EXHIBIT 99.1
SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
AMONG
▇▇▇▇▇▇▇.▇▇▇, INC.
CIBER, INC.
AND
THE PURCHASERS
(AS SET FORTH ON THE SCHEDULE OF PURCHASERS)
DATED FEBRUARY 29, 2000
TABLE OF CONTENTS
1. DEFINITIONS.....................................................................................1
2. AGREEMENT TO SELL AND PURCHASE..................................................................8
2.01 Authorization of Shares................................................................8
2.02 Sale and Purchase......................................................................8
3. CLOSING, DELIVERY AND PAYMENT...................................................................9
3.01 Closing................................................................................9
3.02 Additional Purchasers.................................................................10
3.03 Post-Closing Transaction..............................................................10
4. REPRESENTATIONS AND WARRANTIES OF CIBER AND THE COMPANY........................................10
4.01 Organization, Good Standing and Qualification.........................................10
4.02 Certificate of Incorporation and Bylaws; Records......................................11
4.03 Capitalization........................................................................12
4.04 Authorization; Binding Obligations....................................................13
4.05 Non-Contravention; Consents...........................................................13
4.06 Financial Statements..................................................................14
4.07 Compliance With Legal Requirements....................................................16
4.08 Governmental Authorizations...........................................................16
4.09 Proprietary Rights....................................................................16
4.10 Proceedings; Orders...................................................................17
4.11 Title to Assets.......................................................................18
4.12 Material Contracts....................................................................19
4.13 Employees; Employee Benefits..........................................................20
4.14 Receivables; Major Customers..........................................................21
4.15 Major Suppliers.......................................................................22
4.16 Tax Matters...........................................................................23
4.17 Securities Laws Compliance; Registration Rights.......................................24
4.18 Finders and Brokers...................................................................24
4.19 Environmental Compliance..............................................................24
4.20 Insurance.............................................................................24
4.21 Related Party Transactions............................................................25
4.22 Absence of Changes....................................................................26
4.23 Powers of Attorney....................................................................28
4.24 Benefit Plans; ERISA..................................................................28
4.25 Full Disclosure.......................................................................30
4.26 DATA CENTER...........................................................................30
4.27 Unrelated Business Taxable Income.....................................................31
4.30 PERFORMANCE BONDS, ETC................................................................31
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS...............................................31
5.01 Requisite Power and Authority.........................................................31
5.02 Non-Contravention.....................................................................31
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5.03 Investment Representations............................................................31
(a) Purchaser Bears Economic Risk................................................31
(b) Acquisition for Own Account..................................................32
(c) Purchaser Can Protect Its Interest...........................................32
(d) Accredited Investor..........................................................32
(e) Company Information..........................................................32
(f) Rule 144.....................................................................32
5.04 Consents..............................................................................32
6. PRE-CLOSING COVENANTS..........................................................................33
6.01 Access and Investigation..............................................................33
6.02 Operation of Business.................................................................33
6.03 Filings and Consents..................................................................35
6.04 Notification; Updates to Disclosure Schedule..........................................36
6.05 Payment of Indebtedness by Related Parties............................................37
6.06 No Negotiation........................................................................37
6.07 Best Efforts..........................................................................37
6.08 Confidentiality.......................................................................37
6.09 Stock Option Plan.....................................................................38
6.10 Approval of Certificate of Designation; Authorization of Shares.......................38
6.11 AFFILIATED ASSETS.....................................................................39
7. CONDITIONS PRECEDENT TO PURCHASERS' OBLIGATIONS................................................39
7.01 Representations and Warranties........................................................39
7.02 EXECUTION OF AGREEMENTS...............................................................39
7.03 Certificate of Designation............................................................39
7.04 Business Plan.........................................................................39
7.05 Consents, Permits, Waivers and Approvals..............................................39
7.06 Reservation of Conversion Shares......................................................39
7.07 Corporate Documents...................................................................40
7.08 Compliance Certificate................................................................40
7.09 Delivery of Legal Opinion.............................................................40
7.10 Certification of Securities Holdings..................................................40
7.11 NON-DISCLOSURE AND INVENTION ASSIGNMENT AGREEMENTS....................................40
7.12 AFFILIATED ASSETS.....................................................................40
7.13 Amendment to Existing PLAN............................................................40
