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INVESTOR RIGHTS AGREEMENT
INVESTOR RIGHTS AGREEMENT, dated as of _______ __, 2000 (this "AGREEMENT"),
by and among Convergent Holding Corporation, a Delaware corporation ("PARENT"),
Schlumberger Technology Corp., a Texas corporation ("STC") and Cinergy Ventures,
LLC ("CINERGY").
W I T N E S S E T H:
WHEREAS, Cinergy desires to enter into an arrangement concerning the right
of Cinergy to demand redemption of the shares of Common Stock owned by Cinergy
on the date of this Agreement (the "SHARES"); and
WHEREAS, Parent, Cinergy, STC and certain management investors have entered
into a Stockholders' Agreement governing matters such as the transfer and
registration of the Shares (as hereafter defined), operation and governance of
Parent and other related matters (the "STOCKHOLDERS' AGREEMENT"); and
WHEREAS, Parent, STC, Cinergy and certain management investors have entered
into a Subscription and Contribution Agreement providing for the initial
capitalization of Parent (the "SUBSCRIPTION AGREEMENT").
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements in this Agreement, the
parties hereto, intending to be legally bound, agree as follows:
Section 1. REDEMPTION. Notwithstanding Section 2.5 of the Stockholders'
Agreement, Cinergy shall be entitled to the following right of redemption.
(a) Parent shall cause the Fair Market Value per Share to be
determined as of the third anniversary of the date hereof in accordance with
Section 2. When the Fair Market Value per Share has been determined, Parent
shall promptly notify (the "REDEMPTION NOTICE") Cinergy of such Fair Market
Value. Cinergy shall have thirty days following the receipt of the Redemption
Notice in which to deliver to Parent a written redemption demand (a "REDEMPTION
DEMAND") that Parent shall redeem all, or any portion of, the Common Stock (as
requested in the Redemption Demand), for a per share purchase price (the
"REDEMPTION PRICE") equal to the greater of (i) the Fair Market Value or (ii)
$8.00. The closing of such purchase and sale shall occur at the offices of
Parent on such business day reasonably selected by Parent, but not on a date
less than forty days nor more than 90 days after delivery of the Redemption
Notice (the "REDEMPTION DATE"). From and after the Redemption Date, the rights
of Cinergy as a stockholder of Parent, with respect to any Shares redeemed,
shall cease and the certificates representing the redeemed Shares shall
thereafter represent only the right to receive the applicable Redemption Price
upon surrender of such certificates to Parent.
(b) Parent shall pay the applicable Redemption Price in immediately
available funds against delivery of the stock certificates representing the
applicable Shares (or, in lieu of delivery of lost, stolen or destroyed
certificates, an agreement to indemnify Parent from
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any loss incurred by it in connection with such certificates). If Parent is
prevented from redeeming or making full payment for the Shares by any legal or
contractual restriction, Parent shall then redeem the maximum number of Shares
from Cinergy as permitted free from any legal or other restrictions and STC
shall purchase the remaining Shares included in Redemption Demands for the
Redemption Price.
(c) STC shall cause Parent to fully, faithfully and timely perform
the Parent's obligations under this Section 1.
Section 2. DETERMINATION OF FAIR MARKET VALUE; PAYMENT FOR SHARES. For
purposes of Section 1, Fair Market Value shall be determined in accordance with
the procedures set forth in Section 2.6 of the Stockholders' Agreement.
Section 3. RIGHT IN THE EVENT THE DRAG-ALONG RIGHT IS EXERCISED.
Notwithstanding Section 2.2 (d)(i) of the Stockholders' Agreement, in the event
that the Drag-Along Seller exercises its Drag-Along Right pursuant to Section
2.2 of the Stockholders' Agreement, the per share consideration payable to
Cinergy in the Sale of Parent (whether through the direct or indirect Transfer
of its shares in the Parent or through a liquidation of the Parent following a
sale of all or substantially all of the Parent's assets) must be equal to the
greater of (i) the same price per share as the Drag-Along Seller, (ii) at least
ninety percent (90%) of the then Fair Market Value of such shares, as the same
may be determined in accordance with the procedures set forth in Section 2.6 of
the Stockholders' Agreement, or (iii) $8.00.
Section 4. BINDING EFFECT OF STOCKHOLDERS' AGREEMENT. The parties hereto
acknowledge that they are bound by all provisions of the Stockholders'
Agreement, except for Section 2.2 and Section 2.5 of the Stockholders' Agreement
to the extent modified by the parties to this Agreement. To the extent that
there is a conflict between the provisions of this Agreement and the
Stockholder's Agreement, the provision of this Agreement shall prevail.
Section 5. AMENDMENT. Any provision of this Agreement may be amended,
waived or modified if, but only if, such amendment, waiver or modification is in
writing and is signed by the parties hereto and thereto.
Section 6. BINDING EFFECT; BENEFITS. This Agreement and all the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective heirs, legal representatives, successors and permitted assigns.
Except as expressly provided herein, nothing in this Agreement is intended to
confer on any persons or entities, other than the parties hereto or their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement. Any transfer in violation of
the provisions of this Agreement shall be null and void.
