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EXHIBIT 2
NOTE PURCHASE AGREEMENT
EFFECTIVE AS OF AUGUST 3, 2000
BY AND BETWEEN
MSI HOLDINGS, INC.,
DOING BUSINESS AS APERIAN
AND
HEWLETT-PACKARD COMPANY
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TABLE OF CONTENTS
<TABLE>
<S> <C>
1. Note.......................................................................................1
2. Representation and Warranties of the Company...............................................2
3. Representations and Warranties of HP.......................................................9
4. Conditions to Closings....................................................................10
5. Financial Statements......................................................................12
6. Miscellaneous.............................................................................13
</TABLE>
Schedule 1 Disclosure Schedule
Exhibit A Form of Legal Opinion of Company Counsel
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NOTE PURCHASE AGREEMENT
This Note Purchase Agreement ("Agreement") is entered into and is
effective as of August 3, 2000 by and between MSI Holdings, Inc., a Utah
corporation doing business as Aperian (the "Company"), and Hewlett-Packard
Company, a Delaware corporation ("HP").
RECITAL
WHEREAS, on the terms and subject to the conditions set forth herein,
HP is willing to advance up to U.S. $40,000,000 (Forty Million U.S. Dollars) to
the Company, and the Company is willing to execute in favor of HP a convertible
secured promissory note in the principal amount of U.S. $40,000,000 (Forty
Million U.S. Dollars) (the "Note").
AGREEMENT
NOW, THEREFORE, in consideration of the promises and representations,
warranties, covenants and conditions set forth below, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Note.
(1) Issuance and Delivery of the Note.
(1) At the Closing (as defined below), the Company shall
issue the Note to HP.
(2) The issuance of the Note shall take place at a
closing to be held at such place and time and on such
date (the "Closing Date") as the Company and HP may
determine (the "Closing"). At the Closing the Company
will deliver to HP the Note. The Note shall be
registered in HP's name in the Company's records.
Wire transfers of Loan proceeds shall be sent to
account number 20707P31 in the name of the MSI
Holdings, Inc. at Everen Securities, Merrill Lynch,
Columbus, Ohio 43271, ABA number 043000261.
(2) Security. The obligations evidenced by the Note shall be
secured as provided in the Note.
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2. Representation and Warranties of the Company. The Company represents and
warrants to HP that, as of the date of this Agreement, except as disclosed in
the Disclosure Schedule attached hereto as Schedule 1:
(1) Due Incorporation, Qualification, etc. The Company is (i) a
corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
and (ii) is duly qualified, licensed to do business and in
good standing as a foreign corporation in each jurisdiction
where the failure to be so qualified or licensed could
reasonably be expected to have a material adverse effect on
the Company and its subsidiaries taken as a whole.
(2) Capitalization. The Company's total authorized and issued
capitalization is as set forth on the Disclosure Schedule. All
of the outstanding equity securities of the Company have been
duly authorized and are validly issued, fully paid and
nonassessable. Except as expressly referenced in the Note or
in the Disclosure Schedule, there are as of the date of this
Agreement, no options, warrants or rights to purchase equity
securities authorized, issued or outstanding, nor is the
Company obligated in any other manner to issue shares of its
equity securities. The Disclosure Schedule sets forth with
respect to such options, warrants and other rights, the grant
date, vesting schedule, terms and exercise period thereof;
provided, that to the extent such options, warrants or other
rights are granted pursuant to an employee stock option plan,
the Disclosure Schedule shall set forth the number of shares
issuable under such employee stock option plan and the general
terms of the rights provided to employees, rather than the
details relating to each employee participating in such
employee stock option plan. The Form 10K-SB/A filed by the
company with the SEC on July 28, 2000, a copy of which has
been provided to HP, sets forth, as of the date indicated
therein, a list of the beneficial owners known to the company
of 5% or more of the outstanding shares of common stock of the
Company, and the Company represents and warrants to HP that
the Form 10K-SB/A is true and correct in all material
respects. Except as expressly referenced in the Note or in the
Disclosure Schedule, there are no restrictions on the transfer
of equity securities of the Company, other than those imposed
by the Company's Certificate of Incorporation and Bylaws as of
the date hereof, or relevant state and federal securities
laws, and no holder of any equity security of the Company is
entitled to preemptive or similar statutory or contractual
rights. All outstanding securities of the Company were issued
in compliance with all applicable federal and state securities
laws. Except as expressly referenced in the Note or in the
Disclosure
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Schedule, no person or entity has the right to demand or other
rights to cause the Company to file any registration statement
under the Securities Act of 1933, as amended (the "Securities
Act"), relating to any equity securities of the Company
presently outstanding or that may be subsequently issued, or
any right to participate in any registration statement.