7.14 Qualification to Conduct Business.....................................................40
7.15 Employment Agreements.................................................................40
7.16 Insurance.............................................................................41
7.17 Company Benefits Plans................................................................41
7.18 Pipeline Report.......................................................................41
8. CONDITIONS PRECEDENT TO THE COMPANY'S AND CIBER'S OBLIGATIONS..................................41
8.01 Representations and Warranties........................................................41
8.02 Execution of Agreements...............................................................41
8.03 Business Plan.........................................................................41
8.04 Consents, Permits, Waivers and Approvals..............................................41
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8.05 Compliance Certificate................................................................42
9. EXPENSE REIMBURSEMENT..........................................................................42
10. INDEMNIFICATION, ETC...........................................................................42
10.01 Survival of Representations and Covenants.............................................42
10.02 Indemnification by the Company and CIBER..............................................43
11. TERMINATION....................................................................................44
11.01 Rights to Terminate...................................................................44
11.02 Effect of Termination.................................................................45
12. MISCELLANEOUS..................................................................................45
12.01 Governing Law.........................................................................45
12.02 Survival..............................................................................46
12.03 Successors and Assigns................................................................46
12.04 Entire Agreement......................................................................46
12.05 Specific Enforcement..................................................................47
12.06 Severability..........................................................................47
12.07 Amendment and Waiver..................................................................47
12.08 Notices...............................................................................47
12.09 Counterparts; Facsimile...............................................................48
12.10 Future Financings.....................................................................48
12.11 EXCULPATION AMONG PURCHASERS..........................................................48
12.12 PRESS RELEASES AND ANNOUNCEMENTS......................................................49
12.13 Interpretation........................................................................49
12.14 NO THIRD PARTY BENEFICIARIES..........................................................49
Exhibit A Schedule of Purchasers
Exhibit B Certificate of Designation
Exhibit C Financial Statements
Exhibit D Form of Confidentiality, Anti-Solicitation And Invention Assignment Agreement
Exhibit E Form Of Amendment To Existing Plan
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EXECUTION
COPY
SERIES A CONVERTIBLE
PREFERRED STOCK PURCHASE AGREEMENT
This Series A Convertible Preferred Stock Purchase Agreement is
entered into as of February 29, 2000, by and among ▇▇▇▇▇▇▇.▇▇▇, Inc., a
Delaware corporation (the "COMPANY"), CIBER, Inc., a Delaware corporation
("CIBER") and each of those persons and entities, severally and not jointly,
whose names are set forth on the Schedule of Purchasers attached hereto as
EXHIBIT A (collectively, the "PURCHASERS" and each, individually, a
"PURCHASER").
In consideration of the mutual promises hereinafter set forth, the
parties hereto agree as follows:
1. DEFINITIONS
Capitalized terms in this Agreement are used as defined in this
Article 1 or elsewhere in this Agreement (such terms to be equally applicable
to the singular and plural forms thereof):
"ACQUISITION TRANSACTION" means any transaction involving:
(a) the sale or other disposition of all or any substantial
portion of the Company's business or assets;
(b) the issuance, sale or other disposition of (i) any capital
stock of the Company, (ii) any option, call, warrant or right
(whether or not immediately exercisable) to acquire any
capital stock of the Company, or (iii) any security,
instrument or obligation that is or may become convertible
into or exchangeable for any capital stock of the Company, in
each case, other than with respect to:
(A) any issuance of shares of such stock issued upon
exercise or conversion of any option, warrant or
other convertible security outstanding as of the
Closing Date;
(B) shares of such stock issued or issuable in a public
offering before or in connection with which all
outstanding Shares will be converted to Common Stock
or upon exercise of warrants or rights granted to
underwriters in connection with such a public
offering;
(C) warrants issued in connection with any borrowings
(and any Common Stock issued in connection with the
exercise of such warrants), whether or not presently
authorized, including any type of loan, lease
financing or payment evidenced by any type of debt
instrument, if such borrowing, loan or debt
instrument is approved by a majority of the Company's
Board of Directors; or
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(D) any options, warrants or rights issued under the New
Plan or any other stock option plan of the Company
then in effect; or
(c) any merger, consolidation, business combination, share
exchange, reorganization or similar transaction involving the
Company.
The term "Acquisition Transaction" shall not include any of the
foregoing transactions that involve CIBER directly and that involve the
Company only indirectly as a result of CIBER's ownership of Common Stock.
"ADDITIONAL PURCHASERS" has the meaning set forth in Section 3.02.
"ADJUNCT SERVICES AGREEMENT" means the Adjunct Services Agreement,
dated the Closing Date, by and between Verio Inc. and the Company.
"AFFILIATE" means, with respect to any Person, a Person that,
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with such Person or an officer,
director, holder of 10% or more of the outstanding equity securities of such
Person, or the parent, spouse or lineal descendant of any of the foregoing.
"AFFILIATED ASSETS" has the meaning set forth in Section 4.21.
"AGREEMENT" means this Series A Convertible Preferred Stock Purchase
Agreement, dated as of the date hereof, by and among the Company, CIBER and
the Purchasers (including the Disclosure Schedule and all other Schedules and
Exhibits attached hereto), as it may be amended from time to time.
"ALLIANCE AGREEMENT" means the Business Alliance Agreement, dated
the Closing Date, by and between the Company and CIBER.
