under this Section 11.02 if the transactions contemplated by
this Agreement are consummated. Sellers shall have a right of contribution
against each other with respect to amounts actually paid pursuant to this
Section 11.02, but such right of contribution shall in no way limit or affect
Buyer's and the Company's rights contained in this Article XI.
(d) Buyer's or the Company's claim for indemnification against
Sellers pursuant to this Article XI must be satisfied (i) first by setting off
amounts payable hereunder against the Buyer Stock held pursuant to the Escrow
Agreement, (ii) second against any amounts payable pursuant to the Earn-out
Agreement, (iii) third, against any compensation payable to Rothenberger in
connection with his employment by Buyer, and (iv) fourth by the Sellers
individually.
11.03. Procedures; No Waiver. (a) The party seeking indemnification under
---------------------
Section 11.02 (the "Indemnified Party") agrees to give prompt notice (a "Notice
----------------- ------
of Claim") to the party against whom indemnity is sought (the "Indemnifying
- -------- ------------
Party") of the assertion of any claim,
- -----
<PAGE>
-30-
or the commencement of any suit, action or proceeding in respect of which
indemnity may be sought under such Section. At its cost, the Indemnifying Party
shall have the sole authority to choose competent counsel and to litigate,
defend, pursue or settle the claim; provided however, that the choice of
----------------
competent counsel must be approved by the Indemnified Party, but such consent
may not be unreasonably withheld. A claim may not be settled without the
approval of the Indemnified Party, with such approval not being unreasonably
withheld, unless the settlement of the claim results in no monetary loss to the
Indemnified Party in which case its approval shall not be necessary.
Notwithstanding the preceding sentence to the contrary, if counsel for the
Indemnified Party reasonably believes that the Indemnifying Party has a legal
conflict in pursuing a vigorous defense of the claim on behalf of the
Indemnified Party or if the Indemnified Party reasonably believes that it has
defenses to the claim that are separate from the defenses advanced by (or
reasonably expected to be advanced by) the Indemnifying Party, then the
Indemnified Party (at its cost) shall be permitted to participate in the
litigation or defense of the claim with separate counsel of its choice. If the
Indemnified Party is successful in pursuing its separate defense then the
Indemnified Party shall be reimbursed by the Indemnifying Party the reasonable
attorneys' fees incurred in connection with the Indemnified Party's separate
representation.
(b) No waiver of a closing condition by either Buyer or Sellers
shall limit such party's rights under Section 11.02.
11.04. Resolutions of Conflicts; Arbitration. The following provisions
-------------------------------------
shall apply with respect to the assertion of claims and the indemnification
provisions of Section 11.02:
(a) A Notice of Claim shall contain the following information to the
extent it is reasonably available to the Indemnified Party:
(i) the Indemnified Party's good faith estimate of the
reasonably foreseeable maximum amount of the alleged
Damages;
(ii) a brief description in reasonable detail of the
facts, circumstances or events giving rise to the
alleged Damages based on the Indemnified Party's good
faith belief thereof; and
(iii) the specific bases upon which indemnification may be
sought consistent with the provisions of this
Agreement.
(b) In the event the Indemnifying Party is one or both Sellers and such
Indemnifying Party does not contest a Notice of Claim (or contests only a
portion of a Notice of Claim) in writing to the Indemnified Party within twenty
(20) days after such Notice of Claim is deemed delivered pursuant to Section
13.01 hereof, the Indemnified Party shall have the right to set off the amount
specified in the Notice of Claim (that is not contested) in accordance with
Section 11.02(d).
(c) In the event the Indemnifying Party gives written notice contesting
all or a portion of a Notice of Claim (a "Contested Claim") to the Indemnified
---------------
Party within twenty (20) days, if
<PAGE>
-31-
Buyer or the Company is the Indemnified Party, the Indemnified Party shall not
set off the contested amount in accordance with Section 11.02(d). In the event
of a Contested Claim, the Indemnifying Party and the Indemnified Party shall use
their best efforts to promptly and in good faith agree upon the rights of the
parties with respect to any Contested Claims. If the Indemnified Party and the
Indemnifying Party shall so agree, a memorandum setting forth such agreement
shall be prepared and signed by both parties and the Indemnified Party shall
satisfy the claim in accordance with the terms thereof.
(d) Any dispute or controversy concerning the indemnity obligations of
Section 11.02 not agreed to by the parties pursuant to Section 11.04(c) shall be
resolved in good faith by mediation among Sellers and the senior executive
officers of Buyer.
(e) If such dispute cannot be resolved by mediation within thirty (30)
days, then, except for the right of either party to apply to a court of
competent jurisdiction for a temporary restraining order, preliminary
injunction, or other equitable relief to preserve the status quo or prevent
irreparable harm pending the selection and confirmation of an arbitrator, any
continuing dispute, controversy or claim arising out of, in connection with or
in relation to the indemnity obligations under Section 11.02 shall be settled by
arbitration. Arbitration shall be conducted by a single arbitrator mutually
agreeable to the Sellers and Buyer, or if a single arbitrator cannot be agreed
to within thirty (30) days, then by three arbitrators. In the event of three
arbitrators, Buyer and Sellers shall each elect one arbitrator and the two
arbitrators so elected shall select a third arbitrator. The decision of the
arbitrators as to the validity and amount of any claim in dispute shall be
binding and conclusive upon the parties to this Agreement and the parties shall
act in accordance with such decision and satisfy and such claim in accordance
therewith. Judgment upon any aware rendered by the arbitrators may be entered in
any court having jurisdiction. Any such arbitration shall be held in Stamford,
Connecticut and shall be conducted under the rules then in effect of the
American Arbitration Association.
ARTICLE XII
TERMINATION
12.01. Grounds for Termination. This Agreement may be terminated at any
-----------------------
time prior to the Closing:
(i) by written agreement of Sellers and Buyer;
(ii) by either Sellers or Buyer if the Closing shall not have
been consummated on or before March 1, 2000;
(iii) by either Sellers or Buyer in the event of a material breach
by the other of the breaching party's covenants, representations and
warranties contained herein; or
<PAGE>
-32-
(iv) by either Sellers or Buyer 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.
The party desiring to terminate this Agreement pursuant to clauses (ii),
(iii), or (iv) shall give notice of such termination to the other parties.
12.02. Effect of Termination. If this Agreement is terminated as
---------------------
permitted by Section 12.01, such termination shall be without liability of
either party (or any shareholder, 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 failure of any party to
fulfill a condition to the performance of the obligations of another party or to
perform a covenant of this Agreement or from a willful breach by any party to
this Agreement, 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 6.06, 7.01 and 13.03 shall survive any termination
hereof pursuant to Section 12.01.
ARTICLE XIII
MISCELLANEOUS
13.01. Notices. All notices, requests and other communications to either
-------
party hereunder shall be in writing (including telecopy or similar writing) and
shall be given,
if to Buyer, to:
Joseph P. Beninati
Chief Executive Officer
Greenwich Technology Partners, Inc.
43 Gate House Road
Stamford, CT 06902
Telecopy: (203) 969-3340
with a copy to:
Kevin M. Barry, Esq.
Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, MA 02110
Telecopy: (617) 248-7100
<PAGE>
-33-
if to the Company or a Seller, to each of:
John Rothenberger
700 Springvale Road
Great Falls, VA 22066
Telecopy: (703) 222-5817
and
G. Richard Rothenberger
687 Pony Road
Mohrsville, PA 19541
with a copy to:
Vernon Johnson, Esq.
Jackson & Campbell, P.C.
One Lafayette Center, South Tower
1120-20/th/ Street, N.W.
Washington D.C. 20036-3437
Telecopy: (202) 457-1678
13.02. Amendments; No Waivers. (a) Any provision of this Agreement may
----------------------
be amended or waived prior to the Closing Date if, and only if, such amendment
or waiver is in writing and signed by Buyer, the Company and Sellers.
(b) No failure or delay by either 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.
13.03. Expenses. All costs and expenses incurred in connection with this
--------
Agreement shall be paid by the party incurring such cost or expense.
13.04. Successors and Assigns. The provisions of this Agreement shall be
----------------------
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that no party may assign, delegate or otherwise
--------
transfer any of his or its rights or obligations under this Agreement without
the consent of the other parties hereto, except that Buyer may transfer or
assign, in whole or from time to time in part, to one or more of its Affiliates,
the right to purchase all or a portion of the Shares, but no such transfer or
assignment will relieve Buyer of its obligations hereunder, and Buyer may
collaterally assign its rights to receive payments pursuant to Article XI
hereof.
<PAGE>
-34-
13.05. Further Assurances. From time to time after the Closing, at the
------------------
request of any party and without further consideration, each other party will
execute and deliver to such party such other documents, and take such other
action, as such party may reasonably request in order to consummate more
effectively the transactions contemplated hereby, including without limitation,
vesting in Buyer good, valid and marketable title to the Shares.
13.06. Governing Law. This Agreement and the Ancillary Agreements shall
-------------
be construed in accordance with and governed by the law of the State of
Delaware, without regard to the conflicts of law rules of such state.
13.07. Counterparts; Effectiveness. This Agreement may be signed 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. This
Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by the other parties hereto.
13.08. Entire Agreement. This Agreement and the Ancillary Agreements
----------------
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior agreements, understandings and
negotiations, both written and oral, between the parties with respect to the
subject matter hereof. No representation, inducement, promise, understanding,
condition or warranty not set forth herein has been made or relied upon by
either party hereto. Neither this Agreement nor any provision hereof is
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder.
13.09. Captions. The captions herein are included for convenience of
--------
reference only and shall be ignored in the construction or interpretation
hereof.
13.10. Jurisdiction. Any action or proceeding seeking to enforce any
------------
provision of, or based on any right arising out of, this Agreement, may be
brought against any of the parties in the courts of the State of Delaware or the
federal court sitting therein, and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any such action or proceeding may be served on any party anywhere in
the world, whether within or without the State of Delaware.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
-35-
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
GREENWICH TECHNOLOGY PARTNERS, INC.
By: /s/ Dennis M. Goett
----------------------------------
Name:
Title:
ASPIRE TECHNOLOGY GROUP, INC.
By: /s/ John Rothenberg
----------------------------------
Name: John Rothenberg
Title: President
SELLERS:
/s/ John Rothenberger
--------------------------------------
John Rothenberger
/s/ G. Richard Rothenberger
--------------------------------------
G. Richard Rothenberger
<PAGE>
Exhibit A - Earn-out Agreement
------------------------------
Earn-out Payment: Buyer will pay Rothenberger the Earn-out Payment over four
quarters based on revenue and retention, which will account for 75% and 25%,
respectively, of the Earn-out Payment, providing certain targets are met. The
first payment will be made after the first three complete months following the
Closing Date. Payment will be made at the end of the month following each
three-month period (i.e., the end of the fourth month for the first payment)
(each such payment date being referred to herein as a "Payment Date") . For
------------
example, if the Closing Date were March 1, 2000, the first Payment Date would be
June 30, 2000 based on the results from March through May of 2000. The maximum
quarterly portion of the Earn-out Payment is $24,375 for an aggregate Earn-out
Payment of $97,500 if the revenue and retention goals are achieved in full. G.
Richard Rothenberger acknowledges and agrees that he is not entitled to any
Earn-out Payment of any kind.
Revenue:
- --------
Rothenberger will be eligible to receive an Earn-out Payment for revenue if
billable and collected revenues earned by Jay White, Jake Marshak, Adam Morey,
Tavia Ford, Marcel Messing, Brian Lucas and Chris Funderberg (the "Aspire
------
Consultants") exceed $200,000; for "fixed fee" projects (i.e. projects in which
- -----------
the customer agrees to pay a fixed fee for completion of a particular task or
tasks) billable revenues shall be calculated by multiplying the number of hours
budgeted and worked by the particular Aspire Consultant by the rate for such
Aspire Consultant as listed on Buyer's standard rate card in effect from time to
time. Rothenberger will receive the full quarterly Earn-out Payment for revenue
attainment (75% x $24,375 = $18,281) if the Aspire Consultants generate at least
$250,000 of billable and collectable revenue during any of the three-month
periods. If, however, revenues generated by the Aspire Consultants fall to or
below $200,000 for a three-month period, he receives none of the quarterly
payment. If he achieves revenue between $200,000 and $250,000, he receives that
portion of the deferred cash determined according to the following formula: 1.0
minus Y where Y equals the number determined by the following formula: 250,000
minus X divided by 50,000 where X equals the revenue. For example, if he
achieves $225,000, he receives half of the payment: 250,000 minus 225,000
divided by 50,000 = .5; 1.0 minus .5 equal .5 = $9,140.50.
The maximum Rothenberger can earn any quarter for achieving (or over achieving)
revenue with the Aspire Consultants is $18,281. At the first anniversary of the
Closing Date, there will be an adjustment to compensate Rothenberger based on
his cumulative YTD achievement which will reconcile fluctuations outside of the
$200,000-250,000 range. In the following examples, an adjustment is unnecessary
because the revenue achievement does not fluctuate outside of the $200,000 to
$250,000 range.
<PAGE>
-2-
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Examples Without Adjustment:
Year End
Feb-Apr May-Jul Aug-Oct Nov-Jan Adjustment TOTAL
-------- -------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Revenue Target $250,000 $250,000 $250,000 $250,000 $1,000,000 $1,000,000
Revenue Achieved $250,000 $250,000 $250,000 $250,000 $1,000,000 $1,000,000
Achievement of Target 100% 100% 100% 100% 100% 100%
% Target Deferred Cash Earned 100% 100% 100% 100% 100% 100%
Deferred Percentage earned 18.750% 18.750% 18.750% 18.750% 75.000% 75.000%
Deferred Cash Paid $18,281 $18,281 $18,281 $18,281 $0 $73,125
Revenue Achieved $225,000 $225,000 $225,000 $225,000 $900,000 $900,000
Achievement of Target 90% 90% 90% 90% 90% 90%
% Target Deferred Cash Earned 50% 50% 50% 50% 50% 50%
Deferred Percentage earned 9.375% 9.375% 9.375% 9.375% 37.500% 37.500%
Deferred Cash Paid $9,141 $9,141 $9,141 $9,141 $0 $36,563
Revenue Achieved $200,000 $200,000 $200,000 $200,000 $800,000 $800,000
Achievement of Target 80% 80% 80% 80% 80% 80%
% Target Deferred Cash Earned 0% 0% 0% 0% 0% 0%
Deferred Percentage earned 0.000% 0.000% 0.000% 0.000% 0.000% 0.000%
Deferred Cash Paid $0 $0 $0 $0 $0 $0
- -----------------------------------------------------------------------------------------------
</TABLE>
In the following example, at the end of the year, Rothenberger receives an
adjustment to compensate for the fluctuations in revenues for the year. In this
example, since he achieves 95% of targeted revenues for the year, he receives
75% of the Earn-out Payment attributable to revenue (determined as follows:
1,000,000 minus 950,000 equals 50,000 divided by 200,000 equals .25; 1.0 minus
.25 equals .75), or 56.25% of the total Earn-out Payment (75% x 75% = 56.25%).
Before the adjustment he received 46.875%, therefore the adjustment is 9.375%:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Examples Without Adjustment:
Year End
Feb-Apr May-Jul Aug-Oct Nov-Jan Adjustment TOTAL
-------- -------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Revenue Achieved $175,000 $225,000 $250,000 $300,000 $950,000 $950,000
Achievement of Target 70% 90% 100% 120% 95% 95%
% Target Deferred Cash Earned 0.00% 50.00% 100.00% 100.00% 75.00% 75.00%
Deferred Percentage earned 0.000% 9.375% 18.750% 18.750% 9.375% 56.250%
Deferred Cash Paid $0 $9,141 $18,281 $18,281 $9,141 $54,844
- -----------------------------------------------------------------------------------------------
</TABLE>
Retention:
- ----------
Rothenberger will receive the remaining 25% (6.25% quarterly) of the Earn-out
Payment payable at the end of the month following each quarter if all seven
Aspire Consultants still work for Buyer at the end of such quarter. If all
seven Aspire Consultants still work for Buyer at the end of any measured
quarter, Rothenberger will receive 6.25% of the Earn-out Payment for such
quarter. If six of the Aspire Consultants still work for Buyer at the end of
any measured quarter, 3.125% of the Earn-out Payment will be paid for such
quarter. If five or fewer of the Aspire Consultants still work for Buyer at the
end of any measured quarter, 0% of the Earn-out Payment will be paid for such
quarter. Thus, if for example any Aspire Consultant quits or is terminated
during the third payment quarter, Rothenberger would receive 6.25%, 6.25%,
3.125%, and 3.125% of the total Earn-out Payment over the four quarters.
Procedures:
- -----------
<PAGE>
-3-
On each Payment Date, Buyer shall deliver to Rothenberger by check the portion
of the Earn-out Payment (if any) due to Rothenberger along with Buyer's good
faith basis for the calculation of the payment, made in accordance with
generally accepted accounting principles. If Rothenberger shall disagree with
such calculation, Rothenberger shall have ten (10) days from the date of his
receipt of the payment and the basis for calculation to dispute such amount in
writing (a "Dispute Notice"). Should Rothenberger deliver a Dispute Notice,
--------------
Buyer will provide Rothenberger with reasonable access to the supporting
information for such calculations.
Buyer and Rothenberger shall use their best efforts to reach agreement on the
disputed amount. If Buyer and Rothenberger are unable to reach agreement within
20 days of Buyer's receipt of the Dispute Notice, the parties shall promptly
cause Arthur Andersen to review this Agreement and the disputed amount. Arthur
Andersen shall deliver to Buyer and Rothenberger as promptly as possible a
report setting forth its calculation of the disputed amount, which report shall
be binding on Buyer and Rothenberger. The cost of such review and report shall
be borne by Rothenberger; provided however, Buyer shall bear the expenses if the
payment determined to be due to Rothenberger exceeds Buyer's original
calculation of such amount by more than 5% of Buyer's original calculation.
In the event Buyer terminates Rothenberger's employment for Cause (as defined
herein) or Rothenberger voluntarily terminates his employment with Buyer,
Rothenberger shall be entitled to no further payments pursuant to this Exhibit
-------
A.
- -
As used above, "Cause" shall be defined as (i) the failure or refusal of
-----
Rothenberger to render services to the Company in accordance with his position
or a good faith determination by a majority of the Board of Directors of Buyer
that Rothenberger has failed to perform the material duties of his employment as
requested by Buyer, in either case upon notice from the Board of Directors of
Buyer and ten days to cure such failure or refusal to the reasonable
satisfaction of the Board of Directors; (ii) gross negligence or material breach
of fiduciary duty with respect to Rothenberger's obligations to Buyer; (iii) the
commission by Rothenberger of an act of fraud, embezzlement or the deliberate
disregard of the material rules or policies of Buyer (provided the Board of
Directors of Buyer shall provide Rothenberger notice of such deliberate
disregard and ten days to cure such disregard to the reasonable satisfaction of
the Board of Directors) or the commission by Rothenberger of any other action
with the intent to materially injure Buyer; (iv) Rothenberger's conviction or a
plea of nolo contendere to a felony; (v) the commission of any act which
constitutes unfair competition with Buyer or which induces any customer of Buyer
to breach a contract with Buyer; or (vi) violation by Rothenberger of the
Noncompetition and Non-Solicitation Agreement to which he is a party or of his
Employment Letter with the Company.
<PAGE>
EXHIBIT 2.2
ASSET PURCHASE AGREEMENT
dated as of
March 31, 2000
between
Greenwich Technology Partners, Inc.,
Net Gain, LLC
and the Members
listed on the Signature Pages hereto
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<S> <C>
ARTICLE I - DEFINITIONS................................................... 1
Section 1.01. Definitions............................................... 1
ARTICLE II - PURCHASE AND SALE............................................ 2
2.01. Purchase and Sale................................................. 2
2.02. Excluded Assets................................................... 3
2.03. No Assumption of Liabilities...................................... 3
2.04. Assignment of Purchased Assets and Rights......................... 3
2.05. Purchase Price; Allocation of Purchase Price...................... 4
2.06. Closing........................................................... 4
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF SELLER.................... 5
3.01. Limited Liability Company Existence and Power..................... 5
3.02. Authorization..................................................... 5
3.03. Governmental Authorization........................................ 5
3.04. Non-Contravention................................................. 5
3.05. Required Consents................................................. 6
3.06. Financial Statements.............................................. 6
3.07. Absence of Certain Changes........................................ 6
3.08. Properties........................................................ 7
3.09. Title to Purchased Assets......................................... 7
3.10. No Undisclosed Liabilities........................................ 7
3.11. Litigation........................................................ 7
3.12. Material Contracts................................................ 7
3.13. Compliance with Laws.............................................. 8
3.14. Proprietary Rights................................................ 8
3.15. Finders' Fees..................................................... 9
3.16. Other Information................................................. 9
3.17. Settlement and Release............................................ 9
ARTICLE IIIA - REPRESENTATIONS AND WARRANTIES OF THE MEMBERS.............. 10
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF BUYER...................... 10
4.01. Organization and Existence........................................ 10
4.02. Corporate Authorization........................................... 10
4.03. Governmental Authorization........................................ 11
4.04. Non-Contravention................................................. 11
ARTICLE V - COVENANTS OF SELLER........................................... 12
5.01. Access to Information............................................. 12
5.02. Noncompetition.................................................... 12
ARTICLE VI - COVENANT OF BUYER............................................ 13
6.01 Working Capital Loans.............................................. 13
ARTICLE VII - COVENANTS OF BOTH PARTIES................................... 13
7.01. Further Assurances................................................ 13
7.02. Certain Filings................................................... 13
7.03. Public Announcements.............................................. 14
</TABLE>
<PAGE>
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<TABLE>
<S> <C>
ARTICLE VIII - TAX MATTERS................................................ 14
8.01. Tax Definitions................................................... 14
8.02. Tax Matters....................................................... 14
8.03. Tax Cooperation; Allocation of Taxes.............................. 15
ARTICLE IX - CONDITIONS TO CLOSING........................................ 16
9.01. Conditions to the Obligations of Each Party....................... 16
9.02. Conditions to Obligation of Buyer................................. 16
9.03. Conditions to Obligations of Seller............................... 17
ARTICLE X - SURVIVAL; INDEMNIFICATION..................................... 17
10.01. Survival......................................................... 17
10.02. Indemnification.................................................. 17
10.03. Procedures; No Waiver............................................ 18
ARTICLE XI - MISCELLANEOUS................................................ 18
11.01. Notices.......................................................... 18
11.02. Amendments; No Waivers........................................... 19
11.03. Expenses......................................................... 19
11.04. Successors and Assigns........................................... 19
11.05. Governing Law.................................................... 20
11.06. Counterparts; Effectiveness...................................... 20
11.07. Entire Agreement................................................. 20
11.08. Bulk Sales Laws.................................................. 20
11.09. Captions......................................................... 20
</TABLE>
Exhibits
- --------
Exhibit A -- Assignment and Assumption Agreement
Exhibit B -- Bill of Sale
Exhibit C -- Form of Promissory Note
Exhibit D -- Certificate of Originality
Schedules
- ---------
Schedule 2.01 Purchased Customer Contracts and Proprietary Rights
Schedule 3.05 Seller's Required Consents
Schedule 3.06 Financial Statements of the Business
Schedule 3.12 Contracts
Schedule 3.14 Proprietary Rights
Schedule 4.05 Buyer's Required Consents
Schedule 6.01 Expenses
Schedule 9.02 Employees
<PAGE>
ASSET PURCHASE AGREEMENT
AGREEMENT dated as of March 31, 2000 between Greenwich Technology
Partners, Inc., a Delaware corporation ("Buyer"), NetGain, LLC, a Delaware
-----
limited liability company ("Seller"), Jeffrey R. Drew and Shally Bansal Stanley
------
each (each individually, a "Member" and collectively, the "Members").
------ -------
W I T N E S S E T H:
WHEREAS, Seller conducts a business (the "Business") that provides
--------
network consulting services; and
WHEREAS, Buyer desires to purchase certain of the assets of the Business
from Seller, and Seller desires to sell such assets of the Business to Buyer,
upon the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01. Definitions. The following terms, as used herein, have the
-----------
following meanings:
"Affiliate" means, with respect to any Person, any Person directly or
---------
indirectly controlling, controlled by, or under common control with such other
Person.
"Ancillary Agreements" means the Assignment and Assumption Agreement
--------------------
attached hereto as Exhibit A (the "Assignment and Assumption"), the Bill of Sale
--------- -------------------------
and General Assignment attached hereto as Exhibit B (the "Bill of Sale") and the
--------- ------------
Certificate of Originality in the form attached hereto as Exhibit D (the
---------
"Certificate").
-----------
"Balance Sheet" means the unaudited balance sheet of the Business as of
-------------
December 31, 1999 found in Schedule 3.06.
-------------
"Balance Sheet Date" means December 31, 1999.
------------------
"Closing Date" means the date of the Closing.
------------
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"Lien" means, with respect to any asset, any mortgage, lien, pledge,
----
charge, security interest or encumbrance of any kind in respect of such asset.
"Material Adverse Change" means a material adverse change in the
-----------------------
business, assets, condition (financial or otherwise), results of operations or
prospects of the Business taken as a whole.
"Material Adverse Effect" means a material adverse effect on the
-----------------------
business, assets, condition (financial or otherwise), results of operations or
prospects of the Business taken as a whole.
"Person" means an individual, corporation, partnership, association,
------
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Proprietary Rights" means all (A) patents, patent applications, patent
------------------
disclosures and all related continuation, continuation-in-part, divisional,
reissue, re-examination, utility, model, certificate of invention and design
patents, patent applications, registrations and applications for registrations,
(B) trademarks, service marks, trade dress, logos, tradenames, service names and
corporate names and registrations and applications for registration thereof, (C)
copyrights and registrations and applications for registration thereof, (D) mask
works and registrations and applications for registration thereof, (E) computer
software, source code, data and documentation, (F) trade secrets and
confidential business information, whether patentable or nonpatentable and
whether or not reduced to practice, know-how, manufacturing and product
processes and techniques, research and development information, copyrightable
works, financial, marketing and business data, pricing and cost information,
business and marketing plans and customer and supplier lists and information,
(G) other proprietary rights relating to any of the foregoing (including without
limitation associated goodwill and remedies against infringements thereof and
rights of protection of an interest therein under the laws of all jurisdictions)
and (H) copies and tangible embodiments thereof.
"Seller's Proprietary Rights" means all Proprietary Rights relating to
---------------------------
the Business that are owned by Seller or an Affiliate, or that are used in the
operation of the Business or necessary for the operation of the Business
ARTICLE II
PURCHASE AND SALE
2.01. Purchase and Sale. Upon the terms and subject to the conditions
-----------------
of this Agreement, Buyer agrees to purchase from Seller and Seller agrees to
sell, transfer, assign and deliver, or cause to be sold, transferred, assigned
and delivered, to Buyer at the Closing, free and clear of all Liens the
following assets of Seller as the same shall exist on the Closing Date (the
"Purchased Assets"):
----------------
<PAGE>
-3-
(i) all rights under the customer contracts and customer agreements
specifically identified on Schedule 2.01 (collectively, the "Purchased
------------- ---------
Customer Contracts");
------------------
(ii) all of Seller's rights, claims, credits, causes of action or
rights of set-off against third parties relating to the Purchased Customer
Contracts;
(iii) all Proprietary Rights owned or licensed, or used in the
Business, by Seller or its Affiliates, including without limitation, that
software listed in Schedule 2.01 and the source code thereto, the
-------------
specifications for which also are set forth on Schedule 2.01, all copies of
-------------
which will be delivered to Buyer at the Closing (collectively, the
"Software");
--------
(iv) all books, records, files and papers, whether in hard copy or
computer format, including, without limitation, engineering information,
sales, marketing and promotional materials, manuals and data, sales and
purchase correspondence, lists of present and former customers, personnel and
employment records, and any information relating to Tax imposed on the
Purchased Assets;
(v) all rights of the Seller to and in the "NetGain" name; and
(v) all goodwill associated with the Purchased Assets.
2.02. Excluded Assets. Buyer expressly understands and agrees that
---------------
except as specifically listed in Section 2.01, all other assets of the Seller,
including but not limited to accounts receivable due and payable as of the
Closing Date (the "Excluded Assets") shall be excluded from the Purchased
---------------
Assets.
2.03. No Assumption of Liabilities. Buyer shall not assume any
----------------------------
liabilities of Seller or the Members.
2.04. Assignment of Purchased Assets and Rights. Anything in this
-----------------------------------------
Agreement to the contrary notwithstanding, this Agreement shall not constitute
an agreement to assign any Purchased Asset or any claim or right or any benefit
arising thereunder or resulting therefrom if an attempted assignment thereof,
without consent of a third party thereto, would constitute a breach or other
contravention thereof or would in any way adversely affect the rights of Buyer
or Seller thereunder. Seller and Buyer will use their best efforts (but without
any payment of money by Seller or Buyer) to obtain the consent of the other
parties to any such Purchased Asset or claim or right or any benefit arising
thereunder for the assignment thereof to Buyer as Buyer may request. If such
consent is not obtained, or if an attempted assignment thereof would be
ineffective or would adversely affect the rights of Seller thereunder so that
Buyer would not in fact receive all such rights, Seller and Buyer will cooperate
in a mutually agreeable arrangement under which Buyer would obtain the benefits
thereunder in accordance with this Agreement, including subcontracting, sub-
licensing, or subleasing to Buyer, or under which Seller would enforce for the
benefit of Buyer, any and all rights of Seller against a third party thereto.
Seller will promptly pay to Buyer when received all monies received by Seller
under any Purchased
<PAGE>
-4-
Asset or any claim or right or any benefit arising thereunder on or as of the
Closing Date, except to the extent the same represents an Excluded Asset and
except to the extent Buyer is obtaining the benefits of a Purchased Asset
pursuant to a subcontracting, sub-licensing or subleasing arrangement as
provided in this Section 2.04.
2.05. Purchase Price; Allocation of Purchase Price. (a) The purchase
--------------------------------------------
price for the Purchased Assets (the "Purchase Price") is $800,000. The Purchase
--------------
Price shall be paid as provided in Section 2.06.
(b) At Closing, Buyer and Seller shall agree upon and exchange a
statement (the "Allocation Statement"), setting forth the value of the Purchased
--------------------
Assets and of the covenant not to compete described in Section 5.02 hereof,
which shall be used for the allocation of the Purchase Price among the Purchased
Assets and the covenant not to compete.
(c) Seller and Buyer agree to report an allocation of the Purchase Price
among the Purchased Assets in a manner entirely consistent with the Allocation
Statement and agree to act in accordance with the Allocation Statement in the
preparation of financial statements and filing of all tax returns (including,
without limitation, filing Form 8594 with its Federal income tax return for the
taxable year that includes the date of the Closing) and in the course of any tax
audit, tax review or tax litigation relating thereto. Each party shall notify
the other party if it receives notice that any governmental authority proposes
any allocation different than that set forth in the Allocation Statement.
2.06. Closing. The closing (the "Closing") of the purchase and sale of
------- -------
the Purchased Assets shall take place at the offices of Testa, Hurwitz &
Thibeault, LLP in Boston, Massachusetts as soon as possible, but in no event
later than 2 business days after satisfaction of the conditions set forth in
Article IX, or at such other time or place as Buyer and Seller may agree. At the
Closing,
(a) Buyer shall either (i) deliver to Seller certified or official bank
checks payable to the order of Seller in such amounts as are requested by
Seller, or (ii) at Seller's option make a wire transfer to an account or
accounts designated by Seller, in either case, in the aggregate amount of
$800,000 and pursuant to instructions received by Buyer from Seller at least two
business days prior to the Closing Date.
(b) Seller and Buyer shall enter into an Assignment and Assumption
Agreement substantially in the form attached hereto as Exhibit A, and Seller
---------
shall deliver to Buyer such deeds, bills of sale, endorsements, consents,
assignments and other good and sufficient instruments of conveyance and
assignment (the "Conveyance Documents") as the parties and their respective
--------------------
counsel shall deem reasonably necessary or appropriate to vest in Buyer all
right, title and interest in, to and under the Purchased Assets.
(c) Seller and Buyer shall enter into the other Ancillary Agreements.
<PAGE>
-5-
(d) Seller and Buyer shall execute and deliver all such instruments,
documents and certificates as may be reasonably requested by the other party
that are necessary, appropriate or desirable for the consummation at the Closing
of the transactions contemplated by this Agreement.
(e) Seller shall deliver to Buyer all copies of the K-9 Software and any
and all source code for such software.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller and the Members, jointly and severally, hereby represent and
warrant to Buyer that except as set forth in the Schedules hereto:
3.01. Limited Liability Company Existence and Power. Seller is a limited
----------------------------------------------
liability company duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and has all powers and all
material governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted. Seller is duly qualified to do
business and is in good standing in each jurisdiction where the character of the
property owned or leased by it or the nature of its activities make such
qualification necessary, except for those jurisdictions where failure to be so
qualified would not, individually or in the aggregate, have a Material Adverse
Effect. Seller has heretofore delivered to Buyer true and complete copies of
its certificate of formation and the limited liability company operating
agreement and related documents of Seller as currently in effect.
3.02. Authorization. The execution, delivery and performance by Seller
-------------
of this Agreement and each of the Ancillary Agreements, and the consummation by
Seller of the transactions contemplated hereby and thereby are within Seller's
powers and have been duly authorized by all necessary action on the part of
Seller. This Agreement and each of the Ancillary Agreements to which Seller is
a party constitute valid and binding agreements of Seller, enforceable against
it in accordance with their respective terms.
3.03. Governmental Authorization. The execution delivery and
--------------------------
performance by Seller of this Agreement and each of the Ancillary Agreements do
not require any action by or in respect of, or filing with, any governmental
body, agency, official or authority.
3.04. Non-Contravention. The execution, delivery and performance by
-----------------
Seller of this Agreement and each of the Ancillary Agreements do not and will
not (i) contravene or conflict with the limited liability company operating
agreement of Seller, (ii) contravene or conflict with or constitute a violation
of any provision of any law, regulation, judgment, injunction, order or decree
binding upon or applicable to Seller or the Business, (iii) assuming the receipt
of all Required Consents, constitute a default under or give rise to any right
of termination, cancellation or acceleration of any right or obligation of
Seller or to a loss of any benefit relating to the Business to which Seller is
entitled under any provision of any agreement,
<PAGE>
-6-
contract or other instrument binding upon Seller or by which any of the
Purchased Assets is or may be bound, or (iv) result in the creation or
imposition of any Lien on any Purchased Asset.
3.05. Required Consents. Schedule 3.05 sets forth each agreement,
----------------- -------------
contract or other instrument binding upon Seller requiring a consent as a result
of the execution, delivery and performance of this Agreement and the Ancillary
Agreements or the consummation of the transactions contemplated hereby and
thereby (each such consent, a "Required Consent").
----------------
3.06. Financial Statements. The balance sheet and the related unaudited
--------------------
statements of operations and cash flows for the Business taken as a whole for
the years ended December 31, 1999 and 1998 (collectively, the "Financial
---------
Statements") of the Business fairly present the financial position of the
- ----------
Business as of the dates thereof and its results of operations and cash flows
for the periods then ended. The Financial Statements are attached hereto as
Schedule 3.06.
- -------------
3.07. Absence of Certain Changes. Since the Balance Sheet Date, Seller
--------------------------
has conducted the Business in the ordinary course consistent with past
practices, and there has not been:
(a) Any Material Adverse Change or any event, occurrence, development or
state of circumstances or facts which could reasonably be expected to result
in a Material Adverse Change;
(b) any incurrence, assumption or guarantee by Seller of any indebtedness
for borrowed money with respect to the Business;
(c) any creation or other incurrence of any Lien on any Purchased Asset
other than in the ordinary course of business consistent with past practices;
(d) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the Business or any Purchased Asset which,
individually or in the aggregate, has had or could reasonably be expected to
have a Material Adverse Effect;
(e) any transaction, contract, agreement or other instrument entered
into, or commitment made, by Seller relating to the Business or any Purchased
Asset (including the acquisition or disposition of any assets) or any
relinquishment by Seller of any contract or other right, other than
transactions and commitments in the ordinary course of business consistent
with past practices and those contemplated by this Agreement;
(f) any change in any method of accounting or accounting practice by
Seller with respect to the Business;
(g) any (i) grant of severance or termination pay to any employee of the
Business, (ii) entering into of any employment, deferred compensation or
other similar agreement (or any amendment to any such existing agreement)
with any employee of the Business, (iii) increase in benefits payable under
existing severance or termination pay policies or
<PAGE>
-7-
employment agreements or (iv) increase in compensation, bonus or other
benefits payable to employees of the Business;
(h) any labor dispute, other than routine individual grievances, or any
activity or proceeding by a labor union or representative thereof to organize
any employees of the Business, or any lockouts, strikes, slowdowns, work
stoppages or threats thereof by or with respect to such employees; or
(i) any capital expenditure, or commitment for a capital expenditure, for
additions or improvements to property, plant and equipment.
3.08. Properties. (a) The Seller has good and marketable, indefeasible,
----------
fee simple title to all Purchased Assets (whether real, personal, tangible or
intangible).
(b) No Purchased Asset is subject to any Lien.
(c) No violation of any law, regulation or ordinance (including, without
limitation, laws, regulations or ordinances relating to zoning, environmental,
city planning or similar matters) relating to the Business or any Purchased
Asset currently exists or has existed at any time, except for violations that
have not had and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect. There are no developments affecting
any of the Purchased Assets pending or, to the knowledge of Seller and the
Members threatened, which might materially detract from the value of such
Purchased Assets, materially interfere with any present or intended use of any
such Purchased Assets or materially adversely affect the marketability of such
Purchased Assets.
3.09. Title to Purchased Assets. Upon consummation of the transactions
-------------------------
contemplated hereby, Buyer will have acquired good and marketable title in and
to, or a valid leasehold interest in, each of the Purchased Assets, free and
clear of all Liens.
3.10. No Undisclosed Liabilities. There are no liabilities of the
--------------------------
Business 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 to result
in such a liability, other than liabilities disclosed or provided for in the
Balance Sheet or incurred in the ordinary course of Seller's business.
3.11. Litigation. There is no action, suit, investigation or proceeding
----------
(or any basis therefor) pending against, or to the knowledge of Seller and the
Members, threatened against or affecting, the Business or any Purchased Asset
before any court or arbitrator or any governmental body, agency or official.
3.12. Material Contracts. (a) Except for the contracts disclosed in
------------------
Schedule 3.12 (collectively, the "Contracts") or any other Schedule to this
- ------------- ---------
Agreement, with respect to the Business, Seller is not a party to or subject to:
<PAGE>
-8-
(i) any Customer Contract or service, sales, distribution or other
similar agreement providing for the sale by Seller of materials, supplies,
goods, services, equipment or other assets;
(ii) any partnership, joint venture or other similar contract,
arrangement or agreement;
(iii) any contract relating to indebtedness for borrowed money or the
deferred purchase price of property (whether incurred, assumed, guaranteed or
secured by an asset);
(iv) any license agreement, franchise agreement or agreement in
respect of similar rights granted to or held by Seller;
(v) any agreement, contract or commitment that substantially limits
the freedom of Seller to compete in any line of business or with any Person
or in any area or to own, operate, sell, transfer, pledge or otherwise
dispose of or encumber any Purchased Asset or that would so limit the freedom
of the Buyer after the Closing Date;
(vi) any agreement, contract or commitment which is or relates to an
agreement with or for the benefit of any Affiliate of Seller; or
(vii) any other agreement, contract or commitment not made in the
ordinary course of business which is material to the Business taken as a
whole.
(b) Each Contract disclosed in any Schedule to this Agreement or required
to be disclosed pursuant to Section 3.12(a) is valid and binding agreement of
Seller and is in full force and effect, and neither Seller nor, to the knowledge
of Seller and the Members, any other party thereto is in default in any material
respect under the terms of any such Contract, nor, to the knowledge of Seller
and the Members, has any event or circumstance occurred that, with notice or
lapse of time or both, would constitute any event of default thereunder.
3.13. Compliance with Laws. Seller is not in violation of, has not
--------------------
violated, and to Seller's and the Members' knowledge is not under investigation
with respect to and has not been threatened to be charged with or given notice
of any violation of, any law, rule, ordinance or regulation, or judgment, order
or decree entered by any court, arbitrator or governmental authority, domestic
or foreign, applicable to the Purchased Assets or the conduct of the Business.
3.14. Proprietary Rights. (a) Schedule 3.14 sets forth a list of all
------------------ -------------
patents and patent applications, trademarks, tradenames and service marks and
registrations thereof and applications therefor, registered copyrights and
applications for copyright registration included in Seller's Proprietary Rights,
specifying as to each, as applicable: (i) the nature of such Proprietary Right;
(ii) the owner of such Proprietary Right; (iii) the jurisdictions by or in which
such Proprietary Right has been issued or registered or in which an application
for such issuance or registration has been filed, including the respective
registration or application numbers; and (iv) material licenses, sublicenses and
other agreements as to which Seller or any of its Affiliates is a party and
<PAGE>
-9-
pursuant to which any Person is authorized to use such Proprietary Right,
including the identity of all parties thereto, a description of the nature and
subject matter thereof, the applicable royalty and the term thereof.
(b) (i) Seller has not been sued or charged in writing with or been a
defendant in any claim, suit, action or proceeding relating to the Business that
has not been finally terminated prior to the date hereof and that involves a
claim of infringement of any Proprietary Rights and (ii) Neither Seller nor the
Members has any knowledge of any other claim or infringement by Seller, and no
knowledge of any continuing infringement by any other Person of any of Seller's
Proprietary Rights. No Proprietary Right of Seller is subject to any
outstanding order, judgment, decree, stipulation or agreement restricting the
use thereof by Seller with respect to the Business or restricting the licensing
thereof by Seller to any Person. Seller has not entered into any agreement to
indemnify any other Person against any charge of infringement of any Proprietary
Right.
(c) None of the processes and formulae, research and development results
and other know-how relating to the Business, the value of which to Seller is
contingent upon maintenance of the confidentiality thereof, has been disclosed
by Seller or any Affiliate thereof to any Person other than employees,
representatives and agents of Seller under an agreement of confidentiality.
(d) Seller owns or has the right to use all of Seller's Proprietary
Rights in the Purchased Assets. Upon execution and delivery by Seller to Buyer
of the instruments of conveyance contemplated by this Agreement, each item of
Seller's Proprietary Rights will be owned or available for use by Buyer on
identical terms and conditions immediately following the Closing. Seller has
taken reasonable measures to protect the proprietary nature of Seller's
Proprietary Rights and to maintain in confidence the trade secrets and
confidential information that it owns or uses in the Business. To Seller's and
the Members' knowledge, no other Person or has any rights to any item of
Seller's Proprietary Rights or has any rights to any of the Seller's Proprietary
Rights, and, to Seller's and the Members' knowledge, no other Person is
infringing, violating or misappropriating any of Seller's Proprietary Rights.
3.15. Finders' Fees. There is no investment banker, broker, finder or
-------------
other intermediary which has been retained by or is authorized to act on behalf
of Seller who might be entitled to any fee or commission from Buyer or any of
its Affiliates upon consummation of the transactions contemplated by this
Agreement.
3.16. Other Information. None of the documents or information delivered
-----------------
to Buyer in connection with the transactions contemplated by this Agreement and
the Ancillary Agreements contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained therein not misleading.
3.17. Settlement and Release. Seller has entered into a Settlement and
----------------------
Release Agreement (the "Release") with Neil Denney and Acasta LLC settling any
-------
and all claims of Mr. Denney and Acasta LLC arising out of that certain
Agreement of Sale dated as of October 21,
<PAGE>
-10-
1999 by and between Mr. Denney and Seller and that certain Consulting Agreement
dated as of October 21, 1999 by and between Seller and Acasta, LLC and providing
Mr. Denney and/or Acasta LLC, as agreed, with an agreed-upon allocation of
proceeds from the transactions contemplated hereby. None of the documents or
information delivered to Mr. Denney by Seller and its Affiliates in connection
with the Release and the transactions contemplated hereby contains any untrue
statement of material fact or omits to state a material fact necessary in order
to make the statements contained therein not misleading.
ARTICLE IIIA
REPRESENTATIONS AND WARRANTIES OF THE MEMBERS
Each Member severally represents and warrants to the Buyer that:
(a) The execution, delivery and performance by such Member of this
Agreement, the Ancillary Agreements to which such Member is a party and the Note
(if any) executed by such Member will not violate any provision of any
indenture, agreement or other instrument to which such Member is a party or by
which any of its properties or assets is bound, or conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any such indenture, agreement or other instrument, or result in the
creation or imposition of any lien, charge, restriction, claim or encumbrance of
any nature whatsoever upon any of the properties or assets of the Member.
(b) This Agreement has been duly executed and delivered by such Member and
constitutes the legal, valid and binding obligation of such Member, enforceable
in accordance with its terms. The Ancillary Agreements and the Note (if any)
executed by such Member, when executed and delivered by the Member in accordance
with this Agreement, will constitute legal, valid and binding obligations of the
Member, enforceable in accordance with their respective terms.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller that:
4.01. Organization and Existence. Buyer is a corporation duly
--------------------------
incorporated, validly existing and in good standing under the laws of Delaware
and has all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.
4.02. Corporate Authorization. The execution, delivery and performance
-----------------------
by Buyer of this Agreement and each of the Ancillary Agreements and the
consummation by Buyer of the transactions contemplated hereby and thereby are
within the corporate powers of Buyer and have been duly authorized by all
necessary corporate action on the part of Buyer. This Agreement and
<PAGE>
-11-
the Ancillary Agreements to which Buyer is a party constitute valid and binding
agreements of Buyer.
4.03. Governmental Authorization. The execution, delivery and
--------------------------
performance by Buyer of this Agreement and the Ancillary Agreements require no
action by or in respect of, or filing with, any governmental body, agency,
official or authority
4.04. Non-Contravention. The execution, delivery and performance by
-----------------
Buyer of this Agreement and the Ancillary Agreements do not and will not (i)
contravene or conflict with the corporate charter or bylaws of Buyer or (ii)
contravene or conflict with any provision of any law, regulation, judgment,
injunction, order or decree binding upon Buyer.
4.05 Required Consents. Schedule 4.05 sets forth each agreement,
-------------
contract or other instrument binding upon Buyer requiring a consent as a result
of the execution, delivery and performance of this Agreement and the Ancillary
Agreements or the consummation of the truncations contemplated hereby and
thereby.
4.06 Litigation. There is no material action, suit, investigation or
proceeding (or any basis therefore) pending against, or to the knowledge of
Buyer, threatened against or affecting Buyer before any court or arbitrator or
any governmental body, agency or official.
<PAGE>
- 12 -
4.07 Compliance with Laws. Except as would not have a Material Adverse
Effect on Buyer, Buyer is not in violation of, has not violated, and to Buyer's
knowledge is not under investigation with respect to and has not been threatened
to be charged with or given notice of any violation of, any law, rule, ordinance
or regulation, or judgment, order or decree entered by any court, arbitrator or
governmental authority, domestic or foreign.
4.08 Finders' Fees. There is not investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Buyer who might be entitled to any fee or commission from Seller or its
Affiliates upon consummation of the transactions contemplated by this Agreement.
ARTICLE V
COVENANTS OF SELLER
Seller agrees that:
5.01. Access to Information. Following the Closing Date, Seller (a)
---------------------
will give Buyer, its counsel, financial advisors, financing sources, auditors
and other authorized representatives full access to the offices, properties,
books and records of Seller related to the Business, (b) will furnish to Buyer,
its counsel, financial advisors, financing sources, auditors and other
authorized representatives such financial and operating data and other
information relating to the Business.
5.02. Noncompetition. (a) Seller agrees that for a period of two full
--------------
years from the Closing Date, it shall not:
(i) engage, either directly or indirectly, as a principal or for its
own account, solely or jointly with others, or through any form of ownership
in another Person, or otherwise, in any business that competes with the
business of the Buyer as it exists on the Closing Date; or
(ii) employ or solicit, or receive or accept the performance of
services by, any employee of the LLC.
(b) If any provision contained in this Section shall for any reason
by held invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Section, but this Section shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. It is the intention of
the parties that if any of the restrictions or covenants contained herein is
held to cover a geographic area or to be for a length of time which is not
permitted by applicable law, or in any way construed to be too broad or to any
extent invalid, such provision shall not be construed to be null, void and of no
effect, but to the extent such provision would be valid or enforceable under
applicable law, a court of competent jurisdiction shall construe and interpret
or reform this
<PAGE>
- 13 -
Section to provide for a covenant having the maximum enforceable geographic
area, time period and other provisions (not greater than those contained herein)
as shall be valid and enforceable under such applicable law. Seller acknowledges
that Buyer would be irreparably harmed by any breach of this Section and that
there would be no adequate remedy at law or in damages to compensate Buyer for
any such breach. Seller agrees that Buyer shall be entitled to injunctive relief
requiring specific performance by Seller of this Section, and Seller consents to
the entry thereof.
ARTICLE VI
COVENANT OF BUYER
6.01. Working Capital Loans. If, on the Closing Date, the expenses of
---------------------
Seller identified on Schedule 6.01 hereto shall exceed cash on hand to pay such
-------------
expenses and each Member makes a written request, Buyer shall lend to each
Member the amounts requested in equal amounts of up to $125,000 each on a full-
recourse basis pursuant to a Promissory Note to be issued by each Member to
Buyer in substantially the form of Exhibit C hereto (each, a "Note").
--------- ----
ARTICLE VII
COVENANTS OF BOTH PARTIES
The parties hereto agree that:
7.01. Further Assurances. (a) Seller and Buyer each 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 and to vest in Buyer good and marketable title to the Purchased
Assets.
(b) Seller hereby constitutes and appoints, effective as of the
Closing Date, Buyer and its successors and assigns as the true and lawful
attorney of Seller with full power of substitution in the name of Buyer or in
the name of Seller, but for the benefit of Buyer (i) to collect for the account
of Buyer any items of Purchased Assets and (ii) to institute and prosecute all
proceedings which Buyer may in its sole discretion deem proper in order to
assert or enforce any right, title or interest in, to or under the Purchased
Assets, and to defend or compromise any and all actions, suits or proceedings in
respect of the Purchased Assets. Buyer shall be entitled to retain for its
account any amounts collected pursuant to the foregoing powers, including any
amounts payable as interest in respect thereof.
7.02. Certain Filings. Seller and Buyer shall cooperate with one
---------------
another (a) in determining whether any action by or in respect of, or filing
with, any governmental body,
<PAGE>
- 14 -
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 this
Agreement and (b) 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.
7.03. Public Announcements. Seller shall not issue any press release
--------------------
or make any public statement with respect to this Agreement or the transactions
contemplated hereby except as may be required by applicable law.
ARTICLE VIII
TAX MATTERS
8.01. Tax Definitions. The following terms, as used herein, have the
---------------
following meanings:
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Post-Closing Tax Period" means any Tax period (or portion thereof)
-----------------------
ending on or after the Closing Date.
"Pre-Closing Tax Period" means any Tax period (or portion thereof) ending
----------------------
on or before the close of business on the date preceding the Closing Date.
"Tax" means any net income, alternative or add-on minimum tax, gross
---
income, gross receipts, sales, use, ad valorem, franchise, capital, paid-up
capital, profits, greenmail, license, withholding, 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 imposed by any governmental authority
(domestic or foreign) responsible for the imposition of any such tax
8.02. Tax Matters. Seller hereby represents and warrants to Buyer that:
-----------
(a) Seller has timely paid all Taxes, and all interest and penalties
due thereon and payable by it, for the Pre-Closing Tax Period which will have
been required to be paid on or prior to the Closing Date, the non-payment of
which would result in a Lien on any Purchased Asset, would otherwise adversely
affect the Business or would result in Buyer becoming liable or responsible
therefor.
(b) Seller has established, in accordance with generally accepted
accounting principles applied on a basis consistent with that of preceding
periods, adequate reserves for the payment of, and will timely pay all Tax
liabilities, assessments, interest and penalties which arise
<PAGE>
- 15 -
from or with respect to the Purchased Assets or the operation of the Business
and are incurred in or attributable to the Pre-Closing Tax Period, the non-
payment of which would result in a Lien on any Purchased Asset, would otherwise
adversely affect the Business or would result in Buyer becoming liable or
responsible therefore.
(c) No portion of the Purchase Price is subject to any Tax withholding
provision of federal, state, local or foreign law. No new elections with
respect to Taxes, or any changes in current elections with respect to Taxes,
affecting the Purchased Assets shall be made after the date of this Agreement
without the prior written consent of Buyer.
8.03. Tax Cooperation; Allocation of Taxes. (a) Buyer and Seller agree
------------------------------------
to furnish or cause to be furnished to each other, upon request, as promptly as
practicable, such information and assistance relating to the Purchased Assets
and the Business as is reasonably necessary for the filing of all Tax returns,
and the making of any election related to Taxes, the preparation for any audit
by any taxing authority, and the prosecution or defense of any claim, suit or
proceeding relating to any Tax return. Seller and Buyer shall cooperate with
each other in the conduct of any audit or other proceeding related to Taxes
involving the Business or the Purchased Assets and each shall execute and
deliver such powers of attorney and other documents as are necessary to carry
out the intent of this paragraph (a) of Section 8.03.
(b) All real property taxes, personal property taxes and similar ad
--
valorem obligations levied with respect to the Purchased Assets for a taxable
- -------
period which includes (but does not end on) the Closing Date (collectively, the
"Apportioned Obligations") shall be apportioned between Seller and Buyer as of
-----------------------
the Closing Date based on the number of days of such taxable period included in
the Pre-Closing Tax Period and the number of days of such taxable period
included in the Post-Closing Tax Period. Seller shall be liable for the
proportionate amount of such taxes that is attributable to the Pre-Closing Tax
Period. Within 90 days after the Closing, Seller and Buyer shall each present a
statement to the other setting forth the amount of reimbursement to which each
is entitled under this Section 8.03(b) together with such supporting evidence as
is reasonably necessary to calculate the proration amount. The proration amount
shall be paid by the party owing it to the other within 10 days after delivery
of such statement. Thereafter, Seller shall notify Buyer upon receipt of any
bill for real or personal property taxes relating to the Purchased Assets, part
or all of which are attributable to the Post-Closing Tax Period, and shall
promptly deliver such bill to Buyer who shall pay the same to the appropriate
taxing authority, provided that if such bill covers the Pre-Closing Tax Period,
Seller shall also remit prior to the due date of assessment to Buyer payment for
the proportionate amount of such bill that is attributable to the Pre-Closing
Tax Period. If either Seller or Buyer shall thereafter make a payment for which
it is entitled to reimbursement under this Section 8.03(b), the other party
shall make such reimbursement promptly but in no event later than 30 days after
the presentation of a statement setting forth the amount of reimbursement to
which the presenting party is entitled along with such supporting evidence as is
reasonably necessary to calculate the amount of reimbursement. Any payment
required under this Section and not made within 10 days of delivery of the
statement shall bear interest at the rate per annum determined, from time to
time, under the provisions of Section 6621(a)(2) of the Code for each day until
paid.
<PAGE>
- 16 -
(c) Any transfer, documentary, sales, use or other Taxes assessed upon
or with respect to the transfer of the Purchased Assets to Buyer and any
recording or filing fees with respect thereto shall be the responsibility of
Buyer.
ARTICLE IX
CONDITIONS TO CLOSING
9.01. Conditions to the Obligations of Each Party. The obligations of
-------------------------------------------
Buyer and Seller to consummate the Closing are subject to the satisfaction of
the following conditions:
(a) No provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the consummation of the Closing.
(b) No proceeding challenging this Agreement or the transactions
contemplated hereby or seeking to prohibit, alter, prevent or materially delay
the Closing shall have been instituted by any Person before any court,
arbitrator or governmental body, agency or official and be pending.
(c) Each of Buyer and Seller shall have executed and delivered to the
other each of the Ancillary Agreements to be entered into at Closing, in each
case substantially in the form attached as an Exhibit to this Agreement.
(d) All actions by or in respect of or filings with any governmental
body, agency, official or authority required to permit the consummation of the
Closing.
9.02. Conditions to Obligation of Buyer. The obligation of Buyer to
---------------------------------
consummate the Closing is subject to the satisfaction of the following further
conditions:
(a)(i) Seller 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 Seller and the Members
contained in this Agreement as of the date hereof shall be true and correct in
all respects at and as of the Closing Date, and (iii) Buyer shall have received
a certificate signed by the President of Seller and each Member certifying as to
(i) and (ii) hereof.
(b) No provision of any applicable law or regulation and no judgment,
injunction, order or decree shall restrain, prohibit or otherwise interfere with
the effective operation or enjoyment by Buyer of all or any material portion of
the Purchased Assets.
(c) Each Employee of Seller identified on Schedule 9.02 (each an
-------------
"Employee") shall have accepted employment with Buyer and resigned his or her
- ---------
position with Seller.
<PAGE>
- 17 -
(d) Seller shall have received all Required Consents in form and
substance reasonably satisfactory to Buyer, and no such consent shall have been
withdrawn.
(e) Seller and Neil Denney shall have executed and delivered to Buyer
a Settlement and Release Agreement in form and substance reasonably satisfactory
to Buyer.
(f) Buyer shall have received such closing documents as it may
reasonably request, all in form and substance reasonably satisfactory to Buyer.
(g) McKinsey shall have signed an agreement with Buyer in form and
substance satisfactory to Buyer.
9.03. Conditions to Obligations of Seller. The obligation of Seller to
-----------------------------------
consummate the Closing is subject to the satisfaction of the following further
conditions:
(a) (i) Buyer shall have performed in all 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 Buyer contained in this
Agreement as of the date hereof shall be true and correct in all material
respects at and as of the Closing Date and (iii) Seller shall have received a
certificate signed by the Chief Financial Officer of Buyer certifying as to (i)
and (ii) hereof.
(b) Seller shall have received all other closing documents it may
reasonably request, all in form and substance reasonably satisfactory to Seller.
ARTICLE X
SURVIVAL; INDEMNIFICATION
10.01. Survival. The covenants, agreements, representations and
--------
warranties of the parties hereto contained in this Agreement or in any
certificate or other writing delivered pursuant hereto or in connection herewith
shall survive the Closing until the second anniversary of the Closing Date; and
(iii) in the case of the covenants, agreements, representations and warranties
contained in Articles VIII, until expiration of the applicable statutory period
of limitations (giving effect to any waiver, mitigation or extension thereof),
if later. Notwithstanding the preceding sentence, any covenant, agreement,
representation or warranty in respect of which indemnity may be sought under
Sections 10.02 or 10.03 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 to indemnity shall have been given to
the party against whom such indemnity may be sought prior to such time.
10.02. Indemnification. (a) Seller and the Members, jointly and
---------------
severally, hereby indemnify Buyer and its Affiliates against and agrees to hold
each of them harmless from any and all damage, loss, liability and expense
(including, without limitation, reasonable expenses of investigation and
reasonable attorneys' fees and expenses in connection with any action, suit or
<PAGE>
- 18 -
proceeding) (collectively, "Loss") incurred or suffered by Buyer or any of its
----
Affiliates arising out of:
(i) any misrepresentation or breach of warranty, covenant or
agreement made or to be performed by Seller or the Members pursuant to this
Agreement (determined without regard to any materiality qualification
contained in any representation, warranty or covenant giving rise to the
claim for indemnity hereunder and whether or not discovered by Buyer prior to
Closing);
(ii) the failure of Seller to assume full responsibility for any
obligation or liability of the Business; or
(iii) any claim by Neil Denny against Seller, the Members or Buyer
with respect to his Consulting Agreement or the Release.
(b) Buyer hereby indemnifies Seller and its Affiliates against and
agrees to hold each of them harmless from any and all Loss incurred or suffered
by Seller or any of its Affiliates arising out of any misrepresentation or
breach of warranty, covenant or agreement made or to be performed by the Buyer
pursuant to this Agreement.
10.03. Procedures; No Waiver. (a) The party seeking indemnification
----------------------
under Section 10.02 or 10.03 (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, and at the request of the Indemnified Party shall,
participate in and control the defense of any such third party suit, action or
proceeding at its own expense. The Indemnifying Party shall not be liable under
Section 11.02 for any settlement effected without its consent of any claim,
litigation or proceeding in respect of which indemnity may be sought hereunder.
(b) No waiver of a closing condition by either Buyer or Seller
shall limit its rights under Section 10.02.
ARTICLE XI
MISCELLANEOUS
11.01. Notices. All notices, requests and other communications to
-------
either party hereunder shall be in writing (including telex, telecopy or similar
writing) and shall be given,
if to Buyer, to:
Greenwich Technology Partners, Inc.
123 Main Street
White Plains, NY 10601
<PAGE>
- 19 -
Attn: President
Fax: 203-316-9033
with a copy to:
Kevin M. Barry, Esq.
Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, MA 02110
Fax: 617-248-7100
if to Seller, to:
NetGain, LLC
17014 Simpson Circle
Parsonian Springs, VA 20129
Telecopy: 888-267-5985
with a copy to:
Sigmund Fox
1370 Avenue of the Americas
New York, NY
Telecopy: 212-586-9683
11.02. Amendments; No Waivers. (a) Any provisions of this Agreement may
----------------------
be amended or waived if and only if such amendment or waiver is in writing and
signed, in the case of an amendment, by the Buyer, Seller and the Members, or in
the case of a waiver, by the party against whom the waiver is to be effective.
(b) No failure or delay by either 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.
11.03. Expenses. All costs and expenses incurred in connection with this
--------
Agreement shall be paid by the party incurring such cost or expense. Any and
all fees of Steve Cheheyl of shall be paid by Seller.
11.04. Successors and Assigns. The provisions of this Agreement shall
----------------------
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
<PAGE>
- 20 -
11.05. Governing Law. This Agreement shall be construed in accordance
-------------
with and governed by the law of the State of New York, without regard to the
conflicts of law rules of such state.
11.06. Counterparts; Effectiveness. This Agreement may be signed 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. This
Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by the other party hereto.
11.07. Entire Agreement. This Agreement and the Ancillary Agreements
----------------
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior agreements, understandings and
negotiations, both written and oral, between the parties with respect to the
subject matter of this Agreement. No representation, inducement, promise,
understanding, condition or warranty not set forth herein has been made or
relied upon by either party hereto. Neither this Agreement nor the Ancillary
Agreements nor any provision hereof or thereof, is intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder.
11.08. Bulk Sales Laws. Buyer and Seller each hereby waive compliance
---------------
by Seller with the provisions of the "bulk sales", "bulk transfer" or similar
laws of any state to the extent that they may be held to apply to the purchase
and sale of the Purchased Assets or to the transactions contemplated hereby.
Seller and the Members agree to jointly and severally indemnify and hold Buyer
harmless against any and all claims, losses, damages, liabilities, costs and
expenses incurred by Buyer or any of its Affiliates as a result of any failure
to comply with any such "bulk sales", "bulk transfer" or similar laws.
11.09. Captions. The captions herein are included for convenience of
--------
reference only and shall be ignored in the construction or interpretation
hereof.
[Remainder of Page Left Intentionally Blank.]
<PAGE>
- 21 -
IN WITNESS WHEREOF, the parties hereto here caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
GREENWICH TECHNOLOGY PARTNERS, INC.
By:/s/ Joseph Beninati
-----------------------------------
Name:
Title:
NETGAIN, LLC
By: /s/ Shally Bansal Stanley
----------------------------------
Name: Shally Bansal Stanley
Title: Partners
MEMBERS:
/s/ Jeffrey R. Drew
--------------------------------------
Jeffrey R. Drew
/s/ Shally Bansal Stanley
--------------------------------------
Shally Bansal Stanley
<PAGE>
Exhibit A
---------
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of March 31, 2000, between
NetGain, LLC, a Delaware limited liability company ("Seller"), and Greenwich
------
Technology Partners, Inc., a Delaware corporation ("Buyer").
-----
W I T N E S S E T H
WHEREAS, Buyer and Seller have concurrently herewith consummated the
purchase by Buyer of the Purchased Assets pursuant to the terms and conditions
of the Asset Purchase Agreement dated March 31, 2000 between Buyer and Seller,
(the "Asset Purchase Agreement"; terms defined in the Asset Purchase Agreement
------------------------
and not otherwise defined herein being used herein as therein defined);
NOW, THEREFORE, in consideration of the sale of the Purchased Assets and
in accordance with the terms of the Asset Purchase Agreement, Buyer and Seller
agree as follows:
1. (a) Seller does hereby sell, transfer, assign and deliver to Buyer
all of the right, title and interest of Seller in, to and under the Purchased
Assets; provided that no sale, transfer, assignment or delivery shall be made if
--------
an attempted sale, assignment, transfer or delivery, without the consent of a
third party, would constitute a breach or other contravention thereof or in any
way adversely affect the rights of Buyer or Seller thereunder.
(b) Buyer does hereby accept all the right, title and interest of
Seller in, to and under all of the Purchased Assets (except as aforesaid).
2. This Agreement shall be construed in accordance with and governed by
the law of the State of New York, without regard to the conflicts of law rules
of such state.
3. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
NETGAIN, LLC
By:___________________________
Name:
Title:
GREENWICH TECHNOLOGY PARTNERS, INC.
By:___________________________
Name:
Title:
<PAGE>
Exhibit B
---------
BILL OF SALE AND GENERAL ASSIGNMENT
-----------------------------------
NetGain, LLC, a Delaware limited liability company(the "Seller"), for
------
good and valuable consideration to it paid, receipt and sufficiency of which is
hereby acknowledged, and pursuant to the Asset Purchase Agreement (the
"Agreement") dated March 31, 2000 between the Seller and Greenwich Technology
- ----------
Partners, Inc., a Delaware corporation (the "Buyer"), and notwithstanding that
-----
the following property may be conveyed by separate and specific transfer
documents, by these presents does sell, assign, transfer and deliver unto the
Buyer, and its successors and assigns, as of March 31, 2000 (the "Closing
Date"), all of its rights, title and interest in the Purchased Assets;
TO HAVE AND TO HOLD the Purchased Assets unto the Buyer and its
successors and assigns, to and for its or their use forever,
This Bill of Sale is being delivered pursuant to the Agreement and shall
be construed consistently therewith.
IN WITNESS WHEREOF, the Seller has caused this Bill of Sale to be signed
by its duly authorized officer on the Closing Date.
NETGAIN, LLC
By:___________________________
Name:
Title:
[Seal]
STATE OF _________________)
) ss.:
COUNTY OF ________________)
On this _________ day of ______________, 2000, before me personally came
_____________________, to be personally known, who, being duly sworn, did depose
and say that he resides at ________________________; that he is _____________ of
NetGain, LLC, and that he signed his name thereto by likely authority.
______________________________
Notary Public
<PAGE>
EXHIBIT 3.1
THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
GREENWICH TECHNOLOGY PARTNERS, INC.
I, Joseph P. Beninati, Chief Executive Officer of Greenwich Technology
Partners, Inc. (the "Corporation"), a corporation organized and existing under
-----------
the General Corporation Law of the State of Delaware (the "Delaware Corporation
--------------------
Law"), do hereby certify as follows:
- ---
1. The name of the Corporation is Greenwich Technology Partners, Inc.,
and the name under which the Corporation was originally incorporated is Datamax
of Connecticut, Inc. The date of filing of its original Certificate of
Incorporation with the Secretary of State was April 21, 1997, the date of filing
of its Restated Certificate of Incorporation with the Secretary of State was
June 24, 1998, and the date of filing of its Second Amended and Restated
Certificate of Incorporation with the Secretary of State was February 1, 1999.
2. On September 9, 1999, in the manner prescribed by Sections 242 and 245
of the Delaware Corporation Law, this Third Amended and Restated Certificate of
Incorporation was duly adopted by written consent of the Board of Directors and
by written consent of the stockholders pursuant to Sections 141 and 228 of the
Delaware Corporation Law.
3. The text of the Third Amended and Restated Certificate of
Incorporation of the Corporation, as amended and restated herein, is as follows:
1. The name of the Corporation is GREENWICH TECHNOLOGY PARTNERS, INC.
2. The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County
of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
3. The nature of the business or purposes to be conducted or promoted is to
engage in any lawful activity for which the Corporation may be organized under
the Delaware Corporation Law.
4. (A) This Corporation is authorized to issue two classes of stock to be
designated, respectively, "Common Stock" and "Preferred Stock." The total
------------ ---------------
number of shares of capital stock which the corporation shall have authority to
issue is Ninety Million (90,000,000) shares, Fifty Four Million Eight Hundred
Twenty Four Thousand Seven Hundred Eighty Two (54,824,782) shares of which shall
be Common Stock, par value $.01 per share (the "Common Stock"), and Thirty Five
------------
Million One Hundred
<PAGE>
Seventy Five Thousand Two Hundred Eighteen (35,175,218) shares of which shall be
Preferred Stock, par value $.01 per share (the "Preferred Stock").
---------------
(B) Four Million One Hundred Thousand (4,100,000) of the authorized
shares of Preferred Stock are hereby designated "Series A Preferred Stock" (the
------------------------
"Series A Preferred"), Five Million Five Hundred Thirty Three Thousand Thirty
------------------
One (5,533,031) of the authorized shares of Preferred Stock are hereby
designated "Series B Preferred Stock" (the "Series B Preferred"), Four Million
------------------------ ------------------
Two Hundred Six Thousand Six Hundred Sixty Six (4,206,666) of the authorized
shares of Preferred Stock are hereby designated "Series C Preferred Stock" (the
------------------------
"Series C Preferred"), Nine Million Four Hundred Eighty Seven Thousand One
------------------
Hundred Seventy Nine (9,487,179) of the authorized shares of Preferred Stock are
hereby designated "Series D Preferred Stock" (the "Series D Preferred"), and
------------------------ ------------------
Eleven Million Eight Hundred Forty Eight Thousand Three Hundred Forty Two
(11,848,342) of the authorized shares of Preferred Stock are hereby designated
"Series E Preferred Stock" (the "Series E Preferred"). The Series A Preferred,
------------------------- ------------------
the Series B Preferred, the Series C Preferred, the Series D Preferred and the
Series E Preferred are hereinafter collectively referred to as the "Series
------
Preferred."
- ---------
(C) The number of authorized shares of Common Stock may be increased
or decreased (but not below the number of shares of Common Stock then
outstanding) by the affirmative vote of the holders of a majority of the capital
stock of the Corporation (voting together on an as-if-converted basis)
notwithstanding the provisions of Section 242(b)(2) of the Delaware Corporation
Law.
(D) The Preferred Stock may be issued from time to time in one or more
series. The Board of Directors is hereby authorized, within the limitations and
restrictions stated in this Third Amended and Restated Certificate of
Incorporation, to fix or alter the dividend rights, dividend rate, conversion
rights, voting rights, rights and terms of redemption (including sinking fund
provisions), the redemption price or prices, the liquidation preferences of any
wholly unissued series of Preferred Stock, and the number of shares constituting
any such series and the designation thereof, or any of them; and to increase or
decrease the number of shares of any series subsequent to the issue of shares of
that series, but not below the number of shares of such series then outstanding.
In case the number of shares of any series shall be so decreased, the shares
constituting such decrease shall resume the status which they had prior to the
adoption of the resolution originally fixing the number of shares of such
series.
(E) The rights, preferences, privileges, restrictions and other
matters relating to the Preferred Stock are as follows:
1. Dividend Rights.
---------------
(a) Holders of the Series A Preferred, in preference to the holders of
the Series D Preferred, Series E Preferred and Common Stock of the Corporation,
shall be entitled to receive, when and as declared by the Board of Directors,
but only out of funds
-2-
<PAGE>
that are legally available therefor, cash dividends equal to an aggregate of
$106,150.68 to be paid pro rata among the holders of the Series A Preferred.
Holders of the Series B Preferred, in preference to the holders of the Series D
Preferred, Series E Preferred and Common Stock of the Corporation, shall be
entitled to receive, when and as declared by the Board of Directors, but only
out of funds that are legally available therefor, cash dividends equal to an
aggregate of $12,515.50 to be paid pro rata among the holders of the Series B
Preferred. Holders of the Series C Preferred, in preference to the holders of
the Series D Preferred, Series E Preferred and Common Stock of the Corporation,
shall be entitled to receive, when and as declared by the Board of Directors,
but only out of funds that are legally available therefor, cash dividends equal
to an aggregate of $158,653.97 to be paid pro rata among the holders of the
Series C Preferred.
(b) After the payment of dividends to the holders of Series A
Preferred, Series B Preferred and Series C Preferred as provided in Section 1(a)
above, holders of the Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred, Series E Preferred and Common Stock, shall be
entitled to receive dividends, when, if and as declared by the Board of
Directors, but only out of funds that are legally available therefor. All
dividends shall be paid on a pro-rata basis on the outstanding Common Stock,
Series A Preferred, Series B Preferred, Series C Preferred, Series D Preferred
and Series E Preferred with the outstanding Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred and Series E Preferred sharing
in such dividends on an is if converted into Common Stock basis. Such dividends
shall not be cumulative and no right to such dividends shall accrue to the
holders of the Series A Preferred, Series B Preferred, Series C Preferred,
Series D Preferred and Series E Preferred until and unless declared by the Board
of Directors nor shall any undeclared or unpaid dividend bear interest.
(c) So long as any shares of Series A Preferred, Series B Preferred or
Series C Preferred shall be outstanding, no additional dividend, whether in cash
or property, shall be paid or declared, nor shall any other distribution be
made, on any Series A Preferred, Series B Preferred, Series C Preferred, Series
D Preferred, Series E Preferred or Common Stock, nor shall any shares of any
Series A Preferred, Series B Preferred, Series C Preferred, Series D Preferred,
Series E Preferred or Common Stock of the Corporation be purchased, redeemed, or
otherwise acquired for value by the Corporation (except for acquisitions of
common stock by the Corporation pursuant to agreements which permit the
Corporation to repurchase such shares upon termination of employment or in
exercise of the Corporation's right of first refusal upon a proposed transfer)
until all of the dividends on the Series A Preferred, Series B Preferred and
Series C Preferred as provided in Section 1(a) above, shall have been paid or
declared and set apart. In the event dividends are paid on any share of Common
Stock, an additional dividend shall be paid with respect to all outstanding
shares of Series Preferred in an amount equal per share of Series Preferred (on
an as-if-converted to Common Stock basis) to the amount paid or set aside for
each share of Common Stock. The provisions of this Section 1(c) shall not,
however, apply to (i) a dividend payable in Common Stock, (ii) the acquisition
of shares of any Common Stock in exchange for shares of any other Common Stock,
or
-3-
<PAGE>
(iii) any repurchase of any outstanding securities of the Corporation that is
unanimously approved by the Corporation's Board of Directors.
2. Voting Rights.
-------------
(a) General Rights. Except as otherwise provided herein or as
--------------
required by law, the Series Preferred shall be voted equally with the shares of
the Common Stock of the Corporation and not as a separate class, at any annual
or special meeting of shareholders of the Corporation, and may act by written
consent in the same manner as the Common Stock, in either case upon the
following basis: each holder of shares of Series Preferred shall be entitled to
such number of votes as shall be equal to the whole number of shares of Common
Stock into which such holder's aggregate number of shares of Series Preferred
are convertible (pursuant to Section 4 hereof) immediately after the close of
business on the record date fixed for such meeting or the effective date of such
written consent.
(b) Election of Board of Directors. (i) For so long as 1,000,000
------------------------------
shares of Series A Preferred shall be outstanding (as adjusted for combinations,
stock dividends, subdivisions or split-ups), the holders of the Series A
Preferred, voting together as a separate class on an as-converted basis, shall
be entitled to elect one (1) member of the Corporation's Board of Directors at
each meeting or pursuant to each consent of the Corporation's shareholders for
the election of directors, and to remove from office such director and to fill
any vacancy caused by the resignation, death or removal of such director; (ii)
for so long as 1,000,000 shares of Series B Preferred shall be outstanding (as
adjusted for combinations, stock dividends, subdivisions or split-ups), the
holders of the Series B Preferred, voting as a separate class on an as-converted
basis, shall be entitled to elect one (1) member of the Corporation's Board of
Directors at each meeting or pursuant to each consent of the Corporation's
shareholders for the election of directors, and to remove from office such
director and to fill any vacancy caused by the resignation, death or removal of
such director; (iii) for so long as 1,000,000 shares of Series C Preferred shall
be outstanding (as adjusted for combinations, stock dividends, subdivisions or
split-ups), the holders of the Series C Preferred, voting together as a separate
class on as-converted basis, shall be entitled to elect one (1) member of the
Corporation's Board of Directors at each meeting or pursuant to each consent of
the Corporation's shareholders for the election of directors, and to remove from
office such director and to fill any vacancy caused by the resignation, death or
removal of such director; (iv) for so long as 1,000,000 shares of Series D
Preferred shall be outstanding (as adjusted for combinations, stock dividends,
subdivisions or split-ups), the holders of the Series D Preferred, voting
together as a separate class on as-converted basis, shall be entitled to elect
one (1) member of the Corporation's Board of Directors at each meeting or
pursuant to each consent of the Corporation's shareholders for the election of
directors, and to remove from office such director and to fill any vacancy
caused by the resignation, death or removal of such director; (v) for so long as
1,000,000 shares of Series E Preferred shall be outstanding (as adjusted for
combinations, stock dividends, subdivisions or split-ups), the holders of Series
E Preferred, voting together as a separate class on an as-converted
-4-
<PAGE>
basis, shall be entitled to elect one (1) member of the Corporation's Board of
Directors at each meeting or pursuant to each consent of the Corporation's
shareholders for the election of directors, and to remove from office such
director and to fill any vacancy caused by the resignation, death or removal of
such director; and (vi) a plurality of the holders of Common Stock and Series
Preferred, voting together as a class on an as-converted basis, shall be
entitled to elect all remaining members of the Board of Directors.
(c) Separate Series A Preferred Voting Rights. In addition to any
-----------------------------------------
other vote or consent required herein or by law, so long as at least fifty
percent (50%) of the authorized shares of the Series A Preferred remain
outstanding, the vote or written consent of the holders of at least two-thirds
(2/3) of the outstanding Series A Preferred, voting as a separate class, shall
be necessary for effecting or validating any of the following actions:
(i) Any increase or decrease, whether by reclassification or
otherwise, in the authorized shares of Series A Preferred or any issuance of any
shares of Series A Preferred or combination, split, reclassification of the
outstanding shares of Series A Preferred into a smaller or larger number of
shares or exchange or conversion of any shares of Series A Preferred or require
the exchange or conversion of any shares of Series A Preferred, except as
provided herein;
(ii) Any amendment, alteration, or repeal of any provision of
the Certificate of Incorporation or the Bylaws of the Corporation that adversely
affects the rights, preferences, conversion and other rights, voting powers or
privileges of the Series A Preferred; or
(iii) Any creation, whether by reclassification or otherwise, of
any new class or series of shares having rights, preferences or privileges
senior to or on parity with the Series A Preferred.
(d) Separate Series C Preferred Voting Rights. In addition to any
-----------------------------------------
other vote or consent required herein or by law, so long as at least fifty
percent (50%) of the authorized shares of the Series C Preferred remain
outstanding, the vote or written consent of the holders of at least two-thirds
(2/3) of the outstanding Series C Preferred, voting as a separate class, shall
be necessary for effecting or validating any of the following actions:
(i) Any increase or decrease, whether by reclassification or
otherwise, in the authorized shares of Series C Preferred or any issuance of any
shares of Series C Preferred or combination, split, reclassification of the
outstanding shares of Series Preferred into a smaller or larger number of shares
or exchange or conversion of any shares of Series C Preferred or require the
exchange or conversion of any shares of Series C Preferred, except as provided
herein;
-5-
<PAGE>
(ii) Any amendment, alteration, or repeal of any provision of
the Certificate of Incorporation or the Bylaws of the Corporation that adversely
affects the rights, preferences, conversion and other rights, voting powers or
privileges of the Series C Preferred; or
(iii) Any creation, whether by reclassification or otherwise, of
any new class or series of shares having rights, preferences or privileges
senior to or on parity with the Series C Preferred.
(e) Separate Series D Preferred Voting Rights. In addition to any
-----------------------------------------
other vote or consent required herein or by law, so long as at least fifty
percent (50%) of the authorized shares of Series D Preferred remain outstanding,
the vote or written consent of the holders of a majority of the outstanding
shares of Series D Preferred, voting as a separate class, shall be necessary for
effecting or validating the following actions:
(i) Any increase or decrease, whether by reclassification or
otherwise, in the authorized shares of Series D Preferred or any issuance of any
shares of Series D Preferred or combination, split, reclassification of the
outstanding shares of Series D Preferred into a smaller or larger number of
shares or exchange or conversion of any shares of Series D Preferred or require
the exchange or conversion of any shares of Series D Preferred, except as
provided herein;
(ii) Any amendment, alteration, or repeal of any provision of
the Certificate of Incorporation or the Bylaws of the Corporation that adversely
affects the rights, preferences, conversion and other rights, voting powers or
privileges of the Series D Preferred; or
(iii) Any creation, whether by reclassification or otherwise, of
any new class or series of shares having rights, preferences or privileges
senior to or on parity with the Series D Preferred.