(3) Subsidiaries and Business Names. The Disclosure Statement sets
forth (i) each corporation, association, partnership, or other
business entity which the Company owns or controls, directly
or indirectly, (ii) the Company's percentage of ownership of
such business entity, (iii) the jurisdiction under which such
business entity is organized, and (iv) all names under which
the Company conducts business, each as of the date hereof.
(4) Authority; Enforceability. The execution, delivery and
performance by the Company of each Transaction Document (as
defined below) and the consummation by the Company of the
transaction contemplated thereby (i) are within the power of
the Company, and (ii) have been duly authorized by all
necessary actions on the part of the Company. Each Transaction
Document executed, or to be executed, by the Company has been,
or will be, duly executed and delivered by the Company and
constitutes, or will constitute, a legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or
affecting the enforcement of creditors' rights generally and
general principles of equity. The shares of the Company's
capital stock, issuable upon conversion of the Note, when
issued in compliance with this Agreement and the Note (the
"Underlying Stock"), will be validly issued, fully paid and
nonassessable and will be free of any liens or encumbrances,
other than any liens or encumbrances created by or imposed
upon HP through no action of the Company. The Underlying Stock
is not subject to any preemptive rights or rights of first
refusal.
(5) Non-Contravention. The execution and delivery by the Company
of the Transaction Documents and the performance and
consummation of the transactions contemplated thereby do not
and will not (i) violate the Certificate of Incorporation or
Bylaws of the Company or any judgment, order, writ, decree,
statute, rule or regulation applicable to the Company; (ii)
violate any provision of, or result in the breach or the
acceleration of, or entitle any other person to accelerate
(whether after the giving of notice or lapse of time or both),
any mortgage, indenture, agreement,
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instrument or contract to which the Company is a party or by
which it is bound; or (iii) result in the creation or
imposition of any lien upon any property, asset or revenue of
the Company (other than any lien in favor of HP) or the
suspension, revocation, impairment, forfeiture, or nonrenewal
of any material permit, license, authorization or approval
applicable to the Company, its business or operations, or any
of its assets or properties.
(6) Approvals. No consent, approval, order or authorization of, or
registration, declaration or filing with any governmental
authority or other person or entity (including without
limitation the shareholders of any person or entity) is
required in connection with the execution and delivery of the
Transaction Documents executed by the Company and the
performance and consummation of the transactions contemplated
thereby.
(7) Financial Statements; Operating Plan.
(1) The consolidated balance sheet of the Company and its
subsidiaries, if any, as at the end of the last
fiscal year, and consolidated statements of income
and cash flows of the Company and it subsidiaries, if
any, for such year (the "Audited Financial
Statements") and the unaudited consolidated balance
sheet of the Company and its subsidiaries, if any, as
of the end of each of the quarterly periods ending
after the end of the last fiscal year, and the
consolidated statements of income and cash flows of
the Company and its subsidiaries, if any, for such
periods and for the current fiscal year to date (the
"Unaudited Financial Statements," and together with
the Audited Financial Statements, the "Financial
Statements"), in each case which have been delivered
to HP, (A) were prepared in accordance with generally
accepted accounting principles ("GAAP") (except that
the Unaudited Financial Statements do not contain
footnotes required by GAAP or normal year-end closing
adjustments); (B) are in accordance with the books
and records of the Company and its subsidiaries,
which have been maintained in accordance with good
business practices; and (C) fairly present the
consolidated financial position of the Company as of
the dates presented therein and the income for the
periods presented therein. The Audited Financial
Statements set forth in reasonable detail the
Company's accounting policies, principles and
methods, and there has been no change thereof since
the date thereof, except as may
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be required by GAAP or as may have been concurred
with by the company's independent public accountant.