"BEST EFFORTS" means the efforts that a prudent Person desiring to
achieve a particular result would use in order to ensure that such result is
achieved in a commercially reasonable manner and as expeditiously as is
commercially reasonable under the circumstances.
"BREACH", when used in connection with any representation, warranty,
covenant, obligation or other provision set forth in this Agreement, means
that there is or has been any inaccuracy in or breach of, or any failure to
comply with or perform, such representation, warranty, covenant, obligation
or other provision, and Breach shall be deemed to refer to any such
inaccuracy, breach, failure or circumstance.
"CENTENNIAL" means, collectively, Centennial Fund VI, L.P., a
Delaware limited partnership, Centennial Entrepreneurs Fund VI, L.P., a
Delaware limited partnership, Centennial Strategic Partners VI, L.P., a
Delaware limited partnership and Centennial Holdings I, LLC a Delaware
limited partnership.
"CERTIFICATE OF DESIGNATION" has the meaning set forth in Section
2.01.
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"CIBER" has the meaning set forth in the introductory paragraph.
"CIBER ADVANCE" has the meaning set forth in Section 3.03.
"CLOSING" has the meaning set forth in Section 3.01.
"CLOSING DATE" has the meaning set forth in Section 3.01.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" means the shares of common stock of the Company.
"COMPANY" has the meaning set forth in the introductory paragraph.
"COMPANY CONTRACT" means any Contract:
(a) to which the Company is a party;
(b) by which the Company or any of its assets is bound or under
which the Company has, or may become subject to, any
obligation;
(c) under which the Company has or may acquire any right or
interest; or
(d) all or any portion of the Affiliated Assets which are to be
assigned to the Company pursuant to Section 6.11.
"CONSENT" means any approval, consent, ratification, permission, waiver
or authorization (including any Governmental Authorization).
"CONTRACT" means, with respect to any Person, any written or oral
agreement, contract, lease, understanding, arrangement, instrument, note,
guaranty, deed, assignment, power of attorney or certificate of any nature to
which such Person is a party or by which its properties or assets are bound, as
such Contract may be amended from time-to-time.
"CONVERSION SHARES" has the meaning set forth in Section 4.01.
"DAMAGES" shall include any loss, damage, injury, Liability, claim,
demand, settlement, judgment, award, fine, penalty, Tax, fee (including any
reasonable legal fee, expert fee, accounting fee or advisory fee), charge, cost
(including the reasonable cost of investigation) or expense of any nature, but
shall not include Special Damages.
"DATA CENTER" has the meaning set forth in Section 4.26.
"DISCLOSURE SCHEDULE" means the schedule (dated as of the date of this
Agreement), and as defined in Article 4, delivered to the Purchasers on behalf
of the Company and CIBER, a copy of which is attached to this Agreement and
incorporated in this Agreement by reference.
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"EMPLOYEE BENEFIT PLAN" has the meaning set forth in Section 3(3) of
ERISA.
"ENCUMBRANCE" means any lien, pledge, hypothecation, charge,
mortgage, security interest, encumbrance, equity, trust, equitable interest,
claim, preference, right of possession, lease, tenancy, license,
encroachment, covenant, infringement, interference, Order, proxy, option,
right of first refusal, preemptive right, community property interest,
legend, defect, impediment, exception, reservation, limitation, impairment,
imperfection of title, condition or restriction of any nature (including any
restriction on the voting of any security, any restriction on the transfer of
any security or other asset, any restriction on the receipt of any income
derived from any asset, any restriction on the use of any asset and any
restriction on the possession, exercise or transfer of any other attribute of
ownership of any asset).
"ENTITY" means any corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability partnership, limited
liability limited partnership, joint venture, estate, trust, cooperative,
foundation, society, political party, union, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization or other entity.
"ENVIRONMENTAL LAW" has the meaning set forth in Section 4.19.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCLUDED CONTRACT" means any Company Contract that meets any of the
following requirements:
(a) the Company has entered into such Company Contract in the
Ordinary Course of Business and such Company Contract does not
contemplate or involve the payment of cash or other
consideration in an amount or having a value in excess of
$50,000; or
(b) has a term of less than 90 days or may be terminated by the
Company (without penalty) within 90 days after the delivery of
a termination notice by the Company.
"EXISTING PLAN" means the CIBER Enterprise Outsourcing, Inc. Stock
Option Plan.
"FINANCIAL STATEMENTS" has the meaning set forth in Section 4.06.
"GAAP" means generally accepted accounting principles, consistently
applied.
"GOVERNMENTAL AUTHORIZATION" means any:
(a) permit, license, certificate, franchise, concession, approval,
Consent, ratification, permission, clearance, confirmation,
endorsement, waiver, certification, designation, rating,
registration, qualification or authorization
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that is or has been issued, granted, given or otherwise made
available by or under the authority of any Governmental Body
or pursuant to any Legal Requirement; or
(b) right under any Contract with any Governmental Body.