(f) Separate Series E Preferred Voting Rights. In addition to any
------------------------------------------
other vote or consent required herein or by law, so long as at least fifty
percent (50%) of the authorized shares of Series E Preferred remain outstanding,
the vote or written consent of the holders of a majority of the outstanding
shares of Series E Preferred, voting as a separate class, shall be necessary for
effecting or validating the following actions:
(i) Any increase or decrease, whether by reclassification or
otherwise, in the authorized shares of Series E Preferred or any issuance of any
shares of Series E Preferred or combination, split, reclassification of the
outstanding shares of Series E Preferred into a smaller or larger number of
shares or exchange or conversion of any shares of Series E Preferred or require
the
-6-
<PAGE>
exchange or conversion of any shares of Series E Preferred, except as provided
herein;
(ii) Any amendment, alteration, or repeal of any provision of
the Certificate of Incorporation or the Bylaws of the Corporation that adversely
affects the rights, preferences, conversion and other rights, voting powers or
privileges of the Series E Preferred; or
(iii) Any creation, whether by reclassification or otherwise, of
any new class or series of shares having rights, preferences or privileges
senior to or on parity with the Series E Preferred.
(g) Additional Series Preferred Voting Rights. In addition to any
------------------------------------------
other vote or consent required herein or by law, so long as at least fifty
percent of the authorized Series Preferred remain outstanding, the vote or
written consent of the holders of a majority of the outstanding shares of Series
Preferred, voting as a separate class, shall be necessary for effecting or
validating the following actions:
(i) Any redemption of, or payment of dividends with respect to,
Common Stock, other than a repurchase of Common Stock pursuant to the exercise
of any contractual or other legal rights of first refusal or repurchase, or any
repurchase of any outstanding securities of the Corporation that is approved by
the Corporation's Board of Directors;
(ii) Any action to change the authorized number of directors of
the Corporation's Board of Directors;
(iii) Any sale, lease or other disposition of all or
substantially all of the assets, property or business of the Corporation, or
merger or consolidation of the Corporation with any person, or the permitting of
any other person to merge into it, or any other reorganization or any agreement
with respect to any of the foregoing except for mergers, consolidations or
reorganizations in which the Corporation is the surviving corporation and, after
giving effect to the merger, consolidation, or reorganization, the holders of
the Corporation's outstanding capital stock immediately preceding such event own
more than fifty percent (50%) of the outstanding capital stock of the surviving
corporation;
(iv) Any plan or action to effect a voluntary liquidation,
dissolution or winding up of the Corporation;
(v) Any amendment to a stock plan or stock purchase plan of the
Corporation, including, but not limited to, the Corporation's 1997 Stock Plan,
modifying the number of shares of the Corporation's Common Stock reserved for
issuance thereunder;
-7-
<PAGE>
(vi) Any repayment of shareholder notes or obligations to
related parties other than in accordance with the terms set forth in the
instrument, if any, evidencing such shareholder note or obligations to related
parties provided that such shareholder notes or obligations are or have been
approved by the Board of Directors; or
(vii) Any transfer or grant of rights in or to any of the
Corporation's intellectual property to a third party other than transfers or
grants of limited licenses incidental to sales of the Corporation's products or
services in the ordinary course of the Corporation's business.
3. Liquidation Rights.
------------------
(a) Upon any liquidation, dissolution, or winding up of the
Corporation, whether voluntary or involuntary, before any distribution or
payment shall be made to the holders of any Common Stock, (i) the holders of the
Series A Preferred shall be entitled to be paid out of the assets of the
Corporation an amount per share of Series A Preferred equal to the sum of (A)
the Series A Original Issue Price, (B) $0.0258904 and (C) all declared but
unpaid dividends on such shares of Series A Preferred to the date of such
liquidation, dissolution or winding up, (ii) the holders of the Series B
Preferred shall be entitled to be paid out of the assets of the Corporation an
amount per share of Series B Preferred equal to the sum of (A) the Series B
Preferred Original Issue Price, (B) $0.0022619 and (C) all declared but unpaid
dividends on such shares of Series B Preferred to the date of such liquidation,
dissolution or winding up, (iii) the holders of the Series C Preferred shall be
entitled to be paid out of the assets of the Corporation an amount per share of
Series C Preferred equal to the sum of (A) the Series C Preferred Original Issue
Price, (B) $0.0377148 and (C) all declared but unpaid dividends on such shares
of Series C Preferred to the date of such liquidation, dissolution or winding
up, (iv) the holders of the Series D Preferred shall be entitled to be paid out
of the assets of the Corporation an amount per share of Series D Preferred equal
to the sum of (A) the Series D Preferred Original Issue Price and (B) all
declared but unpaid dividends on such shares of Series D Preferred to the date
of such liquidation, dissolution or winding up, and (v) the holders of the
Series E Preferred shall be entitled to be paid out of the assets of the
Corporation an amount per share of Series E Preferred equal to the sum of (A)
the Series E Original Issue Price and (B) all declared but unpaid dividends on
such shares of Series E Preferred to the date of such liquidation, dissolution
or winding up. The Original Issue Price of the Series A Preferred shall be
equal to $0.25, the Original Issue Price of the Series B Preferred shall be
equal to $0.021841691, the Original Issue Price of the Series C Preferred shall
be equal to $0.75, the Original Issue Price of the Series D Preferred shall be
equal to $1.17, and the Original Issue Price of the Series E Preferred shall be
equal to $2.110. The applicable Original Issue Price of each of the Series
Preferred shall be appropriately adjusted for any future stock splits, stock
combinations, stock dividends or similar transactions affecting the respective
Series Preferred.
-8-
<PAGE>
(b) If, upon any liquidation, distribution, or winding up, the assets
of the Corporation shall be insufficient to make payment in full to all holders
of Series Preferred, then such assets shall be distributed among the holders of
Series Preferred at the time outstanding, ratably in proportion to the full
amounts to which they, individually, would otherwise be respectively entitled
pursuant to Section 3(a) above.
(c) The following events shall be considered a liquidation under
Section 3(a):
(i) any consolidation or merger of the Corporation with or into
any other corporation or other entity or person, or any other corporate
reorganization, in which the Corporation shall not be the continuing or
surviving entity of such consolidation, merger or reorganization and the holders
of the Corporation's outstanding capital stock immediately preceding such event
own less than fifty percent (50%) of the outstanding capital stock of the
surviving corporation; or
(ii) a sale, lease or other disposition of all or substantially
all of the assets of the Corporation.
(d) After the payment of the full liquidation preference of the
Preferred Stock, if applicable, as set forth in Section 3(a) above, the
remaining assets of the Corporation legally available for distribution, if any,
shall be distributed ratably to holders of the Common Stock and Series D
Preferred on an as-if-converted to Common Stock basis.
4. Conversion Rights.
-----------------
The holders of the Series Preferred shall have the following rights to
convert the Series Preferred into shares of Common Stock:
(a) Optional Conversion. Subject to and in compliance with the
-------------------
provisions of this Section 4, any shares of Series Preferred may, at the option
of the holder, be converted at any time into fully-paid and nonassessable shares
of Common Stock. The number of shares of Common Stock to which a holder of
Series Preferred shall be entitled upon conversion shall be the product obtained
by multiplying the applicable "Conversion Rate" for such series of Preferred
---------------
Stock then in effect (determined as provided in Section 4(b)) by the number of
shares of Series Preferred being converted.
(b) Conversion Rate. The conversion rate in effect at any time for
---------------
conversion of the Series A Preferred (the "Series A Conversion Rate") shall be
------------------------
the quotient obtained by dividing $0.25 by the "Series A Conversion Price,"
-------------------------
calculated as provided in Section 4(c). The conversion rate in effect at any
time for conversion of the Series B Preferred (the "Series B Conversion Rate")
------------------------
shall be the quotient obtained by
-9-
<PAGE>
dividing $0.021841691 by the "Series B Conversion Price," calculated as provided
--------------------------
in Section 4(c). The conversion rate in effect at any time for conversion of the
Series C Preferred (the "Series C Conversion Rate") shall be the quotient
------------------------
obtained by dividing $0.75 by the "Series C Conversion Price," calculated as
-------------------------
provided in Section 4(c). The conversion rate in effect at any time for
conversion of the Series D Preferred (the "Series D Conversion Rate") shall be
------------------------
the quotient obtained by dividing $1.17 by the "Series D Conversion Price,"
calculated as provided in Section 4(c). The conversion rate in effect at any
time for the conversion of the Series E Preferred (the "Series E Conversion
-------------------
Rate") shall be the quotient obtained by dividing $2.110 by the "Series E
- ---- --------
Conversion Price" calculated as provided in Section 4(c).
- ----------------
(c) Conversion Price. The conversion price for the Series A Preferred
----------------
shall initially be $0.25 (the "Series A Conversion Price"). Such initial Series
-------------------------
A Conversion Price shall be adjusted from time to time in accordance with this
Section 4. All references to the Series A Conversion Price herein shall mean
the Series A Conversion Price as so adjusted. The conversion price for the
Series B Preferred shall initially be $0.021841691 (the "Series B Conversion
-------------------
Price"). Such initial Series B Conversion Price shall be adjusted from time to
- -----
time in accordance with this Section 4. All references to the Series B
Conversion Price herein shall mean the Series B Conversion Price as so adjusted.
The conversion price for the Series C Preferred shall initially be $0.75 (the
"Series C Conversion Price"). Such initial Series C Conversion Price shall be
-------------------------
adjusted from time to time in accordance with this Section 4. All references to
the Series C Conversion Price herein shall mean the Series C Conversion Price as
so adjusted. The conversion price of the Series D Preferred shall initially be
$1.17 (the "Series D Conversion Price"). Such initial Series D Conversion Price
-------------------------
shall be adjusted from time to time in accordance with this Section 4. All
references to the Series D Conversion Price herein shall mean the Series D
Conversion Price as so adjusted. The conversion price for the Series E
Preferred shall initially be $2.110 (the "Series E Conversion Price"). Such
-------------------------
initial Series E Conversion Price shall be adjusted from time to time in
accordance with this Section 4. All references to the Series E Conversion Price
herein shall mean the Series E Conversion Price as so adjusted.
(d) Mechanics of Conversion. Each holder of Series Preferred who
-----------------------
desires to convert the same into shares of Common Stock pursuant to this Section
4 shall surrender the certificate or certificates therefor, duly endorsed, at
the office of the Corporation or any transfer agent for the Series Preferred,
and shall give written notice to the Corporation at such office that such holder
elects to convert the same. Such notice shall state the number of shares of
Series Preferred being converted and the name or names in which said holder
wishes the certificate or certificates for shares of Common Stock to be issued
(except that no such notice of intent to convert shall be necessary in the event
of an automatic conversion pursuant to Section 4(m) below). Thereupon, the
Corporation shall promptly issue and deliver at such office to such holder a
certificate or certificates for the number of shares of Common Stock to which
such holder is entitled. Any declared and unpaid dividends on the Series
Preferred being converted shall remain payable to the holders converting such
shares on the specified payment date therefor.
-10-
<PAGE>
Except as provided in Section 4(m) below, such conversion shall be deemed to
have been made at the close of business on the date of such surrender of the
certificates representing the shares of Series Preferred to be converted, and
the person entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder of such shares
of Common Stock on such date.
(e) Adjustment for Stock Splits and Combinations. If the Corporation
--------------------------------------------
shall at any time or from time to time after the date that the first share of a
series of Preferred Stock is issued (for each such series, the "Original Issue
--------------
Date") effect a subdivision of the outstanding Common Stock, the Conversion
- ----
Price for each such series in effect immediately before that subdivision shall
be proportionately decreased. Conversely, if the Corporation shall at any time
or from time to time after the Original Issue Date of a series of Preferred
Stock combine the outstanding shares of Common Stock into a smaller number of
shares, the Conversion Price for each such series in effect immediately before
the combination shall be proportionately increased. Any adjustment under this
Section 4(e) shall become effective at the close of business on the date the
subdivision or combination becomes effective. The Original Issue Date for the
Series A Preferred is December 9, 1997. The Original Issue Date for the Series
B Preferred is December 9, 1997. The Original Issue Date for the Series C
Preferred is June 25, 1998. The Original Issue Date for the Series D Preferred
is February 1, 1999. The Original Issue Date for the Series E Preferred shall
be the date the first share of Series E Preferred is issued as provided in this
Section 4(e).
(f) Adjustment for Common Stock Dividends and Distributions. If the
-------------------------------------------------------
Corporation at any time or from time to time after the Original Issue Date of a
series of Preferred Stock makes, or fixes a record date for the determination of
holders of Common Stock entitled to receive a dividend or other distribution
payable in additional shares of Common Stock, in each such event the Conversion
Price for each such series that is then in effect shall be decreased as of the
time of such issuance or, in the event such record date is fixed, as of the
close of business on such record date, by multiplying the Conversion Price then
in effect for such series of Preferred Stock by a fraction (1) the numerator of
which is the total number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the close of business on such
record date, and (2) the denominator of which is the total number of shares of
Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date plus the number of shares
of Common Stock issuable in payment of such dividend or distribution; provided,
however, that if such record date is fixed and such dividend is not fully paid
or if such distribution is not fully made on the date fixed therefor, the
Conversion Price shall be recomputed accordingly as of the close of business on
such record date and thereafter the Conversion Price shall be adjusted pursuant
to this Section 4(f) to reflect the actual payment of such dividend or
distribution. For the purposes of the preceding sentence, all outstanding
shares of Common Stock and all shares of Common Stock issuable upon conversion
of Series Preferred that are outstanding as of the close of business on the day
next preceding the date of such issuance, or next preceding such record date,
shall be deemed outstanding.
-11-
<PAGE>
(g) Adjustments for Other Dividends and Distributions. If the
-------------------------------------------------
Corporation at anytime or from time to time after the Original Issue Date of a
series of Preferred Stock makes, or fixes a record date for the determination of
holders of Common Stock entitled to receive a dividend or other distribution
payable in securities of the Corporation other than shares of Common Stock, in
each such event provision shall be made so that the holders of each such series
of Preferred Stock shall receive upon conversion thereof, in addition to the
number of shares of Common Stock receivable thereupon, the amount of other
securities of the Corporation which they would have received had their Series
Preferred been converted into Common Stock on the date of such event and had
they thereafter, during the period from the date of such event to and including
the conversion date, retained such securities receivable by them as aforesaid
during such period, subject to all other adjustments called for during such
period under this Section 4 with respect to the rights of the holders of the
Series Preferred or with respect to such other securities by their terms.
(h) Adjustment for Reclassification, Exchange and Substitution. If at
----------------------------------------------------------
any time or from time to time after the Original Issue Date of a series of
Preferred Stock, the Common Stock issuable upon the conversion of such series of
Preferred Stock is changed into the same or a different number of shares of any
class or classes of stock, whether by recapitalization, reclassification or
otherwise (other than a subdivision or combination of shares or stock dividend
or a reorganization, merger, consolidation or sale of assets provided for
elsewhere in this Section 4 or in Section 3(c)), in any such event each holder
of such series of Preferred Stock shall have the right thereafter to convert
such stock into the kind and amount of stock and other securities and property
receivable upon such recapitalization, reclassification or other change by
holders of the maximum number of shares of Common Stock into which such shares
of Series Preferred could have been converted immediately prior to such
recapitalization, reclassification or change, all subject to further adjustment
as provided herein or with respect to such other securities or property by the
terms thereof.
(i) Reorganizations, Mergers, Consolidations or Sales of Assets. If
-----------------------------------------------------------
at anytime or from time to time after the Original Issue Date of a series of
Preferred Stock, there is a capital reorganization of the Common Stock (other
than a recapitalization, subdivision, combination, reclassification, exchange or
substitution of shares provided for elsewhere in this Section 4 or in Section
3(c)), as a part of such capital reorganization, provision shall be made so that
the holders of such series of Preferred Stock shall thereafter be entitled to
receive upon conversion of such series of Preferred Stock the number of shares
of stock or other securities or property of the Corporation to which a holder of
the number of shares of Common Stock deliverable upon conversion would have been
entitled on such capital reorganization, subject to adjustment in respect of
such stock or securities by the terms thereof. In any such case, appropriate
adjustment shall be made in the application of the provisions of this Section 4
with respect to the rights of the holders of Series Preferred after the capital
reorganization to the end that the provisions of this Section 4 (including
adjustment of the applicable Conversion Price then in effect
-12-
<PAGE>
and the number of shares issuable upon conversion of the Series Preferred) shall
be applicable after that event and be as nearly equivalent as practicable.
(j) Sale of Shares Below Conversion Price.
-------------------------------------
(i) If at any time or from time to time after the Original
Issue Date of a series of Preferred Stock, the Corporation issues or sells, or
is deemed by the express provisions of this subsection (j) to have issued or
sold, Additional Shares of Common Stock (as hereinafter defined), other than as
a dividend or other distribution on any class of stock as provided in Section
4(f) above, and other than a subdivision or combination of shares of Common
Stock as provided in Section 4(e) above, for an Effective Price (as defined in
subsection (j)(iv) below) less than the then effective Conversion Price of such
series, then and in each case, the then applicable Conversion Price shall be
reduced, as of the opening of business on the date of such issue or sale, (x)
with respect to the Series A Preferred, the Series B Preferred or the Series C
Preferred, to a price determined individually for each of such series of
Preferred Stock by multiplying the applicable Conversion Price for such series
of Preferred Stock by a fraction (A) the numerator of which shall be the number
of shares of Common Stock deemed outstanding (as defined in the following
sentence) immediately prior to such issue or sale, plus the number of shares of
Common Stock which the aggregate consideration received (as defined in
subsection (j)(ii)) by the Corporation for the total number of Additional Shares
of Common Stock so issued would purchase at the applicable Conversion Price for
such series of Preferred Stock, and (B) the denominator of which shall be the
number of shares of Common Stock deemed outstanding (as defined below)
immediately prior to such issue or sale plus the total Additional Shares of
Common Stock so issued, and (y) with respect to the Series D Preferred and
Series E Preferred, to a price determined by multiplying the applicable
Conversion Price for such series of Preferred Stock by a fraction, (A) the
numerator of which shall be the number of shares of Preferred Stock outstanding
immediately prior to such issue or sale, plus the number of shares of Common
Stock which the aggregate consideration received by the Corporation for the
total number of Additional Shares of Common Stock so issued would purchase at
the applicable Conversion Price and (B) the denominator of which shall be the
number of shares of Preferred Stock outstanding immediately prior to such issue
or sale, plus the total Additional Shares of Common Stock so issued. For
purposes of clause (x) of the preceding sentence, all outstanding shares of
Common Stock and all shares of Common Stock issuable upon conversion of the
Series Preferred that are outstanding as of the close of business on the day
next preceding the date of issue or sale of Additional Shares of Common Stock
shall be deemed outstanding.
(ii) For the purpose of making any adjustment required under
this Section 4(j), the consideration received by the Corporation for any issue
or sale of securities shall (A) to the extent it consists of cash, be computed
at the net amount of cash received by the Corporation after deduction of any
underwriting or similar commissions, compensation or concessions paid or allowed
by the Corporation in connection with such issue or sale but without deduction
of any expenses payable by the Corporation, (B) to the
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<PAGE>
extent it consists of property other than cash, be computed at the fair value of
that property as determined in good faith by the Board of Directors, and (C) if
Additional Shares of Common Stock, Convertible Securities (as hereinafter
defined) or rights or options to purchase either Additional Shares of Common
Stock or Convertible Securities are issued or sold together with other stock or
securities or other assets of the Corporation for a consideration which covers
both, be computed as the portion of the consideration so received that may be
reasonably determined in good faith by the Board of Directors to be allocable to
such Additional Shares of Common Stock, Convertible Securities or rights or
options.
(iii) For the purpose of the adjustment required under this
Section 4(j), if the Corporation issues or sells any rights or options for the
purchase of, or stock or other securities convertible into, Additional Shares of
Common Stock (such convertible stock or securities being herein referred to as
"Convertible Securities") and if the Effective Price (as defined in subsection
- -----------------------
(iv) below) of such Additional Shares of Common Stock is less than the
applicable Conversion Price of any Series Preferred, in each case the
Corporation shall be deemed to have issued at the time of the issuance of such
rights or options or Convertible Securities the maximum number of Additional
Shares of Common Stock issuable upon exercise or conversion thereof and to have
received as consideration for the issuance of such shares an amount equal to the
total amount of the consideration, if any, received by the Corporation for the
issuance of such rights or options or Convertible Securities, plus, in the case
of such rights or options, the minimum amounts of consideration, if any, payable
to the Corporation upon the exercise of such rights or options, plus, in the
case of Convertible Securities, the minimum amounts of consideration, if any,
payable to the Corporation (other than by cancellation of liabilities or
obligations evidenced by such Convertible Securities) upon the conversion
thereof; provided that if in the case of Convertible Securities the minimum
amounts of such consideration cannot be ascertained, but are a function of
antidilution or similar protective clauses, the Corporation shall be deemed to
have received the minimum amounts of consideration without reference to such
clauses; provided further that if the minimum amount of consideration payable to
the Corporation upon the exercise or conversion of rights, options or
Convertible Securities is reduced over time or on the occurrence or non-
occurrence of specified events other than by reason of antidilution adjustments,
the Effective Price shall be recalculated using the figure to which such minimum
amount of consideration is reduced; provided further that if the minimum amount
of consideration payable to the Corporation upon the exercise or conversion of
such rights, options or Convertible Securities is subsequently increased, the
Effective Price shall be again recalculated using the increased amount of
consideration payable to the Corporation upon the exercise or conversion of such
rights, options or Convertible Securities. No further adjustment of the
applicable Conversion Price, as adjusted upon the issuance of such rights,
options or Convertible Securities, shall be made as a result of the actual
issuance of Additional Shares of Common Stock on the exercise of any such rights
or options or the conversion of any such Convertible Securities. If any such
rights or options or the conversion privilege represented by any such
Convertible Securities shall expire without having been exercised, the
applicable Conversion Price as adjusted
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<PAGE>
upon the issuance of such rights, options or Convertible Securities shall be
readjusted to the Conversion Price which would have been in effect had an
adjustment been made on the basis that the only Additional Shares of Common
Stock so issued were the Additional Shares of Common Stock, if any, actually
issued or sold on the exercise of such rights or options or rights of conversion
of such Convertible Securities, and such Additional Shares of Common Stock, if
any, were issued or sold for the consideration actually received by the
Corporation upon such exercise, plus the consideration, if any, actually
received by the Corporation for the granting of all such rights or options,
whether or not exercised, plus the consideration received for issuing or selling
the Convertible Securities actually converted, plus the consideration, if any,
actually received by the Corporation (other than by cancellation of liabilities
or obligations evidenced by such Convertible Securities) on the conversion of
such Convertible Securities, provided that such readjustment shall not apply to
shares that have previously been converted.
(iv) "Additional Shares of Common Stock" for each series of
---------------------------------
Preferred Stock shall mean all shares of Common Stock issued by the Corporation,
whether or not subsequently reacquired or retired by the Corporation, other than
(1) shares of Common Stock issued upon conversion of the Series Preferred; (2)
shares of Common Stock, and/or options, warrants or other Common Stock purchase
rights, issued to employees, officers or directors of, or consultants or
advisors to, the Corporation or any subsidiary thereof pursuant to stock
purchase or stock option plans or other arrangements that are approved by the
Board of Directors (plus such additional number of shares, options or warrants
as may again become issuable under each such plan due to termination or
repurchase of such shares, options or warrants previously issued), and (3)
shares of Common Stock or Convertible Securities issued in connection with
equipment leases or commercial credit agreements with financial institutions and
up to 1.5 million shares of Common Stock to be issued by the Corporation as
consideration for services rendered pursuant to service and recruiting contracts
of the Corporation. The "Effective Price" of Additional Shares of Common Stock
---------------
shall mean the quotient determined by dividing the total number of Additional
Shares of Common Stock issued or sold, or deemed to have been issued or sold by
the Corporation under this Section 4(j) into the aggregate consideration
received, or deemed to have been received by the Corporation for such issue
under this Section 4(j), for such Additional Shares of Common Stock.
(k) Certificate of Adjustment. In each case of an adjustment or
-------------------------
readjustment of the applicable Conversion Price for the number of shares of
Common Stock or other securities issuable upon conversion of the Series A
Preferred, Series B Preferred, Series C Preferred, Series D Preferred or Series
E Preferred, as applicable, if such Series Preferred is then convertible
pursuant to this Section 4, the Corporation, at its expense, shall compute such
adjustment or readjustment in accordance with the provisions hereof and prepare
a certificate showing such adjustment or readjustment, and shall mail such
certificate, by first class mail, postage prepaid, to each registered holder of
Series Preferred so affected at the holder's address as shown in the
Corporation's books. The certificate shall set forth such adjustment or
readjustment, showing in detail the facts upon which such adjustment or
readjustment is based, including a statement of (1) the
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<PAGE>
consideration received or deemed to be received by the Corporation for any
Additional Shares of Common Stock issued or sold or deemed to have been issued
or sold, (2) the applicable Conversion Price at the time in effect, (3) the
number of Additional Shares of Common Stock and (4) the type and amount, if any,
of other property which at the time would be received upon conversion of such
Series Preferred.
(l) Notices of Record Date. Upon (i) any taking by the Corporation of
----------------------
a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend or
other distribution, or (ii) any capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation,
any merger or consolidation of the Corporation with or into any other
corporation, or any transfer of all or substantially all the assets of the
Corporation to any other person, or any voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, the Corporation shall mail to each
holder of Series Preferred at least twenty (20) days prior to the record date
specified therein a notice specifying (1) the date on which any such record is
to be taken for the purpose of such dividend or distribution and a description
of such dividend or distribution, (2) the date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding up is expected to become effective, and (3) the date, if any, that is to
be fixed as to when the holders of record of Common Stock (or other securities)
shall be entitled to exchange their shares of Common Stock (or other securities)
for securities or other property deliverable upon such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding up.
(m) Automatic Conversion.
--------------------
(i) Each share of a series of Preferred Stock shall
automatically be converted into shares of Common Stock, based on the then-
effective applicable Conversion Price for such series, (A) at any time upon the
affirmative election of the holders of at least two-thirds (2/3) of the
outstanding shares of Series Preferred; provided, however, with respect to the
Series A Preferred, so long as at least fifty percent (50%) of the authorized
shares of the Series A Preferred remain outstanding, the vote or written consent
of the holders of at least two-thirds (2/3) of the outstanding Series A
Preferred, voting as a separate class, shall be required to convert the Series A
Preferred, and, with respect to the Series B Preferred, so long as at least
fifty percent (50%) of the authorized shares of the Series B Preferred remain
outstanding, the vote or written consent of the holders of at least two-thirds
(2/3) of the outstanding Series B Preferred, voting as a separate class, shall
be required to convert the Series B Preferred, and, with respect to the Series C
Preferred, so long as at least fifty percent (50%) of the authorized shares of
the Series C Preferred remain outstanding, the vote or written consent of the
holders of at least two-thirds (2/3) of the outstanding Series C Preferred,
voting as a separate class, shall be required to convert the Series C Preferred,
and, with respect to the Series D Preferred, so long as at least fifty percent
(50%) of the authorized shares of the Series D Preferred remain outstanding, the
vote or written consent of the holders of at least a majority of the outstanding
Series D Preferred, voting as a separate class, shall be required to convert the
Series D Preferred, and, with respect to the Series E Preferred, so long as at
least fifty percent (50%) of the authorized shares of the Series E Preferred
remain outstanding, the vote or written consent of the holders of a majority of
the outstanding Series E Preferred, voting as a separate class, shall be
-16-
<PAGE>
required to convert the Series E Preferred, or (B) immediately upon the closing
of a firmly underwritten public offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended, covering the offer and
sale of Common Stock for the account of the Corporation in which (x) the per
share price is at least Five Dollars and Fifty Cents ($5.50) (as adjusted for
stock splits, recapitalizations and the like), and (y) the net cash proceeds to
the Corporation (after payment of any underwriting discounts, commissions and
fees) are at least Thirty Million Dollars ($30,000,000). Upon such automatic
conversion, any declared but unpaid dividends as provided in Section 1(a) hereof
shall be paid to the holders of the Series A Preferred, Series B Preferred and
Series C Preferred on the specified date of the automatic conversion.
(ii) Upon the occurrence of the event specified in paragraph (i)
above, the outstanding shares of each such series of Preferred Stock shall be
converted automatically without any further action by the holders of such shares
and whether or not the certificates representing such shares are surrendered to
the Corporation or its transfer agent; provided, however, that the Corporation
shall not be obligated to issue certificates evidencing the shares of Common
Stock issuable upon such conversion unless the certificates evidencing such
shares of Series Preferred are either delivered to the Corporation or its
transfer agent as provided below, or the holder notifies the Corporation or its
transfer agent that such certificates have been lost, stolen or destroyed and
executes an agreement satisfactory to the Corporation to indemnify the
Corporation from any loss incurred by it in connection with such certificates.
Upon the occurrence of such automatic conversion of Series Preferred, the
holders of the Series Preferred shall surrender the certificates representing
such shares at the office of the Corporation or any transfer agent for the
Series Preferred. Thereupon, there shall be issued and delivered to such holder
promptly at such office and in its name as shown on such surrendered certificate
or certificates, a certificate or certificates for the number of shares of
Common Stock into which the shares of Series Preferred surrendered were
convertible on the date on which such automatic conversion occurred. All
declared but unpaid dividends as provided in Section 1(a) hereof on the shares
of Series A Preferred, Series B Preferred and Series C Preferred being
converted, to and including the date of such conversion, shall be payable on the
date of conversion.
(n) Fractional Shares. No fractional shares of Common Stock shall be
-----------------
issued upon conversion of the Series Preferred. All shares of Common Stock
(including fractions thereof) issuable upon conversion of more than one share of
Series Preferred by a holder thereof shall be aggregated for purposes of
determining whether the conversion would result in the issuance of any
fractional share. If, after the aforementioned aggregation, the conversion
would result in the issuance of any fractional share, the Corporation shall, in
lieu of issuing any fractional share, pay cash equal to the product of
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<PAGE>
such fraction multiplied by the Common Stock's fair market value (as determined
by the Board of Directors) on the date of conversion.
(o) Reservation of Stock Issuable Upon Conversion. The Corporation
---------------------------------------------
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of the Series Preferred, such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series Preferred. If at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all then outstanding shares of the Series Preferred, the
Corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose.
(p) Notices. Any notice required by the provisions of this Section
-------
4 shall be in writing and shall be deemed effectively given: (i) upon personal
delivery to the party to be notified, (ii) when sent by confirmed telex or
facsimile, (iii) five (5) days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, or (iv) one (1) day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All notices shall be addressed
to each holder of record at the address of such holder appearing on the books of
the Corporation.
(q) Payment of Taxes. The Corporation will pay all taxes (other than
----------------
taxes based upon income) and other governmental charges that may be imposed with
respect to the issue or delivery of shares of Common Stock upon conversion of
shares of Series Preferred, excluding any tax or other charge imposed in
connection with any transfer involved in the issue and delivery of shares of
Common Stock in a name other than that in which the shares of Series Preferred
so converted were registered.
(r) No Dilution or Impairment. The Corporation shall not amend its
-------------------------
Certificate of Incorporation or participate in any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, for the purpose of avoiding or seeking to avoid the
observance of any of the terms to be observed or performed hereunder by the
Corporation, but shall at all times in good faith assist in carrying out all
such actions as may be reasonably necessary or appropriate in order to protect
the conversion rights of the holders of the Series Preferred against dilution or
impairment.
5. Redemption. The shares of Series E Preferred shall be redeemed as
----------
follows:
(a) Mandatory Redemption. On September 30, 2006 (the "Redemption Date
-------------------- ---------------
the Corporation shall redeem from each holder of shares of Series E Preferred,
all of the shares of Series E Preferred held by such holder on the Redemption
Date.
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<PAGE>
(b) Redemption Price and Payment. The Series E Preferred to be redeemed
----------------------------
on the Redemption Date shall be redeemed by paying for each share in cash an
amount equal to $2.110 per share plus, in the case of each share, an amount
equal to all dividends, declared but unpaid thereon, computed to the Redemption
Date, such amount being referred to as the "Redemption Price". Such payment
shall be made in full on the Redemption Date to the holders entitled thereto.
(c) Redemption Mechanics. At least 20 but not more than 30 days prior to
--------------------
the Redemption Date, written notice (the "Redemption Notice") shall be given by
-----------------
the Corporation by delivery in person, certified or registered mail, return
receipt requested, telecopier or telex, to each holder of record (at the close
of business on the business day next preceding the day on which the Redemption
Notice is given) of shares of Series E Preferred notifying such holder of the
redemption and specifying the Redemption Price, the Redemption Date and the
place where said Redemption Price shall be payable. The Redemption Notice shall
be addressed to each holder at his address as shown by the records of the
Corporation. From and after the close of business on the Redemption Date,
unless there shall have been a default in the payment of the Redemption Price,
all rights of holders of shares of Series E Preferred (except the right to
receive the Redemption Price) shall cease with respect to such shares, and such
shares shall not thereafter be transferred on the books of the Corporation or be
deemed to be outstanding for any purpose whatsoever. If the funds of the
Corporation legally available for redemption of shares of Series E Preferred on
the Redemption Date are insufficient to redeem the total number of outstanding
shares of Series E Preferred, the holders of shares of Series E Preferred shall
share ratably in any funds legally available for redemption of such shares
according to the respective amounts which would be payable with respect to the
full number of shares owned by them if all such outstanding shares were redeemed
in full. The shares of Series E Preferred not redeemed shall remain outstanding
and entitled to all rights and preferences provided herein. At any time
thereafter when additional funds of the Corporation are legally available for
the redemption of such shares of Series E Preferred, such funds will be used, at
the end of the next succeeding fiscal quarter, to redeem the balance of such
shares, or such portion thereof for which funds are then legally available, on
the basis set forth above.
6. No Reissuance of Series Preferred. No share or shares of Series Preferred
---------------------------------
acquired by the Corporation by reason of redemption, purchase, conversion or
otherwise shall be reissued.
7. Residual Rights. All rights accruing to the outstanding shares of the
---------------
Corporation not otherwise expressly provided for in this Certificate of
Incorporation or any subsequent Certificate of Incorporation shall be vested in
the Common Stock.
8. Limitation on Liability. No director shall be liable to the Corporation or
-----------------------
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (a) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (b) for acts or omissions not in
good faith or which involve intentional
-19-
<PAGE>
misconduct or knowing violation of law, (c) under Section 174 of the Delaware
Corporation Law, or (d) for any transaction from which the director derived an
improper personal benefit. If the Delaware Corporation Law is subsequently
amended to authorize corporate action further limiting or eliminating the
personal liability of directors, then the liability of a director to the
Corporation shall be limited or eliminated to the fullest extent permitted by
the Delaware Corporation Law, as so amended from time to time.
9. Indemnification. The Corporation is authorized to indemnify the directors
---------------
and officers of the Corporation to the fullest extent permissible under Delaware
law.
10. Miscellaneous. The Board of Directors is authorized to make, alter or
-------------
repeal the bylaws of the Corporation. Election of directors need not be by
written ballot.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE>
IN WITNESS WHEREOF, the undersigned has duly executed this Third Amended
and Restated Certificate of Incorporation in the name and on behalf of Greenwich
Technology Partners, Inc. on this 9th day of September, 1999.
GREENWICH TECHNOLOGY PARTNERS, INC.
By: /s/ Joseph P. Beninati
------------------------------
Joseph P. Beninati
Chief Executive Officer
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<PAGE>
EXHIBIT 3.2
CERTIFICATE OF AMENDMENT
OF
THIRD AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
GREENWICH TECHNOLOGY PARTNERS, INC.
Greenwich Technology Partners, Inc., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation, by unanimous
written consent on February 24, 2000, in accordance with the provisions of
Section 141(f) of the General Corporation Law of Delaware, duly adopted a
resolution setting forth a proposed amendment to the Third Amended and Restated
Certificate of Incorporation of the Corporation. The resolution setting forth
the proposed amendment is as follows:
RESOLVED: That a proposed amendment to the Third Amended and Restated
Certificate of Incorporation of the Corporation (the "Amendment"),
effecting a change in paragraph 4(E)(4)(j)(iv) thereof, so that said
paragraph of Article FOURTH shall be read in its entirety as set forth
below, is hereby approved, and is recommended to the shareholders of
the Corporation (the "Shareholders") for approval as being in the best
interests of the Corporation:
(iv) "Additional Shares of Common Stock" for each series of
---------------------------------
Preferred Stock shall mean all shares of Common Stock issued by the
Corporation, whether or not subsequently reacquired or retired by the
Corporation, other than (1) shares of Common Stock issued upon
conversion of the Series Preferred; (2) shares of Common Stock, and/or
options, warrants or other Common Stock purchase rights, issued to
employees, officers or directors of, or consultants or advisors to,
the Corporation or any subsidiary thereof pursuant to stock purchase
or stock option plans or other arrangements that are approved by the
Board of Directors (plus such additional number of shares, options or
warrants as may again become issuable under each such plan due to
termination or repurchase of such shares, options or warrants
previously issued); (3) shares of Common Stock or Convertible
Securities issued in connection with equipment leases or commercial
credit agreements with financial institutions and up to 1.5 million
shares of Common Stock to be issued by the Corporation as
consideration for services rendered pursuant to service and recruiting
contracts of the Corporation; and (4) securities issued as
consideration in connection with the acquisition of another
corporation by the Corporation by merger, purchase of substantially
all of the assets, or otherwise so long as such issuance has been
approved by the Board of
<PAGE>
-2-
Directors. The "Effective Price" of Additional Shares of Common Stock
---------------
shall mean the quotient determined by dividing the total number of
Additional Shares of Common Stock issued or sold, or deemed to have
been issued or sold by the Corporation under this Section 4(j) into
the aggregate consideration received, or deemed to have been received
by the Corporation for such issue under this Section 4(j), for such
Additional Shares of Common Stock.
SECOND: That the shareholders of the Corporation duly adopted such resolution
by written consent in accordance with the provisions of Section 228 of
the General Corporation Law of the State of Delaware.
THIRD: That said amendment was duly adopted in accordance with the provisions
of Section 242 of the General Corporation Law of the State of
Delaware.
[Remainder of Page Intentionally Left Blank.]
<PAGE>
-3-
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by Joseph P. Beninati, President and Chief Executive Officer, this 28th
day of February, 2000.
GREENWICH TECHNOLOGY PARTNERS, INC.
By: /s/ Joseph P. Beninati
------------------------------------------
Joseph P. Beninati
President and Chief Executive Officer
<PAGE>
EXHIBIT 3.4
BY-LAWS OF
GREENWICH TECHNOLOGY PARTNERS, INC.
A DELAWARE CORPORATION
PRIVATE COMPANY
Adopted: April 30, 1997
Amended: February 1, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I -- MEETINGS OF STOCKHOLDERS................................................. 1
Section 1. Place of Meetings......................................................... 1
Section 2. Annual Meeting............................................................ 1
Section 3. Special Meetings.......................................................... 1
Section 4. Notice of Meetings........................................................ 1
Section 5. Voting List............................................................... 1
Section 6. Quorum.................................................................... 2
Section 7. Adjournments.............................................................. 2
Section 8. Action at Meetings........................................................ 2
Section 9. Voting and Proxies........................................................ 2
Section 10. Action Without Meeting................................................... 3
ARTICLE II -- DIRECTORS............................................................... 3
Section 1. Number, Election, Tenure and Qualification................................ 3
Section 2. Enlargement............................................................... 3
Section 3. Vacancies................................................................. 3
Section 4. Resignation and Removal................................................... 3
Section 5. General Powers............................................................ 4
Section 6. Chairman of the Board..................................................... 4
Section 7. Place of Meetings......................................................... 4
Section 8. Regular Meetings.......................................................... 4
Section 9. Special Meetings.......................................................... 4
Section 10. Quorum, Action at Meeting, Adjournments.................................. 4
Section 11. Action by Consent........................................................ 4
Section 12. Telephonic Meetings...................................................... 5
Section 13. Committees............................................................... 5
Section 14. Compensation............................................................. 5
ARTICLE III -- OFFICERS............................................................... 5
Section 1. Enumeration............................................................... 5
Section 2. Election.................................................................. 6
Section 3. Tenure.................................................................... 6
Section 4. President................................................................. 6
Section 5. Vice-Presidents........................................................... 6
Section 6. Secretary................................................................. 7
Section 7. Assistant Secretaries..................................................... 7
Section 8. Treasurer................................................................. 7
Section 9. Assistant Treasurers...................................................... 7
Section 10. Bond..................................................................... 8
ARTICLE IV -- NOTICES................................................................. 8
Section 1. Delivery.................................................................. 8
Section 2. Waiver of Notice.......................................................... 8
ARTICLE V -- INDEMNIFICATION.......................................................... 8
Section 1. Actions other than by or in the Right of the Corporation.................. 8
Section 2. Actions by or in the Right of the Corporation............................. 9
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Section 3. Success on the Merits..................................................... 9
Section 4. Specific Authorization.................................................... 9
Section 5. Advance Payment........................................................... 9
Section 6. Non-Exclusivity........................................................... 10
Section 7. Insurance................................................................. 10
Section 8. Continuation of Indemnification and Advancement of Expenses............... 10
Section 9. Severability.............................................................. 10
Section 10. Intent of Article........................................................ 10
ARTICLE VI -- CAPITAL STOCK........................................................... 10
Section 1. Certificates of Stock..................................................... 10
Section 2. Lost Certificates......................................................... 11
Section 3. Transfer of Stock......................................................... 11
Section 4. Record Date............................................................... 11
Section 5. Registered Stockholders................................................... 12
ARTICLE VII -- RESERVED............................................................... 12
ARTICLE VIII -- GENERAL PROVISIONS.................................................... 12
Section 1. Dividends................................................................. 12
Section 2. Reserves.................................................................. 12
Section 3. Checks.................................................................... 12
Section 4. Fiscal Year............................................................... 12
Section 5. Seal...................................................................... 12
ARTICLE IX -- AMENDMENTS.............................................................. 13
</TABLE>
Addendum
Register of Amendments to the By-Laws
-ii-
<PAGE>
********
BY-LAWS
********
ARTICLE I
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. All meetings of the stockholders shall be
-----------------
held at such place within or without the State of Delaware as may be fixed from
time to time by the Board of Directors or the Chief Executive Officer, or if not
so designated, at the registered office of the corporation.
Section 2. Annual Meeting. Annual meetings of stockholders shall be held
--------------
on the 15th day of March in each year if not a legal holiday, and if a legal
holiday, then on the next secular day following, at 10:00 a.m., or at such other
date and time as shall be designated from time to time by the Board of Directors
or the Chief Executive Officer, at which meeting the stockholders shall elect by
a plurality vote a Board of Directors and shall transact such other business as
may properly be brought before the meeting. If no annual meeting is held in
accordance with the foregoing provisions, the Board of Directors shall cause the
meeting to be held as soon thereafter as convenient, which meeting shall be
designated a special meeting in lieu of annual meeting.
Section 3. Special Meetings. Special meetings of the stockholders, for
----------------
any purpose or purposes, may, unless otherwise prescribed by statute or by the
certificate of incorporation, be called by the Board of Directors or the Chief
Executive Officer and shall be called by the Chief Executive Officer or
Secretary at the request in writing of a majority of the Board of Directors, or
at the request in writing of stockholders owning a majority in amount of the
entire capital stock of the Corporation issued and outstanding and entitled to
vote. Such request shall state the purpose or purposes of the proposed meeting.
Business transacted at any special meeting shall be limited to matters relating
to the purpose or purposes stated in the notice of meeting.
Section 4. Notice of Meetings. Except as otherwise provided by law,
------------------
written notice of each meeting of stockholders, annual or special, stating the
place, date and hour of the meeting and, in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be given not less
than ten or more than sixty (60) days before the date of the meeting, to each
stockholder entitled to vote at such meeting.
Section 5. Voting List. The officer who has charge of the stock ledger of
-----------
the Corporation shall prepare and make, at least ten (10) days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the city or town
where the meeting is to be held,
<PAGE>
-2-
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section 6. Quorum. The holders of a majority of the stock issued and
------
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business, except as otherwise provided by statute, the
certificate of incorporation or these By-Laws. Where a separate vote by a class
or classes is required, a majority of the outstanding shares of such class or
classes, present in person or represented by proxy, shall constitute a quorum
entitled to take action with respect to that vote on that matter. If no quorum
shall be present or represented at any meeting of stockholders, such meeting may
be adjourned in accordance with Section 7 hereof, until a quorum shall be
present or represented.
Section 7. Adjournments. Any meeting of stockholders may be adjourned
------------
from time to time to any other time and to any other place at which a meeting of
stockholders may be held under these By-Laws, which time and place shall be
announced at the meeting, by a majority of the stockholders present in person or
represented by proxy at the meeting and entitled to vote (whether or not a
quorum is present), or, if no stockholder is present or represented by proxy, by
any officer entitled to preside at or to act as Secretary of such meeting,
without notice other than announcement at the meeting. At such adjourned
meeting, any business may be transacted which might have been transacted at the
original meeting, provided that a quorum either was present at the original
meeting or is present at the adjourned meeting. If the adjournment is for more
than thirty days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 8. Action at Meetings. When a quorum is present at any meeting,
------------------
the affirmative vote of the holders of a majority of the stock present in person
or represented by proxy, entitled to vote and voting on the matter (or where a
separate vote by a class or classes is required, the affirmative vote of the
majority of shares of such class or classes present in person or represented by
proxy at the meeting) shall decide any matter (other than the election of
Directors) brought before such meeting, unless the matter is one upon which by
express provision of law, the certificate of incorporation or these By-Laws, a
different vote is required, in which case such express provision shall govern
and control the decision of such matter. The stock of holders who abstain from
voting on any matter shall be deemed not to have been voted on such matter.
Directors shall be elected by a plurality of the votes of the shares present in
person or represented by proxy at the meeting, entitled to vote and voting on
the election of Directors.
Section 9. Voting and Proxies. Unless otherwise provided in the
------------------
certificate of incorporation, each stockholder shall at every meeting of the
stockholders be entitled to one vote for each share of capital stock having
voting power held of record by such stockholder. Each stockholder entitled to
vote at a meeting of stockholders, or to express consent or dissent to corporate
action in writing without a meeting, may authorize another person or persons to
act for
<PAGE>
-3-
him by proxy, but no such proxy shall be voted or acted upon after three years
from its date, unless the proxy provides for a longer period.
Section 10. Action Without Meeting. Any action required to be taken at any
----------------------
annual or special meeting of stockholders, or any action which may be taken at
any annual or special meeting of such stockholders, may be taken without a
meeting, without prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken, shall be (1) signed and dated by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted and (2) delivered to
the Corporation within sixty days of the earliest dated consent by delivery to
its registered office in the State of Delaware (in which case delivery shall be
by hand or by certified or registered mail, return receipt requested), its
principal place of business, or an officer or agent of the Corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded. Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to those stockholders who
have not consented in writing.
ARTICLE II
DIRECTORS
Section 1. Number, Election, Tenure and Qualification. The number of
------------------------------------------
Directors which shall constitute the whole board shall be not less than one.
Within such limit, the number of Directors shall be determined by resolution of
the stockholders at the annual meeting or at any special meeting of
stockholders. The Directors shall be elected at the annual meeting or at any
special meeting of the stockholders, except as provided in Section 3 of this
Article, and each director elected shall hold office until his successor is
elected and qualified, unless sooner displaced. Directors need not be
stockholders.
Section 2. Enlargement. The number of the Board of Directors may be
-----------
increased at any time by vote of a majority of the Directors then in office.
Section 3. Vacancies. Vacancies and newly created Directorships resulting
---------
from any increase in the authorized number of Directors may be filled by a
majority of the Directors then in office, though less than a quorum, or by a
sole remaining director, and the Directors so chosen shall hold office until the
next annual election and until their successors are duly elected and shall
qualify, unless sooner displaced. If there are no Directors in office, then an
election of Directors may be held in the manner provided by statute. In the
event of a vacancy in the Board of Directors, the remaining Directors, except as
otherwise provided by law or these By-Laws, may exercise the powers of the full
board until the vacancy is filled.
Section 4. Resignation and Removal. Any director may resign at any time
-----------------------
upon written notice to the Corporation at its principal place of business or to
the Chief Executive Officer or Secretary. Such resignation shall be effective
upon receipt unless it is specified to be effective at some other time or upon
the happening of some other event. Any director or the entire Board of
Directors may be removed, with or without cause, by the holders of a majority of
<PAGE>
-4-
the shares then entitled to vote at an election of Directors, unless otherwise
specified by law or the certificate of incorporation.
Section 5. General Powers. The business and affairs of the Corporation
--------------
shall be managed by its Board of Directors, which may exercise all powers of the
Corporation and do all such lawful acts and things as are not by statute or by
the certificate of incorporation or by these By-Laws directed or required to be
exercised or done by the stockholders.
Section 6. Chairman of the Board. If the Board of Directors appoints a
---------------------
chairman of the board, he shall, when present, preside at all meetings of the
stockholders and the Board of Directors. He shall perform such duties and
possess such powers as are customarily vested in the office of the chairman of
the board or as may be vested in him by the Board of Directors.
Section 7. Place of Meetings. The Board of Directors may hold meetings,
-----------------
both regular and special, either within or without the State of Delaware.
Section 8. Regular Meetings. Regular meetings of the Board of Directors
----------------
may be held without notice at such time and at such place as shall from time to
time be determined by the board; provided that any director who is absent when
such a determination is made shall be given prompt notice of such determination.
A regular meeting of the Board of Directors may be held without notice
immediately after and at the same place as the annual meeting of stockholders.
Section 9. Special Meetings. Special meetings of the board may be called
----------------
by the Chief Executive Officer, Secretary, or on the written request of two (2)
or more Directors, or by one director in the event that there is only one
director in office. Two (2) days' notice to each director, either personally or
by telegram, cable, telecopy, commercial delivery service, telex or similar
means sent to his business or home address, or three (3) days' notice by written
notice deposited in the mail, shall be given to each director by the Secretary
or by the officer or one of the Directors calling the meeting. A notice or
waiver of notice of a meeting of the Board of Directors need not specify the
purposes of the meeting.
Section 10. Quorum, Action at Meeting, Adjournments. At all meetings of
---------------------------------------
the board a majority of Directors then in office, but in no event less than one
third of the entire board, shall constitute a quorum for the transaction of
business and the act of a majority of the Directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided by law or by the certificate of
incorporation. For purposes of this section, the term "entire board" shall mean
the number of Directors last fixed by the stockholders or Directors, as the case
may be, in accordance with law and these By-Laws; provided, however, that if
less than all the number so fixed of Directors were elected, the "entire board"
shall mean the greatest number of Directors so elected to hold office at any one
time pursuant to such authorization. If a quorum shall not be present at any
meeting of the Board of Directors, a majority of the Directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 11. Action by Consent. Unless otherwise restricted by the
-----------------
certificate of incorporation or these By-Laws, any action required or permitted
to be taken at any meeting of
<PAGE>
-5-
the Board of Directors or of any committee thereof may be taken without a
meeting, if all members of the board or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the board or committee.
Section 12. Telephonic Meetings. Unless otherwise restricted by the
-------------------
certificate of incorporation or these By-Laws, members of the Board of Directors
or of any committee thereof may participate in a meeting of the Board of
Directors or of any committee, as the case may be, by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and such participation in a
meeting shall constitute presence in person at the meeting.
Section 13. Committees. The Board of Directors may designate one or more
----------
committees, each committee to consist of one or more of the Directors of the
corporation. The board may designate one or more Directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. Any such committee, to the extent provided in the
resolution of the Board of Directors, shall have and may exercise all the powers
and authority of the Board of Directors in the management of the business and
affairs of the corporation, and may authorize the seal of the Corporation to be
affixed to all papers which may require it; but no such committee shall have the
power or authority in reference to (a) adopting, amending or repealing the By-
Laws of the Corporation or any of them or (b) approving or adopting, or
recommending to the stockholders any action or matter expressly required by law
to be submitted to stockholders for approval. Such committee or committees
shall have such name or names as may be determined from time to time by
resolution adopted by the Board of Directors. Each committee shall keep regular
minutes of its meetings and make such reports to the Board of Directors as the
Board of Directors may request. Except as the Board of Directors may otherwise
determine, any committee may make rules for the conduct of its business, but
unless otherwise provided by the Directors or in such rules, its business shall
be conducted as nearly as possible in the same manner as is provided in these
By-Laws for the conduct of its business by the Board of Directors.
Section 14. Compensation. Unless otherwise restricted by the certificate
------------
of incorporation or these By-Laws, the Board of Directors shall have the
authority to fix from time to time the compensation of Directors. The Directors
may be paid their expenses, if any, of attendance at each meeting of the Board
of Directors and the performance of their responsibilities as Directors and may
be paid a fixed sum for attendance at each meeting of the Board of Directors
and/or a stated salary as director. No such payment shall preclude any director
from serving the Corporation or its parent or subsidiary corporations in any
other capacity and receiving compensation therefor. The Board of Directors may
also allow compensation for members of special or standing committees for
service on such committees.
ARTICLE III
OFFICERS
Section 1. Enumeration. The officers of the Corporation shall be chosen
-----------
by the Board of Directors and shall be a President, a Secretary and a Treasurer
and such other officers
<PAGE>
-6-
with such titles, terms of office and duties as the Board of Directors may from
time to time determine, including a Chairman of the Board, one or more Vice-
Presidents, and one or more Assistant Secretaries and Assistant Treasurers. If
authorized by resolution of the Board of Directors, the Chief Executive Officer
may be empowered to appoint from time to time Assistant Secretaries and
Assistant Treasurers. Any number of offices may be held by the same person,
unless the Certificate of Incorporation or these By-Laws otherwise provide.
Section 2. Election. The Board of Directors at its first meeting after
--------
each annual meeting of stockholders shall choose a President, a Secretary and a
Treasurer. Other officers may be appointed by the Board of Directors at such
meeting, at any other meeting, or by written, consent.
Section 3. Tenure. The officers of the Corporation shall hold office
------
until their successors are chosen and qualify, unless a different term is
specified in the vote choosing or appointing him, or until his earlier death,
resignation or removal. Any officer elected or appointed by the Board of
Directors or by the Chief Executive Officer may be removed at any time, with or
without cause, by the affirmative vote of a majority of the Board of Directors
or a committee duly authorized to do so, except that any officer appointed by
the Chief Executive Officer may also be removed at any time, with or without
cause, by the Chief Executive Officer. Any vacancy occurring in any office of
the Corporation may be filled by the Board of Directors, at its discretion. Any
officer may resign by delivering his written resignation to the Corporation at
its principal place of business or to the Chief Executive Officer or the
Secretary. Such resignation shall be effective upon receipt unless it is
specified to be effective at some other time or upon the happening of some other
event.
Section 4. President. The President shall be the Chief Operating Officer
---------
of the corporation. He shall also be the Chief Executive Officer unless the
Board of Directors otherwise provides. If no Chief Executive Officer shall have
been appointed by the Board of Directors, all references herein to the "Chief
Executive Officer" shall be to the President. The President shall, unless the
Board of Directors provides otherwise in a specific instance or generally,
preside at all meetings of the stockholders and the Board of Directors, have
general and active management of the business of the Corporation and see that
all orders and resolutions of the Board of Directors are carried into effect.
The President shall execute bonds, mortgages, and other contracts requiring a
seal, under the seal of the corporation, except where required or permitted by
law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the Board of Directors to some
other officer or agent of the corporation.
Section 5. Vice-Presidents. In the absence of the President or in the
---------------
event of his or her inability or refusal to act, the Vice-President, or if there
be more than one Vice-President, the Vice-Presidents in the order designated by
the Board of Directors or the Chief Executive Officer (or in the absence of any
designation, then in the order determined by their tenure in office) shall
perform the duties of the President, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the President. The Vice-
Presidents shall perform such other duties and have such other powers as the
Board of Directors or the Chief Executive Officer may from time to time
prescribe.
<PAGE>
-7-
Section 6. Secretary. The Secretary shall have such powers and perform
---------
such duties as are incident to the office of Secretary. The Secretary shall
maintain a stock ledger and prepare lists of stockholders and their addresses as
required and shall be the custodian of corporate records. The Secretary shall
attend all meetings of the Board of Directors and all meetings of the
stockholders and record all the proceedings of the meetings of the Corporation
and of the Board of Directors in a book to be kept for that purpose and shall
perform like duties for the standing committees when required. The Secretary
shall give, or cause to be given, notice of all meetings of the Stockholders and
special meetings of the Board of Directors, and shall perform such other duties
as may be from time to time prescribed by the Board of Directors or Chief
Executive Officer, under whose supervision the Secretary shall be. The
Secretary shall have custody of the corporate seal of the Corporation and the
Secretary, or an assistant Secretary, shall have authority to affix the same to
any instrument requiring it and when so affixed, it may be attested by his or
her signature or by the signature of such assistant Secretary. The Board of
Directors may give general authority to any other officer to affix the seal of
the Corporation and to attest the affixing by his or her signature.
Section 7. Assistant Secretaries. The assistant Secretary, or if there be
---------------------
more than one, the assistant secretaries in the order determined by the Board of
Directors, the Chief Executive Officer or the Secretary (or if there be no such
determination, then in the order determined by their tenure in office), shall,
in the absence of the Secretary or in the event of his or her inability or
refusal to act, perform the duties and exercise the powers of the Secretary and
shall perform such other duties and have such other powers as the Board of
Directors, the Chief Executive Officer or the Secretary may from time to time
prescribe. In the absence of the Secretary or any assistant Secretary at any
meeting of stockholders or Directors, the person presiding at the meeting shall
designate a temporary or acting Secretary to keep a record of the meeting.
Section 8. Treasurer. The Treasurer shall perform such duties and shall
---------
have such powers as may be assigned to him or her by the Board of Directors or
the Chief Executive Officer. In addition, the Treasurer shall perform such
duties and have such powers as are incident to the office of Treasurer. The
Treasurer shall have the custody of the corporate funds and securities and shall
keep full and accurate accounts of receipts and disbursements in books belonging
to the Corporation and shall deposit all moneys and other valuable effects in
the name and to the credit of the Corporation in such depositories as may be
designated by the Board of Directors. He shall disburse the funds of the
Corporation as may be ordered by the Board of Directors, taking proper vouchers
for such disbursements, and shall render to the Chief Executive Officer and the
Board of Directors, when the Chief Executive Officer or Board of Directors so
requires, an account of all his or her transactions as Treasurer and of the
financial condition of the corporation.
Section 9. Assistant Treasurers. The assistant Treasurer, or if there
--------------------
shall be more than one, the assistant Treasurers in the order determined by the
Board of Directors, the Chief Executive Officer or the Treasurer (or if there be
no such determination, then in the order determined by their tenure in office),
shall, in the absence of the Treasurer or in the event of his or her inability
or refusal to act, perform the duties and exercise the powers of the Treasurer
and
<PAGE>
-8-
shall perform such other duties and have such other powers as the Board of
Directors, the Chief Executive Officer or the Treasurer may from time to time
prescribe.
Section 10. Bond. If required by the Board of Directors, any officer shall
----
give the Corporation a bond in such sum and with such surety or sureties and
upon such terms and conditions as shall be satisfactory to the Board of
Directors, including without limitation a bond for the faithful performance of
the duties of his office and for the restoration to the Corporation of all
books, papers, vouchers, money and other property of whatever kind in his
possession or under his control and belonging to the corporation.
ARTICLE IV
NOTICES
Section 1. Delivery. Whenever, under the provisions of law, or of the
--------
Certificate of Incorporation or these By-Laws, written notice is required to be
given to any director or stockholder, such notice may be given by mail,
addressed to such director or stockholder, at his address as it appears on the
records of the corporation, with postage thereon prepaid, and such notice shall
be deemed to be given at the time when the same shall be deposited in the United
States mail. Unless written notice by mail is required by law, written notice
may also be given by telegram, cable, telecopy, commercial delivery service,
telex or similar means, addressed to such director or stockholder at his address
as it appears on the records of the corporation, in which case such notice shall
be deemed to be given when delivered into the control of the persons charged
with effecting such transmission, the transmission charge to be paid by the
Corporation or the person sending such notice and not by the addressee. Oral
notice or other in-hand delivery (in person or by telephone) shall be deemed
given at the time it is actually given.
Section 2. Waiver of Notice. Whenever any notice is required to be given
----------------
under the provisions of law or of the certificate of incorporation or of these
By-Laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
INDEMNIFICATION
Section 1. Actions other than by or in the Right of the Corporation. The
--------------------------------------------------------
corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation) by reason of the fact that he
is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
<PAGE>
-9-
corporation, and, with respect to any criminal action or proceedings, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
Section 2. Actions by or in the Right of the Corporation. The Corporation
---------------------------------------------
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact that
he or she is or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defense or settlement
of such action or suit if such person acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable unless and only to the extent that the Court of Chancery of the State of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery of the State of Delaware
or such other court shall deem proper.
Section 3. Success on the Merits. To the extent that any person described
---------------------
in Section 1 or 2 of this Article V has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in said
Sections, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
Section 4. Specific Authorization. Any indemnification under Section 1 or
----------------------
2 of this Article V (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of any person described in said Sections is proper in the
circumstances because he has met the applicable standard of conduct set forth in
said Sections. Such determination shall be made (1) by the Board of Directors
by a majority vote of Directors who were not parties to such action, suit or
proceeding (even though less than a quorum), or (2) if there are no
disinterested Directors or if a majority of disinterested Directors so directs,
by independent legal counsel (who may be regular legal counsel to the
corporation) in a written opinion, or (3) by the stockholders of the
corporation.
Section 5. Advance Payment. Expenses incurred in defending a pending or
---------------
threatened civil or criminal action, suit or proceeding may be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of any person
described in said Section to repay such amount if it shall ultimately be
<PAGE>
-10-
determined that he or she is not entitled to indemnification by the Corporation
as authorized in this Article V.
Section 6. Non-Exclusivity. The indemnification and advancement of
---------------
expenses provided by, or granted pursuant to, the other Sections of this Article
V shall not be deemed exclusive of any other rights to which those provided
indemnification or advancement of expenses may be entitled under any By-Law,
agreement, vote of stockholders or disinterested Directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office.
Section 7. Insurance. The Board of Directors may authorize, by a vote of
---------
the majority of the full board, the Corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the power to indemnify him
against such liability under the provisions of this Article V.
Section 8. Continuation of Indemnification and Advancement of Expenses.
-----------------------------------------------------------
The indemnification and advancement of expenses provided by, or granted pursuant
to, this Article V shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
Section 9. Severability. If any word, clause or provision of this Article
------------
V or any award made hereunder shall for any reason be determined to be invalid,
the provisions hereof shall not otherwise be affected thereby but shall remain
in full force and effect.
Section 10. Intent of Article. The intent of this Article V is to provide
-----------------
for indemnification and advancement of expenses to the fullest extent permitted
by Section 145 of the General Corporation Law of Delaware. To the extent that
such Section or any successor section may be amended or supplemented from time
to time, this Article V shall be amended automatically and construed so as to
permit indemnification and advancement of expenses to the fullest extent from
time to time permitted by law.
ARTICLE VI
CAPITAL STOCK
Section 1. Certificates of Stock. Every holder of stock in the
---------------------
Corporation shall be entitled to have a certificate, signed by, or in the name
of the Corporation by, the chairman or Vice-chairman of the Board of Directors,
or the President or a Vice-President and the Treasurer or an assistant
Treasurer, or the Secretary or an assistant Secretary of the Corporation,
certifying the number of shares owned by such holder in the corporation. Any or
all of the signatures on the certificate may be a facsimile. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such
<PAGE>
-11-
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue. Certificates may be issued for
partly paid shares and in such case upon the face or back of the certificates
issued to represent any such partly paid shares, the total amount of the
consideration to be paid therefor, and the amount paid thereon shall be
specified.
Section 2. Lost Certificates. The Board of Directors may direct a new
-----------------
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate or certificates, or his legal representative, to give
reasonable evidence of such loss, theft or destruction, to advertise the same in
such manner as it shall require and/or to give the Corporation a bond in such
sum as it may direct as indemnity against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost, stolen or
destroyed or the issuance of such new certificate.
Section 3. Transfer of Stock. Upon surrender to the Corporation or the
-----------------
transfer agent of the Corporation of a certificate for shares, duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, and proper evidence of compliance with other conditions to rightful
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 4. Record Date. In order that the Corporation may determine the
-----------
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, the Board of Directors may fix a record date, which
shall not precede the date upon which the resolution fixing the record date is
adopted by the Board of Directors, and which shall not be more than sixty days
nor less then ten days before the date of such meeting. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
If no record date is fixed, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day before the day on which notice is given, or, if
notice is waived, at the close of business on the day before the day on which
the meeting is held. In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing without a
meeting, the Board of Directors may fix a record date, which shall not precede
the date upon which the resolution fixing the record date is adopted by the
Board of Directors, and which shall not be more than ten days after the date
upon which the resolution fixing the record date is adopted by the Board of
Directors. If no record date is fixed, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board of Directors is required by statute,
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the Corporation as provided
in Section 10 of Article 1. If no record date is fixed and prior action by the
Board of Directors is required, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting shall be at
the close of business on the date on which the Board of Directors adopts the
resolution taking such
<PAGE>
-12-
prior action. In order that the Corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the stockholders entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any other
lawful action, the Board of Directors may fix a record date, which shall not
precede the date upon which the resolution fixing the record date is adopted,
and which shall be not more than sixty days prior to such action. If no record
date is fixed, the record date for determining stockholders for any such purpose
shall be at the close of business on the day on which the Board of Directors
adopts the resolution relating to such purpose.
Section 5. Registered Stockholders. The corporation shall be entitled to
-----------------------
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
the laws of Delaware.
ARTICLE VII
RESERVED
ARTICLE VIII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
---------
corporation, if any, may be declared by the Board of Directors at any regular or
special meeting or by written consent, pursuant to law. Dividends may be paid
in cash, in property, or in shares of the capital stock, subject to the
provisions of the certificate of incorporation.
Section 2. Reserves. The Directors may set apart out of any funds of the
--------
Corporation available for dividends a reserve or reserves for any proper purpose
and may abolish any such reserve.
Section 3. Checks. All checks or demands for money and notes of the
------
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
Section 4. Fiscal Year. The fiscal year of the Corporation shall be fixed
-----------
by resolution of the Board of Directors.
Section 5. Seal. The Board of Directors may, by resolution, adopt a
----
corporate seal. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the word "Delaware." The seal may
be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise. The seal may be altered from time to time by the Board
of Directors.
<PAGE>
-13-
ARTICLE IX
AMENDMENTS
These By-Laws may be altered, amended or repealed or new By-Laws may be
adopted by the stockholders or by the Board of Directors, when such power is
conferred upon the Board of Directors by the certificate of incorporation, at
any regular meeting of the stockholders or of the Board of Directors or at any
special meeting of the stockholders or of the Board of Directors provided,
however, that in the case of a regular or special meeting of stockholders,
notice of such alteration, amendment, repeal or adoption of new By-Laws be
contained in the notice of such meeting, provided further however, Article II,
Section 1 of these By-Laws may only be altered, amended or repealed by a vote of
the stockholders of the Corporation, voting together as a single class on an as
converted to common stock basis, and not by the sole action of the Board of
Directors.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
-14-
Register of Amendments to the By-Laws
<TABLE>
<CAPTION>
Date Section Affected Change
- ---- ---------------- ------
<S> <C> <C>
February 1, 1999 Article II, Section 1 The second sentence of this section previously
stated: "Within such limit, the number of
Directors shall be determined by the resolution of
the Board of Directors or by the stockholders at
the annual meeting or at any special meeting of
the stockholders." As amended and restated, now
states:
"Within such limit, the number of Directors shall
be determined by resolution of the stockholders at
the annual meeting or at any special meeting of
stockholders."
February 1, 1999 Article IX Article IX previously stated: "These By-Laws may
be altered, amended or repealed or new By-Laws may
be adopted by the stockholders or by the Board of
Directors, when such power is conferred upon the
Board of Directors by the certificate of
incorporation, at any regular meeting of the
stockholders or of the Board of Directors or at
any special meeting of the stockholders or of the
Board of Directors provided, however, that in the
case of a regular or special meeting of
stockholders, notice of such alteration,
amendment, repeal or adoption of new By-Laws be
contained in the notice of such meeting."
The amended Article IX, now states:
"These By-Laws may be altered, amended or repealed
or new By-Laws may be adopted by the stockholders
or by the Board of Directors, when such power is
conferred upon the Board of Directors by the
certificate of incorporation, at any regular
meeting of the stockholders or of the Board of
Directors or at any special meeting of the
stockholders or of the Board of Directors
provided, however, that in the case of a regular
or special meeting of stockholders, notice of such
alteration, amendment, repeal or adoption of new
By-Laws be contained in the notice of such
meeting, provided further however, Article II,
Section 1 of these By-
</TABLE>
<PAGE>
-15-
<TABLE>
<S> <C>
Laws may only be altered, amended or repealed by a
vote of the stockholders of the Corporation, voting
together as a single class on an as converted to
common stock basis, and not by the sole action of
the Board of Directors."
</TABLE>
<PAGE>
EXHIBIT 10.1
LOAN AGREEMENT
FIRST UNION NATIONAL BANK
300 MAIN STREET
STAMFORD, CONNECTICUT 06904
(Hereinafter referred to as the "Bank")
GREENWICH TECHNOLOGY PARTNERS, INC.
ATTN LYNNE KRAUSS
43 GATEHOUSE ROAD
STAMFORD, CONNECTICUT 06902
(Individually and collectively, "Borrower")
This Loan Agreement ("Agreement") is entered into this 30th day of July, 1999,
by and between Bank and GREENWICH TECHNOLOGY PARTNERS, INC., a corporation
organized under the laws of the State of Delaware.
Borrower has applied to Bank for a loan or loans (individually and collectively,
the "Loan") evidenced by one or more promissory notes (whether one or more, the
"Note") as follows:
. Revolver without termout - in the principal amount of $2,500,000.00
which is evidenced by the Promissory Note dated July 30, 1999. The
Loan proceeds are to be used by Borrower solely to finance working
capital.
This Agreement applies to the loan and all Loan Documents. The terms "Loan
Documents" and "Obligations," as used in this Agreement, are defined in the
Note. The term "Borrower" shall include its Subsidiaries and Affiliates. As used
in this Agreement as to Borrower, "Subsidiary" shall mean any corporation of
which more than 50% of the issued and outstanding voting stock is owned directly
or indirectly by Borrower. As to Borrower, "Affiliate" shall have the meaning as
defined in 11 U.S.C. (S)101, except that the term "debtor" therein shall be
substituted by the term "Borrower" herein.
Relying upon the covenants, agreements, representations and warranties contained
in this Agreement, Bank is willing to extend credit to Borrower upon the terms
and subject to the conditions set forth herein, and Bank and Borrower agree as
follows:
REPRESENTATIONS. Borrower represents that from the date of this Agreement and
until final payment in full of the Obligations: Accurate Information. All
information now and hereafter furnished to Bank is and will be true, correct and
complete. Any such information relating to Borrower's financial condition will
accurately reflect Borrower's financial condition as of the date(s) thereof,
(including all contingent liabilities of every type, and Borrower further
represents that its financial condition has not changed materially or adversely
since the date(s) of such documents. Authorization; Non-Contravention. The
execution, delivery and performance by Borrower and any guarantor, as
applicable, of this Agreement and other Loan Documents to
<PAGE>
-2-
which it is a party are within its power, have been duly authorized by all
necessary action taken by the duly authorized officers of Borrower and any
guarantors and if necessary, by making appropriate filings with any governmental
agency or unit and are the legal, binding, valid and enforceable obligations of
Borrower and any guarantors; and do not (i) contravene, or constitute (with or
without the giving of notice or lapse of time or both) a violation of any
provision of applicable law, a violation of the organizational documents of
Borrower or any guarantor, or a default under any agreement, judgment,
injunction, order, decree or other instrument binding upon or affecting Borrower
or any guarantor, (ii) result in the creation or imposition of any lien (other
than the lien(s) created by the Loan Documents) on any of Borrower's or
guarantor's assets, or (iii) give cause for the acceleration of any obligations
of Borrower or any guarantor to any other creditor. Asset Ownership. Borrower
has good and marketable title to all of the properties and assets reflected on
the balance sheets and financial statements supplied Bank by Borrower, and all
such properties and assets are free and clear of mortgages, security deeds,
pledges, liens, charges, and all other encumbrances, except as otherwise
disclosed to Bank by Borrower in writing ("Permitted Liens"). To Borrower's
knowledge, no default has occurred under any Permitted Liens and no claims or
interests adverse to Borrower's present rights in its properties and assets have
arisen. Discharge of Liens and Taxes. Borrower has duly filed, paid and/or
discharged all taxes or other claims which may become a lien on any of its
property or assets, except to the extent that such items are being appropriately
contested in good faith and an adequate reserve for the payment thereof is being
maintained. Sufficiency of Capital. Borrower is not, and after consummation of
this Agreement and after giving effect to all indebtedness incurred and liens
created by Borrower in connection with the Loan, will not be insolvent within
the meaning of 11 U.S.C. (S)101(32). Compliance with Laws. Borrower is in
compliance in all material respects with all federal, state and local laws,
rules and regulations applicable to its properties, operations, business, and
finances, including, without limitation, any federal or state laws relating to
liquor (including 18 U.S.C. (S)3617 et seq.) or narcotics (including 21 U.S.C.
-- ---
(S)801 et seq.) and/or any commercial crimes, all applicable federal, state and
-- ---
local laws and regulations intended to protect the environment; and the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), if applicable.
Organization and Authority. Each corporate or limited liability company Borrower
and any guarantor, as applicable, is duly created, validly existing and in good
standing under the laws of the state of its organization, and has all powers,
governmental licenses, authorizations, consents and approvals required to
operate its business as now conducted. Each corporate or limited liability
company Borrower and any guarantor, if any, is duly qualified, licensed and in
good standing in each jurisdiction where qualification or licensing is required
by the nature of its business or the character and location of its property,
business or customers, and in which the failure to so qualify or be licensed, as
the case may be, in the aggregate, could have a material adverse effect on the
business, financial position, results of operations, properties or prospects of
Borrower or any such guarantor. No Litigation. There are no pending or
threatened suits, claims or demands against Borrower or any guarantor that have
not been disclosed to Bank by Borrower in writing. ERISA. Each employee pension
benefit plan, as defined in ERISA, maintained by Borrower meets, as of the date
hereof, the minimum funding standards of ERISA and all applicable regulations
thereto and requirements thereof, and of the Internal Revenue Code of 1954, as
amended. No "Prohibited Transaction" or "Reportable Event" (as both terms are
defined by ERISA) has occurred with respect to any such plan.
<PAGE>
-3-
AFFIRMATIVE COVENANTS. Borrower agrees that from the date of this Agreement and
until final payment in full of the Obligations, unless Bank shall otherwise
consent in writing: Business Continuity. Borrower shall conduct its business in
substantially the same manner and locations as such business is now and has
previously been conducted. Maintain Properties. Borrower shall maintain,
preserve and keep its property in good repair, working order and condition,
making all needed replacements, additions and improvements thereto, to the
extent allowed by this Agreement. Access to Books & Records. Borrower shall
allow Bank, or its agents, during normal business hours, access to the books,
records and such other documents of Borrower as Bank shall reasonably require,
and allow Bank to make copies thereof at Bank's expense. Insurance. Borrower
shall maintain adequate insurance coverage with respect to its properties and
business against loss or damage of the kinds and in the amounts customarily
insured against by companies of established reputation engaged in the same or
similar businesses including, without limitation, commercial general liability
insurance, workmen's compensation insurance, and business interruption
insurance, and upon all Collateral (as defined in the Loan Documents) securing
the Obligations, such insurance as specified in the Loan Documents; all acquired
in such amounts and from such companies as Bank may reasonably require. Notice
of Default and Other Notices. (a) Notice of Default. Borrower shall furnish to
Bank immediately upon becoming aware of the existence of any condition or event
which constitutes a Default (as defined in the Loan Documents) or any event
which, upon the giving of notice or lapse of time or both, may become a Default,
written notice specifying the nature and period of existence thereof and the
action which Borrower is taking or proposes to take with respect thereto. (b)
Other Notices. Borrower shall promptly notify Bank in writing of (i) any
material adverse change in its financial condition or its business; (ii) any
material default under any material agreement, contract or other instrument to
which it is a party or by which any of its properties are bound, or any
acceleration of the maturity of any indebtedness owed by Borrower; (iii) any
material adverse claim against or affecting Borrower; or any part of its
properties; (iv) the commencement of, and any material determination in, any
material litigation with any third party or any material proceeding before any
governmental agency or unit affecting Borrower; and (v) at least thirty (30)
days prior thereto, any change in Borrower's name or address as shown above,
and/or any change in Borrower's structure. Compliance with Other Agreements.
Borrower shall comply with all terms and conditions contained in this Agreement,
and any other Loan Documents, and swap agreements, if applicable, as defined in
the Note. Payments of Debts. Borrower shall pay and discharge when due, and
before subject to penalty or further charge, and otherwise satisfy before
maturity or delinquency, all obligations, debts, taxes, and liabilities of
whatever nature or amount, except those which Borrower in good faith disputes.
Other Financial Information. Borrower shall deliver promptly such other
information regarding the operation, business affairs, and financial condition
of Borrower which Bank may reasonably request. Estoppel Certificate. Borrower,
within fifteen (15) days after request by Bank, will furnish a written statement
duly acknowledged of the amount due under the Loan and whether offsets or
defenses exist against the Obligations. Deposit Relationship. Borrower will
maintain its primary depository accounts with First Union. Cash Management
Relationship. Borrower will maintain its cash management accounts with First
Union.
NEGATIVE COVENANTS. Borrower agrees that from the date of this Agreement and
until final payment in full of the Obligations, unless Bank shall otherwise
consent in writing:
<PAGE>
-4-
Government Intervention. Borrower shall not permit the assertion or making of
any seizure, vesting or intervention by or under authority of any government by
which the management of Borrower or any guarantor is displaced of its authority
in the conduct of its respective business or such business is curtailed or
materially impaired. Prepayment of Other Debt. Borrower shall not retire any
long-term debt entered into prior to the date of this Agreement at a date in
advance of its legal obligation to do so without the express written consent of
Bank. Retire or Repurchase Capital Stock. Borrower shall not retire or otherwise
acquire any of its capital stock, except for repurchases from terminated or
former employees. Default on Other Contracts or Obligations. Borrower shall not
default on any material contract with or obligations when due to a third party
or default in the performance of any obligation to a third party incurred for
money borrowed. Judgment Entered. Borrower shall not permit the entry of any
monetary judgment or the assessment against, the filing of any tax lien against,
or the issuance of any writ of garnishment or attachment against any property of
or debts due Borrower. Change In Fiscal Year. Change its fiscal year without the
consent of Bank. Change of Control. Joseph P. Beninati, FGII Partners and
employees of Greenwich Technology Partners, Inc. shall collectively maintain at
all times no less than 51% of the ownership interest in Borrower. Guarantees.
Guarantee or otherwise become responsible for obligations of any other person or
persons other than the endorsement of checks and drafts for collection in the
ordinary course of business. Encumbrances. Create, assume, or permit to exist
any mortgage, security deed, deed of trust, pledge, lien, charge or other
encumbrance on any of its assets, whether now owned or hereafter acquired, other
than: (i) security interests required by the Loan Documents; (ii) liens for
taxes contested in good faith; or (iii) liens accruing by law for employee
benefits; and (iv) Permitted Liens.
FINANCIAL COVENANTS. Borrower agrees to the following provisions from the date
hereof until final payment in full of the Obligations, unless Bank shall
otherwise consent in writing: EBIT to Interest Ratio. Borrower shall maintain an
EBIT to Interest Ratio of not less than 1.50 to 1.00. "EBIT to Interest Ratio"
shall mean the sum of earnings before interest and taxes divided by interest
expense. This covenant shall be tested on a quarterly basis with the first test
occurring March 31, 2000. Quick Ratio. Borrower shall maintain a Quick Ratio of
not less than 2.00 to 1.00. "Quick Ratio" shall mean the ratio of the sum of
cash plus cash equivalents plus marketable securities plus trade receivables
(minus any bad debt reserves), whether or not evidenced by a promissory note,
plus the current portion of any debt due to Borrower from Borrower's officers,
employees, stockholders, affiliates or subsidiaries, to Current Liabilities.