Except as set forth in the Financial Statements, none
of the Company or any of the Company's subsidiaries
has any contingent obligations, liability for taxes
or other outstanding obligations which should have
been reflected in such financial statements, which
are material in the aggregate and of which the
Company is aware, except as incurred in the ordinary
course of business after the date of such Financial
Statement. The Company has not capitalized any
software development costs, and no such costs are
recorded in the Financial Statements.
(2) The Company has delivered to HP true and correct
information regarding its operating plan as of the
date hereof. The projections and forward-looking
statements made by the Company in such operating plan
(the "Projections") were prepared in good faith based
on estimates and assumptions believed by the Company
to be reasonable based on current circumstances.
Actual results during the period covered by the
Projections may differ materially and adversely from
the projected results and such Projections should not
be regarded as a representation or warranty by the
Company that the projected results will be achieved.
(8) Absence of Changes. Since the date of the most recent
Financial Statements delivered to HP hereunder (the "Most
Recent Financial Statements"), unless the Company has advised
HP to the contrary in writing delivered pursuant to Section
6(i) hereof, there has not been to the Company's knowledge:
(1) Any change in the assets, liabilities, financial
condition or operations of the Company from that
reflected in the Most Recent Financial Statements,
other than changes in the ordinary course of
business, none of which individually or in the
aggregate has had or is expected to have a material
adverse effect on such assets, liabilities, financial
condition or operations of the Company;
(2) Any material change in the material contingent
obligations of the Company by way of guaranty,
endorsement, indemnity, warranty or otherwise;
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(3) Any damage, destruction or loss, whether or not
covered by insurance, materially and adversely
affecting the properties, business or financial
condition of the Company;
(4) Any waiver by the Company of a valuable right or of a
material debt owed to it;
(5) Any direct or indirect loans made by the Company to
any shareholder, employee, officer or director of the
Company, other than advances made in the ordinary
course of business;
(6) Any material change in any compensation arrangement
or agreement with any employee, officer, director or
shareholder;
(7) Any declaration or payment of any dividend or other
distribution of the assets of the Company;
(8) Any debt, obligation or liability incurred, assumed
or guaranteed by the Company, except those for
immaterial amounts and for current liabilities
incurred in the ordinary course of business;
(9) Any sale, assignment or transfer of any patents,
trademarks, copyrights, trade secrets or other
intangible assets; or
(10) Any change in any material agreement to which the
Company is a party or by which it is bound which
materially and adversely affects the business,
assets, liabilities, financial condition or
operations of the Company, including compensation
agreements with the Company's employees.
(9) Title. Each of the Company and the Company's subsidiaries owns
and has good and marketable title in fee simple absolute to,
or a valid leasehold interest in, all of its real properties
and good title to all personal property included in its other
assets and properties as reflected in the Most Recent
Financial Statements (except those assets and properties
disposed of in the ordinary course of business since the date
of such Unaudited Financial Statements) and all respective
assets and properties acquired by the Company and the
Company's subsidiaries since such date (except those disposed
of in the ordinary course of business). Such assets and
properties are subject to no lien, except for Permitted Liens
(as defined in the Note).
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(10) Resignation/Termination of Key Officers. Unless the Company
has advised HP to the contrary in writing delivered pursuant
to Section 6(i) hereof, there has been no resignation or
termination of employment of any key officer, consultant or
employee of the Company since the date of the Most Recent
Financial Statement, and the Company does not know of the
impending resignation or termination of employment of any such
key officer, consultant or employee that if consummated would
have a materially adverse affect on its business.
(11) Material Liabilities. Unless the Company has advised HP to the
contrary in writing delivered pursuant to Section 6(i) hereof,
the Company has no material liabilities or obligations,
absolute or contingent (individually or in the aggregate),
except (i) the liabilities and obligations set forth in the
Unaudited Financial Statements, and (ii) liabilities and
obligations which have been incurred in the ordinary course of
business since the date of the Most Recent Financial
Statement.
(12) Patents and Other Intangible Assets.
(1) The Company owns or has the right to use, all
patents, trademarks, service marks, trade names,
copyrights (and licenses with respect to the
foregoing) used in the conduct of its business.