"GOVERNMENTAL BODY" means any:
(a) nation, principality, state, commonwealth, province,
territory, county, municipality, district or other
jurisdiction of any nature;
(b) federal, state, local, municipal, foreign or other government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental division, subdivision, department,
agency, bureau, branch, office, commission, council, board,
instrumentality, officer, official, representative,
organization, unit, body or Entity and any court or other
tribunal);
(d) multi-national governmental or quasi-governmental organization
or body; or
(e) other body exercising, or entitled to exercise, any executive,
legislative, judicial, administrative, regulatory, police,
military or taxing authority.
"INDEMNITEE" has the meaning set forth in Section 10.02.
"KNOWING BREACH" has the meaning set forth in Section 10.01.
"KNOWLEDGE" of a particular fact or other matter means that:
(a) the individual in question is actually aware of such fact or
other matter; or
(b) a reasonable business person engaged in the Company's line of
business would be expected to discover or otherwise become
aware of such fact in the course of operating the business.
CIBER's Knowledge shall mean the Knowledge of its executive officers,
and the Company's Knowledge shall mean the Knowledge of those
individuals identified in Part 1.01 of the Disclosure Schedule.
"LEGAL REQUIREMENT" means any federal, state, local, municipal, foreign
or other governmental law, statute, legislation, constitution, principle of
common law, resolution, ordinance, code, edict, decree, proclamation, treaty,
convention, rule, regulation, ruling, directive, pronouncement, requirement,
specification, determination, decision, opinion or interpretation that is or has
been issued, enacted, adopted, passed, approved, promulgated, made, implemented
or otherwise put into effect by or under the authority of any Governmental Body.
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"LIABILITY" means any debt, obligation, duty or liability of any
nature (including any unknown, undisclosed, unmatured, unaccrued, unasserted,
contingent, indirect, conditional, implied, vicarious, derivative, joint,
several or secondary liability) required to be disclosed on a balance sheet
prepared in accordance with GAAP.
"MATERIAL CONTRACT" has the meaning set forth in Section 4.12.
"MEMBER OF THE CONTROLLED GROUP" means each trade or business, whether
or not incorporated, that would be treated as a single employer with the Company
under Section 4001 of ERISA or Section 414(b), (c), (m) or (o) of the Code.
"MULTIEMPLOYER PLAN" means a plan described in Section 3(37) of ERISA.
"ORDER" means any:
(a) order, judgment, injunction, edict, decree, ruling,
pronouncement, determination, decision, opinion, verdict,
sentence, subpoena, writ or award that is or has been issued,
made, entered, rendered or otherwise put into effect by or
under the authority of any court, administrative agency or
other Governmental Body or any arbitrator or arbitration
panel; or
(b) Contract with any Governmental Body that is or has been
entered into in connection with any Proceeding.
"ORDINARY COURSE OF BUSINESS" means an action taken by or on behalf of
the Company that:
(a) is consistent with the Company's past practices and is taken
in the ordinary course of the Company's normal day-to-day
operations;
(b) is taken in accordance with prudent business practices
consistent with industry practices; and
(c) is not required to be authorized by the Company's
stockholders, the Company's board of directors or any
committee of the Company's board of directors.
"PERSON" means any individual, Entity or Governmental Body.
"PLAN" has the meaning set forth in Section 4.24.
"PLATFORM SERVICES AGREEMENT" means the Platform Services Agreement,
dated the Closing Date, by and between Verio Inc. and the Company.
"PRE-CLOSING PERIOD" means the period commencing as of the date of this
Agreement and ending on the Closing Date.
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"PROCEEDING" means any action, suit, litigation, arbitration,
proceeding (including any civil, criminal, administrative, investigative or
appellate proceeding and any informal proceeding), prosecution, contest,
hearing, inquiry, inquest, audit, examination or investigation that is or has
been commenced, brought, conducted or heard by or before, or that otherwise
has involved or may involve, any Governmental Body or any arbitrator or
arbitration panel.
"PROPRIETARY ASSET" means any patent, patent application, trademark
(whether registered or unregistered and whether or not relating to a
published work), trademark application, trade name, fictitious business name,
service ▇▇▇▇ (whether registered or unregistered), service ▇▇▇▇ application,
copyright (whether registered or unregistered), copyright application,
maskwork, maskwork application, trade secret, know-how, franchise, system,
computer software, invention, design, blueprint, proprietary product,
technology, proprietary right or other intellectual property right or
intangible asset.
"PURCHASERS" has the meaning set forth in the introductory paragraph.