"Current Liabilities" shall mean all liabilities which are so classified in
accordance with generally accepted accounting principles. This covenant shall be
tested on a quarterly basis with the first test occurring September 30, 1999,
Positive Earnings. Commencing with Borrower's first fiscal quarter ending March
31, 2000 and for each fiscal quarter thereafter, Borrower's earnings before
interest, taxes, depreciation and amortization ("EBITDA") shall be positive.
This covenant shall be tested on a quarterly basis with the first test occurring
March 31, 2000. Limitation on Debt. Borrower shall not, directly or indirectly,
create, incur, assume or become liable for any additional indebtedness, whether
contingent or direct, which totals more than $25,000.00 in the aggregate at any
time, without the express written consent of Bank. Loans and Advances. Borrower
shall not, during any fiscal year, make loans or advances, except in the
ordinary course of business, to
<PAGE>
-5-
any person or entity. Dividends. Borrower shall not, during any fiscal year,
declare or pay dividends or make other distributions to shareholders.
FINANCIAL REPORTS. Borrower agrees to the following provision(s) from the date
of this Agreement and until final payment in full of the Obligations, unless
Bank shall otherwise consent in writing: Annual Financial Statements. Borrower
shall deliver to Bank, within 120 days after the close of its fiscal year, draft
audited financial statement and within 150 days after the close of each fiscal
year, audited financial statements reflecting its operations during such fiscal
year, including, without limitation, a balance sheet, profit and loss statement
and statement of cash flows, with supporting schedules; all in reasonable
detail, prepared in conformity with generally accepted accounting principles,
applied on a basis consistent with that of the preceding year. All such
statements shall be examined by an independent certified public accountant
acceptable to Bank. The opinion of such independent certified public accountant
shall not be acceptable to Bank if qualified due to any limitations in scope
imposed by Borrower. Any other qualification of the opinion by the accountant
shall render the acceptability of the financial statements subject to Bank's
approval. Periodic Financial Statements. Borrower shall deliver to Bank
unaudited management-prepared quarterly financial statements, including, without
limitation, a balance sheet, profit and loss statement, and statement of cash
flows, with supporting schedules, as soon as available and in any event within
45 days after the close of each such period; all in reasonable detail. Such
statements shall be certified as to their correctness by a principal financial
officer of Borrower. Accounts Payable Aging. Borrower shall, from time to time
hereafter deliver to Bank monthly within 15 days of the end of each such period,
a detailed aging of payables by total, a summary aging of payables by vendor and
vendor address, and a reconciliation statement. Said aging should also include
the original date of each invoice. Accounts Receivable Aging. Borrower shall,
from time to time hereafter deliver to Bank monthly within 15 days of the end of
each such period, a detailed aging of accounts by total, a summary aging of
accounts by customer and customer address, and a reconciliation statement. Said
aging should also include the original date of each invoice. Compliance
Certificate. Borrower shall furnish to Bank, together with each set of
financial statements described above, compliance certificates signed by the
company's chief financial officer, certifying that (i) none of the covenants in
the loan documents have been breached and (ii) no event has occurred which would
constitute an Event of Default under the loan documents.
BORROWING BASE. "Borrowing Base" means 100% of Assigned Accounts plus 75% of
the net amount of Eligible Accounts, less the amount of any Reserves required by
Bank.
"Assigned Accounts" means time savings accounts and certificates of deposit
maintained in or with Bank and affiliates of Bank.
"Eligible Account" means an account receivable not more than 90 days from the
date of the original invoice that arises in the ordinary course of Borrower's
business and meets the following eligibility requirements: (a) the sale of
goods or services reflected in such account is final and such goods and services
have been delivered or provided and accepted by the account debtor and payment
for such is owing; (b) the invoices comprising an account are not subject to any
claims, returns or disputes of any kind; (c) the account debtor is not
insolvent; (d) the account debtor has
<PAGE>
-6-
its principal place of business in the United States; (e) the account debtor is
not an Affiliate of Borrower and is not a supplier to Borrower and the account
is not otherwise exposed to risk of set-off; (f) not more than thirty percent of
the original invoices owing Borrower by the account debtor are more than 90 days
from the date of the original invoice; and (g) the account is not subject to any
lien prior to the lien of Bank.
"Reserves" means such amounts as may be required by Bank, at any time and from
time to time without prior notice to Borrower, which Bank deems to be adequate
to reserve against outstanding letters of credit, outstanding banker's
acceptances, Borrower's obligations to Bank or its affiliates or any guaranties
or other contingent debts of Borrower.
Required Reports. Borrower shall certify to Bank by the 15th day of each month,
the amount of Eligible Accounts as of the first day of each month, on forms
required by Bank, together with all detail and supporting documents requested by
Bank. Such reports shall be certified as to their correctness by the Chief
Financial Officer of Borrower. Bank may at any time and from time to time,
during Borrowers normal business hours, enter upon any business premises of
Borrower and audit Borrower's accounts. Bank's determination of the amount of
Eligible Accounts shall at all times be indisputable and deemed correct.
Borrower, at all times, shall cooperate with Bank by providing Bank information
and access to Borrower's premises and business records and shall be courteous to
Bank's agents.
CONDITIONS PRECEDENT. The obligations of Bank to make the Loan and any advances
pursuant to this Agreement are subject to the following conditions precedent:
Additional Documents. Receipt by Bank of such additional supporting documents
as Bank or its counsel may reasonably request.
CONDITIONS SUBSEQUENT. Borrower shall provide Bank, no later than August 16,
1999, with evidence that it has filed all required reports for 1998 with the
Secretary of State.
IN WITNESS WHEREOF, Borrower, on the day and year first written above, has
caused this Agreement to be executed under seal.
GREENWICH TECHNOLOGY PARTNERS, INC.
Corporate By:_______________________________________
Seal Dennis M. Goett
Chief Financial Officer
TAXPAYER IDENTIFICATION NUMBER(S):
GREENWICH TECHNOLOGY PARTNERS, INC. 13-3944171
FIRST UNION NATIONAL BANK
<PAGE>
-7-
By:_______________________________________
Robert Martin
Vice President
<PAGE>
EXHIBIT 10.2
SECURITY AGREEMENT
July 30, 1999
GREENWICH TECHNOLOGY PARTNERS, INC.
ATTN: LYNNE KRAUSS
43 GATEHOUSE ROAD
STAMFORD, CONNECTICUT 06902
(Individually and collectively "Debtor")
FIRST UNION NATIONAL BANK
300 MAIN STREET
STAMFORD, CONNECTICUT 06904
(Hereinafter referred to as "Bank")
For value received and to secure payment and performance of the Promissory Note
executed by the Debtor (also referred to herein as "Borrower") dated July 30,
1999, in the original principal amount of $2,500,000.00, payable to Bank, and
any extensions, renewals, modifications or novations thereof (the "Note"), this
Security Agreement and the other Loan Documents, and any other obligations of
Debtor to Bank however created, arising or evidenced, whether direct or
indirect, absolute or contingent, now existing or hereafter arising or acquired,
and whether or not evidenced by a Loan Document, including swap agreements (as
defined in 11 U.S.C. (S)101), future advances, and all costs and expenses
incurred by Bank to obtain, preserve, perfect and enforce the security interest
granted herein and to maintain, preserve and collect the property subject to the
security interest (collectively, "Obligations"), Debtor hereby grants to Bank a
continuing security interest in and lien upon, and for security purposes assigns
and transfers to Bank until all of the Obligations are repaid in full, the
following described property, whether now owned or hereafter acquired, and any
additions, replacements, accessions, or substitutions thereof and all cash and
non-cash proceeds and products thereof (collectively, "Collateral"):
All accounts, contract rights, leases, and any other rights of Debtor to payment
for goods sold or leased or for services rendered; furniture; furnishings;
equipment; machinery; accessories; moveable trade fixtures, goods held for sale
or being processed for sale in Debtor's business, including all raw materials,
supplies, and other materials used or consumed in Debtor's business, goods in
process, finished goods, and all other items customarily classified as
inventory; building improvement and construction materials, supplies and
equipment; chattel paper; instruments; documents; letters of credit (including,
but not limited to, any written undertaking to pay money conditioned upon the
presentation of specified documents, and advices of letters of credits), all
funds on deposit with Bank and its affiliates; and all general intangibles; as
well as all parts, replacements, substitutions, profits, products and cash and
non-cash proceeds of the foregoing (including insurance and condemnation
proceeds payable by reason of condemnation of or loss or damage thereto) in any
form and wherever located.
<PAGE>
-2-
Debtor's, time savings accounts and certificates of deposit maintained in or
with Bank and affiliates of Bank, account(s)/certificate(s) of deposit number(s)
2000005700057 ("Assigned Deposits") .
Debtor hereby represents and agrees that:
OWNERSHIP. Debtor owns the Collateral. The Collateral is free and clear of all
liens, security interests, and claims except those previously reported in
writing to Bank, and Debtor will keep the Collateral free and clear from all
liens, security interests and claims, other than those granted to Bank. Until
all of the Obligations are repaid in full, Bank shall have the entire right and
interest in and to the Assigned Deposits. By executing this Security Agreement,
Debtor has divested itself of all control over the Assigned Deposits and Bank is
entitled to and does possess sole dominion and control over the Assigned
Deposits and is entitled to receive the benefits accruing with respect thereto.
Debtor surrenders all authority or right to withdraw, collect, receive the
benefits of, or otherwise assign or encumber the Assigned Deposits, and
authorizes Bank (and each affiliate and branch office of Bank or such affiliate)
to treat Bank as the sole and exclusive owner of the Assigned Deposits. Upon the
maturity of the Assigned Deposits, Bank shall reinvest the Assigned Deposits in
an investment of Bank's choice. Bank shall have no liability to Debtor for any
loss incurred in connection with or arising out of any such reinvestment except
for loss resulting from Bank's gross negligence or willful misconduct. The
assignment evidenced by this Security Agreement is a continuing one and is
irrevocable so long as any of the Obligations are outstanding or the Bank shall
have any obligations under the Loan Documents and shall terminate only upon
payment or other satisfaction in full of all Obligations or Bank's
acknowledgment in writing that this Security Agreement has been terminated. Upon
termination of this Security Agreement, and to the extent the Assigned Deposits
have not been applied in satisfaction of the Obligations, Bank shall reassign
the Assigned Deposits to Debtor and return any passbooks, certificates, and
other documents in Bank's possession at Debtor's request.
NAME AND OFFICES. There has been no change in the name of Debtor, or the name
under which Debtor conducts business, within the five years preceding the date
hereof and Debtor has not moved its executive offices or residence within the
five years preceding the date hereof except as previously reported in writing to
Bank.
TITLE/TAXES. Debtor has good and marketable title to Collateral and will warrant
and defend same against all claims. Debtor will not transfer, sell, or lease
Collateral (except as permitted herein). Debtor agrees to pay promptly all taxes
and assessments upon or for the use of Collateral and on this Security
Agreement. At its option, Bank may discharge taxes, liens, security interests or
other encumbrances at any time levied or placed on Collateral. Debtor agrees to
reimburse Bank, on demand, for any such payment made by Bank. Any amounts so
paid shall be added to the Obligations.
WAIVERS. Debtor waives presentment, demand, protest, notice of dishonor, notice
of default, demand for payment, notice of intention to accelerate, and notice of
acceleration of maturity. Debtor further agrees not to assert against Bank as a
defense (legal or equitable), as a setoff, as a counterclaim, or otherwise, any
claims Debtor may have against any seller or lessor that provided
<PAGE>
-3-
personal property or services relating to any part of the Collateral. Debtor
waives all exemptions and homestead rights with regard to the Collateral. Debtor
waives any and all rights to notice or to hearing prior to Bank's taking
immediate possession or control of any Collateral, and to any bond or security
which might be required by applicable law prior to the exercise of any of Bank's
remedies against any Collateral. All rights of Bank and security interests
hereunder, and all obligations of Debtor hereunder, shall be absolute and
unconditional, not discharged or impaired irrespective of (and regardless of
whether Debtor receives any notice of): (i) any lack of validity or
enforceability of any Loan Document; (ii) any change in the time, manner or
place of payment or performance, or in any term, of all or any of the
Obligations or the Loan Documents or any other amendment or waiver of or any
consent to any departure from any Loan Document; (iii) any exchange, release or
non-perfection of any collateral, or any release of or modifications of the
obligations of any guarantor or other obligor; (iv) any amendment or waiver of
or consent to departure from any Loan Document or other agreement. To the extent
permitted by law, Debtor hereby waives any rights under any valuation, stay,
appraisement, extension or redemption laws now existing or which may hereafter
exist and which, but for this provision, might be applicable to any sale or
disposition of the Collateral by Bank; and any other circumstance which might
otherwise constitute a defense available to, or a discharge of any party with
respect to the Obligations.
NOTIFICATIONS. Debtor will notify Bank in writing at least 30 days prior to any
change in: (i) Debtors chief place of business and/or residence; (ii) Debtors
name or identity; or (iii) Debtor's corporate/organizational structure. In
addition, Debtor shall promptly notify Bank of any claims or alleged claims of
any other person or entity to the Collateral or the institution of any
litigation, arbitration, governmental investigation or administrative
proceedings against or affecting the Collateral. Debtor will keep Collateral at
the location(s) previously provided to Bank until such time as Bank provides
written advance consent to a change of location. Debtor will bear the cost of
preparing and filing any documents necessary to protect Bank's liens.
COLLATERAL CONDITION AND LAWFUL USE. Debtor represents that the Collateral is in
good repair and condition and that Debtor shall use reasonable care to prevent
Collateral from being damaged or depreciating. Debtor shall immediately notify
Bank of any material loss or damage to Collateral. Debtor shall not permit any
item of Collateral to become a fixture to real estate or an accession to other
personal property. Debtor represents it is in compliance in all respects with
all laws, rules and regulations applicable to the Collateral and its properties,
operations, business, and finances.
RISK OF LOSS AND INSURANCE. Debtor shall bear all risk of loss with respect to
the Collateral. The injury to or loss of Collateral, either partial or total,
shall not release Debtor from payment or other performance hereof. Debtor agrees
to obtain and keep in force casualty and hazard insurance on Collateral naming
Bank as loss payee. Such insurance is to be in form and amounts and issued by
such companies as are satisfactory to Bank. All such policies shall provide to
Bank a minimum of 30 days written notice of cancellation. Debtor shall furnish
to Bank such policies, or other evidence of such policies satisfactory to Bank.
Bank is authorized, but not obligated, to purchase any or all insurance or
"Single Interest Insurance" protecting such interest as Bank deems appropriate
against such risks and for such coverage and for such amounts, including either
the loan amount or value of the Collateral, all at its discretion, and at
<PAGE>
-4-
Debtor's expense. In such event, Debtor agrees to reimburse Bank for the cost of
such insurance and Bank may add such cost to the Obligations. Debtor shall bear
the risk of loss to the extent of any deficiency in the effective insurance
coverage with respect to loss or damage to any of the Collateral. Debtor hereby
assigns to Bank the proceeds of all such insurance and directs any insurer to
make payments directly to Bank. Debtor hereby appoints Bank its attorney-in-
fact, which appointment shall be irrevocable and coupled with an interest for so
long as Obligations are unpaid, to file proof of loss and/or any other forms
required to collect from any insurer any amount due from any damage or
destruction of Collateral, to agree to and bind Debtor as to the amount of said
recovery, to designate payee(s) of such recovery, to grant releases to insurer,
to grant subrogation rights to any insurer, and to endorse any settlement check
or draft. Debtor agrees not to exercise any of the foregoing powers granted to
Bank without Bank's prior written consent.
FINANCING STATEMENTS, POWER OF ATTORNEY. No financing statement (other than any
filed by Bank or disclosed above) covering any Collateral is on file in any
public filing office. On request of Bank, Debtor will execute one or more
financing statements in form satisfactory to Bank and will pay all costs and
expenses of filing the same or of filing this Security Agreement in all public
filing offices, where filing is deemed by Bank to be desirable. Bank is
authorized to file financing statements relating to Collateral without Debtor's
signature where authorized by law. Debtor hereby constitutes and appoints Bank
the true and lawful attorney of Debtor with full power of substitution to take
any and all appropriate action and to execute any and all documents or
instruments that may be necessary or desirable to accomplish the purpose and
carry out the terms of this Security Agreement, including, without limitation,
to ask, demand, collect, receive, receipt for, sue for, compound and give
acquittance for any and all amounts which may be or become due and payable under
the Assigned Deposits; to execute any and all withdrawal requests, receipts or
other orders for the payment of money drawn on the Assigned Deposits and to
endorse the name of Bank on all instruments given in payment or in partial
payment therefor. The foregoing power of attorney is coupled with an interest
and shall be irrevocable until all of the Obligations have been paid in full.
Neither Bank nor anyone acting on its behalf shall be liable for acts,
omissions, errors in judgment, or mistakes in fact in such capacity as attorney-
in-fact. Debtor ratifies all acts of Bank as attorney-in-fact. Debtor agrees to
take such other actions as might be requested for the perfection, continuation
and assignment, in whole or in part, of the security interests granted herein.
If certificates, passbooks, or other documentation or evidence is/are issued or
outstanding as to any of the Collateral, Debtor will cause the security
interests of Bank to be properly protected, including perfection by notation
thereon or delivery thereof to Bank.
LANDLORD/MORTGAGEE WAIVERS. Debtor shall cause each mortgagee of real property
owned by Debtor and each landlord of real property leased by Debtor to execute
and deliver instruments satisfactory in form and substance to Bank by which such
mortgagee or landlord waives its rights, if any, in the Collateral.
CONTRACTS, CHATTEL PAPER, ACCOUNTS, GENERAL INTANGIBLES. Debtor warrants that
Collateral consisting of contract rights, chattel paper, accounts, or general
intangibles is (i) genuine and enforceable in accordance with its terms except
as limited by law; (ii) not subject to any defense, setoff, claim or
counterclaim of a material nature against Debtor
<PAGE>
-5-
except as to which Debtor has notified Bank in writing; and (iii) not subject to
any other circumstances that would impair the validity, enforceability, value,
or amount of such Collateral except as to which Debtor has notified Bank in
writing. Debtor shall not materially amend, modify or supplement any lease,
contract or agreement contained in Collateral or waive any material provision
therein, without prior written consent of Bank which shall not be unreasonable
withheld.
ACCOUNT INFORMATION. From time to time, at Bank's request, Debtor shall provide
Bank with schedules describing all accounts and contracts, including customers'
addresses, credited or acquired by Debtor and at Bank's request shall execute
and deliver written assignments of contracts and other documents evidencing such
accounts and contracts to Bank. Together with each schedule, Debtor shall, if
requested by Bank, furnish Bank with copies of Debtor's sales journals,
invoices, customer purchase orders or the equivalent, and original shipping or
delivery receipts for all goods sold, and Debtor warrants the genuineness
thereof.
ACCOUNT AND CONTRACT DEBTORS. If a Default should occur, Bank shall have the
right to notify the account and contract debtors obligated on any or all of the
Collateral to make payment thereof directly to Bank and Bank may take control of
all proceeds of any such Collateral, which rights Bank may exercise at any time.
The cost of such collection and enforcement, including attorneys' fees and
expenses, shall be borne solely by Debtor whether the same is incurred by Bank
or Debtor. If a Default should occur, upon demand of Bank, Debtor will, upon
receipt of all checks, drafts, cash and other remittances in payment on
Collateral, deposit the same in a special bank account maintained with Bank,
over which Bank also has the power of withdrawal.
If a Default should occur, no discount, credit, or allowance shall be granted by
Debtor to any account or contract debtor and no return of merchandise shall be
accepted by Debtor without Bank's consent. Bank may, after Default, settle or
adjust disputes and claims directly with account contract debtors for amounts
and upon terms that Bank considers advisable, and in such cases Bank will credit
the Obligations with the net amounts received by Bank, after deducting all of
the expenses incurred by Bank. Debtor agrees to indemnify and defend Bank and
hold it harmless with respect to any claim or proceeding arising out of any
matter related to collection of Collateral.
GOVERNMENT CONTRACTS. If any Collateral covered hereby arises from obligations
due to Debtor from any governmental unit or organization, Debtor shall
immediately notify Bank in writing and execute all documents and take all
actions demanded by Bank to ensure recognition by such governmental unit or
organization of the rights of Bank in the Collateral.
INVENTORY. So long as no Default has occurred, Debtor shall have the right in
the regular course of business, to process and sell Debtor's inventory, unless
Bank shall hereafter otherwise direct in writing. Upon demand of Bank, Debtor
will, upon receipt of all checks, drafts, cash and other remittances, in payment
of Collateral sold, deposit the same in a special bank account maintained with
Bank, over which Bank also has the power of withdrawal. Debtor shall comply in
all respects with all laws, regulations, rulings, and orders applicable to
Debtor or its assets or business including, without limitation, the Federal Fair
Labor Standards Act in the conduct of its
<PAGE>
-6-
business and the production of inventory. Debtor shall notify Bank immediately
of any violation by Debtor of the Fair Labor Standards Act, and a failure of
Debtor to so notify Bank shall constitute a continuing representation that all
inventory then existing has been produced in compliance with the Fair Labor
Standards Act.
INSTRUMENTS, CHATTEL PAPER. Any Collateral that is instruments, chattel paper
and negotiable documents will be properly assigned to, the originals deposited
with and held by Bank, unless Bank shall hereafter otherwise direct or consent
in writing. Bank may, without notice, before or after maturity of the
Obligations, exercise any or all rights of collection, conversion, or exchange
and other similar rights, privileges and options pertaining to Collateral, but
shall have no duty to do so.
COLLATERAL DUTIES. Bank shall have no custodial or ministerial duties to perform
with respect to Collateral pledged except as set forth herein; and by way of
explanation and not by way of limitation, Bank shall incur no liability for any
of the following: (i) loss or depreciation of Collateral (unless caused by its
willful misconduct or gross negligence), (ii) failure to present any paper for
payment or protest, to protest or give notice of nonpayment, or any other notice
with respect to any paper or Collateral. Bank's sole duty with respect to the
custody, safekeeping and physical preservation of any certificate, passbook, or
other documentation evidencing the Assigned Deposits in its possession shall be
to deal with it in the same manner as it deals with similar property for its own
account. Neither Bank, nor any of its employees or agents shall be liable for
failure to demand, collect, or realize upon any of the Assigned Deposits or for
any delay in doing so.
TRANSFER OF COLLATERAL. Bank may assign its rights in Collateral or any part
thereof to any assignee who shall thereupon become vested with all the powers
and rights herein given to Bank with respect to the property so transferred and
delivered, and Bank shall thereafter be forever relieved and fully discharged
from any liability with respect to such property so transferred, but with
respect to any property not so transferred, Bank shall retain all rights and
powers hereby given.
INSPECTION, BOOKS AND RECORDS. Debtor will at all times keep accurate and
complete records covering each item of Collateral, including the proceeds
therefrom. Bank, or any of its agents, shall have the right, at intervals to be
determined by Bank and without hindrance or delay, to inspect, audit, and
examine the Collateral and to make extracts from the books, records, journals,
orders, receipts, correspondence and other data relating to Collateral, Debtors
business or any other transaction between the parties hereto. Debtor will at its
expense furnish Bank copies thereof upon request.
CROSS COLLATERALIZATION LIMITATION. As to any other existing or future consumer
purpose loan made by Bank to Debtor, within the meaning of the Federal Consumer
Credit Protection Act, Bank expressly waives any security interest granted
herein in Collateral that Debtor uses as a principal dwelling and household
goods.
ATTORNEYS' FEES AND OTHER COSTS OF COLLECTION. Debtor shall pay all of Bank's
reasonable expenses incurred in enforcing this Security Agreement and in
preserving and
<PAGE>
-7-
liquidating Collateral, including but not limited to, reasonable arbitration,
paralegals', attorneys' and experts' fees and expenses, whether incurred with or
without the commencement of a suit, trial, arbitration, or administrative
proceeding, or in any appellate or bankruptcy proceeding.
DEFAULT. If any of the following occurs, a default ("Default") under this
Security Agreement shall exist: (i) the failure of timely payment or performance
of any of Obligations or a default under any Loan Document; (ii) any breach of
any representation or agreement contained or referred to in this Security
Agreement or other Loan Document; (iii) any loss, theft, substantial damage, or
destruction of Collateral not fully covered by insurance, or as to which
insurance proceeds are not remitted to Bank within 30 days of the loss; (iv) any
sale, lease, or encumbrance of any Collateral not specifically permitted herein
without prior written consent of Bank; (v) the making of any levy, seizure, or
attachment on or of Collateral which is not removed within 10 days; (vi) the
death of, appointment of guardian for, dissolution of, termination of existence
of, loss of good standing status by, appointment of a receiver for, assignment
for the benefit of creditors of, or commencement of any bankruptcy or insolvency
proceeding by or against Debtor, its Subsidiaries or Affiliates ("Affiliate"
shall have the meaning as defined in 11 U.S.C. (S) 101; and "Subsidiary" shall
mean any corporation of which more than 50% of the issued and outstanding voting
stock is owned directly or indirectly by Debtor), if any, or any general partner
of or the holder(s) of the majority ownership interests in Debtor or any party
to the Loan Documents; or (vii) any attempt to collect, cash in or otherwise
recover deposits that are Collateral.
REMEDIES ON DEFAULT (INCLUDING POWER OF SALE). If a Default occurs, all of the
Obligations shall be immediately due and payable, without notice and Bank shall
have all the rights and remedies of a secured party under the Uniform Commercial
Code. Without limitation thereto, Bank shall have the following rights and
remedies: (i) to take immediate possession of Collateral, without notice or
resort to legal process, and for such purpose, to enter upon any premises on
which Collateral or any part thereof may be situated and to remove the same
therefrom, or, at its option, to render Collateral unusable or dispose of said
Collateral on Debtor's premises; (ii) to require Debtor to assemble the
Collateral and make it available to Bank at a place to be designated by Bank;
(iii) to exercise its right of setoff or bank lien as to any monies of Debtor
deposited in accounts of any nature maintained by Debtor with Bank or affiliates
of Bank, without advance notice, regardless of whether such accounts are general
or special; (iv) to dispose of Collateral, as a unit or in parcels, separately
or with any real property interests also securing the Obligations, in any county
or place to be selected by Bank, at either private or public sale (at which
public sale Bank may be the purchaser) with or without having the Collateral
physically present at said sale; (v) apply toward and setoff against and apply
to the then unpaid balance of the Obligations the Assigned Deposits (accelerated
to maturity if necessary), even if effecting such setoff results in a loss or
reduction of interest or the imposition of a penalty applicable to the early
withdrawal of time deposits; (vi) receive any interest or payments in respect of
the Assigned Deposits and apply such amounts and the Assigned Deposits to the
Obligations in such manner as Bank, in its sole discretion, may determine.
Any notice of sale, disposition or other action by Bank required by law and sent
to Debtor at Debtors address shown above, or at such other address of Debtor as
may from time to time be shown on the records of Bank, at least 5 days prior to
such action, shall constitute reasonable
<PAGE>
-8-
notice to Debtor. Notice shall be deemed given or sent when mailed postage
prepaid to Debtor's address as provided herein. Bank shall be entitled to apply
the proceeds of any sale or other disposition of the Collateral, and the
payments received by Bank with respect to any of the Collateral, to Obligations
in such order and manner as Bank may determine. Collateral that is subject to
rapid declines in value and is customarily sold in recognized markets may be
disposed of by Bank in a recognized market for such collateral without providing
notice of sale. Debtor waives any and all requirements that the Bank sell or
dispose of all or any part of the Collateral at any particular time, regardless
of whether Debtor has requested such sale or disposition.
REMEDIES ARE CUMULATIVE. No failure on the part of Bank to exercise, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by Bank or any right,
power or remedy hereunder preclude any other or further exercise thereof or the
exercise of any right, power or remedy. The remedies herein provided are
cumulative and are not exclusive of any remedies provided by law, in equity, or
in other Loan Documents.
MISCELLANEOUS. (i) Amendments and Waivers. No waiver, amendment or modification
of any provision of this Security Agreement shall be valid unless in writing and
signed by Debtor and an officer of Bank. No waiver by Bank of any Default shall
operate as a waiver of any other Default or of the same Default on a future
occasion. (ii) Assignment. All rights of Bank hereunder are freely assignable,
in whole or in part, and shall inure to the benefit of and be enforceable by
Bank, its successors, assigns and affiliates. Debtor shall not assign its rights
and interest hereunder without the prior written consent of Bank, and any
attempt by Debtor to assign without Bank's prior written consent is null and
void. Any assignment shall not release Debtor from the Obligations. This
Security Agreement shall be binding upon Debtor, and the heirs, personal
representatives, successors, and assigns of Debtor. (iii) Applicable Law;
Conflict Between Documents. This Security Agreement shall be governed by and
construed under the law of the state named in the address of the Bank first
shown above without regard to that state's conflict of laws principles. If any
terms of this Security Agreement conflict with the terms of any commitment
letter or loan proposal, the terms of this Security Agreement shall control.
(iv) Jurisdiction. Debtor irrevocably agrees to nonexclusive personal
jurisdiction in the state in which the office of Bank as stated above is
located. (v) Severability. If any provision of this Security Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective but only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Security Agreement. (vi) Notices. Any notices to Debtor shall be sufficiently
given, if in writing and mailed or delivered to the address of Debtor shown
above or such other address as provided hereunder; and to Bank, if in writing
and mailed or delivered to Bank's office address shown above or such other
address as Bank may specify in writing from time to time. In the event that
Debtor changes Debtor's mailing address at any time prior to the date the
Obligations are paid in full, Debtor agrees to promptly give written notice of
said change of address by registered or certified mail, return receipt
requested, all charges prepaid. (vii) Captions. The captions contained herein
are inserted for convenience only and shall not affect the meaning or
interpretation of this Security Agreement or any provision hereof. The use of
the plural shall also mean the singular, and vice versa. (viii) Joint and
Several Liability. If more than one party has signed this Security
<PAGE>
-9-
Agreement, such parties are jointly and severally obligated hereunder. (ix)
Binding Contract. Debtor by execution and Bank by acceptance of this Security
Agreement, agree that each party is bound by all terms and provisions of this
Security Agreement. (x) Loan Documents. The term "Loan Documents" refers to all
documents, whether now or hereafter existing, executed in connection with the
Obligations and may include, without limitation and whether executed by Debtor
or others, commitment letters, loan agreements, guaranty agreements,
confirmations, deposit or other similar agreements, other security agreements,
letters of credit, instruments, financing statements, mortgages, deeds of trust,
deeds to secure debt, and any amendments or supplements (excluding swap
agreements as defined in 11 U.S.C. (S) 101).
IN WITNESS WHEREOF, Debtor, on the day and year first written above, has caused
this Security Agreement to be executed under seal.
GREENWICH TECHNOLOGY
PARTNERS, INC.
Taxpayer Identification: 13-3944171
CORPORATE By: ________________________________
SEAL Dennis M. Goett, Financial Officer
<PAGE>
-10-
Schedule A to UCC
Schedule A to UCC from Greenwich Technology Partners, Inc. ("Debtor") and for
the benefit of First Union National Bank ("Secured Party").
Description of Collateral:
All accounts, contract rights, leases, and any other rights of Debtor to payment
for goods sold or leased or for services rendered; furniture; furnishings;
equipment; machinery; accessories; moveable trade fixtures; goods held for sale
or being processed for sale in Debtor's business, including all raw materials,
supplies, and other materials used or consumed in Debtor's business, goods in
process, finished goods, and all other items customarily classified as
inventory; building improvement and construction materials, supplies and
equipment; chattel paper; instruments; documents; letters of credit (including,
but not limited to, any written undertaking to pay money conditioned upon the
presentation of specified documents, and advices of letters of credits); all
funds on deposit with Bank and its affiliates; and all general intangibles; as
well as all parts, replacements, substitutions, profits, products and cash and
non-cash proceeds of the foregoing (including insurance and condemnation
proceeds payable by reason of condemnation of or loss or damage thereto) in any
form and wherever located.
Debtor's, time savings accounts and certificates of deposit maintained in or
with Bank and affiliates of Bank, account(s)/certificate(s) of deposit number(s)
2000005700057 ("Assigned Deposits").
All products and proceeds (including investment property and security
entitlements) of any of the property described above in any form, and all
proceeds of such products.
<PAGE>
EXHIBIT 10.3
PROMISSORY NOTE
$2,500,000.00
July 30, 1999
GREENWICH TECHNOLOGY PARTNERS, INC.
ATTN: LYNNE KRAUSS
43 GATEHOUSE ROAD
STAMFORD, CONNECTICUT 06902
(Individually and collectively "Borrower")
FIRST UNION NATIONAL BANK
300 MAIN STREET
STAMFORD, CONNECTICUT 06904
(Hereinafter referred to as "Bank")
Borrower promises to pay to the order of Bank, in lawful money of the United
States of America, at its office indicated above or wherever else Bank may
specify, the sum of Two Million, Five Hundred Thousand and No/100 Dollars
($2,500,000.00) or such sum as may be advanced and outstanding from time to
time, with interest on the unpaid principal balance at the rate and on the terms
provided in this Promissory Note (including all renewals, extensions or
modifications hereof, this "Note").
SECURITY. Borrower has granted Bank a security interest in the collateral
described in the Loan Documents, including, but not limited to, personal
property collateral described in that certain Security Agreement of even date
herewith.
INTEREST RATE. Interest shall accrue on that portion of the unpaid principal
balance of this Note which is less than or is equal to one million
($1,000,000.00) from the date hereof at the LIBOR Market Index Rate plus 1.75%
and on that portion of the unpaid principal balance of this Note which exceeds
one million ($1,000,000.00) from the date hereof at the LIBOR Market Index Rate
plus 3.50% as those rates may change from day to day in accordance with changes
in the LIBOR Market Index Rate ("Interest Rate"). "LIBOR Market Index Rate",
for any day, is the rate for 1 month U.S. dollar deposits as reported on
Telerate page 3750 as of 11:00 a.m., London time, on such day, or if such day is
not a London business day, then the immediately preceding London business day
(or if not so reported, then as determined by Bank from another recognized
source or interbank quotation).
DEFAULT RATE. In addition to all other rights contained in this Note, if a
Default (as defined herein) occurs and as long as a Default continues, all
outstanding Obligations shall bear interest at the Interest Rate plus 3%
("Default Rate"). The Default Rate shall also apply from acceleration until the
Obligations or any judgment thereon is paid in full.
INTEREST AND FEE(S) COMPUTATION (ACTUAL/360). Interest and fees, if any, shall
be computed on the basis of a 360-day year for the actual number of days in the
applicable period ("Actual/360 Computation"). The Actual/360 Computation
determines the annual effective
Page 1
<PAGE>
interest yield by taking the stated (nominal) rate for a year's period and then
dividing said rate by 360 to determine the daily periodic rate to be applied for
each day in the applicable period. Application of the Actual/360 Computation
produces an annualized effective rate exceeding that of the nominal rate.
REPAYMENT TERMS. This Note shall be due and payable in consecutive monthly
payments of accrued interest only, commencing on September 1, 1999, and
continuing on the same day of each month thereafter until fully paid. In any
event, all principal and accrued interest shall be due and payable on August 1.
2000.
APPLICATION OF PAYMENTS. Monies received by Bank from any source for
application toward payment of the Obligations shall be applied to accrued
interest and then to principal. If a Default occurs, monies may be applied to
the Obligations in any manner or order deemed appropriate by Bank,
If any payment received by Bank under this Note or other Loan Documents is
rescinded, avoided or for any reason returned by Bank because of any adverse
claim or threatened action, the returned payment shall remain payable as an
obligation of all persons liable under this Note or other Loan Documents as
though such payment had not been made.
DEFINITIONS. Loan Documents. The term "Loan Documents" used in this Note and
the other Loan Documents refers to all documents executed in connection with the
loan evidenced by this Note and any prior notes which evidence all or any
portion of the loan evidenced by this Note, and any letters of credit issued
pursuant to any loan agreement to which this Note is subject, any applications
for such letters of credit and any other documents executed in connection
therewith, and may include, without limitation, a commitment letter that
survives closing, a loan agreement, this Note, guaranty agreements, security
agreements, security instruments, financing statements, mortgage instruments,
any renewals or modifications, whenever any of the foregoing are executed, but
does not include swap agreements (as defined in 11 U.S.C. (S) 101). Obligations.
The term "Obligations" used in this Note refers to any and all indebtedness and
other obligations under this Note, all other obligations under any other Loan
Document(s), and all obligations under any swap agreements (as defined in 11
U.S.C. (S) 101) between Borrower and Bank whenever executed. Certain Other
Terms. All terms that are used but not otherwise defined in any of the Loan
Documents shall have the definitions provided in the Uniform Commercial Code.
LATE CHARGE. If any payments are not timely made, Borrower shall also pay to
Bank a late charge equal to 5% of each payment past due for 10 or more days.
Acceptance by Bank of any late payment without an accompanying late charge shall
not be deemed a waiver of Bank's right to collect such late charge or to collect
a late charge for any subsequent late payment received.
ATTORNEYS' FEES AND OTHER COLLECTION COSTS. Borrower shall pay all of Bank's
reasonable expenses incurred to enforce or collect any of the Obligations
including, without limitation, reasonable arbitration, paralegals', attorneys'
and experts' fees and expenses,
Page 2
<PAGE>
whether incurred without the commencement of a suit, in any trial, arbitration,
or administrative proceeding, or in any appellate or bankruptcy proceeding.
USURY. If at any time the effective interest rate under this Note would, but
for this paragraph, exceed the maximum lawful rate, the effective interest rate
under this Note shall be the maximum lawful rate, and any amount received by
Bank in excess of such rate shall be applied to principal and then to fees and
expenses, or, if no such amounts are owing, returned to Borrower.
DEFAULT. If any of the following occurs, a default ("Default") under this Note
shall exist: Nonpayment; Nonperformance. The failure of timely payment or
performance of the Obligations or Default under this Note or any other Loan
Documents. False Warranty. A warranty or representation made or deemed made in
the Loan Documents or furnished Bank in connection with the loan evidenced by
this Note proves materially false, or if of a continuing nature, becomes
materially false. Cross Default. At Bank's option, any default in payment or
performance of any obligation under any other loans, contracts or agreements of
Borrower, any Subsidiary or Affiliate of Borrower, any general partner of or the
holder(s) of the majority ownership interests of Borrower with Bank or its
affiliates ("Affiliate" shall have the meaning as defined in 11 U.S.C. (S) 101,
except that the term "Borrower" shall be substituted for the term "Debtor'
therein; "Subsidiary" shall mean any business in which Borrower holds, directly
or indirectly, a controlling interest). Cessation; Bankruptcy. The death of,
appointment of a guardian for, dissolution of, termination of existence of, loss
of good standing status by, appointment of a receiver for, assignment for the
benefit of creditors of, or commencement of any bankruptcy or insolvency
proceeding by or against Borrower, its Subsidiaries or Affiliates, if any, or
any general partner of or the holder(s) of the majority ownership interests of
Borrower, or any party to the Loan Documents. Material Capital Structure or
Business Alteration. Without prior written consent of Bank, (i) a material
alteration in the kind or type of Borrower's business or that of Borrower's
Subsidiaries or Affiliates, if any; (ii) the sale of substantially all of the
business or assets of Borrower, any of Borrower's Subsidiaries or Affiliates or
any guarantor, or a material portion (10% or more) of such business or assets if
such a sale is outside the ordinary course of business of Borrower, or any of
Borrower's Subsidiaries or Affiliates or any guarantor, or more than 50% of the
outstanding stock or voting power of or in any such entity in a single
transaction or a series of transactions; (iii) the acquisition of substantially
all of the business or assets or more than 50% of the outstanding stock or
voting power of any other entity; or (iv) should any Borrower, or any of
Borrower's Subsidiaries or Affiliates or any guarantor enter into any merger or
consolidation in which Borrower is not the surviving entity.
REMEDIES UPON DEFAULT. If a Default occurs under this Note or any Loan
Documents, Bank may at any time thereafter, take the following actions: Bank
Lien. Foreclose its security interest or lien against Borrower's accounts
without notice. Acceleration Upon Default. Accelerate the maturity of this
Note and, at Bank's option, any or all other Obligations, whereupon this Note
and the accelerated Obligations shall be immediately due and payable.
Cumulative. Exercise any rights and remedies as provided under the Note and
other Loan Documents, or as provided by law or equity.
FINANCIAL AND OTHER INFORMATION. Borrower shall deliver to Bank such
information as Bank may reasonably request from time to time, including without
limitation,
Page 3
<PAGE>
financial statements and information pertaining to Borrower's financial
condition. Such information shall be true, complete, and accurate.
YEAR 2000 COMPATIBILITY. Borrower shall take all action necessary to assure
that Borrower's computer based systems are able to operate and effectively
process data including dates on and after January 1, 2000. At the request of
Bank, Borrower shall provide Bank assurance acceptable to Bank of Borrower's
Year 2000 compatibility.
LOAN AGREEMENT. This Note is subject to the provisions of that certain Loan
Agreement between Bank and Borrower dated July 30, 1999, as modified from time
to time.
LINE OF CREDIT ADVANCES. Borrower may borrow, repay and reborrow, and Bank may
advance and readvance under this Note respectively from time to time until the
maturity hereof (each an "Advance" and together the "Advances"), so long as the
total principal balance outstanding under this Note at any one time does not
exceed the principal amount stated on the face of this Note, subject to the
limitations described in any loan agreement to which this Note is subject.
Bank's obligation to make Advances under this Note shall terminate if Borrower
is in Default. As of the date of each proposed Advance, Borrower shall be
deemed to represent that each representation made in the Loan Documents is true
as of such date.
If Borrower subscribes to Bank's cash management services and such services are
applicable to this line of credit, the terms of such service shall control the
manner in which funds are transferred between the applicable demand deposit
account and the line of credit for credit or debit to the line of credit.
WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of this Note
and other Loan Documents shall be valid unless in writing and signed by an
officer of Bank. No waiver by Bank of any Default shall operate as a waiver of
any other Default or the same Default on a future occasion. Neither the failure
nor any delay on the part of Bank in exercising any right, power, or remedy
under this Note and other Loan Documents shall operate as a waiver thereof, nor
shall a single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or remedy.
Each Borrower or any person liable under this Note waives presentment, protest,
notice of dishonor, demand for payment, notice of intention to accelerate
maturity, notice of acceleration of maturity, notice of sale and all other
notices of any kind. Further, each agrees that Bank may extend, modify or renew
this Note or make a novation of the loan evidenced by this Note for any period,
and grant any releases, compromises or indulgences with respect to any
collateral securing this Note, or with respect to any other Borrower or any
other person liable under this Note or other Loan Documents, all without notice
to or consent of each Borrower or each person who may be liable under this Note
or any other Loan Document and without affecting the liability of Borrower or
any person who may be liable under this Note or any other Loan Document.
MISCELLANEOUS PROVISIONS. Assignment. This Note and the other Loan Documents
shall inure to the benefit of and be binding upon the parties and their
respective heirs, legal
Page 4
<PAGE>
representatives, successors and assigns. Bank's interests in and rights under
this Note and the other Loan Documents are freely assignable, in whole or in
part, by Bank. In addition, nothing in this Note or any of the other Loan
Documents shall prohibit Bank from pledging or assigning this Note or any of the
other Loan Documents or any interest therein to any Federal Reserve Bank.
Borrower shall not assign its rights and interest hereunder without the prior
written consent of Bank, and any attempt by Borrower to assign without Bank's
prior written consent is null and void. Any assignment shall not release
Borrower from the Obligations. Applicable Law; Conflict Between Documents. This
Note and the other Loan Documents shall be governed by and construed under the
laws of the state named in Bank's address shown above without regard to that
state's conflict of laws principles. If the terms of this Note should conflict
with the terms of the Loan Agreement or any commitment letter that survives
closing, the terms of this Note shall control. Borrower's Accounts. Except as
prohibited by law, Borrower grants Bank a security interest in all of Borrower's
accounts with Bank and any of its affiliates. Jurisdiction. Borrower irrevocably
agrees to non-exclusive personal jurisdiction in the state named in Bank's
address shown above. Severability. If any provision of this Note or of the other
Loan Documents shall be prohibited or invalid under applicable law, such
provision shall be ineffective but only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note or other such document. Notices. Any notices
to Borrower shall be sufficiently given, if in writing and mailed or delivered
to the Borrower's address shown above or such other address as provided
hereunder, and to Bank, if in writing and mailed or delivered to Bank's office
address shown above or such other address as Bank may specify in writing from
time to time. In the event that Borrower changes Borrower's address at any time
prior to the date the Obligations are paid in full, Borrower agrees to promptly
give written notice of said change of address by registered or certified mail,
return receipt requested, all charges prepaid. Plural; Captions. All references
in the Loan Documents to Borrower, guarantor, person, document or other nouns of
reference mean both the singular and plural form, as the case may be, and the
term person" shall mean any individual, person or entity. The captions contained
in the Loan Documents are inserted for convenience only and shall not affect the
meaning or interpretation of the Loan Documents. Advances. Bank may, in its sole
discretion, make other advances which shall be deemed to be advances under this
Note, even though the stated principal amount of this Note may be exceeded as a
result thereof. Posting of Payments. All payments received during normal banking
hours after 2:00 p.m. local time at the office of Bank first shown above shall
be deemed received at the opening of the next banking day. Joint and Several
Obligations. Each person who signs this Note is a Borrower and is jointly and
severally obligated. Fees and Taxes. Borrower shall promptly pay all
documentary, intangible recordation and/or similar taxes on this transaction
whether assessed at closing or arising from time to time.
ARBITRATION. Upon demand of any party hereto, whether made before or after
institution of any judicial proceeding, any claim or controversy arising out of
or relating to the Loan Documents between parties hereto (a "Dispute") shall be
resolved by binding arbitration conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA") and the Federal Arbitration Act. Disputes
may include, without limitation, tort claims, counterclaims, a dispute as to
whether a matter is subject to arbitration, claims brought as class actions, or
claims arising
Page 5
<PAGE>
from documents executed in the future. A judgment upon the award may be entered
in any court having jurisdiction. Notwithstanding the foregoing, this
arbitration provision does not apply to disputes under or related to swap
agreements. Special Rules. All arbitration hearings shall be conducted in the
city named in the address of Bank first stated above. A hearing shall begin
within 90 days of demand for arbitration and all hearings shall conclude within
120 days of demand for arbitration. These time limitations may not be extended
unless a party shows cause for extension and then for no more than a total of 60
days. The expedited procedures set forth in Rule 51 et seq. of the Arbitration
------
Rules shall be applicable to claims of less than $1,000,000.00. Arbitrators
shall be licensed attorneys selected from the Commercial Financial Dispute
Arbitration Panel of the AAA. The parties do not waive applicable Federal or
state substantive law except as provided herein. Preservation and Limitation of
Remedies. Notwithstanding the preceding binding arbitration provisions, the
parties agree to preserve, without diminution, certain remedies that any party
may exercise before or after an arbitration proceeding is brought. The parties
shall have the right to proceed in any court of proper jurisdiction or by self-
help to exercise or prosecute the following remedies, as applicable: (i) all
rights to foreclose against any real or personal property or other security by
exercising a power of sale or under applicable law by judicial foreclosure
including a proceeding to confirm the sale; (ii) all rights of self-help
including peaceful occupation of real property and collection of rents, setoff,
and peaceful possession of personal property; (iii) obtaining provisional or
ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and filing an involuntary bankruptcy
proceeding; and (iv) when applicable, a judgment by confession of judgment. Any
claim or controversy with regard to any party's entitlement to such remedies is
a Dispute. Waiver of Exemplary Damages. The parties agree that they shall not
have a remedy of punitive or exemplary damages against other parties in any
Dispute and hereby waive any right or claim to punitive or exemplary damages
they have now or which may arise in the future in connection with any Dispute
whether the Dispute is resolved by arbitration or judicially. Waiver of Jury
Trial. THE PARTIES ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY
HAVE IRREVOCABLY WAIVED ANY RIGHT THEY MAY HAVE TO JURY TRIAL WITH REGARD TO A
DISPUTE.
CONNECTICUT PREJUDGMENT REMEDY WAIVER. EACH BORROWER ACKNOWLEDGES THAT THE
TRANSACTIONS REPRESENTED BY THIS NOTE ARE COMMERCIAL TRANSACTIONS AND HEREBY
VOLUNTARILY AND KNOWINGLY WAIVES ANY RIGHTS TO NOTICE OF AND HEARING ON
PREJUDGMENT REMEDIES UNDER CHAPTER 903A OF THE CONNECTICUT GENERAL STATUTES OR
OTHER STATUTES AFFECTING PREJUDGMENT REMEDIES, AND AUTHORIZES THE BANK'S
ATTORNEY TO ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT COURT ORDER, PROVIDED
THE COMPLAINT SHALL SET FORTH A COPY OF THIS WAIVER.
IN WITNESS WHEREOF, Borrower, on the day and year first above written, has
caused this Note to be executed under seal.
PLACE OF EXECUTION AND DELIVERY. Borrower hereby certifies that this Agreement
and the Loan Documents were executed in the State of Connecticut and delivered
to Bank in the State of Connecticut.
Page 6
<PAGE>
Greenwich Technology Partners, Inc.
Taxpayer Identification Number: 13-3944171
CORPORATE By:___________________________________________
SEAL Dennis M. Goett, Chief Financial Officer
Page 7
<PAGE>
EXHIBIT 10.4
GREENWICH TECHNOLOGY PARTNERS, INC.
1997 STOCK PLAN
---------------
1. Purpose. The purpose of the Greenwich Technology Partners, Inc. 1997
-------
Stock Plan (the "Plan") is to encourage key employees of Greenwich Technology
Partners, Inc. (the "Company") and of any present or future parent or subsidiary
of the Company (collectively, "Related Corporations") and other persons who
render services to the Company or a Related Corporation to enter into and remain
in the service of the Company, to enhance the long-term performance of the
Company, and to acquire a proprietary interest in the success of the Company, by
providing opportunities to such employees and other service-providers to
participate in the ownership of the Company and its future growth through (a)
the grant of options which qualify as "incentive stock options" ("ISOs") under
Section 422(b) of the Internal Revenue Code of 1986, as amended (the "Code");
(b) the grant of options which do not qualify as ISOs ("Non-Qualified Options");
(c) awards of stock in the Company ("Awards"); and (d) opportunities to make
direct purchases of stock in the Company ("Purchases"). Both ISOs and Non-
Qualified Options are referred to hereafter individually as an "Option" and
collectively as "Options". Options, Awards and authorizations to make Purchases
are referred to hereafter collectively as "Stock Rights". As used herein, the
terms "parent" and "subsidiary" mean "parent corporation" and "subsidiary
corporation," respectively, as those terms are defined in Section 424 of the
Code.
2. Administration of the Plan.
--------------------------
2.1. Board Administration. The Plan shall be administered by the
--------------------
Board of Directors of the Company (the "Board"). Subject to the terms of the
Plan, the Board shall (i) determine to whom (from among the class of employees
eligible under paragraph 3 to receive ISOs) ISOs shall be granted, and to whom
(from among the class of individuals and entities eligible under paragraph 3 to
receive Non-Qualified Options and Awards and to make Purchases) Non-Qualified
Options, Awards and authorizations to make Purchases may be granted; (ii)
determine the time or times at which Options or Awards shall be granted or
Purchases made; (iii) determine the purchase price of shares subject to each
Option or Purchase, which prices shall not be less than the minimum price
specified in paragraph 6; (iv) determine whether each Option granted shall be an
ISO or a Non-Qualified Option; (v) determine (subject to paragraph 7) the time
or times when each Option shall become exercisable and the duration of the
exercise period; (vi) extend the period during which outstanding Options may be
exercised; (vii) determine whether restrictions such as repurchase options are
to be imposed on shares subject to Options, Awards and Purchases and the nature
of such restrictions, if any, and (viii) interpret the Plan and prescribe and
rescind rules and regulations relating to it. If the Board determines to issue
a Non-Qualified Option, it shall take whatever actions it deems necessary, under
Section 422 of the Code and the regulations promulgated thereunder, to ensure
that such Option is not treated as an ISO. The interpretation and construction
by the Board of any provisions of the Plan or of any Stock Right granted under
it shall be final unless otherwise determined by the Board. The Board may from
time to time adopt such rules and regulations for carrying out the Plan as it
may deem
<PAGE>
advisable. No member of the Board shall be liable for any action or
determination made in good faith with respect to the Plan or any Stock Right
granted under it.
2.2. Grant of Stock Rights to Board Members. Stock Rights may be
--------------------------------------
granted to members of the Board. All grants of Stock Rights to members of the
Board shall in all respects be made in accordance with the provisions of this
Plan applicable to other eligible persons. Members of the Board who either (i)
are eligible to receive grants of Stock Rights pursuant to the Plan or (ii) have
been granted Stock Rights may vote on any matters affecting the administration
of the Plan or the grant of any Stock Rights pursuant to the Plan, except that
no such member shall act upon the granting to himself or herself of Stock
Rights, but any such member may be counted in determining the existence of a
quorum at any meeting of the Board during which action is taken with respect to
the granting to such member of Stock Rights.
3. Eligible Employees and Others. ISOs may be granted only to employees
-----------------------------
of the Company or any Related Corporation. Non-Qualified Options, Awards and
authorizations to make purchases may be granted to any employee, officer or
director (whether or not also an employee) or consultant of the Company or any
Related Corporation. The Board may take into consideration a recipient's
individual circumstances in determining whether to grant a Stock Right. The
granting of any Stock Right to any individual or entity shall neither entitle
that individual or entity to, no disqualify such individual or entity from,
participation in any other grant of Stock Rights.
4. Stock. The stock subject to Stock Rights shall be authorized but
-----
unissued shares of Common Stock of the Company, par value $0.01 per share (the
"Common Stock"), or shares of Common Stock reacquired by the Company in any
manner. The aggregate number of shares which may be issued pursuant to the Plan
is 9,150,000, subject to adjustment as provided in paragraph 13. If any option
granted under the Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be exercisable in whole
or in part or shall be repurchased by the Company, the unpurchased shares of
Common Stock subject to such Option shall again be available for grants of Stock
Rights under the Plan.
5. Granting of Stock Rights. Stock Rights may be granted under the Plan
------------------------
at any time on or after May 1, 1997 and prior to March 31, 2007. The date of
grant of a Stock Right under the Plan will be the date specified by the Board at
the time it grants the Stock Right; provided, however, that such date shall not
be prior to the date on which the Board acts to approve the grant.
6. Minimum Option Price; ISO Limitations.
-------------------------------------
6.1. Price for Non-Qualified Options, Awards and Purchases. The
-----------------------------------------------------
exercise price per share specified in the agreement relating to each Non-
Qualified Option (a "Non-Qualified Stock Option Agreement") granted, and the
purchase price per share of stock granted in any Award or authorized as a
Purchase, under the Plan may be less than the fair market value of the Common
Stock of the Company on the date of grant; provided that, in no event shall such
exercise price or such purchase price be less than the minimum legal
consideration required
2
<PAGE>
therefor under the laws of any jurisdiction in which the Company is or its
successors in interest may be organized.
6.2. Price for ISOs. The exercise price per share specified in the
--------------
agreement relating to each ISO (a "Qualified Stock Option Agreement") granted
under the Plan shall not be less than the fair market value per share of Common
Stock on the date of such grant. In the case of an ISO to be granted to an
employee owning stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Related
Corporation, the price per share specified in the Qualified Stock Option
Agreement relating to such ISO shall not be less than one hundred ten percent
(110%) of the fair market value per share of Common Stock on the date of grant.
For purposes of determining stock ownership under this paragraph, the rules of
Section 424(d) of the Code shall apply.
6.3. $100,000 Annual Limitation on ISO Vesting. Each eligible
-----------------------------------------
employee may be granted Options treated as ISOs only to the extent that, in the
aggregate under this Plan and all incentive stock option plans of the Company
and any Related Corporation, ISOs do not become exercisable for the first time
by such employee during any calendar year with respect to stock having a fair
market value (determined at the time the ISOs were granted) in excess of
$100,000. The Company intends to designate any Options granted in excess of
such limitation as Non-Qualified Options.
6.4. Determination of Fair Market Value. If, at the time an Option
----------------------------------
is granted under the Plan, the Company's Common Stock is publicly traded, "fair
market value" shall be determined as of the date of grant or, if the prices or
quotes discussed in this sentence are unavailable for such date, the last
business day for which such prices or quotes are available prior to the date of
grant and shall mean (i) the average (on that date) of the high and low prices
of the Common Stock on the principal national securities exchange on which the
Common Stock is traded, if the Common Stock is then traded on a national
securities exchange; or (ii) the last reported sale price (on that date) of the
Common Stock on the NASDAQ National Market, if the Common Stock is not traded on
a national securities exchange; or (iii) the closing bid price (or average of
bid prices) last quoted (on that date) by an established quotation service for
over-the-counter securities, if the Common Stock is not reported on the NASDAQ
National Market. If the Common Stock is not publicly traded at the time an
Option is granted under the Plan, "fair market value" shall mean the fair value
of the Common Stock as determined by the Board after taking into consideration
all factors which it deems appropriate, including, without limitation, recent
sale and offer prices of the Common Stock in private transactions negotiated at
arm's length.
7. Option Duration. Subject to earlier termination as provided in
---------------
paragraphs 9 and 10 or in the agreement relating to such Option, each Option
shall expire on the date specified by the Board, but not more than (i) ten (10)
years from the date of grant in the case of Options generally and (ii) five (5)
years from the date of grant in the case of ISOs granted to an employee owning
stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or any Related Corporation, as determined
under paragraph 6.2. Subject to earlier termination as provided in paragraphs 9
and 10, the term of each ISO shall be
3
<PAGE>
the term set forth in the Qualified Stock Option Agreement granting such ISO,
except with respect to any part of such ISO that is converted into a Non-
Qualified Option pursuant to paragraph 16.
8. Exercise of Option. Subject to the provisions of paragraphs 9 through
------------------
12, each Option granted under the Plan shall be exercisable as follows:
8.1. Vesting. The Option shall either be fully exercisable on the
-------
date of grant or shall become exercisable thereafter in such installments as the
Board may specify.
8.2. Full Vesting of Installments. Once an installment becomes
----------------------------
exercisable, it shall remain exercisable until expiration or termination of the
Option, unless otherwise specified by the Board.
8.3. Partial Exercise. Each Option or installment may be exercised
----------------
at any time or from time to time, in whole or in part, for up to the total
number of shares with respect to which it is then exercisable.
9. Termination of Employment. Unless otherwise specified in the
-------------------------
Qualified Stock Option Agreement relating to such ISO, if an ISO optionee ceases
to be employed by the Company and all Related Corporations other than by reason
of death or disability as defined in paragraph 10, no further installments of
his or her ISOs shall become exercisable, and his or her ISOs shall terminate on
the earlier of (a) three months after the date of termination of his or her
employment or (b) their specified expiration dates, except to the extent that
such ISOs (or unexercised installments thereof) have been converted into Non-
Qualified Options pursuant to paragraph 16. For purposes of this paragraph 9,
employment shall be considered as continuing interrupted during any bona fide
leave of absence (such as those attributable to illness, military obligations or
governmental service) provided that the period of such leave does not exceed 90
days or, if longer, any period during which such optionee's night to
reemployment is guaranteed by statute or by contract. A bona fide leave of
absence with the written approval of the Board shall not be considered an
interruption of employment under this paragraph 9, provided that such written
approval contractually obligates the Company or any Related Corporation to
continue to employment of the optionee after the approved period of absence.
ISOs granted under the Plan shall not be affected by any change of employment
within or among the Company and Related Corporations, so long as the optionee
continues to be an employee of the Company or any Related Corporation. Nothing
in the Plan shall be deemed to give any grantee of any Stock Right the night to
be retained in employment or other service by the Company or any Related
Corporation for any period of time.
10. Death, Disability.
-----------------
10.1. Death. If an ISO optionee ceases to be employed by the Company
-----
and all Related Corporations by reason of his or her death, any ISO owned by
such optionee may be exercised, to the extent otherwise exercisable on the date
of death, by the estate, personal representative or beneficiary who has acquired
the ISO by will or by the laws of descent and
4
<PAGE>
distribution, until the earlier of (i) the specified expiration date of the ISO
or (ii) one (1) year from the date of the optionee's death.
10.2. Disability. If an ISO optionee ceases to be employed by the
----------
Company and all Related Corporations by reason of his or her disability, such
optionee shall have the right to exercise any ISO held by him or her on the date
of termination of employment, for the number of shares for which he or she could
have exercised it on that date, until the earlier of (i) the specified
expiration date of the ISO or (ii) one (1) year from the date of the termination
of the optionee's employment. For the purposes of the Plan, the term
"disability" shall mean "permanent and total disability" as defined in Section
22(e)(3) of the Code or any successor statute.
11. Assignability. No ISO shall be assignable or transferable by the
-------------
optionee except by will or by the laws of descent and distribution, and during
the lifetime of the optionee shall be exercisable only by such optionee. Stock
Rights other than ISOs shall be transferable to the extent set forth in the
agreement relating to such Stock Right.
12. Terms and Conditions of Options. Options shall be evidenced by
-------------------------------
instruments (which need not be identical) in such forms as the Board may from
time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Board deems advisable which are not inconsistent with
the Plan, including restrictions applicable to shares of Common Stock issuable
upon exercise of Options. The Board may specify that any Non-Qualified Option
shall be subject to the restrictions set forth herein with respect to ISOs, or
to such other termination and cancellation provisions as the Board may
determine. The Board may from time to time confer authority and responsibility
on one or more of is own members and/or one or more officers of the Company to
execute and deliver such instruments. The proper officers of the Company are
authorized and directed to take any and all action necessary or advisable from
time to time to carry out the terms of such instruments.
13. Adjustments. Upon the occurrence of any of the following events,
-----------
an optionee's rights with respect to Options granted to such optionee hereunder
shall be adjusted as hereinafter provided, unless otherwise specifically
provided in the written agreement between the optionee and the Company relating
to such Option:
13.1. Stock Dividends and Stock Splits. If the shares of Common
--------------------------------
Stock shall be subdivided or combined into a greater or smaller number of shares
or if the Company shall issue any shares of Common Stock as a stock dividend on
its outstanding Common Stock, the number of shares of Common Stock deliverable
upon the exercise of Options shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.
13.2. Consolidations or Mergers. If the Company is to be
-------------------------
consolidated with or acquired by another entity in a merger or other
reorganization in which the holders of the outstanding voting stock of the
Company immediately preceding the consummation of such event shall, immediately
following such event, hold, as a group, less than a majority of the voting
5
<PAGE>
securities of the surviving or successor entity, or in the event of a sale of
all or substantially all of the Company's assets or otherwise (each, an
"Acquisition"), the Board or the board of directors of any entity assuming the
obligations of the Company hereunder (the "Successor Board"), shall, as to
outstanding Options, either (i) make appropriate provisions for the continuation
of such Options by substituting on an equitable basis for the shares then
subject to such Options either (a) the consideration payable with respect to the
outstanding shares of Common Stock in connection with the Acquisition, (b)
shares of stock of the surviving or successor corporation or (c) such other
securities as the Successor Board deems appropriate, the fair market value of
which shall not materially exceed the fair market value of the shares of Common
Stock subject to such Options immediately preceding the Acquisition; or (ii)
upon written notice to the optionees, provide that all Options must be
exercised, to the extent then exercisable, within a specified number of days of
the date of such notice, at the end of which period the Options shall terminate;
or (iii) terminate all Options in exchange for a cash payment equal to the
excess of the fair market value of the shares subject to such Options (to the
extent then exercisable) over the exercise price thereof.
13.3. Recapitalization or Reorganization. In the event of a
----------------------------------
recapitalization or reorganization of the Company (other than a transaction
described in paragraph 13.2 above) pursuant to which securities of the Company
or of another corporation are issued with respect to the outstanding shares of
Common Stock, an optionee upon exercising an Option shall be entitled to receive
for the purchase price paid upon such exercise the securities he or she would
have received if he or she had exercised such Option prior to such
recapitalization or reorganization.
13.4. Modification of ISOs. Notwithstanding the foregoing, any
--------------------
adjustments made pursuant to paragraphs 13.1, 13.2 or 13.3 with respect to ISOs
shall be made only after the Board, after consulting with counsel for the
Company, determines whether such adjustments would constitute a "modification"
of such ISOs (as that term is defined in Section 424 of the Code) or would cause
any adverse tax consequences for the holders of such ISOs. If the Board
determines that such adjustments made with respect to ISOs would constitute a
modification of such ISOs or would cause adverse tax consequences to the holder,
it may refrain from making such adjustments.
13.5. Dissolution or Liquidation. In the event of the proposed
--------------------------
dissolution or liquidation of the Company, each Option will terminate
immediately prior to the consummation of such proposed action or at such other
time and subject to such other conditions as shall be determined by the Board.
13.6. Issuances of Securities. Except as expressly provided herein,
-----------------------
no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
subject to Options. No adjustments shall be made for dividends paid in cash or
in property other than securities of the Company.
13.7. Fractional Shares. No fractional shares shall be issued under
-----------------
the Plan and the optionee shall receive from the Company cash in lieu of such
fractional shares.
6
<PAGE>
13.8. Adjustments. Upon the happening of any of the events described
-----------
in paragraphs 13.1, 13.2 or 13.3 above, the class and aggregate number of shares
set forth in paragraph 4 hereof that are subject to Stock Rights which
previously have been or subsequently may be granted under the Plan shall also be
appropriately adjusted to reflect the events described in such subparagraphs.
The Board or the Successor Board shall determine the specific adjustments to be
made under this paragraph 13 and, subject to paragraph 2, its determination
shall be conclusive.
14. Means of Exercising Option. An Option (or any part or installment
--------------------------
thereof) shall be exercised by giving written notice to the Company at its
principal office address, or to such transfer agent as the Company shall
designate. Such notice shall identify the Option being exercised and specify the
number of shares as to which such Option is being exercised, accompanied by full
payment of the purchase price therefor (a) in United States dollars in cash or
by certified check, (b) at the discretion of the Board, through delivery of
shares of Common Stock having a fair market value equal as of the date of the
exercise to the cash exercise price of the Option, (c) at the discretion of the
Board, by the delivery of the grantee's personal recourse note bearing interest
payable not less than annually at no less than 100% of the lowest applicable
Federal rate, as defined in Section 1274(d) of the Code, (d) at the discretion
of the Board and consistent with applicable law, through the delivery of an
assignment to the Company of a sufficient amount of the proceeds from the sale
of the Common Stock acquired upon exercise of the Option and an authorization to
the broker or selling agent to pay that amount to the Company, which sale shall
be at the participant's direction at the time of exercise, or (e) at the
discretion of the Board, by an combination of (4), (b), (c) and (d) above. If
the Board exercises its discretion to permit payment of the exercise price of an
ISO by means of the methods set forth in clauses (b), (c), (d) or (e) of the
preceding sentence, such discretion shall be exercised in writing in the
relevant Qualified Stock Option Agreement at the time of the grant of the ISO in
question. The holder of an Option shall not have the rights of a shareholder
with respect to the shares covered by such Option until the date of issuance of
a stock certificate to such holder for such shares. Except as expressly provided
above in paragraph 13 with respect to changes in capitalization and stock
dividends, no adjustment shall be made for dividends or similar rights for which
the record date is before the date such stock certificate is issued.
15. Term and Amendment of Plan. This Plan was adopted by the Board as of
--------------------------
May 1, 1997, and approved by the stockholders of the Company as of the same date
by written consent in lieu of the annual Meeting of the Stockholders. The Plan
shall expire at the end of the day on March 31, 2007 (except as to Options
outstanding on that date). The Board may terminate or amend the Plan in an
respect at any time, except that, without the approval of the stockholders
obtained within 12 months before or after the Board adopts a resolution
authorizing any of the following actions: (a) the total number of shares that
may be issued under the Plan may not be increased (except by adjustment pursuant
to paragraph 13); (b) the provisions of paragraph 3 regarding eligibility for
grants of ISOs may not be modified; (c) the provisions of paragraph 6.2
regarding the exercise price at which shares may be offered pursuant to ISOs may
not be modified (except by adjustment pursuant to paragraph 13); and (d) the
expiration date of the Plan may not be extended. Except as otherwise provided in
this paragraph 15, in no event
7
<PAGE>
may action of the Board or stockholders alter or impair the rights of a grantee,
without such grantee's consent under any Stock Right previously granted to such
grantee.
16. Modifications of ISOs; Conversion of ISOs into Non-Qualified Options.
--------------------------------------------------------------------
Subject to paragraph 13.4, without the prior written consent of the holder of an
ISO, the Board shall not alter the terms of such ISO (including the means of
exercising such ISO) if such alteration would constitute a modification (within
the meaning, of Section 424(h)(3) of the Code). The Board, at the written
request or with the written consent of any optionee, may in its discretion take
such actions as may be necessary to convert such optionee's ISOs (or any
installments or options of installments thereof) that have not been exercised on
the date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the optionee is an employee of
the Company or a Related Corporation at the time of such conversion. Such
actions may include, but shall not be limited to, extending the exercise period
or reducing the exercise price of the appropriate installments of such ISOs. At
the time of such conversion, the Board (with the consent of the optionee) may
impose such conditions on the exercise of the resulting Non-Qualified Options as
the Board in its discretion may determine, provided that such conditions shall
not be inconsistent with this Plan. Nothing in the Plan shall be deemed to give
any optionee the right to have such optionee's ISOs converted into Non-Qualified
Options, and no such conversion shall occur until and unless the Board takes
appropriate action.
17. Application of Funds. The proceeds received by the Company from the
--------------------
sale of shares pursuant to Options granted and Purchases authorized under the
Plan shall be used for general corporate purposes.
18. Notice to Company of Disqualifying Disposition. By accepting an ISO
----------------------------------------------
granted under the Plan, each optionee agrees to notify the Company in writing
immediately after such optionee makes a Disqualifying Disposition (as described
in Sections 421, 422 and 424 of the Code and regulations thereunder) of any
stock acquired pursuant to the exercise of ISOs granted under the Plan. A
Disqualifying Disposition is generally any disposition occurring on or before
the later of (a) the date two years following the date the ISO was granted or
(b) the date one year following the date the ISO was exercised.
19. Withholding of Additional Income Taxes. Upon the exercise of a
--------------------------------------
Non-Qualified Option, the transfer of a Non-Qualified Stock Option pursuant to
an arm's-length transaction, the grant of an Award, the making of a Purchase of
Common Stock for less than is fair market value, the making, of a Disqualifying
Disposition (as defined in paragraph 18), the vesting or transfer of restricted
stock or securities acquired on the exercise of an Option hereunder, or the
making of a distribution or other payment with respect to such stock or
securities, the Company may withhold taxes in respect of amounts that constitute
compensation includible in gross income. The Board in its discretion may
condition (i) the exercise of an Option, (ii) the transfer of a Non-Qualified
Stock Option, (iii) the grant of an Award, (iv) the making of a Purchase of
Common Stock for less than its fair market value, or (v) the vesting or
transferability of restricted stock or securities acquired by exercising an
Option, on the grantee's making satisfactory arrangement for such withholding.
Such arrangement may include payment
8
<PAGE>
by the grantee in cash or by check of the amount of the withholding, taxes or,
at the discretion of the Board, by the grantee's delivery of previously held
shares of Common Stock or the withholding from the shares of Common Stock other-
wise deliverable upon exercise of an Option shares having an aggregate fair
market value equal to the amount of such withholding taxes.
20. Governmental Regulation. The Company's obligation to sell and deliver
-----------------------
shares of the Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.
Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company my be required to
send tax information statements to employees and former employees that exercise
ISOs under the Plan, and the Company may be required to file tax information
returns reporting the income received by grantees of Options in connection with
the Plan.
21. Governing Law. The validity and construction of the Plan and the
-------------
instruments evidencing Stock Rights shall be governed by the laws of the State
of Delaware, or the laws of any jurisdiction in which the Company is or its
successors in interest may be organized.
9
<PAGE>
Register of Amendments
to the 1997 Stock Plan
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Date of Board of
Directors Action Section Affected Change
---------------- ---------------- ------
- ----------------------------------------------------------------------------------------
<S> <C> <C>
January 12, 1999 Second sentence of Paragraph 4 "1,500,000" is changed to
"2,100,000"
- ----------------------------------------------------------------------------------------
February 1, 1999 Second sentence of Paragraph 4 "2,100,000" is changed to
"3,500,000"
- ----------------------------------------------------------------------------------------
August 25, 1999 Second sentence of Paragraph 4 "3,500,000" is changed to
"4,500,000"
- ----------------------------------------------------------------------------------------
December 2, 1999 Second sentence of Paragraph 4 "4,500,000" is changed to
"7,500,000"
- ----------------------------------------------------------------------------------------
March 30, 2000 Second sentence of Paragraph 4 "7,500,000" is changed to
"9,150,000"
- ----------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
EXHIBIT 10.7
Investment Agreement
--------------------
THIS IS AN INVESTMENT AGREEMENT (this "Agreement") made and dated as of
December 9, 1997,
among: Greenwich Technology Partners, inc., a Delaware corporation (the
- -----
"Corporation");
Persistence Partners, L.P., a Delaware limited partnership
("Persistence");
and: FG-GTP, a Florida partnership, (the "Investor").
- ---
The Corporation, Persistence and the Investor agree as follows:
1. DEFINITIONS. As used in this Agreement, each of the following terms
-----------
means:
"Affiliate": With respect to any particular Person, any other
Person directly or indirectly, controlling, controlled by or under common
control with such Person.
"Antares": Antares Networks, Inc., a Delaware corporation, which
has been merged into the Corporation in the Merger.
"Books and Records": The books and records of the Corporation.
"Business": The computer networking and related consulting
business conducted by the Corporation.
"Corporation": Greenwich Technology Partners, Inc., Delaware
corporation. The term "Corporation" also specifically includes Antares.
"Environmental Laws": All Laws governing the use, storage,
shipment, handling, disposal, discharge, release, cleanup, reporting, labelling,
warning, workplace disclosure or monitoring of Hazardous Materials, or otherwise
relating to environmental pollution or environmental protection, including, as
may be applicable to environmental matters, the common law respecting nuisance,
trespass, tortious liability and strict liability.
"Financial Statements": The Corporation's balance sheet as at
November 30, 1997.
"Hazardous Materials": All substances, in whatever form or
concentration, which are classified as hazardous, toxic or dangerous or as
pollutants or contaminants under any Environmental Laws. "Hazardous Materials"
specifically include gasoline, oil and other
<PAGE>
petroleum products, their fractions and their constituent and residual compounds
and by-products, and radon, asbestos, lead-based paint, ureaformaldehyde and
PCB's. Where under applicable Environmental Laws a jurisdiction exercises the
authority to establish stricter requirements regarding Hazardous Materials or to
define Hazardous Materials more inclusively, the stricter requirements and more
inclusive definitions shall apply with respect to the operations of the Business
which are located or conducted within such jurisdiction or which are otherwise
subject to its authority.
"Laws": All laws, statutes, ordinances, rules, regulations and
other requirements having the force of law promulgated by any governmental
authority, commission, agency or body which are applicable to the Corporation or
the Business, in each case whether local, state, territorial, or federal.
"Liabilities": All liabilities or obligations of the Corporation
of any kind or description, whether accrued, absolute, contingent or otherwise.
"Liens": All liens, security interests, pledges, mortgages,
encumbrances, claims, charges, agreements and rights of others of any nature
whatsoever.
"Losses": Any loss (including loss in the value of any Series A
Shares), claim, liability, penalty, damage, cost or expense, whether direct or
indirect, special or consequential, including reasonable attorneys' fees.
"Merger": The merger of Antares with and into the Corporation
pursuant to the Plan of Merger and as effectuated pursuant to a Certificate of
Ownership and Merger filed with the Office of the Secretary of State of Delaware
prior to the date of this Agreement.
"Order": Any order, writ, decree, ruling, award, injunction or
other directive or requirement having the force of law issued by any court,
tribunal, administrative agency, other governmental authority, or arbitrator, in
each case whether local, state, territorial or federal which is applicable to
the Corporation.
"Person": Any natural person, corporation, partnership (general,
limited or otherwise), limited liability company, trust, association, joint
venture, governmental body or agency or other entity having legal status of any
kind.
"Proceeding": Any litigation, lawsuit, arbitration, mediation,
grievance, hearing, investigation or other legal, administrative, governmental
or private party proceeding or enforcement action.
"Series A Shares": Share of Series A Convertible Preferred Stock
having the rights, preferences, privileges, restrictions and other matters set
forth in Articles 4, 5 and 6 of the Certificate of Incorporation of the
Corporation.
2
<PAGE>
"Series B Shares": Share of Series B Convertible Preferred Stock
having the rights, preferences, privileges, restrictions and other matters set
forth in Articles 4, 5 and 6 of the Certificate of Incorporation of the
Corporation.
"Shareholders Agreement": As defined in Section 14.1.
2. PURPOSE AND BACKGROUND.
----------------------
2.1 The Corporation desires to sell to the Investor 4,000,000
Series A Shares, and the Investor desires to purchase the Series A Shares from
the Corporation, all on the terms and conditions set forth in this Agreement.
2.2 Prior to the date of this Agreement, the Corporation was a
wholly-owned subsidiary of Antares in which Persistence and Vincent Yenko were
the sole stockholders. Prior to the date hereof, the Merger has been effected
and Antares was merged into the Corporation. After giving effect to the Merger,
the sole stockholders of the Company are Persistence and Vincent Yenko.
3. PURCHASE AND SALE OF SHARES, USE OF PROCEEDS. Subject to the terms
--------------------------------------------
and conditions contained in this Agreement.
3.1 Purchase of Series A Shares. The Corporation hereby sells
--------------------------------
and issues to the Investor, and the Investor hereby purchases from the
Corporation, 4,000,000 Series A Shares free and clear of all Liens for an
aggregate purchase price of $1,000,000, which is being paid concurrently with
this Agreement.
3.2 Use of Proceeds. The Corporation shall use the proceeds
---------------
from the sale of the Series A Shares for working capital and general corporate
purposes, including the payment of legal fees and expenses of the Investor as
provided in Section 12.6.
4. THE CORPORATION'S REPRESENTATIONS AND WARRANTIES. The Corporation
------------------------------------------------
makes the following representations and warranties to the Investor:
4.1. Organization and Authority. The Corporation is a
--------------------------
corporation duly organized, validly existing and in good standing under the Laws
of Delaware. The Corporation has full corporate power and authority to own its
assets and to carry on the Business as presently conducted. The Corporation is
duly qualified to do business as a foreign corporation and is in good standing
in Connecticut and each other jurisdiction where the Corporation is required to
be so qualified. The Corporation has no subsidiaries and owns no capital stock
or other equity interests in any Person. The signing, delivery and performance
of this Agreement and the Shareholders Agreement have been duly authorized by
the Corporation's Board of Directors and shareholders, and no further corporate
or other action is required on the part of the Corporation in order to authorize
this Agreement or the transactions contemplated by this Agreement. This
Agreement is the legal, valid and binding obligation of the Corporation, duly
enforceable against the Corporation in accordance with its terms.
3
<PAGE>
4.2 Merger. As of the date of this Agreement, the Merger has
------
been consummated and has been unanimously approved by the shareholders and
boards of directors of the Corporation and Antares. The Merger has not resulted
in and will not result in a default under the certificate of incorporation or
bylaws of the Corporation or any agreement or other restrictions to which
Antares was a party or to which any of the assets of the Corporation or Antares
are subject. The Corporation and Antares have received all consents and
authorizations necessary to consummate the Merger.
4.3 Capitalization. The Corporation's authorized capital stock
--------------
consists solely of 40,000,000 shares, 30,000,000 of which shall be common stock,
par value $.01 per share and 10,000,000 of which shall be preferred stock, par
value $.01 per share. 4,100,000 of the authorized shares of preferred stock are
designated as Series A Preferred Stock, 5,723,000 of the authorized shares of
preferred stock are designated as Series B Preferred Stock and 177,000 shares of
the authorized shares of preferred stock are not designated as to series. The
only shares of stock which are presently issued are 177,000 shares of common
stock and 5,723,000 shares of preferred stock. Except as provided in the
Certificate of Incorporation and except for stock options granted to employees
of the Corporation which are set forth in Schedule 4.14, the Corporation has no
shares of capital stock reserved for issuance, and the Corporation has no
outstanding options, warrants, rights, calls or commitments relating to its
shares of capital stock or any outstanding securities or obligations convertible
into or exchangeable for, or giving any Person any right to subscribe for or
acquire from the Corporation, any shares of capital stock; provided that
-------- ----
contemporaneously with the closing contemplated by this Agreement, 100,000
shares of Series A Preferred will be sold by the Corporation to James Cabrera.