Unless the Company has advised HP to the contrary in
writing, delivered pursuant to Section 6(i) hereof,
there are no pending or threatened claims against the
Company alleging that the conduct of the Company's
business infringes upon otherwise conflicts with the
right or claimed right of any person under or with
respect to any of the foregoing. The Company is not
obligated or under any liability whatsoever to make
any payments by way of royalties, fees or otherwise
to any owner of, licensor of or other claimant to any
patent, trademark, trade name, copyright or other
intangible asset, with respect to the use thereof in
connection with the conduct of its business or
otherwise except with respect to licenses undertaken
by the Company in the ordinary course of business.
Except in the ordinary course of business, the
Company has not granted any licenses or manufacturing
rights with respect to its business as now conducted
or as now proposed to conduct.
(2) The Company owns or has the right to use all trade
secrets, including know-how, inventions, designs,
processes and technical data required for the
development, operation and sale of all
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products and services sold and now proposed to be
sold by the Company, free and clear of any rights,
liens or claims of others.
(3) The Company has not received any communication
alleging that the Company has violated or, by
conducting its business as now proposed, would
violate or infringe in any way any of the patents,
trademarks, service marks, trade names, copyrights,
trade secrets or other proprietary rights or
processes of any other person or entity.
(4) The Company has obtained confidentiality and
non-disclosure agreements from its employees
regarding its intellectual property and trade secrets
(each, a "Non-Disclosure Agreement") pursuant to the
terms of a form Non-Disclosure Agreement which has
previously been provided to HP. There are no
Non-Disclosure Agreements which differ substantially
from the form Non-Disclosure Agreement.
(13) Securities Law Compliance. Subject to the accuracy of HP's
representations and warranties in Section 3 below, the offer,
sale and issuance of the Note to be issued in conformity with
this Agreement constitutes a transaction exempt from the
registration requirements of Section 5 of the Securities Act
and all applicable state securities laws.
(14) Litigation. There are no actions, suits, proceedings or
investigations pending or, to the Company's knowledge,
threatened against the Company or its properties before any
court or governmental agency.
(15) No Brokers or Finders. The Company has not incurred, and will
not incur, directly or indirectly, as a result of any action
taken or permitted to be taken by the Company, any liability
for brokerage or finders' fees or agents' commissions or
similar charges in connection with the execution and
performance of this Agreement or any other Transaction
Document.
(16) Security Interest. The security interests created under the
Note create a valid and enforceable security interest in the
Collateral (as defined in the Note), and upon the filing of
UCC-1 financing statements in Texas, Florida, Georgia and
Arizona and such other states as the Company shall advise HP
in writing pursuant to Section 8(d) of the Note, HP will have
a perfected first priority security interest in all Collateral
that may be perfected by filing a financing statement.
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(17) Conversion of the Note. The principal and interest under the
Note is convertible into the capital stock of the Company as
provided under the terms of the Note.
(18) Disclosure. This Agreement with the Disclosure Schedule, the
Note, the Registration Rights Agreement and the UCC-1
financing statements to be executed in connection with the
Note (collectively, the "Transaction Documents"), when taken
as a whole, do not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to
make the statements contained herein or therein not misleading
in light of the circumstances under which they were made.
3. Representations and Warranties of HP. HP represents and warrants to the
Company that:
(1) Authority. The execution, delivery and performance by HP of
each Transaction Document and the consummation by HP of the
transactions contemplated thereby are within the power of HP
and have been duly authorized by all necessary actions on the
part of HP. Each Transaction Document executed, or to be
executed, by HP has been or will be, duly executed and
delivered by HP and constitutes, or will constitute, a legal,
valid and binding obligation of HP, enforceable against HP in
accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or
affecting the enforcement of creditors' rights generally and
general principles of equity.
(2) Securities Law Investment Representations. HP acknowledges
that the Note has not been and will not be registered under
the Securities Act, or the securities laws of any state of the
United States or any other jurisdiction. HP is purchasing the
Note and the Underlying Stock for HP's own account for
investment and not for the interest of any other person and
not for resale to others or with a view to or for sale in
connection with any distribution thereof. HP has such
knowledge and experience in financial and business matters so
as to be capable of evaluating the merits and risks of its
investment and to bear the economic risk of such investment
for an indefinite period of time.
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4. Conditions to Closings.
(1) Conditions of HP to Closing. HP's obligation hereunder to
advance funds to the Company is subject to the satisfaction,
on or prior to the Closing Date, of all the following
conditions, any of which may be waived in whole or in part by
HP:
(1) Representations and Warranties; Covenants; Officer's
Certificate; Opinion of Counsel.