"RELATED PARTY" means, with respect to the Company:
(a) CIBER, or any of its Affiliates;
(b) each individual who is, or who has within the past year been, an
officer of the Company;
(c) each member of the family (comprising the spouse, children, parents
or siblings of such individual) of each of the individuals referred
to in clause "(b)" above; and
(d) any Entity (other than the Company) in which any one of the Persons
referred to in clauses "(a)," "(b)" and "(c)" above holds (or in
which more than one of such individuals collectively hold),
beneficially or otherwise, a material voting, proprietary or equity
interest.
"REPRESENTATIVES" means as to any particular party, the officers,
directors, employees, attorneys, accountants, advisors and representatives of
such party. CIBER, its Representatives and all other Related Parties shall be
deemed to be Representatives of the Company.
"SECURITIES ACT" means the Securities Act of 1933 (or any similar
successor federal statute), as amended, and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
"SHARES" has the meaning set forth in Section 2.01.
"SPECIAL DAMAGES" shall include consequential damages, decline in value
and lost opportunity, but shall not include punitive damages; PROVIDED, HOWEVER,
that lost opportunity shall not be measured in respect of a party's alternative
investment opportunities; PROVIDED, FURTHER, that for purposes of determining
the amount of any
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Special Damages, such amount may be mitigated by taking into account positive
or offsetting events that occur after the date hereof, but prior to the award
of such Special Damages.
"SPECIFIED REPRESENTATIONS" has the meaning set forth in Section
10.02.
"STOCKHOLDERS AGREEMENT" means the ▇▇▇▇▇▇▇.▇▇▇ Stockholder and Voting
Agreement, dated as of the Closing Date, by and among the Company, CIBER, the
Investors and the Management Holders (as such terms are defined therein).
"TAX" means any tax (including any income tax, franchise tax, capital
gains tax, estimated tax, gross receipts tax, value added tax, surtax, excise
tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax,
business tax, occupation tax, inventory tax, occupancy tax, withholding tax or
payroll tax), levy, assessment, tariff, impost, imposition, toll, duty
(including any customs duty), deficiency or fee, and any related charge or
amount (including any fine, penalty or interest), that is or has been (a)
imposed, assessed or collected by or under the authority of any Governmental
Body, or (b) payable pursuant to any tax sharing agreement or similar Contract.
"TAX RETURN" means any return (including any information return),
report, statement, declaration, estimate, schedule, notice, notification, form,
election, certificate or other document or information that is or has been filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.
"TRANSACTION AGREEMENTS" has the meaning set forth in Section 4.01.
"TRANSITION SERVICES AGREEMENT" means the General and Administrative
Services Agreement, dated as of the Closing Date, between CIBER and the Company.
"USRPHC" has the meaning set forth in Section 4.16.
"VERIO" means Verio, Inc., a Delaware corporation, or Verio LLC, a
Delaware limited liability company wholly owned by Verio, Inc.
2. AGREEMENT TO SELL AND PURCHASE
2.01 AUTHORIZATION OF SHARES. On or prior to the Closing, the
Company shall have authorized the sale and issuance to the Purchasers of
shares of its Series A Convertible Preferred Stock (the "SHARES") having the
rights, preferences, privileges and restrictions set forth in the Certificate
of Designation of Powers, Preferences, Rights, Qualifications, Limitations
and Restrictions of Series A Convertible Preferred Stock, attached hereto as
EXHIBIT B (the "CERTIFICATE OF DESIGNATION").
2.02 SALE AND PURCHASE. Subject to the terms and conditions hereof,
at the Closing the Company hereby agrees to issue and sell to each Purchaser,
and each
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Purchaser severally, and not jointly, agrees to purchase from the Company,
the number of Shares set forth opposite its name on EXHIBIT A at a purchase
price per Share of $3.25.
3. CLOSING, DELIVERY AND PAYMENT
3.01 CLOSING. The closing of the sale and purchase of the Shares
under this Agreement (the "CLOSING") shall take place at 10:00 a.m. on the
date on which all of the conditions specified in Article 7 have been
satisfied or waived by all of the Purchasers, at the offices of ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ at such other time or place as the Company and Purchasers may
mutually agree (such date is hereinafter referred to as the "CLOSING DATE").
Subject to the terms and conditions hereof, the following transactions shall
occur at the Closing:
(a) the Company shall deliver to the Purchasers
certificates representing the number of Shares to be purchased at the Closing
by each Purchaser;
(b) each Purchaser shall effect payment for the Shares
purchased at the Closing by certified check or wire transfer of immediately
available funds to an account designated by the Company;
(c) if not already done, each of the Transaction
Agreements shall be executed and delivered;
(d) if not already done, the Company shall amend its
Certificate of Incorporation to authorize the Conversion Shares and shall
file such amendment, as well as the Certificate of Designation, with the
Secretary of State of the State of Delaware;
(e) the Company and CIBER shall each deliver to each of
the Purchasers the compliance certificate contemplated by Section 7.09;
(f) the legal opinion specified in Section 7.10 shall be
delivered to the Purchasers;
(g) if not already done, a meeting of the stockholders of
the Company shall be held (or the written consent of the stockholders shall
be obtained pursuant to the Company's Certificate of Incorporation) at which
the stockholders shall elect a new board of directors of the Company in
accordance with Section 5.01(a) of the Stockholders Agreement and shall
approve the business plan and the operating budget; and
(h) if not already done, the Company shall provide to
Centennial the Certification specified in Section 7.11.