There are no preemptive or other subscription rights with respect to any shares
of capital stock. All of the shares of capital stock which are issued and
outstanding have been duly authorized and validly issued and are fully paid and
are nonassessable. The Series A Shares to be issued to the Investor pursuant to
this Agreement have been duly authorized an when issued, they will be validly
issued, fully paid and nonassessable.
4.4 No Conflict or Violation. Neither the signing and delivery
------------------------
of this Agreement or the Shareholders Agreement by the Corporation nor the
performance by the Corporation of the transactions contemplated by this
Agreement or the Shareholders Agreement will result in: (i) a violation of or
conflict with the Corporation's certificate of incorporation or bylaws; (ii) a
violation of any Laws or any Order to which the Corporation is subject; (iii)
the imposition of any material Lien against the Corporation's assets; or (iv) a
breach or default under any mortgage, indenture, deed of trust, real property or
personal property lease, license, contract, or other agreement.
4.5 Financial Statements. The Financial Statements present
--------------------
fairly the financial condition and results of operations of the Corporation of
and for periods covered by the Financial Statements, subject only to ordinary
course adjustments for normal, recurring accruals resulting from the year-end
audit.
4.6 Absence of Certain Changes or Events. Since May 1, 1997 the
------------------------------------
Business has operated only in the ordinary course and there has been no: (i)
material adverse change in the Business, the financial condition of the
Corporation, the results of operations of the
4
<PAGE>
Corporation or the prospects for the Business; (ii) damage, destruction or loss
(whether or not covered by insurance) involving any of the Corporation's assets;
(iii) sale or lease or other disposition of any of the Corporation's assets,
except for dispositions in the ordinary course; (iv) declaration or payment of
any dividend or distribution on any shares of its capital stock or other equity
interests; (v) repurchase or other acquisition of any shares of its capital
stock or of any option, warrant, right, call or commitment relating to shares of
capital stock or other equity interests or any outstanding securities
convertible into shares of capital stock, or any grant to any Person any right
to subscribe for or acquire from it, any shares of capital stock or other equity
interests; (vi) the granting or creation by the Corporation of any material Lien
affecting any of the Corporation's assets; or (vii) to the Corporation's best
knowledge, any transaction by the Corporation outside the ordinary course of the
Business.
4.7 Consents and Approvals. The signing, delivery and
----------------------
performance by the Corporation of this Agreement and the transactions
contemplated by this Agreement do not require the consent, approval or
authorization of, or any declaration, filing, registration or notice with or to
any governmental or regulatory authority, or any other Person, except where the
failure to obtain such would not have a material adverse effect on the
Corporation.
4.8 Material Agreements. Schedule 4.8 contains a complete and
-------------------
correct list, as of the date of this Agreement, of all agreements, contracts,
commitments, undertakings and other obligations, whether written or oral,
involving the Corporation or otherwise relating to the Business, which (i)
entail a commitment of $10,000 or more, or (ii) have a stated duration of one
(1) year or longer, or (iii) are not cancelable on thirty (30) days' notice or
less without penalty. True and complete copies of all written agreements,
contracts and commitments listed in Schedule 4.8, including all amendments, have
been made available to the Investors.
4.9 Absence of Litigation. There is no material Proceeding
---------------------
which is either pending or, to the Corporation's best knowledge, threatened
against the Corporation or otherwise involving its assets or the Business, and
there are no outstanding Orders against the Corporation or with respect to the
Business or the Corporation's assets.
4.10 Compliance with Laws. The Corporation is currently in
--------------------
compliance and has in the past complied, in each case in all material respects,
with the Laws applicable to the Corporation, except where the failure to do so
would not have a material adverse effect on the Corporation. The Corporation has
not received notice of violation or alleged violation of any Laws relating to
the conduct of the Business which has not been rectified or which remains
outstanding.
4.11 Accounts Receivable. All accounts receivable reflected on
-------------------
the Financial Statements and all accounts receivable of the Business that have
arisen since the respective dates of the Financial Statements derive from bona
----
fide transactions in the ordinary course of the Business and are payable on
- ----
ordinary terms, less adequate reserves for doubtful accounts as reflected in the
Books and Records. No person has asserted or threatened to assert any counter-
claims or offsetting claims or defenses to collection of the Corporation's
accounts receivable. The Books and Records as of the date of this Agreement
reflect an accurate aging of all accounts receivable. Except as stated in
Schedule 4.11, the Corporation is not aware that any
5
<PAGE>
of the accounts receivable as of the date of this Agreement are uncollectible or
are likely to be uncollectible in the ordinary course within 60 days after
origination.
4.12 Intellectual Property. Schedule 4.12 is a true and complete
---------------------
listing, as they relate to or are used in the Business, of all: (i) trademark
registrations and applications in the United States, any state or any other
jurisdiction; (ii) common law or unregistered trademarks; (iii) tradenames, (iv)
patents and patent applications; (v) registered copyrights; and (vi) technical
know-how, license or similar agreements to which the Corporation with respect to
the Business is party, or from which the Business otherwise benefits
(collectively, the "Intellectual Property"). No proceedings are pending or, to
the Corporation's best knowledge, threatened, which challenge the validity of
the Corporation's ownership or use of the Intellectual Property. All licensing
and similar agreements relating to the Intellectual Property are listed on
Schedule 4.12 and are in full force and effect, and there is no default by the
Corporation or any other party to such agreements. The Corporation has not
received notice of conflict with the asserted rights of other Persons. To its
best knowledge, the Corporation is not infringing any patents, trademarks or
copyrights and is not misappropriating or violating trade secrets or other
proprietary rights of any other Person.
4.13 Environmental Matters. The Corporation is in compliance
---------------------
with applicable Environmental Laws. To the Corporation's best knowledge, there
is no past or existing event, condition, circumstance or practice or procedure
involving or relating to Hazardous Materials or other environmental matters
which might interfere with or adversely affect the conduct of the Business as
now being conducted, or which would require disclosure, reporting, monitoring,
cleanup, remediation or other action on the part of the Corporation or at the
Corporation's expense, or which might result in the Corporation's being in
violation of or in noncompliance with Environmental Laws.
4.14 Employees. To the Corporation's best knowledge, the
---------
Corporation has satisfied in full all of its obligations to date to its
employees, including obligations under employee benefits plans. Except as
specified in Schedule 4.14, employees of the Business are employed "at will",
and, except as otherwise provided in this Agreement, the employment of each
employee may be terminated at any time, without obligation to pay severance or
other payments or benefits. None of the Corporation's employees are represented
by any labor union or other organization and, there have been no attempts by or
on behalf of the Corporation's employees to be represented by a labor union.
There are not controversies pending or, to the Corporation's best knowledge,
threatened between the Corporation and its employees. The Corporation considers
its relations with employees to be good. Schedule 4.14 also contains a complete
and correct list, as of the date of this Agreement, of all bonus, deferred
compensation, severance, pension, profit-sharing, retirement, insurance, stock
purchase, stock option and other fringe benefit plans, written or otherwise,
maintained or sponsored by the Corporation or any of its Affiliates in which
employees or former employees of the Business are eligible to participate.
4.15 Undisclosed Liabilities. To the Corporation's best
-----------------------
knowledge, neither the Corporation nor the Business is liable for or subject to
any material Liabilities, except material Liabilities adequately and
specifically disclosed or reserved for in the Financial Statements or, if
6
<PAGE>
incurred subsequent to the date of the Corporation's balance sheet included in
the Financial Statements, disclosed and adequately reserved for in the Books and
Records.
4.16 Books of Account; Returns and Reports; Taxes. The
--------------------------------------------
Corporation has paid in full all Taxes which were due and payable to date, and
the Books and Records reflect appropriate accruals and reserves for Taxes in
respect of current periods which are not yet due and payable. The Corporation
has duly and timely filed all Tax returns required to have been filed to date in
all applicable jurisdictions with respect to the Business or otherwise. The
Corporation has made all deposits required with respect to withholding Taxes for
employees of the Business.
4.17 Transactions With Affiliates. Except as set forth in
----------------------------
Schedule 4.17, the Corporation has no outstanding contract, agreement or other
arrangement with an Affiliate of the Corporation with respect to the Business,
and none of the Corporation's assets is owned by or leased, licensed or
otherwise used by the Corporation under grant from any of such Affiliate.
4.18 Broker's or Finder's Fees. No broker, finder or other
-------------------------
Person acting in a similar capacity has acted directly or indirectly for the
Corporation in connection with this Agreement or the transactions contemplated
by this Agreement.
4.19 No Misleading Statements. This Agreement and all documents
------------------------
furnished or to be furnished by the Corporation to the Investor referenced in
this Agreement do not and will not contain any untrue statement of material fact
or omit to state any material fact necessary to make the statements made and to
be made not misleading in any material respect.
5. REPRESENTATIONS AND WARRANTIES OF PERSISTENCE. Persistence makes the
---------------------------------------------
following representations and warranties to the Investor:
5.1 Organization and Authority. Persistence is a limited
--------------------------
partnership duly organized, validly existing and in good standing under the laws
of the State of Delaware. The general partner of Persistence is JoBen Equities,
Limited, a New York corporation owned entirely by Joseph Beninati and the
limited partners in Persistence are Rhonda Beninati and Joseph Beninati each
with a 44.5% interest and Beninati Children and Education Trust with a 10%
interest. Persistence has full power and authority to enter into this Agreement
and to perform its obligations under this Agreement. The signing, delivery and
performance of this Agreement and the Shareholders Agreement by Persistence have
been duly authorized by the partners of Persistence and no further action is
required on the part of Persistence in order to authorize this Agreement and the
Shareholders Agreement or the transactions contemplated by this Agreement and
the Shareholders Agreement. This Agreement and the Shareholders Agreement are
the legal, valid and binding obligations of Persistence, duly enforceable
against Persistence in accordance with their terms.
5.2 No Conflict or Violation. Neither the signing and delivery
------------------------
of this Agreement or the Shareholders Agreement by Persistence nor the
performance by Persistence of the transactions contemplated by this Agreement or
the Shareholders Agreement will result in (i) a violation of or conflict with
the partnership agreement or other governing documents of
7
<PAGE>
Persistence; (ii) a violation of any Laws or any Order to which Persistence is
subject; or (iii) a breach or default under any mortgage, indenture, deed of
trust, real property or personal property lease, license, contract or other
agreement to which Persistence is subject.
5.3 Consent and Approvals. The signing, delivery and
---------------------
performance by Persistence of this Agreement and the transactions contemplated
by this Agreement do not require the consent, approval or authorization of, or
any declaration, filing, registration or notice with or to any governmental or
regulatory authority, or any other Person, except where the failure to obtain
such would not have a material adverse effect on the Corporation.
6. REPRESENTATIONS AND WARRANTIES THE INVESTOR. The Investor makes the
-------------------------------------------
following representations and warranties to the Corporation:
6.1 Organization and Authority. The Investor is duly organized,
--------------------------
validly existing and in good standing under the laws of its jurisdiction of
formation. The Investor has full power and authority to enter into this
Agreement and to perform its obligations under this Agreement. The signing,
delivery and performance of this Agreement and the Shareholders Agreement by the
Investor have been duly authorized by all necessary action on the part of the
Investor and no further action is required on the Investor's part in order to
authorize this Agreement and the Shareholders Agreement or the transactions
contemplated by this Agreement and the Shareholders Agreement. This Agreement
and the Shareholders Agreement are the legal, valid and binding obligations of
the Investor, duly enforceable against the Investor in accordance with their
terms.
6.2 No Conflict or Violation. Neither the signing and delivery
------------------------
of this Agreement or the Shareholders Agreement by the Investor nor the
performance by the Investor of the transactions contemplated by this Agreement
or the Shareholders Agreement will result in: (i) a violation of or conflict
with the governing documents of the Investor; (ii) a violation of any Laws or
any Order to which the Investor is subject; or (iii) a breach or default under
any mortgage, indenture, deed of trust, real property or personal property
lease, license, contract or other agreement to which the Investor is subject.
6.3 Consents and Approvals. The signing, delivery and
----------------------
performance by the Investor of this Agreement and the transactions contemplated
by this Agreement do not require the consent, approval or authorization of, or
any declaration, filing, registration or notice with or to any governmental or
regulatory authority, or any other Person.
6.4 Purchase for Investment. The Investor is an Accreditor
-----------------------
Investor as defined under Rule 501(a) of the Securities Act of 1933, as amended.
The Investor is purchasing the Series A Shares pursuant to this Agreement for
its own account and not with a view to the distribution thereof.
6.5 Broker's or Finder's Fees. No broker, finder or other
-------------------------
Person acting in a similar capacity has acted directly or indirectly for the
Investor in connection with this Agreement and the transactions contemplated by
this Agreement.
8
<PAGE>
7. OTHER COVENANTS.
---------------
7.1 Life Insurance. Immediately after the execution and
--------------
delivery of this Agreement, the Corporation shall take all actions necessary to
obtain a term life insurance policy on the life of Joseph Beninati in the amount
of $5,000,000 as to which the Corporation shall be the owner and the
beneficiary. The Corporation shall cause Joseph Beninati to take all physical
examinations and to complete all applications as may be required in connection
with the issuance of any such insurance policy. The Corporation shall pay all
premiums on such policy and shall keep it in full force and effect.
7.2 Financial Statements. The Corporation shall furnish the
--------------------
following financial statements to the Investor:
7.2.1 as soon as practicable and in any event within 90
days after the end of each fiscal year of the Corporation, the balance sheet of
the Corporation as at the end of such fiscal year and the related statements of
income, retained earnings and changes in financial position for such fiscal
year, setting forth in each case in comparative form (for each year other than
the first fiscal year) corresponding figures from the preceding annual audit,
prepared in accordance with generally accepted accounting principles
consistently applied and certified by independent public accountants selected by
the Corporation and reasonably satisfactory to the Investor; and
7.2.2 as soon as practicable and in any event within 45
days after the end of each of the first three quarters in each fiscal year of
the Corporation, the balance sheet of the Corporation as at the end of such
quarterly period and the related statements of income, retained earnings and
changes in the financial position for such quarterly period and for the elapsed
portion of the fiscal year ended with the last day of such quarterly period, and
in each case setting forth comparative figures for the related periods in the
prior fiscal year, all of which shall be prepared in accordance with generally
accepted accounting principles, consistently applied, subject to normal year-end
audit adjustments.
8. OTHER AGREEMENTS. Concurrently with this Agreement.
----------------
8.1 Shareholders' Agreement. The Corporation, Persistence, the
-----------------------
Investor and James P. Cabrera are entering into a Shareholders Agreement (the
"Shareholders Agreement").
8.2 Employment Agreement. The Corporation is entering into an
--------------------
Employment Agreement with Joseph Beninati (the "Employment Agreement").
9
<PAGE>
9. CLOSING DELIVERIES.
------------------
9.1 Closing. The closing of the transactions contemplated by
-------
this Agreement (the "Closing") shall take place concurrently with the signing
and delivery of this Agreement.
9.2 The Corporation's Closing Deliveries. Concurrently with
------------------------------------
this Agreement, the Corporation is delivering the following items:
9.2.1. A certificate dated as of the date of this
Agreement, of the secretary of the Corporation certifying as to (i) the
certificate of incorporation and bylaws of the Corporation; and (ii) resolutions
of the Board of Directors and the shareholders of the Corporation authorizing
the execution, delivery and performance of this Agreement, all documents
contemplated by this Agreement and the transactions contemplated by this
Agreement.
9.2.2. A copy of the Certificates of Merger of Antares
into the Corporation certified by the Secretary of State of Delaware.
9.2.3. Certificates of "good standing" of the
Corporation from the Secretaries of State of Delaware and Connecticut.
9.2.4. Unanimous Written Consent of Shareholders (after
giving effect to the transactions contemplated by this Agreement), among other
things, electing Joseph Beninati and Ronald V. Davis as the two members of the
Board of Directors of the Corporation.
9.2.5. Stock certificates issued to the Investor for
4,000,000 Series A Shares.
9.2.6. The Shareholders Agreement signed by the
Corporation and Persistence.
9.2.7. The Employment Agreement with Joseph Beninati
signed by the Corporation and Joseph Beninati.
9.3 Investor's Closing Deliveries. At the Closing, the Investor
-----------------------------
shall deliver or cause to be delivered the following items to the Corporation:
9.3.1. $1,000,000 by wire transfer for the purchase
price of the Series A Shares to be purchased pursuant to this Agreement.
9.3.2. The Shareholders Agreement signed by the
Investor.
10. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All covenants,
-----------------------------------------------------
representations and warranties in this Agreement or in any documents delivered
pursuant to this Agreement shall survive the Closing.
10
<PAGE>
11. INDEMNIFICATION.
---------------
11.1. Indemnification by the Corporation to the Investor. The
--------------------------------------------------
Corporation shall indemnify, defend and hold each of the Investors, each of the
Investor's Affiliates and their respective, shareholders, officers, directors,
employees, assignees and successors, harmless against, and shall reimburse each
of the indemnified Persons on demand on account of, any Losses which may be
asserted against, imposed on or incurred by any of them as a result of or
arising out of or in any manner relating or attributable to any inaccuracy in or
breach of the representations, warranties or covenants on the part of the
Corporation in this Agreement or in any document delivered by the Corporation
pursuant to this Agreement.
11.2. Indemnification by Persistence to the Investor and the
------------------------------------------------------
Corporation. Persistence shall indemnify, defend and hold the Investor, the
- -----------
Corporation and the Corporation's officers, directors, employees, assignees and
successors, harmless against, and shall reimburse each of the indemnified
Persons on demand on account of, any Losses which may be asserted against,
imposed on or incurred by any of them as a result of or arising out of or in any
manner relating or attributable to any inaccuracy in or breach of the Investor's
representations or warranties in this Agreement or in any document delivered by
Persistence pursuant to this Agreement.
11.3. Indemnification by the Investor to the Corporation and
------------------------------------------------------
Persistence. The Investor shall indemnify, defend and hold Persistence, the
- -----------
Corporation and the Corporation's officers, directors, employees, assignees and
successors, harmless against, and shall reimburse such indemnified Persons on
demand on account of, any Losses which may be asserted against, imposed on or
incurred by any of them as a result of or arising out of or in any manner
relating or attributable to any inaccuracy in or breach of the Investor's
representations, warranties in this Agreement or in any document delivered by
the Investor pursuant to this Agreement.
12. MISCELLANEOUS.
-------------
12.1. Notices. Notices given pursuant to this Agreement must be
-------
in writing. They shall be deemed to have been duly given: (i) upon delivery or
refusal to accept delivery, if hand-delivered; (ii) when transmitted, if sent by
fax with confirmed receipt, followed by a "hard" copy delivered by any other
method specified in this Section 12.1; or (iii) one (1) business day after being
deposited for next-day delivery with Federal Express or other national overnight
courier service. In each case, notice shall be addressed to the parties as
follows:
If to the Corporation and/or Persistence:
----------------------------------------
Greenwich Technology Partners, Inc.
200 Railroad Avenue
Greenwich, Connecticut 06830
Attention: Joseph Beninati
Fax: (203) 661-4554
If to the Investor:
------------------
11
<PAGE>
Davis Capital LLC
2015 West Main Street
Stamford, Connecticut 06902
Attention: Ronald V. Davis
and
FG-II
72 Cummings Point Road
Stamford, Connecticut 06902
Attention: Kathleen Sheppird
With a copy to:
Orloff, Lowenbach, Stifelman & Siegel, P.A.
101 Eisenhower Parkway
Roseland, New Jersey 07068
Attention: Stanley Schwartz, Esq.
Fax: (973) 622-3073
or to such other place and with such other concurrent copies as the parties may
subsequently designate by written notice.
12.2. Amendment; Waiver. None of the provisions of this
-----------------
Agreement may be changed, modified, waived or cancelled orally or otherwise
except in writing, signed by the party against whom the change, modification,
waiver or cancellation is sought to be enforced.
12.3. Binding Effect; Assignment. This Agreement is binding on
--------------------------
the Corporation, Persistence, the Investor and their respective heirs, personal
representatives and successors in interest. No party may assign his or its
rights and obligations under this Agreement without the prior written consent of
the other parties. There are no third-party beneficiaries of this Agreement,
and any intention to afford any right or benefit under this Agreement to any
third party is specifically disclaimed.
12.4. Entire Agreement. This Agreement and the Shareholders
----------------
Agreement embody the entire understanding among parties with respect to the
subject matter of this Agreement. There are no binding agreements or
understandings among the parties with respect to the transactions contemplated
by this Agreement other than as expressly set forth in this Agreement or the
Shareholders Agreement.
12
<PAGE>
12.5. Interpretation; Construction.
----------------------------
12.5.1. The terms of this Agreement have been fully
negotiated by the parties in consultation with counsel, and the wording of this
Agreement has been arrived at by all of them as a result of their joint
discussions. Accordingly, no provision of this Agreement shall be construed
against a particular party or in favor of another party merely because of which
party (or its representative) drafted or supplied the wording for such
provision.
12.5.2. Except where otherwise noted in context, all
references to "Sections", "Exhibits" or "Schedules" shall be deemed to
refer to the sections or subsections, as appropriate, exhibits or schedules
of this Agreement.
12.5.3. Section headings appearing in this Agreement
are inserted solely as reference aids for the ease and convenience of the
reader; they shall not be deemed to modify, limit or define the scope or
substance of the provisions they introduce, nor shall they be used in construing
the intent or effect of such provisions.
12.5.4. Where the context requires: (i) use of the
singular or plural incorporates the other, and (ii) pronouns and modifiers in
the masculine, feminine or neuter gender shall be deemed to refer to or include
the other genders.
12.5.5. As used in this Agreement, the terms
"include[s]" and "including" mean "including but not limited to"; that is, in
each case the example or enumeration which follows the use of either term is
illustrative but not exclusive or exhaustive.
12.6 Expenses. The Corporation shall pay at the Closing (or
--------
reimburse the Investor for, as the case may be) the fees and disbursements of
counsel to the Investor for services rendered and expenses incurred in
connection with the negotiation and consummation of the transactions
contemplated by this Agreement.
12.7. Prevailing Party. In any Proceeding to enforce any
----------------
provision of this Agreement, the substantially prevailing party shall be
entitled to recover reasonable attorneys' fees and out-of-pocket expenses from
the other party, as determined by a court having jurisdiction.
12.8. Multiple Counterparts. This Agreement may be signed in
---------------------
one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when each of the parties has signed and
delivered a counterpart to the other.
12.9. Further Assurances. The parties agree, upon request and
------------------
for no additional consideration, to sign, acknowledge and deliver any documents
and to do anything else which the other may reasonably request in order to carry
out more completely the purpose and intent of this Agreement consistent with its
terms.
13
<PAGE>
12.10 Governing Law. This Agreement shall be governed by and
-------------
interpreted according to the Laws of Delaware, but without giving effect to any
Delaware choice of law provisions which might otherwise make the Laws of a
different jurisdiction govern or apply.
[Signature Page follows]
14
<PAGE>
Greenwich Technology Partners, Inc.
By: /s/ Joseph Beninati
----------------------------------------------
Joseph Beninati, Chief Executive Officer
Persistence Partners, L.P.
By: JoBen Equities, Inc., its
General Partner
By: /s/ Joseph Beninati
-----------------------------------------
Joseph Beninati, Chief Executive Officer
FG-GTP
By: /s/ K. E. Shepphird
-----------------------------------------
15
<PAGE>
EXHIBIT 10.8
Investment Agreement
--------------------
(Series C Preferred Stock)
THIS IS AN INVESTMENT AGREEMENT (this "Agreement") made and dated as of
June 25, 1998,
among: Greenwich Technology Partners, inc., a Delaware corporation (the
- -----
"Corporation");
FG-GTPC, a Florida partnership, (the "Investor");
and: those additional parties, if any, identified as "Other Investors" on
the
---
signature pages of this Agreement (collectively, with the Investor,
the "Series C Investors").
The Corporation and the Series C Investors agree as follows:
1. DEFINITIONS. As used in this Agreement, each of the following terms
-----------
means:
"Affiliate": With respect to any particular Person, any other Person
directly or indirectly, controlling, controlled by or under common control with
such Person.
"Books and Records": The books and records of the Corporation.
"Business": The computer networking and related consulting business
conducted by the Corporation.
"Corporation": Greenwich Technology Partners, Inc., a Delaware
corporation.
"Environmental Laws": All Laws governing the use, storage, shipment,
handling, disposal, discharge, release, cleanup, reporting, labelling, warning,
workplace disclosure or monitoring of Hazardous Materials, or otherwise relating
to environmental pollution or environmental protection, including, as may be
applicable to environmental matters, the common law respecting nuisance,
trespass, tortious liability and strict liability.
"Financial Statements": The Corporation's balance sheet as at
December 31, 1997 and the related statements of income, retained earnings and
changes in financial position for such fiscal year, and the Corporation's
interim balance sheet as at March 31, 1998 and the related interim statements of
income, retained earnings and changes in financial position for the fiscal
quarter then ended.
"Hazardous Materials": All substances, in whatever form or
concentration, which are classified as hazardous, toxic or dangerous or as
pollutants or contaminants under any
<PAGE>
Environmental Laws. "Hazardous Materials" specifically include gasoline, oil and
other petroleum products, their fractions and their constituent and residual
compounds and by-products, and radon, asbestos, lead-based paint,
ureaformaldehyde and PCB's. Where under applicable Environmental Laws a
jurisdiction exercises the authority to establish stricter requirements
regarding Hazardous Materials or to define Hazardous Materials more inclusively,
the stricter requirements and more inclusive definitions shall apply with
respect to the operations of the Business which are located or conducted within
such jurisdiction or which are otherwise subject to its authority.
"Laws": All laws, statutes, ordinances, rules, regulations and other
requirements having the force of law promulgated by any governmental authority,
commission, agency or body which are applicable to the Corporation or the
Business, in each case whether local, state, territorial, or federal.
"Liabilities": All liabilities or obligations of the Corporation of
any kind or description, whether accrued, absolute, contingent or otherwise.
"Liens": All liens, security interests, pledges, mortgages,
encumbrances, claims, charges, agreements and rights of others of any nature
whatsoever.
"Losses": Any loss (including loss in the value of any Series A
Shares), claim, liability, penalty, damage, cost or expense, whether direct or
indirect, special or consequential, including reasonable attorneys' fees.
"Order": Any order, writ, decree, ruling, award, injunction or other
directive or requirement having the force of law issued by any court, tribunal,
administrative agency, other governmental authority, or arbitrator, in each case
whether local, state, territorial or federal which is applicable to the
Corporation.
"Person": Any natural person, corporation, partnership (general,
limited or otherwise), limited liability company, trust, association, joint
venture, governmental body or agency or other entity having legal status of any
kind.
"Preferred Shareholders": As defined in Section 2.2.
"Proceeding": Any litigation, lawsuit, arbitration, mediation,
grievance, hearing, investigation or other legal, administrative, governmental
or private party proceeding or enforcement action.
"Series A Shares": Share of Series A Convertible Preferred Stock
having the rights, preferences, privileges, restrictions and other matters set
forth in Articles 4, 5 and 6 of the Restated Certificate of Incorporation of the
Corporation.
"Series B Shares": Shares of Series B Convertible Preferred Stock
having the rights, preferences, privileges, restrictions and other matters set
forth in Articles 4, 5 and 6 of the Restated Certificate of Incorporation of the
Corporation.
2
<PAGE>
"Series C Shares": Shares of Series C Convertible Preferred Stock
having the rights, preferences, privileges, restrictions and other matters set
forth in Articles 4, 5 and 6 of the Restated Certificate of Incorporation of the
Corporation.
"Shareholders Agreement": As defined in Section 2.2.
2. PURPOSE AND BACKGROUND.
----------------------
2.1. Sale of Series C Shares. The Corporation desires to sell to
-----------------------
the Series C Investors that number of Series C Shares set forth opposite their
respective names on Schedule 2.1, and the Series C Investors desire to purchase
the Series C Shares from the Corporation, all on the terms and conditions set
forth in this Agreement.
2.2. Shareholders Agreement. Concurrently with this Agreement, the
----------------------
Corporation, the Series C Investors and the holders of the Corporation's Series
A Shares and the Series B Shares (collectively, after giving effect to the
transactions contemplated by this Agreement, the "Preferred Shareholders") are
entering into a Shareholders Agreement (the "Shareholders Agreement") setting
forth, among other matters, certain restrictions on disposition of, and options
to purchase or sell, the Preferred Shareholders' respective shares of the
Corporation's Preferred Stock..
3. PURCHASE AND SALE OF SHARES, USE OF PROCEEDS. Subject to the terms and
--------------------------------------------
conditions contained in this Agreement.
3.1. Purchase of Series C Shares. The Corporation hereby sells and
---------------------------
issues to the Series C Investors, and the Series C Investors hereby purchases
from the Corporation, the number of Series C Shares set forth opposite their
respective names on Schedule 2.1, free and clear of all Liens, for an aggregate
purchase price shown on Schedule 2.1, which is being paid concurrently with this
Agreement.
3.2. Use of Proceeds. The Corporation shall use the proceeds from
---------------
the sale of the Series C Shares for working capital and general corporate
purposes, including the payment of legal fees and expenses of the Series C
Investors as provided in Section 12.6.
4. THE CORPORATION'S REPRESENTATIONS AND WARRANTIES. The Corporation
------------------------------------------------
makes the following representations and warranties to the Series C Investors:
4.1. Organization and Authority. The Corporation is a corporation
--------------------------
duly organized, validly existing and in good standing under the Laws of
Delaware. The Corporation has full corporate power and authority to own its
assets and to carry on the Business as presently conducted. The Corporation is
duly qualified to do business as a foreign corporation and is in good standing
in Connecticut, New York and each other jurisdiction where the Corporation is
required to be so qualified. The Corporation has no subsidiaries and owns no
capital stock or other equity interests in any Person. The signing, delivery
and performance of this Agreement and the Shareholders Agreement have been duly
authorized by the Corporation's Board of
3
<PAGE>
Directors and shareholders, and no further corporate or other action is required
on the part of the Corporation in order to authorize this Agreement or the
transactions contemplated by this Agreement. This Agreement is the legal, valid
and binding obligation of the Corporation, duly enforceable against the
Corporation in accordance with its terms.
4.2. Capitalization. The Corporation's authorized capital stock
--------------
consists solely of 46,666,666 shares, 30,000,000 of which shall be common stock,
par value $.01 per share and 16,666,666 of which shall be preferred stock, par
value $.01 per share. 4,100,000 of the authorized shares of preferred stock are
designated as Series A Preferred Stock, 5,723,000 of the authorized shares of
preferred stock are designated as Series B Preferred Stock, 6,666,666 of the
authorized shares of preferred stock are designated as Series C Preferred Stock
and 177,000 of the authorized shares of preferred stock are not designated as to
series. The only shares of stock which are presently issued are 177,000 shares
of common stock, 4,100,000 shares of Series A Preferred Stock and 5,723,000
shares of Series B Preferred Stock. Except as provided in the Certificate of
Incorporation and except for stock options granted to employees of the
Corporation which are set forth in Schedule 4.13, the Corporation has no shares
of capital stock reserved for issuance, and the Corporation has no outstanding
options, warrants, rights, calls or commitments relating to its shares of
capital stock or any outstanding securities or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire
from the Corporation, any shares of capital stock. There are no preemptive or
other subscription rights with respect to any shares of capital stock. All of
the shares of capital stock which are issued and outstanding have been duly
authorized and validly issued and are fully paid and are nonassessable. The
Series C Shares to be issued to the Series C Investors pursuant to this
Agreement have been duly authorized and when issued, they will be validly
issued, fully paid and nonassessable.
4.3. No Conflict or Violation. Neither the signing and delivery of
------------------------
this Agreement or the Shareholders Agreement by the Corporation nor the
performance by the Corporation of the transactions contemplated by this
Agreement or the Shareholders Agreement will result in: (i) a violation of or
conflict with the Corporation's certificate of incorporation or bylaws; (ii) a
violation of any Laws or any Order to which the Corporation is subject; (iii)
the imposition of any material Lien against the Corporation's assets; or (iv) a
breach or default under any mortgage, indenture, deed of trust, real property or
personal property lease, license, contract, or other agreement.
4.4. Financial Statements. The Financial Statements present fairly
--------------------
the financial condition and results of operations of the Corporation of and for
periods covered by the Financial Statements, subject only to ordinary course
adjustments for normal, recurring accruals resulting from the year-end audit.
4.5. Absence of Certain Changes or Events. Since March 31, 1998, the
------------------------------------
Business has operated only in the ordinary course and there has been no: (i)
material adverse change in the Business, the financial condition of the
Corporation, the results of operations of the Corporation or the prospects for
the Business; (ii) damage, destruction or loss (whether or not covered by
insurance) involving any of the Corporation's assets; (iii) sale or lease or
other disposition of any of the Corporation's assets, except for dispositions in
the ordinary course;
4
<PAGE>
(iv) declaration or payment of any dividend or distribution on any shares of its
capital stock or other equity interests; (v) repurchase or other acquisition of
any shares of its capital stock or of any option, warrant, right, call or
commitment relating to shares of capital stock or other equity interests or any
outstanding securities convertible into shares of capital stock, or, except as
set forth in Schedule 4.13, any grant to any Person of any right to subscribe
for or acquire from it, any shares of capital stock or other equity interests;
(vi) the granting or creation by the Corporation of any material Lien affecting
any of the Corporation's assets; or (vii) to the Corporation's best knowledge,
any transaction by the Corporation outside the ordinary course of the Business.
4.6. Consents and Approvals. The signing, delivery and performance
----------------------
by the Corporation of this Agreement and the transactions contemplated by this
Agreement do not require the consent, approval or authorization of, or any
declaration, filing, registration or notice with or to any governmental or
regulatory authority, or any other Person, except where the failure to obtain
such would not have a material adverse effect on the Corporation.
4.7. Material Agreements. Schedule 4.7 contains a complete and
-------------------
correct list, as of the date of this Agreement, of all agreements, contracts,
commitments, undertakings and other obligations, whether written or oral,
involving the Corporation or otherwise relating to the Business, which (i)
entail a commitment of $10,000 or more, or (ii) have a stated duration of one
(1) year or longer, or (iii) are not cancelable on thirty (30) days' notice or
less without penalty. True and complete copies of all written agreements,
contracts and commitments listed in Schedule 4.7, including all amendments, have
been made available to the Series C Investors.
4.8. Absence of Litigation. There is no material Proceeding which is
---------------------
either pending or, to the Corporation's best knowledge, threatened against the
Corporation or otherwise involving its assets or the Business, and there are no
outstanding Orders against the Corporation or with respect to the Business or
the Corporation's assets.
4.9. Compliance with Laws. The Corporation is currently in
--------------------
compliance and has in the past complied, in each case in all material respects,
with the Laws applicable to the Corporation, except where the failure to do so
would not have a material adverse effect on the Corporation. The Corporation
has not received notice of violation or alleged violation of any Laws relating
to the conduct of the Business which has not been rectified or which remains
outstanding.
4.10. Accounts Receivable. All accounts receivable reflected on the
-------------------
Financial Statements and all accounts receivable of the Business that have
arisen since the respective dates of the Financial Statements derive from bona
----
fide transactions in the ordinary course of the Business and are payable on
- ----
ordinary terms, less adequate reserves for doubtful accounts as reflected in the
Books and Records. No person has asserted or threatened to assert any counter-
claims or offsetting claims or defenses to collection of the Corporation's
accounts receivable. The Books and Records as of the date of this Agreement
reflect an accurate aging of all accounts receivable. Except as stated in
Schedule 4.10, the Corporation is not aware that any of the accounts receivable
as of the date of this Agreement are uncollectible or are likely to be
uncollectible in the ordinary course within 60 days after origination.
5
<PAGE>
4.11. Intellectual Property. Schedule 4.11 is a true and complete
---------------------
listing, as they relate to or are used in the Business, of all: (i) trademark
registrations and applications in the United States, any state or any other
jurisdiction; (ii) common law or unregistered trademarks; (iii) tradenames, (iv)
patents and patent applications; (v) registered copyrights; and (vi) technical
know-how, license or similar agreements to which the Corporation with respect to
the Business is party, or from which the Business otherwise benefits
(collectively, the "Intellectual Property"). No proceedings are pending or, to
the Corporation's best knowledge, threatened, which challenge the validity of
the Corporation's ownership or use of the Intellectual Property. All licensing
and similar agreements relating to the Intellectual Property are listed on
Schedule 4.11 and are in full force and effect, and there is no default by the
Corporation or any other party to such agreements. The Corporation has not
received notice of conflict with the asserted rights of other Persons. To its
best knowledge, the Corporation is not infringing any patents, trademarks or
copyrights and is not misappropriating or violating trade secrets or other
proprietary rights of any other Person.
4.12. Environmental Matters. The Corporation is in compliance with
---------------------
applicable Environmental Laws. To the Corporation's best knowledge, there is no
past or existing event, condition, circumstance or practice or procedure
involving or relating to Hazardous Materials or other environmental matters
which might interfere with or adversely affect the conduct of the Business as
now being conducted, or which would require disclosure, reporting, monitoring,
cleanup, remediation or other action on the part of the Corporation or at the
Corporation's expense, or which might result in the Corporation's being in
violation of or in noncompliance with Environmental Laws.
4.13. Employees. To the Corporation's best knowledge, the
---------
Corporation has satisfied in full all of its obligations to date to its
employees, including obligations under employee benefits plans. Except as
specified in Schedule 4.13, employees of the Business are employed "at will",
and, except as otherwise provided in this Agreement, the employment of each
employee may be terminated at any time, without obligation to pay severance or
other payments or benefits. None of the Corporation's employees are represented
by any labor union or other organization and, there have been no attempts by or
on behalf of the Corporation's employees to be represented by a labor union.
Except as set forth in Schedule 2.1, there are no controversies pending or, to
the Corporation's best knowledge, threatened between the Corporation and its
employees or consultants, present or former. The Corporation considers its
relations with employees to be good. Schedule 4.34 also contains a complete and
correct list, as of the date of this Agreement, of all bonus, deferred
compensation, severance, pension, profit-sharing, retirement, insurance, stock
purchase, stock option and other fringe benefit plans, written or otherwise,
maintained or sponsored by the Corporation or any of its Affiliates in which
employees or former employees of the Business are eligible to participate.
4.14. Undisclosed Liabilities. To the Corporation's best knowledge,
-----------------------
neither the Corporation nor the Business is liable for or subject to any
material Liabilities, except material Liabilities adequately and specifically
disclosed or reserved for in the Financial Statements or, if incurred subsequent
to the date of the Corporation's balance sheet included in the Financial
Statements, disclosed and adequately reserved for in the Books and Records.
6
<PAGE>
4.15. Books of Account; Returns and Reports; Taxes. The Corporation
--------------------------------------------
has paid in full all Taxes which were due and payable to date, and the Books and
Records reflect appropriate accruals and reserves for Taxes in respect of
current periods which are not yet due and payable. The Corporation has duly and
timely filed all Tax returns required to have been filed to date in all
applicable jurisdictions with respect to the Business or otherwise. The
Corporation has made all deposits required with respect to withholding Taxes for
employees of the Business.
4.16. Transactions With Affiliates. Except as set forth in Schedule
----------------------------
4.16, the Corporation has no outstanding contract, agreement or other
arrangement with an Affiliate of the Corporation with respect to the Business,
and none of the Corporation's assets is owned by or leased, licensed or
otherwise used by the Corporation under grant from any of such Affiliate.
4.17. Broker's or Finder's Fees. No broker, finder or other Person
-------------------------
acting in a similar capacity has acted directly or indirectly for the
Corporation in connection with this Agreement or the transactions contemplated
by this Agreement.
4.18. No Misleading Statements. This Agreement and all documents
------------------------
furnished or to be furnished by the Corporation to the Investor referenced in
this Agreement do not and will not contain any untrue statement of material fact
or omit to state any material fact necessary to make the statements made and to
be made not misleading in any material respect.
5. REPRESENTATIONS AND WARRANTIES OF THE SERIES C INVESTORS. Each of the
--------------------------------------------------------
Series C Investors makes the following representations and warranties to the
Corporation, severally and not jointly, and each with respect only to itself or
himself:
5.1. Organization and Authority. Such Series C Investor, if not a
--------------------------
natural person, is duly organized, validly existing and in good standing under
the laws of its jurisdiction of formation. Such Series C Investor has full
power and authority to enter into this Agreement and to perform its or his
obligations under this Agreement. The signing, delivery and performance of this
Agreement and the Shareholders Agreement by such Series C Investor have been
duly authorized by all necessary action on the part of such Series C Investor,
and no further action is required on such Series C Investor's part in order to
authorize this Agreement and the Shareholders Agreement or the transactions
contemplated by this Agreement and the Shareholders Agreement. This Agreement
and the Shareholders Agreement are the legal, valid and binding obligations of
such Series C Investor, duly enforceable against such Series C Investor in
accordance with their terms.
5.2. No Conflict or Violation. Neither the signing and delivery of
------------------------
this Agreement or the Shareholders Agreement by such Series C Investor nor the
performance by such Series C Investor of the transactions contemplated by this
Agreement or the Shareholders Agreement will result in (i) a violation of or
conflict with the governing documents of such Series C Investor, if not a
natural person; (ii) a violation of any Laws or any Order to which such Series C
Investor is subject; or (iii) a breach or default under any mortgage, indenture,
deed of
7
<PAGE>
trust, real property or personal property lease, license, contract or other
agreement to which such Series C Investor is subject.
5.3. Consent and Approvals. The signing, delivery and performance by
---------------------
such Series C Investor of this Agreement and the transactions contemplated by
this Agreement do not require the consent, approval or authorization of, or any
declaration, filing, registration or notice with or to any governmental or
regulatory authority, or any other Person.
5.4. Purchase of Investment. Such Series C Investor is an Accredited
----------------------
Investor as defined under Rule 5.01(a) of the Securities Act of 1933, as
amended. Such Series C Investor is purchasing the Series C Shares pursuant to
this Agreement for its or his own account and not with a view to the
distribution thereof.
5.5. Broker's or Finder's Fees. No broker, finder or other Person
-------------------------
acting in a similar capacity has acted directly or indirectly for such Series C
Investor in connection with this Agreement and the transactions contemplated by
this Agreement.
6. OTHER COVENANTS.
---------------
6.1. The Corporation shall keep in full force and effect, and shall
pay all premiums on, a term life insurance policy on the life of Joseph Beninati
in the amount of $5,000,000 as to which the Corporation shall be the owner and
the beneficiary..
6.2. The Corporation shall furnish the following financial statements
to the Series C Investors:
6.2.1. as soon as practicable and in any event within 90 days
after the end of each fiscal year of the Corporation, the balance sheet of the
Corporation as at the end of such fiscal year and the related statements of
income, retained earnings and changes in financial position for such fiscal
year, setting forth in each case in comparative form (for each year other than
the first fiscal year) corresponding figures from the preceding annual audit,
prepared in accordance with generally accepted accounting principles
consistently applied and certified by independent public accountants selected by
the Corporation and reasonably satisfactory to the Series C Investors; and
6.2.2. as soon as practicable and in any event within 45 days
after the end of each of the first three quarters in each fiscal year of the
Corporation, the balance sheet of the Corporation as at the end of such
quarterly period and the related statements of income, retained earnings and
changes in the financial position for such quarterly period and for the elapsed
portion of the fiscal year ended with the last day of such quarterly period, and
in each case setting forth comparative figures for the related periods in the
prior fiscal year, all of which shall be prepared in accordance with generally
accepted accounting principles, consistently applied, subject to normal year-end
audit adjustments.
7. CLOSING DELIVERIES.
------------------
8
<PAGE>
7.1 Closing. The closing of the transactions contemplated by this
-------
Agreement (the "Closing") shall take place concurrently with the signing and
delivery of this Agreement.
7.2 The Corporation's Closing Deliveries. Concurrently with this
------------------------------------
Agreement, the Corporation is delivering the following items:
7.2.1. A certificate dated as of the date of this Agreement, of
the secretary of the Corporation certifying as to (i) the certificate of
incorporation and bylaws of the Corporation; and (ii) resolutions of the Board
of Directors and the shareholders of the Corporation authorizing the execution,
delivery and performance of this Agreement, all documents contemplated by this
Agreement and the transactions contemplated by this Agreement.
7.2.2. Certificates of "good standing" of the Corporation from
the Secretaries of State of Delaware, Connecticut and New York.
7.2.3. Consent of Directors, among other things, authorizing (a)
the amendment and restatement of the Corporation's Certificate of Incorporation,
as previously amended, to increase the authorized number of shares of
Convertible Preferred Stock of the Corporation by 6,666,666 shares to 16,666,666
shares, and to designate such 6,666,666 new shares as Series C Shares; and (b)
the transactions contemplated by this Agreement.
7.2.4. Stock certificates issued to the Series C Investors for
the number of Series C Shares set forth on Schedule 2.1.
7.2.5. The Shareholders Agreement signed by the Corporation and
the Preferred Shareholders other than the Series C Investors.
7.3. Closing Deliveries of the Series C Investors. At the Closing,
--------------------------------------------
each Series C Investor shall deliver or cause to be delivered the following
items to the Corporation:
7.3.1. The sum set forth opposite its or his name in Schedule
2.1, by wire transfer for the purchase price of the Series C Shares to be
purchased pursuant to this Agreement.
7.3.2. The Shareholders Agreement signed by such Series C
Investor.
8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All covenants,
-----------------------------------------------------
representations and warranties in this Agreement or in any documents delivered
pursuant to this Agreement shall survive the Closing.
9. INDEMNIFICATION.
---------------
9.1. Indemnification by the Corporation to the Series C Investors.
------------------------------------------------------------
The Corporation shall indemnify, defend and hold each of the Series C Investors,
the Affiliates of each Series C Investor, and their respective, shareholders,
officers, directors, employees, assignees and successors, harmless against, and
shall reimburse each of the indemnified Persons
9
<PAGE>
on demand on account of, any Losses which may be asserted against, imposed on or
incurred by any of them as a result of or arising out of or in any manner
relating or attributable to any inaccuracy in or breach of the representations,
warranties or covenants on the part of the Corporation in this Agreement or in
any document delivered by the Corporation pursuant to this Agreement.
9.2. Indemnification by the Series C Investors to the Corporation.
------------------------------------------------------------
Each Series C Investor, severally and not jointly, shall indemnify, defend and
hold the Corporation and the Corporation's officers, directors, employees,
assignees and successors, harmless against, and shall reimburse each of the
indemnified Persons on demand on account of, any Losses which may be asserted
against, imposed on or incurred by any of them as a result of or arising out of
or in any manner relating or attributable to any inaccuracy in or breach of such
Series C Investor's representations or warranties in this Agreement or in any
document delivered by such Series C Investor pursuant to this Agreement.
10. MISCELLANEOUS.
-------------
10.1. Notices. Notices given pursuant to this Agreement must be in
-------
writing. They shall be deemed to have been duly given: (i) upon delivery or
refusal to accept delivery, if hand-delivered; (ii) when transmitted, if sent by
fax with confirmed receipt, followed by a "hard" copy delivered by any other
method specified in this Section 12.1; or (iii) one (1) business day after being
deposited for next-day delivery with Federal Express or other national overnight
courier service. In each case, notice shall be addressed to the parties as
follows:
If to the Corporation:
---------------------
Greenwich Technology Partners, Inc.
200 Railroad Avenue
Greenwich, Connecticut 06830
Attention: Joseph Beninati
Fax: (203) 661-4554
10
<PAGE>
If to the Investor:
------------------
Davis Capital LLC
2015 West Main Street
Stamford, Connecticut 06902
Attention: Ronald V. Davis
and
FG-GTPC
72 Cummings Point Road
Stamford, Connecticut 06902
Attention: Kathleen Sheppird
With a copy to:
Orloff, Lowenbach, Stifelman & Siegel, P.A.
101 Eisenhower Parkway
Roseland, New Jersey 07068
Attention: Stanley Schwartz, Esq.
Fax: (973) 622-3073
If to the Other Investors:
-------------------------
As set forth on the signature page hereof
or to such other place and with such other concurrent copies as the parties may
subsequently designate by written notice.
10.2. Amendment; Waiver. None of the provisions of this Agreement
-----------------
may be changed, modified, waived or cancelled orally or otherwise except in
writing, signed by the party against whom the change, modification, waiver or
cancellation is sought to be enforced.
10.3. Binding Effect; Assignment. This Agreement is binding on the
--------------------------
Corporation, the Series C Investors and their respective successors in interest.
No party may assign his or its rights and obligations under this Agreement
without the prior written consent of the other parties. There are no third-
party beneficiaries of this Agreement, and any intention to afford any right or
benefit under this Agreement to any third party is specifically disclaimed.
10.4. Entire Agreement. This Agreement and the Shareholders
----------------
Agreement embody the entire understanding among parties with respect to the
subject matter of this Agreement. There are no binding agreements or
understandings among the parties with respect to the transactions contemplated
by this Agreement other than as expressly set forth in this Agreement or the
Shareholders Agreement.
11
<PAGE>
10.5. Interpretation; Construction.
----------------------------
10.5.1. The terms of this Agreement have been fully negotiated
by the parties in consultation with counsel, and the wording of this Agreement
has been arrived at by all of them as a result of their joint discussions.
Accordingly, no provision of this Agreement shall be construed against a
particular party or in favor of another party merely because of which party (or
its representative) drafted or supplied the wording for such provision.
10.5.2. Except where otherwise noted in context, all references
to "Sections", "Exhibits" or "Schedules" shall be deemed to refer to the
sections or subsections, as appropriate, exhibits or schedules of this
Agreement.
10.5.3. Section headings appearing in this Agreement are
inserted solely as reference aids for the ease and convenience of the reader;
they shall not be deemed to modify, limit or define the scope or substance of
the provisions they introduce, nor shall they be used in construing the intent
or effect of such provisions.
10.5.4. Where the context requires: (i) use of the singular or
plural incorporates the other, and (ii) pronouns and modifiers in the masculine,
feminine or neuter gender shall be deemed to refer to or include the other
genders.
10.5.5. As used in this Agreement, the terms "include[s]" and
"including" mean "including but not limited to"; that is, in each case the
example or enumeration which follows the use of either term is illustrative but
not exclusive or exhaustive.
10.6. Expenses. The Corporation shall pay at the Closing (or
--------
reimburse such Series C Investor for, as the case may be) the fees and
disbursements of counsel to FG-FTPC for services rendered and expenses incurred
in connection with the negotiation and consummation of the transactions
contemplated by this Agreement.
10.7. Prevailing Party. In any Proceeding to enforce any provision
----------------
of this Agreement, the substantially prevailing party shall be entitled to
recover reasonable attorneys' fees and out-of-pocket expenses from the other
party, as determined by a court having jurisdiction.
10.8. Multiple Counterparts. This Agreement may be signed in one or
---------------------
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when each of the parties has signed and delivered a
counterpart to the other.
10.9. Further Assurances. The parties agree, upon request and for no
------------------
additional consideration, to sign, acknowledge and deliver any documents and to
do anything else which the other may reasonably request in order to carry out
more completely the purpose and intent of this Agreement consistent with its
terms.
12
<PAGE>
10.10 Governing Law. This Agreement shall be governed by and
-------------
interpreted according to the Laws of Delaware, but without giving effect to any
Delaware choice of law provisions which might otherwise make the Laws of a
different jurisdiction govern or apply.
[Signature Page follows]
13
<PAGE>
Greenwich Technology Partners, Inc.
By: /s/ Joseph Beninati
----------------------------------------
Joseph Beninati, Chief Executive Officer
FG-GTPC
By: /s/ Joseph Beninati
----------------------------------------
Joseph Beninati, Chief Executive Officer
Other Investors:
Name: Russell J. Carpentieri Retirement Plan
----------------------------------------
By: /s/ Russell J. Carpentieri
-------------------------------
Print Name and Title:
____________________________________
____________________________________
Print Address for Notice:
1025 West Chester Avenue
------------------------------------
White Plains, NY 10604
------------------------------------
914-288-8950 (PHONE)
------------------------------------
914-288-8803 (FAX)
------------------------------------
14
<PAGE>
EXHIBIT 10.9
Investment Agreement
--------------------
(Series C Preferred Stock)
THIS IS AN INVESTMENT AGREEMENT (this "Agreement") made and dated as of
August 7, 1998,
between: Greenwich Technology Partners, inc., a Delaware corporation (the
- -------
"Corporation");
and: FG-GTPC, a Florida partnership, (the "Investor");
- ---
The Corporation and the Investor agree as follows:
1. DEFINITIONS. As used in this Agreement, each of the following terms
-----------
means:
"Affiliate": With respect to any particular Person, any other
Person directly or indirectly, controlling, controlled by or under common
control with such Person.
"Books and Records": The books and records of the Corporation.
"Business": The computer networking and related consulting
business conducted by the Corporation.
"Corporation": Greenwich Technology Partners, Inc., a Delaware
corporation.
"Environmental Laws": All Laws governing the use, storage,
shipment, handling, disposal, discharge, release, cleanup, reporting, labelling,
warning, workplace disclosure or monitoring of Hazardous Materials, or otherwise
relating to environmental pollution or environmental protection, including, as
may be applicable to environmental matters, the common law respecting nuisance,
trespass, tortious liability and strict liability.
"Financial Statements": The Corporation's balance sheet as at
December 31, 1997 and the related statements of income, retained earnings and
changes in financial position for such fiscal year, and the Corporation's
interim balance sheet as at March 31, 1998 and the related interim statements of
income, retained earnings and changes in financial position for the fiscal
quarter then ended.
"Hazardous Materials": All substances, in whatever form or
concentration, which are classified as hazardous, toxic or dangerous or as
pollutants or contaminants under any Environmental Laws. "Hazardous Materials"
specifically include gasoline, oil and other petroleum products, their fractions
and their constituent and residual compounds and by-products, and radon,
asbestos, lead-based paint, ureaformaldehyde and PCB's. Where under applicable
Environmental Laws a jurisdiction exercises the authority to establish stricter
<PAGE>
requirements regarding Hazardous Materials or to define Hazardous Materials more
inclusively, the stricter requirements and more inclusive definitions shall
apply with respect to the operations of the Business which are located or
conducted within such jurisdiction or which are otherwise subject to its
authority.
"Laws": All laws, statutes, ordinances, rules, regulations and
other requirements having the force of law promulgated by any governmental
authority, commission, agency or body which are applicable to the Corporation or
the Business, in each case whether local, state, territorial, or federal.
"Liabilities": All liabilities or obligations of the Corporation
of any kind or description, whether accrued, absolute, contingent or otherwise.
"Liens": All liens, security interests, pledges, mortgages,
encumbrances, claims, charges, agreements and rights of others of any nature
whatsoever.
"Losses": Any loss (including loss in the value of any Series C
Shares), claim, liability, penalty, damage, cost or expense, whether direct or
indirect, special or consequential, including reasonable attorneys' fees.
"Order": Any order, writ, decree, ruling, award, injunction or
other directive or requirement having the force of law issued by any court,
tribunal, administrative agency, other governmental authority, or arbitrator, in
each case whether local, state, territorial or federal which is applicable to
the Corporation.
"Person": Any natural person, corporation, partnership (general,
limited or otherwise), limited liability company, trust, association, joint
venture, governmental body or agency or other entity having legal status of any
kind.
"Preferred Shareholders": As defined in Section 2.2.
"Proceeding": Any litigation, lawsuit, arbitration, mediation,
grievance, hearing, investigation or other legal, administrative, governmental
or private party proceeding or enforcement action.
"Series A Shares": Share of Series A Convertible Preferred Stock
having the rights, preferences, privileges, restrictions and other matters set
forth in Articles 4, 5 and 6 of the Restated Certificate of Incorporation of the
Corporation.
"Series B Shares": Shares of Series B Convertible Preferred Stock
having the rights, preferences, privileges, restrictions and other matters set
forth in Articles 4, 5 and 6 of the Restated Certificate of Incorporation of the
Corporation.
"Series C Shares": Shares of Series C Convertible Preferred Stock
having the rights, preferences, privileges, restrictions and other matters set
forth in Articles 4, 5 and 6 of the Restated Certificate of Incorporation of the
Corporation.
2
<PAGE>
"Shareholders Agreement": As defined in Section 2.2.
2. PURPOSE AND BACKGROUND.
----------------------
2.1 Sale of Series C Shares. The Investor is the owner of certain
-----------------------
Series C Shares. The Corporation desires to sell to the Investors and additional
number of Series C Shares as set forth opposite the Investor's name under the
heading "Second-II" on Schedule 2.1, and the Investor desires to purchase such
additional Series C Shares from the Corporation, all on the terms and conditions
set forth in this Agreement.
2.2 Shareholders Agreement. The Corporation, the Investor, the other
----------------------
holders of the Corporation's Series C Shares, and the holders of the
Corporation's Series A Shares and Series B Shares (collectively, the "Preferred
Shareholders") are parties to a Shareholders Agreement dated as of June 25, 1998
(the "Shareholders Agreement") setting forth, among other matters, certain
restrictions on disposition of, and options to purchase or sell, the Preferred
Shareholders' respective shares of the Corporation's capital stock.
3. PURCHASE AND SALE OF SHARES, USE OF PROCEEDS. Subject to the terms and
--------------------------------------------
conditions contained in this Agreement.
3.1 Purchase of Series C Shares. The Corporation hereby sells and
---------------------------
issues to the Investor, and the Investor hereby purchases from the Corporation,
the number of Series C Shares set forth opposite the name of the Investor under
the heading "Second-II" on Schedule 2.1, free and clear of all Liens, for an
aggregate purchase price shown on Schedule 2.1, which is being paid concurrently
with this Agreement.
3.2 Use of Proceeds. The Corporation shall use the proceeds from the
---------------
sale of the Series C Shares for working capital and general corporate purposes,
including the payment of legal fees and expenses of the Investor as provided in
Section 12.6.
4. THE CORPORATION'S REPRESENTATIONS AND WARRANTIES. The Corporation
------------------------------------------------
makes the following representations and warranties to the Investor:
4.1. Organization and Authority. The Corporation is a corporation
--------------------------
duly organized, validly existing and in good standing under the Laws of
Delaware. The Corporation has full corporate power and authority to own its
assets and to carry on the Business as presently conducted. The Corporation is
duly qualified to do business as a foreign corporation and is in good standing
in Connecticut, New York and each other jurisdiction where the Corporation is
required to be so qualified. The Corporation has no subsidiaries and owns no
capital stock or other equity interests in any Person. The signing, delivery
and performance of this Agreement have been duly authorized by the Corporation's
Board of Directors and shareholders, and no further corporate or other action is
required on the part of the Corporation in order to authorize this Agreement or
the transactions contemplated by this Agreement. This Agreement is the legal,
valid and binding obligation of the Corporation, duly enforceable against the
Corporation in accordance with its terms.
3
<PAGE>
4.2. Capitalization. The Corporation's authorized capital stock
--------------
consists solely of 46,666,666 shares, 30,000,000 of which shall be common stock,
par value $.01 per share and 16,666,666 of which shall be preferred stock, par
value $.01 per share. 4,100,000 of the authorized shares of preferred stock are
designated as Series A Preferred Stock, 5,723,000 of the authorized shares of
preferred stock are designated as Series B Preferred Stock, 6,666,666 of the
authorized shares of preferred stock are designated as Series C Preferred Stock
and 177,000 of the authorized shares of preferred stock are not designated as to
series. The only shares of stock which are presently issued are 177,000 shares
of common stock, 4,100,000 shares of Series A Preferred Stock and 5,722,954
shares of Series B Preferred Stock, and 3,060,000 shares of Series C Preferred
Stock. Except as provided in the Certificate of Incorporation and except for
stock options granted to employees of the Corporation's employees, directors or
consultants which are set forth in Schedule 4.13, the Corporation has no shares
of capital stock reserved for issuance, and the Corporation has no outstanding
options, warrants, rights, calls or commitments relating to its shares of
capital stock or any outstanding securities or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire
from the Corporation, any shares of capital stock. There are no preemptive or
other subscription rights with respect to any shares of capital stock. All of
the shares of capital stock which are issued and outstanding have been duly
authorized and validly issued and are fully paid and are nonassessable. The
Series C Shares to be issued to the Investor pursuant to this Agreement have
been duly authorized and when issued, they will be validly issued, fully paid
and nonassessable.
4.3. No Conflict or Violation. Neither the signing and delivery of
------------------------
this Agreement by the Corporation nor the performance by the Corporation of the
transactions contemplated by this Agreement will result in: (i) a violation of
or conflict with the Corporation's certificate of incorporation or bylaws; (ii)
a violation of any Laws or any Order to which the Corporation is subject; (iii)
the imposition of any material Lien against the Corporation's assets; or (iv) a
breach or default under any mortgage, indenture, deed of trust, real property or
personal property lease, license, contract, or other agreement.
4.4. Financial Statements. The Financial Statements present fairly
--------------------
the financial condition and results of operations of the Corporation of and for
periods covered by the Financial Statements, subject only to ordinary course
adjustments for normal, recurring accruals resulting from the year-end audit.
4.5. Absence of Certain Changes or Events. Since March 31, 1998, the
------------------------------------
Business has operated only in the ordinary course and there has been no: (i)
material adverse change in the Business, the financial condition of the
Corporation, the results of operations of the Corporation or the prospects for
the Business; (ii) damage, destruction or loss (whether or not covered by
insurance) involving any of the Corporation's assets; (iii) sale or lease or
other disposition of any of the Corporation's assets, except for dispositions in
the ordinary course; (iv) declaration or payment of any dividend or distribution
on any shares of its capital stock or other equity interests; (v) repurchase or
other acquisition of any shares of its capital stock or of any option, warrant,
right, call or commitment relating to shares of capital stock or other equity
interests or any outstanding securities convertible into shares of capital
stock, or, except as set forth in Schedule 4.13, any grant to any Person of any
right to subscribe for or acquire from it,
4
<PAGE>
any shares of capital stock or other equity interests; (vi) the granting or
creation by the Corporation of any material Lien affecting any of the
Corporation's assets; or (vii) to the Corporation's best knowledge, any
transaction by the Corporation outside the ordinary course of the Business.
4.6. Consents and Approvals. The signing, delivery and performance
----------------------
by the Corporation of this Agreement and the transactions contemplated by this
Agreement do not require the consent, approval or authorization of, or any
declaration, filing, registration or notice with or to any governmental or
regulatory authority, or any other Person, except where the failure to obtain
such would not have a material adverse effect on the Corporation.
4.7. Material Agreements. Schedule 4.7 contains a complete and
-------------------
correct list, as of the date of this Agreement, of all agreements, contracts,
commitments, undertakings and other obligations, whether written or oral,
involving the Corporation or otherwise relating to the Business, which (i)
entail a commitment of $10,000 or more, or (ii) have a stated duration of one
(1) year or longer, or (iii) are not cancelable on thirty (30) days' notice or
less without penalty. True and complete copies of all written agreements,
contracts and commitments listed in Schedule 4.7, including all amendments, have
been made available to the Investor.
4.8. Absence of Litigation. There is no material Proceeding which is
---------------------
either pending or, to the Corporation's best knowledge, threatened against the
Corporation or otherwise involving its assets or the Business, and there are no
outstanding Orders against the Corporation or with respect to the Business or
the Corporation's assets.
4.9. Compliance with Laws. The Corporation is currently in
--------------------
compliance and has in the past complied, in each case in all material respects,
with the Laws applicable to the Corporation, except where the failure to do so
would not have a material adverse effect on the Corporation. The Corporation
has not received notice of violation or alleged violation of any Laws relating
to the conduct of the Business which has not been rectified or which remains
outstanding.
4.10. Accounts Receivable. All accounts receivable reflected on the
-------------------
Financial Statements and all accounts receivable of the Business that have
arisen since the respective dates of the Financial Statements derive from bona
----
fide transactions in the ordinary course of the Business and are payable on
- ----
ordinary terms, less adequate reserves for doubtful accounts as reflected in the
Books and Records. No person has asserted or threatened to assert any counter-
claims or offsetting claims or defenses to collection of the Corporation's
accounts receivable. The Books and Records as of the date of this Agreement
reflect an accurate aging of all accounts receivable. Except as stated in
Schedule 4.10, the Corporation is not aware that any of the accounts receivable
as of the date of this Agreement are uncollectible or are likely to be
uncollectible in the ordinary course within 60 days after origination.
4.11. Intellectual Property. Schedule 4.11 is a true and complete
---------------------
listing, as they relate to or are used in the Business, of all: (i) trademark
registrations and applications in the United States, any state or any other
jurisdiction; (ii) common law or unregistered trademarks; (iii) tradenames, (iv)
patents and patent applications; (v) registered copyrights; and
5
<PAGE>
(vi) technical know-how, license or similar agreements to which the Corporation
with respect to the Business is party, or from which the Business otherwise
benefits (collectively, the "Intellectual Property"). No proceedings are pending
or, to the Corporation's best knowledge, threatened, which challenge the
validity of the Corporation's ownership or use of the Intellectual Property. All
licensing and similar agreements relating to the Intellectual Property are
listed on Schedule 4.11 and are in full force and effect, and there is no
default by the Corporation or any other party to such agreements. The
Corporation has not received notice of conflict with the asserted rights of
other Persons. To its best knowledge, the Corporation is not infringing any
patents, trademarks or copyrights and is not misappropriating or violating trade
secrets or other proprietary rights of any other Person.
4.12. Environmental Matters. The Corporation is in compliance with
---------------------
applicable Environmental Laws. To the Corporation's best knowledge, there is no
past or existing event, condition, circumstance or practice or procedure
involving or relating to Hazardous Materials or other environmental matters
which might interfere with or adversely affect the conduct of the Business as
now being conducted, or which would require disclosure, reporting, monitoring,
cleanup, remediation or other action on the part of the Corporation or at the
Corporation's expense, or which might result in the Corporation's being in
violation of or in noncompliance with Environmental Laws.
4.13. Employees. To the Corporation's best knowledge, the
---------
Corporation has satisfied in full all of its obligations to date to its
employees, including obligations under employee benefits plans. Except as
specified in Schedule 4.13, employees of the Business are employed "at will",
and, except as otherwise provided in this Agreement, the employment of each
employee may be terminated at any time, without obligation to pay severance or
other payments or benefits. None of the Corporation's employees are represented
by any labor union or other organization and, there have been no attempts by or
on behalf of the Corporation's employees to be represented by a labor union.
Except as set forth in Schedule 2.1, there are no controversies pending or, to
the Corporation's best knowledge, threatened between the Corporation and its
employees or consultants, present or former. The Corporation considers its
relations with employees to be good. Schedule 4.13 also contains a complete and
correct list, as of the date of this Agreement, of all bonus, deferred
compensation, severance, pension, profit-sharing, retirement, insurance, stock
purchase, stock option and other fringe benefit plans, written or otherwise,
maintained or sponsored by the Corporation or any of its Affiliates in which
employees or former employees of the Business are eligible to participate.
4.14. Undisclosed Liabilities. To the Corporation's best knowledge,
-----------------------
neither the Corporation nor the Business is liable for or subject to any
material Liabilities, except material Liabilities adequately and specifically
disclosed or reserved for in the Financial Statements or, if incurred subsequent
to the date of the Corporation's balance sheet included in the Financial
Statements, disclosed and adequately reserved for in the Books and Records.
4.15. Books of Account; Returns and Reports; Taxes. The Corporation
--------------------------------------------
has paid in full all Taxes which were due and payable to date, and the Books and
Records reflect appropriate accruals and reserves for Taxes in respect of
current periods which are not yet due and payable. The Corporation has duly and
timely filed all Tax returns required to have been
6
<PAGE>
filed to date in all applicable jurisdictions with respect to the Business or
otherwise. The Corporation has made all deposits required with respect to
withholding Taxes for employees of the Business.
4.16. Transactions With Affiliates. Except as set forth in Schedule
----------------------------
4.16, the Corporation has no outstanding contract, agreement or other
arrangement with an Affiliate of the Corporation with respect to the Business,
and none of the Corporation's assets is owned by or leased, licensed or
otherwise used by the Corporation under grant from any of such Affiliate.
4.17. Broker's or Finder's Fees. No broker, finder or other Person
-------------------------
acting in a similar capacity has acted directly or indirectly for the
Corporation in connection with this Agreement or the transactions contemplated
by this Agreement.
4.18. No Misleading Statements. This Agreement and all documents
------------------------
furnished or to be furnished by the Corporation to the Investor referenced in
this Agreement do not and will not contain any untrue statement of material fact
or omit to state any material fact necessary to make the statements made and to
be made not misleading in any material respect.
5. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. The Investor makes the
----------------------------------------------
following representations and warranties to the Corporation:
5.1 Organization and Authority. The Investor is duly organized,
--------------------------
validly existing and in good standing under the laws of its jurisdiction of
formation. The Investor has full power and authority to enter into this
Agreement and to perform its or his obligations under this Agreement. The
signing, delivery and performance of this Agreement by the Investor have been
duly authorized by all necessary action on the part of the Investor, and no
further action is required on the Investor's part in order to authorize this
Agreement or the transactions contemplated by this Agreement. This Agreement
is, and the Shareholders Agreement continues to be, the legal, valid and binding
obligation of the Investor, duly enforceable against the Investor in accordance
with the respective terms of such agreements.
5.2. No Conflict or Violation. Neither the signing and delivery of
------------------------
this Agreement by the Investor nor the performance by the Investor of the
transactions contemplated by this Agreement or the Shareholders Agreement will
result in (i) a violation of or conflict with the governing documents of the
Investor; (ii) a violation of any Laws or any Order to which the Investor is
subject; or (iii) a breach or default under any mortgage, indenture, deed of
trust, real property or personal property lease, license, contract or other
agreement to which the Investor is subject.
5.3. Consent and Approvals. The signing, delivery and performance by
---------------------
the Investor of this Agreement and the transactions contemplated by this
Agreement do not require the consent, approval or authorization of, or any
declaration, filing, registration or notice with or to any governmental or
regulatory authority, or any other Person.
5.4. Purchase of Investment. The Investor is an Accredited Investor
----------------------
as defined under Rule 501(a) of the Securities Act of 1933, as amended. The
Investor is purchasing the
7
<PAGE>
Series C Shares pursuant to this Agreement for its or his own account and not
with a view to the distribution thereof.
5.5 Broker's or Finder's Fees. No broker, finder or other Person
-------------------------
acting in a similar capacity has acted directly or indirectly for the Investor
in connection with this Agreement and the transactions contemplated by this
Agreement.
6. OTHER COVENANTS.
---------------
6.1 All Shares Subject to Shareholders Agreement. The Investor
--------------------------------------------
acknowledges that all of the Investor's shares of the Corporation's capital
stock, including the Series C Shares that the Investor is purchasing pursuant
to this Investment Agreement, are and shall remain subject to and shall be
governed by the terms and provisions of the Shareholders Agreement.
6.2. Insurance. The Corporation shall keep in full force and effect,
---------
and shall pay all premiums on, a term life insurance policy on the life of
Joseph Beninati in the amount of $5,000,000 as to which the Corporation shall be
the owner and the beneficiary.
6.3. Financial Statements. The Corporation shall furnish the
--------------------
following financial statements to the Investor:
6.3.1. as soon as practicable and in any event within 90 days
after the end of each fiscal year of the Corporation, the balance sheet of the
Corporation as at the end of such fiscal year and the related statements of
income, retained earnings and changes in financial position for such fiscal
year, setting forth in each case in comparative form (for each year other than
the first fiscal year) corresponding figures from the preceding annual audit,
prepared in accordance with generally accepted accounting principles
consistently applied and certified by independent public accountants selected by
the Corporation and reasonably satisfactory to the Investor; and
6.3.2. as soon as practicable and in any event within 45 days
after the end of each of the first three quarters in each fiscal year of the
Corporation, the balance sheet of the Corporation as at the end of such
quarterly period and the related statements of income, retained earnings and
changes in the financial position for such quarterly period and for the elapsed
portion of the fiscal year ended with the last day of such quarterly period, and
in each case setting forth comparative figures for the related periods in the
prior fiscal year, all of which shall be prepared in accordance with generally
accepted accounting principles, consistently applied, subject to normal year-end
audit adjustments.
7. CLOSING DELIVERIES.
------------------
7.1 Closing. The closing of the transactions contemplated by this
-------
Agreement (the "Closing") shall take place concurrently with the signing and
delivery of this Agreement.
8
<PAGE>
7.2 The Corporation's Closing Deliveries. Concurrently with this
------------------------------------
Agreement, the Corporation is delivering the following items:
7.2.1. A certificate dated as of the date of this Agreement,
of the secretary of the Corporation certifying as to (i) the absence of any
amendments to the certificate of incorporation and bylaws of the Corporation;
since June 25, 1998; and (ii) resolutions of the Board of Directors and the
shareholders of the Corporation authorizing the execution, delivery and
performance of this Agreement, all documents contemplated by this Agreement and
the transactions contemplated by this Agreement.
7.2.2. Certificates of "good standing" of the Corporation from
the Secretaries of State of Delaware, Connecticut and New York.
7.2.3. Consent of Directors, among other things, authorizing
the transactions contemplated by this Agreement.
7.2.4. A stock certificate issued to the Investor for the number
of Series C Shares set forth under the heading "Second-II" on Schedule 2.1.
7.3. Closing Deliveries of the Investor. At the Closing, the
----------------------------------
Investor shall deliver or cause to be delivered the following items to the
Corporation:
7.3.1. The sum set forth opposite its name under the heading
"Second-II" on Schedule 2.1, by wire transfer for the purchase price of the
Series C Shares to be purchased pursuant to this Agreement.
8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All covenants,
-----------------------------------------------------
representations and warranties in this Agreement or in any documents delivered
pursuant to this Agreement shall survive the Closing.
9. INDEMNIFICATION.
---------------
9.1. Indemnification by the Corporation to the Investor. The
--------------------------------------------------
Corporation shall indemnify, defend and hold each of the Investor, its
Affiliates, and their respective shareholders, officers, directors, employees,
assignees and successors, harmless against, and shall reimburse each of the
indemnified Persons on demand on account of, any Losses which may be asserted
against, imposed on or incurred by any of them as a result of or arising out of
or in any manner relating or attributable to any inaccuracy in or breach of the
representations, warranties or covenants on the part of the Corporation in this
Agreement or in any document delivered by the Corporation pursuant to this
Agreement.
9.2. Indemnification by the Investor to the Corporation. The
--------------------------------------------------
Investor shall indemnify, defend and hold the Corporation and the Corporation's
officers, directors, employees, assignees and successors, harmless against, and
shall reimburse each of the indemnified Persons on demand on account of, any
Losses which may be asserted against, imposed on or incurred by any of them as a
result of or arising out of or in any manner relating or attributable to any
9
<PAGE>
inaccuracy in or breach of the Investor's representations or warranties in this
Agreement or in any document delivered by the Investor pursuant to this
Agreement.
10. MISCELLANEOUS.
-------------
10.1. Notices. Notices given pursuant to this Agreement must be in
-------
writing. They shall be deemed to have been duly given: (i) upon delivery or
refusal to accept delivery, if hand-delivered; (ii) when transmitted, if sent by
fax with confirmed receipt, followed by a "hard" copy delivered by any other
method specified in this Section 10.1; or (iii) one (1) business day after being
deposited for next-day delivery with Federal Express or other national overnight
courier service. In each case, notice shall be addressed to the parties as
follows:
If to the Corporation:
---------------------
Greenwich Technology Partners, Inc.
200 Railroad Avenue
Greenwich, Connecticut 06830
Attention: Joseph Beninati
Fax: (203) 661-4554
If to the Investor:
------------------
Davis Capital LLC
2015 West Main Street
Stamford, Connecticut 06902
Attention: Ronald V. Davis
and
FG-GTPC
2187 Atlantic Street - 10th Floor
Stamford, Connecticut 06902
Attention: Kathleen Sheppird
With a copy to:
Orloff, Lowenbach, Stifelman & Siegel, P.A.
101 Eisenhower Parkway
Roseland, New Jersey 07068
Attention: Stanley Schwartz, Esq.
Fax: (973) 622-3073
or to such other place and with such other concurrent copies as the parties may
subsequently designate by written notice.
10
<PAGE>
10.2. Amendment; Waiver. None of the provisions of this Agreement
-----------------
may be changed, modified, waived or cancelled orally or otherwise except in
writing, signed by the party against whom the change, modification, waiver or
cancellation is sought to be enforced.
10.3. Binding Effect; Assignment. This Agreement is binding on the
--------------------------
Corporation, the Investor and their respective successors in interest. Neither
party may assign his or its rights and obligations under this Agreement without
the prior written consent of the other parties. There are no third-party
beneficiaries of this Agreement, and any intention to afford any right or
benefit under this Agreement to any third party is specifically disclaimed.
10.4. Entire Agreement. This Agreement and the Shareholders
----------------
Agreement embody the entire understanding among parties with respect to the
subject matter of this Agreement. There are no binding agreements or
understandings among the parties with respect to the transactions contemplated
by this Agreement other than as expressly set forth in this Agreement or the
Shareholders Agreement.
10.5. Interpretation; Construction.
----------------------------
10.5.1. The terms of this Agreement have been fully negotiated
by the parties in consultation with counsel, and the wording of this Agreement
has been arrived at by all of them as a result of their joint discussions.
Accordingly, no provision of this Agreement shall be construed against a
particular party or in favor of another party merely because of which party (or
its representative) drafted or supplied the wording for such provision.
10.5.2. Except where otherwise noted in context, all
references to "Sections", "Exhibits" or "Schedules" shall be deemed to refer to
the sections or subsections, as appropriate, exhibits or schedules of this
Agreement.
10.5.3. Section headings appearing in this Agreement are
inserted solely as reference aids for the ease and convenience of the reader;
they shall not be deemed to modify, limit or define the scope or substance of
the provisions they introduce, nor shall they be used in construing the intent
or effect of such provisions.
10.5.4. Where the context requires: (i) use of the singular or
plural incorporates the other, and (ii) pronouns and modifiers in the masculine,
feminine or neuter gender shall be deemed to refer to or include the other
genders.
10.5.5. As used in this Agreement, the terms "include[s]" and
"including" mean "including but not limited to"; that is, in each case the
example or enumeration which follows the use of either term is illustrative but
not exclusive or exhaustive.
10.6 Expenses. The Corporation shall pay at the Closing (or
--------
reimburse the Investor for, as the case may be) the fees and disbursements of
counsel to the Investor for services rendered and expenses incurred in
connection with the negotiation and consummation of the transactions
contemplated by this Agreement.
11
<PAGE>
10.7. Prevailing Party. In any Proceeding to enforce any provision
----------------
of this Agreement, the substantially prevailing party shall be entitled to
recover reasonable attorneys' fees and out-of-pocket expenses from the other
party, as determined by a court having jurisdiction.
10.8. Multiple Counterparts. This Agreement may be signed in one or
---------------------
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when each of the parties has signed and delivered a
counterpart to the other.
10.9. Further Assurances. The parties agree, upon request and for no
------------------
additional consideration, to sign, acknowledge and deliver any documents and to
do anything else which the other may reasonably request in order to carry out
more completely the purpose and intent of this Agreement consistent with its
terms.
10.10 Governing Law. This Agreement shall be governed by and
-------------
interpreted according to the Laws of Delaware, but without giving effect to any
Delaware choice of law provisions which might otherwise make the Laws of a
different jurisdiction govern or apply.
[Signature Page follows]
12
<PAGE>
Greenwich Technology Partners, Inc.
By: /s/ Joseph Beninati
-----------------------------------------
Joseph Beninati, Chief Executive Officer
FG-GTPC
By: /s/ K.E. Shepphird
-----------------------------------------
Print Name and Title:
Kathleen E. Shepphird
--------------------------------
________________________________
13
<PAGE>
EXHIBIT 10.10
INVESTMENT AGREEMENT
--------------------
(Series D Preferred Stock)
THIS IS AN INVESTMENT AGREEMENT (this "Agreement") made and dated as of
February 1, 1999 by and:
among: GREENWICH TECHNOLOGY PARTNERS, INC., a Delaware corporation (the
- -----
"Corporation");
and: those parties identified on the "Schedule of Investors" attached to this
- ---
Agreement as Exhibit A (collectively, the "Series D Investors").
---------
The Corporation and the Series D Investors agree as follows:
1. DEFINITIONS. As used in this Agreement, each of the following
-----------
terms means:
"Affiliate": With respect to any particular Person, any other Person
directly or indirectly, controlling, controlled by or under common control with
such Person.