Section 7. FURTHER ASSURANCES. Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto reasonably may request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
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Section 8. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied (which
is confirmed) or sent by an internationally recognized overnight courier
service, such as Federal Express, to the parties at the following addresses (or
at such other address for a party as shall be specified by like notice):
(a) if to Parent or STC, to:
c/o Schlumberger Limited
277 Park Avenue
New York, New York 10172
Attention: General Counsel
Telephone No.: (212) 350-9100
Telecopy No.:
with a copy (which shall not constitute notice) to:
Brobeck, Phleger & Harrison LLP
370 Interlocken Boulevard, Suite 500
Broomfield, Colorado 80021
Attention: Richard R. Plumridge
Telephone No.: (303) 410-2014
Telecopy No.: (303) 410-2199
and
(b) if to Cinergy, to:
Cinergy Ventures, LLC
221 E. Fourth Street, Suite 30
Cincinnati, Ohio 45201
Attention: Larry E. Thomas
Telephone No.: (513) 287-2488
Telecopy No.: (513) 287-2433
with a copy (which shall not constitute notice) to:
Cinergy Ventures, LLC
221 E. Fourth Street, Suite 30
Cincinnati, Ohio 45201
Attention: Jerome A. Vennemann, General Counsel
Telephone No.: (513) 287-3023
Telecopy No.: (513) 287-2433
Section 9. SEVERABILITY. Any term or provision of this Agreement that is
held by a court of competent jurisdiction or other authority to be invalid, void
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the invalid, void or unenforceable term
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or provision in any other situation or in any other jurisdiction. If the final
judgment of a court of competent jurisdiction or other authority declares that
any term or provision hereof is invalid, void or unenforceable, the parties
agree that the court making such determination shall have the power to and
shall, subject to the discretion of such court, reduce the scope, duration, area
or applicability of the term or provision, to delete specific words or phrases,
or to replace any invalid, void or unenforceable term or provision with a term
or provision that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision.
Section 10. HEADINGS. The headings of the sections of this Agreement are
inserted for convenience only and shall not constitute a part of this Agreement.
Section 11. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without giving
effect to the principles of conflicts of law thereof.
Section 12. RIGHTS CUMULATIVE; WAIVER. The rights and remedies of Cinergy,
STC and Parent under this Agreement shall be cumulative and not exclusive of any
rights or remedies which any party hereto would otherwise have hereunder or at
law or in equity or by statute, and no failure or delay by any such party in
exercising any right or remedy shall impair any such right or remedy or operate
as a waiver of such right or remedy, nor shall any single or partial exercise of
any power or right preclude such party's other or further exercise or the
exercise of any other power or right. The waiver by any party hereto of a breach
of any provision of this Agreement shall not operate or be construed as a waiver
of any preceding or succeeding breach and no failure by any party hereto to
exercise any right or privilege hereunder shall be deemed a waiver of such
party's rights or privileges hereunder or shall be deemed a waiver of such
party's rights to exercise the same at any subsequent time or times hereunder.
No waiver by any party hereto of any right, power or remedy under any of such
investments shall be effective unless given in writing by such party.
Section 13. TERMINATION. This Agreement may be terminated upon the written
agreement of all of the parties hereto. This Agreement shall automatically
terminate and have no further force or effect on any party hereto in connection
with the effectuation of Parent's initial registered public offering of capital
stock under the Securities Act of 1933, as amended, effective as of the
consummation of such offering.
Section 14. INTERPRETATION. When a reference is made in this Agreement to a
section or article, such reference shall be to a section or article of this
Agreement unless otherwise clearly indicated to the contrary. Whenever the words
"include," "includes" or "including" are used in this Agreement they shall be
deemed to be followed by the words "without limitation." The words "hereof,"
"herein" and "herewith" and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement, and article, section, paragraph, exhibit
and schedule references are to the articles, sections, paragraphs, appendix and
schedules of this Agreement unless otherwise specified. The plural of any
defined term shall have a meaning correlative to such defined term, and words
denoting any gender shall include all genders and the neuter. Where a word or
phrase is defined herein, each of its other grammatical forms shall have a
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corresponding meaning. A reference to any party to this Agreement or any other
agreement or document shall include such party's successors and permitted
assigns. A reference to any legislation or to any provision of any legislation
shall include any modification, amendment or re-enactment thereof, any
legislative provision substituted therefor and all regulations and statutory
instruments issued thereunder or pursuant thereto. The parties have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties, and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement. No prior draft nor any course of
performance or course of dealing shall be used in the interpretation or
construction this Agreement. Defined terms used herein but not defined shall
have the meaning ascribed to such terms in the Stockholders' Agreement.
Section 15. WAIVER OF JURY TRIAL. Each party acknowledges and agrees that
any controversy which may arise under this agreement is likely to involve
complicated and difficult issues, and therefore each such party hereby
irrevocably and unconditionally waives any right such party may have to a trial
by jury in respect of any litigation directly or indirectly arising out of or
relating to this agreement or the transactions contemplated by this agreement.
Each party certifies and acknowledges that (i) no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the foregoing
waiver, (ii) each such party understands and has considered the implications of
this waiver, (iii) each such party makes this waiver voluntarily, and (iv) each
such party has been induced to enter into this agreement by, among other things,
the waivers and certifications in this Section 15.
Section 16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts (whether delivered by facsimile or otherwise), each of which shall
be considered one and the same agreement and shall become effective when two or
more counterparts have been signed by each of the parties and delivered to the
other parties.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date set forth above.
CONVERGENT HOLDING CORPORATION
By:
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Name:
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Title:
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SCHLUMBERGER TECHNOLOGY CORP.
By:
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Name:
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Title:
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CINERGY VENTURES, LLC
By:
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Name:
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Title:
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