Each of the transactions listed above (other than such transactions that may
take place prior to the Closing and that have been completed prior to the
Closing) shall be deemed to take place simultaneously and none of them shall
be deemed to have been completed until all of them have been completed.
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3.02 ADDITIONAL PURCHASERS. At or at any time prior to the 16th day
following the Closing Date, the Company may sell Shares to certain additional
purchasers, which additional purchasers shall be acceptable to each of Verio,
Centennial and CIBER, in their full discretion (each an "ADDITIONAL
PURCHASER"), on the same terms and conditions as such Shares are being sold
to the Purchasers hereunder and in an aggregate amount not to exceed $30
million.
3.03 POST-CLOSING TRANSACTION.
(a) At the Closing, the Company shall pay to CIBER the amount
of $9,908,855.00, representing the full repayment of advances made by CIBER
to the Company on or prior to December 31, 1999 (collectively with the sums
to be paid pursuant to Section 3.03(c), the "CIBER ADVANCE").
(b) As promptly as practicable following the Closing (but not
later than 30 days thereafter), the Company shall prepare and deliver to the
Purchasers and CIBER a report of the funds advanced by CIBER to the Company
from January 1, 2000 through the Closing Date. The Purchasers and their
accountants shall be entitled to make an independent review of such report,
and the Company shall provide the Purchasers and their accountants with full
access to the books and records of the Company in connection with such
review. The Purchasers and their accountants shall, within 15 business days
following their receipt of such report, notify the Company that either the
report is acceptable or that it is unacceptable, specifying in detail the
reasons therefor. The parties shall endeavor to resolve such dispute as soon
as is reasonably practicable; PROVIDED, HOWEVER, that in the event the
parties are unable to resolve such dispute within 30 days from the date of
such notice, they shall jointly appoint an independent, nationally-recognized
accounting firm to resolve such dispute, the costs of which shall be borne by
the Company.
(c) Promptly upon receipt by the Purchasers of the report
referenced in Section 3.03(b) or upon the resolution of any dispute related
thereto, as the case may be, the Company shall pay to CIBER an amount equal
to the amount of any funds advanced by CIBER to the Company from January 1,
2000 through the Closing Date.
4. REPRESENTATIONS AND WARRANTIES OF CIBER AND THE COMPANY
Except as specifically set forth in the disclosure schedules
attached hereto (the "DISCLOSURE Schedule"), the parts of which are numbered
to correspond to the Section numbers of this Agreement, the Company and CIBER
hereby jointly and severally represent and warrant to each Purchaser as
follows:
4.01 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Except as set
forth in Part 4.01 of the Disclosure Schedule, the Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and is duly qualified to conduct business and is in good
standing under the laws of each jurisdiction in which the nature of its
business or the ownership or leasing of its properties requires such
qualifications. The Company has all requisite corporate power and authority
to own
10
and operate its properties and assets, and to carry on its business as
presently conducted and as presently proposed to be conducted. The Company
has all requisite power and authority (a) to execute and deliver (i) this
Agreement; (ii) the Stockholders Agreement; (iii) the Platform Services
Agreement; (iv) the Adjunct Services Agreement; (v) the Alliance Agreement;
and (vi) the Transition Services Agreement; (b) to issue and sell the Shares
and the shares of Common Stock issuable upon conversion thereof (the
"CONVERSION SHARES"); and (c) perform its obligations under the other
provisions of this Agreement, the Stockholders Agreement, the Platform
Services Agreement, the Adjunct Services Agreement, the Alliance Agreement
and the Transition Services Agreement (collectively, except for this
Agreement, the "TRANSACTION AGREEMENTS").CIBER represents (severally and not
jointly with the Company) that CIBER is a corporation duly organized under
the laws of the State of Delaware and has all requisite corporate power and
authority to execute and deliver this Agreement and each of the Transaction
Agreements to which it is a party.
4.02 CERTIFICATE OF INCORPORATION AND BYLAWS; RECORDS.
(a) The Company has delivered to the Purchasers accurate
and complete copies of:
(i) The Company's certificate of incorporation and
bylaws, including all amendments thereto;
(ii) the stock records of the Company; and
(iii) the minutes and other records of the meetings
and other proceedings (including any actions taken by written Consent
or otherwise without a meeting) of the stockholders of the Company, the
board of directors of the Company and all committees of the board of
directors of the Company, in each case at which any material matter
was considered or material action taken.