"Books and Records": The books and records of the Corporation.
"Business": The computer networking and related consulting business
conducted by the Corporation.
"Environmental Laws": All Laws governing the use, storage, shipment,
handling, disposal, discharge, release, cleanup, reporting, labeling, warning,
workplace disclosure or monitoring of Hazardous Materials, or otherwise relating
to environmental pollution or environmental protection, including, as may be
applicable to environmental matters, the common law respecting nuisance,
trespass, tortious liability and strict liability.
"Financial Statements": The Corporation's unaudited balance sheet as
at December 31, 1998 and the related statements of income, retained earnings and
changes in financial position for such fiscal year.
"Hazardous Materials": All substances, in whatever form or
concentration, which are classified as hazardous, toxic or dangerous or as
pollutants or contaminants under any Environmental Laws. "Hazardous Materials"
specifically include gasoline, oil and other petroleum products, their fractions
and their constituent and residual compounds and by-products, and radon,
asbestos, lead-based paint, ureaformaldehyde and PCB's. Where under applicable
Environmental Laws a jurisdiction exercises the authority to establish stricter
requirements regarding Hazardous Materials or to define Hazardous Materials more
inclusively, the stricter requirements and more inclusive definitions shall
apply with respect to the operations of the Business
<PAGE>
which are located or conducted within such jurisdictions or which are otherwise
subject to its authority.
"Initial Public Offering": As defined in Section 6.4.
"Laws": All material laws, statutes, ordinances, rules, regulations
and other requirements having the force of law promulgated by any governmental
authority, commission, agency or body which are applicable to the Corporation or
the Business, in each case whether local, state, territorial, or federal.
"Liabilities": All liabilities or obligations of the Corporation of
any kind or description, whether accrued, absolute, contingent or otherwise.
"Liens": All liens, security interests, pledges, mortgages,
encumbrances, claims, charges, agreements and rights of others of any nature
whatsoever.
"Losses": Any loss, claim, liability, penalty, damage, cost or
expense, whether direct or indirect, special or consequential, including
reasonable attorneys' fees.
"Order": Any order, writ, decree, ruling, award, injunction or other
directive or requirement having the force of law issued by any court, tribunal,
administrative agency, other governmental authority, or arbitrator, in each case
whether local, state, territorial or federal which is applicable to the
Corporation.
"Person": Any natural person, corporation, partnership (general,
limited or otherwise), limited liability company, trust, association, joint
venture, governmental body or agency or other entity having legal status of any
kind.
"Preferred Shareholders": As defined in Section 2.2.
"Preferred Shares": All outstanding Series A Shares, Series B Shares,
Series C Shares and Series D Shares.
"Proceeding": Any litigation, lawsuit, arbitration, mediation,
grievance, hearing, investigation or other legal, administrative, governmental
or private party proceeding or enforcement action.
"Registration Rights Agreement": As defined in Section 2.3.
"Series A Shares": Share of Series A Preferred Stock having the
rights, preferences, privileges, restrictions and other matters set forth in the
Second Amended and Restated Certificate of Incorporation of the Corporation.
"Series B Shares": Shares of Series B Preferred Stock having the
rights, preferences, privileges, restrictions and other matters set forth in the
Second Amended and Restated Certificate of Incorporation of the Corporation.
<PAGE>
"Series C Shares": Shares of Series C Preferred Stock having the
rights, preferences, privileges, restrictions and other matters set forth in the
Second Amended and Restated Certificate of Incorporation of the Corporation.
"Series D Shares": Shares of Series D Participating Preferred Stock
having the rights, preferences, privileges, restrictions and other matters set
forth in the Second Amended and Restated Certificate of Incorporation of the
Corporation.
"Shareholders' Agreement": As defined in Section 2.2.
2. PURPOSE AND BACKGROUND.
----------------------
2.1. Sale of Series D Shares. The Corporation desires to sell to the
-----------------------
Series D Investors an aggregate of 5,213,675 Series D Shares, and the Series D
Investors desire to purchase such Series D Shares from the Corporation in the
amounts and for aggregate purchase prices as set forth on the Schedule of
Investors attached hereto as Exhibit A, all on the terms and conditions set
forth in this Agreement.
2.2. Shareholders Agreement. Concurrently with this Agreement, the
----------------------
Corporation, the Series D Investors and the holders of the Corporation's Series
A Shares, Series B Shares and Series C Shares (such holders of Series A Shares,
Series B Shares, Series C Shares and Series D Shares, collectively, after giving
effect to the transactions contemplated by this Agreement, the "Preferred
Shareholders") are entering into an Amended and Restated Shareholders' Agreement
(the "Shareholders' Agreement") setting forth, among other matters, certain
restrictions on disposition of, and options to purchase or sell, the Preferred
Shareholders' respective shares of the Corporation's Preferred Stock.
2.3. Registration Rights Agreement. Concurrently with this
-----------------------------
Agreement, the Corporation and the Series D Investors are entering into a
Registration Rights Agreement (the "Registration Rights Agreement") setting
forth, among other matters, certain obligations of the Corporation to register
the Series D Shares pursuant to the Securities Act of 1933, as amended (the
"Securities Act").
2.4 Sale of Warrants. In addition to the sale and issuance of the
----------------
Series D Shares pursuant to Section 2.1 hereof, the Corporation desires to sell
to VantagePoint Communications Partners, LP and VantagePoint Venture Partners
1996 (collectively, "VantagePoint") Warrants in the form attached hereto as
Exhibit B (the "Warrants") to purchase an aggregate of 4,273,504 Series D Shares
(the "Warrant Shares")and in the amounts as set forth on Exhibit A, and
VantagePoint desires to purchase such Warrants from the Corporation in the
amounts as set forth on Exhibit A, all on the terms and conditions set forth in
this Agreement.
3. PURCHASE AND SALE OF SHARES AND WARRANTS; USE OF PROCEEDS.
---------------------------------------------------------
Subject to the terms and conditions contained in this Agreement:
<PAGE>
3.1. Purchase of Series D Shares. The Corporation hereby sells and
---------------------------
issues to the Series D Investors, and the Series D Investors hereby purchase
from the Corporation, the number of Series D Shares set forth opposite their
respective names on Schedule of Investors attached hereto as Exhibit A, free and
clear of all Liens, for the respective purchase prices set forth opposite their
names on such Schedule of Investors, and which applicable purchase prices will
be paid by each Series D Investor on or before the date of this Agreement.
3.2 Purchase of the Warrants. The Corporation hereby sells and
------------------------
issues to VantagePoint, and VantagePoint hereby purchases from the Corporation,
the Warrants, free and clear of all Liens, for an aggregate purchase price of
$1000.00, which is being paid concurrently with this Agreement and which the
parties hereto agree is the fair value of the Warrants on the date hereof.
3.3. Use of Proceeds. The Corporation shall use the proceeds from
---------------
the sale of the Series D Shares and Warrants for working capital and general
corporate purposes, including the payment of legal fees and expenses of certain
Series D Investors as provided in section 10.6 and the potential purchase of
shares of Common Stock of the Corporation from a former shareholder of the
Corporation as described more fully in the Schedule of Exceptions attached
hereto as Exhibit C.
4. THE CORPORATION'S REPRESENTATIONS AND WARRANTIES. Except as set
------------------------------------------------
forth in the Schedule of Exceptions, attached hereto as Exhibit C, the
Corporation makes the following representations and warranties to the Series D
Investors:
4.1. Organization and Authority. The Corporation is a corporation
--------------------------
duly organized, validly existing and in good standing under the Laws of
Delaware. The Corporation has full corporate power and authority to own its
assets and to carry on the Business as presently conducted. The Corporation is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the failure to so qualify would have a material
adverse effect on the Corporation's business, properties or financial condition.
The Corporation has no subsidiaries and owns no capital stock or other equity
interests in any Person. The execution, delivery and performance of this
Agreement, the Shareholders' Agreement and the Registration Rights Agreement
have been duly authorized by the Corporation's Board of Directors and
shareholders, and no further corporate or other action is required on the part
of the Corporation in order to authorize this Agreement, the Shareholders'
Agreement or the Registration Rights Agreement or the transactions contemplated
hereby or thereby, including, without limitation, the issuance of the Series D
Shares to the Series D Investors, as set forth on the Schedule of Investors, the
issuance of the shares of Common Stock upon conversion of the Series D Shares,
the issuance of the Warrants to VantagePoint and the issuance of the Warrant
Shares upon exercise of the Warrants. Each of this Agreement, the Shareholders'
Agreement and the Registration Rights Agreement is the legal, valid and binding
obligation of the Corporation, duly enforceable against the Corporation in
accordance with its terms.
<PAGE>
4.2. Capitalization. The Corporation's authorized capital stock
--------------
consists solely of 53,326,876 shares, 30,000,000 of which have been designated
common stock, par value $.01 per share (the "Common Stock"), of which 377,000
shares are issued and outstanding, and 23,326,876 of which have been designated
preferred stock, par value $.01 per share (the "Preferred Stock"). 4,100,000 of
the authorized shares of Preferred Stock are designated as "Series A Preferred
Stock", all of which are issued and outstanding, 5,533,031 of the authorized
shares of Preferred Stock are designated as "Series B Preferred Stock", all of
which are issued and outstanding, 4,206,666 of the authorized shares of
Preferred Stock are designated as "Series C Preferred Stock", all of which are
issued and outstanding, and 9,487,179 of the authorized shares of Preferred
Stock are designated as "Series D Participating Preferred Stock", none of which
are issued and outstanding prior to the date hereof. As of the date hereof,
3,500,000 of the Corporation's authorized but unissued shares of Common Stock
have been reserved for issuance under the Corporation's 1997 Option Plan (the
"1997 Plan"), of which options to purchase 2,007,525 shares of Common Stock are
currently outstanding. A total of 23,326,876 of the Corporation's authorized
but unissued shares of Common Stock have been reserved for issuance upon
conversion of the authorized Series A Shares, Series B Shares, Series C Shares
and Series D Shares, whether or not currently issued and outstanding. A total
of 4,273,504 of the Corporation's authorized but unissued Series D Shares have
been reserved for issuance upon exercise of the Warrants. Except as provided
above, the Corporation has no other shares of capital stock reserved for
issuance, and no outstanding options, warrants, rights, calls or commitments
related to its shares of capital stock or any outstanding securities or
obligations convertible into or exchangeable for, or giving any Person any right
to subscribe for or acquire from the Corporation, any shares of capital stock.
There are no preemptive or other subscription rights with respect to any shares
of capital stock. All of the shares of capital stock which are issued and
outstanding have been duly authorized and validly issued and are fully paid and
are nonassessable. The Series D Shares to be issued to the Series D Investors
pursuant to this Agreement, the Warrants to be issued to VantagePoint pursuant
to this Agreement and the Warrant Shares to be issued to VantagePoint pursuant
to the Warrants have been duly authorized and when issued in accordance with
this Agreement or the Warrants, as applicable, will be validly issued, fully
paid and nonassessable. All securities issued by the Corporation prior to the
date of this Agreement have been issued in compliance with all applicable
securities laws or pursuant to a valid exemption therefrom.
4.3. No Conflict or Violation. Neither the execution of this
------------------------
Agreement, the Shareholders' Agreement or the Registration Rights Agreement by
the Corporation nor the performance by the Corporation of the transactions
contemplated by this Agreement, the Shareholders' Agreement or the Registration
Rights Agreement, including without limitation, the issuance of the Series D
Shares to the Series D Investors, the issuance of the Warrants to VantagePoint,
the issuance of the Common Stock upon conversion of the Series D Shares and the
issuance of the Series D Shares upon exercise of the Warrants, will result in:
(i) a violation of or conflict with the Corporation's Second Amended and
Restated Certificate of Incorporation or bylaws; (ii) a violation of any Laws
<PAGE>
or any Order to which the Corporation is subject: (iii) the imposition of any
material Lien against the Corporation's assets; or (iv) a material breach or
default under any mortgage, indenture, deed of trust, real property or personal
property lease, license, material contract, or other agreement.
4.4. Financial Statements. The Financial Statements present fairly
--------------------
the financial condition and results of operations of the Corporation of and for
the periods covered by the Financial Statements, subject only to ordinary course
adjustments for normal, recurring accruals resulting from the year-end audit.
4.5. Absence of Certain Changes or Events. Since December 31, 1998,
------------------------------------
the Corporation has operated only in the ordinary course and there has been no:
(i) material adverse change in the business, financial condition or results of
operations of the Corporation, (ii) damage, destruction or loss (whether or not
covered by insurance) involving any of the Corporation's assets; (iii) sale or
lease or other disposition of any of the Corporation's assets, except for
dispositions in the ordinary course; (iv) declaration or payment of any dividend
or distribution on any shares of its capital stock or other equity interests;
(v) repurchase or other acquisition of any shares of its capital stock or other
equity interests or any outstanding securities convertible into shares of
capital stock or of any option, warrant, right, call or commitment relating to
shares of capital stock or other equity interests or any outstanding securities
convertible into shares of capital stock, or, any grant to any Person of any
right to subscribe for or acquire from it, any shares of capital stock or other
equity interests; (vi) the granting or creation by the Corporation of any
material Lien affecting any of the Corporation's assets; or (vii) to the
Corporation's best knowledge, any transaction by the Corporation outside the
ordinary course of business.
4.6. Consents and Approvals. Other than consents obtained prior to
----------------------
the Closing, the execution, delivery and performance by the Corporation of this
Agreement, the Shareholders' Agreement or the Registration Rights Agreement and
the transactions contemplated hereby or thereby, including without limitation,
the issuance of the Series D Shares to the Series D Investors, the issuance of
the Warrants to VantagePoint, the issuance of the Common Stock upon conversion
of the Series D Shares and the issuance of the Series D Shares upon exercise of
the Warrants, do not require the consent, approval or authorization of, or any
declaration, filing, registration or notice with or to any governmental or
regulatory authority, or any other Person, except where the failure to obtain
such consent would not have a material adverse effect on the Corporation.
4.7. Material Agreements. Schedule 4.7 of the Schedule of Exceptions
-------------------
contains a complete and correct list, as of the date of this Agreement, of all
material agreements, contracts, commitments, undertakings and other obligations,
whether written or oral, involving the Corporation or otherwise relating to the
Business, which shall include but are not limited to agreements which entail a
commitment of $50,000 or more. True and complete copies of all written
agreements, contracts and
<PAGE>
commitments listed in Schedule 4.7 of the Schedule of Exceptions, including all
amendments, have been made available to the Series D Investors.
4.8. Absence of Litigation. There is no material Proceeding which is
---------------------
either pending or, to the Corporation's best knowledge, threatened against the
Corporation or otherwise involving its assets or the Business, and there are no
outstanding Orders against the Corporation or with respect to the Business or
the Corporation's assets.
4.9. Compliance with Laws. The Corporation is currently in
--------------------
compliance and has in the past complied, in each case in all material respects,
with the Laws applicable to the Corporation, except where the failure to do so
would not have a material adverse effect on the Corporation. The Corporation
has not received notice of violation or alleged violation of any Laws relating
to the conduct of the Business which has not been rectified or which remains
outstanding.
4.10. Accounts Receivable. All accounts receivable reflected on the
-------------------
Financial Statements and all accounts receivable of the Business that have
arisen since the date of the Financial Statements derive from bona fide
---- ----
transactions in the ordinary course of the Business and are payable on ordinary
terms, less adequate reserves for doubtful accounts as reflected in the Books
and Records. No person has asserted or threatened to assert any counterclaims
or offsetting claims or defenses to collection of the Corporation's accounts
receivable. The Books and Records as of the date of this Agreement reflect an
accurate aging of all accounts receivable. The Corporation is not aware that
any of the accounts receivables as of the date of this Agreement are
uncollectible or are likely to be uncollectible in the ordinary course within 60
days after origination.
4.11. Intellectual Property. Schedule 4.11 of the Schedule of
---------------------
Exceptions contains a true and complete listing, as they relate to or are used
in the Business, of all: (i) trademark registrations and applications in the
United States, any state or any other jurisdiction; (ii) common law or
unregistered trademarks; (iii) tradenames, (iv) patents and patent applications;
(v) registered copyrights; and (vi) technical know-how, license or similar
agreements to which the Corporation with respect to the Business is party, or
from which the Business otherwise benefits (collectively, the "Intellectual
Property"). No proceedings are pending or, to the Corporation's best knowledge,
threatened, which challenge the validity of the Corporation's ownership or use
of the Intellectual Property. All licensing and similar agreements relating to
the Intellectual Property are listed on Schedule 4.11 of the Schedule of
Exceptions and are in full force and effect, and there is no default by the
Corporation or any other party to such agreements. The Corporation has not
received notice of conflict with the asserted rights of other Persons. To its
best knowledge, the Corporation is not infringing any patents, trademarks or
copyrights and is not misappropriating or violating trade secrets or other
proprietary rights of any other Persons. All executive officers of the
Corporation have executed an agreement containing an assignment of inventions
provision, a form of which has been provided to counsel for the Series D
Investors.
<PAGE>
4.12. Environmental Matters. The Corporation is in compliance with
---------------------
applicable Environmental Laws. To the Corporation's best knowledge, there is no
past or existing event, condition, circumstance or practice or procedure
involving or relating to Hazardous Materials or other environmental matters
which might interfere with or adversely affect the conduct of the Business as
now being conducted, or which would require disclosure, reporting, monitoring,
cleanup, remediation or other action on the part of the Corporation or at the
Corporation's expense, or which might result in the Corporation's being in
violation of or in noncompliance with Environmental Laws.
4.13. Employees. Employees of the Business are employed "at will",
---------
and, except as otherwise provided in this Agreement, the employment of each
employee may be terminated at any time, without obligation to pay severance or
other payments or benefits. None of the Corporation's employees are represented
by any labor union or other organization and, there have been no attempts by or
on behalf of the Corporation's employees to be represented by a labor union.
There are no controversies pending or, to the Corporation's best knowledge,
threatened between the Corporation and its employees or consultants, present or
former. The Corporation considers its relations with employees to be good.
Schedule 4.13 of the Schedule of Exceptions also contains a complete and correct
list, as of the date of this Agreement, of all bonus, deferred compensation,
severance, pension, profit-sharing, retirement, insurance, stock purchase, stock
option and other fringe benefit plans, written or otherwise, maintained or
sponsored by the Corporation or any of its Affiliates in which employees or
former employees of the Business are eligible to participate.
4.14. Undisclosed Liabilities. To the Corporation's best knowledge,
-----------------------
neither the Corporation nor the Business is liable for or subject to any
material Liabilities, except material Liabilities adequately and specifically
disclosed or reserved for in the Financial Statements or, if incurred subsequent
to the date of the Corporation's balance sheet included in the Financial
Statements, disclosed and adequately reserved for in the Books and Records.
4.15. Books of Accounts; Returns and Reports; Taxes. The Corporation
---------------------------------------------
has paid in full all taxes which were due and payable to date, and the Books and
Records reflect appropriate accruals and reserves for taxes in respect of
current periods which are not yet due and payable. The Corporation has duly and
timely filed all tax returns required to have been filed to date in all
applicable jurisdictions with respect to the Business or otherwise, except where
the failure to so file would not have a material adverse effect on the
Corporation. The Corporation has made all deposits required with respect to
withholding taxes for employees of the Business.
4.16. Transactions With Affiliates. The Corporation has no
----------------------------
outstanding contract, agreement or other arrangement with an Affiliate of the
Corporation with respect to the Business, and none of the Corporation's assets
is owned by or leased, licensed or otherwise used by the Corporation under grant
from any of such Affiliate. There are currently no outstanding shareholder
notes or obligations to related parties of the Corporation.
<PAGE>
4.17. Broker's or Finder's Fees. No broker, finder or other Person
-------------------------
acting in a similar capacity has acted directly or indirectly for the
Corporation in connection with this Agreement or the transactions contemplated
by this Agreement.
4.18. No Misleading Statements. The Corporation has provided or made
------------------------
available to the Series D Investors all of the information which the Series D
Investors have requested in connection with the execution of this Agreement and
the offer and sale of the Series D Shares and the Warrants. To the
Corporation's knowledge, none of this Agreement, the Shareholders' Agreement,
the Registration Rights Agreement or any certificate furnished to the Series D
Investors in connection herewith (when read together) contain any untrue
statement of material fact or omit to state any material fact necessary to make
the statements contained herein or therein not misleading in any material
respect.
5. REPRESENTATIONS AND WARRANTIES OF THE SERIES D INVESTORS. Each of
--------------------------------------------------------
the Series D Investors makes the following representations and warranties to the
Corporation, severally and not jointly, and each with respect only to itself or
himself:
5.1. Organization and Authority. Such Series D Investor, if not a
--------------------------
natural person, is duly organized, validly existing and in good standing under
the laws of its jurisdiction of formation. Such Series D Investor has full
power and authority to enter into this Agreement and to perform its or his
obligations under this Agreement. The signing, delivery and performance of this
Agreement, the Shareholders' Agreement and the Registration Rights Agreement by
such Series D Investor have been duly authorized by all necessary action on the
part of such Series D Investor, and no further action is required on the part of
such Series D Investor in order to authorize this Agreement, the Shareholders'
Agreement, the Registration Rights Agreement or the transactions contemplated
hereby or thereby. Each of this Agreement, the Shareholders' Agreement and the
Registration Rights Agreement constitute the legal, valid and binding obligation
of such Series D Investor, duly enforceable against such Series D Investor in
accordance with its terms.
5.2. No Conflict or Violation. Neither the execution and delivery of
------------------------
this Agreement, the Shareholders' Agreement or the Registration Rights Agreement
by such Series D Investor nor the performance by such Series D Investor of the
transactions contemplated hereby or thereby will result in: (i) a violation of
or conflict with the governing documents of such Series D Investor, if not a
natural person; (ii) a violation of any Laws or any Order to which such Series D
Investor is subject; or (iii) a breach or default under any mortgage, indenture,
deed of trust, real property or personal property lease, license, contract or
other agreement to which such Series D Investor is subject.
5.3. Consents and Approvals. The execution, delivery and performance
----------------------
by such Series D Investor of this Agreement, the Shareholders' Agreement and the
Registration Rights Agreement and the transactions contemplated hereby and
thereby do not require the consent, approval or authorization of, or any
declaration, filing,
<PAGE>
registration or notice with or to any governmental or regulatory or any other
Person other than such consents or approvals which have been obtained prior to
the date of this Agreement.
5.4. Purchase for Investment. (a) The Series D Investor has
-----------------------
substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Corporation such that the
Series D Investor is capable of evaluating the merits and risks of its
investment in the Corporation and has the capacity to protect its own interests.
The Series D Investor is an "accredited investor" as that term is defined in
Rule 501 promulgated under the Securities Act.
(b) The Series D Investor is acquiring the Series D Shares and, as
applicable, the Warrants for investment, for the Series D Investor's own
account, not as a nominee or agent, and not with the view to, or for resale in
connection with, any distribution thereof. The Series D Investor understands
that the Series D Shares, Common Stock issuable upon conversion thereof, the
Warrants and the Warrant Shares have not been, and will not be when issued,
registered under the Securities Act and are being issued pursuant to a specific
exemption from the registration provisions of the Securities Act, the
availability of which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of the representations as expressed
herein.
(c) The Series D Investor acknowledges that the Series D Shares, the
Common Stock issuable upon conversion thereof, the Warrants and the Warrant
Shares must be held indefinitely unless subsequently registered under the
Securities Act or unless an exemption from such registration is available. The
Series D Investor is aware of the provisions of Rule 144 promulgated under the
Securities Act which permit limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, which may include,
among other things, the existence of a public market for the shares, the
availability of certain current public information about the Corporation, the
resale occurring not less than one year after a party has purchased and paid for
the security to be sold, the sale being effected through a "broker's
transaction" or in transactions directly with a "market marker" and the number
of shares being sold during any three-month period not exceeding specified
limitations.
(d) The Series D Investor understands that no public market now exits,
and that a market may never exist, for any of the securities issued by the
Corporation.
5.5. Broker's or Finder's Fees. No broker, finder or other Persons
-------------------------
acting in a similar capacity has acted directly or indirectly for such Series D
Investor in connection with this Agreement and the transactions contemplated
hereby.
6. POST-CLOSING COVENANTS OF THE CORPORATION.
-----------------------------------------
6.1. Insurance. The Corporation shall keep in full force and effect,
---------
and shall pay all premiums on, a term life insurance policy on the life of
Joseph Beninati
<PAGE>
in the amount of $5,000,000 as to which the Corporation shall be the owner and
the beneficiary. The Corporation shall keep in full force and effect, and shall
pay all premiums on, a Directors and Officers liability insurance policy in the
amount of at least $1,000,000 as to which the Corporation shall be the owner and
the beneficiary. The Corporation shall increase such amount to at least
$5,000,000 prior to the Corporation's Initial Public Offering.
6.2. Financial Information. The Corporation shall furnish the
---------------------
following financial statements to the Series D Investors.
6.2.1. As soon as practicable and in any event within 120 days
after the end of each fiscal year of the Corporation, the balance sheet of the
Corporation as at the end of such fiscal year and the related statements of
income, retained earnings and changes in financial position for such fiscal
year, setting forth in each case in comparative form (for each year other than
the first fiscal year) corresponding figures from the preceding annual audit,
prepared in accordance with generally accepted accounting principles
consistently applied and certified by independent public accountants selected by
the Corporation and reasonably satisfactory to the Series D Investors; and
6.2.2. As soon as practicable and in any event within 45 days
after the end of each of the first three quarters in each fiscal year of the
Corporation, the balance sheet of the Corporation as at the end of such
quarterly period and the related statements of income, retained earnings and
changes in financial position for such quarterly period and for the elapsed
portion of the fiscal year ended with the last day of such quarterly period, and
in each case setting forth comparative figures for the related periods in the
prior fiscal year, all of which shall be prepared in accordance with generally
accepted accounting principles, consistently applied, subject to normal year-end
audit adjustments.
6.3. Right of First Offer.
--------------------
6.3.1. The Corporation hereby grants to each Series D Investor
the right of first offer to purchase such Series D Investor's pro rata share
("Pro Rata Share") of New Securities (as defined in Section 6.3.2) that the
Corporation may, from time to time, propose to sell and issue. Such Series D
Investor's Pro Rata Share, for purposes of this right of first offer, is the
ratio that the number of shares of Common Stock (assuming conversion of all
Preferred Stock and other securities convertible into Common Stock or Preferred
Stock including, without limitation, options or warrants to acquire Common Stock
or Preferred Stock) held by such Series D Investor bears to the total number of
shares of Common Stock outstanding immediately prior to the time of issuance of
such New Securities (assuming conversion into Common Stock of all outstanding
Preferred Stock and any other securities convertible into Common Stock or
Preferred Stock including, without limitation, options or warrants to acquire
Common Stock or Preferred Stock). This right of first offer shall be subject to
the following provisions of this Section 6.3:
<PAGE>
6.3.2. "New Securities" shall mean any Common Stock or any
Preferred Stock of the Corporation, whether or not now authorized, and any
rights, options, or warrants to purchase said Common Stock or Preferred Stock,
and securities of any type whatsoever that are, or may become, convertible into
or exchangeable for Common Stock or Preferred Stock; provided, however, that
"New Securities" does not include (i) securities issuable upon exercise of the
Warrants or upon conversion of or with respect to the outstanding Preferred
Stock or Warrant Shares or upon conversion of or with respect to any other
Preferred Stock issued after the date of this Agreement and to which the Series
D Investors have either exercised or affirmatively waived in writing their
rights of first offer as set forth in this Section 6.3; (ii) securities offered
to the public pursuant to a registration statement filed under the Securities
Act in connection with the Corporation's Initial Public Offering or relating to
any employee benefit plan on Form S-8 or any corporate reorganization on Form S-
4; (iii) securities issued in connection with the acquisition of another
unaffiliated corporation by the Corporation by merger, purchase of substantially
all of the assets, or other reorganization whereby the Corporation owns not less
than 50% of the voting power of the surviving corporation; (iv) shares of the
Corporation's Common Stock (or related options or warrants) issued to employees,
officers, directors, consultants, or other persons performing services for the
Corporation pursuant to any stock offering, plan, or arrangement approved by the
Board of Directors of the Corporation; (v) securities issued pursuant to or in
connection with any corporate partnership, joint venture or licensing
arrangement with a non-affiliate or in connection with an unaffiliated equipment
lease financing or bank debt into which the Corporation may enter; (vi) shares
of the Corporation's Common Stock or Preferred Stock issued in connection with
any stock split, stock dividend, or recapitalization by the Corporation; or
(vii) securities issued upon exercise or conversion of any New Securities.
6.3.3. (a) In the event that the Corporation proposes to issue
New Securities, it shall give each Series D Investor written notice (the "First
Notice") of its intention, describing the type of New Securities, the price, and
the general terms upon which the Corporation proposes to issue the same. Within
20 days after receipt of the First Notice, the Series D Investor shall give the
Corporation written notice (the "Investor Notice") of its intention to purchase
or obtain, at the price and on the terms specified in the Notice, a number of
shares equal to or less than its Pro Rata Share of the New Securities. The
Investor Notice shall be deemed a binding offer to purchase the number of New
Securities set forth therein. In addition, the Investor Notice shall state
whether the Series D Investor wishes to purchase more than its Pro Rata Share of
the New Securities. The Corporation shall promptly give written notice to each
Series D Investor that purchases its Pro Rata Share of the New Securities (a
"Fully-Exercising Investor") of the amount of New Securities, if any, that other
Series D Investors do not elect to purchase in response to the First Notice (the
"Second Notice"). Each Fully Exercising Series D Investor shall notify the
Corporation within 10 days of receipt of the Second Notice if it would like to
purchase any of the unsubscribed shares and indicate the maximum number of
unsubscribed shares it would like to purchase. The Corporation shall inform the
Fully-Exercising Investor of the total number of unsubscribed shares
<PAGE>
available and provide the Fully-Exercising Investor with an allocation of the
unsubscribed shares based on the number of shares of Common Stock (assuming
conversion of all Preferred Stock into Common Stock) held by each Fully
Exercising Investor.
(b) To the extent that the Investors fail to exercise in
full the right of first offer as provided in Section 6.3.3(a) hereof, the
Corporation shall have 90 days thereafter to sell (or enter into an agreement
pursuant to which the sale of New Securities covered thereby shall be closed, if
at all, within 90 days after execution of such agreement) the New Securities to
which the Series D Investors' rights were not exercised, at a price and upon
general terms no more favorable to the purchasers thereof than specified in the
First Notice. In the event the Corporation has not sold the New Securities
within said 90-day period (or sold and issued New Securities in accordance with
the foregoing within 90 days from the date of said agreement), the Corporation
shall not thereafter issue or sell any New Securities, without first offering
such securities to the Series D Investors in the manner provided above.
(c) A Series D Investor's failure to exercise this right
of first offer on any issuance of New Securities shall not adversely affect the
Investor's right of first offer to purchase subsequent issuances of New
Securities.
6.3.4. The right of first offer granted under this Section 6.3
is nonassignable except to an Affiliate of the Series D Investor.
6.4. Termination of Covenants. The covenants set forth in Sections
------------------------
6.2 and 6.3 shall terminate and be of no further force or effect as to each of
the Series D Investors upon the earlier to occur of: (i) the time at which such
Series D Investor owns less than 50% of the Series D Shares and, if applicable,
Warrant Shares, purchased by and issued to such Series D Investor pursuant to
this Agreement or upon exercise of the Warrants, and (ii) the closing of a
firmly underwritten public offering pursuant to an effective registration
statement under the Securities Act, covering the offer and sale of Common Stock
for the account of the Corporation in which the price per share (as adjusted for
combinations, stock dividends, subdivisions or split-ups) is at least $7.00 and
the net cash proceeds to the Corporation (after payment of underwriting
discounts, commissions and fees) are at least $30,000,000 (the "Initial Public
Offering").
6.5. Participation in an Initial Public Offering. In the event of an
-------------------------------------------
Initial Public Offering, VantagePoint (or an "Affiliate" thereof as defined in
Rule 501 promulgated under the Securities Act) shall have the right to purchase
in such offering in the aggregate up to a number of shares of Common Stock equal
to $5,000,000 divided by the price per share of the Corporation's Common Stock
at the Initial Public Offering. Such shares allocated to VantagePoint shall not
be subject to any underwriting discounts, commission or fees. Notwithstanding
the foregoing, the allocation of the shares to VantagePoint under this Section
6.5, shall in all cases be subject to compliance with all applicable rules and
regulations of, and, if necessary, approval by, the Securities and
<PAGE>
Exchange Commission and National Association of Securities Dealers and any other
law, rule or regulation applicable to the Corporation at such time.
6.6. Committees of the Board of Directors. The Board of Directors of
------------------------------------
the Corporation shall establish audit and compensation committees and shall
delegate to such committees those duties and powers as are customarily performed
by committees of such type and the director elected by the holders of the Series
D Shares shall be elected or designated chairperson of the compensation
committee.
6.7. Assignment of Inventions. The Corporation shall use its best
------------------------
efforts to obtain from each employee of the Corporation hired after the date
hereof an agreement executed by such employee containing provisions regarding
assignment of inventions in form and substance similar to the provisions
contained in the agreements signed by current employees of the Corporation.
7. CLOSING DELIVERIES
------------------
7.1. Closing. The closing of the transactions contemplated by this
-------
Agreement (the "Closing") shall take place concurrently with the signing and
delivery of this Agreement.
7.2. The Corporation's Closing Deliveries. The Series D Investor's
------------------------------------
obligations to purchase the Series D Shares and VantagePoint's obligation to
purchase the Warrants at the Closing are subject to the fulfillment by the
Corporation or waiver by the affected Series D Investor of the following
conditions:
7.2.1. The representations and warranties made by the
Corporation in Section 4 hereof shall be true and correct as of the Closing.
7.2.2. All covenants, agreements and conditions contained in
this Agreement to be performed by the Corporation on or prior to the Closing
shall have been performed or complied with unless waived in writing by the
Series D Investor.
7.2.3. The Corporation shall have obtained all necessary state
securities law permits and qualifications, or have the availability of
exemptions therefrom, required by any state for the offer and sale of Series D
Shares and the Common Stock issuable upon conversion of the Series D Shares, the
Warrants and the Warrant Shares.
7.2.4. The Second Amended and Restated Certificate of
Incorporation of the Corporation shall have been filed with the Secretary of
State of the State of Delaware.
7.2.5 The Corporation shall deliver a certificate executed by
the Chief Executive Officer of the Corporation, dated as of the Closing,
certifying that the
<PAGE>
conditions specified in Sections 7.2.1, 7.2.2 and 7.2.4 of this Agreement have
been fulfilled.
7.2.6. The Corporation shall deliver a certificate dated as of
the date of the Closing, of the secretary of the Corporation certifying as to
(i) the certificate of incorporation and bylaws of the Corporation; and (ii)
resolutions of the Board of Directors and the shareholders of the Corporation
authorizing the execution, delivery and performance of this Agreement, all
documents contemplated by this Agreement and the transactions contemplated by
this Agreement.
7.2.7. The Corporation shall deliver certificates of "good
standing" of the Corporation from the Secretaries of State of the States of
Delaware, Connecticut, New York, New Jersey and the Commonwealth of
Massachusetts.
7.2.8. The Corporation shall deliver stock certificates issued
to the Series D Investors for the number of Series D Shares set forth on The
Schedule of Investors.
7.2.9. The Corporation shall deliver the Warrants issued to
VantagePoint as set forth on the Schedule of Investors.
7.2.10. The Corporation shall deliver the Shareholders'
Agreement signed on behalf of the Corporation and by or on behalf of the holders
of the Series A Shares, Series B Shares and Series C Shares.
7.2.11. The Corporation shall deliver the Registration Rights
Agreement signed on behalf of the Corporation.
7.2.12. The Corporation shall deliver an opinion of Testa,
Hurwitz & Thibeault, LLP, counsel to the Corporation in the form attached hereto
as Exhibit D.
---------
7.3. Closing Deliveries of the Series D Investors. The Corporation's
--------------------------------------------
obligations to sell and issue the Series D Shares and the Warrants at the
Closing are subject to the fulfillment by the Series D Investors or waiver by
Corporation of the following conditions:
7.3.1. The Series D Investors shall deliver to the Corporation
the sum set forth opposite its or his name in the Schedule of Investors, by wire
transfer, representing the purchase price of the Series D Shares to be issued
pursuant to this Agreement.
7.3.2. VantagePoint shall deliver to the Corporation the sum
set forth in Section 3.2, by wire transfer, representing the purchase price of
the Warrants to be issued pursuant to this Agreement.
7.3.3. Each Series D Investors shall deliver to the Corporation
the Shareholders' Agreement signed by such Series D Investor.
<PAGE>
7.3.4. Each Series D Investor shall deliver to the Corporation
the Registration Rights Agreement signed by such Series D Investor.
8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All covenants,
-----------------------------------------------------
representations and warranties in this Agreement or in any documents delivered
pursuant to this Agreement shall survive the Closing for a period of two (2)
years after the Closing.
9. INDEMNIFICATION.
---------------
9.1. Indemnification by the Corporation to the Series D Investors.
------------------------------------------------------------
The Corporation shall indemnify, defend and hold each of the Series D Investors,
the Affiliates of each Series D Investor, and their respective shareholders,
officers, directors, employees, assignees and successors, harmless against, and
shall reimburse each of the indemnified Persons on demand on account of, any
Losses which may be asserted against, imposed on or incurred by any of them as a
result of or arising out of or in any manner relating or attributable to any
inaccuracy in or breach of the representations, warranties or covenants on the
part of the Corporation in this Agreement or in any document delivered by the
Corporation pursuant to this Agreement.
9.2. Indemnification by the Series D Investors to the Corporation.
------------------------------------------------------------
Each Series D Investor, severally and not jointly, shall indemnify, defend and
hold the Corporation and the Corporation's officers, directors, employees,
assignees and successors harmless against, and shall reimburse such indemnified
Persons on demand on account of, any Losses which may be asserted against,
imposed on or incurred by any of them as a result of or arising out of or in any
manner relating or attributable to any inaccuracy in or breach of such Series D
Investor's representations or warranties in this Agreement or in any document
delivered by such Series D Investor pursuant to this Agreement; provided
however, such obligation shall not exceed the amount the purchase price paid by
such Series D Investor for the Series D Shares as set forth on the Schedule of
Investors and, as applicable, for the Warrants.
10. MISCELLANEOUS.
-------------
10.1. Notices. Notices given pursuant to this Agreement must be in
-------
writing. They shall be deemed to have been duly given: (i) upon delivery or
refusal to accept delivery, if hand-delivered; (ii) when transmitted, if sent by
fax with confirmed receipt, followed by a "hard" copy delivered by any other
method specified in this Section 10.1; or (iii) one (1) business day after being
deposited for next-day delivery with Federal Express or other national overnight
courier service. In each case, notice shall be addressed to the parties as
follows:
<PAGE>
If to the Corporation:
---------------------
Greenwich Technology Partners, Inc.
43 Gate House Road
Stamford, Connecticut 06902
Attention: Dennis M. Goett
Fax: (203) 316-9254
If to the Series D Investors:
----------------------------
To the address of such Series D Investor as set forth
on the Schedule of Investors
or to such other place and with such other concurrent copies as the parties may
subsequently designate by written notice.
10.2. Amendment; Waiver. None of the provisions of this Agreement
-----------------
may be changed, modified, waived or canceled orally or otherwise except in
writing, signed by the Corporation and persons holding at least a majority of
the aggregate of (a) the then outstanding Series D Shares (assuming conversion
to Common Stock at the conversion rate then in effect) and (b) the then
outstanding shares of Common Stock into which the Series D Shares have been
converted, other than shares of Common Stock which have been sold to the public.
10.3. Binding Effect; Assignment. This Agreement is binding on the
--------------------------
Corporation, the Series D Investors and their respective successors in interest.
No party may assign his or its rights and obligations under this Agreement with
the prior written consent of the other parties. There are no third-party
beneficiaries of this Agreement, and any intention to afford any right or
benefit under this Agreement to any third party is specifically disclaimed.
10.4. Entire Agreement. This Agreement, including the exhibits
----------------
attached hereto, the Shareholders' Agreement and the Registration Rights
Agreement embody the entire understanding among the parties with respect to the
subject matter of this Agreement. There are no binding agreements or
understandings among the parties with respect to the transactions contemplated
by this Agreement other than as expressly set forth in this Agreement, the
Shareholders' Agreement or the Registration Rights Agreement.
10.5. Interpretation; Construction.
----------------------------
10.5.1. The terms of this Agreement have been fully negotiated
by the parties in consultation with counsel, and the wording of this Agreement
has been arrived at by all of them as a result of their joint discussions.
Accordingly, no provision of this Agreement shall be construed against a
particular party or in favor of another party
<PAGE>
merely because of which party (or its representatives) drafted or supplied the
wording for such provision.
10.5.2. Except where otherwise noted in context, all references
to "Sections", "Exhibits" or "Schedules" shall be deemed to refer to the
sections or subsections, as appropriate, exhibits or schedules of this
Agreement.
10.5.3. Section headings appearing in this Agreement are
inserted solely as reference aids for the ease and convenience of the reader;
they shall not be deemed to modify, limit or define the scope or substance of
the provisions they introduce, nor shall they be used in construing the intent
or effect of such provisions.
10.5.4. Where the context requires: (i) use of the singular or
plural incorporates the other, and (ii) pronouns and modifiers in the masculine,
feminine or neuter gender shall be deemed to refer to or include the other
genders.
10.5.5. As used in this Agreement, the terms "include(s)" and
"including" mean "including but not limited to"; that is each case the example
or enumeration which follows the use of either term is illustrative but no
exclusive or exhaustive.
10.6. Expenses. The Corporation shall pay at the Closing (or
--------
reimburse such Series D Investor for, as the case may be) the reasonable out-of-
pocket fees and disbursements of such Series D Investor incurred in connection
with the negotiation and consummation of the transactions contemplated hereby,
including attorney fees incurred by a single counsel on behalf of the Series D
Investors, in an amount not expected to exceed $25,000.
10.7. Prevailing Party. In any Proceeding to enforce any provision
----------------
of this Agreement, the substantially prevailing party shall be entitled to
recover reasonable attorneys' fees and out-of-pocket expenses from the other
party, as determined by a court having jurisdiction.
10.8. Multiple Counterparts. This Agreement may be signed in one or
---------------------
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when each of the parties has signed and delivered a
counterpart to the other.
10.9. Further Assurances. The parties agree, upon request and for no
------------------
additional consideration, to sign, acknowledge and deliver any documents and to
do anything else which the other may reasonably request in order to carry out
more completely the purpose and intent of this Agreement consistent with its
terms.
10.10. Governing Law. This Agreement shall be governed by and
-------------
interpreted according to the Laws of Delaware, but without giving effect to any
Delaware choice of law provisions which might otherwise make the Laws of a
different jurisdiction govern or apply.
<PAGE>
[Remainder of Page Intentionally Left Blank]
<PAGE>
IN WITNESS WHEREOF, the Corporation and the Series D Investors have
executed this Agreement as of the day and year first above written.
Greenwich Technology Partners, Inc.
By:_____________________________________
Name:
Title:
VantagePoint Communications
Partners, LP
By: VantagePoint Communications Associates, LLC
Its General Partner
By:_____________________________________
Name:
Title:
VantagePoint Venture Partners 1996, LP
By: VantagePoint Associates, LLC
Its General Partner
By:_____________________________________
Name:
Title:
By:_____________________________________
Name: Dennis M. Goett
FG - GTPD
By:_____________________________________
Name:
Title:
By:_____________________________________
Name: Carlos Dominquez
By:_____________________________________
Name: Greg Berger
<PAGE>
By:_____________________________________
Name: John Miller
By:_____________________________________
Name: Deborah Farrington
<PAGE>
EXHIBIT A
---------
Schedule of Investors
---------------------
<TABLE>
<CAPTION>
Aggregate Purchase
Name and Address Number of Series D Price for Series D
of Series D Investor Shares to be Purchased Shares
-------------------- ---------------------- ------
<S> <C> <C>
VantagePoint 2,849,002 $3,333,332.34
Communications
Partners, LP
VantagePoint Venture 1,424,502 $1,666,667.34
Partners 1996, LP
Dennis M. Goett 85,470 $ 99,999.90
FG - GTPD 747,863 $ 874,999.71
Carlos Dominquez 42,735 $ 49,999.95
Greg Berger 21,368 $ 25,000.56
John Miller 34,188 $ 39,999.96
Deborah Farrington 8,547 $ 9,999.99
TOTAL: 5,213,675 $6,099,999.75
</TABLE>
Warrant Schedule
----------------
<TABLE>
<CAPTION>
Number of Warrants to be Aggregate Purchase Price
Name of Warrantholder Purchased for Warrants
--------------------- --------- ------------
<S> <C> <C>
VantagePoint Communications 2,849,002 $666.60
Partners, LP
VantagePoint Venture 1,424,502 $333.40
Partners 1996, LP
</TABLE>
<PAGE>
EXHIBIT 10.11
INVESTMENT AGREEMENT
--------------------
(Series E Preferred Stock)
THIS IS AN INVESTMENT AGREEMENT (this "Agreement") made and dated as of
September 10, 1999 by and:
among: GREENWICH TECHNOLOGY PARTNERS, INC., a Delaware corporation (the
- -----
"Corporation");
and: those parties identified on the "Schedule of Investors" attached to
- ---
this Agreement as Exhibit A under the heading "Investor" (each an
---------
"Initial Investor"), and the parties executing a counterpart signature
page hereto as an additional investor (each an "Additional Investor"
and collectively, the "Series E Investors").
The Corporation and the Series E Investors agree as follows:
1. DEFINITIONS. As used in this Agreement, each of the following terms is
-----------
used as follows:
"Affiliate": With respect to any particular Person, any other Person
directly or indirectly, controlling, controlled by or under common control with
such Person.
"Books and Records": The books and records of the Corporation.
"Business": The computer networking and related consulting business
conducted by the Corporation.
"Common Stock": As defined in Section 4.2.
"Environmental Laws": All Laws governing the use, storage, shipment,
handling, disposal, discharge, release, cleanup, reporting, labeling, warning,
workplace disclosure or monitoring of Hazardous Materials, or otherwise relating
to environmental pollution or environmental protection, including, as may be
applicable to environmental matters, the common law respecting nuisance,
trespass, tortious liability and strict liability.
"Financial Statements": The Corporation's (i) audited balance sheet
for the period ending December 31, 1998 and the related statements of income,
retained earnings and changes in financial position for such fiscal period and
(ii) unaudited balance sheet for the period ending June 30, 1999 and the related
statements of income, retained earnings and changes in financial position for
such fiscal period.
"Hazardous Materials": All substances, in whatever form or
concentration, which are classified as hazardous, toxic or dangerous or as
pollutants or
<PAGE>
-2-
contaminants under any Environmental Laws. "Hazardous Materials" specifically
include gasoline, oil and other petroleum products, their fractions and their
constituent and residual compounds and by-products, and radon, asbestos, lead-
based paint, ureaformaldehyde and PCB's. Where under applicable Environmental
Laws a jurisdiction exercises the authority to establish stricter requirements
regarding Hazardous Materials or to define Hazardous Materials more inclusively,
the stricter requirements and more inclusive definitions shall apply with
respect to the operations of the Business which are located or conducted within
such jurisdictions or which are otherwise subject to its authority.
"Laws": All material laws, statutes, ordinances, rules, regulations
and other requirements having the force of law promulgated by any governmental
authority, commission, agency or body which are applicable to the Corporation or
the Business, in each case whether local, state, or federal.
"Liabilities": All liabilities or obligations of the Corporation of
any kind or description, whether accrued, absolute, contingent or otherwise.
"Liens": All liens, security interests, pledges, mortgages,
encumbrances, claims, charges, agreements and rights of others of any nature
whatsoever.
"Losses": Any loss, claim, liability, penalty, damage, cost or
expense, whether direct or indirect, special or consequential, including
reasonable attorney's fees.
"Order": Any order, writ, decree, ruling, award, injunction or other
directive or requirement having the force of law issued by any court, tribunal,
administrative agency, other governmental authority, or arbitrator, in each case
whether local, state or federal which is applicable to the Corporation.
"Person": Any natural person, corporation, partnership (general,
limited or otherwise), limited liability company, trust, association, joint
venture, governmental body or agency or other entity having legal status of any
kind.
"Preferred Shareholders": As defined in Section 2.2.
"Preferred Shares": All outstanding Series A Shares, Series B Shares,
Series C Shares, Series D Shares and Series E Shares.
"Proceeding": Any litigation, lawsuit, arbitration, mediation,
grievance, hearing, investigation or other legal, administrative, governmental
or private party proceeding or enforcement action.
"Registration Rights Agreement": As defined in Section 2.3.
"Series A Shares": Shares of Series A Preferred Stock, $.01 par value
per share, having the rights, preferences, privileges, restrictions and other
matters set forth in the Third Amended and Restated Certificate of Incorporation
of the Corporation.
<PAGE>
-3-
"Series B Shares": Shares of Series B Preferred Stock, $.01 par value
per share, having the rights, preferences, privileges, restrictions and other
matters set forth in the Third Amended and Restated Certificate of Incorporation
of the Corporation.
"Series C Shares": Shares of Series C Preferred Stock, $.01 par value
per share, having the rights, preferences, privileges, restrictions and other
matters set forth in the Third Amended and Restated Certificate of Incorporation
of the Corporation.
"Series D Shares": Shares of Series D Preferred Stock, $.01 par value
per share, having the rights, preferences, privileges, restrictions and other
matters set forth in the Third Amended and Restated Certificate of Incorporation
of the Corporation.
"Series D Warrants": Warrants to purchase Series D Shares.
"Series E Shares": Shares of Series E Preferred Stock, $.01 par value
per share, having the rights, preferences, privileges, restrictions and other
matters set forth in the Third Amended and Restated Certificate of Incorporation
of the Corporation.
"Shareholders' Agreement": As defined in Section 2.2.
2. PURPOSE AND BACKGROUND.
----------------------
2.1. Sale of Series E Shares. The Corporation desires to sell to the
-----------------------
Series E Investors an aggregate of not more than 11,848,342 Series E Shares, and
the Series E Investors desire to purchase such Series E Shares from the
Corporation in the amounts and for the aggregate purchase prices as set forth on
the Schedule of Investors attached hereto as Exhibit A, all on the terms and
---------
conditions set forth in this Agreement.
2.2 The Closing.
-----------
(a) The initial closing ("Initial Closing") of the sale and purchase
of up to 7,582,940 of the Series E Shares under this Agreement shall take place
at the offices of Testa, Hurwitz & Thibeault, LLP, 125 High Street, Boston,
Massachusetts, at 1:00 p.m. on the date as is mutually agreeable to the Initial
Investors and the Corporation.
(b) An additional closing (the "Additional Closing") of the sale and
purchase of up to an additional 4,265,402 of the Series E Shares under this
Agreement shall take place at the offices of Testa, Hurwitz & Thibeault, LLP,
125 High Street, Boston, Massachusetts, at 1:00 p.m. on the date as is mutually
agreeable to the Additional Investors and the Corporation.
(c) The Initial Closing and the Additional Closing are each referred
to herein as a "Closing."
<PAGE>
-4-
(d) The representations of the Corporation in Section 4 hereof and
the representations of the Series E Investors in Section 5 hereof shall speak as
of the date of the Closing in which such Series E Investor is purchasing Series
E Shares.
2.3. Shareholders' Agreement. At the Initial Closing, the Corporation
-----------------------
the participating Series E Investors and the holders of the Corporation's Series
A Shares, Series B Shares, Series C Shares and Series D Shares (such holders of
Series A Shares, Series B Shares, Series C Shares, Series D Shares and Series E
Shares, collectively, after giving effect to the transactions contemplated by
this Agreement, the "Preferred Shareholders") shall enter into an Amended and
Restated Shareholders' Agreement (the "Shareholders' Agreement") setting forth,
among other matters, certain restrictions on disposition of, and options to
purchase or sell, the Preferred Shareholders' respective shares of the
Corporation's Preferred Stock.
2.4. Registration Rights Agreement. At the Initial Closing, the
-----------------------------
Corporation, the holders of Series D Shares and the participating Series E
Investors shall enter into an Amended and Restated Registration Rights Agreement
(the "Registration Rights Agreement") setting forth, among other matters,
certain obligations of the Corporation to register the Series D Shares and
Series E Shares pursuant to the Securities Act of 1933, as amended (the
"Securities Act").
2.5 Counterpart Signature Pages. At the Additional Closing, the
---------------------------
Additional Investors shall execute a counterpart signature page to this
Agreement, the Shareholders' Agreement and the Registration Rights Agreement.
3. PURCHASE AND SALE; USE OF PROCEEDS. Subject to the terms and
----------------------------------
conditions contained in this Agreement:
3.1. Purchase of Series E Shares. At each Closing the Corporation
---------------------------
shall sell and issue to the Series E Investors participating in such Closing,
and each of the Series E Investors participating in such Closing shall purchase
from the Corporation, the number of Series E Shares set forth opposite his, her
or its name on Schedule of Investors attached hereto as Exhibit A, free and
---------
clear of all Liens, for the respective purchase prices set forth opposite such
name on such Schedule of Investors, and which applicable purchase prices will be
paid by each Series E Investor on the date of the applicable Closing.
3.2. Use of Proceeds. The Corporation shall use the proceeds from
---------------
the sale of the Series E Shares for working capital and general corporate
purposes, including the payment of placement agent fees and the payment of legal
fees and expenses of the Series E Investors as provided in section 10.6, for the
expansion of the Corporation's business, for capital expenditures, for potential
acquisitions and for the repayment of debt.
4. THE CORPORATION'S REPRESENTATIONS AND WARRANTIES. Except as set forth
------------------------------------------------
in the Schedule of Exceptions attached hereto as
<PAGE>
-5-
Exhibit B, the Corporation makes the following representations and warranties to
- ---------
the Series E Investors:
4.1. Organization and Authority. The Corporation is a corporation
--------------------------
duly organized, validly existing and in good standing under the Laws of the
State of Delaware. The Corporation has full corporate power and authority to
own its assets and to carry on the Business as presently conducted. The
Corporation is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction where the failure to so qualify would have a
material adverse effect on the Corporation's business, properties or financial
condition. The Corporation has no subsidiaries and owns no capital stock or
other equity interests in any Person. The execution, delivery and performance
of this Agreement, the Shareholders' Agreement and the Registration Rights
Agreement have been duly authorized by the Corporation's Board of Directors and
shareholders, and no further corporate or other action is required on the part
of the Corporation in order to authorize this Agreement, the Shareholders'
Agreement or the Registration Rights Agreement or the transactions contemplated
hereby or thereby, including, without limitation, the issuance of the Series E
Shares to the Series E Investors, as set forth on the Schedule of Investors and
the issuance of the shares of Common Stock upon conversion of the Series E
Shares. Each of this Agreement, the Shareholders' Agreement and the
Registration Rights Agreement is the legal, valid and binding obligation of the
Corporation, duly enforceable against the Corporation in accordance with its
terms.
4.2. Capitalization. The Corporation's authorized capital stock
--------------
consists solely of 90,000,000 shares, 54,824,782 of which have been designated
common stock, par value $.01 per share (the "Common Stock"), of which 200,550
shares are issued and outstanding, and 35,175,218 of which have been designated
preferred stock, par value $.01 per share (the "Preferred Stock"). 4,100,000 of
the authorized shares of Preferred Stock are designated as "Series A Preferred
Stock", all of which are issued and outstanding, 5,533,031 of the authorized
shares of Preferred Stock are designated as "Series B Preferred Stock", all of
which are issued and outstanding, 4,206,666 of the authorized shares of
Preferred Stock are designated as "Series C Preferred Stock", all of which are
issued and outstanding, 9,487,179 of the authorized shares of Preferred Stock
are designated as "Series D Preferred Stock", 5,213,675 of which are issued and
outstanding, and 11,848,342 of the authorized shares of Preferred Stock are
designated as "Series E Preferred Stock", none of which are issued and
outstanding prior to the date of the initial Closing. As of the date hereof,
4,500,000 of the Corporation's authorized but unissued shares of Common Stock
have been reserved for issuance under the Corporation's 1997 Option Plan (the
"1997 Plan"), of which options to purchase 3,771,405 shares of Common Stock are
currently outstanding. A total of 35,175,218 of the Corporation's authorized
but unissued shares of Common Stock have been reserved for issuance upon
conversion of the authorized Series A Shares, Series B Shares, Series C Shares,
Series D Shares, and Series E Shares whether or not currently issued and
outstanding. A total of 4,273,504 of the Corporation's authorized but unissued
Series D Shares have been reserved for issuance upon exercise of the Series D
Warrants. Except
<PAGE>
-6-
as provided above, the Corporation has no other shares of capital stock reserved
for issuance, and no outstanding options or warrants related to its shares of
capital stock or any outstanding securities or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire
from the Corporation, any shares of capital stock. There are no preemptive or
other subscription rights with respect to any shares of capital stock. All of
the shares of capital stock which are issued and outstanding have been duly
authorized and validly issued and are fully paid and are nonassessable. The
Series E Shares to be issued to the Series E Investors pursuant to this
Agreement have been duly authorized and when issued in accordance with this
Agreement will be validly issued, fully paid and nonassessable. All securities
issued by the Corporation prior to the date of this Agreement have been issued
in compliance with all applicable securities laws or pursuant to a valid
exemption therefrom.
4.3. No Conflict or Violation. Neither the execution of this
------------------------
Agreement, the Shareholders' Agreement or the Registration Rights Agreement by
the Corporation nor the performance by the Corporation of the transactions
contemplated by this Agreement, the Shareholders' Agreement or the Registration
Rights Agreement, will result in: (i) a violation of or conflict with the
Corporation's Third Amended and Restated Certificate of Incorporation or bylaws;
(ii) a violation of any Laws or any Order to which the Corporation is subject;
(iii) the imposition of any material Lien against the Corporation's assets; or
(iv) a material breach or default under any mortgage, indenture, deed of trust,
real property or personal property lease, license, material contract, or other
agreement.
4.4. Financial Statements. The Financial Statements were prepared in
--------------------
accordance with United States generally accepted accounting principles ("GAAP"),
applied on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto). The Financial Statements present fairly in all
material respects the financial condition and results of operations of the
Corporation of and for the periods covered by the Financial Statements, subject
only to ordinary course adjustments for normal, recurring accruals resulting
from the year-end audit in the case of the June 30, 1999 financial statements.
4.5. Absence of Certain Changes or Events. Since June 30, 1999, the
------------------------------------
Corporation has operated only in the ordinary course and there has been no: (i)
material adverse change in the business, financial condition or results of
operations of the Corporation, (ii) damage, destruction or loss (whether or not
covered by insurance) involving any of the Corporation's assets; (iii) sale or
lease or other disposition of any of the Corporation's assets, except for
dispositions in the ordinary course; (iv) declaration or payment of any dividend
or distribution on any shares of its capital stock or other equity interests;
(v) repurchase or other acquisition of any shares of its capital stock or other
equity interests or any outstanding securities convertible into shares of
capital stock or of any option, warrant, right, call or commitment relating to
shares of capital stock or other equity interests or any outstanding securities
convertible into shares of capital stock, or, any grant to any Person of any
right to subscribe for or acquire from it, any shares of capital stock or other
equity interests; (vi) the granting or creation by the Corporation of
<PAGE>
-7-
any material Lien affecting any of the Corporation's assets; or (vii) to the
Corporation's best knowledge, any transaction by the Corporation outside the
ordinary course of business.
4.6. Consents and Approvals. Other than consents obtained prior to
----------------------
the Closing and except for the applicable requirements of the Securities Act and
state securities laws, the execution, delivery and performance by the
Corporation of this Agreement, the Shareholders' Agreement or the Registration
Rights Agreement and the transactions contemplated hereby or thereby, do not
require the consent, approval or authorization of, or any declaration, filing,
registration or notice with or to any governmental or regulatory authority, or
any other Person, except where the failure to obtain such consent would not have
a material adverse effect on the Corporation.
4.7. Material Agreements. Schedule 4.7 of the Schedule of Exceptions
-------------------
contains a complete and correct list, as of the date of this Agreement, of all
material agreements, contracts, commitments, undertakings and other obligations,
whether written or oral, involving the Corporation or otherwise relating to the
Business, which shall include but are not limited to agreements which entail a
commitment of $50,000 or more. True and complete copies of all written
agreements, contracts and commitments listed in Schedule 4.7 of the Schedule of
Exceptions, including all amendments, have been made available to the Series E
Investors. Each such agreement, contract or commitment is a valid and binding
agreement of the Corporation and is in full force and effect, and neither the
Corporation, nor, to the knowledge of the Corporation, any other party thereto
is in default under the terms of any such agreement, contract or commitment.
4.8. Absence of Litigation. There is no material Proceeding which is
---------------------
either pending or, to the Corporation's best knowledge, threatened against the
Corporation or otherwise involving its assets or the Business, and there are no
outstanding Orders against the Corporation or with respect to the Business or
the Corporation's assets.
4.9. Compliance with Laws. The Corporation is in compliance in all
--------------------
material respects, with the Laws applicable to the Corporation, except where the
failure to do so would not have a material adverse effect on the Corporation.
The Corporation has complied in all material respects with the Laws applicable
to the Corporation, except where the failure to do so did not have a material
adverse effect on the Corporation. The Corporation has not received notice of
violation or alleged violation of any Laws relating to the conduct of the
Business which has not been rectified or which remains outstanding.
4.10. Accounts Receivable. All accounts receivable reflected on the
-------------------
Financial Statements and all accounts receivable of the Business that have
arisen since the date of the Financial Statements derive from bona fide
---- ----
transactions in the ordinary course of the Business and are payable on ordinary
terms, less adequate reserves for doubtful accounts as reflected in the Books
and Records. No person has asserted or threatened to assert any counterclaims
or offsetting claims or defenses to collection of the
<PAGE>
-8-
Corporation's accounts receivable. The Books and Records as of the date of this
Agreement reflect an accurate aging of all accounts receivable. The Corporation
is not aware that any of the accounts receivables as of the date of this
Agreement are uncollectible or are likely to be uncollectible in the ordinary
course within 90 days after origination.
4.11. Intellectual Property. Schedule 4.11 of the Schedule of
---------------------
Exceptions contains a true and complete listing, as they relate to or are used
in the Business, of all: (i) trademark registrations and applications in the
United States, any state or any other jurisdiction; (ii) common law or
unregistered trademarks; (iii) tradenames, (iv) patents and patent applications;
and (v) registered copyrights (collectively, the "Intellectual Property"). No
proceedings are pending or, to the Corporation's best knowledge, threatened,
which challenge the validity of the Corporation's ownership or use of the
Intellectual Property. All licensing and similar agreements relating to the
Intellectual Property are listed on Schedule 4.11 of the Schedule of Exceptions
and are in full force and effect, and there is no default by the Corporation or
any other party to such agreements. The Corporation has not received notice of
conflict with the asserted rights of other Persons. To its best knowledge, the
Corporation is not infringing any patents, trademarks or copyrights and is not
misappropriating or violating trade secrets or other proprietary rights of any
other Persons. All executive officers of the Corporation have executed an
agreement containing an assignment of inventions provision, a form of which has
been provided to counsel for the Series E Investors.
4.12. Environmental Matters. The Corporation is in compliance with
---------------------
applicable Environmental Laws. To the Corporation's best knowledge, there is no
past or existing event, condition, circumstance or practice or procedure
involving or relating to Hazardous Materials or other environmental matters
which might interfere with or adversely affect the conduct of the Business as
now being conducted, or which would require disclosure, reporting, monitoring,
cleanup, remediation or other action on the part of the Corporation or at the
Corporation's expense, or which might result in the Corporation's being in
violation of or in noncompliance with Environmental Laws.
4.13. Employees. Employees of the Business are employed "at will",
---------
and, except as otherwise provided in this Agreement, the employment of each
employee may be terminated at any time, without obligation to pay severance or
other payments or benefits. None of the Corporation's employees are represented
by any labor union or other organization and, there have been no attempts by or
on behalf of the Corporation's employees to be represented by a labor union.
There are no controversies pending or, to the Corporation's best knowledge,
threatened between the Corporation and its employees or consultants, present or
former. The Corporation considers its relations with employees to be good.
Schedule 4.13 of the Schedule of Exceptions also contains a complete and correct
list, as of the date of this Agreement, of all bonus, deferred compensation,
severance, pension, profit-sharing, retirement, insurance, stock purchase, stock
option and other fringe benefit plans, written or otherwise, maintained or
sponsored by the
<PAGE>
-9-
Corporation in which employees or former employees of the Business are eligible
to participate.
4.14. Undisclosed Liabilities. To the Corporation's best knowledge,
-----------------------
neither the Corporation nor the Business is liable for or subject to any
material Liabilities, except material Liabilities adequately and specifically
disclosed or reserved for in the Financial Statements or, if incurred subsequent
to the date of the Corporation's balance sheet included in the Financial
Statements, disclosed and adequately reserved for in the Books and Records.
4.15. Books of Accounts; Returns and Reports; Taxes. The Corporation
---------------------------------------------
has paid in full all taxes which were due and payable to date, and the Books and
Records reflect appropriate accruals and reserves for taxes in respect of
current periods which are not yet due and payable. The Corporation has duly and
timely filed all tax returns required to have been filed to date in all
applicable jurisdictions with respect to the Business or otherwise, except where
the failure to so file would not have a material adverse effect on the
Corporation. The Corporation has made all deposits required with respect to
withholding taxes for employees of the Business.
4.16. Transactions With Affiliates. The Corporation has no
----------------------------
outstanding contract, agreement or other arrangement with an Affiliate of the
Corporation with respect to the Business, and none of the Corporation's assets
is owned by or leased, licensed or otherwise used by the Corporation under grant
from any of such Affiliate. There are currently no outstanding shareholder notes
or obligations to related parties of the Corporation.
4.17. Broker's or Finder's Fees. No broker, finder or other Person
-------------------------
acting in a similar capacity, other than Credit Suisse First Boston, has acted
directly or indirectly for the Corporation in connection with this Agreement or
the transactions contemplated by this Agreement.
4.18. Year 2000. Any reprogramming required to permit the proper
---------
functioning, in and following the year 2000, of the Corporation's internal
computer systems and equipment containing embedded microchips used in the
Corporation's business, and the testing of all such systems and equipment, as so
reprogrammed, has been completed. The cost to the Corporation of such
reprogramming and testing and the reasonably foreseeable consequences of year
2000 to the Corporation will not have a material adverse effect on the
Corporation.
4.19. No Misleading Statements. To the Corporation's knowledge, none
------------------------
of this Agreement, the Shareholders' Agreement, the Registration Rights
Agreement or any certificate furnished to the Series E Investors in connection
herewith (when read together) contain any untrue statement of material fact or
omit to state any material fact necessary to make the statements contained
herein or therein not misleading in any material respect.
<PAGE>
-10-
5. REPRESENTATIONS AND WARRANTIES OF THE SERIES E INVESTORS. Each of the
--------------------------------------------------------
Series E Investors makes the following representations and warranties to the
Corporation, severally and not jointly, and each with respect only to itself,
himself or herself:
5.1. Organization and Authority. Such Series E Investor, if not a
--------------------------
natural person, is duly organized, validly existing and in good standing under
the laws of its jurisdiction of formation. Such Series E Investor has full power
and authority to enter into this Agreement and to perform its, his or her
obligations under this Agreement. The signing, delivery and performance of this
Agreement, the Shareholders' Agreement and the Registration Rights Agreement by
such Series E Investor have been duly authorized by all necessary action on the
part of such Series E Investor, and no further action is required on the part of
such Series E Investor in order to authorize this Agreement, the Shareholders'
Agreement, the Registration Rights Agreement or the transactions contemplated
hereby or thereby. Each of this Agreement, the Shareholders' Agreement and the
Registration Rights Agreement constitute the legal, valid and binding obligation
of such Series E Investor, duly enforceable against such Series E Investor in
accordance with its terms.
5.2. No Conflict or Violation. Neither the execution and delivery of
------------------------
this Agreement, the Shareholders' Agreement or the Registration Rights Agreement
by such Series E Investor nor the performance by such Series E Investor of the
transactions contemplated hereby or thereby will result in: (i) a violation of
or conflict with the governing documents of such Series E Investor, if not a
natural person; (ii) a violation of any Laws or any Order to which such Series E
Investor is subject; or (iii) a breach or default under any mortgage, indenture,
deed of trust, real property or personal property lease, license, contract or
other agreement to which such Series E Investor is subject.
5.3. Consents and Approvals. The execution, delivery and performance
----------------------
by such Series E Investor of this Agreement, the Shareholders' Agreement and the
Registration Rights Agreement and the transactions contemplated hereby and
thereby do not require the consent, approval or authorization of, or any
declaration, filing, registration or notice with or to any governmental or
regulatory or any other Person other than such consents or approvals which have
been obtained prior to the date of this Agreement.
5.4. Purchase for Investment. (a) Such Series E Investor has
-----------------------
substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Corporation such that
such Series E Investor is capable of evaluating the merits and risks of its
investment in the Corporation and has the capacity to protect its own interests.
Such Series E Investor is an "accredited investor" as that term is defined in
Rule 501 promulgated under the Securities Act of 1933.
(b) Such Series E Investor is acquiring the Series E Shares for
investment, for such Series E Investor's own account, not as a nominee or agent,
and not with the view to, or for resale in connection with, any distribution
thereof. Such Series E Investor
<PAGE>
-11-
understands that the Series E Shares and Common Stock issuable upon conversion
thereof have not been, and will not be when issued, registered under the
Securities Act of 1933 and are being issued pursuant to a specific exemption
from the registration provisions of the Securities Act of 1933, the availability
of which depends upon, among other things, the bona fide nature of the
investment intent and the accuracy of the representations as expressed herein.
(c) Such Series E Investor acknowledges that the Series E Shares and
the Common Stock issuable upon conversion thereof must be held indefinitely
unless subsequently registered under the Securities Act of 1933 or unless an
exemption from such registration is available. Such Series E Investor is aware
of the provisions of Rule 144 promulgated under the Securities Act of 1933 which
permit limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions.
(d) Such Series E Investor understands that no public market now
exits, and that a market may never exist, for any of the securities issued by
the Corporation.
5.5. Broker's or Finder's Fees. No broker, finder or other Persons
-------------------------
acting in a similar capacity has acted directly or indirectly for such Series E
Investor in connection with this Agreement and the transactions contemplated
hereby.
6. POST-CLOSING COVENANT OF THE CORPORATION.
----------------------------------------
6.1. Insurance. The Corporation shall keep in full force and effect,
---------
and shall pay all premiums on, a term life insurance policy on the life of
Joseph Beninati in the amount of $5,000,000 as to which the Corporation shall be
the owner and the beneficiary. The Corporation shall keep in full force and
effect, and shall pay all premiums on, a Directors and Officers liability
insurance policy in the amount of at least $1,000,000 as to which the
Corporation shall be the owner and the beneficiary. The Corporation shall
increase such amount to at least $5,000,000 prior to the Corporation's Initial
Public Offering.
7. CLOSING DELIVERIES
------------------
7.1. The Corporation's Closing Deliveries for the Initial Closing.
------------------------------------------------------------
The participating Series E Investors' obligations to purchase the Series E
Shares at the Initial Closing are subject to the fulfillment by the Corporation
or waiver by the participating Series E Investors of the following conditions at
the Initial Closing:
7.1.1. The representations and warranties made by the
Corporation in Section 4 hereof shall be true and correct as of the Initial
Closing.
7.1.2. All covenants, agreements and conditions contained in
this Agreement to be performed by the Corporation on or prior to the Initial
Closing shall have been performed or complied with unless waived in writing by
the Series E Investors purchasing Series E Shares at the Initial Closing.
<PAGE>
-12-
7.1.3. The Corporation shall have obtained all necessary state
securities law permits and qualifications, or have the availability of
exemptions therefrom, required by any state for the offer and sale of Series E
Shares and the Common Stock issuable upon conversion of the Series E Shares.
7.1.4. The Third Amended and Restated Certificate of
Incorporation of the Corporation shall have been filed with the Secretary of
State of the State of Delaware.
7.1.5. The Corporation shall deliver a certificate executed by
the Chief Executive Officer of the Corporation, dated as of the Initial Closing,
certifying that the conditions specified in Sections 7.1.1, 7.1.2 and 7.1.4 of
this Agreement have been fulfilled.
7.1.6. The Corporation shall deliver a certificate dated as of
the date of the Initial Closing, of the Secretary of the Corporation certifying
as to (i) the certificate of incorporation and bylaws of the Corporation; and
(ii) resolutions of the Board of Directors and the shareholders of the
Corporation authorizing the execution, delivery and performance of this
Agreement, all documents contemplated by this Agreement and the transactions
contemplated by this Agreement.
7.1.7. The Corporation shall deliver certificates of "good
standing" of the Corporation from the Secretaries of State of the States of
Delaware, Connecticut, New York, New Jersey and the Commonwealth of
Massachusetts.
7.1.8. The Corporation shall deliver stock certificates issued
to the participating Series E Investors for the number of Series E Shares set
forth on the Schedule of Investors.
7.1.9. The Corporation shall deliver the Shareholders' Agreement
signed on behalf of the Corporation and by or on behalf of the holders of the
Series A Shares, Series B Shares, Series C Shares and Series D Shares.
7.1.10. The Corporation shall deliver the Registration Rights
Agreement signed on behalf of the Corporation.
7.1.11. The Corporation shall deliver an opinion of Testa,
Hurwitz & Thibeault, LLP, counsel to the Corporation in the form attached hereto
as Exhibit C.
---------
7.2. Closing Deliveries of the Series E Investors for the Initial
------------------------------------------------------------
Closing. The Corporation's obligations to sell and issue the Series E Shares at
- -------
the Initial Closing are subject to the fulfillment by the participating Series E
Investors or waiver by Corporation of the following conditions:
7.2.1. The participating Series E Investors shall deliver to the
Corporation the sum set forth opposite its, his or her name in the Schedule of
Investors,
<PAGE>
-13-
by wire transfer, representing the purchase price of the Series E Shares to be
issued pursuant to this Agreement.
7.2.2. Each participating Series E Investor shall deliver to the
Corporation the Shareholders' Agreement signed by such Series E Investor.
7.2.3. Each Series E Investor shall deliver to the Corporation
the Registration Rights Agreement signed by such Series E Investor.
7.3. The Corporation's Closing Deliveries for the Additional Closing.
---------------------------------------------------------------
The participating Series E Investors' obligations to purchase the Series E
Shares at the Additional Closing are subject to the fulfillment by the
Corporation or waiver by the participating Series E Investors of the following
conditions at the Additional Closing:
7.3.1. The representations and warranties made by the
Corporation in Section 4 hereof shall be true and correct as of the Additional
Closing.
7.3.2. All covenants, agreements and conditions contained in
this Agreement to be performed by the Corporation on or prior to the Additional
Closing shall have been performed or complied with unless waived in writing by
the Series E Investors purchasing Series E Shares at the Additional Closing.
7.3.3. The Corporation shall have obtained all necessary state
securities law permits and qualifications, or have the availability of
exemptions therefrom, required by any state for the offer and sale of Series E
Shares and the Common Stock issuable upon conversion of the Series E Shares.
7.3.4. The Third Amended and Restated Certificate of
Incorporation of the Corporation shall have been filed with the Secretary of
State of the State of Delaware.
7.3.5. The Corporation shall deliver a certificate executed by
the Chief Executive Officer of the Corporation, dated as of the Additional
Closing, certifying that the conditions specified in Sections 7.3.1, 7.3.2 and
7.3.4 of this Agreement have been fulfilled.
7.3.6. The Corporation shall deliver a certificate dated as of
the date of the Additional Closing, of the Secretary of the Corporation
certifying as to (i) the certificate of incorporation and bylaws of the
Corporation; and (ii) resolutions of the Board of Directors and the shareholders
of the Corporation authorizing the execution, delivery and performance of this
Agreement, all documents contemplated by this Agreement and the transactions
contemplated by this Agreement.
7.3.7. The Corporation shall deliver certificates of "good
standing" of the Corporation from the Secretaries of State of the States of
Delaware, Connecticut, New York, New Jersey and the Commonwealth of
Massachusetts.
<PAGE>
-14-
7.3.8. The Corporation shall deliver stock certificates issued
to the participating Series E Investors for the number of Series E Shares set
forth on the Schedule of Investors.
7.3.9. The Corporation shall deliver the Shareholders'
Agreement signed on behalf of the Corporation and by or on behalf of the holders
of the Series A Shares, Series B Shares, Series C Shares and Series D Shares.
7.3.10. The Corporation shall deliver the Registration Rights
Agreement signed on behalf of the Corporation.
7.3.11. The Corporation shall deliver an opinion of Testa,
Hurwitz & Thibeault, LLP, counsel to the Corporation in the form attached hereto
as Exhibit C.
---------
7.4. Closing Deliveries of the Series E Investors for the Additional
---------------------------------------------------------------
Closing. The Corporation's obligations to sell and issue the Series E Shares at
- -------
the Additional Closing are subject to the fulfillment by the participating
Series E Investors or waiver by Corporation of the following conditions:
7.4.1. The participating Series E Investors shall deliver to
the Corporation the sum set forth opposite its, his or her name in the Schedule
of Investors, by wire transfer, representing the purchase price of the Series E
Shares to be issued pursuant to this Agreement.
7.4.2. Each participating Series E Investor shall deliver to
the Corporation the counterpart signature page to the Shareholders' Agreement
signed by such Series E Investor.
7.4.3. Each Series E Investor shall deliver to the Corporation
the counterpart signature page to the Registration Rights Agreement signed by
such Series E Investor.
8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All covenants,
-----------------------------------------------------
representations and warranties in this Agreement or in any documents delivered
pursuant to this Agreement (A) (other than those in Section 4.1 and 4.2) shall
survive the Closing for a period of 1 (one) year after the Closing and (B)
contained in Sections 4.1 and 4.2 only shall survive the Closing for a period of
3 (three) years after the Closing.
9. INDEMNIFICATION.
---------------
9.1. Indemnification by the Corporation to the Series E Investors.
------------------------------------------------------------
The Corporation shall indemnify, defend and hold each of the Series E Investors,
the Affiliates of each Series E Investor, and their respective shareholders,
officers, directors, employees, assignees and successors, harmless against, and
shall reimburse each of the indemnified Persons on demand on account of, any
Losses which may be asserted against, imposed on or incurred by any of them as a
result of or arising out of or in any manner
<PAGE>
-15-
relating or attributable to any inaccuracy in or breach of the representations,
warranties or covenants on the part of the Corporation in this Agreement or in
any document delivered by the Corporation pursuant to this Agreement.
9.2. Indemnification by the Series E Investors to the Corporation.
------------------------------------------------------------
Each Series E Investor, severally and not jointly, shall indemnify, defend and
hold the Corporation and the Corporation's officers, directors, employees,
assignees and successors harmless against, and shall reimburse such indemnified
Persons on demand on account of, any Losses which may be asserted against,
imposed on or incurred by any of them as a result of or arising out of or in any
manner relating or attributable to any inaccuracy in or breach of such Series E
Investor's representations or warranties in this Agreement or in any document
delivered by such Series E Investor pursuant to this Agreement; provided
however, such obligation shall not exceed the amount the purchase price paid by
such Series E Investor for the Series E Shares as set forth on the Schedule of
Investors.
10. MISCELLANEOUS.
-------------
10.1. Notices. Notices given pursuant to this Agreement must be in
-------
writing. They shall be deemed to have been duly given: (i) upon delivery or
refusal to accept delivery, if hand-delivered; (ii) when transmitted, if sent by
fax with confirmed receipt, followed by a "hard" copy delivered by any other
method specified in this Section 10.1; or (iii) one (1) business day after being
deposited for next-day delivery with Federal Express or other national overnight
courier service. In each case, notice shall be addressed to the parties as
follows:
If to the Corporation:
---------------------
Greenwich Technology Partners, Inc.
43 Gate House Road
Stamford, Connecticut 06902
Attention: Dennis M. Goett
Fax: (203) 969-1500
If to the Series E Investors:
----------------------------
To the address of such Series E Investor as set forth on the Schedule
of Investors
or to such other place and with such other concurrent copies as the parties may
subsequently designate by written notice.
10.2. Amendment; Waiver. None of the provisions of this Agreement may
-----------------
be changed, modified, waived or canceled orally or otherwise except in writing,
signed by the Corporation and persons holding at least 66 2/3% of the then
outstanding
<PAGE>
-16-
Series E Shares (assuming conversion to Common Stock at the conversion rate then
in effect).