(1) The representations and warranties made by
the Company herein or in any other
Transaction Document shall be true and
correct as of the Closing Date.
(2) The Company shall have performed all
covenants set forth in the Transaction
Documents required to be performed prior to
the Closing.
(3) A duly authorized officer of the Company
shall have executed and delivered to HP a
certificate, dated the Closing Date, with
respect to the satisfaction of the
conditions set forth herein.
(4) HP shall have received an opinion of counsel
to the Company regarding the enforceability
and due authorization of the transactions
contemplated by the Transaction Documents in
substantially the form attached hereto as
Exhibit A, and opinions of counsel to the
Company in each state in which Collateral is
located regarding the filing of UCC-1
financing statements as provided in Exhibit
A and otherwise in substantially the form of
Exhibit A.
(2) Transaction Documents. The Company shall have duly
executed and delivered to HP the following documents:
(1) This Agreement;
(2) The Note;
(3) The Registration Rights Agreement; and
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(4) UCC-1 financing statements and other
documents and instruments which HP may
reasonably request to perfect its security
interest in the collateral described in the
Note.
(3) Corporate Documents. The Company shall have delivered
to HP each of the following:
(1) The Certificate of Incorporation of the
Company, certified as of a recent date prior
to the Closing Date by the Secretary of the
State of Utah;
(2) A Certificate of Good Standing with respect
to the Company, certified as of a recent
date prior to the Closing Date by the
Secretary of the State of Utah; and
(3) A certificate of the Secretary of the
Company, dated the Closing Date, certifying
that (1) the Certificate of Incorporation of
the Company, delivered to HP pursuant to the
terms hereof, is in full force and effect
and has not been amended, supplemented,
revoked or repealed since the date of such
certification; (2) attached thereto is a
true and correct copy of the Bylaws of the
Company as in effect on the Closing Date;
(3) attached thereto is a true and correct
copy of resolutions duly adopted by the
Board of Directors of the Company
authorizing the execution, delivery, and
performance by the Company of this Agreement
and the other Transaction Documents and the
consummation of the transactions
contemplated hereby and thereby; and (4)
there are no proceedings for the dissolution
or liquidation of the Company that have
commenced or, to the knowledge of the
Company, been threatened.
(2) The Company Conditions to Closing. The Company's obligation
hereunder to accept the advance of the funds from HP is
subject to satisfaction, on or prior to the Closing Date, of
all of the following conditions, any of which may be waived in
whole or part by the Company:
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(1) Representations and Warranties; Covenants.
(1) The representations and warranties made by
HP herein shall be true and correct as of
the Closing Date.
(2) HP shall have performed all covenants set
forth in this Agreement required to be
performed prior to the Closing.
(2) Execution and Delivery. HP shall have duly executed
and delivered to the Company this Agreement, the
Registration Rights Agreement and the Note.
5. Financial Statements. The Company will furnish the following reports to HP
for so long as any amounts are outstanding under the Note and until conversion
of the Note by HP:
(1) Annual. As soon as practicable after the end of each fiscal
year of the Company, and in any event within ninety (90) days
thereafter, (A) a consolidated balance sheet of the Company
and its subsidiaries, if any as at the end of such fiscal
year, and consolidated statements of income and cash flows of
the Company and its subsidiaries, if any, for such year,
prepared in accordance with GAAP consistently applied and
setting forth in each case in comparative form the figures for
the previous fiscal year, all in reasonable detail and
certified as unqualified by independent public accountants of
recognized national standing selected by the Company and
reasonably acceptable to HP; and (B) a financial plan,
including an operating budget and business plan, for the
fiscal year which just began.
(2) Quarterly. As soon as practicable after the end of the first,
second and third quarterly accounting periods in each fiscal
year of the Company, and in any event within forty-five (45)
days thereafter, a consolidated balance sheet of the Company
and its subsidiaries, if any, as of the end of each such
quarterly period, and consolidated statements of income and
cash flows of the Company and its subsidiaries, if any, for
each such period and for the current fiscal year to date,
prepared in accordance with GAAP (except that such financial
statements need not contain footnotes required by GAAP or
normal year-end closing adjustments), all in reasonable detail
and certified by the chief financial officer of the Company.