There have been no meetings or other proceedings of the stockholders
of the Company, the board of directors of the Company or any committee of the
board of directors of the Company at which any material matter was considered
or material action taken that are not reflected in such minutes or other
records.
(b) The Company has never conducted any business under or
otherwise used, for any purpose or in any jurisdiction, any fictitious name,
assumed name, trade name or other name, other than the name "▇▇▇▇▇▇▇.▇▇▇,
Inc." and "CIBER Enterprise Outsourcing, Inc."
(c) There has not been any material violation of any of the
provisions of the Company's certificate of incorporation or bylaws or of any
resolution adopted by the Company's stockholders, the Company's board of
directors or any committee of the Company's board of directors, and no event
has occurred, and no condition or circumstance exists, except as set forth in
Part 4.02(c) of the Disclosure Schedule, that reasonably would be expected
(with or without notice or lapse of time) to constitute or
11
result directly or indirectly in such a violation, where such violation would
have a material adverse effect on the Company.
(d) The books of account, stock records, minute books and
other records of the Company are accurate, up to date and complete in all
material respects, and have been maintained in accordance with prudent
business practices. Except as set forth in Part 4.02(d) of the Disclosure
Schedule, all of the records of the Company are in the actual possession and
direct control of the Company.
4.03 CAPITALIZATION.
(a) The authorized capital stock of the Company (without
regard to the amendments contemplated by Section 3.01(d)) consists of
30,000,000 shares of Common Stock, par value $.01 per share, of which
10,000,000 shares have been issued and are outstanding, all of which are held
by CIBER. All issued and outstanding shares of the Company's capital stock
have been duly authorized and validly issued in full compliance with all
applicable securities laws (or pursuant to valid exemptions therefrom) and
other applicable Legal Requirements, and are fully paid and non-assessable.
(b) Part 4.03(b) of the Disclosure Schedule sets forth the
names of each holder of outstanding options to purchase shares of the
Company's capital stock and, for each such holder, the number of options
held, the grant date, expiration date, vesting schedule and exercise price
for such options. The Company has reserved a sufficient number of shares of
Common Stock for issuance upon exercise of each of the options listed in Part
4.03(b) of the Disclosure Schedule. Other than the options set forth on Part
4.03(b) of the Disclosure Schedule and the transactions contemplated herein,
there is no: (i) outstanding subscription, option, call, warrant or right
(whether or not currently exercisable) to acquire any shares of the capital
stock or other securities of the Company; (ii) outstanding security,
instrument or obligation that is or may become convertible into or
exchangeable for any shares of the capital stock or other securities of the
Company; (iii) Contract under which the Company is or reasonably would be
expected to become obligated to sell or otherwise issue any shares of its
capital stock or any other securities; or (iv) except as set forth in Part
4.03(b) of the Disclosure Schedule, condition or circumstance that reasonably
would be expected directly or indirectly to give rise to or provide a basis
for the assertion of a claim by any Person to the effect that such Person is
entitled to acquire or receive any shares of capital stock or other
securities of the Company.
(c) Except as set forth in Part 4.03(c) of the Disclosure
Schedule, the Company has never repurchased, redeemed or otherwise reacquired
(and, except as contemplated by this Agreement, has not agreed, committed or
offered (in writing or otherwise) to reacquire) any shares of capital stock
or other securities of the Company. Any securities so reacquired by the
Company were (or will have been) reacquired in full compliance with all
applicable Legal Requirements.
(d) Prior to the Closing, all of the Shares and the Conversion
Shares (i) will have been duly authorized and reserved for issuance, (ii)
upon issuance in
12
compliance with the provisions of this Agreement and the Certificate of
Designation will be validly issued, fully paid and non-assessable, and (iii)
upon issuance in compliance with the provisions of this Agreement and the
Certificate of Designation will have been issued in full compliance with all
applicable securities laws and other applicable Legal Requirements.
4.04 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on
the part of the Company, its officers, directors and stockholders necessary
for the authorization of this Agreement and the Transaction Agreements, and
for the performance of all obligations of the Company hereunder and under the
Transaction Agreements and for the delivery of the Shares has been taken or
will be taken prior to the Closing. This Agreement and the Transaction
Agreements constitute, or upon execution and delivery will constitute, valid
and binding obligations of the Company enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by
applicable Legal Requirements relating to bankruptcy or creditors' rights
generally. CIBER represents (severally and not jointly with the Company),
that all corporate action on the part of CIBER, its officers, directors and
stockholders necessary for the authorization of this Agreement and the
Transaction Agreements to which it is a party, and for the performance of all
obligations of CIBER hereunder and under the Transaction Agreements to which
it is a party has been taken or will be taken prior to the Closing. This
Agreement and the Transaction Agreements to which CIBER is a party
constitute, or upon execution and delivery will constitute, valid and binding
obligations of CIBER enforceable against CIBER in accordance with their
terms, except as such enforceability may be limited by applicable Legal
Requirements relating to bankruptcy or creditors' rights generally.