10.3. Binding Effect; Assignment. This Agreement is binding on the
--------------------------
Corporation, the Series E Investors and their respective successors in interest.
No party may assign his or its rights and obligations under this Agreement
without the prior written consent of the other parties. There are no third-
party beneficiaries of this Agreement, and any intention to afford any right or
benefit under this Agreement to any third party is specifically disclaimed.
10.4. Entire Agreement. This Agreement, including the exhibits
----------------
attached hereto, the Shareholders' Agreement and the Registration Rights
Agreement embody the entire understanding among the parties with respect to the
subject matter of this Agreement. There are no binding agreements or
understandings among the parties with respect to the transactions contemplated
by this Agreement other than as expressly set forth in this Agreement, the
Shareholders' Agreement or the Registration Rights Agreement.
10.5. Interpretation; Construction.
----------------------------
10.5.1. The terms of this Agreement have been fully
negotiated by the parties in consultation with counsel, and the wording of this
Agreement has been arrived at by all of them as a result of their joint
discussions. Accordingly, no provision of this Agreement shall be construed
against a particular party or in favor of another party merely because of which
party (or its representatives) drafted or supplied the wording for such
provision.
10.5.2. Except where otherwise noted in context, all
references to "Sections", "Exhibits" or "Schedules" shall be deemed to refer to
the sections or subsections, as appropriate, exhibits or schedules of this
Agreement.
10.5.3. Section headings appearing in this Agreement are
inserted solely as reference aids for the ease and convenience of the reader;
they shall not be deemed to modify, limit or define the scope or substance of
the provisions they introduce, nor shall they be used in construing the intent
or effect of such provisions.
10.5.4. Where the context requires: (i) use of the singular
or plural incorporates the other, and (ii) pronouns and modifiers in the
masculine, feminine or neuter gender shall be deemed to refer to or include the
other genders.
10.5.5. As used in this Agreement, the terms "include(s)" and
"including" mean "including but not limited to"; that is each case the example
or enumeration which follows the use of either term is illustrative but no
exclusive or exhaustive.
10.6. Expenses. The Corporation shall pay (or reimburse the Series E
--------
Investors for, as the case may be) the reasonable out-of-pocket fees and
disbursements of
<PAGE>
-17-
the Series E Investors incurred in connection with the negotiation and
consummation of the transactions contemplated hereby, including attorney and
consulting fees and disbursements incurred by a single counsel on behalf of the
Series E Investors, in an aggregate amount not to exceed $20,000.
10.7. Multiple Counterparts. This Agreement may be signed in one or
---------------------
more counterparts, each of which shall be deemed to be an original and all of
which shall be considered one and the same agreement and shall become effective
when each of the parties has signed and delivered a counterpart to the other.
10.8. Further Assurances. The parties agree, upon request and for no
------------------
additional consideration, to sign, acknowledge and deliver any documents and to
do anything else which the other may reasonably request in order to carry out
more completely the purpose and intent of this Agreement consistent with its
terms.
10.9. Governing Law. This Agreement shall be governed by and
-------------
interpreted according to the Laws of the State of Delaware, but without giving
effect to any Delaware choice of law provisions which might otherwise make the
Laws of a different jurisdiction govern or apply.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the Corporation and the participating Series E
Investors have executed this Agreement as of the day and year first above
written.
Greenwich Technology Partners, Inc.
/s/ Dennis M. Goett
-------------------------------------
Name:
Title:
<PAGE>
SERIES E INVESTOR:
CHASE VENTURE CAPITAL ASSOCIATES, L.P.
/s/ Stephen Murray
-----------------------------
its General Partner
By:______________________________
<PAGE>
SERIES E INVESTOR:
CREDIT SUISSE FIRST BOSTON VENTURE FUND I, L.P.
By: QBB MANAGEMENT FUND I, LLC,
its General Partner
/s/ William J.B. Brady III
----------------------
<PAGE>
SERIES E INVESTOR:
FG-GTPF
/s/ Kathleen E. Shepphird
---------------------------
Name: Kathleen E. Shepphird
Title: Managing Director
<PAGE>
SERIES E INVESTOR:
STV PARTNERS III, L.L.C.
By: Jerome C. Silvey,
its General Manager
/s/ Jerome C. Silvey
----------------------------
<PAGE>
SERIES E INVESTOR:
WHEATLEY PARTNERS II L.P.
/s/ Irwin Lieber
----------------------------
Irwin Lieber
General Partner
<PAGE>
SERIES E INVESTOR:
VANTAGEPOINT VENTURE PARTNERS 1996
By: VantagePoint Associates, LLC,
its General Partner
/s/ James D. Marver
----------------------------
Name: James D. Marver
Title: Managing Member
<PAGE>
SERIES E INVESTOR:
VANTAGEPOINT COMMUNICATIONS
PARTNERS, LP
By: VantagePoint Communications Associates, LLC,
its General Partner
/s/ James D. Marver
----------------------------
Name: James D. Marver
Title: Managing Member
<PAGE>
/s/ Edwin J. O'Mara
-------------------------------
Name: Edwin J. O'Mara
-----------------------------
Title:_____________________________
Date: 10/13/99
----------------------------
/s/ John Stopper
-------------------------------
Name: John Stopper
-----------------------------
Title:_____________________________
Date: 10/20/99
----------------------------
/s/ Laurence Pinkus
-------------------------------
Name: Laurence Pinkus
-----------------------------
Title:_____________________________
Date: 10/11/99
----------------------------
/s/ Kevin Bock
-------------------------------
Name: Kevin Bock
-----------------------------
Title:_____________________________
Date: 10/18/99
----------------------------
/s/ James Tucci
-------------------------------
Name: James Tucci
-----------------------------
Title:_____________________________
Date: 10/18/99
----------------------------
<PAGE>
/s/ Robert Berlin
-------------------------------
Name: Robert Berlin
-----------------------------
Title:_____________________________
Date: 10/11/99
----------------------------
/s/ John V. Wheeler
-------------------------------
Name: John V. Wheeler
-----------------------------
Title:_____________________________
Date: 10/13/99
----------------------------
/s/ L. David Cardenas
-------------------------------
Name: L. David Cardenas
-----------------------------
Title:_____________________________
Date: 10/11/99
----------------------------
/s/ Louis J. Mischianti
-------------------------------
Name: Louis J. Mischianti
-----------------------------
Title:_____________________________
Date:______________________________
/s/ James A. Conroy
-------------------------------
Name: James A. Conroy
-----------------------------
Title:_____________________________
Date: 10/11/99
----------------------------
<PAGE>
/s/ Emil Roymans
-------------------------------
Name: Emil Roymans
-----------------------------
Title:_____________________________
Date: 10/15/99
----------------------------
/s/ Paul A. Rubin
-------------------------------
Name: Paul A. Rubin
-----------------------------
Title:_____________________________
Date: 10/11/99
----------------------------
/s/ Scott M. Freeman
-------------------------------
Name: Scott M. Freeman
-----------------------------
Title:_____________________________
Date: 10/12/99
----------------------------
/s/ Michael J. Schmidtberger
-------------------------------
Name: Michael J. Schmidtberger
-----------------------------
Title:_____________________________
Date: 10/12/99
----------------------------
/s/ Michael Grossman
-------------------------------
Name: Michael Grossman
-----------------------------
Title:_____________________________
Date: 10/14/99
----------------------------
/s/ Karl Frey
-------------------------------
Name: Karl Frey
-----------------------------
Title:_____________________________
Date: 10/11/99
----------------------------
<PAGE>
EPFL Partners
/s/ Russell Carpenteri
-------------------------------
Name: Russell Carpenteri
-----------------------------
Title: Partner
----------------------------
Date: 10/12/99
----------------------------
/s/ John D. Miller
-------------------------------
Name: John D. Miller
-----------------------------
Title:_____________________________
Date: 10/14/99
----------------------------
/s/ Deborah A. Farrington
-------------------------------
Name: Deborah A. Farrington
-----------------------------
Title:_____________________________
Date: 10/14/99
----------------------------
<PAGE>
/s/ Gerard F. Becker and Christine B. Becker
----------------------------------------------
Name: Gerard F. Becker and Christine B. Becker
-------------------------------------------
Title:___________________________________________
Date: 10/13/99
------------------------------------------
/s/ Nicholas A. Johnson and Patricia A. Johnson
---------------------------------------------
Name: Nicholas A. Johnson and Patricia A. Johnson
-------------------------------------------
Title:___________________________________________
Date: 11/29/99
------------------------------------------
Clemente Family Trust
/s/ Richard Clemente
---------------------------------------
Name: Richard Clemente
-------------------------------------
Title: Trustee
------------------------------------
Date: 10/13/99
------------------------------------
BMZ Investments
/s/ Stacey Cox
---------------------------------------
Name: Stacey E. Cox
-------------------------------------
Title: Partner
------------------------------------
Date: 10/13/99
------------------------------------
/s/ Richard J. Testa
---------------------------------------
Name: Richard J. Testa
-------------------------------------
Title:_____________________________________
Date:______________________________________
<PAGE>
/s/ Anthony M. Carvette
-------------------------------
Name: Anthony M. Carvette
-----------------------------
Title:_____________________________
Date: 10/20/99
----------------------------
/s/ Greg Berger
-------------------------------
Name: Greg Berger
-----------------------------
Title:_____________________________
Date: 10/15/99
----------------------------
/s/ Kevin J. Kitson
-------------------------------
Name: Kevin J. Kitson
-----------------------------
Title:_____________________________
Date: 10/11/99
----------------------------
/s/ Brian J. Flynn
-------------------------------
Name: Brian J. Flynn
-----------------------------
Title:_____________________________
Date: 10/12/99
----------------------------
/s/ Angus M. Green
-------------------------------
Name: Angus M. Green
-----------------------------
Title:_____________________________
Date: 10/13/99
----------------------------
/s/ Joseph A. Cabrera
-------------------------------
Name: Joseph A. Cabrera
-----------------------------
Title:_____________________________
Date: 10/14/99
----------------------------
<PAGE>
/s/ Clint Heiden
-------------------------------
Name: Clint Heiden
-----------------------------
Title:_____________________________
Date: 10/16/99
----------------------------
/s/ Stephen B. Seigel
-------------------------------
Name: Stephen B. Seigel
-----------------------------
Title:_____________________________
Date:______________________________
/s/ DHW Turner
-------------------------------
Name: DHW Turner
-----------------------------
Title:_____________________________
Date: 10/22/99
----------------------------
/s/ Dennis M. Goett
-------------------------------
Name: Dennis M. Goett
-----------------------------
Title:_____________________________
Date:______________________________
IRA f/b/o Dennis M. Goett
/s/ Dennis M. Goett
-------------------------------
Name:______________________________
Title:_____________________________
Date: 10/11/99
----------------------------
<PAGE>
/s/ S. Elizabeth Press and Mark Andrew Mohn
---------------------------------------
Name: Elizabeth Press and Mark Andrew Mohn
-------------------------------------
Title:_____________________________________
Date: 10/13/99
------------------------------------
/s/ Paul C. Carey
----------------------------------
Name: Paul C. Carey
--------------------------------
Title:________________________________
Date: 10/13/99
-------------------------------
/s/ Samer Tawfik
----------------------------------
Name: Samer Tawfik
--------------------------------
Title:________________________________
Date: 10/14/99
-------------------------------
HIGHWOOD PARTNERS LLC
/s/ Ari Horowitz
----------------------------------
Name: Ari Horowitz
--------------------------------
Title: CEO
-------------------------------
Date: 10/14/99
-------------------------------
/s/ William Cox and Beatrice Cox
----------------------------------
Name: William Cox and Beatrice Cox
--------------------------------
Title:________________________________
Date: 10/15/99
-------------------------------
<PAGE>
/s/ Gregory W. Carney
------------------------------------
Name: Gregory W. Carney
----------------------------------
Title:__________________________________
Date: 10/15/99
---------------------------------
/s/ Paul T. Goldman
------------------------------------
Name: Paul T. Goldman
----------------------------------
Title:__________________________________
Date: 10/15/99
---------------------------------
/s/ Donald K. Bryan and Belinda B. Bryan
------------------------------------
Name: Donald K. Bryan
----------------------------------
Title:__________________________________
Date: 10/14/99
---------------------------------
/s/ Edward Cettina
------------------------------------
Name: Edward Cettina
----------------------------------
Title:__________________________________
Date: 10/17/99
---------------------------------
/s/ Elio Cettina
------------------------------------
Name: Elio Cettina
----------------------------------
Title:__________________________________
Date: 10/18/99
---------------------------------
<PAGE>
The CIT Group/Equity Investments, Inc.
/s/ Mark Vander Veen
------------------------------------
Name: Mark Vander Veen
-----------------------------------
Title: Vice President
---------------------------------
Date: 10/27/99
---------------------------------
Chase Venture Capital Associates L.P.
/s/ Donald J. Hofmann
------------------------------------
Name: Donald J. Hofmann
----------------------------------
Title: General Partner
---------------------------------
Date: 10/19/99
---------------------------------
VantagePoint Communications Partners, L.P.
By: VantagePoint Communications Associate, L.L.C.,
Its General Partner
/s/ James D. Marver
-------------------------------------------
Name: James D. Marver
-----------------------------------------
Title: Managing Member
---------------------------------------
VantagePoint Venture Partners 1996, L.P.
By: VantagePoint Associates, L.L.C.,
Its General Partner
/s/ James D. Marver
------------------------------------
Name: James D. Marver
----------------------------------
Title: Managing Director
---------------------------------
/s/ Mark B. Templeton
------------------------------------
Name: Mark B. Templeton
----------------------------------
Title:__________________________________
Date: 12/30/99
---------------------------------
<PAGE>
/s/ Mark Wolfenberger
------------------------------------
Name: Mark Wolfenberger
----------------------------------
Title:__________________________________
Date: 01/03/00
---------------------------------
/s/ Frank P. Slattery
------------------------------------
Name: Frank P. Slattery
----------------------------------
Title:__________________________________
Date: 12/30/99
---------------------------------
/s/ Jeffrey A. Wrona
------------------------------------
Name: Jeffrey A. Wrona
----------------------------------
Title:__________________________________
Date: 01/04/00
---------------------------------
/s/ Michael K. Ma
------------------------------------
Name: Michael K. Ma
----------------------------------
Title:__________________________________
Date: 01/03/99
---------------------------------
/s/ Kurt Weber
------------------------------------
Name: Kurt Weber
----------------------------------
Title:__________________________________
Date: 12/31/99
---------------------------------
UGE Enterprises LLC
/s/ Roger Cozzi
------------------------------------
Name: Roger Cozzi
----------------------------------
Title: Partner
---------------------------------
Date: 01/06/00
---------------------------------
<PAGE>
Edgell Street Partners
/s/ James Harasimowicz
------------------------------------
Name: James Harasimowicz
----------------------------------
Title: Managing Partner
---------------------------------
Date: 01/12/00
---------------------------------
/s/ Dennis M. Goett
------------------------------------
Name: Dennis M. Goett
----------------------------------
Title:__________________________________
Date: 12/30/99
---------------------------------
/s/ Jill Catania
------------------------------------
Name: Jill Catania
----------------------------------
Title:__________________________________
Date: 12/30/99
---------------------------------
/s/ Geryl W. Darington
------------------------------------
Name: Geryl W. Darington
----------------------------------
Title:__________________________________
Date: 12/31/99
---------------------------------
/s/ Robert J. Garbarino
------------------------------------
Name: Robert J. Garbarino
----------------------------------
Title:__________________________________
Date: 12/30/99
---------------------------------
/s/ Don Henderson
------------------------------------
Name: Don Henderson
----------------------------------
Title:__________________________________
Date: 01/03/00
---------------------------------
<PAGE>
/s/ Bruce M. Tanis
------------------------------------
Name: Bruce M. Tanis
----------------------------------
Title:__________________________________
Date: 12/31/99
---------------------------------
/s/ Peter Cherasia
------------------------------------
Name: Peter Cherasia
----------------------------------
Title:__________________________________
Date: 01/06/00
---------------------------------
/s/ Michael A. Tunstall
------------------------------------
Name: Michael A. Tunstall
----------------------------------
Title:__________________________________
Date: 01/03/00
---------------------------------
/s/ Wayne A. Segal
------------------------------------
Name: Wayne A. Segal
----------------------------------
Title:__________________________________
Date: 01/04/00
---------------------------------
/s/ Tony Trousset
------------------------------------
Name: Tony Trousset
----------------------------------
Title:__________________________________
Date: 01/04/00
---------------------------------
/s/ S. Elizabeth Press and Mark Andrew Mohn
-----------------------------------------
Name: Elizabeth Press and Mark Andrew Mohn
---------------------------------------
Title:_______________________________________
Date: 01/05/00
--------------------------------------
<PAGE>
/s/ Richard Haverly
-------------------------------------
Name: Richard Haverly
----------------------------------
Title:__________________________________
Date:___________________________________
HIGH STREET INVESTORS 2000
By: Testa, Hurwitz & Thibeault, LLP
/s/ George W. Thibeault
------------------------------------
Name: George W. Thibeault
----------------------------------
Title: Partner
---------------------------------
Date: 01/14/00
---------------------------------
/s/ Kevin M. Barry
------------------------------------
Name: Kevin M. Barry
----------------------------------
Title:__________________________________
Date: 01/14/00
---------------------------------
<PAGE>
EXHIBIT A
---------
Initial Closing
---------------
<TABLE>
<CAPTION>
Name of Series E Investor Registrable Securities
------------------------- ----------------------------
<S> <C>
Chase Venture Capital Associates, L.P. 4,739,337
Credit Suisse First Boston Venture Fund I, L.P. 236,967
STV Partners III, L.L.C. 473,934
FG-GTPF 236,967
Vantagepoint Communications Partners, LP 947,867
Vantagepoint Venture Partners 1996, L.P. 473,934
Wheatley Partners II L.P. 473,934
</TABLE>
First Additional Closing
------------------------
<TABLE>
<CAPTION>
Name of Series E Investor Registrable Securities
------------------------- -----------------------------
<S> <C>
Edwin J. O'Mara 7,108
John Stopper 23,696
Laurence Pinkus 4,739
Kevin Bock 50,236
James Tucci 59,241
Robert Berlin 11,848
John V. Wheeler 11,848
L. David Cardenas and Stacey J. Cardenas 2,369
Louis J. Mischianti 23,696
James A. Conroy 4,739
Emil A. Roymans 2,369
Paul A. Rubin 7,109
Scott M. Freeman 4,739
Michael J. Schmidtberger 4,739
Michael A. Grossman 5,924
Karl Frey 11,848
EPFL Partners 4,739
John D. Miller 11,848
Deborah A. Farrington 2,369
Gerard F. Becker and Christine B. Becker 11,848
Nils A. Johnson and Patricia A. Johnson 9,478
Clemente Family Trust 9,478
BMZ Investments 23,696
Richard J. Testa 9,952
Anthony M. Carvette 23,696
Greg Berger 5,924
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Name of Series E Investor Registrable Securities
------------------------- -----------------------------
<S> <C>
Kevin J. Kitson 47,393
Brian J. Flynn 4,739
Angus M. Green 18,957
Joseph A. Cabrera 11,848
Clint Heiden 23,696
Stephen B. Seigel 47,393
David HW Turner 11,848
Dennis M. Goett 18,957
IRA FBO Dennis M. Goett 28,435
S. Elizabeth Press and Mark Andrew Mohn 10,000
Paul C. Carey 18,957
Samer Tawfik 142,180
Highwood Partners LLC 14,218
William C. Cox III and Beatrice I. Cox 9,478
Gregory W. Carney 11,848
Paul T. Goldman 7,109
Donald K. Bryan and Belinda B. Bryan 11,848
Edward Cettina 7,109
Elio Cettina 7,109
The CIT Group/Equity Investments, Inc. 473,934
Chase Venture Capital Associates, L.P. 473,933
VantagePoint Venture Partners 1996, L.P. 157,820
VantagePoint Communications Partners, L.P. 316,114
</TABLE>
<PAGE>
Second Additional Closing
-------------------------
<TABLE>
<CAPTION>
Name of Series E Investor Registrable Securities
------------------------- -----------------------------
<S> <C>
Mark B. Templeton 11,848
Mark Wolfenberger 23,696
Frank P. Slattery 4,739
Jeffrey Wrona 4,739
Michael Ma 4,739
Kurt Weber 11,848
UGE Enterprises LLC 4,739
Edgell Street Partners 7,109
Dennis M. Goett 14,218
Jill Catania 4,739
Geryl Darington 11,848
Robert Garbarino 23,696
Donald Henderson 9,478
Bruce M. Tanis 11,848
Peter Cherasia 23,696
Michael Tunstall 35,545
Wayne A. Segal 23,696
Anthony Trousett 23,696
S. Elizabeth Press and Mark Andrew Mohn 20,000
Richard Haverly 100,000
High Street Investors 2000 47,393
Kevin M. Barry 4,739
</TABLE>
<PAGE>
EXHIBIT B
---------
Schedule of Exceptions
See Attached
<PAGE>
EXHIBIT C
---------
Form of Opinion of Testa, Hurwitz & Thibeault, LLP
<PAGE>
EXHIBIT 10.12
AMENDMENT NO. 1 TO
INVESTMENT AGREEMENT
(Series E Preferred Stock)
This Amendment No. 1 to Investment Agreement (the "Amendment") dated as of
---------
January 14, 2000 (the "Effective Date"), is entered into by and among Greenwich
--------------
Technology Partners, Inc., a Delaware corporation (the "Corporation") and those
-----------
parties executing the signature page hereto, representing at least 66 2/3% of
the Corporation's outstanding Series E Preferred Stock, $0.01 par value per
share (the "Series E Shares").
---------------
This Amendment amends that certain Investment Agreement (Series E Preferred
Stock) dated September 10, 1999 (the "Original Agreement").
------------------
Capitalized terms used herein and not otherwise defined, shall have the
meanings set forth in the Original Agreement.
NOW, THEREFORE, in accordance with Section 10.2 of the Original Agreement,
the parties hereto agree that the Original Agreement shall be amended as
follows:
1. Section 2.2(b) shall be deleted in its entirety and replaced with the
following:
"(b) One or more additional closings (each an "Additional Closing")
------------------
of the sale and purchase of up to an additional 4,265,402 of the
Series E Shares under this Agreement shall take place at the offices
of Testa, Hurwitz & Thibeault, LLP, 125 High Street, Boston,
Massachusetts, 02110, at 1:00 p.m. on such date or dates as is
mutually agreeable to the Additional Investors participating in such
Additional Closing, and the Company."
2. Section 2.2(c) shall be deleted in its entirety and replaced with the
following:
"(c) The Initial Closing and the Additional Closings are each
referred to herein as a "Closing"."
-------
3. Section 2.5 shall be deleted in its entirety and replaced with the
following:
"2.5 Counterpart Signature Pages. At each Additional Closing, the
Additional Investors participating in such Additional Closing shall
execute a counterpart signature page to this Agreement, the
Shareholders' Agreement and the Registration Rights Agreement."
4. Exhibit A, Schedule of Investors shall be deleted in its entirety and
---------
replaced with the attached Exhibit A hereto.
---------
5. All other provisions of the Original Agreement shall be unmodified and
shall remain in full force and effect.
<PAGE>
6. This Amendment may be signed in one or more counterparts, each of
which shall be deemed to be an original and all of which shall be considered one
and the same agreement and shall become effective when each of the parties has
signed and delivered a counterpart to the other.
7. This Amendment shall be governed by and interpreted in accordance with
the laws of the State of Delaware, but without giving effect to any Delaware
choice of law provisions which might otherwise make the laws of a difference
jurisdiction govern or apply.
[Remainder of Page Left Blank Intentionally]
<PAGE>
IN WITNESS WHEREOF, this Amendment has been executed as of the date and year
first above written.
CORPORATION:
GREENWICH TECHNOLOGY PARTNERS, INC.
By: /s/ Dennis M. Goett
---------------------------------------
Name: Dennis M. Goett
Title: CFO
INVESTORS:
CHASE VENTURE CAPITAL ASSOCIATES, L.P.
By:
By: /s/ Michael R. Hannon
---------------------------------------
Name: Michael R. Hannon
Title: General Partner
CREDIT SUISSE FIRST BOSTON VENTURE FUND I,
L.P.
By: QBB Management I, LLC, Its General
Partner
By: /s/ George Bourtos
---------------------------------------
Name: George Bourtos
Title: Member
STV PARTNERS III, L.L.C.
By:
By: /s/ Jerome C. Silvey
---------------------------------------
Name: Jerome C. Silvey
Title: Managing Member
<PAGE>
FG-GTPF
By:
By: /s/ Kathleen E. Shepphird
----------------------------------------
Name: Kathleen E. Shepphird
Title: Managing Director
VANTAGEPOINT COMMUNICATIONS PARTNERS, LP
By:
By: /s/ William Jefferson Marshall
----------------------------------------
Name: William Jefferson Marshall
Title: Managing Director
VANTAGEPOINT VENTURE PARTNERS 1996, L.P.
By: Vantagepoint Communications Associates,
LLC, Its General Partner
By: /s/ William Jefferson Marshall
----------------------------------------
Name: William Jefferson Marshall
Title: Managing Director
WHEATLEY PARTNERS II L.P.
By:
By: /s/ Irwin Lieber
---------------------------------------
Name: Irwin Lieber
Title: General Partner
<PAGE>
EXHIBIT A
---------
Schedule of Investors
---------------------
Initial Closing
---------------
<TABLE>
<CAPTION>
Aggregate
Number of Series E Purchase Price
Shares to be for Series E
Name of Series E Investor Purchased Shares
- ------------------------- --------- ------
<S> <C> <C>
Chase Venture Capital Associates, L.P. 4,739,337 $10,000,001.07
Credit Suisse First Boston Venture Fund I, L.P. 236,967 $ 500,000.37
STV Partners III, L.L.C. 473,934 $ 1,000,000.74
FG-GTPF 236,967 $ 500,000.37
Vantagepoint Communications Partners, LP 947,867 $ 1,999,999.37
Vantagepoint Venture Partners 1996, L.P. 473,934 $ 1,000,000.74
Wheatley Partners II L.P. 473,934 $ 1,000,000.74
TOTAL: 7,582,940 $16,000,003.40
</TABLE>
First Additional Closing
------------------------
<TABLE>
<CAPTION>
Aggregate
Number of Series E Purchase Price
Shares to be for Series E
Name of Series E Investor Purchased Shares
- ------------------------- --------- ------
<S> <C> <C>
Edwin J. O'Mara 7,108 14,997.88
John Stopper 23,696 49,998.56
Laurence Pinkus 4,739 9,999.29
Kevin Bock 50,236 105,997.96
James Tucci 59,241 124,998.51
Robert Berlin 11,848 24,999.28
John V. Wheeler 11,848 24,999.28
L. David Cardenas and Stacey J. Cardenas 2,369 4,998.59
Louis J. Mischianti 23,696 49,998.56
James A. Conroy 4,739 9,999.29
Emil A. Roymans 2,369 4,998.59
Paul A. Rubin 7,109 14,999.99
Scott M. Freeman 4,739 9,999.29
Michael J. Schmidtberger 4,739 9,999.29
Michael A. Grossman 5,924 12,499.64
Karl Frey 11,848 24,999.28
EPFL Partners 4,739 9,999.29
John D. Miller 11,848 24,999.28
</TABLE>
<PAGE>
Deborah A. Farrington 2,369 4,998.59
Gerard F. Becker and Christine B. Becker 11,848 24,999.28
Nils A. Johnson and Patricia A. Johnson 9,478 19,998.58
Clemente Family Trust 9,478 19,998.58
BMZ Investments 23,696 49,998.56
Richard J. Testa 9,952 20,998.72
Anthony M. Carvette 23,696 49,998.56
Greg Berger 5,924 12,499.64
Kevin J. Kitson 47,393 99,999.23
Brian J. Flynn 4,739 9,999.29
Angus M. Green 18,957 39,999.27
Joseph A. Cabrera 11,848 24,999.28
Clint Heiden 23,696 49,998.56
Stephen B. Seigel 47,393 99,999.23
David HW Turner 11,848 24,999.28
Dennis M. Goett 18,957 39,999.27
IRA FBO Dennis M. Goett 28,435 59,997.85
S. Elizabeth Press and Mark Andrew Mohn 10,000 21,100
Paul C. Carey 18,957 39,999.27
Samer Tawfik 142,180 299,999.80
Highwood Partners LLC 14,218 29,999.98
William C. Cox III and Beatrice I. Cox 9,478 19,998.58
Gregory W. Carney 11,848 24,999.28
Paul T. Goldman 7,109 14,999.99
Donald K. Bryan and Belinda B. Bryan 11,848 24,999.28
Edward Cettina 7,109 14,999.99
Elio Cettina 7,109 14,999.99
The CIT Group/Equity Investments, Inc. 473,934 1,000,000.74
Chase Venture Capital Associates, L.P. 473,933 999,998.63
VantagePoint Venture Partners 1996, L.P. 157,820 333,000.20
VantagePoint Communications Partners, L.P. 316,114 667,000.54
Total: 2,224,199 $4,693,059.89
<PAGE>
Second Additional Closing
-------------------------
<TABLE>
<CAPTION>
Aggregate
Number of Series E Purchase Price
Shares to be for Series E
Name of Series E Investor Purchased Shares
------------------------- --------- ------
<S> <C> <C>
Mark B. Templeton 11,848 24,999.28
Mark Wolfenberger 23,696 49,998.56
Frank P. Slattery 4,739 9,999.29
Jeffrey Wrona 4,739 9,999.29
Michael Ma 4,739 9,999.29
Kurt Weber 11,848 24,999.28
UGE Enterprises LLC 4,739 9,999.29
Edgell Street Partners 7,109 14,999.99
Dennis M. Goett 14,218 29,999.98
Jill Catania 4,739 9,999.29
Geryl Darington 11,848 24,999.28
Robert Garbarino 23,696 49,998.56
Donald Henderson 9,478 19,998.58
Bruce M. Tanis 11,848 24,999.28
Peter Cherasia 23,696 49,998.56
Michael Tunstall 35,545 74,999.95
Wayne A. Segal 23,696 49,998.56
Anthony Trousett 23,696 49,998.56
S. Elizabeth Press and Mark Andrew Mohn 20,000 42,200.00
Richard Haverly 100,000 211,000.00
Kevin Barry 4,739 9,999.29
High Street Investors 2000 47,393 99,999.23
TOTAL: 428,049 $903,183.39
</TABLE>
<PAGE>
EXHIBIT 10.13
AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
--------------------------------------------
THIS IS AN AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT (the "Agreement")
made and dated as of September 10, 1999 by and:
among: GREENWICH TECHNOLOGY PARTNERS, INC., a Delaware corporation (the
- -----
"Corporation");
and: the holders of shares of Preferred Stock of the Corporation identified
- ---
on the signature pages hereto, including Additional Investors that
purchase Series E Preferred Stock after the date hereof as
contemplated by the Investment Agreement and Section 12.8 hereof
(collectively, the "Preferred Shareholders").
The Corporation and the Preferred Shareholders agree as follows:
1. DEFINITIONS. As used in this Agreement, each of the following terms is
-----------
used as follows:
"Affiliate": With respect to any particular Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person or as otherwise defined in Rule 501 promulgated under the Securities
Act of 1933, as amended.
"Cabrera": James P. Cabrera.
"Carpentieri": the Russell J. Carpentieri Retirement Plan.
"Dispose": To make a Disposition.
"Disposition": A gift, sale, assignment, transfer, pledge,
encumbrance, or any other transfer, voluntary or involuntary, of an interest in
the Shares, including transfers effected by operation of laws.
"FG-GTP": A Florida partnership.
"FG-GTPC": A Florida partnership.
"Investment Agreements": (a) The Investment Agreement dated as of the
date hereof by and among the Corporation and the purchasers of Series E
Preferred Stock (the "Investment Agreement"), (b) the Investment Agreement dated
as of February 1, 1999 by and among the Corporation and the Series D Investors
(the "February 1, 1999 Investment Agreement"), (b) the Investment Agreement
dated as of August 7, 1998 by and among the Corporation and FG-GTPC (the "August
1998 Agreement"), (c) the Investment Agreement dated as of June 25, 1998 by and
among the Corporation, FG-GTPC and Carpentieri (the "June 1998 Agreement"), and
(d) the
<PAGE>
-2-
Investment Agreement dated as of December 9, 1997 by and among the Corporation,
Persistence and FG-GTP (the "December 1997 Agreement").
"Liens": All liens, security interests, pledges, mortgages,
encumbrances, claims, charges, agreements and rights of others of any nature
whatsoever.
"Offeror": A Shareholder desiring to Dispose of all or any part of
his Shares (other than to a Permitted Transferee).
"Permitted Transferees": With respect to:
(i) Any Disposition of limited partnership interests in
Persistence or any equity interests in any Successor
Permitted Owner: (a) Joseph Beninati or Rhonda Beninati;
(b) the children or descendants of Joseph Beninati and/or
Rhonda Beninati; (c) any trust for the primary benefit of
any one or more of the individuals listed in clauses (a)
and (b); and (d) any Successor Permitted Owner;
(ii) Any Disposition of any Shares by Persistence: any
Successor Permitted Owner.
(iii) Any Disposition of Shares by any Preferred Shareholder
other than Persistence or a Successor Permitted Owner: (a)
any Persons who hold equity interests in such Preferred
Shareholder; (b) the spouse, children or descendants of
any such Preferred Shareholder or any persons listed in
clause (a); (c) any trust for the exclusive benefit of any
such Preferred Shareholder or one or more of the
individuals listed in clauses (a) and (b); (d) any Person
in which all of the beneficial equity interests are owned
by any one or more of any such Preferred Shareholder or
the individuals and/or trusts listed in clauses (a), (b)
and (c); and (e) any Affiliate.
"Persistence Partners, L.P.": A Delaware limited partnership.
"Person": Any natural person, corporation, partnership (general,
limited or otherwise), limited liability company, trust, association, joint
venture, governmental body or agency or other entity having legal status of any
kind.
"Prior Registration Rights Agreement": The Registration Rights
Agreement dated as of February 1, 1999 by and among the Corporation and the
Series D Investors.
"Prior Shareholders' Agreements": (a) The Shareholders' Agreement
dated as of February 1, 1999 by and among the Corporation and the Series D
Investors,
<PAGE>
-3-
(b) the Shareholders' Agreement dated as of August 7, 1998 by and between the
Corporation and FG-GTPC, (c) the Shareholders' Agreement dated as of June 25,
1998 by and among the Corporation, FG-GTPC and Carpentieri and (d) the
Shareholders' Agreement dated as of December 9, 1997 by and among the
Corporation, Persistence and FG-GTP.
"Proportionate Percentage": With respect to any Remaining Shareholder,
the percentage obtained by dividing (i) the number of Shares owned by such
Remaining Shareholder by (ii) the aggregate number of Shares owned by all
Remaining Shareholders as a group. For purposes of determining the number of
Shares owned, the number of Shares represented by each Share of Preferred Stock
shall be equal to the number of Shares of Common Stock into which such Shares of
Preferred Stock might be converted.
"Registration Rights Agreement": The Amended and Restated Registration
Rights Agreement dated the date hereof by and among the Corporation, the Series
D Investors and the Series E Investors.
"Remaining Shareholders": The Shareholders other than the Selling
Shareholder.
"Selling Shareholder": A Shareholder or a Shareholder's Permitted
Transferee(s) who or which is selling or Disposing any of his or its Shares
(other than to a Permitted Transferee) pursuant to the terms of this Agreement.
"Series D Investors": The holders of the Corporation's Series D
Preferred Stock.
"Series E Investors": The holders of the Corporation's Series E
Preferred Stock.
"Shareholder" or "Shareholders": The parties to this Agreement (other
than the Corporation), and their respective Permitted Transferees so long as
they shall own Shares.
"Shares": Issued and outstanding shares of capital stock of the
Corporation.
"Successor Permitted Owner": Any Person in which 80% or more of the
beneficial equity interests are owned by Joseph Beninati, Rhonda Beninati, the
children or descendants of Joseph Beninati and/or Rhonda Beninati, and/or any
trust for the primary benefit of Joseph Beninati, Rhonda Beninati and/or their
children and/or descendants; provided that all of the voting rights as well as
all of the rights to manage and make decisions on behalf of such Person are
solely held and shall continue to be solely held by Joseph Beninati so long as
he is alive, unless otherwise approved in writing by all the Preferred
Shareholders other than Persistence or a Successor Permitted Owner.
<PAGE>
-4-
"Termination Event": Any of the following: (i) the sale of all or
substantially all of the assets of the Corporation; (ii) the merger or
consolidation of the Corporation as a result of which the Shareholders shall own
less than a majority of the outstanding voting capital stock of the surviving
Corporation; (iii) the dissolution or liquidation of the Corporation; or (iv)
upon the closing of a firmly underwritten public offering pursuant to an
effective registration statement under the Securities Act, as amended, covering
the offer and sale of Common Stock for the account of the Corporation.
Capitalized terms not otherwise defined in this Agreement shall have the
meanings set forth in the Investment Agreement identified in clause (a) of the
definition of "Investment Agreements" above.
2. PURPOSE AND BACKGROUND. The Preferred Shareholders are parties to
----------------------
certain Investment Agreements pursuant to which they have purchased, or are
purchasing, certain Shares from the Corporation. The Preferred Shareholders
believe that their best interests and those of the Corporation will be served by
preserving harmony and continuity with respect to the management of the
Corporation, and that these goals can best be obtained by imposing restrictions
on the Disposition of the Shares and by providing options to purchase or sell
the Shares, all as provided in this Agreement.
3. RESTRICTION ON DISPOSITION.
--------------------------
3.1. General Restriction. Except for Dispositions to Permitted
-------------------
Transferees or as otherwise provided in this Agreement, no Shareholder shall at
any time Dispose of all or any part of the Shareholder's Shares unless and until
the Shareholder shall have obtained the prior written consent of all of the
other Shareholders, or unless the Disposition is a sale made in compliance with
the provisions of this Agreement. Persistence shall not permit any Dispositions
of any limited partnership interests in Persistence except to Permitted
Transferees. Persistence shall not permit any Disposition of the general
partner's interest in Persistence or any Disposition of the voting rights in any
Successor Permitted Owner or any Disposition of any equity interests in the
Person which is the general partner of Persistence or in any Person which holds
the voting rights in any Successor Permitted Owner (except upon the death of
Joseph Beninati); it being understood and agreed that the general partnership
interest in Persistence and all of the voting rights in any Successor Permitted
Owner shall continue to be solely held by Joseph Beninati or an entity in which
he owns and has the right to vote all of the equity interests so long as he is
alive, unless otherwise approved in writing by all the Preferred Shareholders.
Any attempted Disposition which is not in accordance with the terms and
conditions of this Agreement shall be null and void.
3.2. Exception for Permitted Transferees. Notwithstanding anything
-----------------------------------
to the contrary contained in this Agreement, a Shareholder may Dispose of all or
any portion of his or its Shares to a Permitted Transferee without the consent
of the other Shareholders. If a Shareholder Disposes of all or any portion of
his or its Shares to a Permitted Transferee, the Permitted Transferee shall
succeed to all of the rights and benefits, and be subject to all of the
restrictions under this Agreement, applicable to the
<PAGE>
-5-
Shareholder from whom or which the Permitted Transferee receives his Shares. If
a Shareholder who or which made a Disposition to a Permitted Transferee Disposes
of his or its Shares, such Shareholder's Permitted Transferee(s) shall also be
required to Dispose of his or its Shares on the same terms and conditions. In
the event of a Disposition to a Permitted Transferee, each reference in this
Agreement to the Shareholder making such Disposition shall also include each
Permitted Transferee of such Shareholder.
4. GENERAL PROCEDURES ON DISPOSITIONS.
----------------------------------
4.1. Sale Right. If a Shareholder desires to sell all or any part of
----------
a Shareholders' Shares then held or owned beneficially by such Shareholder
(other than to a Permitted Transferee), then the Offeror shall offer all, but
not less than all, of the Offeror's Shares for sale in accordance with the
remaining provisions of this Section 4 and the Offeror shall not have the right
to make any Disposition of the Offeror's Shares, except in accordance with the
remaining provisions of this Section 4.
4.2. Bona Fide Offer. If the Offeror receives from any Person (a "Bona
---------------
Fide Offeror") a bona fide offer in writing (the "Bona Fide Offer") to purchase
all of the Offeror's Shares, then the Offeror shall give to the Corporation and
the Remaining Shareholders a notice (the "Bona Fide Offer Notice") to which
shall be annexed a copy of the Bona Fide Offer containing the material terms and
conditions of the Bona Fide Offer.
4.2.1. The Bona Fide Offer Notice shall constitute an offer (the
"Offer") on the part of the Offeror to sell to the Remaining Shareholders all of
---
the Shares owned by the Offeror and shall fix a date and time by which the
Remaining Shareholders individually must notify the Offeror of their intent to
purchase the Shares owned by such Offeror, which date shall not be less than 10
days nor more than 30 days after the Bona Fide Offer Notice is given.
4.2.2. Each Remaining Shareholder shall have the option to
purchase the Shares owned by the Offeror in accordance with such Remaining
Shareholder's Proportionate Percentage. If a Remaining Shareholder does not
exercise his or its option, in whole or in part, then the other Remaining
Shareholders shall have the option to purchase all of the remaining Shares in
proportion to their Proportionate Percentages.
4.2.3. the Corporation and/or each Remaining Shareholder
desiring to accept the Offer shall sign and deliver an acknowledgment setting
forth the number of Shares for which he or it desires to accept the Offer. Any
such acknowledgment shall constitute an acceptance of the Offer as to the number
of Shares set forth in the acknowledgment.
4.2.4. The acceptance by the Remaining Shareholders of the
Offer, if at all, must be for all of the Offeror's Shares. If the Offer is
accepted for less
<PAGE>
-6-
than all of the Offeror's Shares, the Offer shall be deemed withdrawn and any
acceptance of the Offer shall be deemed ineffective.
4.2.5. If the Offer is accepted as to all of the Offeror's
Shares, the Offeror and the Remaining Shareholders accepting the Offer shall set
a date, time and place when the purchase and sale of the Shares shall be
consummated (the "Offer Closing"), which date shall not be less than 10 days nor
more than 30 days after the date set forth in Section 4.2.1 above. The Remaining
Shareholders accepting the Offer shall be bound to purchase and the Offeror
shall be obligated to sell the Offeror's Shares at the Offer Closing.
4.2.6. At the Offer Closing, the Offeror shall deliver all
documents which counsel for the purchaser(s) and the Corporation reasonably deem
necessary or advisable in order to accomplish a complete transfer of the Shares
to the purchaser(s) free and clear of all Liens, and the purchaser(s) shall
deliver to the Offeror the purchase price per Shares set forth in the Bona Fide
Offer Notice for the number of Share to be purchased by such purchaser(s) in
accordance with the terms set forth in the Bona Fide Offer Notice.
4.3. Tag Along Offer. If the Offer is not accepted for all of the
---------------
Offeror's Shares and therefore expires and if the Offeror decides to continue to
accept the Bona Fide Offer, than the Offeror shall give to the Corporation and
the Remaining Shareholders a notice (the "Tag Along Notice") within five days
after the date set forth in Section 4.2.1 above.
4.3.1. The Tag Along Notice shall constitute an offer on the
part of the Offeror to the Remaining Shareholders for the Remaining Shareholders
to sell their Shares to the Bona Fide Offeror on the same terms and conditions
contained in the Bona Fide Offer in ratable amounts based upon their percentage
ownership of Shares (the "Tag Along Offer").
4.3.2. The Remaining Shareholders shall accept the Tag Along
Offer, if at all, by delivering to the Offeror an acknowledgment (the "Tag Along
Offer Acceptance Notice"), within 10 days after the delivery of the Tag Along
Notice, of such Remaining Shareholder's agreement to sell such ratable portion
of his or its Shares to the Bona Fide Offeror on the terms contained in the Bona
Fide Offer.
4.3.3. If any of the Remaining Shareholders accept the Tag Along
Offer, the Offeror shall deliver to each Remaining Shareholder a notice fixing a
date, time and place when the purchase and sale of the Shares shall be
consummated (the "Tag Along Closing"), which date shall not be less than 10 days
nor more than 30 days after the 10 day period for delivery of a Tag Along
Acceptance Notice has expired. At the Tag Along Closing, all of the Selling
Shareholders (i.e. the Offeror and Remaining Shareholders accepting the Tag
Along Offer) shall deliver all documents which counsel for the Bona Fide Offeror
and the Corporation reasonably deem necessary or advisable in order to
accomplish a complete transfer of the Shares to the Bona Fide Offeror free and
clear of all Liens.
<PAGE>
-7-
4.3.4. The Offeror may not sell his Shares to the Bona Fide
Offeror unless the Bona Fide Offeror purchases a ratable number of Shares from
the Remaining Shareholders accepting the Tag Along Offer. If the Tag Along Offer
is not accepted by a Remaining Shareholder as provided in Section 4.3.2, then
the Tag Along Offer shall be deemed withdrawn with respect to such Remaining
Shareholder and any attempted acceptance of the Tag Along Offer by a Remaining
Shareholder after such date shall be deemed ineffective.
4.4. Failure to Exercise Tag Along Offer. If the Tag Along Offer shall
-----------------------------------
not be timely accepted as provided in Section 4.3.2. and therefore expires, then
the Offeror may sell his or its Shares to the Bona Fide Offeror within 60 days
from the date of the Date set forth in Section 4.2.1 hereof upon the terms and
conditions set forth in the Bona Fide Offer. If the Offeror does not consummate
the sale of his or its Shares to the Bona Fide Offeror on such terms and
conditions within such 60-day period, the Offeror shall again be required to
comply with all of the provisions of this Section 4.
4.5. Agreement to be Bound. Any Bona Fide Offeror who purchases Shares
---------------------
pursuant to Section 4 or otherwise becomes the owner of the Shares shall be
deemed to have consented to his Shares being subject to and governed by the
terms of this Agreement and shall have all of the rights and obligations of a
Shareholder under this Agreement from the date of his or its purchase.
4.6. "Market Stand-Off" Agreement. Each Shareholder hereby agrees that
----------------------------
it shall not, to the extent requested by the Corporation or an underwriter of
securities of the Corporation, sell or otherwise transfer or dispose of any
Shares (other than to donees, members or partners of the Preferred Shareholder
who agree to be similarly bound) for up to 180 days following the date of the
final prospectus in connection with a registration statement of the Corporation
filed under the Securities Act in connection with its Initial Public Offering
provided that each executive officer and director of the Corporation agree to
such restrictions. The provisions of this Section 4.6 shall be binding upon any
transferee or assignee of any Shares.
5. TERMINATION AND REPLACEMENT OF PRIOR AGREEMENTS.
-----------------------------------------------
(a) The Corporation and each of the Shareholders that is a party to
all or any of the Prior Shareholders' Agreements agree that this Agreement
supersedes and replaces each of the Prior Shareholders Agreements in their
entirety and such Prior Shareholders Agreements shall be deemed terminated and
shall have no further force and effect. The legend approved by or placed on
stock certificates issued in connection with the Prior Shareholders Agreements
shall constitute substantial compliance with the legend requirements set forth
in Section 6 below.
(b) The Corporation and each Shareholder that is a party to the Prior
Registration Rights Agreement agree that the Registration Rights Agreement
supersedes and replaces the Prior Registration Rights Agreement in its entirety
and that the Prior
<PAGE>
-8-
Registration Rights Agreement shall be deemed terminated and shall have no
further force and effect.
(c) The Corporation and each Shareholder that is a party to the
February 1, 1999 Investment Agreement agree (i) that Sections 6.2, 6.3, 6.6 and
6.7 shall be deemed terminated and shall have no further force and effect and
(ii) to waive such Shareholder's right of first offer contained in Section 6.3
thereof (including any notice provisions contained therein).
6. LEGENDS ON STOCK CERTIFICATES. Subject to the provisions of Section 5
-----------------------------
with respect to certificates approved by or issued in connection with the Prior
Shareholders Agreements, all stock certificates currently outstanding or issued
after the date of this Agreement shall be legended substantially as follows:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AND
ARE TRANSFERABLE ONLY IN COMPLIANCE WITH THE AMENDED AND RESTATED
SHAREHOLDERS' AGREEMENT DATED AS OF SEPTEMBER 10, 1999 MADE BY AND
AMONG THE CORPORATION AND CERTAIN OF ITS STOCKHOLDERS, A COPY OF WHICH
IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL SUCH SHARES ARE REGISTERED UNDER SUCH ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY IS OBTAINED TO THE EFFECT THAT
SUCH REGISTRATION IS NOT REQUIRED.
7. BOARD OF DIRECTORS. Unless otherwise set forth herein, each
------------------
Shareholder agrees to vote all of its, his or her Shares and to take all other
necessary or desirable actions within its control (whether as a shareholder,
director or officer of the Corporation or otherwise, and including without
limitation attendance at meetings in person or by proxy for purposes of
obtaining a quorum and execution of written consents in lieu of meetings), and
the Corporation shall take all necessary and desirable actions within its
control (including, without limitation, calling special board and shareholder
meetings), so that:
7.1. The Corporation shall have a Board of Directors comprised of
seven (7) members.
<PAGE>
-9-
7.2. As of the date of this Agreement, for a period of one year and
unless and until their respective successors are subsequently elected: (i) the
holders of the Series A Preferred Stock hereby agree that the director to be
elected by holders of the Series A Preferred Stock, voting as a separate class,
pursuant to the terms of the Third Amended and Restated Certificate of
Incorporation, shall be Ronald V. Davis, (ii) the holders of the Series B
Preferred Stock hereby agree that the director to be elected by the holders of
the Series B Preferred Stock, voting as a separate class, pursuant to the terms
of the Third Amended and Restated Certificate of Incorporation, shall be Joseph
P. Beninati, (iii) the holders of the Series C Preferred Stock hereby agree that
the director to be elected by the holders of the Series C Preferred Stock,
voting as a separate class, pursuant to the terms of the Third Amended and
Restated Certificate of Incorporation, shall be Ed Hajim, (iv) the holders of
the Series D Preferred Stock hereby agree that the director to be elected by
holders of the Series D Preferred Stock, voting as a separate class, pursuant to
the terms of the Third Amended and Restated Certificate of Incorporation, shall
be William J. Marshall, and (v) the holders of the Series E Preferred Stock
hereby agree that the directors to be elected by holders of the Series E
Preferred Stock, voting as a separate class, pursuant to the terms of the Third
Amended and Restated Certificate of Incorporation, shall be Jonathan R. Lynch.
The foregoing shall constitute a written consent of the applicable shareholders
pursuant to the terms of Section 228(a) of the Delaware General Corporation Law.
7.3 With regard to the two directors to be elected by the holders of
the Common Stock, the Series A Preferred Stock, the Series B Preferred Stock,
the Series C Preferred Stock, the Series D Preferred and the Series E Preferred
Stock, voting together as a single class (the Preferred Stock voting on an as-
converted into Common Stock basis), pursuant to the terms of the Third Amended
and Restated Certificate of Incorporation, all such Shareholders who are parties
to this Agreement hereby agree to vote for each of Dennis M. Goett, the Chief
Financial Officer of the Corporation, and Graham Albutt, each of whom shall
serve for a period of one year and unless and until his successor is
subsequently elected.
7.4. In the event that any director for any reason ceases to serve as
a member of the Board during his or her term of office, the resulting vacancy on
the Board shall be filled by a majority vote of the Shareholders entitled to
elect such director as provided in this Section 7.
7.5. If the Shareholders fail to designate a representative to fill a
directorship pursuant to the terms of this Section 7, the election of such
director shall be accomplished in accordance with the Corporation's Third
Amended and Restated Certificate of Incorporation, bylaws and applicable law.
7.6. Each of the Shareholders agrees to vote all shares of stock
owned by such shareholder for the removal of a director whenever (but only
whenever) there shall be presented to the Board of Directors the written
direction that such director be removed by a majority of the Shareholders
entitled to elect such director.
<PAGE>
-10-
7.7. To the extent that any provision of the Corporation's Third
Amended and Restated Certificate of Incorporation or bylaws is inconsistent with
the provisions of this Agreement, the Shareholders agree to take all actions
necessary to effect such amendments to the Third Amended and Restated
Certificate of Incorporation or bylaws as may be necessary and appropriate to
give full effect to the provisions of this Agreement.
This Section 7 is intended to constitute a voting agreement among
Shareholders under Section 218 of the Delaware General Corporation Law.
8. FINANCIAL INFORMATION. The Corporation covenants and agrees to furnish
---------------------
to the Preferred Shareholders (other than (A) holders of Series E Preferred
Stock that have purchased less than $1.0 million in shares of Series E Preferred
Stock on the date hereof, or (B) any holder of Series D Preferred Stock if such
holder fails at any time to own less than 50% of the Series D Preferred Stock
purchased by such holder pursuant to the February 1, 1999 Investment Agreement,
or (C) any holder of Series E Preferred Stock if such holder fails at any time
to own less than 50% of the Series E Preferred Stock purchased by such holder
pursuant to the Investment Agreement) as soon as practicable and in any event
(i) within 120 days after the end of each fiscal year of the Corporation, the
audited balance sheet of the Corporation as at the end of such fiscal year and
the related statements of income, retained earnings and changes in financial
position for such fiscal year, setting forth in the each case in comparative
form (for each year other than the first fiscal year) corresponding figures from
the preceding annual audit, prepared in accordance with generally accepted
accounting principles consistently applied and certified by independent public
accountants selected by the Corporation and (ii) within 45 days after the end of
each fiscal quarter of the Corporation, the unaudited balance sheet of the
Corporation as at the end of such fiscal period and the related statements of
income, retained earnings and changes in financial position for such fiscal
quarterly period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly period, and in each case setting forth comparative
figures for the related periods in the prior fiscal year, all of which shall be
prepared in accordance with generally accepted accounting principles,
consistently applied, subject to normal year-end audit adjustments. The
Preferred Shareholders agree that this Section 8 supersedes and replaces in
their entirety the obligations of the Corporation contained in Section 6.3.1 of
the August 1998 Agreement, Section 6.2.1 of the June 1998 Agreement, Section
7.2.1 of the December 1997 Agreement, and Section 6.2 of the February 1, 1999
Investment Agreement, and such sections of the August 1998 Agreement, June 1998
Agreement, December 1997 Agreement and February 1, 1999 Investment Agreement
shall have no further force or effect subsequent to the date hereof.
<PAGE>
-11-
9. RIGHT OF FIRST OFFER.
--------------------
9.1. Calculation of Pro Rata Share. The Corporation hereby grants to
-----------------------------
each Series D Investor and each Series E Investor that holds at least 100,000
Shares (each an "Investor") the right of first offer to purchase such Investor's
pro rata share ("Pro Rata Share") of New Securities (as defined in Section 9.2)
that the Corporation may, from time to time, propose to sell and issue. Such
Investor's Pro Rata Share, for purposes of this right of first offer, is the
ratio that the number of shares of Common Stock (assuming conversion of all
Preferred Stock and other securities convertible into Common Stock or Preferred
Stock including, without limitation, options or warrants to acquire Common Stock
or Preferred Stock) held by such Investor bears to the total number of shares of
Common Stock outstanding immediately prior to the time of issuance of such New
Securities (assuming conversion into Common Stock of all outstanding Preferred
Stock and any other securities convertible into Common Stock or Preferred Stock
including, without limitation, options or warrants to acquire Common Stock or
Preferred Stock). This right of first offer shall be subject to the following
provisions of this Section 9.
9.2. Definition of New Securities. "New Securities" shall mean any
----------------------------
Common Stock or any Preferred Stock of the Corporation, whether or not now
authorized, and any rights, options, or warrants to purchase said Common Stock
or Preferred Stock, and securities of any type whatsoever that are, or may
become, convertible into or exchangeable for Common Stock or Preferred Stock;
provided, however, that "New Securities" does not include (i) securities
issuable upon exercise of the Series D Warrants or upon conversion of or with
respect to the outstanding Preferred Stock or Series D Warrant shares or upon
conversion of or with respect to any other Preferred Stock issued after the
date of this Agreement and to which the Investors have either exercised or
affirmatively waived in writing their rights of first offer as set forth in this
Section 9; (ii) securities offered to the public pursuant to a registration
statement filed under the Securities Act in connection with any public offering;
(iii) securities issued as consideration in connection with the acquisition of
another corporation by the Corporation by merger, purchase of substantially all
of the assets, or otherwise; (iv) shares of the Corporation's Common Stock (or
related options or warrants) issued to employees, officers, directors,
consultants, or other persons performing services for the Corporation pursuant
to any stock offering, plan, or arrangement approved by the Board of Directors
of the Corporation; (v) securities issued pursuant to or in connection with any
corporate partnership, joint venture or licensing arrangement with a non-
affiliate or in connection with an unaffiliated equipment lease financing or
bank debt into which the Corporation may enter; (vi) shares of the Corporation's
Common Stock or Preferred Stock issued in connection with any stock split, stock
dividend, or recapitalization by the Corporation; or (vii) securities issued
upon exercise or conversion of any New Securities.
9.3. Procedures. (a) In the event that the Corporation proposes to
----------
issue New Securities, it shall give each Investor written notice (the "First
Notice") of its intention, describing the type of New Securities, the price, and
the general terms upon which the Corporation proposes to issue the same. Within
seven (7) days after receipt of the First Notice, the Investors shall give the
Corporation written notice (the "Investor
<PAGE>
-12-
Notice") of its intention to purchase or obtain, at the price and on the terms
specified in the Notice, a number of shares equal to or less than its Pro Rata
Share of the New Securities. The Investor Notice shall be deemed a binding offer
to purchase the number of New Securities set forth therein. In addition, the
Investor Notice shall state whether the Investor wishes to purchase more than
its Pro Rata Share of the New Securities. The Corporation shall promptly give
written notice to each Investor that purchases its Pro Rata Share of the New
Securities (a "Fully-Exercising Investor") of the amount of New Securities, if
any, that other Investors do not elect to purchase in response to the First
Notice (the "Second Notice"). Each Fully Exercising Investor shall notify the
Corporation within three (3) days of receipt of the Second Notice if it would
like to purchase any of the unsubscribed shares and indicate the maximum number
of unsubscribed shares it would like to purchase. The Corporation shall inform
the Fully-Exercising Investor of the total number of unsubscribed shares
available and provide the Fully-Exercising Investor with an allocation of the
unsubscribed shares based on the number of shares of Common Stock (assuming
conversion of all Preferred Stock into Common Stock) held by each Fully
Exercising Investor.
(b) To the extent that the Investors fail to exercise in full
the right of first offer as provided in this Section 9 hereof, the Corporation
shall have ninety (90) days thereafter to sell (or enter into an agreement
pursuant to which the sale of New Securities covered thereby shall be closed, if
at all, within ninety (90) days after execution of such agreement) the New
Securities to which the Investors' rights were not exercised, at a price and
upon general terms no more favorable to the purchasers thereof than specified in
the First Notice. In the event the Corporation has not sold the New Securities
within said ninety (90)-day period (or sold and issued New Securities in
accordance with the foregoing within ninety (90) days from the date of said
agreement), the Corporation shall not thereafter issue or sell any New
Securities, without first offering such securities to the Investors in the
manner provided above.
(c) An Investor's failure to exercise this right of first offer
on any issuance of New Securities shall not adversely affect the Investor's
right of first offer to purchase subsequent issuances of New Securities.
(d) The right of first offer granted under this Section 9 is
nonassignable except to an Affiliate of the Investor.
10. REPRESENTATIONS AND WARRANTIES OF THE PREFERRED SHAREHOLDERS. Each of
------------------------------------------------------------
the Shareholders identified on the signature pages of this Agreement, makes the
following representations and warranties to the Corporation, severally and not
jointly, and each with respect only to itself, himself or herself:
10.1. Organization and Authority. Such Shareholder, if not a natural
--------------------------
person, is duly organized, validly existing and in good standing under the laws
of its jurisdiction of formation. Such Shareholder has full power and authority
to enter into this Agreement and to perform its, his or her obligations under
this Agreement. The signing, delivery and performance of this Agreement by such
Shareholder, if not a natural person, have been duly authorized by all necessary
action on the part of such Shareholder, and no
<PAGE>
-13-
further action is required on the part of such Shareholder in order to authorize
this Agreement or the transactions contemplated by this Agreement. This
Agreement is the legal, valid and binding obligation of such Shareholder, duly
enforceable against such Shareholder in accordance with its terms.
10.2. No Conflict or Violation. Neither the execution and delivery of
------------------------
this Agreement by such Shareholder nor the performance by such Shareholder of
the transactions contemplated by this Agreement will result in: (i) a violation
of or conflict with the governing documents of such Shareholder, if not a
natural person; (ii) a violation of any Laws or any Order to which such
Shareholder is subject; or (iii) a breach or default under any mortgage,
indenture, deed of trust, real property or personal property lease, license,
contract or other agreement to which such Shareholder is subject.
10.3. Consents and Approvals. The execution, delivery and performance
----------------------
by such Shareholder of this Agreement and the transactions contemplated by this
Agreement do not require the consent, approval or authorization of, or any
declaration, filing, registration or notice with or to any governmental or
regulatory authority, or any other Person.
11. TERMINATION. This Agreement shall be terminated on the earlier of (i)
-----------
the occurrence of a Termination Event or (ii) the agreement of the Corporation
and 66 2/3% of the then outstanding Shares.
12. MISCELLANEOUS.
-------------
12.1. Notices. Notices given pursuant to this Agreement must be in
-------
writing. They shall be deemed to have been duly given: (i) upon delivery or
refusal to accept delivery, if hand-delivered; (ii) when transmitted, if sent by
fax with confirmed receipt, followed by a "hard" copy delivered by any other
method specified in this Section 11.1; or (iii) one (1) business day after being
deposited for next-day delivery with Federal Express or other national overnight
courier service. In each case, notices shall be addressed to the parties at
their addresses set forth herein to such other place and with such concurrent
copies as the parties may subsequently designate by written notice.
12.2. Amendment; Waiver. None of the provisions of this Agreement
-----------------
may be changed, modified, waived or cancelled orally or otherwise except in
writing, signed by the Corporation and persons holding at least 66 2/3% of the
then outstanding Shares (assuming conversion to Common Stock at the conversion
rate then in effect).
12.3. Binding Effect; Assignment. This Agreement is binding on the
--------------------------
Corporation and the Shareholders and their respective heirs, personal
representatives and successors in interest.
12.4. Entire Agreement. This written Agreement embodies the entire
----------------
understanding among parties with respect to the Shares. There are no binding
agreements or understandings among the parties with respect to the Shares other
than as expressly set forth in this Agreement and the Registration Rights
Agreement.
<PAGE>
-14-
12.5. Interpretation; Construction.
----------------------------
12.5.1. The terms of this Agreement have been fully negotiated
by the parties in consultation with counsel, and the wording of this Agreement
has been arrived at by all of them as a result of their joint discussions.
Accordingly, no provision of this Agreement shall be construed against a
particular party or in favor of another party merely because of which party (or
its representative) drafted or supplied the wording for such provision.
12.5.2. Except where otherwise noted in context, all
references to "Sections"; "Exhibits" or "Schedules" shall be deemed to refer to
the sections or subsections, as appropriate, exhibits or schedules of this
Agreement.
12.5.3. Section headings appearing in this Agreement are
inserted solely as reference aids for the ease and convenience of the reader;
they shall not be deemed to modify, limit or define the scope or substance of
the provisions they introduce, nor shall they be used in construing the intent
or effect of such provisions.
12.5.4. Where the context requires: (i) use of the singular or
plural incorporates the other, and (ii) pronouns and modifiers in the masculine,
feminine or neuter gender shall be deemed to refer to or include the other
genders.
12.5.5. As used in this Agreement, the terms "include(s)" and
"including" mean "including but not limited to"; that is, in each case the
example or enumeration which follows the use of either term is illustrative but
not exclusive or exhaustive.
12.6. Multiple Counterparts. This Agreement may be signed in one or
---------------------
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when each of the parties has signed and delivered a
counterpart to the other.
12.7. Governing Law. This Agreement shall be governed by and
-------------
interpreted according to the laws of Delaware, but without giving effect to any
Delaware choice of law provisions which might otherwise make the Laws of a
different jurisdiction govern or apply.
12.8 Additional Investors. As contemplated by Section 2.2 of the
Investment Agreement, by executing a counterpart signature page hereto, each
Additional Investor (as defined in the Investment Agreement) agrees to be bound
by the terms of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the Corporation and the Shareholders have executed this
Agreement as of the day and year first above written.
<TABLE>
<CAPTION>
THE CORPORATION: THE PREFERRED SHAREHOLDERS:
<S> <C>
GREENWICH TECHNOLOGY PERSISTENCE PARTNERS, L.P.
PARTNERS, INC. Address: c/o Graham Albutt
Address: 43 Gatehouse Road 40 E. 52/nd/ Street, 14/th/ Floor
Stamford, CT 06902 New York, NY 10022
By: JOBEN EQUITIES, LTD., its General Partner
/s/ Joseph Beninati
--------------------------------
Joseph Beninati, Chief Executive /s/ Joseph Beninati
----------------------------------------
Officer Joseph Beninati, Chief Executive Officer
FG-GTP
Address: 20 Dayton Avenue
Greenwich, CT 06830
/s/ Kathleen Shepphird
----------------------------------------
Name: c/o Kathleen Shepphird
Title: Managing Director
/s/ James P. Cabrera
----------------------------------------
James P. Cabrera
Address: c/o Antares Holding
One Gatehouse Road
Stamford, CT 06902
FG-GTPC
Address: 20 Dayton Avenue
Greenwich, CT 06830
/s/ Kathleen Shepphird
----------------------------------------
Name: c/o Kathleen Shepphird
Title: Managing Director
</TABLE>
<PAGE>
RUSSELL J. CARPENTIERI RETIREMENT PLAN
Address: c/o The Alteron Group, Inc.
1025 Westchester Avenue
White Plains, NY 10604
/s/ Russell J. Carpentieri
-------------------------------------------
Name:
Title:
VANTAGEPOINT COMMUNICATIONS PARTNERS, LP
Address: One Stamford Landing, Suite 201
Stamford, CT 06902
By: VantagePoint Communications Associates, LLC,
its General Partner
/s/ Jeff Marshall
-------------------------------------------
Name: Jeff Marshall
Title: Managing Partner
VANTAGEPOINT VENTURE PARTNERS 1996, LP
Address: One Stamford Landing, Suite 201
Stamford, CT 06902
By: VantagePoint Associates, LLC,
its General Partner
/s/ Jeff Marshall
-------------------------------------------
Name: Jeff Marshall
Title: Managing Partner
/s/ Dennis M. Goett
-------------------------------------------
Name: Dennis M. Goett
Address: c/o Greenwich Technology Partners
43 Gatehouse Road
Stamford, CT 06902
<PAGE>
FG-GTPD
Address: c/o Kathleen Shepphird
20 Dayton Avenue
Greenwich, CT 06830
/s/ Kathleen Sheppird
-----------------------------------
Name: Kathleen Shepphird
Title: Managing Director
/s/ Carlos Dominquez
-----------------------------------
Name: Carlos Dominquez
Address: c/o Cisco Systems, Inc.
One Penn Plaza, 5th Floor
New York, NY 10119
/s/ Greg Berger
-----------------------------------
Name: Greg Berger
Address: c/o Mack-Call RealityGroup
100 Clearbrook Road
Elmsford, NY 10523
/s/ John Miller
-----------------------------------
Name: John Miller
Address: c/o Star Vest Management, Inc.
712 Fifth Avenue, 34th Floor
New York, NY 10019
/s/ Deborah Farrington
-----------------------------------
Name: Deborah Farrington
Address: c/o Star Vest Management, Inc.
712 Fifth Avenue, 34th Floor
New York, NY 10019
<PAGE>
/s/ Kevin M. Barry
----------------------------------------
Name: Kevin M. Barry
Address: c/o Testa, Hurwitz & Thibeault, LLP
125 High Street, 17th Floor
Boston, MA 02110
FG-GTPE
Address: c/o Kathleen Shepphird
20 Dayton Avenue
Greenwich, CT 06830
/s/ Kathleen Shepphird
----------------------------------------
Name: Kathleen Shepphird
Title: Managing Director
/s/ Graham Albutt
----------------------------------------
Name: Graham Albutt
Address: 40 E. 52/nd/ Street, 14/th/ Floor
New York, NY 10022
/s/ Robert J. Garbarino
------------------------------------------
Name: Robert J. Garbarino
Address: 245 Park Avenue, 16/th/ Floor
New York, NY 10167
/s/ Peter D. Cherasia
----------------------------------------
Name: Peter D. Cherasia
Address: 245 Park Avenue, 16/th/ Floor
New York, NY 10167
<PAGE>
CHASE VENTURE CAPITAL ASSOCIATES, L.P.
Address: Attn: Jonathan R. Lynch
Chase Capital Partners
380 Madison Avenue, 12/th/ Floor
New York, NY 10017
By:______________________________________,
its General Partner
/s/ Brian Richmond
--------------------------------------
Name: Brian Richmond
Title: General Partner
CREDIT SUISSE FIRST BOSTON VENTURE FUND I, L.P.
Address: Attn: Steve West
Credit Suisse First Boston
2400 Hanover Street
Palo Alto, CA 94304
By: QBB MANAGEMENT FUND I, LLC,
its General Partner
/s/ William J. B. Brady III
--------------------------------------
Name: William J. B. Brady III
Title: Managing Director
FG-GTPF
Address: 20 Dayton Avenue
Greenwich, CT 06830
/s/ Kathleen Shepphird
--------------------------------------
Name: Kathleen Shepphird
Title: Managing Director
STV PARTNERS III, L.L.C.
Address: 591 West Putnam Avenue
Greenwich, CT 06830
/s/ Jerome C. Silvey
--------------------------------------
Name: Jerome C. Silvey
Title: General Manager
<PAGE>
WHEATLEY PARTNERS II L.P.
Address: c/o Geocapital Corp.
767 5/th/ Avenue
New York, NY 10153
/s/ Irwin Lieber
--------------------------
Name: Irwin Lieber
Title: General Partner
<PAGE>
/s/ Edwin J. O'Mara
----------------------
Name: Edwin J. O'Mara
---------------------
Title:____________________
Date: 10/13/99
---------------------
/s/ John Stopper
----------------------
Name: John Stopper
---------------------
Title:____________________
Date: 10/20/99
---------------------
/s/ Laurence Pinkus
----------------------
Name: Laurence Pinkus
---------------------
Title:____________________
Date: 10/11/99
---------------------
/s/ Kevin Bock
----------------------
Name: Kevin Bock
---------------------
Title:____________________
Date: 10/18/99
---------------------
/s/ James Tucci
----------------------
Name: James Tucci
---------------------
Title:____________________
Date: 10/18/99
---------------------
<PAGE>
/s/ Robert Berlin
----------------------
Name: Robert Berlin
---------------------
Title:____________________
Date: 10/11/99
---------------------
/s/ John V. Wheeler
----------------------
Name: John V. Wheeler
---------------------
Title:____________________
Date: 10/13/99
---------------------
/s/ L. David Cardenas
----------------------
Name: L. David Cardenas
--------------------
Title:____________________
Date: 10/11/99
---------------------
/s/ Louis J. Mischianti
----------------------
Name: Louis J. Mischianti
---------------------
Title:____________________
Date:_____________________
/s/ James A. Conroy
----------------------
Name: James A. Conroy
---------------------
Title:____________________
Date: 10/11/99
---------------------
<PAGE>
/s/ Emil Roymans
--------------------------
Name: Emil Roymans
-------------------------
Title:________________________
Date: 10/15/99
-------------------------
/s/ Paul A. Rubin
--------------------------
Name: Paul A. Rubin
-------------------------
Title:________________________
Date: 10/11/99
--------------------------
/s/ Scott M. Freeman
--------------------------
Name: Scott M. Freeman
-------------------------
Title:________________________
Date: 10/12/99
--------------------------
/s/ Michael J. Schmidtberger
--------------------------
Name: Michael J. Schmidtberger
-------------------------
Title:________________________
Date: 10/12/99
--------------------------
/s/ Michael Grossman
--------------------------
Name: Michael Grossman
-------------------------
Title:________________________
Date: 10/14/99
--------------------------
/s/ Karl Frey
--------------------------
Name: Karl Frey
-------------------------
Title:________________________
Date: 10/11/99
--------------------------
<PAGE>
EPFL Partners
/s/ Russell Carpenteri
--------------------------
Name: Russell Carpenteri
------------------------
Title: Partner
------------------------
Date: 10/12/99
-------------------------
/s/ John D. Miller
--------------------------
Name: John D. Miller
------------------------
Title:
Date: 10/14/99
-------------------------
/s/ Deborah A. Farrington
--------------------------
Name: Deborah A. Farrington
------------------------
Title:________________________
Date: 10/14/99
-------------------------
<PAGE>
/s/ Gerard F. Becker and Christine B. Becker
---------------------------------------------
Name: Gerard F. Becker and Christine B. Becker
--------------------------------------------
Title:___________________________________________
Date: 10/13/99
--------------------------------------------
/s/ Nicholas A. Johnson and Patricia A. Johnson
---------------------------------------------
Name: Nicholas A. Johnson and Patricia A. Johnson
--------------------------------------------
Title:___________________________________________
Date: 11/29/99
--------------------------------------------
Clemente Family Trust
/s/ Richard Clemente
---------------------------------------
Name: Richard Clemente
-------------------------------------
Title: Trustee
------------------------------------
Date: 10/13/99
--------------------------------------
BMZ Investments
/s/ Stacey Cox
--------------------------------------
Name: Stacey E. Cox
-------------------------------------
Title: Partner
------------------------------------
Date: 10/13/99
-------------------------------------
/s/ Richard J. Testa
--------------------------------------
Name: Richard J. Testa
-------------------------------------
Title:____________________________________
Date:_____________________________________
<PAGE>
/s/ Anthony M. Carvette
-----------------------
Name: Anthony M. Carvette
----------------------
Title:_____________________
Date: 10/20/99
----------------------
/s/ Greg Berger
-----------------------
Name: Greg Berger
----------------------
Title:_____________________
Date: 10/15/99
----------------------
/s/ Kevin J. Kitson
-----------------------
Name: Kevin J. Kitson
----------------------
Title:_____________________
Date: 10/11/99
----------------------
/s/ Brian J. Flynn
-----------------------
Name: Brian J. Flynn
----------------------
Title:_____________________
Date: 10/12/99
----------------------
/s/ Angus M. Green
-----------------------
Name: Angus M. Green
---------------------
Title:_____________________
Date: 10/13/99
----------------------
/s/ Joseph A. Cabrera
-----------------------
Name: Joseph A. Cabrera
----------------------
Title:_____________________
Date: 10/14/99
----------------------
<PAGE>
/s/ Clint Heiden
-----------------------
Name: Clint Heiden
----------------------
Title:_____________________
Date: 10/16/99
----------------------
/s/ Stephen B. Seigel
-----------------------
Name: Stephen B. Seigel
----------------------
Title:_____________________
Date:______________________
/s/ DHW Turner
-----------------------
Name: DHW Turner
----------------------
Title:_____________________
Date: 10/22/99
----------------------
/s/ Dennis M. Goett
-----------------------
Name: Dennis M. Goett
----------------------
Title:_____________________
Date:______________________
IRA f/b/o Dennis M. Goett
/s/ Dennis M. Goett
-----------------------
Name:______________________
Title:_____________________
Date: 10/11/99
----------------------
<PAGE>
/s/ S. Elizabeth Press and Mark Andrew Mohn
---------------------------------------
Name: Elizabeth Press and Mark Andrew Mohn
--------------------------------------
Title:_____________________________________
Date: 10/13/99
--------------------------------------
/s/ Paul C. Carey
----------------------------------
Name: Paul C. Carey
---------------------------------
Title:________________________________
Date: 10/13/99
---------------------------------
/s/ Samer Tawfik
----------------------------------
Name: Samer Tawfik
---------------------------------
Title:________________________________
Date: 10/14/99
---------------------------------
HIGHWOOD PARTNERS LLC
/s/ Ari Horowitz
----------------------------------
Name: Ari Horowitz
---------------------------------
Title: CEO
--------------------------------
Date: 10/14/99
---------------------------------
/s/ William Cox and Beatrice Cox
----------------------------------
Name: William Cox and Beatrice Cox
---------------------------------
Title:________________________________
Date: 10/15/99
---------------------------------
<PAGE>
/s/ Gregory W. Carney
------------------------------------
Name: Gregory W. Carney
-----------------------------------
Title:__________________________________
Date: 10/15/99
-----------------------------------
/s/ Paul T. Goldman
------------------------------------
Name: Paul T. Goldman
-----------------------------------
Title:__________________________________
Date: 10/15/99
-----------------------------------
/s/ Donald K. Bryan and Belinda B. Bryan
------------------------------------
Name: Donald K. Bryan
-----------------------------------
Title:__________________________________
Date: 10/14/99
-----------------------------------
/s/ Edward Cettina
------------------------------------
Name: Edward Cettina
-----------------------------------
Title:__________________________________
Date: 10/17/99
-----------------------------------
/s/ Elio Cettina
------------------------------------
Name: Elio Cettina
-----------------------------------
Title:__________________________________
Date: 10/18/99
-----------------------------------
<PAGE>
The CIT Group/Equity Investments, Inc.
/s/ Mark Vander Veen
-----------------------------
Name: Mark Vander Veen
----------------------------
Title: Vice President
---------------------------
Date: 10/27/99
----------------------------
Chase Venture Capital Associates L.P.
/s/ Donald J. Hofmann
-----------------------------
Name: Donald J. Hofmann
----------------------------
Title: General Partner
---------------------------
Date: 10/19/99
----------------------------
VantagePoint Communications Partners, L.P.
By: VantagePoint Communications Associate, L.L.C.,
Its General Partner
/s/ James D. Marver
------------------------------------
Name: James D. Marver
-----------------------------------
Title: Managing Member
----------------------------------
VantagePoint Venture Partners 1996, L.P.