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(3) Information Provided to Shareholders. Promptly upon the
mailing thereof to the shareholders of the Company, copies of
all financial statements, reports and proxy statements so
mailed.
(4) Securities Filings. Promptly upon the filing thereof, copies
of all reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) which the Company shall have filed with the
Securities and Exchange Commission.
(5) Other Information. Such other information as HP reasonably
requests, including monthly financial statements.
6. Miscellaneous.
(1) Confidentiality. From and after the date hereof, each of HP
and the Company shall receive confidential information of the
other party. For purposes hereof, the party, disclosing
confidential information shall be designated "Discloser" and
the party receiving such information shall be designated
"Recipient". Except with Discloser's prior written approval,
and except as HP reasonably determines to be necessary with
any foreclosure of its security interests under the Note.
Recipient shall keep all of Discloser's confidential
information confidential and shall use such information only
for the furtherance of business relationships between the
parties. Recipient shall protect Discloser's confidential
information by using the same degree of care, but no less than
a reasonable degree of care, to prevent the unauthorized use,
dissemination, or publication of Discloser's confidential
information as Recipient uses to protect its own confidential
information of a like nature. Information shall not be deemed
confidential if it (i) is or becomes a matter of public
knowledge through no fault of Recipient; (ii) is rightfully
received by Recipient from a third party without a duty of
confidentiality; (iii) is disclosed under operation of law; or
(iv) is independently developed by Recipient. Recipient agrees
that Discloser is entitled, in addition to any other remedies
available to it either at law or in equity, to injunctive
relief restraining Recipient from violation of the foregoing
restrictions.
(2) Waivers and Amendments. No provision of this Agreement may be
amended or modified without the written consent of the Company
and HP. No provision of this Agreement may be waived unless
such waiver is in writing and then only to the extent
specifically set forth in such writing. A waiver with
reference to one event shall not be construed as continuing or
as a bar to or waiver of any right or remedy as to a
subsequent event.
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(3) Governing Law. This Agreement and all actions arising out of
or in connection with this Agreement shall be governed by and
construed in accordance with the laws of the State of
California, without regard to the conflicts of law provisions
of the State of California or of any other state.
(4) Waiver of Jury Trial. HP and the Company each hereby
irrevocably waives any and all right to trial by jury in any
legal proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby, whether the claims
raised in such proceeding are based on contract, tort, or
otherwise.
(5) Survival. The representations and warranties made herein shall
survive the execution and delivery of this Agreement.
(6) Successors and Assigns. Subject to the restriction on transfer
described in Section 8(g) below, the rights and obligations of
the Company and HP shall be binding upon and benefit their
respective successors, assigns, heirs, administrators, and
transferees.
(7) Assignment by HP and the Company. Neither the Note nor any of
the rights, interests or obligations thereunder or hereunder
or under any other Transaction Document may be assigned, by
operation of law or otherwise, in whole or in part, by the
Company without the prior written consent of HP (except in the
case of the Company to a successor entity pursuant to a
migratory merger to another state). HP may assign the Note or
any of its rights, interests or obligations thereunder or
hereunder or under any other Transaction Document; provided,
that HP shall not be a party to more than five (5) such
assignment transactions.
(8) Entire Agreement. This Agreement, together with the Note and
the other Transaction Documents, constitute the full and
entire understanding and agreement between the parties with
regard to the subjects hereof and thereof.
(9) Notices. Any notice, request, or other communication required
or permitted hereunder shall be in writing and shall be deemed
to have been duly given on the date of delivery if personally
delivered, on the date of being faxed if sent by confirmed
fax, on the first business day after being sent if sent by
recognized overnight courier, and on the third business day
after being mailed if sent by registered or certified mail,
postage prepaid, addressed (i) if to HP to: Hewlett-Packard
Company, 333 Logue
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Avenue, MS32, Mountain View, CA 94043, Attention: General
Manager, fax number, (650)919-8013; with a copy to
Hewlett-Packard Company, 3000 Hanover Street, MS20BQ, Palo
Alto, CA 94304, Attention General Counsel, fax number (650)
857-4392, or (ii) if to the Company to: MSI Holdings, Inc.,
d/b/a Aperian, 1121 East Seventh Street, Austin, TX
78702-3220, Attention: Chief Executive Officer, facsimile
(512) 473-2371.
(10) Expenses. Each party shall bear and pay its own legal fees in
connection with the negotiation and execution of this
Agreement and the other Transaction Documents.
(11) Severability of this Agreement. If any provision of this
agreement shall be judicially determined to be invalid,
illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any
way be affected or impaired thereby.
(12) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of
which together shall be deemed to constitute one instrument.
IN WITNESS WHEREOF, each of the parties has caused this Note Purchase
Agreement to be duly executed and delivered by its duly authorized
representative as of the date first written above.
HEWLETT-PACKARD COMPANY MSI HOLDINGS, INC., d/b/a
APERIAN
By: /s/ Craig White By: /s/ Douglas W. Banister
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Name: Craig White Name: Douglas W. Banister
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Title: Vice President and General Manager Title: Vice President and Chief
Financial Officer
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EXHIBIT A
OPINION OF COUNSEL
[Letterhead of the Company's Legal Counsel]
August ____, 2000
Hewlett-Packard Company
Financing & Complements Group
333 Logue Avenue
Mountain View, CA 94043
Attention: General Manager
Hewlett-Packard Company
3000 Hanover Street, MS: 20BQ
Palo Alto, California, 94304
Attention: Legal Department
Ladies and Gentlemen:
We have acted as counsel for MSI Holdings, Inc., a Utah corporation
doing business as Aperian (the "Company"), in connection with its issuance and
sale to you of that certain convertible promissory note in the principal amount
of $40,000,000 dated August 3, 2000 (the "Note") pursuant to that certain Note
Purchase Agreement dated as of August 3, 2000 (the "Note Purchase Agreement") by
and between the Company and you. This opinion is being delivered pursuant to
Section 4(a)(i) of the Note Purchase Agreement. Capitalized terms used herein
without definition have the respective meanings specified in the Note Purchase
Agreement.
As such counsel, we have examined such matters of fact and questions of
law as we have considered appropriate for purposes of tendering the opinions
expressed below. We have examined, among other things, originals or copies
certified or otherwise identified to our satisfaction of the following:
(13) the Note Purchase Agreement;
(14) the Note;
(15) that certain Registration Rights Agreement dated as of the
date of the Note by and between the Company and you;
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(16) UCC-1 Financing Statements duly executed by the Company for
the following jurisdiction: [Texas, Florida, Georgia and
Arizona] (the "Financing Statements");
(17) the Certificate of Incorporation and Bylaws of the Company
(the "Governing Documents");
(18) the agreements, indentures and other instruments to which the
Company is a party or by which it or any of them is bound,
identified to us by an officer of the Company as a material
agreement (the "Material Agreements"), and
(19) Court and governmental orders, writs, judgments and decrees
specifically directed to the Company and identified to us by
an officer of the Company as applicable to the Company (the
"Court Orders").
We have been furnished with and, with your consent, have relied upon
certificates of officers and other employees of the Company with respect to
certain factual matters. In addition, we have obtained and relied upon such
certificates and assurances from public officials as we have deemed necessary.
We are opining as to the internal laws of the State of [Utah Arizona
Florida Georgia Texas], and the federal laws of the United States; we express no
opinion with respect to the application to the subject transactions, or the
effect thereon, of the laws of any other jurisdiction. The opinions contained
herein are as of the Closing on the date hereof of the purchase and sale of the
Note pursuant to the Note Purchase Agreement and (except as otherwise specified
herein) the consummation of all related transactions as they are contemplated to
occur on the Closing Date.
Based upon the foregoing, and in reliance thereon, and subject to the
limitations, qualifications, exceptions and assumptions set forth below, we are
of the opinion that, as of the date hereof.
1 The Company has been duly incorporated and is validly existing and in
good standing under the laws of the State of Utah with full corporate power and
authority to own or lease its properties and to conduct its business as now
conducted. The Company is duly qualified or registered to transact business and
is in good standing in the States of Texas, Florida, Georgia and Arizona, based
solely upon our review of certificates of qualification or good standing or
similar certificates.