By: VantagePoint Associates, L.L.C.,
Its General Partner
/s/ James D. Marver
-----------------------------
Name: James D. Marver
----------------------------
Title: Managing Director
---------------------------
/s/ Mark B. Templeton
-----------------------------
Name: Mark B. Templeton
----------------------------
Title:___________________________
Date: 12/30/99
----------------------------
<PAGE>
/s/ Mark Wolfenberger
--------------------------------
Name: Mark Wolfenberger
-------------------------------
Title:______________________________
Date: 01/03/00
-------------------------------
/s/ Frank P. Slattery
--------------------------------
Name: Frank P. Slattery
-------------------------------
Title:______________________________
Date: 12/30/99
-------------------------------
/s/ Jeffrey A. Wrona
--------------------------------
Name: Jeffrey A. Wrona
-------------------------------
Title:______________________________
Date: 01/04/00
-------------------------------
/s/ Michael K. Ma
--------------------------------
Name: Michael K. Ma
-------------------------------
Title:______________________________
Date: 01/03/99
-------------------------------
/s/ Kurt Weber
--------------------------------
Name: Kurt Weber
-------------------------------
Title:______________________________
Date: 12/31/99
-------------------------------
UGE Enterprises LLC
/s/ Roger Cozzi
--------------------------------
Name: Roger Cozzi
-------------------------------
Title: Partner
------------------------------
Date: 01/06/00
-------------------------------
<PAGE>
Edgell Street Partners
/s/ James Harasimowicz
-------------------------------
Name: James Harasimowicz
-----------------------------
Title: Managing Partner
-----------------------------
Date: 01/12/00
------------------------------
/s/ Dennis M. Goett
-------------------------------
Name: Dennis M. Goett
------------------------------
Title:_____________________________
Date: 12/30/99
------------------------------
/s/ Jill Catania
-------------------------------
Name: Jill Catania
------------------------------
Title:_____________________________
Date: 12/30/99
------------------------------
/s/ Geryl W. Darington
-------------------------------
Name: Geryl W. Darington
------------------------------
Title:_____________________________
Date: 12/31/99
------------------------------
/s/ Robert J. Garbarino
-------------------------------
Name: Robert J. Garbarino
------------------------------
Title:_____________________________
Date: 12/30/99
------------------------------
/s/ Don Henderson
-------------------------------
Name: Don Henderson
------------------------------
Title:_____________________________
Date: 01/03/00
------------------------------
/s/ Bruce M. Tanis
-------------------------------
Name: Bruce M. Tanis
------------------------------
Title:_____________________________
Date: 12/31/99
------------------------------
<PAGE>
/s/ Peter Cherasia
--------------------------------
Name: Peter Cherasia
-------------------------------
Title:______________________________
Date: 01/06/00
-------------------------------
/s/ Michael A. Tunstall
--------------------------------
Name: Michael A. Tunstall
-------------------------------
Title:______________________________
Date: 01/03/00
-------------------------------
/s/ Wayne A. Segal
--------------------------------
Name: Wayne A. Segal
-------------------------------
Title:______________________________
Date: 01/04/00
-------------------------------
/s/ Tony Trousset
--------------------------------
Name: Tony Trousset
-------------------------------
Title:
Date: 01/04/00
-------------------------------
/s/ S. Elizabeth Press and Mark Andrew Mohn
---------------------------------------
Name: Elizabeth Press and Mark Andrew Mohn
--------------------------------------
Title:_____________________________________
Date: 01/05/00
--------------------------------------
/s/ Richard Haverly
--------------------------------
Name: Richard Haverly
-------------------------------
Title:______________________________
Date:_______________________________
<PAGE>
HIGH STREET INVESTORS 2000
By: Testa, Hurwitz & Thibeault, LLP
/s/ George W. Thibeault
-------------------------------
Name: George W. Thibeault
------------------------------
Title: Partner
-----------------------------
Date: 01/14/00
------------------------------
/s/ Kevin M. Barry
-------------------------------
Name: Kevin M. Barry
------------------------------
Title:_____________________________
Date: 01/14/00
------------------------------
<PAGE>
Exhibit A
- ---------
Preferred Stock Common Stock
--------------- ------------
Series A Preferred Shareholders
- -------------------------------
FG-GTP 4,000,000
JAMES P. CABRERA 100,000
Series B Preferred Shareholders
- -------------------------------
PERSISTENCE PARTNERS, L.P. 4,486,025 200,000
VANTAGEPOINT COMMUNICATIONS PARTNERS, LP 284,900
VANTAGEPOINT VENTURE PARTNERS 1996, L.P. 142,450
RUSSELL J. CARPENTIERI 4,273
RETIREMENT PLAN
GREG BERGER 4,273
KEVIN BARRY 8,547
FG-GTPE 495,726
GRAHAM ALBUTT 8,547
JOHN MILLER 8,547
DEBORAH FARRINGTON 4,273
ROBERT GARBARINO 42,735
PETER CHERASIA 42,735
Series C Preferred Shareholders
- -------------------------------
FG-GTPC 4,139,999
RUSSELL J. CARPENTIERI 66,667
RETIREMENT PLAN
<PAGE>
Preferred Stock Common Stock
--------------- ------------
Series D Preferred Shareholders/1/
- ----------------------------------
VANTAGEPOINT COMMUNICATIONS 2,849,002
PARTNERS, LP
VANTAGEPOINT VENTURE 1,424,502
PARTNERS 1996, LP
DENNIS GOETT 85,470
FG-GTPD 747,863
CARLOS DOMINQUEZ 42,735
GREG BERGER 21,368
JOHN MILLER 34,188
DEBORAH FARRINGTON 8,547
Holders of Series E Preferred Stock
- -----------------------------------
Initial Closing
---------------
Name of Series E Investor Registrable Securities
------------------------- ----------------------
Chase Venture Capital Associates, L.P. 4,739,337
Credit Suisse First Boston Venture Fund I, L.P. 236,967
STV Partners III, L.L.C. 473,934
FG-GTPF 236,967
Vantagepoint Communications Partners, LP 947,867
Vantagepoint Venture Partners 1996, L.P. 473,934
Wheatley Partners II L.P. 473,934
First Additional Closing
------------------------
Name of Series E Investor Registrable Securities
------------------------- ----------------------
Edwin J. O'Mara 7,108
John Stopper 23,696
Laurence Pinkus 4,739
Kevin Bock 50,236
________________
/1/ Vantagepoint Communications Partners, LP also has Warrants to purchase up to
2,849,002 shares of Series D Preferred Stock. Vantagepoint Venture Partners
1996, L.P. also has Warrants to purchase up to 1,424,502 shares of Series D
Preferred Stock.
<PAGE>
Name of Series E Investor Registrable Securities
------------------------- ----------------------
James Tucci 59,241
Robert Berlin 11,848
John V. Wheeler 11,848
L. David Cardenas and Stacey J. Cardenas 2,369
Louis J. Mischianti 23,696
James A. Conroy 4,739
Emil A. Roymans 2,369
Paul A. Rubin 7,109
Scott M. Freeman 4,739
Michael J. Schmidtberger 4,739
Michael A. Grossman 5,924
Karl Frey 11,848
EPFL Partners 4,739
John D. Miller 11,848
Deborah A. Farrington 2,369
Gerard F. Becker and Christine B. Becker 11,848
Nils A. Johnson and Patricia A. Johnson 9,478
Clemente Family Trust 9,478
BMZ Investments 23,696
Richard J. Testa 9,952
Anthony M. Carvette 23,696
Greg Berger 5,924
Kevin J. Kitson 47,393
Brian J. Flynn 4,739
Angus M. Green 18,957
Joseph A. Cabrera 11,848
Clint Heiden 23,696
Stephen B. Seigel 47,393
David HW Turner 11,848
Dennis M. Goett 18,957
IRA FBO Dennis M. Goett 28,435
S. Elizabeth Press and Mark Andrew Mohn 10,000
Paul C. Carey 18,957
Samer Tawfik 142,180
Highwood Partners LLC 14,218
William C. Cox III and Beatrice I. Cox 9,478
Gregory W. Carney 11,848
Paul T. Goldman 7,109
Donald K. Bryan and Belinda B. Bryan 11,848
Edward Cettina 7,109
Elio Cettina 7,109
The CIT Group/Equity Investments, Inc. 473,934
Chase Venture Capital Associates, L.P. 473,933
VantagePoint Venture Partners 1996, L.P. 157,820
VantagePoint Communications Partners, L.P. 316,114
<PAGE>
Second Additional Closing
-------------------------
Name of Series E Investor Registrable Securities
------------------------- ----------------------
Mark B. Templeton 11,848
Mark Wolfenberger 23,696
Frank P. Slattery 4,739
Jeffrey Wrona 4,739
Michael Ma 4,739
Kurt Weber 11,848
UGE Enterprises LLC 4,739
Edgell Street Partners 7,109
Dennis M. Goett 14,218
Jill Catania 4,739
Geryl Darington 11,848
Robert Garbarino 23,696
Donald Henderson 9,478
Bruce M. Tanis 11,848
Peter Cherasia 23,696
Michael Tunstall 35,545
Wayne A. Segal 23,696
Anthony Trousett 23,696
S. Elizabeth Press and Mark Andrew Mohn 20,000
Richard Haverly 100,000
High Street Investors 2000 47,393
Kevin M. Barry 4,739
<PAGE>
EXHIBIT 10.14
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
--------------------------------------------------
THIS IS AN AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (the
"Agreement") made and dated as of September 10, 1999 by and:
---------
among: GREENWICH TECHNOLOGY PARTNERS, INC., a Delaware corporation (the
- -----
"Corporation");
-----------
and: the holders of shares of Series D Preferred Stock and Series E Preferred
- ---
Stock of the Corporation as set forth on Exhibit A attached to this
---------
Agreement, including Additional Investors that purchase Series E
Preferred Stock after the date hereof as contemplated by Section 3.11
hereof (collectively, the "Investors"):
---------
The Corporation and the Investors agree as follows:
1. DEFINITIONS. As used in this Agreement, each of the following terms
-----------
means:
"Exchange Act": The Securities Exchange Act of 1934, as amended.
------------
"Form S-3": The form under the Securities Act as is in effect on the
--------
date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Corporation
with the SEC.
"Holder": Any person owning of record Registrable Securities or any
------
transferee of record of such Registrable Securities to whom rights under this
Agreement have been duly assigned in accordance with this Agreement.
"Initial Public Offering": A firmly underwritten public offering
-----------------------
pursuant to an effective registration statement under the Securities Act
covering the offer and sale of Common Stock for the account of the Corporation
in which the price per share (as adjusted for combinations, stock dividends,
subdivisions or split-ups) is at least $5.50 and the net cash proceeds to the
Corporation (after payment of underwriting discounts, commissions and fees) are
at least $30,000,000.
"Initiating Holders": Any Holder or Holders who in the aggregate are
------------------
Holders of not less than 50% of the then outstanding Registrable Securities.
"Preferred Stock": Collectively, the Series D Preferred Stock of the
---------------
Corporation and the Series E Preferred Stock of the Corporation.
"Registrable Securities": All shares of Common Stock issued or
----------------------
issuable pursuant to the conversion of the Preferred Stock and any shares of the
Common Stock of the Corporation or other securities issued in connection with
any stock split, stock dividend, recapitalization or similar event relating to
the foregoing; excluding in all cases, however, any
<PAGE>
Registrable Securities sold by a person in a transaction in which rights under
this Agreement are not assigned in accordance with this Agreement or any
Registrable Securities sold to the public.
"Registration": A registration effected by preparing and filing a
------------
registration statement in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such registration statement.
"Registration Expenses": All expenses incurred by the Corporation in
---------------------
complying with Sections 2.1, 2.2 and 2.3 hereof, including, without limitation,
all registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel and accountants for the Corporation, blue sky
fees and expenses and the expense of any special audits incident to or required
by any such registration (but excluding the compensation of regular employees of
the Corporation, which shall be paid in any event by the Corporation) and the
reasonable fees and disbursements of one counsel for all Holders.
"SEC" or "Commission": means the U.S. Securities and Exchange
--- ----------
Commission.
"Securities Act": The Securities Act of 1933, as amended.
--------------
"Selling Expenses": All underwriting discounts and selling
---------------- ---
commissions applicable to the sale of Registrable Securities.
2. REGISTRATION RIGHTS.
-------------------
2.1. Requested Registration.
----------------------
2.1.1. If the Corporation shall receive from an Initiating
Holder, at any time, a written request that the Corporation effect any
registration with respect to all or a part of the Registrable Securities, the
Corporation will:
(i) promptly give written notice of the proposed
registration, qualification or compliance to all other Holders of Registrable
Securities; and
(ii) as soon as practicable, use its reasonable best
efforts to effect such registration (including, without limitation, the
execution of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations issued under the Securities
Act) as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the Registrable
Securities of any Holder or Holders joining in such request as are specified in
a written request received by the Corporation within 20 days after written
notice from the Corporation is given under Section 2.1.1(a)(i) above; provided,
however, that the Corporation shall not be obligated to effect, or take any
action to effect, any such registration pursuant to this Section 2.1:
-2-
<PAGE>
(A) In any particular jurisdiction in which the Corporation
would be required to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless the Corporation
is already subject to service in such jurisdiction and except as may be required
by the Securities Act or applicable rules or regulations thereunder;
(B) After the Corporation has effected one (1) such
registration pursuant to this Section 2.1 and such registration has been
declared or ordered effective or withdrawn by the Initiating Holders;
(C) If the aggregate number of all the Registrable
Securities requested by all Holders to be registered pursuant to such request
equals less than fifty percent (50%) of the total number of outstanding
Registrable Securities; or
(D) Prior to six months after the closing of the
Corporation's Initial Public Offering.
The registration statement filed pursuant to the request of the Initiating
Holders may, subject to the provisions of Section 2.1.2 below, include other
securities of the Corporation which are held by officers or directors of the
Corporation for the Corporation's own account or which are held by persons who,
by virtue of agreements with the Corporation, are entitled to include their
securities in any such registration, but the Corporation and such other holders
shall have no absolute right to include any of its securities in any such
registration.
2.1.2. If the Initiating Holders intend to distribute the
Registrable Securities covered by their request made pursuant to Section 2.1.1
hereof by means of an underwriting, they shall so advise the Corporation as a
part of their request made pursuant to Section 2.1.1 and the Corporation shall
include such information in the written notice referred to in Section 2.1.1. In
such event, the right of any Holder to include such Holder's Registrable
Securities in such registration shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. All Holders proposing to distribute their securities through
such underwriting shall (together with the Corporation) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by a majority in interest of the Initiating
Holders and reasonably acceptable to the Corporation. Notwithstanding any other
provision hereof, if the underwriter advises the Corporation and the Initiating
Holders in writing that marketing factors require a limitation of the number of
shares to be underwritten, then the Corporation shall so advise all Holders of
Registrable Securities which would otherwise be underwritten pursuant hereto and
all other holders of securities which would otherwise be underwritten pursuant
hereto, and the number of shares of Registrable Securities that may be included
in the underwriting shall be allocated first among all Holders thereof,
including the Initiating Holders, in such proportion (as nearly as practicable)
among the Holders, including the Initiating Holders, pro rata based on the
amount of Registrable Securities owned
-3-
<PAGE>
by each Holder and second, if the underwriters so permit, among such additional
shares held by the holders of securities of the Corporation pro rata in
proportion to the number of shares so requested to be included in such
registration. If any Holder disapproves of the terms of such underwritten
offering, such Holder may elect to withdraw therefrom by written notice to the
Corporation, the managing underwriter and the Initiating Holders. The
Registrable Securities and or other securities held by such Holder shall be
withdrawn from registration and such Registrable Securities shall continue to be
subject to the provisions of this Agreement.
2.1.3. Notwithstanding the foregoing, if the Corporation shall
furnish to the Holders requesting the filing of a registration statement
pursuant to this Section 2.1, a certificate signed by the President or Chief
Executive Officer of the Corporation stating either (i) that in the good faith
judgment of the Board of Directors of the Corporation, it would be seriously
detrimental to the Corporation and its shareholders for such registration
statement to be filed and it is therefore essential to defer the filing of such
registration statement, or (ii) that the Corporation intends to file its initial
registration statement within ninety (90) days following the receipt by the
Corporation of the notice by the Initiating Holders to the Corporation pursuant
to Section 2.1.1, then the Corporation shall have the right to defer such filing
for a period of not more than 90 days after receipt of the request of the
Initiating Holders; provided, however, that the Corporation may not utilize this
right more than once in any twelve (12) month period.
2.2. Piggyback Registrations.
-----------------------
2.2.1. The Corporation shall notify all Holders of Registrable
Securities in writing at least 30 days prior to filing any registration
statement under the Securities Act for purposes of effecting a public offering
of securities of the Corporation (including, but not limited to, registration
statements relating to secondary offerings of securities of the Corporation, but
excluding any registration statement relating to any employee benefit plan or a
corporate reorganization) and will afford each such Holder an opportunity to
include in such registration statement all or any part of the Registrable
Securities then held by such Holder. Each Holder desiring to include in any such
registration statement all or any part of the Registrable Securities held by
such Holder shall, within 20 days after receipt of the above-described notice
from the Corporation, so notify the Corporation in writing, and in such notice
shall inform the Corporation of the number of Registrable Securities such Holder
wishes to include in such registration statement. If a Holder decides not to
include all of its Registrable Securities in any registration statement
thereafter filed by the Corporation, such Holder shall nevertheless continue to
have the right to include any Registrable Securities in any subsequent
registration statement or registration statements as may be filed by the
Corporation with respect to offerings of its securities, all upon the terms and
conditions set forth herein.
2.2.2. If a registration statement of which the Corporation gives
notice under Section 2.2.1 is for an underwritten offering, then the Corporation
shall so advise the Holders. In such event, the right of any such Holder to
include its Registrable Securities in a registration pursuant to this Section
2.2 shall be conditioned upon such Holder's participation in such underwriting
and the inclusion of such Holder's Registrable Securities in the underwriting to
the extent provided herein. All Holders proposing to distribute their
Registrable Securities
-4-
<PAGE>
through such underwriting shall enter into an underwriting agreement in
customary form with the managing underwriter or underwriter(s) selected for such
underwriting. Notwithstanding any other provision of this Agreement, if the
managing underwriter(s) determine(s) in good faith that marketing factors
require a limitation of the number of shares to be underwritten, then the
managing underwriter(s) may exclude shares (including Registrable Securities)
from the registration and the underwriting, and the number of shares that may be
included in the registration and the underwriting shall be allocated, first, to
the Corporation, second, to each of the Holders of Registrable Securities
requesting inclusion of their Registrable Securities in such registration
statement, to be allocated among all Holders thereof pro rata based on the
amount of Registrable Securities of the Corporation owned by each Holder and
third, to each of the other holders of the Corporation's securities, other than
the Holders requesting inclusion of their Registrable Securities in such
registration statement, to be allocated among such other holders thereof pro
rata based on the number of shares of capital stock of the Corporation owned by
each such other holder; provided, however, that the right of the underwriters to
exclude shares (including Registrable Securities) from the registration and
underwriting as described above shall be restricted so that the number of
Registrable Securities included in any such registration is not reduced below
thirty percent (30%) of the total number of securities being registered in such
registration, except for a registration relating to the Corporation's Initial
Public Offering from which all Registrable Securities may be excluded. Any
Registrable Securities excluded or withdrawn from such underwriting shall be
excluded and withdrawn from the registration. For any Holder which is a
partnership or corporation, the partners, retired partners and stockholders of
such Holder, or the estates and family members of any such partners and retired
partners and any trusts for the benefit of any of the foregoing persons
collectively shall be deemed to be a single "Holder," and any pro rata reduction
with respect to such "Holder" shall be based upon the aggregate amount of shares
carrying registration rights owned by all entities and individuals included in
such "Holder," as defined in this sentence.
2.2.3. The Corporation shall have the right to withdraw any
registration initiated by it under this Section.
2.3. Form S-3 Registration. In case the Corporation shall receive
---------------------
from one or more Holders a written request or requests that the Corporation
effect a registration on Form S-3 and any related qualification or compliance
with respect to all or a part of the Registrable Securities owned by such
Holders, provided the number of shares requested to be sold would have an
aggregate price to the public of at least $5,000,000, then the Corporation will:
(i) Promptly give written notice of the proposed registration and the
Holder's request therefor, and any related qualification or compliance, to all
other Holders of Registrable Securities; and
(ii) As soon as practicable, use its reasonable best efforts to effect
such registration on such Form S-3 and all such qualifications and compliances
as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of the Holder's Registrable Securities as
are specified in a written request received by the Corporation within 20 days
after written notice from the Corporation is given under Section 2.3(i) above;
provided,
-5-
<PAGE>
however, that the Corporation shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 2.3:
(A) if Form S-3 is not available for such offering by the
Holders;
(B) if the Corporation shall furnish to the Holders a certificate
signed by the President or Chief Executive Officer of the Corporation stating
that in the good faith judgment of the Board of Directors of the Corporation, it
would be seriously detrimental to the Corporation and its shareholders for such
Form S-3 Registration to be effected at such time, in which event the
Corporation shall have the right to defer the filing of the Form S-3
registration statement for an aggregate of not more than ninety (90) days after
receipt of the request of the Holders; provided however, that the Corporation
may not utilize this right more than once in any twelve (12)-month period.
(C) in any particular jurisdiction in which the Corporation would
be required to qualify to do business or to execute a general consent to service
of process in effecting such registration, qualification or compliance; or
(D) if the Corporation has filed a registration statement on Form
S-3 relating to Registrable Securities within the six (6) months preceding the
request of the Holders.
2.4. Expenses of Registration. All Registration Expenses incurred in
------------------------
connection with one demand registration (pursuant to Section 2.1), all piggyback
registrations (pursuant to Section 2.2) and all Form S-3 registrations (pursuant
to Section 2.3) shall be borne by the Corporation unless the expenses are in
connection with a registration subsequently withdrawn by the Holders in which
case, the Holders agree to reimburse the Corporation for such Registration
Expenses, and all Selling Expenses shall be borne by the Holders of the
securities so registered pro rata on the basis of the number of their shares so
registered.
2.5. Obligations of the Corporation. Whenever required to effect the
------------------------------
registration of any Registrable Securities under this Agreement, the Corporation
shall, as expeditiously as reasonably possible:
(i) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its reasonable best efforts to
cause such registration statement to become effective, and keep such
registration statement effective until the distribution is completed, but not
more than 180 days.
(ii) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
-6-
<PAGE>
(iii) Furnish to the Holders participating in such registration
such number of copies of a prospectus, including the registration statement and
a preliminary prospectus, if requested by any such Holder, in conformity with
the requirements of the Securities Act, and all amendments and supplements
thereto, and such other documents as they may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by them that are
included in such registration.
(iv) Use its reasonable best efforts to register and qualify
the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders, provided, however, that the Corporation shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions.
(v) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(vi) Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
of which the Corporation has knowledge as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing and, following such notification,
promptly deliver to each Holder copies of all amendments or supplements referred
to in clauses (ii) and (iii) of this Section 2.5.
(vii) Use its commercially reasonable best efforts to cause all
such Registrable Securities registered pursuant to this Agreement to be listed
on each securities exchange on which similar securities issued by the
Corporation are then listed.
(viii) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereto and a CUSIP number for such Registrable
Securities in each case no later than the effective date of the registration.
2.6. Furnish Information. It shall be a condition precedent to the
-------------------
obligations of the Corporation to take any action pursuant to Sections 2.1, 2.2
or 2.3 that the selling Holders shall furnish to the Corporation such
information regarding themselves, the Registrable Securities held by them, and
the intended method of disposition of such securities as shall be required to
timely effect the registration of Registrable Securities.
2.7. Delay of Registration. No Holder shall have any right to obtain
---------------------
or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 2.
-7-
<PAGE>
2.8. Indemnification. In the event any Registrable Securities are
---------------
included in a registration statement under Sections 2.1, 2.2 or 2.3:
2.8.1. To the extent permitted by law, the Corporation will
indemnify and hold harmless each Holder, the partners, members, officers and
directors of each Holder, any underwriter (as defined in the Securities Act) for
such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act or the Exchange Act against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation"):
---------
(i) any untrue statement or alleged untrue statement of
a material fact contained or incorporated by reference in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto;
(ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading, or
(iii) any violation or alleged violation by the
Corporation of the Securities Act, the Exchange Act, any Federal or state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any Federal or state securities law in connection with the
offering covered by such registration statement;
and the Corporation will reimburse each such Holder, partner, member, officer or
director, underwriter or controlling person for any legal or other expenses
reasonably incurred by them, as incurred, in connection with investigating or
defending any such loss, claim, damage, liability or action; provided however,
that the indemnity agreement contained in this subsection 2.8.1 shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Corporation
(which consent shall not be unreasonably withheld), nor shall the Corporation be
liable in any such case for any such loss, claim, damage, liability or action to
the extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished in writing
and expressly stated for use in connection with such registration by such
Holder, partner, member, officer, director, underwriter or controlling person of
such Holder.
2.8.2. To the extent permitted by law, each selling Holder will,
if Registrable Securities held by such Holder are included in the registration
being effected, indemnify and hold harmless the Corporation, each of its
directors, each of its officers who have signed the registration statement, each
person, if any, who controls the Corporation within the meaning of the
Securities Act, any underwriter (as defined in the Securities Act) and any other
Holder selling securities under such registration statement or any of such other
Holder's partners, members, directors or officers or any person who controls
such underwriter or other Holder
-8-
<PAGE>
within the meaning of the Securities Act or the Exchange Act, against any
losses, claims, damages or liabilities (joint or several) to which the
Corporation or any such director, officer, controlling person, underwriter or
other such Holder, member, partner or director, officer or controlling person of
such underwriter or other Holder may become subject under the Securities Act,
the Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are based
upon any Violation, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with written
information furnished by such Holder and stated to be specifically for use in
such registration; and each such Holder will reimburse any legal or other
expenses reasonably incurred by the Corporation or any such director, officer,
controlling person, underwriter or other Holder, partner, member, officer,
director or controlling person of such other Holder or underwriter in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in this
subsection 2.8.2 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Holder, which consent shall not be unreasonably withheld; and
provided further, that the total amounts payable in indemnity by a Holder under
this Section 2.8.2 in respect of any Violation shall not exceed the net proceeds
received by such Holder in the registered offering out of which such Violation
arises.
2.8.3. Promptly after receipt by an indemnified party under this
Section 2.8 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.8, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential conflict of interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 2.8, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 2.8.
2.8.4. The obligations of the Corporation and Holders under this
Section 2.8 shall survive the completion of any offering of Registrable
Securities in a registration statement, and otherwise and any transfer of
Registrable Securities by the Holder.
2.9. Rule 144 Reporting. With a view to making available the
------------------
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of the
-9-
<PAGE>
Registrable Securities to the public without registration, after such time as a
public market exists for the Common Stock of the Corporation, the Corporation
agrees to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 promulgated under the Securities Act, at
all times after the Corporation becomes subject to the reporting requirements of
the Exchange Act;
(b) Use its reasonable best efforts to file with the Commission
in a timely manner all reports and other documents required of the Corporation
under the Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements); and
(c) So long as a Holder owns any Registrable Securities, to
furnish to the Holder forthwith upon request a written statement by the
Corporation as to its compliance with the reporting requirements of Rule 144 (at
any time after 90 days after the effective date of the first registration
statement filed by the Corporation for an offering of its securities to the
general public), and of the Securities Act and the Exchange Act (at any time
after it has become subject to the reporting requirements of the Exchange Act),
a copy of the most recent annual or quarterly report of the Corporation, and
such other reports and documents of the Corporation as a Holder may reasonably
request in availing itself of any rule or regulation of the Commission allowing
a Holder to sell any such securities without registration (at any time after the
Corporation has become subject to the reporting requirements of the Exchange
Act).
2.10. Assignment of Registration Rights. The rights of a Holder under
---------------------------------
this Section 2 may be assigned by any Holder to any party in a transfer of
Registrable Securities not involving a distribution or offering of such shares
to the public and not made pursuant to Rule 144 promulgated under the Securities
Act; provided, however, in each case that such other party agrees in writing
with the Corporation to be bound by all of the provisions of this Section 2.
2.11. Termination of Registration Rights. The registration rights
----------------------------------
granted pursuant to Section 2 will terminate as to any Holder upon the later to
occur of (a) such time as Rule 144(k) is available for the resale by the then-
current Holder of all Registrable Securities then held by such Holder, (b) the
three-year anniversary following the effective date of the Corporation's Initial
Public Offering (unless such Holder is deemed an "affiliate" of the Corporation
for purposes of Rule 144) or (c) such time as a Holder has less than one percent
of the shares of the outstanding Common Stock of the Corporation (assuming
conversion of all preferred stock of the Corporation into Common Stock) and can
sell all of its remaining Registrable Securities under Rule 144 during any three
(3)-month period.
2.12. Limitation on Subsequent Registration Rights. From and after
--------------------------------------------
the date hereof, the Corporation shall not enter into an agreement granting any
holder or prospective holder of any securities of the Corporation registration
rights with similar rights that are superior to the rights granted to the
Holders hereunder without the written consent of a majority of the Holders of
Registrable Securities.
-10-
<PAGE>
3. MISCELLANEOUS.
3.1. Notices. Notices given pursuant to this Agreement must be in
-------
writing. They shall be deemed to have been duly given: (i) upon delivery or
refusal to accept delivery, if hand-delivered; (ii) when transmitted, if sent by
fax with confirmed receipt, followed by a "hard" copy delivered by any other
method specified in this Section 3.1; or (iii) one (1) business day after being
deposited for next-day delivery with Federal Express or other national overnight
courier service. In each case, notices shall be addressed to the parties at
their addresses set forth on Exhibit A attached hereto or to such other place
and with such concurrent copies as the parties may subsequently designate by
written notice. The Corporation may discharge its notice obligation hereunder by
giving notice to a transferor of Registrable Securities if it has not been given
an address of the transferee.
3.2. Amendment; Waiver. Any term of this Agreement may be amended and
-----------------
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively), only with
the written consent of the party against whom enforcement of such amendment or
waiver is sought; provided, however that with respect to any Holder, the consent
of the holders of more than 50% of the Registrable Securities shall be
sufficient to bind any and all Holders; and provided, further, that where the
amendment or waiver affects a right or creates an obligation that is specific to
a party named herein (whether an individual, trust, partnership or corporation),
the amendment or waiver of such right or creation of such obligation shall
require the consent of such party.
3.3. Binding Effect; Assignment. This Agreement is binding on the
--------------------------
Corporation and the Holders and their respective heirs, personal representatives
and successors in interest.
3.4. Entire Agreement. The parties hereto acknowledge that this
----------------
written Agreement embodies the entire understanding among the parties with
respect to the registration of the Registrable Securities and amends and
restates in its entirety that certain Registration Rights Agreement dated as of
February 1, 1999, by and between the Corporation and the holders of the
Corporation's Series D Preferred Stock. There are no binding agreements or
understandings among the parties with respect to the registration of the
Registrable Securities other than as expressly set forth in this Agreement.
3.5. Interpretation; Construction.
----------------------------
3.5.1. The terms of this Agreement have been fully negotiated by
the parties in consultation with counsel, and the wording of this Agreement has
been arrived at by all of them as a result of their joint discussions.
Accordingly, no provision of this Agreement shall be construed against a
particular party or in favor of another party merely because of which party (or
its representative) drafted or supplied the wording for such provision.
3.5.2. Except where otherwise noted in context, all references to
"Sections"; "Exhibits" or "Schedules" shall be deemed to refer to the sections
or subsections, as appropriate, exhibits or schedules of this Agreement.
-11-
<PAGE>
3.5.3. Section headings appearing in this Agreement are inserted
solely as reference aids for the ease and convenience of the reader; they shall
not be deemed to modify, limit or define the scope or substance of the
provisions they introduce, nor shall they be used in construing the intent or
effect of such provisions.
3.5.4. Where the context requires: (i) use of the singular or
plural incorporates the other, and (ii) pronouns and modifiers in the masculine,
feminine or neuter gender shall be deemed to refer to or include the other
genders.
3.5.5. As used in this Agreement, the terms "include(s)" and
"including" mean "including but not limited to"; that is, in each case the
example or enumeration which follows the use of either term is illustrative but
not exclusive or exhaustive.
3.6. Prevailing Party. In any proceeding to enforce any provision of
----------------
this Agreement, the substantially prevailing party shall be entitled to recover
reasonable attorneys' fees and out-of-pocket expenses from the other party, as
determined by the court having jurisdiction.
3.7. Multiple Counterparts. This Agreement may be signed in one or
---------------------
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when each of the parties has signed and delivered a
counterpart to the other.
3.8. Governing Law. This Agreement shall be governed by and
-------------
interpreted according to the laws of Delaware, but without giving effect to any
Delaware choice of law provisions which might otherwise make the Laws of a
different jurisdiction govern or apply.
3.9. Severability. If any provision of this Agreement is held to be
------------
unenforceable under applicable law, then such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision was so excluded and shall be enforceable in accordance with its terms.
3.10. Further Assurances. From and after the date of this Agreement,
------------------
upon the request of a party, the other parties shall execute and deliver such
instruments, documents or other writings as may be reasonably necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement.
3.11 Additional Investors. As contemplated by Section 2.2 of the
--------------------
Investment Agreement by and among the Corporation and the holders of Series E
Preferred Stock of the Corporation, by executing a counterpart signature page
hereto, each Additional Investor (as defined in the Investment Agreement) agrees
to be bound by the terms of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-12-
<PAGE>
IN WITNESS WHEREOF, the Corporation and the Investors have executed this
Agreement as of the day and year first above written.
GREENWICH TECHNOLOGY PARTNERS, INC.
Address: 43 Gatehouse Road
Stamford, CT 06902
By: /s/ Dennis M. Goett
--------------------------------
Name:
Title:
VANTAGEPOINT COMMUNICATIONS PARTNERS, LP
Address: One Stamford Landing, Suite 201
Stamford, CT 06902
By: VantagePoint Communications Associates, LLC, its
General Partner
By: /s/ Jeff Marshall
--------------------------------
Name: Jeff Marshall
Title: Managing Partner
VANTAGEPOINT VENTURE PARTNERS 1996, L.P.
Address: One Stamford Landing, Suite 201
Stamford, CT 06902
By: VantagePoint Associates, LLC
its General Partner
By: /s/ Jeff Marshall
--------------------------------
Name: Jeff Marshall
Title: Managing Partner
By: /s/ Dennis M. Goett
--------------------------------
Name: Dennis M. Goett
Address: c/o Greenwich Technology Partners
43 Gatehouse Road
Stamford, CT 06902
-13-
<PAGE>
FG-GTPD
Address: 20 Dayton Avenue
Greenwich, CT 06830
By: /s/ Kathleen Shepphird
--------------------------------
Name: Kathleen Shepphird
Title: Managing Director
By: /s/ Carlos Dominguez
--------------------------------
Name: Carlos Dominguez
Address: c/o Cisco Systems, Inc.
One Penn Plaza, 5/th/ Floor
New York, NY 10119
By: /s/ Greg Berger
--------------------------------
Name: Greg Berger
Address: c/o Mack-Call Reality Group
100 Clearbrook Road
Elmsford, NY 10523
By: /s/ John Miller
--------------------------------
Name: John Miller
Address: c/o Star Vest Management, Inc.
712 Fifth Avenue, 34th Floor
New York, NY 10019
By: /s/ Deborah Farrington
--------------------------------
Name: Deborah Farrington
Address: c/o Star Vest Management, Inc.
712 Fifth Avenue, 34th Floor
New York, NY 10019
-14-
<PAGE>
CHASE VENTURE CAPITAL ASSOCIATES, L.P.
Address: Attn: Jonathan R. Lynch
Chase Capital Partners
380 Madison Avenue, 12th Floor
New York, NY 10017
By: /s/ Brian Richmond
--------------------------------
its General Partner
By:
--------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON VENTURE
FUND I, L.P.
Address: Attn. Steve West
Credit Suisse First Boston
2400 Hanover Street
Palo Alto, CA 94304
By: QBB MANAGEMENT FUND I, LLC,
its General Partner
By: /s/ William J. B. Brady III
---------------------------------
Name: William J. B. Brady III
Title: Managing Director
STV PARTNERS III, L.L.C.
Address: 591 West Putnam Avenue
Greenwich, CT 06830
By: /s/ Jerome C. Silvey
--------------------------------
Name: Jerome C. Silvey
Title: General Manager
-15-
<PAGE>
FG-GTPF
Address: 20 Dayton Avenue
Greenwich, CT 06830
By: /s/ Kathleen Sheppird
--------------------------------
Name: Kathleen Sheppird
Title: Managing Director
WHEATLEY PARTNERS II, L.P.
Address: c/o Geocapital Corp.
767 5th Avenue
New York, NY 10153
By: /s/ Irwin Lieber
--------------------------------
Name: Irwin Lieber
Title: General Partner
-16-
<PAGE>
By: /s/ Edwin J. O'Mara
----------------------------------
Name: Edwin J. O'Mara
--------------------------------
Title:
--------------------------------
Date: 10/13/99
--------------------------------
By: /s/ John Stopper
----------------------------------
Name: John Stopper
--------------------------------
Title:
-------------------------------
Date: 10/20/99
--------------------------------
By: /s/ Laurence Pinkus
----------------------------------
Name: Laurence Pinkus
--------------------------------
Title:
--------------------------------
Date: 10/11/99
--------------------------------
By: /s/ Kevin Bock
----------------------------------
Name: Kevin Bock
--------------------------------
Title:
--------------------------------
Date: 10/18/99
--------------------------------
By: /s/ James Tucci
----------------------------------
Name: James Tucci
--------------------------------
Title:
--------------------------------
Date: 10/18/99
--------------------------------
<PAGE>
By: /s/ Robert Berlin
--------------------------------
Name: Robert Berlin
----------------------------
Title:
----------------------------
Date: 10/11/99
----------------------------
By: /s/ John V. Wheeler
------------------------------
Name: John V. Wheeler
----------------------------
Title:
---------------------------
Date: 10/13/99
----------------------------
By: /s/ L. David Cardenas
------------------------------
Name: L. David Cardenas
----------------------------
Title:
----------------------------
Date: 10/11/99
----------------------------
By: /s/ Louis J. Mischianti
------------------------------
Name: Louis J. Mischianti
----------------------------
Title:
----------------------------
Date:
----------------------------
By: /s/ James A. Conroy
------------------------------
Name: James A. Conroy
----------------------------
Title:
----------------------------
Date: 10/11/99
----------------------------
<PAGE>
By: /s/ Emil Roymans
------------------------------
Name: Emil Roymans
--------------------------------
Title:
--------------------------------
Date: 10/15/99
--------------------------------
By: /s/ Paul A. Rubin
----------------------------------
Name: Paul A. Rubin
--------------------------------
Title:
--------------------------------
Date: 10/11/99
-------------------------------
By: /s/ Scott M. Freeman
-----------------------------------
Name: Scott M. Freeman
--------------------------------
Title:
--------------------------------
Date: 10/12/99
-------------------------------
By: /s/ Michael J. Schmidtberger
----------------------------------
Name: Michael J. Schmidtberger
--------------------------------
Title:
--------------------------------
Date: 10/12/99
--------------------------------
By: /s/ Michael Grossman
----------------------------------
Name: Michael Grossman
--------------------------------
Title:
--------------------------------
Date: 10/14/99
--------------------------------
By: /s/ Karl Frey
----------------------------------
Name: Karl Frey
--------------------------------
Title:
--------------------------------
Date: 10/11/99
--------------------------------
<PAGE>
EPFL Partners
By: /s/ Russell Carpenteri
----------------------------------
Name: Russell Carpenteri
--------------------------------
Title: Partner
-------------------------------
Date: 10/12/99
-------------------------------
By: /s/ John D. Miller
----------------------------------
Name: John D. Miller
--------------------------------
Title:
--------------------------------
Date: 10/14/99
--------------------------------
By: /s/ Deborah A. Farrington
----------------------------------
Name: Deborah A. Farrington
--------------------------------
Title:
--------------------------------
Date: 10/14/99
-------------------------------
<PAGE>
By: /s/ Gerard F. Becker and Christine B. Becker
-----------------------------------------------
Name: Gerard F. Becker and Christine B. Becker
---------------------------------------------
Title:
---------------------------------------------
Date: 10/13/99
---------------------------------------------
By: /s/ Nicholas A. Johnson and Patricia A. Johnson
-----------------------------------------------
Name: Nicholas A. Johnson and Patricia A. Johnson
---------------------------------------------
Title:
---------------------------------------------
Date: 11/29/99
---------------------------------------------
Clemente Family Trust
By: /s/ Richard Clemente
------------------------
Name: Richard Clemente
----------------------
Title: Trustee
---------------------
Date: 10/13/99
---------------------
BMZ Investments
By: /s/ Stacey Cox
------------------------
Name: Stacey E. Cox
----------------------
Title: Partner
---------------------
Date: 10/13/99
---------------------
By: /s/ Richard J. Testa
------------------------
Name: Richard J. Testa
----------------------
Title:
----------------------
Date:
-----------------------
<PAGE>
By: /s/ Anthony M. Carvette
------------------------
Name: Anthony M. Carvette
----------------------
Title:
----------------------
Date: 10/20/99
---------------------
By: /s/ Greg Berger
------------------------
Name: Greg Berger
----------------------
Title:
----------------------
Date: 10/15/99
---------------------
By: /s/ Kevin J. Kitson
------------------------
Name: Kevin J. Kitson
----------------------
Title:
----------------------
Date: 10/11/99
---------------------
By: /s/ Brian J. Flynn
------------------------
Name: Brian J. Flynn
----------------------
Title:
----------------------
Date: 10/12/99
---------------------
By: /s/ Angus M. Green
------------------------
Name: Angus M. Green
----------------------
Title:
----------------------
Date: 10/13/99
---------------------
By: /s/ Joseph A. Cabrera
------------------------
Name: Joseph A. Cabrera
----------------------
Title:
----------------------
Date: 10/14/99
---------------------
<PAGE>
By: /s/ Clint Heiden
------------------------
Name: Clint Heiden
----------------------
Title:
----------------------
Date: 10/16/99
---------------------
By: /s/ Stephen B. Seigel
------------------------
Name: Stephen B. Seigel
----------------------
Title:
----------------------
Date:
-----------------------
By: /s/ DHW Turner
------------------------
Name: DHW Turner
----------------------
Title:
----------------------
Date: 10/22/99
---------------------
By: /s/ Dennis M. Goett
------------------------
Name: Dennis M. Goett
----------------------
Title:
----------------------
Date:
-----------------------
IRA f/b/o Dennis M. Goett
By: /s/ Dennis M. Goett
------------------------
Name:
-----------------------
Title:
----------------------
Date: 10/11/99
---------------------
<PAGE>
By: /s/ S. Elizabeth Press and Mark Andrew Mohn
-------------------------------------------
Name: Elizabeth Press and Mark Andrew Mohn
-----------------------------------------
Title:
-----------------------------------------
Date: 10/13/99
-----------------------------------------
By: /s/ Paul C. Carey
------------------------
Name: Paul C. Carey
----------------------
Title:
----------------------
Date: 10/13/99
---------------------
By: /s/ Samer Tawfik
------------------------
Name: Samer Tawfik
----------------------
Title:
----------------------
Date: 10/14/99
---------------------
HIGHWOOD PARTNERS LLC
By: /s/ Ari Horowitz
------------------------
Name: Ari Horowitz
----------------------
Title: CEO
---------------------
Date: 10/14/99
---------------------
By: /s/ William Cox and Beatrice Cox
----------------------------------------
Name: William Cox and Beatrice Cox
--------------------------------------
Title:
--------------------------------------
Date: 10/15/99
-------------------------------------
<PAGE>
/s/ Gregory W. Carney
--------------------------
Name: Gregory W. Carney
-------------------------
Title:
------------------------
Date: 10/15/99
-------------------------
/s/ Paul T. Goldman
--------------------------
Name: Paul T. Goldman
-------------------------
Title:
------------------------
Date: 10/15/99
-------------------------
/s/ Donald K. Bryan and Belinda B. Bryan
------------------------------------
Name: Donald K. Bryan
-------------------------
Title:
------------------------
Date: 10/14/99
------------------------
/s/ Edward Cettina
--------------------------
Name: Edward Cettina
-------------------------
Title:
------------------------
Date: 10/17/99
-------------------------
/s/ Elio Cettina
--------------------------
Name: Elio Cettina
-------------------------
Title:
------------------------
Date: 10/18/99
-------------------------
<PAGE>
The CIT Group/Equity Investments, Inc.
/s/ Mark Vander Veen
--------------------------
Name: Mark Vander Veen
-------------------------
Title: Vice President
------------------------
Date: 10/27/99
-------------------------
Chase Venture Capital Associates L.P.
/s/ Donald J. Hofmann
--------------------------
Name: Donald J. Hofmann
-------------------------
Title: General Partner
------------------------
Date: 10/19/99
-------------------------
VantagePoint Communications Partners, L.P.
By: VantagePoint Communications Associate, L.L.C.,
Its General Partner
/s/ James D. Marver
--------------------------
Name: James D. Marver
-------------------------
Title: Managing Member
------------------------
VantagePoint Venture Partners 1996, L.P.
By: VantagePoint Associates, L.L.C.,
Its General Partner
/s/ James D. Marver
--------------------------
Name: James D. Marver
-------------------------
Title: Managing Director
------------------------
/s/ Mark B. Templeton
--------------------------
Name: Mark B. Templeton
-------------------------
Title:
------------------------
Date: 12/30/99
-------------------------
<PAGE>
/s/ Mark Wolfenberger
--------------------------
Name: Mark Wolfenberger
-------------------------
Title:
------------------------
Date: 01/03/00
-------------------------
/s/ Frank P. Slattery
--------------------------
Name: Frank P. Slattery
-------------------------
Title:
------------------------
Date: 12/30/99
--------------------------
/s/ Jeffrey A. Wrona
--------------------------
Name: Jeffrey A. Wrona
-------------------------
Title:
------------------------
Date: 01/04/00
-------------------------
/s/ Michael K. Ma
--------------------------
Name: Michael K. Ma
-------------------------
Title:
------------------------
Date: 01/03/99
-------------------------
/s/ Kurt Weber
--------------------------
Name: Kurt Weber
-------------------------
Title:
------------------------
Date: 12/31/99
-------------------------
UGE Enterprises LLC
/s/ Roger Cozzi
--------------------------
Name: Roger Cozzi
-------------------------
Title: Partner
------------------------
Date: 01/06/00
-------------------------
<PAGE>
Edgell Street Partners
/s/ James Harasimowicz
--------------------------
Name: James Harasimowicz
-------------------------
Title: Managing Partner
------------------------
Date: 01/12/00
-------------------------
/s/ Dennis M. Goett
--------------------------
Name: Dennis M. Goett
-------------------------
Title:
------------------------
Date: 12/30/99
-------------------------
/s/ Jill Catania
--------------------------
Name: Jill Catania
-------------------------
Title:
------------------------
Date: 12/30/99
-------------------------
/s/ Geryl W. Darington
--------------------------
Name: Geryl W. Darington
-------------------------
Title:
------------------------
Date: 12/31/99
-------------------------
/s/ Robert J. Garbarino
--------------------------
Name: Robert J. Garbarino
-------------------------
Title:
------------------------
Date: 12/30/99
-------------------------
/s/ Don Henderson
--------------------------
Name: Don Henderson
-------------------------
Title:
------------------------
Date: 01/03/00
-------------------------
<PAGE>
/s/ Bruce M. Tanis
--------------------------
Name: Bruce M. Tanis
-------------------------
Title:
------------------------
Date: 12/31/99
-------------------------
/s/ Peter Cherasia
--------------------------
Name: Peter Cherasia
-------------------------
Title:
------------------------
Date: 01/06/00
-------------------------
/s/ Michael A. Tunstall
--------------------------
Name: Michael A. Tunstall
-------------------------
Title:
------------------------
Date: 01/03/00
-------------------------
/s/ Wayne A. Segal
--------------------------
Name: Wayne A. Segal
-------------------------
Title:
------------------------
Date: 01/04/00
-------------------------
/s/ Tony Trousset
--------------------------
Name: Tony Trousset
-------------------------
Title:
------------------------
Date: 01/04/00
-------------------------
/s/ S. Elizabeth Press and Mark Andrew Mohn
---------------------------------------
Name: Elizabeth Press and Mark Andrew Mohn
------------------------------------
Title:
-----------------------------
Date: 01/05/00
------------------------------
<PAGE>
/s/ Richard Haverly
--------------------------
Name: Richard Haverly
-------------------------
Title:
------------------------
Date:
-------------------------
HIGH STREET INVESTORS 2000
By: Testa, Hurwitz & Thibeault, LLP
/s/ George W. Thibeault
--------------------------
Name: George W. Thibeault
-------------------------
Title: Partner
------------------------
Date: 01/14/00
-------------------------
/s/ Kevin M. Barry
--------------------------
Name: Kevin M. Barry
-------------------------
Title:
------------------------
Date: 01/14/00
-------------------------
<PAGE>
Exhibit A - Investors
---------------------
<TABLE>
<CAPTION>
Holders of Series D Preferred Stock Registrable Securities
- ----------------------------------- ----------------------
<S> <C>
*Vantagepoint 2,849,002
Communications Partners, LP
*Vantagepoint Venture 1,424,502
Partners, 1996
Dennis M. Goett 85,470
FG-GTPD 747,863
Carlos Dominguez 42,735
Greg Berger 21,368
John Miller 34,188
Deborah Farrington 8,547
</TABLE>
*In addition to any adjustments to the number of Registrable Securities held by
such Investor provided for in this Agreement, the number of Registrable
Securities shall be increased for such Series D Investor by the number of shares
of Common Stock issued to such Investor upon exercise of such Investor's
warrants to purchase shares of Series D Preferred Stock of the Corporation
issued on February 1, 1999 and the subsequent conversion of such shares of
Series D Preferred Stock into shares of Common Stock of the Corporation.
Holders of Series E Preferred Stock
- -----------------------------------
Initial Closing
---------------
<TABLE>
<CAPTION>
Name of Series E Investor Registrable Securities
- ------------------------- ----------------------
<S> <C>
Chase Venture Capital Associates, L.P. 4,739,337
Credit Suisse First Boston Venture Fund I, L.P. 236,967
STV Partners III, L.L.C. 473,934
FG-GTPF 236,967
Vantagepoint Communications Partners, LP 947,867
Vantagepoint Venture Partners 1996, L.P. 473,934
Wheatley Partners II L.P. 473,934
</TABLE>
First Additional Closing
------------------------
<TABLE>
<CAPTION>
Name of Series E Investor Registrable Securities
- ------------------------- ----------------------
<S> <C>
Edwin J. O'Mara 7,108
John Stopper 23,696
Laurence Pinkus 4,739
Kevin Bock 50,236
James Tucci 59,241
Robert Berlin 11,848
John V. Wheeler 11,848
L. David Cardenas and Stacey J. Cardenas 2,369
Louis J. Mischianti 23,696
James A. Conroy 4,739
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
Name of Series E Investor Registrable Securities
- ------------------------- ----------------------
<S> <C>
Emil A. Roymans 2,369
Paul A. Rubin 7,109
Scott M. Freeman 4,739
Michael J. Schmidtberger 4,739
Michael A. Grossman 5,924
Karl Frey 11,848
EPFL Partners 4,739
John D. Miller 11,848
Deborah A. Farrington 2,369
Gerard F. Becker and Christine B. Becker 11,848
Nils A. Johnson and Patricia A. Johnson 9,478
Clemente Family Trust 9,478
BMZ Investments 23,696
Richard J. Testa 9,952
Anthony M. Carvette 23,696
Greg Berger 5,924
Kevin J. Kitson 47,393
Brian J. Flynn 4,739
Angus M. Green 18,957
Joseph A. Cabrera 11,848
Clint Heiden 23,696
Stephen B. Seigel 47,393
David HW Turner 11,848
Dennis M. Goett 18,957
IRA FBO Dennis M. Goett 28,435
S. Elizabeth Press and Mark Andrew Mohn 10,000
Paul C. Carey 18,957
Samer Tawfik 142,180
Highwood Partners LLC 14,218
William C. Cox III and Beatrice I. Cox 9,478
Gregory W. Carney 11,848
Paul T. Goldman 7,109
Donald K. Bryan and Belinda B. Bryan 11,848
Edward Cettina 7,109
Elio Cettina 7,109
The CIT Group/Equity Investments, Inc. 473,934
Chase Venture Capital Associates, L.P. 473,933
VantagePoint Venture Partners 1996, L.P. 157,820
VantagePoint Communications Partners, L.P. 316,114
</TABLE>
-ii-
<PAGE>
Second Additional Closing
-------------------------
<TABLE>
<CAPTION>
Name of Series E Investor Registrable Securities
- ------------------------- ----------------------
<S> <C>
Mark B. Templeton 11,848
Mark Wolfenberger 23,696
Frank P. Slattery 4,739
Jeffrey Wrona 4,739
Michael Ma 4,739
Kurt Weber 11,848
UGE Enterprises LLC 4,739
Edgell Street Partners 7,109
Dennis M. Goett 14,218
Jill Catania 4,739
Geryl Darington 11,848
Robert Garbarino 23,696
Donald Henderson 9,478
Bruce M. Tanis 11,848
Peter Cherasia 23,696
Michael Tunstall 35,545
Wayne A. Segal 23,696
Anthony Trousett 23,696
S. Elizabeth Press and Mark Andrew Mohn 20,000
Richard Haverly 100,000
High Street Investors 2000 47,393
Kevin M. Barry 4,739
</TABLE>
-iii-
<PAGE>
EXHIBIT 10.16
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of the 9th day
of December, 1997 between Greenwich Technology Partners, Inc., (the "Company")
and Joseph Beninati (the "Executive").
In consideration of the covenants and terms and conditions contained
in this Agreement, the parties agree as follows:
1. DEFINITIONS. As used in this Agreement, each of the following terms
-----------
shall have the indicated meanings:
1.1. "Business" means the provision of complex computer network
services and any other business engaged in by the Company or any of its
subsidiaries while the Executive is employed by the Company.
1.2. "Cause" means (i) except as otherwise provided in Section 3.3,
the Executive's failure or refusal to perform his duties under this Agreement
which continues uncured for a period of ten (10) days after written notice; (ii)
the Executive's failure to abide by the terms of this Agreement which continues
uncured for a period of ten (10) days after written notice; (iii) the
Executive's involvement in fraud, misappropriation, willful misconduct or
dishonesty in connection with or relating to his employment by the Company or
the Executive's disloyalty; or (iv) the Executives conviction for, or plea of no
contest to, any criminal activity (other than minor traffic offenses).
1.3. "Intellectual Property" means all inventions, trade secrets,
secret processes, trade marks, trade names, trade styles, service marks,
copyrights, designs, engineering and manufacturing techniques, "know how" and
other proprietary rights of every kind and nature of Company relating to the
Business, whether now existing or developed during the Executive's period of
employment, and whether subject to a registration, an application for
registration or arising at common law, used or developed in connection with the
Business.
2. EMPLOYMENT. The Company hereby employs the Executive and the Executive
----------
hereby accepts employment with the Company, on the terms and conditions set
forth in this Agreement.
3. TERM AND TERMINATION.
--------------------
3.1. The initial term of the Executive's employment pursuant to this
Agreement shall commence on the date of this Agreement and shall continue until
December 31, 2002, unless sooner terminated in accordance with Section 3.2. The
term of this Agreement shall be renewed at the conclusion of the initial term
for a period of one year and shall be renewed each year thereafter for a period
of one year unless the Company or the Executive shall elect to
<PAGE>
-2-
terminate the term of Executive's employment by notice given at least 90 days
prior to the end of the initial term or any successive renewal period.
3.2. The Executive's employment pursuant to this Agreement shall
terminate upon the death of the Employee. The Company shall be entitled to
terminate the Executive's employment, at any time, for Cause, effective
immediately.
3.3. If Executive is unable to perform any substantial duties
hereunder by reason of physical or mental disability for a period of 120
consecutive days, or a period of more than 180 days in the aggregate in any
eighteen-month period, Company may terminate Executive. Prior to any such
termination, Company shall continue to pay Executive's annual salary in
accordance with Company's normal payroll practices and Executive shall continue
to receive all other employment-related fringe benefits due to him hereunder. If
Executive is terminated due to a disability, Executive shall be entitled to any
cash bonus due Executive for such fiscal year, prorated for the portion of the
year prior to Executive's termination.
3.4. From and after the effective date of his termination, the
Executive shall cease to render any services on behalf of the Company and shall
not be entitled to receive any salary or compensation, except for salary and
compensation accrued prior to his termination.
4. TITLE AND DUTIES.
----------------
4.1. Executive shall serve as an chairman and chief executive officer
of the Company during the term of his employment.
4.2. The Executive shall devote his best efforts and undivided
loyalty and his full business time to the Business.
5. COMPENSATION.
------------
5.1. The Executive shall receive a base salary at the rate of
$180,000 per year from December 1, 1997 to November 30, 1998 subject to increase
thereafter from year to year as may be determined by the Company, payable on the
Employees regular pay periods and subject to annual payroll deductions.
5.2. The Executive shall be entitled to such bonuses, if any, as may
be determined from time to time by the Company.
6. BENEFITS.
--------
6.1. The Executive will be entitled to the use of a Company-leased
automobile of similar size and type to that heretofore used by Executive, or the
equivalent cash allowance, and to the same employee benefits from the Employer
as are generally provided to employees of Employer. Any such benefits may be
changed by Employer from time to time as it shall determine in its sole
discretion.
<PAGE>
-3-
6.2. Company will reimburse Executive for reasonable travel and other
reasonable expenses incident to Executive's rendering services hereunder.
Payments to Executive will be made upon presentation of expense vouchers in such
detail as Company may from time to time reasonably require. Company will
provide Executive with a credit card which Executive may use for legitimate
business expenses.
7. COMPETITION; PROPRIETARY INFORMATION.
------------------------------------
7.1. Competition. Executive covenants and agrees that during his
-----------
employment by the Company and continuing for a period of three years after the
termination of his employment with the Company he shall not directly or
---
indirectly, whether as principal, agent, employee, employer, consultant,
stockholder, copartner or in any other individual or representative capacity
whatsoever, do any of the following:
7.1.1. Engage or participate in the establishment, affairs,
conduct or management of, or own any stock or other proprietary interest in
(except for passive investments of not more than 2% of the issued and
outstanding stock of any publicly traded corporation), or debt of, any business
which engages in any aspect of the Business or conducts any business or renders
any services that are competitive or similar to any aspect of the Business, as
then being conducted.
7.1.2. Solicit or induce any customers or prospective customers
to obtain services from any enterprise (other than the Company ), wherever
--------
located, that is or intends to become engaged in any business which is
- -------
competitive with any aspect of the Business. As used in this Agreement,
"customer" means (i) any person, corporation or other entity to which the
Company has rendered any services or sold any products within the preceding two
(2) year period, and their affiliates and "prospective customer" means any
person, corporation or other entity which has been solicited by the Company to
use its services or purchase its products within the preceding six (6) months.
7.1.3. Encourage any officer, director, executive or employee of
the Company to leave his or her employment with the Company; or hire, employ or
cause to be hired or employed (other than by the Company), or establish a
business with, any person who within two (2) years prior thereto was employed by
the Company or any of its subsidiaries.
7.1.4. Disrupt or interfere with the relationship between the
Company and any of its customers, prospective customers or suppliers.
7.2. Confidentiality. Executive covenants and agrees that he shall not
---------------
directly or indirectly, at any time, whether during or after his employment by
the Company divulge, furnish or make accessible to anyone, or use for his
benefit or the benefit of anyone other than the Company, any of the Intellectual
Property or any other confidential information with respect to the Company,
including its technology, finances, customers, prospective customers, suppliers,
pricing policies or marketing strategies.
<PAGE>
-4-
7.3. Proprietary Information. The Executive further covenants and
-----------------------
agrees to promptly disclose to the Company, and to no one else, all additional
Intellectual Property which results from, is suggested by or relates to his
employment by the Company and which are made or conceived or reduced to practice
by him, alone or in con unction with others, while in the employ of the Company,
whether or not patentable, whether or not made or conceived or reduced to
practice at the request of or upon the suggestion of the Company, whether made
or conceived or reduced to practice during or out of his usual hours of work, or
whether made or conceived or reduced to practice in or about the premises of the
Company or elsewhere. The Executive agrees that all such additional
Intellectual Property and all rights in connection therewith shall be and remain
the sole and exclusive property of the Company. The Executive hereby assigns,
and agrees to further assign, to the Company all of his right, title and
interest in and to any additional Intellectual Property relating to the Business
as now conducted or as conducted during the course of the Executive's
employment.
8. ENFORCEMENT OF COVENANTS.
------------------------
8.1. Executive acknowledges that the covenants contained in Section 7
are necessary to protect the Company and the Business. Executive further
acknowledges that any breach or threatened breach of any of his obligations
under Section 7 will result in irreparable injury to the Company, which will not
have an adequate remedy at law. Consequently, Executive consents and agrees
that in the event he breaches or threatens to breach any of the provisions of
Section 7, then the Company will be entitled, as a matter of right (i) to
injunctive relief in any court of competent jurisdiction to restrain Executive
from such breach or threatened breach; (ii) to an accounting for and payment of
all proceeds realized by Executive as a result of such breach; and (iii) to any
other remedies as may be available under applicable law, all of which remedies
shall be cumulative and may be pursued separately or concurrently. Executive
further agrees to reimburse the Company for any costs (including reasonable
attorneys fees) incurred by the Company in connection with enforcement of its
remedies under this Agreement.
8.2. The existence of any claim or cause of action of Executive
against the Company, or any member, officer, director, employee or agent of the
Company, whether predicated upon this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of the provisions of
Section 7.
8.3. If, in any judicial proceeding, a court shall refuse to enforce
one or more of the covenants set forth in Section 7 because the duration thereof
is too long or the scope thereof is too broad, it is expressly agreed between
the Company and Executive that the court making such determination shall be
empowered to reduce the duration and scope of the covenants set forth in Section
7 to the extent necessary to permit enforcement of such covenants.
9. ENFORCEMENT OF AGREEMENT. The Executive acknowledges that the Board of
------------------------
Directors of the Company presently is comprised and may in the future be
comprised of two directors and that he is and in the future may be one of the
two directors. Accordingly, the Executive agrees that so long as he is serving
as one of the two directors on the Board of
<PAGE>
-5-
Directors of the Company, all decisions and determinations on behalf of the
Company with respect to Executive's determinations on behalf of the Company with
respect to Executive's employment by the Company and this Agreement or any
provisions thereof shall be made up on behalf of the Company by the other
director then serving as a member of the Board of Directors and any decisions or
determinations so made by such other director shall constitute the duly
authorized actions of the Company and shall be binding upon the Company. The
Executive hereby releases and forever waives any claims which he may ever have
against such other director concerning this Agreement or any actions taken by
such other director with regard to Executive's employment or the termination of
Executive's employment or this Agreement.
10. TERMINATION OF AGREEMENT. This Agreement shall terminate upon the
------------------------
earliest to occur of the following events if the Executive shall be employed by
the Company at the time of such occurrence: (i) the sale of all or substantially
all of the assets of the Company; (ii) the merger or consolidation of the
Company as a result of which the shareholders of the Company who shall have
owned stock in the Company prior to such transaction shall own less than a
majority of the outstanding capital stock of the surviving corporation; (iii)
the dissolution or liquidation of the Company; or (iv) the closing of a firmly
underwritten public offering pursuant to an effective registration statement
under the Securities Act of 1933, as amended, covering the offer and sale of
common stock for the account of the Company in which the per share price is at
least $5 and the gross cash proceeds to the Company (before underwriting
discounts, commissions and fees) are at least $10,000,000.
11. MISCELLANEOUS.
-------------
11.1. Binding Agreement. This Agreement shall be binding upon and
-----------------
inure to the benefit of the Company and the Executive and their respective
personal representatives, heirs, beneficiaries, successors and assigns. This
Agreement is a contract for personal services and Executive shall not assign any
of Its duties or responsibilities under the Agreement to any other person or
entity. Any such attempted assignment shall be void.
11.2. Entire Agreement. This Agreement embodies or reflects the
----------------
entire agreement between the parties relating to the subject matter of this
Agreement, and there are no agreements, understandings, representations, or
warranties between the parties relating to the subject matter of this Agreement
other than those set forth in this Agreement or such other writings.
11.3. Headings. The section and other headings of this Agreement are
--------
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.4. Section and Subsection References. All references in this
---------------------------------
Agreement to Sections refer to sections or subsections of this Agreement, as
appropriate.
<PAGE>
-6-
11.5. Amendment and Waiver. This Agreement may not be amended,
--------------------
modified or waived in whole or in part at any time, except in a writing signed
by the Executive and the Company.
11.6. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Connecticut.
IN WITNESS WHEREOF, this Agreement has been executed and delivered as
of the date first above written.
GREENWICH TECHNOLOGY PARTNERS, INC.
By: /s/ Joseph Beninati
--------------------------------------
Joseph Beninati, CEO
/s/ Joseph Beninati
--------------------------------------
JOSEPH BENINATI
<PAGE>
EXHIBIT 10.17
Greenwich Technology Partners, Inc.
43 Gatehouse Road
Stamford, Connecticut 09602
December 1, 1998
Mr. Dennis M. Goett
140 Old Farm Road South
Pleasantville, New York 10570
Dear Mr. Goett:
We are delighted to make the offer to you to become an employee of Greenwich
Technology Partners, Inc. (the "Company") as Vice President and Chief Financial
Officer to serve under the terms and conditions as defined in this letter.
1. Major Terms
-----------
A. Services
--------
While you are employed by the Company, you will devote substantially
all of your business and professional time, attention, energy, loyalty
and skill to the business of the Company. In addition, you will use
your reasonable efforts to preserve for the Company the goodwill of
customers and others with whom the Company establishes business
relationships during your employment and to advance the reputation of
the Company. You shall comply with and perform such reasonable
directions and duties as are customary to the role of Chief Financial
Officer of an organization similar to the Company. Any material
changes in your role with the Company must be mutually agreed upon in
writing by the Company and you.
The Company does hereby expressly recognize that you have the right to
participate in non-competitive ventures as an investor, director or
non-active officer on the condition that such participation does not
materially interfere with your ability to perform your duties with the
Company.
B. Compensation
------------
In consideration of all of the services to be rendered by you to the
Company, the Company will pay to you a salary of $100,000 per annum
for the first year of your employment. On the first anniversary of
your employment, your annual salary will be increased to $200,000. On
the second anniversary of your employment, your annual salary will be
increased by a percentage equal to the annual consumer
<PAGE>
-2-
price index for the New York Metropolitan area. Such salary shall be
payable on the 15/th/ and 30/th/ day of each month in arrears, pro
rated for the initial period worked. The Company shall have the right
to deduct from your compensation all taxes and other legally required
payroll deductions and withholdings. Pursuant to New York Wage laws,
you are an exempt employee and therefore not eligible under State
requirements to receive overtime pay. In addition, you will receive
(a) the Company will reimburse you monthly for auto expenses of $250
and (b) are eligible to participate in a manner consistent with other
members of the senior management team in any bonus, compensation or
benefit program that the Company establishes for management employees.
C. Options
-------
You will be eligible to receive a grant of stock options under the
Company's 1997 Stock Plan (the "Plan"). Such options are subject to
an agreement (the "Option Agreement") entered into by the Company and
you in connection with your employment.
D. Employment At Will
------------------
You will be an employee-at-will; your employment may be terminated by
you or the Company at any time, with or without Cause. Neither this
letter agreement, any employee handbook, or any other document of the
Company gives you the contractual right, either express or implied, to
remain in the employ of the Company.
"Cause" shall mean conduct involving one or more of the following: (i)
gross negligence, willful misconduct, or breach of fiduciary duty to
the Company in any such case which event is material and adverse to
the Company; (ii) the commission of an act of embezzlement or fraud;
(iii) deliberate disregard of the rules or policies of the Company
which results in a material adverse damage or injury to the Company
provided that the Company has given you written notice of such action
and such action continues for a period of thirty (30) days following
receipt of written notice; or (iv) the unauthorized disclosure of any
trade secret or confidential information of the Company.
E. Paid Time Off
-------------
You are entitled to four (4) weeks of paid vacation annually in
addition to the holidays, personal days and sick days permitted under
standard Company policy for all employees. Unused paid time off will
be accrued or paid per the Company's standard policies as amended from
time to time.
<PAGE>
-3-
F. Moonlighting and Competitive Activity
-------------------------------------
You covenant and agree that you shall not engage in any Competitive
Activity without the prior written consent of the Company. Such
activities shall include, but not be limited to designing intranet or
internet networks, network consulting, maintenance, repair,
troubleshooting or systems design and/or installation (a "Competitive
Activity"). If you are unsure whether a particular activity would
violate the aforesaid covenant, you shall seek the advice of the Chief
Executive Officer of the Company.
The Company acknowledges and expressly agrees to your existing
participation as an investor, shareholder, officer, consultant,
advisor and/or member of the Board of Directors of two information
technology ventures (i) a development stage Internet integration
services firm and (ii) CrossRoads Strategy Group, Inc., which develops
and implements financial and accounting system applications.
2. Right to Change Pay Practices, Policies, Procedures and Benefits.
----------------------------------------------------------------
The Company shall have the right, at any time without prior notice, to
change, modify, amend, or terminate any pay practice, employment policy or
procedure, or employment benefit plan or program in effect upon the
commencement of your employment or adopted subsequently. You will be
entitled to participate on the same basis with all other employees in
similar positions of the Company in the Company's standard benefits package
generally available to other employees in similar positions of the Company,
including medical and dental coverage, a 401K plan, short term and long
term disability, and life insurance. However, it is expressly agreed that
under the terms of this letter agreement, Compensation as detailed in
Paragraph B above and the Options detailed in the Option Agreement entered
into between the Company and you may not be changed, modified, amended or
terminated without mutual agreement of the Company and you. This does not
limit the Company's right to terminate your employment, which is subject to
terms and conditions contained in this letter agreement and the Option
Agreement.
3. Representations and Warranties.
------------------------------
You represent and warrant that: you are not under any obligation to any
third party which could interfere with your performance under this letter
agreement; and your performance of your obligations to the Company during
your employment with the Company will not breach any agreement by which you
are bound not to disclose any proprietary information.
4. Confidential Information.
------------------------
i. You will not disclose, give, sell, publish or otherwise use, either
during your employment by the Company or after the termination of your
employment, except in the performance of your duties for the benefit
of the Company, any
<PAGE>
-4-
Confidential Information (as herein defined). "Confidential
Information" shall mean, but not be limited to, all of the Company's
proprietary information, technical data, technology, process, trade
secrets, and know-how, other intellectual property rights, strategies,
financial statements or other financial information, forecasts,
operations, business plans, prices, discounts, products, product
specifications, designs, plans data, ideas or information contained in
the Company's Business Strategy Overview and Career Advancement Manual
which is disclosed to you, which you may acquire or develop, or which
you may observe in the course of your employment by the Company and
which at the time of disclosure is not previously known by you and not
known or used by others in the trade generally, does not become
generally available to the trade through no fault of yours, and does
not become rightfully available to you on a non-confidential basis
from a source other than the Company, including, without limitation,
research, product plans, customer lists, markets, software,
developments, inventions, processes, formulas, technology, designs,
drawings, marketing and other plans, and financial data and
information. "Confidential Information" shall also mean information
received by the Company from customers of the Company or other third
parties subject to a duty to keep confidential and financial, pricing,
and credit information regarding customers, clients, or vendors of the
Company. Upon termination of your employment, you shall promptly
deliver to the Company, in whatever form or medium, all files,
drawings, blueprints, specifications, reports, notebooks, and other
materials containing any Confidential Information which are in your
possession or control.
ii. shall not discuss with, or disclose to, other employees of the
Company, the terms of your Offer Package, including, but not limited
to, compensation, grant of options or other special arrangements.
Such information shall be considered Confidential Information, and
disclosure of such Confidential Information shall be grounds for your
dismissal from the Company.
5. Restrictive Covenants.
---------------------
A. Covenants Against Competition and Solicitation.
----------------------------------------------
Following the date of your termination (for any reason), for a period
not longer than the lesser of: (i) the length of your employment by
the Company, (ii) the period of your severance from the Company or
(iii) one year, you will not, without the prior written consent of the
Company, directly or indirectly:
i. persuade or attempt to persuade any customer, client, supplier or
distributor of the Company to cease doing business with the
Company, or to reduce the amount of business it does with the
Company;
ii. persuade or attempt to persuade any potential customer, client,
supplier or distributor to which the Company has made a
presentation, or with which
<PAGE>
-5-
the Company had been having discussions, not to do business with
the Company;
iii. solicit for yourself or any Person other than the Company the
business which is competitive with the Company of any Person
which is a customer, client, supplier or distributor of the
Company, except as permitted herein;
iv. solicit any employee of the Company, to leave the employ of the
Company, or to become employed by, as a consultant, employee or
otherwise, of any Person engaged in a Competitive Activity.
B. Extracurricular Activity.
------------------------
Subject to the other terms and conditions of this letter agreement,
you may engage in business activity (the "Extracurricular Activity")
other than your employment with the Company that meets all of the
following conditions:
i. it is performed outside of your working hours for the Company and
outside of the Company's premises;
ii. it is not a Competitive Activity;
iii. it does not interfere with, and is not harmful to, your
employment relationship with the Company.
6. Injunctive Relief and Severability.
----------------------------------
i. You agree that the remedy at law for any breach of the provisions of
this letter agreement shall be inadequate and the Company shall be
entitled to injunctive or other equitable relief in addition to any
other remedy it might have.
ii. The Company and you agree and acknowledge that the covenant not to
compete described are made in consideration of substantial
compensation payable under this letter agreement. In consequence of
this, the Company and you agree and acknowledge that the duration,
scope, and geographic area included in such covenant not to compete
are fair, reasonable, necessary, and appropriate, and will not prevent
you from engaging in profitable business activities or employment.
Nevertheless, should a court determine that such duration, scope, or
geographic areas are not reasonable, such restrictions shall be
interpreted, modified, or rewritten to include as much of such
duration, scope, or geographic areas as will render such restrictions
valid and enforceable.
<PAGE>
-6-
7. Severability.
------------
In the event any of the provisions of this letter agreement shall be held
by a court or other tribunal of competent jurisdiction to be unenforceable,
the other provisions of this letter agreement shall remain in full force
and effect.
8. Survival.
--------
All terms and conditions of this letter agreement which should by their
nature survive the termination of your employment with the Company shall so
survive.
9. Governing Law.
-------------
This letter shall be governed by, construed and enforced in accordance with
the internal laws of the State of New York governing agreements made and to
be fully performed therein, without giving effect to conflict of law
principles.
10. Notices.
-------
All notices, requests, consents and other communications required or
permitted hereunder shall be in writing and shall be hand delivered or
mailed by certified or registered mail, return receipt requested, addressed
as follows:
i. if to the Company, at Greenwich Technology Partners, Inc., 43 Gate
House Road, Stamford, CT 06902, Attention: General Counsel
ii. if to you, at the address set forth above or in any such case, at such
other addresses as may have been furnished to any party by the other
party in writing in the manner herein provided. Any notice or other
communication so addressed and so mailed shall be seemed to have been
given when mailed, and if hand delivered shall be deemed to have been
given when delivered.
11. Waivers and Modifications.
-------------------------
This letter agreement may be modified, and the rights and remedies of any
provision hereof may be waived, only in writing, signed by each of the
Company, and you. No waiver by either party of any breach by the other of
any provision hereof shall be deemed to be a waiver of any later or other
breach thereof or as a waiver of any such or other provision of this letter
agreement. This agreement sets forth all of the terms of the
understandings between the parties with reference to the subject matter set
forth herein may not be waived, changed, discharged or terminated orally or
by any course of dealing between the parties, but only by an instrument in
writing signed by the party against whom any waiver, change, discharge or
termination is sought. Each of the Company and you hereby acknowledges and
agrees that any prior arrangements, agreements or
<PAGE>
-7-
understandings relating to your employment with the Company and/or any of
its affiliates is hereby terminated and extinguished in its entirety.
12. Assignment.
----------
This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and assigns. This Agreement is not assignable
by you and your right to receive payment for your services is hereby
expressly agreed to be non-assignable and nontransferable, except as
otherwise specifically provided herein.
Sincerely,
Greenwich Technology Partners, Inc.
By: /s/ Joseph P. Beninati
----------------------
Joseph P. Beninati
Chief Executive Officer
I have carefully read the terms and conditions of the above and acknowledge and
accept the terms and conditions of this letter agreement.
/s/ Dennis M. Goett
- -------------------
Dennis M. Goett
<PAGE>
EXHIBIT 10.18
Greenwich Technology Partners, Inc.
43 Gatehouse Road
Stamford, Connecticut 09602
December 1, 1998
Mr. Dennis M. Goett
140 Old Farm Road South
Pleasantville, New York 10570
Dear Mr. Goett:
Pursuant to our letter of agreement dated December 1, 1998, the following
modifications are made by our mutual consent to that letter agreement between
us:
1. Severance: Upon termination for reasons other than Cause (as defined in
such letter agreement), you will be receive three (3) months salary and
benefits.
2. Additional Options: At each of the first three (3) anniversary dates of
your employment, you are eligible to receive incentive stock options to
purchase 33,333 shares (an aggregate of 100,000 shares over the three year
period). These additional options will vest immediately upon grant and
will have an exercise price per share of $.30. These additional options
will be granted based upon the achievement of certain objectives contained
on the attached Schedule A, hereto. It is understood that these options
will be subject to the approval of the Board of Directors and an Option
Agreement between the Company and you.
These provisions are in addition to the terms and conditions our letter
agreement dated December 1, 1998 and pursuant to the terms of that letter
agreement the foregoing provisions are hereby incorporated therein.
Sincerely,
Greenwich Technology Partners, Inc.
By: /s/ Joseph Beninati
-----------------------
Joseph P. Beninati
Chief Executive Officer
I have carefully read the above provisions and acknowledge and accept them as
terms and conditions to our letter agreement dated December 1, 1998.
/s/ Dennis M. Goett
- ---------------------------
Dennis M. Goett
<PAGE>
EXHIBIT 10.19
October 1, 1999
Mr. John Stopper
346 Dan's Highway
New Canaan, CT 06840
Dear John:
We are delighted to make the conditional offer to you to become an employee of
Greenwich Technology Partners, Inc. (the "Company") as a Vice President - New
Markets, contained in our offering letter to you dated this date. Your start
date is August 3, 1999 and your office location will be 43 Gatehouse Rd.,
Stamford, CT 06902. This offer is valid for 15 business days from the above date
and is contingent upon successful completion of our background checks.
We are very proud of our corporate culture. We believe that open communication
between the Company and its employees and treating each other fairly and with
respect are critical to our success and to creating an environment in which we
are able to enjoy our work. Consequently, we want your assurance that should
there ever come a time during your employment with the Company that you are
dissatisfied with any aspect of your employment, you will communicate such
dissatisfaction to the person to whom you directly report, or, if that is not
comfortable for you, to any other manager of the Company, including the Chief
Executive Officer.
1. Major Terms
-----------
A. Services
--------
While you are employed by the Company, you, will devote your entire and
exclusive business and professional time, attention, energy, loyalty and
skill to the business of the Company. In addition, you will use your
reasonable efforts to preserve for the Company the goodwill of customers
and others with whom the Company establishes business relationships
during your employment and to advance the reputation of the Company. You
shall comply with and perform such directions and duties in relation to
the business and affairs of the Company requested of you by the Company.
B. Compensation
------------
In consideration of all of the services to be rendered by you to the
Company, while you are employed by the Company, the Company will pay to
you a salary of $150,000 per annum. Such salary shall be payable on the
15th and 30th day of each month in arrears, pro rated for the initial
period worked. The Company shall have the right to deduct from your
compensation all taxes and other legally required payroll deductions and
withholdings. Your salary structure and promotions shall be reviewed
annually by a member of senior management.
<PAGE>
-2-
Pursuant to Connecticut Wage laws, you are an exempt employee and
therefore not eligible under State requirements to receive overtime pay.
Variable Compensation: While you are employed by the Company, variable
compensation for each of the first three (3) months will be $12,500 of
monthly nonrecoverable draw, and during months four (4) through six (6)
will be $12,500 of monthly recoverable draw, based on a target variable
compensation of $150,000 per annum.
C. Options
-------
You will be granted an option to purchase up to 168,600 shares of the
Company's common stock, upon approval of the Company's Board of
Directors. The option will be issued pursuant to the terms of the
Company's 1997 Stock Plan and a stock option agreement to be entered
into between the Company and you. In addition, you will be eligible to
receive an additional 112,400 shares of the Company's common stock, in
accordance with the Company's standard stock option grant policy. This
Section 1.C. is for informational purposes only.
D. Employment At Will
------------------
You will be an employee-at-will; your employment may be terminated by
you or the Company at any time, with or without cause. Neither this
letter agreement, any employee handbook, or any other document of the
Company gives you any contractual right, either express or implied, to
remain in the employ of the Company.
E. Use of Company Property
-----------------------
You will not use the Company's premises, facilities, or equipment for
personal purposes.
F. Moonlighting and Competitive Activity
-------------------------------------
You covenant and agree that, during non-business hours, you shall not
engage in any activity related to, competitive with, or in the business
of, the Company, without the prior written consent of the Company. Such
activities shall include, but not be limited to designing intranet or
internet networks, network consulting, maintenance, repair,
troubleshooting or systems design and/or installation (a "Competitive
Activity"). If you are unsure whether a particular activity would
violate the aforesaid covenant, you shall seek the advice of a senior
officer of the Company. You hereby accept said employment and agree
faithfully to perform said duties and render said services for the term
of your employment.
2. Right to Change Pay Practices, Policies, Procedures and Benefits. The
----------------------------------------------------------------
Company shall have the right, at any time without prior notice, to change,
modify, amend, or terminate
<PAGE>
-3-
any pay practice, employment policy or procedure, or employment benefit plan
or program in effect upon the commencement of your employment or adopted
subsequently. You will be entitled to participate on the same basis with all
other employees in similar positions of the Company in the Company's
standard benefits package generally available to other employees in similar
positions of the Company, including medical and dental coverage, a 401K
plan, short term and long term disability, and life insurance.
3. Representations and Warranties. You represent and warrant that: you are not
------------------------------
under any obligation to any third party which could interfere with your
performance under this letter agreement; and your performance of your
obligations to the Company during your employment with the Company will not
breach any agreement by which you are bound not to disclose any proprietary
information.
4. Inventions.
----------
i. You will as soon as practicable disclose to the Company all Inventions
(as herein defined). "Inventions" shall mean all ideas, potential
marketing and sales relationships, inventions, research, plans for
products and services, marketing plans, software (including, without
limitation, source code), know-how, trade secrets, information, data,
developments, discoveries, improvements, modifications, technology, and
designs, whether or not subject to patent or copyright protection,
made, conceived, expressed, developed, or actually or constructively
reduced to practice by you solely or jointly with others during your
employment with the Company, which refer to, are suggested by, or
result from any work which you may do during your employment, or from
any information obtained from the Company.
ii. The Inventions shall be the exclusive property of the Company, and are
hereby assigned by you to the Company; the Company shall have the
exclusive right to use the Inventions for all purposes without
additional compensation to you. At the Company's expense, you will
assist the Company in every proper way to protect the Inventions
throughout the world, including, without limitation, executing in favor
of the Company patent, copyright, and other applications and
assignments relating to the Inventions.