2 The authorized capital stock of the Company is as set forth in the
Disclosure Schedule of the Note Purchase Agreement. Except as provided in the
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Disclosure Schedule of the Note Purchase Agreement, there are (i) no outstanding
warrants, options, conversion privileges, preemptive rights or other rights or
agreements to purchase or otherwise acquire or issue any equity securities of
the Company pursuant to any of the Governing Documents or any Material Agreement
other than the Transaction Documents and (ii) no restrictions upon the voting or
transfer of any shares of capital stock of the Company, pursuant to any of the
Governing Documents or any Material Agreement other than the Transaction
Documents.
3 The Company has full corporate power and authority to execute,
deliver and perform its obligations under the Transactions Documents, to issue
and sell the Note pursuant to the Note Purchase Agreement and to perform its
obligations thereunder, including the issuance and delivery of the shares of
capital stock of the Company that may be issued upon the conversion of the Note,
in whole or in part (the "Conversion Shares").
4 Each of the Transaction Documents has been duly authorized, executed
and delivered by the Company, and (assuming due authorization, execution and
delivery by the other parties thereto) is the legally valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms.
5 The Note has been duly authorized by the Company for issuance.
6 No person has preemptive rights with respect to any Conversion Shares
upon issuance thereof pursuant to any of the Governing Documents or any Material
Agreement. The Board of Directors of the Company has duly authorized the
issuance of the Conversion Shares upon conversion of the Note, in whole or in
part, in accordance with the respective terms thereof and such number of
Conversion Shares as may be required to be issued upon conversion of the Note,
respectively, including by reason of the anti-dilution provisions thereof, has
been duly reserved for issuance by the Company. The Conversion Shares, when
issued, sold and delivered in accordance with the terms and for the
consideration expressed in the Note, will be duly and validly issued, fully paid
and nonassessable.
7 Based on the representations contained in Section 3 of the Note
Purchase Agreement, the offer, issue, sale and delivery of the Note constitute
transactions exempted from the registration requirements of the Securities Act
of 1933, as amended.
8 The execution and delivery of each of the Transaction Documents by
the Company, the issuance and sale of the Note pursuant to the Note Purchase
Agreement, and the performance by the Company of its obligations under the
Transaction Documents (including the issuance of the Conversion Shares upon the
conversion thereof) will not result in (i) the violation by the Company of its
Governing Documents, (ii) the violation
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by the Company of any federal or Utah statute, rule or (other than federal
securities laws, which are specifically addressed elsewhere herein) or (iii) the
breach of or a default by the Company under any of the Material Agreements or
Court Orders.
9 To the best of our knowledge, no consent, approval, authorization or
order of, or filing with, any governmental or public authority is required for
the execution and delivery of each of the Transaction Documents by the Company,
the issuance and sale of the Note pursuant to the Note Purchase Agreement or the
performance by the Company of the Transaction Documents, except such consents,
approvals, authorizations, orders, or filings as have been obtained or made.
10 The Financing Statements are in an appropriate form for filing in
the office of the Secretary of State of [TEXAS FLORIDA GEORGIA ARIZONA]. Upon
the due filing of the Financing Statements in the office of the Secretary of
State of [TEXAS FLORIDA GEORGIA ARIZONA], all action necessary to "perfect" (as
such term is used in Article 9 of the Uniform Commercial Code of such state, as
applicable ("Article 9")) a security interest in the collateral described in the
Financing Statements will have been taken, to the extent that a security
interest in such collateral is governed by and may be perfected pursuant to
Article 9 by filing or recording in such state.
The opinions rendered above are subject to the following exceptions,
limitations and qualifications:
(i) an opinion rendered in paragraph 4 relating to the
enforceability of the Transaction Documents is
limited and subject to:
(A) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar
laws now or hereafter in effect relating to
or affecting the rights and remedies of
creditors generally or
(B) the effect of general principles of equity,
whether enforcement is considered in a
proceeding in equity or law, and the
discretion of the court before which any
proceeding therefor may be brought.
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(ii) [OTHER ASSUMPTIONS OF COUNSEL]
This opinion is limited to the matters stated herein and no opinion is
implied or may be inferred beyond the matters expressly stated. The opinions
expressed in this letter are based upon the law in effect on the date hereof,
and we assume no obligation to revise or supplement this opinion should such law
be changed by legislative action, judicial action or otherwise.
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, quoted to, or relied upon by
any other person, firm or corporation for any purpose, without our prior written
consent.
Very truly yours,
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