5. Confidential Information.
-------------------------
i. You will not disclose, give, sell, publish or otherwise use, either
during your employment by the Company or after the termination of your
employment, except in the performance of your duties for the benefit of
the Company, any Confidential Information (as herein defined).
"Confidential Information" shall mean, but not be limited to, all of
the Company's proprietary information, technical data, technology,
process, trade secrets, and know-how, other intellectual property
rights, strategies, financial statements or other financial
information, forecasts, operations, business plans, prices, discounts,
products, product specifications, designs, plans data, ideas or
information contained in the
<PAGE>
-4-
Company's Business Strategy Overview and Career Advancement Manual
which is disclosed to you, which you may acquire or develop, or which
you may observe in the course of your employment by the Company and
which at the time of disclosure is not previously known by you and not
known or used by others in the trade generally, does not become
generally available to the trade through no fault of yours, and does
not become rightfully available to you on a non-confidential basis from
a source other than the Company, including, without limitation,
research, product plans, customer lists, markets, software,
developments, inventions, processes, formulas, technology, designs,
drawings, marketing and other plans, and financial data and
information. "Confidential Information" shall also mean information
received by the Company from customers of the Company or other third
parties subject to a duty to keep confidential and financial, pricing,
and credit information regarding customers, clients, or vendors of the
Company. Upon termination of your employment, you shall promptly
deliver to the Company, in whatever form or medium, all files,
drawings, blueprints, specifications, reports, notebooks, and other
materials containing any Confidential Information which are in your
possession or control.
ii. shall not discuss with, or disclose to, other employees of the Company,
the terms of your Offer Package, including, but not limited to,
compensation, grant of options or other special arrangements. Such
information shall be considered Confidential Information, and
disclosure of such Confidential Information shall be grounds for your
dismissal from the Company.
6. Restrictive Covenants.
---------------------
A. Covenants Against Competition and Solicitation.
----------------------------------------------
From the date hereof until one year following the date of termination
(for any reason) of your (the "Term of Commitment") employment with the
Company (or any of its affiliates) (the "Termination Date"), without the
prior written consent of the Company, you will not, directly or
indirectly:
i. persuade or attempt to persuade any customer, client, supplier
or distributor of the Company to cease doing business with the
Company, or to reduce the amount of business it does with the
Company;
ii. persuade or attempt to persuade any potential customer,
client, supplier or distributor to which the Company has made
a presentation, or with which the Company had been having
discussions, not to do business with the Company, or to
undertake with any other person, individual, corporation,
partnership, trust, joint venture, business or unincorporated
organization (a "Person") a Competitive Activity;
<PAGE>
-5-
iii. solicit for itself or any Person other than the Company the
business of any Person which is a customer, client, supplier
or distributor of the Company, or was a customer, client,
supplier or distributor of the Company or become retained or
employed by, as a consultant, employee or otherwise, of any of
the foregoing, except as permitted herein;
iv. persuade or attempt to persuade any employee of the Company,
or any individual who was an employee of the Company during
the two years prior to the Termination Date, to leave the
employ of the Company, or to become employed by, as a
consultant, employee or otherwise, of any Person engaged in a
Competitive Activity.
B. Geographic Scope.
-----------------
For purposes of paragraph 6A, the geographic scope of the restrictive
covenants contained therein, shall be 150 miles from any Company branch
office or the Company's headquarters.
7. Injunctive Relief and Severability.
-----------------------------------
i. You agree that the remedy at law for any breach of the provisions of
this letter agreement shall be inadequate and the Company shall be
entitled to injunctive or other equitable relief in addition to any
other remedy it might have.
ii. The Company and you agree and acknowledge that the covenant not to
compete and the right of first refusal described are made in
consideration of substantial compensation payable under this letter
agreement. In consequence of this the Company and you agree and
acknowledge that the duration, scope, and geographic area included in
such covenant not to compete are fair, reasonable, necessary, and
appropriate, and will not prevent you from engaging in profitable
business activities or employment. Nevertheless, should a court
determine that such duration, scope, or geographic areas are not
reasonable, such restrictions shall be interpreted, modified, or
rewritten to include as much of such duration, scope, or geographic
areas as will render such restrictions valid and enforceable.
iii. The Company and you intend to and do hereby confer jurisdiction to
enforce this letter agreement upon the courts of any jurisdiction
within the geographical scope of the agreements contained herein. In
the event that the courts of any one or more of such jurisdictions
shall hold such agreements wholly or partly unenforceable by reason of
the breadth of such scope or otherwise, it is the intention of the
Company and you that such determination shall not bar or in any way
affect the Company's right to relief hereunder in the courts of any
other jurisdiction within the geographical scope of any such agreement,
as to breaches of such agreements in such other respective
jurisdictions, the above agreements as they relate to each jurisdiction
being, for this purpose, severable into independent agreements.
<PAGE>
-6-
8. Severability.
------------
In the event any of the provisions of this letter agreement shall be held by
a court or other tribunal of competent jurisdiction to be unenforceable, the
other provisions of this letter agreement shall remain in full force and
effect.
9. Survival.
--------
All terms and conditions of this letter agreement which should by their
nature survive the termination of your employment with the Company shall so
survive.
10. Governing Law.
-------------
This letter shall be governed by, construed and enforced in accordance with
the internal laws of the State of Connecticut governing agreements made and
to be fully performed therein, without giving effect to conflict of law
principles.
11. Notices.
-------
All notices, requests, consents and other communications required or
permitted hereunder shall be in writing and shall be hand delivered or
mailed by certified or registered mail, return receipt requested, addressed
as follows:
i. if to the Company, at Greenwich Technology Partners, Inc., 43
Gatehouse Road, Stamford, CT 06902, Attention: Director of Legal
Affairs.
ii. if to you, at the address set forth above or in any such case, at such
other addresses as may have been furnished to any party by the other
party in writing in the manner herein provided. Any notice or other
communication so addressed and so mailed shall be seemed to have been
given when mailed, and if hand delivered shall be deemed to have been
given when delivered.
12. Waivers and Modifications.
-------------------------
This letter agreement may be modified, and the rights and remedies of any
provision hereof may be waived, only in writing, signed by each of the
Company, and you. No waiver by either party of any breach by the other of
any provision hereof shall be deemed to be a waiver of any later or other
breach thereof or as a waiver of any such or other provision of this letter
agreement. This agreement sets forth all of the terms of the understandings
between the parties with reference to the subject matter set forth herein
may not be waived, changed, discharged or terminated orally or by any course
of dealing between the parties, but only by an instrument in writing signed
by the party against whom any waiver, change, discharge or termination is
sought. Each of the Company and you hereby acknowledges and agrees that any
prior arrangements, agreements or
<PAGE>
-7-
understandings relating to your employment with the Company and/or any of
its affiliates is hereby terminated and extinguished in its entirety.
13. Assignment.
----------
This Agreement shall be binding upon and inure to the benefit of the Company
and its successors and assigns. This Agreement is not assignable by you and
your right to receive payment for your services is hereby expressly agreed
to be non-assignable and nontransferable, except as otherwise specifically
provided herein.
14. Change in Control.
-----------------
In the event that following a Change in Control (defined below) your
employment with the Company is terminated by you for Good Reason (defined
below) or by the Company, other than for Good Cause (defined below), (each a
"Termination Event"), you will be provided with Severance Pay (defined
below) and there will be an automatic acceleration of the vesting of 25% of
the options granted to you, on the terms and conditions set forth herein. If
following a Change in Control a Termination Event occurs in the first twelve
(12) months of your employment, 70,250 of the options granted to you shall
automatically become exercisable. This Section is for informational purposes
and is pursuant to the terms of the Stock Option Agreement.
If following a Change in Control there is a Termination Event which occurs
after the date of your employment but prior to six months of said date, the
Company will provide six months' Severance Pay. If following a Change in
Control there is a Termination Event which occurs after the sixth month
anniversary date of your employment date but prior to one year anniversary
of your employment date, the Company will provide nine months' Severance
Pay. If following a Change in Control there is a Termination Event which
occurs after the twelfth month anniversary date of your employment date of
the Change in Control, the Company will provide twelve (12) months'
Severance Pay. The Severance Pay will be paid no later than thirty (30) days
after termination and paid in one lump sum unless a schedule of payments is
agreed to by you.
Definitions. The following definitions are applicable only to the extent the
-----------
above Change in Control occurs. In no instance shall these definitions apply
outside of a Change in Control with the Company.
a. Severance Pay: an amount equal to the monthly average sum of (i) your
-------------
monthly base salary plus (ii) your monthly incentive or variable
compensation amount being paid to you in the previous quarter prior to any
Termination Event.
b. Change in Control; the first to occur of the following:
-----------------
(i) the Company is merged, consolidated or reorganized into or with
another corporation or other legal person, and as a result of such
merger, consolidation or reorganization less than a majority of
the combined
<PAGE>
-8-
voting power of the then-outstanding securities of
the combined corporation or person immediately after such
transaction are held in the aggregate by the holders of the
combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors of the Company
("Voting Stock") immediately prior to such transaction;
(ii) the Company sells or otherwise transfers all or substantially all
of its assets to any other corporation or other legal person, and
less than a majority of the combined voting power of the then-
outstanding securities of such corporation or person immediately
after such sale or transfer is held in the aggregate by the
holders of the Voting Stock of the Company immediately prior to
such sale or transfer;
(iii) any person (as the term "person" is used in Section 13(d)(3) or
Section 14(d)(2) of the Securities Exchange Act of 1934) has
become the beneficial owner (as the term "beneficial owner" is
defined under Rule 13d-3 or any successor rule or regulation
promulgated under the Securities Exchange Act of 1934 Act) of
securities representing 50% or more of the Voting Stock.
c. Good Cause: any of
----------
(i) Your willful and substantial misconduct with respect to the
business and affairs of the Company;
(ii) Your gross neglect of duties, dishonesty, deliberate disregard
of any material rule or policy of the Company or the commission
by you of any other action with the intent to injury the
Company; or
(iii) Your commission of an act involving embezzlement or fraud or
commission of a felony.
d. Good Reason: the occurrence of any of the following: (i) the
-----------
assignment to you of duties materially inconsistent with the status of
your position with the Company or the material diminution in the
nature or status of your duties and powers and your responsibilities
in connection with such duties and powers, (ii) a requirement by the
Company that you relocate your primary residence outside of the area
comprising a 50 mile radius around the then current location of such
residence (the "Area"), (iii) the reduction of your base salary; or
(iv) a change in the composition of the plan pursuant to which you are
eligible for incentive or variable compensation such that your ability
to earn such incentive compensation is significantly diminished.
If the Company proposes to engage in any transaction which is intended to be
accounted for as a pooling-of-interests, and in the event that the provisions of
this Agreement, or any actions of the
<PAGE>
-9-
Board of Directors of the Company taken in connection with such transaction, are
determined by the Company's or the acquiring company's independent public
accounts to cause such transaction to fail to be accounted for as a pooling-of-
interests, then such provisions or actions shall be amended or rescinded by the
Board of Directors of the Company, without your consent, to be consistent with
pooling-of-interests. accounting treatment for such transaction.
Notwithstanding the provisions of this Section 14, if, in connection with a
Change in Control, a tax under Section 4999 of the Internal Revenue Code would
be imposed on you (after taking into account the exceptions set forth in
Sections 280G(b)(4) and 280G(b)(5) of the Code), then the number of options
which shall become exercisable, realizable or vested as provided in such section
shall be reduced (or delayed), to the minimum extent necessary, so that no such
tax would be imposed on you.
Sincerely
/s/ Dennis M. Goett
Dennis M. Goett
Chief Financial Officer
I have carefully read the terms and conditions of the above and acknowledge and
accept the terms and conditions of this letter agreement.
Signature /s/ John Stopper
----------------
Date: 10.5.99
<PAGE>
EXHIBIT 10.20
January 26, 2000
Mr. Richard Haverly
4 Davis Drive
Armonk, New York 10504
Dear Mr. Haverly:
We are delighted to make this offer to you to become an employee of Greenwich
Technology Partners, Inc. (the "Company") as Senior Vice President of
Operations, contained in this offering letter to you. Your anticipated start
date is January 26, 2000 and your office location will be 43 Gatehouse Road,
Stamford CT or such other location, which becomes the corporate headquarters.
This offer is valid for 15 business days from the above date.
We are very proud of our corporate culture. We believe that open communication
between the Company and its employees and treating each other fairly and with
respect are critical to our success and to creating an environment in which we
are able to enjoy our work. Consequently, we want your assurance that should
there ever come a time during your employment with the Company that you are
dissatisfied with any aspect of your employment, you will communicate such
dissatisfaction to the person to whom you directly report, or, if that is not
comfortable for you, to any other manager of the Company, including the Chief
Executive Officer.
1. Major Terms
-----------
A. Services
--------
While you are employed by the Company, you will devote your entire and
exclusive business and professional time, attention, energy, loyalty
and skill to the business of the Company. In addition, you will use
your reasonable efforts to preserve for the Company the goodwill of
customers and others with whom the Company establishes business
relationships during your employment and to advance the reputation of
the Company. You shall comply with and perform such directions and
duties in relation to the business and affairs of the Company
requested of you by the Company, including:
. general management of the Company's business within a team of
senior managers reporting directly to the Chairman and CEO
including the SVP of Sales and the Chief Financial Officer;
. management of the Company's Managing Principals and their
respective practice areas;
. management of the Company's Divisional, Regional and Branch
Technical Managers including the oversight of engineers and
consultants;
. maintenance of customer satisfaction and customer service;
. oversight of all aspects of service delivery to clients including
Quality Assurance;
<PAGE>
-2-
. jointly with the Sales SVP:
. development and expansion of account relationships and the
development of business with existing accounts and clients;
. preparation/approval of proposals, including pricing
policies and strategies; and
. identify the need for methodologies, tools and other practice
aids and oversee their development and rollout.
B. Compensation and Benefits
-------------------------
In consideration of all of the services to be rendered by you to the
Company, the Company will pay to you a salary of $150,000 per annum to
be earned and paid in semimonthly installments of $6,250.00. Such
salary shall be payable on the 15/th/ and 30/th/ day of each month in
arrears, pro rated for the initial period worked. In addition you will
receive Variable Compensation in accordance with the Company's
Variable Compensation Plan. For calendar year 2000 your variable
compensation will be equal to 50% of the full participation rate of
0.25%. During calendar year 2000, you will be paid 0.125% of Company
revenues on a quarterly basis (excluding revenues from the resale of
hardware and software). Thereafter, you will participate fully in the
Variable Compensation Plan for subsequent calendar years. The Company
shall have the right to deduct from your compensation all taxes and
other legally required payroll deductions and withholdings. Pursuant
to local wage law, you are an exempt employee and therefore not
eligible under State requirements to receive overtime pay.
You will also receive a monthly car allowance of $250.
You will be entitled to three (3) weeks vacation in accordance with
our Company policy.
You will be entitled to receive the medical, life insurance,
disability insurance and other benefits available from time to time to
senior executives of the Company. Currently, these benefits include:
. Medical: Blue Cross/Blue Shield Empire Deluxe PPO program with a
monthly employee premium of $162.08 for family coverage (GTP
covers the other 75% of the premium).
. Dental: Guardian Dental PPO with a monthly employee premium of
$20.94 for family coverage (GTP covers the other 75% of the
premium).
. Life Insurance: Guardian Life at 1 time your annual salary up to
a maximum of $100,000. This is fully paid by the Company.
. Long Term/Short Term Disability: Guardian Life. This is fully
paid by the Company.
. AD&D: Guardian Life up to 1 time your annual salary up to a
maximum of $100,000. This is fully paid by the Company.
<PAGE>
-3-
. 401k Plan: Eligible in the quarter following your 60th day of
employment. GTP will make a matching contribution equal to 25% of
your savings contribution subject to a maximum contribution by
you of $10,000 per year. Savings over 6% of your pay are not
matched. As soon as you are enrolled you are eligible for the
match that vests over 4 years from your participation in the
plan.
C. Option/Equity
-------------
You will be granted not later than the Company's next regularly
scheduled meeting of its Board of Directors an option to purchase up
to 300,000 shares of the Company's common stock, upon approval of the
Company's Board of Directors. The option will be issued pursuant to
the terms of the Company's 1997 Stock Plan and a stock option
agreement to be entered into between the Company and you (the "Option
Agreement"). If the Board of Directors does not approve of such option
grant, this Agreement shall be considered null and void.
Notwithstanding anything to the contrary contained herein or in the
Option Agreement, in the event that on or before January 25, 2001 (i)
your employment with the Company is terminated without Cause (as that
term is defined in the Option Agreement) or (ii) you cease to be
employed by the Company for reasons of death or permanent disability,
then 25% of the options granted to you in the Option Agreement (and no
subsequent options granted to you) shall automatically vest without
any action on your part or the Company's part.
In addition, on or prior to the date hereof, you will be purchasing
100,000 shares of Series E Preferred Stock of the Company at a price
of $2.11 per share.
D. Employment At Will
------------------
You will be an employee-at-will; your employment may be terminated by
you or the Company at any time, with or without cause. Neither this
letter agreement, any employee handbook, or any other document of the
Company gives you any contractual right, either express or implied, to
remain in the employ of the Company.
E. Use of Company Property
-----------------------
You will not use the Company's premises, facilities, or equipment for
personal purposes.
F. Moonlighting and Competitive Activity
-------------------------------------
You covenant and agree that, during non-business hours, you shall not
engage in any activity related to, competitive with, or in the
business of, the Company,
<PAGE>
-4-
without the prior written consent of the Company. Such activities
shall include designing intranet or internet networks, network
consulting, maintenance, repair, troubleshooting or network design
and/or installation (a "Competitive Activity"). If you are unsure
whether a particular activity would violate the aforesaid covenant,
you shall seek the advice of a senior officer of the Company. You
hereby accept said employment and agree faithfully to perform said
duties and render said services for the term of your employment.
2. Right to Change Pay Practices, Policies, Procedures and Benefits. The
----------------------------------------------------------------
Company shall have the right, at any time without prior notice, to change,
modify, amend, or terminate any pay practice, employment policy or procedure, or
employment benefit plan or program in effect upon the commencement of your
employment or adopted subsequently. You will be entitled to participate on the
same basis with all other employees in similar positions of the Company in the
Company's standard benefits package generally available to other employees in
similar positions of the Company, including medical and dental coverage, a 401K
plan, short term and long term disability, and life insurance.
3. Representations and Warranties. You represent and warrant that: you are not
------------------------------
under any obligation to any third party which could interfere with your
performance under this letter agreement; and your performance of your
obligations to the Company during your employment with the Company will not
breach any agreement by which you are bound not to disclose any proprietary
information.
4. Inventions.
----------
i. You will as soon as practicable disclose to the Company all Inventions
(as herein defined). "Inventions" shall mean all ideas, potential
marketing and sales relationships, inventions, research, plans for
products and services, marketing plans, software (including, without
limitation, source code), know-how, trade secrets, information, data,
developments, discoveries, improvements, modifications, technology,
and designs, whether or not subject to patent or copyright protection,
made, conceived, expressed, developed, or actually or constructively
reduced to practice by you solely or jointly with others during your
employment with the Company, which refer to, are suggested by, or
result from any work which you may do during your employment, or from
any information obtained from the Company.
ii. The Inventions shall be the exclusive property of the Company, and are
hereby assigned by you to the Company; the Company shall have the
exclusive right to use the Inventions for all purposes without
additional compensation to you. At the Company's expense, you will
assist the Company in every proper way to protect the Inventions
throughout the world, including, without limitation, executing in
favor of the Company patent, copyright, and other applications and
assignments relating to the Inventions.
<PAGE>
-5-
5. Confidential Information.
------------------------
i. You will not disclose, give, sell, publish or otherwise use, either
during your employment by the Company or after the termination of your
employment for a period of one year, except in the performance of your
duties for the benefit of the Company, any Confidential Information
(as herein defined). "Confidential Information" shall mean, but not be
limited to, all of the Company's proprietary information, technical
data, technology, process, trade secrets, and know-how, other
intellectual property rights, strategies, financial statements or
other financial information, forecasts, operations, business plans,
prices, discounts, products, product specifications, designs, plans
data, ideas or information contained in the Company's Business
Strategy Overview and Career Advancement Manual which is disclosed to
you, which you may acquire or develop, or which you may observe in the
course of your employment by the Company and which at the time of
disclosure is not previously known by you and not known or used by
others in the trade generally, does not become generally available to
the trade through no fault of yours, and does not become rightfully
available to you on a non-confidential basis from a source other than
the Company, including, without limitation, research, product plans,
customer lists, markets, software, developments, inventions,
processes, formulas, technology, designs, drawings, marketing and
other plans, and financial data and information. "Confidential
Information" shall also mean information received by the Company from
customers of the Company or other third parties subject to a duty to
keep confidential and financial, pricing, and credit information
regarding customers, clients, or vendors of the Company. Upon
termination of your employment, you shall promptly deliver to the
Company, in whatever form or medium, all files, drawings, blueprints,
specifications, reports, notebooks, and other materials containing any
Confidential Information which are in your possession or control.
Notwithstanding anything contained in this paragraph, Confidential
Information shall not include any information, technical data,
technology, process, trade secrets, know-how, other intellectual
property rights or strategies which you have in your possession prior
to your employment with the Company. For the purposes of this
Agreement, Confidential Information shall be only that information,
which Greenwich Technology Partners can demonstrate, came from their
sources and no other sources. Greenwich Technology Partners realizes
that Mr. Haverly has worked in a similar industry for approximately
thirty years and has substantial prior technical data, intellectual
property and strategies in his possession at the time of his
employment.
ii. You shall not discuss with, or disclose to, other employees of the
Company, the terms of your Offer Package, including, but not limited
to, compensation, grant of options or other special arrangements. Such
information shall be considered Confidential Information, and
disclosure of such Confidential Information shall be grounds for your
dismissal from the Company.
<PAGE>
-6-
6. Restrictive Covenants.
---------------------
A. Covenants Against Competition and Solicitation.
----------------------------------------------
From the date hereof until the period equal to the shorter of (A) one
year following the date of termination of your employment with the
Company or (B) the period equal to the number of complete months of
your employment with the Company up to a period of twelve complete
months, without the prior written consent of the Company, you will not
directly or indirectly:
i. persuade, or attempt to persuade any customer or client of the
Company who was a customer or client of the Company on the date
of your termination to cease doing business with the Company, or
to reduce the amount of business such customer or client does
with the Company in the areas specifically noted in Section 1.F
hereof;
ii. persuade, or attempt to persuade any potential customer or client
to which the Company has delivered a formal written proposal in
the six months preceding your termination not to do business with
the Company in the areas and scope of work specified by the
formal proposal (activities in proposals that are restricted are
limited to those specifically noted in Section 1.F hereof);
iii. solicit for yourself or any other person other than the Company
the business of any person, individual, corporation, partnership,
trust, joint venture, business or incorporated organization which
is, at the time of your termination, a current customer or client
of the Company. If the target company has annual revenues greater
than $100 million, this restriction does not apply. Such
limitation on solicitation is only to areas specifically noted in
Section 1.F hereof; or
iv. persuade, or attempt to persuade any employee of the Company
to leave the employ of the Company.
7. Injunctive Relief and Severability.
----------------------------------
i. You agree that the remedy at law for any breach of the provisions of
this letter agreement shall be inadequate and the Company shall be
entitled to injunctive or other equitable relief in addition to any
other remedy it might have.
ii. The Company and you agree and acknowledge that the covenant not to
compete is made in consideration of substantial compensation payable
under this letter agreement. Should a court determine that the
duration, scope, or geographic areas in such covenant are not
reasonable, such restrictions shall be interpreted,
<PAGE>
-7-
modified, or rewritten to include as much of such duration, scope, or
geographic areas as will render such restrictions valid and
enforceable.
iii. The Company and you intend to and do hereby confer jurisdiction to
enforce this letter agreement upon the courts of the State of New
York.
8. Severability. In the event any of the provisions of this letter agreement
------------
shall be held by a court or other tribunal of competent jurisdiction to be
unenforceable, the other provisions of this letter agreement shall remain in
full force and effect.
9. Survival. All terms and conditions of this letter agreement which should by
--------
their nature survive the termination of your employment with the Company shall
so survive.
10. Governing Law. This letter shall be governed by, construed and enforced in
-------------
accordance with the internal laws of the State of New York governing agreements
made and to be fully performed therein, without giving effect to conflict of law
principles.
11. Notices. All notices, requests, consents and other communications required
-------
or permitted hereunder shall be in writing and shall be hand delivered or mailed
by certified or registered mail, return receipt requested, addressed as follows:
i. if to the Company, at Greenwich Technology Partners, Inc., 43
Gatehouse Road, Stamford, CT 06902, Attention: Director of Legal
Affairs.
ii. if to you, at the address set forth above or in any such case, at such
other addresses as may have been furnished to any party by the other
party in writing in the manner herein provided. Any notice or other
communication so addressed and so mailed shall be deemed to have been
given when received, and if hand delivered shall be deemed to have
been given when delivered.
The address for such notices may be changed from time to time by written notice
given in the manner provided for herein.
12. Waivers and Modifications. This letter agreement may be modified, and the
-------------------------
rights and remedies of any provision hereof may be waived, only in writing,
signed by each of the Company, and you. No waiver by either party of any breach
by the other of any provision hereof shall be deemed to be a waiver of any later
or other breach thereof or as a waiver of any such or other provision of this
letter agreement. This agreement sets forth all of the terms of the
understandings between the parties with reference to the subject matter set
forth herein may not be waived, changed, discharged or terminated orally or by
any course of dealing between the parties, but only by an instrument in writing
signed by the party against whom any waiver, change, discharge or termination is
sought. Each of the Company and you hereby acknowledges and agrees that any
prior arrangements, agreements or understandings relating to your employment
with the Company and/or any of its affiliates is hereby terminated and
extinguished in its entirety.
<PAGE>
-8-
13. Assignment. This Agreement shall be binding upon and inure to the benefit
----------
of the Company and its successors and assigns. This Agreement is not assignable
by you and your right to receive payment for your services is hereby expressly
agreed to be non-assignable and nontransferable, except as otherwise
specifically provided herein.
Sincerely,
/s/ Dennis M. Goett
Dennis M. Goett
Chief Financial Officer
I have carefully read the terms and conditions of the above and acknowledge and
accept the terms and conditions of this letter agreement.
Please sign, date and return this offer letter prior to your state date.
Signature: /s/ Richard C. Haverly
----------------------------
Richard Haverly
Date: 1/26/00
----------------------------
<PAGE>
EXHIBIT 10.21
March 13, 2000
Ms. Johna Till Johnson
221 East 33/rd/ Street Apt. 6-F
New York, NY 10016
Dear Johna:
This letter agreement (this "Agreement") when executed by both you and Greenwich
Technology Partners, Inc. (the "Company"), shall confirm the understanding
between you and the Company relating to your employment by the Company, and
shall supercede all prior agreements between you and the Company.
We are very proud of our corporate culture. We believe that open communication
between the Company and its employees and treating each other fairly and with
respect are critical to our success and to creating an environment in which we
are able to enjoy our work. Consequently, we want your assurance that should
there ever come a time during your employment with the Company that you are
dissatisfied with any aspect of your employment, you will communicate such
dissatisfaction to the person to whom you directly report, or, if that is not
comfortable for you, to any other manager of the Company, including the Chief
Executive Officer.
1. Major Terms
-----------
A. Services
--------
You shall serve and your title shall be Chief Technology Officer of
the Company. In that capacity, you shall report directly to the Chief
Executive Officer of the Company. As Chief Technology Officer of the
Company, you will have executive responsibility for (i) developing and
implementing the strategic direction of the Company in connection
with, among other things, technology investments, strategic
partnerships and new product and service offers, with other senior
executives of the Company; (ii) representing the Company's technology
strategies, expertise and direction to all third parties, including,
without limitation, the Company's current, future and prospective
customers, members of the press and industry analysts; (iii) working
with the Company's current, future and prospective customers to define
and develop new product and service offerings; and (iv) those other
functions customary to your position and title.
<PAGE>
While you are employed by the Company, you will devote your entire and
exclusive business and professional time, attention, energy, loyalty
and skill to the business of the Company to the best of your ability.
In addition, you will use your reasonable efforts to preserve for the
Company the goodwill of customers and others with whom the Company
establishes business relationships during your employment and to
advance the reputation of the Company. You shall comply with and
perform such directions and duties in relation to the business and
affairs of the Company consistent with your title and position as are
requested of you by the Company. While you are employed by the
Company your principal place of employment shall be the New York City
Metropolitan Area (as such term is customarily defined) (the
"Principal Place of Employment").
B. Compensation
------------
In consideration of all of the services to be rendered by you to the
Company pursuant to this Agreement, the Company will pay to you a base
salary of $150,000 per annum (the "Base Salary"). Your Base Salary
shall be payable on the 15th and 30th day of each month in arrears,
pro rated for the initial period worked. The Company shall have the
right to deduct from your compensation all taxes and other normal and
customary payroll deductions and withholdings required by applicable
law. Your Base Salary and Bonus (as defined below) shall be reviewed
at least annually by a member of senior management to ascertain
whether such Base Salary and Bonus should be increased. Pursuant to
Connecticut Wage laws, you are an exempt employee and therefore not
eligible under State requirements to receive overtime pay.
Bonus: So long as you are employed by the Company, you will receive a
------
guaranteed bonus of $12,500 per annum, payable on July 15 of each year
and an additional annual bonus of up-to $37,500, or $50,000 in the
aggregate, based on MBO's jointly developed by you and Company (the
"Bonus").
Expenses: The Company shall pay or reimburse you for all reasonable
---------
expenses actually incurred or paid by you, in the course of your
employment with the Company.
Home Office and Computer Allowance: The Company shall provide you
-----------------------------------
with home office and computer equipment allowance in the amount up to
$2,000 per annum.
Tools and Resources: During the course of your employment with the
--------------------
Company, the Company shall provide to you, at the Company's sole cost
and expense, all tools and resources necessary for you to perform your
duties and functions, including, without limitation, those tools and
resources set forth as Exhibit A attached hereto.
2
<PAGE>
C. Options
-------
You shall be entitled to participate in the Company's 1997 Stock
Option Plan (the "Plan") to the same extent as other senior executives
of the Company. Subject to the approval of the Company's Board of
Directors you shall initially be granted options to purchase up to
125,000 shares of the Company's common stock (the "Options"), par
value $0.01 per share, at an exercise price equal to the fair market
value of the Company's common stock per share on the Commencement Date
(as defined in Section 1D hereof), but in no event greater than $0.60
per share. The Options shall vest and become exercisable as follows:
25% of the Options shall vest and become exercisable on the first
anniversary of the Commencement Date, and the remainder of the Options
shall vest and become exercisable ratably on the first day of each
month after the first anniversary date of the Commencement Date over
the following three years. The Options shall be subject to the terms
of the Plan and to such other terms and conditions as may be specified
by the Company in the form of a standard option agreement between the
Company and you, subject, however to the immediately proceeding
sentence. In the event that the your employment with the Company is
terminated by the Company without "Cause", or you resign with "Good
------- ----
Reason" (as such terms are defined in Section 8 of the Agreement) at
any time prior to the first anniversary of the Commencement Date, the
vesting of the Options shall accelerate, and 25% of the Options shall
immediately vest and you shall be entitled to exercise such Options
for a period of equal to three months after the date of such
termination or resignation, as the case may be.
D. Commencement Date; Termination
------------------------------
Your employment shall commence on or around April 1, 2000 (the
"Commencement Date"). Your employment may be terminated by you with
or without Good Reason or by the Company with or without Cause at
anytime. Neither this Agreement, any employee handbook, or any other
document of the Company gives you any contractual right, either
express or implied, to remain in the employ of the Company.
Notwithstanding the foregoing, in the event you resign because of the
failure of the Company to grant to you the Options on the terms set
forth in this Agreement prior to the first anniversary date of the
Commencement Date, the Company shall pay to you as severance within 30
days after the effective date of such resignation a lump sum payment
in the amount equal to your Base Salary from the effective date of
such resignation up-to the first anniversary date of the Commencement
Date and that portion of your Bonus theretofore earned but unpaid,
including, without limitation, any guaranteed payments (the "Severance
Payment"). Furthermore, in such event, you shall be under no
obligation to seek other employment and there shall be no off-set
against the Severance Payment on account of any renumeration
attributable to any subsequent employment you may obtain.
3
<PAGE>
E. Use of Company Property
-----------------------
You will not use the Company's premises, facilities, or equipment for
personal purposes.
F. Moonlighting and Competitive Activity
-------------------------------------
You covenant and agree that, during non-business hours, you shall not
engage in any activity related to, competitive with, or in the
business of, the Company, without the prior written consent of the
Company. Such activities shall include, but not be limited to
designing intranet or internet networks, network consulting,
maintenance, repair, troubleshooting or systems design and/or
installation (a "Competitive Activity"). If you are unsure whether a
particular activity would violate the aforesaid covenant, you shall
seek the advice of a senior officer of the Company. You hereby accept
said employment and agree faithfully to perform said duties and render
said services for the term of your employment.
2. Right to Change Pay Practices, Policies, Procedures and Benefits. The
----------------------------------------------------------------
Company shall have the right, at any time without prior notice, to change,
modify, amend, or terminate any pay practice, employment policy or
procedure, or employment benefit plan or program in effect upon the
commencement of your employment or adopted subsequently. You will be
entitled to participate on the same basis as other senior executives of the
Company in all the Company's benefits available to other senior executives
employees in similar positions of the Company, including, without
limitation, medical and dental coverage, a 401K plan, short term and long
term disability, life insurance, and those other benefits and privileges
set forth on Exhibit B attached hereto. You shall be covered by and named
as an additional insured under the Company's Director's and Officers
Liability Insurance Policy.
3. Representations and Warranties. You represent and warrant that: you are
------------------------------
not under any obligation to any third party which could interfere with your
performance under this letter agreement; and your performance of your
obligations to the Company during your employment with the Company will not
breach any agreement by which you are bound not to disclose any proprietary
information.
4. Inventions.
----------
i. You will as soon as practicable disclose to the Company all Inventions
(as herein defined). "Inventions" shall mean all ideas, potential
marketing and sales relationships, inventions, research, plans for
products and services, marketing plans, software (including, without
limitation, source code), know-how, trade secrets, information, data,
developments, discoveries, improvements, modifications, technology,
and designs, whether or not subject to patent or copyright protection,
made, conceived, expressed, developed, or actually or constructively
reduced to practice by you solely or jointly with others during your
employment with the Company, which refer to, are suggested by, or
result
4
<PAGE>
from any work which you may do during your employment, or from any
information obtained from the Company.
ii. The Inventions shall be the exclusive property of the Company, and are
hereby assigned by you to the Company; the Company shall have the
exclusive right to use the Inventions for all purposes without
additional compensation to you. At the Company's expense, you will
assist the Company in every proper way to protect the Inventions
throughout the world, including, without limitation, executing in
favor of the Company patent, copyright, and other applications and
assignments relating to the Inventions.
5. Confidential Information.
-------------------------
i. You will not disclose, give, sell, publish or otherwise use, either
during your employment by the Company or after the termination of your
employment, except in the performance of your duties for the benefit
of the Company, any Confidential Information (as herein defined).
"Confidential Information" shall mean, all of the Company's
proprietary information, technical data, technology, process, trade
secrets, and know-how, other intellectual property rights, strategies,
financial statements or other financial information, forecasts,
operations, business plans, prices, discounts, products, product
specifications, designs, plans data, ideas or information contained in
the Company's Business Strategy Overview and Career Advancement Manual
which is disclosed to you, which you may acquire or develop, or which
you may observe in the course of your employment by the Company and
which at the time of disclosure is not previously known by you and not
known or used by others in the trade generally, does not become
generally available to the trade through no fault of yours, and does
not become rightfully available to you on a non-confidential basis
from a source other than the Company, including, without limitation,
research, product plans, customer lists, markets, software,
developments, inventions, processes, formulas, technology, designs,
drawings, marketing and other plans, and financial data and
information. "Confidential Information" shall also mean information
received by the Company from customers of the Company or other third
parties subject to a duty to keep confidential and financial, pricing,
and credit information regarding customers, clients, or vendors of the
Company. Upon termination of your employment, you shall promptly
deliver to the Company, in whatever form or medium, all files,
drawings, blueprints, specifications, reports, notebooks, and other
materials containing any Confidential Information which are in you
possession or control.
6. Restrictive Covenants.
---------------------
A. Covenants Against Competition and Solicitation.
----------------------------------------------
Commencing on the Commencement Date and continuing thereinafter for a
period of 90 days from the date of termination of your employment with
the Company by either (i) the Company for Cause or (ii) by you without
Good
5
<PAGE>
Reason, without the prior written consent of the Company, you will
not, directly or indirectly:
i. persuade or attempt to persuade any customer, client, supplier or
distributor of the Company to cease doing business with the
Company, or to reduce the amount of business it does with the
Company;
ii. persuade or attempt to persuade any potential customer, client,
supplier or distributor to which the Company has made a
presentation, or with which the Company had been having
discussions, not to do business with the Company;
iii. persuade or attempt to persuade any employee of the Company to
leave the employ of the Company;
iv. Become retained by or employed by, as an employee or consultant
or otherwise undertake with any other person, individual or
corporation, joint venture, or other business arrangement, which
directly competes with the business of the Company.
B. Geographic Scope.
-----------------
For purposes of paragraph 6A, the geographic scope of the restrictive
covenants contained therein, shall be 150 miles from your Principal
Place of Employment.
7. Injunctive Relief and Severability.
-----------------------------------
i. You agree that the remedy at law for any breach of the provisions of
this letter agreement shall be inadequate and the Company shall be
entitled to injunctive or other equitable relief in addition to any
other remedy it might have.
ii. The Company and you agree and acknowledge that the covenant not to
compete and the right of first refusal described are made in
consideration of substantial compensation payable under this letter
agreement. In consequence of this the Company and you agree and
acknowledge that the duration, scope, and geographic area included in
such covenant not to compete are fair, reasonable, necessary, and
appropriate, and will not prevent you from engaging in profitable
business activities or employment. Nevertheless, should a court
determine that such duration, scope, or geographic areas are not
reasonable, such restrictions shall be interpreted, modified, or
rewritten to include as much of such duration, scope, or geographic
areas as will render such restrictions valid and enforceable.
iii. The Company and you intend to and do hereby confer jurisdiction to
enforce this letter agreement upon the courts of any jurisdiction
within the geographical scope of the agreements contained therein. In
the event that the courts of any one or more of such jurisdictions
shall hold such agreements wholly or partly unenforceable by reason of
the breadth of such scope or otherwise, it is the intention of the
Company and you that such determination shall not bar or in any
6
<PAGE>
way affect the Company's right to relief hereunder in the courts of
any other jurisdiction within the geographical scope of any such
agreement, as to breaches of such agreements in such other respective
jurisdictions, the above agreements as they relate to each
jurisdiction being, for this purpose, severable into independent
agreements.
8. Certain Definitions.
-------------------
As used in this Agreement, the following terms shall have the following
meanings:
Termination for "Cause" shall mean termination of your employment with the
Company because of (i) your conviction of a felony involving fraud, theft
or moral turpitude; (ii) the willful or persistently repeated material non-
performance of your duties to the Company (other than by reason of
incapacity due to your physical or mental illness), provided that you
receive a detailed written notice describing such non-performance and the
same continues after you receive such written notice; and (iii) any
material breach by you of a material term of this Agreement, which breach
is not cured within 5 business days after written notice to you specifying
such breach. Termination of your employment for Cause shall be
communicated by delivery to you of a written notice from the Company
stating that the Executive has been terminated for Cause, specifying the
particulars thereof and the effective date of such termination.
Resignation for "Good Reason" shall mean resignation by Executive because
of (i) an adverse and material change in your duties, titles or reporting
responsibilities; (ii) a breach by the Company of any term of this
Agreement; (iii) a reduction in your Base Salary or bonus opportunity or
the failure of the Company to pay you any amount of compensation when due;
(iv) a relocation of your Principal Place of Employment without your prior
written consent; (v) an assignment of this Agreement by the Company,
whether by operation of law or otherwise; (vi) the failure of the Board of
Directors of the Company to approve and/or the failure of the Company to
grant the Options on the terms set forth in this Agreement on or prior to
June 1, 2000; or (vii) a "Change of Control" (as defined below) in the
Company. The Company shall have 5 business days from the date of receipt
of such notice to effect a cure (if curable) of the material breach
described therein. The date of termination of employment without Cause
shall be the date specified in a written notice of termination to the
Executive. The date of resignation for Good Reason shall be the date
specified in a written notice of resignation from the Executive to the
Company; provided, however, that no such written notice shall be effective
unless the cure period specified in the immediately preceding sentence has
expired without the Company having corrected, to the satisfaction of the
Executive, the event or events subject to cure.
"Change of Control" shall be deemed to have occurred if (i) in connection
with a merger or acquisition of the Company, at least 50% of the voting
stock of the Company is transferred to persons or entities which are not
stockholders of the Company on the date hereof; (ii) the sale, lease or
exchange of all or substantially all the assets of the Company; or (iii)
the Company is to be dissolved or liquidated.
7
<PAGE>
9. Severability.
------------
In the event any of the provisions of this letter agreement shall be held
by a court or other tribunal of competent jurisdiction to be unenforceable,
the other provisions of this letter agreement shall remain in full force
and effect.
10. Survival.
--------
All terms and conditions of this letter agreement which should by their
nature survive the termination of your employment with the Company shall so
survive.
11. Governing Law.
-------------
This letter shall be governed by, construed and enforced in accordance with
the internal laws of the State of New York governing agreements made and to
be fully performed therein, without giving effect to conflict of law
principles.
12. Notices.
-------
All notices, requests, consents and other communications required or
permitted hereunder shall be in writing and shall be hand delivered or
mailed by certified or registered mail, return receipt requested, addressed
as follows:
i. if to the Company, at Greenwich Technology Partners, Inc., 43
Gatehouse Road, Stamford, CT 06902, Attention: Director of Legal
Affairs.
ii. if to you, at the address set forth above or in any such case, at such
other addresses as may have been furnished to any party by the other
party in writing in the manner herein provided. Any notice or other
communication so addressed and so mailed shall be seemed to have been
given when mailed, and if hand delivered shall be deemed to have been
given when delivered.
13. Waivers and Modifications.
-------------------------
This letter agreement may be modified, and the rights and remedies of any
provision hereof may be waived, only in writing, signed by each of the
Company, and you. No waiver by either party of any breach by the other of
any provision hereof shall be deemed to be a waiver of any later or other
breach thereof or as a waiver of any such or other provision of this letter
agreement. This agreement sets forth all of the terms of the
understandings between the parties with reference to the subject matter set
forth herein may not be waived, changed, discharged or terminated orally or
by any course of dealing between the parties, but only by an instrument in
writing signed by the party against whom any waiver, change, discharge or
termination is sought. Each of the Company and you hereby acknowledges and
agrees that any prior arrangements, agreements or understandings relating
to your employment with the Company and/or any of its affiliates is hereby
terminated and extinguished in its entirety.
8
<PAGE>
14. Assignment.
----------
This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and assigns. This Agreement is not assignable
by you and your right to receive payment for your services is hereby
expressly agreed to be non-assignable and nontransferable, except as
otherwise specifically provided herein.
Sincerely,
/s/ Joseph Beninati
Joseph Beninati
Chairman & CEO
I have carefully read the terms and conditions of the above and acknowledge and
accept the terms and conditions of this letter agreement.
Please sign, date and return this offer letter prior to your start date.
Name: /s/ Johna Till Johnson
----------------------
Johna Till Johnson
Date: 03/13/00
----------------------
9
<PAGE>
EXHIBIT 10.22
July 27, 1999
Mr. Joseph Beninati
Chief Executive Officer
Greenwich Technology Partners
43 Gatehouse Road
Stamford, CT 06902
Dear Joe:
This letter agreement confirms our understanding that Greenwich Technology
Partners (the "Company" or "you") has engaged Credit Suisse First Boston
Corporation and its affiliates, successors and assigns, as appropriate ("Credit
Suisse First Boston") to act as its exclusive placement agent in connection with
the private placement (the "Private Placement") by the Company or its affiliates
of Equity or Equity-Linked Securities (the "Securities").
1. Appointment and Acceptance
The Company hereby appoints Credit Suisse First Boston as the Company's
exclusive placement agent in connection with a private placement of the
Securities and Credit Suisse First Boston accepts such appointment.
Credit Suisse First Boston agrees that in its capacity hereunder it will use
reasonable efforts to arrange a private placement of the Securities. In no
event shall Credit Suisse First Boston be obligated to purchase the Securities
for its own account or for the accounts of its customers.
2. Fees and Expenses
As compensation to Credit Suisse First Boston for its services hereunder, the
Company agrees to pay Credit Suisse First Boston promptly upon each closing of a
sale of the Securities, a cash fee (the "Placement Fee") according to the
following table:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Investor Placement Fee
(percentage of gross proceeds raised
from all sales of securities)
- -----------------------------------------------------------------------------------------------
<S> <C>
Existing Investors (as listed in Exhibit 1) 0% for the first $4.0 million in the aggregate,
6% of proceeds in excess of $4.0 million
- -----------------------------------------------------------------------------------------------
Other Investors 6%
- -----------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
The Placement Fee payable hereunder shall be subject to a $1,000,000 minimum
payable upon the first closing of a sale of securities.
Promptly upon request, the Company will reimburse Credit Suisse First Boston for
all of Credit Suisse First Boston's reasonable out-of-pocket expenses incurred
in connection with its activities hereunder, including, without limitation, the
fees and disbursements of its legal counsel, if any, and of any other advisor
retained by Credit Suisse First Boston in connection with this engagement (it
being understood that the retention of any advisor, other than legal counsel,
will be made with the prior approval of the Company).
Such Placement Fee will be payable in respect of each such sale whether such
sale has been arranged by Credit Suisse First Boston, by another agent or
directly by the Company.
3. Information
The Company will furnish Credit Suisse First Boston with all financial and other
information concerning the Company as Credit Suisse First Boston deems
appropriate in connection with the performance of the services contemplated by
this engagement and in that connection will provide Credit Suisse First Boston
with access to the Company's officers, directors, employees, accountants,
counsel and other representatives. The Company acknowledges and confirms that
Credit Suisse First Boston (i) will rely solely on such information in the
performance of the services contemplated by this engagement without assuming any
responsibility for independent investigation or verification thereof, (ii)
assumes no responsibility for the accuracy or completeness of such information
or any other information regarding the Company and (iii) will not make any
appraisal of any assets of the Company.
The Company will be solely responsible for the contents of the private placement
memorandum or other offering document used in connection with the placement of
the Securities contemplated hereby (as such private placement memorandum or
other document may be amended or supplemented and including any information
incorporated therein by reference, the "Private Placement Memorandum") and any
and all other written or oral communications provided by or on behalf of the
Company to any actual or prospective purchaser of the Securities. The Company
represents and warrants that the Private Placement Memorandum and such other
communications will not, at any time during the period of Credit Suisse First
Boston's engagement hereunder contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The Company authorizes Credit Suisse First
Boston to provide the Private Placement Memorandum to prospective purchasers of
the Securities. If at any time prior to the completion of the offer and sale of
the Securities or the closing date of any such sale an event occurs as a result
of which the Private Placement Memorandum (as then supplemented or amended)
would include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, the Company will
promptly notify Credit Suisse First Boston of such event and Credit Suisse First
Boston will suspend solicitations of prospective purchasers of the Securities
until such time as the Company
Page 2
<PAGE>
shall prepare (and the Company agrees that, if it shall have notified Credit
Suisse First Boston to suspend solicitations after the Company has accepted
orders from prospective purchasers, it will promptly prepare) a supplement or
amendment to the Private Placement Memorandum which corrects such statement(s)
or omission(s).
4. Exemption from Registration; Restrictions on Offer and Sale of Same or
Similar Securities
It is understood that the offer and sale of the Securities will be exempt from
the registration requirements of the Securities Act of 1933, as amended (the
"Act") pursuant to Section 4(2) thereof. The Company will not, directly or
indirectly, make any offer or sale of Securities or of securities of the same or
a similar class as the Securities if as a result the offer and sale of
Securities contemplated hereby would fail to be entitled to the exemption from
the registration requirements of the Act provided for in such Section 4(2). The
Company represents and warrants to Credit Suisse First Boston that it has not,
directly or indirectly, made any offer or sale of the Securities or securities
of the same or similar class as the Securities during the six month period
ending on the date of this letter other than the Series D Preferred Stock
Financing which closed February 1, 1999, and has no intention of making an offer
or sale of the Securities or securities of the same or similar class as the
Securities for a period of six months after completion of the private placement
contemplated hereby. As used herein, the terms "offer" and "sale" have the
meanings specified in Section 2(3) of the Act.
5. Additional Restrictions on the Company
In connection with all offers and sales of the Securities:
The Company will not offer or sell the Securities by means of any form of
general solicitation or general advertising.
The Company will not offer or sell the Securities to any person who is not an
"accredited investor" as defined in Rule 501 under the Act.
The Company will exercise reasonable care to ensure that the purchasers of the
Securities are not underwriters within the meaning of Section 2(11) of the Act
and, without limiting the foregoing, that such purchases will comply with Rule
502(d) under the Act.
The Company shall be deemed to make to Credit Suisse First Boston all
representations and warranties which it makes to purchasers of Securities in any
purchase agreement or other document.
6. Compliance with State Securities Laws
The Company will take such action as is necessary to qualify the Securities for
offer and sale under the securities laws of such states and other jurisdictions
of the United States as Credit Suisse First Boston may specify.
Page 3
<PAGE>
7. Indemnification
Since Credit Suisse First Boston will be acting on behalf of the Company in
connection with its engagement hereunder, the Company and Credit Suisse First
Boston have entered into a separate letter agreement (the "Indemnification
Agreement") dated the date hereof providing for the indemnification by the
Company of Credit Suisse First Boston and certain related persons and entities.
8. Additional Services
If at any time within twelve months of the date hereof, the Company is
considering retaining an investment bank or other similar agent in connection
with any related or unrelated investment banking services for the Company, the
Company shall offer to retain Credit Suisse First Boston as its exclusive bank
or agent for such services. As compensation for such services, Credit Suisse
First Boston will be paid customary fees to be mutually agreed upon at the
appropriate time. The terms of any such additional engagement will be set forth
in a separate letter agreement containing terms and conditions to be mutually
agreed upon, including without limitation, appropriate indemnification
provisions.
In addition, if at any time within twelve months of the date hereof, the Company
determines to undertake any merger, acquisition, divestiture or other similar
transaction which results in a sale or a series of transactions of all or
substantial amount of assets or the capital stock of the Company as well as any
recapitalization, restructuring or liquidation of the Company by owners of the
Company holding at least 50% of the voting securities of the Company, a third
party or any combination thereof, or any other form of disposition which results
in the effective sale of the principal business and operations of the Company by
owners of the Company holding at least 50% of the voting securities of the
Company) (an "M&A Transaction"), the Company agrees to retain Credit Suisse
First Boston as its exclusive financial advisor in connection with such M&A
Transaction on customary terms and conditions, including without limitation,
appropriate indemnification provisions. Among other things, such terms and
conditions will provide that in the event an M&A Transaction is consummated, the
Company will pay Credit Suisse First Boston an "M&A Transaction Fee" equal to
the greater of (x) 2.0% of the Aggregate Value (as defined below) of the M&A
Transaction or (y) $2,000,000. Acquisitions anticipated to be valued below $100
million shall be subject to a mutually agreeable M&A Transaction fee.
The "Aggregate Value" of the M&A Transaction shall equal the value of the
consideration received per share of the Company's common stock (the "Per Share
Consideration") multiplied by the Company's Fully Diluted shares outstanding (or
in the case of a sale of assets, the consideration received for such assets),
plus the value of any debt, capital lease, and preferred stock obligations of
the Company assumed, retired, or defeased in connection with the M&A
Transaction. "Fully Diluted" shares outstanding shall mean the total number of
common shares outstanding plus the total number of common shares that would be
issued upon conversion of any securities convertible into common shares,
including, but not limited to, all outstanding stock options (whether or not
vested) or preferred stock of the Company. In the case of an M&A Transaction in
which the Per Share Consideration consists of another company's common stock,
Page 4
<PAGE>
the Per Share Consideration shall be computed in a manner consistent with the
calculation of such price in the definitive acquisition agreement.
The value of any consideration to be paid contingent upon future events shall be
estimated for the purposes of calculating the M&A Transaction Fee at an expected
value mutually agreeable to you and to us at the time of closing; any amounts
held in escrow shall be deemed paid at closing. No fees or expenses payable to
any other financial advisor either by the Company or by any other entity shall
reduce or otherwise affect the fees payable hereunder to CSFB.
Without limiting the generality of the foregoing, it is understood that any
transaction resulting in the sale of more than 50% of the Company's voting stock
will be deemed a consummated M&A Transaction for purposes of determining when
the full M&A Transaction Fee is payable. Nevertheless, our advisory efforts
pursuant to this letter will continue after control is obtained to assist you
with a second step merger or similar transaction.
The terms of any such engagement will be set forth in a separate letter
agreement containing terms and conditions to be mutually agreed upon, including
without limitation, appropriate indemnification provisions.
The Company further understands that if Credit Suisse First Boston is asked to
act for the Company in any other formal additional capacity relating to this
engagement but not specifically addressed in this letter, such activities shall
constitute separate engagements and the terms of any such additional engagements
will be embodied in one or more separate written agreements containing terms and
conditions to be mutually agreed upon including without limitation appropriate
indemnification provisions. The indemnity provisions in the Indemnification
Agreement shall apply to any such additional engagements, unless superceded by
an indemnity provision set forth in a separate agreement applicable to any such
additional engagements and shall remain in full force and effect regardless of
any completion, modification or termination of Credit Suisse First Boston's
engagement(s).
9. Termination
The engagement of Credit Suisse First Boston hereunder (i) may be terminated at
any time, with or without cause, by either the Company or Credit Suisse First
Boston, upon ten days' prior written notice thereof to the other party and (ii)
shall terminate, if no such action described in clause (i) has been taken by
Credit Suisse First Boston or the Company, upon completion of the placement of
the Securities contemplated hereby.
In the event of any termination of Credit Suisse First Boston's engagement
hereunder, Credit Suisse First Boston will continue to be entitled to its full
Placement Fee provided for herein in the event that at any time prior to the
expiration of twelve months after any such termination the Company sells the
Securities or securities of the same or a similar class as the Securities to
either i) purchasers which were contacted by Credit Suisse First Boston in its
capacity as placement agent hereunder, or which the Company, during the term of
CSFB's engagement hereunder, approached or was approached by regarding the
placement of the Securities contemplated
Page 5
<PAGE>
hereby, or ii) any purchasers if the Company has accepted at least $10 million
of securities as part of CSFB's engagement.
No termination of Credit Suisse First Boston's engagement hereunder shall affect
(i) the Company's obligation to reimburse Credit Suisse First Boston for
expenses as provided for herein, (ii) the Company's obligations under the
Indemnification Agreement or (iii) the provisions of paragraphs 3-10 of this
letter agreement.
10. General
No advice rendered by Credit Suisse First Boston, whether formal or informal may
be disclosed, in whole or in part, or summarized, excerpted from or otherwise
referred to without Credit Suisse First Boston's prior written consent. In
addition, Credit Suisse First Boston may not be otherwise referred to without
its prior written consent.
Credit Suisse First Boston may, at its option and expense, and with the prior
consent of the Company, such consent not to be unreasonably withheld, upon the
earliest to occur of (i) the closing of the sale of the Securities in a Private
Placement or (ii) the public announcement of a Private Placement, place
announcements and advertisements in such financial and other newspapers and
journals as it may choose, stating that Credit Suisse First Boston has acted as
exclusive placement agent to the Company in connection with such Private
Placement.
At Credit Suisse First Boston's discretion, any right set forth herein may be
exercised, and any services to be provided by Credit Suisse First Boston may be
provided, by an affiliate of Credit Suisse First Boston.
This letter agreement and the Indemnification Agreement contain the entire
agreement of the parties with respect to the subject matter hereof and supercede
and take precedence over all prior agreements or understandings, whether oral or
written, between Credit Suisse First Boston and the Company.
In connection with this engagement, Credit Suisse First Boston is acting as an
independent contractor and not in any other capacity, with duties owing solely
to the Company.
The validity and interpretation of this letter agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of New York
applicable to agreements made and to be fully performed therein (excluding the
conflicts of laws rules). The Company hereby irrevocably submits to the
jurisdiction of any court of the State of New York or the United States District
Court for the Southern District of the State of New York for the purpose of any
suit, action or other proceeding arising out of this letter agreement, or any of
the agreements or transactions contemplated hereby, which is brought by or
against the Company.
The benefits of this letter agreement shall inure to the parties hereto, their
respective successors and assigns, and to the indemnified parties hereunder and
their respective successors and assigns
Page 6
<PAGE>
and representatives, and the obligations and liabilities assumed in this letter
agreement by the parties hereto shall be binding upon their respective
successors and assigns.
Each of the Company and Credit Suisse First Boston (and, to the extent permitted
by law, on behalf of their respective equity holders and creditors) hereby
knowingly, voluntarily and irrevocably waives any right it may have to a trial
by jury in respect of any claim based upon, arising out of or in connection with
this letter agreement.
The invalidity or unenforceability of any provision of this letter agreement
shall not affect the validity or enforceability of any other provisions of this
agreement or the Indemnification Agreement, which shall remain in full force and
effect.
We are delighted to accept this engagement and look forward to working with you
on this assignment. If this letter agreement correctly sets forth your
understanding of the agreement between Credit Suisse First Boston and the
Company with respect to this engagement, please sign and return to us the
enclosed copy of this letter agreement. The letter agreement signed by you
shall constitute a binding agreement between us as of the date first above
written.
Very truly yours,
CREDIT SUISSE FIRST BOSTON CORPORATION
By: _______________________________________
Name: Michael Tunstall
Title: Managing Director
By: /s/ Josh Tanzer
--------------------------------------
Name: Josh Tanzer
Title: Director
ACCEPTED AND AGREED TO
AS OF THE DATE FIRST ABOVE WRITTEN:
GREENWICH TECHNOLOGY PARTNERS
By: /s/ Joseph Beninati
----------------------------------
Name: Joseph Beninati
Title: Chief Executive Officer
Page 7
<PAGE>
Exhibit 1
Existing Investors
FG-GTP Partnerships
Vantagepoint Partnerships
Carpentieri Plan
James Cabrera
Persistence Partners
Greg Berger
John Miller
Deborah Farrington
Rovert Garbarino
Graham Albutt
Carlos Dominguez
Dennis Goett
Joseph Beninati
For purposes hereof, "Existing Investors" shall include any entity or person
that is an affiliate of any of the above and shall specifically include the
Starvest Partnerships.
Page 8
<PAGE>
EXHIBIT 10.23
July 27, 1999
TO: Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, NY 10010
In connection with the engagement ( the "engagement") by Greenwich Technology
Partners (the "Company") of Credit Suisse First Boston Corporation ("Credit
Suisse First Boston") to act as the Company's exclusive placement agent in
connection with the private placement (the "Private Placement") of Equity or
Equity-Linked securities (the "Securities"), the Company agrees to indemnify and
hold harmless Credit Suisse First Boston and its affiliates, the respective
directors, officers, partners, agents and employees of Credit Suisse First
Boston and its affiliates, and each other person, if any, controlling Credit
Suisse First Boston or any of its affiliates (collectively, "Indemnified
Persons") from and against, and the Company agrees that no Indemnified Person
shall have any liability to the Company or its owners, partners, affiliates,
security holders or creditors for, any losses, claims, damages or liabilities
(including actions or proceedings in respect thereof) (collectively, "Losses")
which (A) relate to, arise out of or are based upon any untrue statement or any
alleged untrue statement of any material fact contained in the private placement
memorandum or other offering document used in connection with the Private
Placement (as such private placement memorandum or other document may be amended
or supplemented and including any information incorporated therein by reference,
the "Private Placement Memorandum"), or in any other written or oral
communication provided by or on behalf of the Company to any actual or
prospective purchaser of the Securities, or relate to, arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light or
the circumstances under which they were made, not misleading, or (B) otherwise
relate to or arise out of the engagement or Credit Suisse First Boston's
performance thereof, except that this clause (B) shall not apply to any Losses
that are finally judicially determined to have resulted primarily from the bad
faith or gross negligence of Credit Suisse First Boston.
The Company agrees that if the indemnification provided for in the foregoing
paragraph is for any reason not available or insufficient to hold Credit Suisse
First Boston harmless, the Company will contribute to the Losses involved in
such proportion as is appropriate to reflect the relative benefits received (or
anticipated to be received) by the Company and by Credit Suisse First Boston
with respect to the engagement or, if such allocation is judicially determined
unavailable, in such proportion as is appropriate to reflect other equitable
considerations such as the relative fault of the Company on the one hand and of
Credit Suisse First Boston on the other hand, provided, however, that, to the
-------- -------
extent permitted by applicable law, the Indemnified Persons shall not be
responsible for amounts which in the aggregate are in excess of the amount of
all fees actually received by Credit Suisse First Boston from the Company in
connection with the engagement. Relative benefits to the Company, on the one
hand, and to Credit Suisse First Boston, on the other hand, with respect to the
engagement shall be deemed to be in the same proportion as (i) the total value
received or proposed to be received by the Company in connection with the
Private Placement, whether or not consummated, bears to (ii) all fees paid to
Credit Suisse First Boston by the Company in connection with the engagement.
Relative fault
Page 1
<PAGE>
shall be determined, in the case of Losses arising out of or based on any untrue
statement or any alleged untrue statement of a material fact or omission or
alleged omission to state a material fact, by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company to Credit Suisse First Boston and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act of
1933, as amended) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
The Company will reimburse each Indemnified Person for all expenses (including
without limitation reasonable fees and disbursements of counsel and expenses
incurred in connection with preparing for and responding to third party
subpoenas) as they are incurred by such Indemnified Person in connection with
investigating, preparing for or defending any action, claim, investigation,
inquiry, arbitration or other proceeding ("Action") in respect of which
indemnification may be sought hereunder (or enforcing this agreement or any
related engagement agreement), whether or not in connection with pending or
threatened litigation in which any Indemnified Person is a party, and whether or
not such Action is initiated or brought by Credit Suisse First Boston. The
Company further agrees that it will not settle or compromise or consent to the
entry of any judgment in any pending or threatened Action in respect of which
indemnification may be sought hereunder (whether or not an Indemnified Person is
a party therein) unless the Company has given Credit Suisse First Boston
reasonable prior written notice thereof and has obtained an unconditional
release of each Indemnified Person from all liability arising therefrom.
In the event that the Company is considering entering into one or a series of
transactions involving a merger or other business combination or a dissolution
or liquidation of all or a significant portion of its assets, the Company shall
promptly notify Credit Suisse First Boston in writing. If requested by Credit
Suisse First Boston, the Company shall then establish alternative means of
providing for its obligations set forth herein on terms and conditions
reasonably satisfactory to Credit Suisse First Boston.
If multiple claims are brought against Credit Suisse First Boston in any Action
with respect to at least one of which indemnification is permitted under
applicable law and provided for under this agreement, the Company agrees that
any judgment, arbitration award or other monetary award shall be conclusively
deemed to be based on claims as to which indemnification is permitted and
provided for hereunder.
The Company's obligations hereunder shall be in addition to any rights that any
Indemnified Person may have at common law or otherwise. Solely for the purpose
of enforcing this agreement, the Company hereby consents to personal
jurisdiction and to service and venue in any court in which any claim which is
subject to this agreement is brought against any Indemnified Person. The
Company acknowledges that in connection with the engagement Credit Suisse First
Boston is acting as an independent contractor and not in any other capacity with
duties owing solely to the Company. CREDIT SUISSE FIRST BOSTON HEREBY AGREES,
AND THE COMPANY HEREBY AGREES ON ITS OWN BEHALF AND, TO THE EXTENT
Page 2
<PAGE>
PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS SECURITY HOLDERS, TO WAIVE ANY
RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM, COUNTER-CLAIM OR ACTION
ARISING OUT OF THE ENGAGEMENT, CREDIT SUISSE FIRST BOSTON'S PERFORMANCE THEREOF
OR THIS AGREEMENT.
The provisions of this agreement shall apply to the engagement (including
related activities prior to the date hereof) and any modification thereof and
shall remain in full force and effect regardless of the completion or
termination of the engagement. This agreement and any other agreements relating
to the engagement shall be governed by and construed in accordance with the laws
of the State of New York, without regard to conflicts of law principals.
Very truly yours,
GREENWICH TECHNOLOGY PARTNERS
By: /s/ Joseph Beninati
-------------------
Name: Joseph Beninati
Title: Chief Executive Officer
Accepted and Agreed to:
CREDIT SUISSE FIRST BOSTON CORPORATION
By:
--------------------------------
Name: Michael Tunstall
Title: Managing Director
By: /s/ Josh Tanzer
--------------------------------
Name: Josh Tanzer
Title: Director
Page 3
<PAGE>
EXHIBIT 10.24
SHAREHOLDERS' AGREEMENT
-----------------------
THIS IS A SHAREHOLDERS' AGREEMENT (the "Agreement") made and dated as of
March 1, 2000 by and:
among: GREENWICH TECHNOLOGY PARTNERS, INC., a Delaware corporation (the
- -----
"Corporation");
and: the holders of shares of common stock of the Corporation identified on
- ---
the signature pages hereto (collectively, the "Shareholders").
The Corporation and the Shareholders agree as follows:
1. DEFINITIONS. As used in this Agreement, each of the following terms
-----------
is used as follows:
"Affiliate": With respect to any particular Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person or as otherwise defined in Rule 501 promulgated under the Securities
Act of 1933, as amended.
"Dispose": To make a Disposition.
"Disposition": A gift, sale, assignment, transfer, pledge,
encumbrance, or any other transfer, voluntary or involuntary, of an interest in
the Shares, including transfers effected by operation of laws.
"Liens": All liens, security interests, pledges, mortgages,
encumbrances, claims, charges, agreements and rights of others of any nature
whatsoever.
"Offeror": A Shareholder desiring to Dispose of all or any part of
his Shares (other than to a Permitted Transferee).
"Permitted Transferees": With respect to any Disposition of Shares by
any Shareholder: (a) the spouse, children or descendants of such Shareholder;
(b) any trust for the exclusive benefit of such Shareholder or one or more of
the individuals listed in clause (a); (c) any Person in which all of the
beneficial equity interests are owned by any one or more of such Shareholder or
the individuals and/or trusts listed in clauses (a), and (b); and (d) any
Affiliate.
"Person": Any natural person, corporation, partnership (general,
limited or otherwise), limited liability company, trust, association, joint
venture, governmental body or agency or other entity having legal status of any
kind.
"Shares": Issued and outstanding shares of capital stock of the
Corporation.
<PAGE>
-2-
"Termination Event": Any of the following: (i) the sale of all or
substantially all of the assets of the Corporation; (ii) the merger or
consolidation of the Corporation as a result of which the Corporation's
stockholders shall own less than a majority of the outstanding voting capital
stock of the surviving Corporation; (iii) the dissolution or liquidation of the
Corporation; or (iv) the closing of a firmly underwritten public offering
pursuant to an effective registration statement under the Securities Act, as
amended, covering the offer and sale of common stock for the account of the
Corporation.
2. PURPOSE AND BACKGROUND. The Shareholders are parties to a certain
----------------------
Stock Purchase Agreement dated as of March 1, 2000 (the "Purchase Agreement")
pursuant to which they have received, or are receiving, certain Shares from the
Corporation. The Shareholders believe that their best interests and those of
the Corporation will be served by preserving harmony and continuity with respect
to the management and capital stock of the Corporation, and that these goals can
best be obtained by imposing restrictions on the Disposition of the Shares as
provided in this Agreement.
3. RESTRICTION ON DISPOSITION.
--------------------------
3.1. General Restriction. Except for Dispositions to Permitted
-------------------
Transferees or as otherwise provided in this Agreement, no Shareholder shall at
any time Dispose of all or any part of the Shareholder's Shares except in
compliance with Section 4 of this Agreement.
3.2. Exception for Permitted Transferees. Notwithstanding
-----------------------------------
anything to the contrary contained in this Agreement, a Shareholder may Dispose
of all or any portion of his Shares to a Permitted Transferee without complying
with the provisions of Section 4. If a Shareholder Disposes of all or any
portion of his Shares to a Permitted Transferee, the Permitted Transferee shall
succeed to all of the rights and benefits, and be subject to all of the
restrictions under this Agreement, applicable to the Shareholder from whom the
Permitted Transferee receives his Shares. If a Shareholder who made a
Disposition to a Permitted Transferee Disposes of his Shares, such Shareholder's
Permitted Transferee(s) shall also be required to Dispose of his or its Shares
on the same terms and conditions. In the event of a Disposition to a Permitted
Transferee, each reference in this Agreement to the Shareholder making such
Disposition shall also include each Permitted Transferee of such Shareholder.
4. GENERAL PROCEDURES ON DISPOSITIONS.
----------------------------------
4.1. Sale Right. If a Shareholder desires to sell all or any
----------
part of a Shareholders' Shares then held or owned beneficially by such
Shareholder (other than to a Permitted Transferee), then the Offeror shall
offer all, but not less than all, of the Offeror's Shares for sale in
accordance with the remaining provisions of this Section 4 and the Offeror
shall not have the right to make any Disposition of the Offeror's Shares,
except in accordance with the remaining provisions of this Section 4.
<PAGE>
-3-
4.2. Bona Fide Offer. If the Offeror receives from any Person (a
---------------
"Bona Fide Offeror") a bona fide offer in writing (the "Bona Fide Offer") to
purchase all or any of the Offeror's Shares, then the Offeror shall give to the
Corporation a notice (the "Bona Fide Offer Notice") to which shall be annexed a
copy of the Bona Fide Offer containing the material terms and conditions of the
Bona Fide Offer.
4.2.1. The Bona Fide Offer Notice shall constitute an offer (the
"Offer") on the part of the Offeror to sell to the Corporation all of the Shares
---
owned by the Offeror and shall fix a date and time by which the Corporation must
notify the Offeror of its intent to purchase the Shares owned by such Offeror,
which date shall not be less than 10 days nor more than 30 days after the Bona
Fide Offer Notice is given.
4.2.2. If the Corporation desires to accept the Offer, an officer
of the Corporation shall sign and deliver an acknowledgment setting forth the
number of Shares for which it desires to accept the Offer. Any such
acknowledgment shall constitute an acceptance of the Offer as to the number of
Shares set forth in the acknowledgment.
4.2.3. If the Offer is accepted as to any of the Offeror's
Shares, the Corporation shall set a date, time and place when the purchase and
sale of the Shares shall be consummated (the "Offer Closing"), which date shall
not be less than 10 days nor more than 30 days after the date set forth in
Section 4.2.1 above. The Corporation shall be bound to purchase and the Offeror
shall be obligated to sell the Offeror's Shares at the Offer Closing.
4.2.4. At the Offer Closing, the Offeror shall deliver all
documents which counsel for the Corporation reasonably deems necessary or
advisable in order to accomplish a complete transfer of the Shares to the
Corporation free and clear of all Liens, and the Corporation shall deliver to
the Offeror the purchase price for the Shares set forth in the Bona Fide Offer
Notice for the number of Share to be purchased by the Corporation in accordance
with the terms set forth in the Bona Fide Offer Notice.
4.3. Failure to Exercise Right. If the Bona Fide Offer Notice shall
-------------------------
not be timely accepted as provided in Section 4.2.1 and therefore expires, then
the Offeror may sell his or its Shares to the Bona Fide Offeror within 60 days
from the date of the date set forth in Section 4.2.1 hereof upon the terms and
conditions set forth in the Bona Fide Offer. If the Offeror does not consummate
the sale of his or its Shares to the Bona Fide Offeror on such terms and
conditions within such 60-day period, the Offeror shall again be required to
comply with all of the provisions of this Section 4.
4.4. Agreement to be Bound. Any Bona Fide Offeror who purchases Shares
---------------------
pursuant to Section 4 or otherwise becomes the owner of the Shares shall be
deemed to have consented to his Shares being subject to and governed by the
terms of this Agreement and shall have all of the rights and obligations of a
Shareholder under this Agreement from the date of his or its purchase.
<PAGE>
-4-
4.5. Market Stand-Off" Agreement. Each Shareholder hereby agrees that it
---------------------------
shall not, to the extent requested by the Corporation or an underwriter of
securities of the Corporation, sell or otherwise transfer or dispose of any
Shares for up to 180 days following the date of the final prospectus in
connection with a registration statement of the Corporation filed under the
Securities Act in connection with its Initial Public Offering provided that each
executive officer and director of the Corporation agree to such restrictions.
The provisions of this Section 4.5 shall be binding upon any transferee or
assignee of any Shares.
5. LEGENDS ON STOCK CERTIFICATES. All stock certificates currently
-----------------------------
outstanding or issued to the Shareholders after the date of this Agreement shall
be legended substantially as follows:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO AND ARE TRANSFERABLE ONLY IN COMPLIANCE WITH
THE SHAREHOLDERS' AGREEMENT DATED AS OF MARCH 1, 2000
MADE BY AND AMONG THE CORPORATION AND CERTAIN OF ITS
STOCKHOLDERS, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL OFFICE OF THE CORPORATION
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
SUCH SHARES ARE REGISTERED UNDER SUCH ACT OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY IS OBTAINED TO
THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.
6. BOARD OF DIRECTORS. Unless otherwise set forth herein, each
------------------
Shareholder agrees to vote all of his Shares and to take all other necessary or
desirable actions within his control (whether as a shareholder, director or
officer of the Corporation or otherwise, and including without limitation
attendance at meetings in person or by proxy for purposes of obtaining a quorum
and execution of written consents in lieu of meetings), and the Corporation
shall take all necessary and desirable actions within its control (including,
without limitation, calling special board and shareholder meetings), so that:
6.1. The Corporation shall have a Board of Directors comprised of
seven (7) members.
<PAGE>
-5-
6.2 With regard to the two directors to be elected by the holders of
the Corporation's Common Stock, the Corporation's Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and
Series E Preferred Stock, voting together as a single class (with each series of
the Preferred Stock voting on an as-converted into Common Stock basis), pursuant
to the terms of the Third Amended and Restated Certificate of Incorporation of
the Corporation, the Shareholders hereby agree to vote for each of Dennis M.
Goett, the Chief Financial Officer of the Corporation, and Graham Albutt, each
of whom shall serve for a period of one year and unless and until his successor
is subsequently elected.
6.3. To the extent that any provision of the Corporation's Third
Amended and Restated Certificate of Incorporation or bylaws is inconsistent with
the provisions of this Agreement, the Shareholders agree to take all actions
necessary to effect such amendments to the Third Amended and Restated
Certificate of Incorporation or bylaws as may be necessary and appropriate to
give full effect to the provisions of this Agreement.
This Section 6 is intended to constitute a voting agreement among the
Shareholders under Section 218 of the Delaware General Corporation Law.
7. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS. Each of the
--------------------------------------------------
Shareholders makes the following representations and warranties to the
Corporation, severally and not jointly, and each with respect only to himself:
7.1. Organization and Authority. Such Shareholder has full power and
--------------------------
authority to enter into this Agreement and to perform his obligations under
this Agreement. This Agreement is the legal, valid and binding obligation of
such Shareholder, duly enforceable against such Shareholder in accordance with
its terms.
7.2. No Conflict or Violation. Neither the execution and delivery of
------------------------
this Agreement by such Shareholder nor the performance by such Shareholder of
the transactions contemplated by this Agreement will result in: (i) a violation
of any laws or any order to which such Shareholder is subject; or (ii) a breach
or default under any mortgage, indenture, deed of trust, real property or
personal property lease, license, contract or other agreement to which such
Shareholder is subject.
7.3. Consents and Approvals. The execution, delivery and performance
----------------------
by such Shareholder of this Agreement and the transactions contemplated by this
Agreement do not require the consent, approval or authorization of, or any
declaration, filing, registration or notice with or to any governmental or
regulatory authority, or any other Person.
8. TERMINATION. This Agreement shall be terminated on the earlier of (i)
-----------
the occurrence of a Termination Event or (ii) the agreement of the Corporation
and the Shareholders.
<PAGE>
-6-
9. MISCELLANEOUS.
-------------
9.1. Notices. Notices given pursuant to this Agreement must be in
-------
writing. They shall be deemed to have been duly given: (i) upon delivery or
refusal to accept delivery, if hand-delivered; (ii) when transmitted, if sent by
fax with confirmed receipt, followed by a "hard" copy delivered by any other
method specified in this Section 9.1; or (iii) one (1) business day after being
deposited for next-day delivery with a national overnight courier service. In
each case, notices shall be addressed to the parties at their addresses set
forth herein or to such other place and with such concurrent copies as the
parties may subsequently designate by written notice.
9.2. Amendment; Waiver. None of the provisions of this Agreement may
-----------------
be changed, modified, waived or cancelled orally or otherwise except in writing,
signed by the Corporation and the Shareholders.
9.3. Binding Effect; Assignment. This Agreement is binding on the
--------------------------
Corporation and the Shareholders and their respective heirs, personal
representatives and successors in interest.
9.4. Entire Agreement. This written Agreement embodies the entire
----------------
understanding among parties with respect to the Shares. There are no binding
agreements or understandings among the parties with respect to the Shares other
than as contemplated by the Purchase Agreement or as expressly set forth in this
Agreement.
9.5. Interpretation; Construction.
----------------------------
9.5.1. The terms of this Agreement have been fully negotiated by
the parties in consultation with counsel, and the wording of this Agreement has
been arrived at by all of them as a result of their joint discussions.
Accordingly, no provision of this Agreement shall be construed against a
particular party or in favor of another party merely because of which party (or
its representative) drafted or supplied the wording for such provision.
9.5.2. Except where otherwise noted in context, all references
to "Sections" shall be deemed to refer to the sections or subsections, as
appropriate, exhibits or schedules of this Agreement.
9.5.3. Section headings appearing in this Agreement are inserted
solely as reference aids for the ease and convenience of the reader; they shall
not be deemed to modify, limit or define the scope or substance of the
provisions they introduce, nor shall they be used in construing the intent or
effect of such provisions.
9.5.4. Where the context requires: (i) use of the singular or
plural incorporates the other, and (ii) pronouns and modifiers in the masculine,
feminine or neuter gender shall be deemed to refer to or include the other
genders.
<PAGE>
-7-
9.5.5. As used in this Agreement, the terms "include(s)" and
"including" mean "including but not limited to"; that is, in each case the
example or enumeration which follows the use of either term is illustrative but
not exclusive or exhaustive.
9.6. Multiple Counterparts. This Agreement may be signed in one or
---------------------
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when each of the parties has signed and delivered a
counterpart to the other.
9.7. Governing Law. This Agreement shall be governed by and
-------------
interpreted according to the laws of Delaware, but without giving effect to any
Delaware choice of law provisions which might otherwise make the Laws of a
different jurisdiction govern or apply.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the Corporation and the Shareholders have executed this
Agreement as of the day and year first above written.
THE CORPORATION: SHAREHOLDERS:
GREENWICH TECHNOLOGY
PARTNERS, INC.
Address: 43 Gatehouse Road
Stamford, CT 06902
By: /s/ Joseph Beninati /s/ John Rothenberger
---------------------- ----------------------------
Joseph Beninati, Chief Executive John Rothenberger
Officer Address:
700 Springvale Road
Great Falls, VA 22066
/s/ G. Richard Rothenberger
-----------------------------
G. Richard Rothenberger
Address:
687 Pony Road
Mohrsville, PA 19541
<PAGE>
Exhibit 21.1
Subsidiaries
- ------------
Aspire Technology Group, Inc., a Virginia corporation and wholly-owned
subsidiary of the Registrant.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
report (and to all references to our firm) included in or made a part of this
registration statement.
ARTHUR ANDERSEN LLP
Stamford, Connecticut
April 13, 2000
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<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
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<RECEIVABLES> 4,461,205
<ALLOWANCES> 216,615
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0
288,606
<COMMON> 10,198
<OTHER-SE> 20,755,293
<TOTAL-LIABILITY-AND-EQUITY> 23,421,947
<SALES> 1,655,522
<TOTAL-REVENUES> 14,194,928
<CGS> 1,259,149
<TOTAL-COSTS> 8,962,751
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<INCOME-PRETAX> (6,350,380)
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<INCOME-CONTINUING> (6,350,380)
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