4.05 NON-CONTRAVENTION; CONSENTS. Except in the case of paragraphs
(b) through (i) for matters that would not reasonably be expected to have a
material adverse effect on the Company, neither the execution and delivery of
this Agreement or any of the Transaction Agreements, nor the consummation or
performance of any of the transactions contemplated herein, will directly or
indirectly (with or without notice or lapse of time):
(a) contravene, conflict with or result in a violation of (i)
any of the provisions of the Company's certificate of incorporation or
bylaws, or (ii) any resolution adopted by the Company's stockholders, the
Company's board of directors or any committee of the Company's board of
directors;
(b) contravene, conflict with or result in a violation of, or
give any Governmental Body or other Person the right to challenge any of the
transactions contemplated herein or to exercise any remedy or obtain any
relief under, any Legal Requirement or any Order to which the Company, or any
of the assets owned or used by the Company, is subject;
(c) cause any of the assets owned or used by the Company to be
reassessed or revalued by any Taxing authority or other Governmental Body;
13
(d) contravene, conflict with or result in a violation of any
of the terms or requirements of, or give any Governmental Body the right to
revoke, withdraw, suspend, cancel, terminate or modify, any Governmental
Authorization that is held by the Company or any of its employees or that
otherwise relates to the Company's business or to any of the assets owned or
used by the Company, which revocation, withdrawal or suspension would have a
material adverse effect on the Company;
(e) contravene, conflict with or result in a violation or
Breach of, or result in a default under, any provision of any of the Company
Contracts;
(f) give any Person the right to (i) declare a default or
exercise any remedy under any Company Contract, (ii) accelerate the maturity
or performance of any Company Contract, or (iii) cancel, terminate or modify
any Company Contract;
(g) give any Person the right to any payment by the Company
(other than as specifically contemplated herein or in the Transaction
Agreements) or give rise to any acceleration or change in the award, grant,
vesting or determination of options, warrants, rights, severance payments or
other contingent obligations of any nature whatsoever of the Company in favor
of any Person, in any such case as a result of the change in control of the
Company or otherwise resulting from the transactions contemplated hereby; or
(h) result in the imposition or creation of any Encumbrance
upon or with respect to any asset owned or used by the Company.
(i) Except for the notification and report form required to be
filed under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, the filing of a Form D pursuant to
Regulation D under the Securities Act, and any corporate filings required
pursuant to the laws of the State of Delaware as contemplated herein, and as
set forth in Part 4.05(i) of the Disclosure Schedule, the Company will not be
required to make any filing with or give any notice to, or to obtain any
Consent from, any Person in connection with the execution and delivery of any
of this Agreement and any other Transaction Agreement or the consummation or
performance of any of the transactions contemplated herein.
CIBER represents, severally and not jointly with the Company, that except for
matters that would not reasonably be expected to have a material adverse
effect on CIBER and its Affiliates take as a whole, neither the execution nor
delivery of this Agreement or any of the Transaction Agreements to which
CIBER is a party, nor the consummation or performance of any of the
transactions contemplated herein, will directly or indirectly (with or
without notice or lapse of time) contravene, conflict with or result in a
violation or Breach of, or result in a default under (i) any of the
provisions of CIBER's certificate of incorporation or bylaws, (ii) any
resolution adopted by CIBER's stockholders or board of directors, or (iii)
any provision of any material contract to which CIBER is a party.
4.06 FINANCIAL STATEMENTS.
(a) The Company has delivered to the Purchasers the unaudited
balance sheet of the Company as of December 31, 1999, and the related
unaudited
14
statements of income and operations of the Company for the six months then
ended, (collectively, the "FINANCIAL STATEMENTS"), which are attached hereto
as EXHIBIT C.
(b) The Financial Statements have been prepared in accordance
with the books and records of the Company and present fairly in all material
respects the financial position of the Company as of the date thereof and the
results of operations for the period covered thereby. The Financial
Statements have been prepared in all material respects in accordance with
GAAP, applied on a consistent basis throughout the periods covered, subject
to changes resulting from normal year-end audit adjustments and except that
such statements do not contain the notes and the statements of stockholders
equity and cash flows required by GAAP.
(c) At the date of the Financial Statements and except as set
forth in Part 4.06(c) of the Disclosure Schedule, (i) the Company had no
Liabilities of any nature required by GAAP to be provided for or reflected in
the Financial Statements that were not provided for or reflected in the
Financial Statements; (ii) the Company had no other material contingent
liabilities that would be required by GAAP to be disclosed in the notes to
financial statements; (iii) the Company has established reserves for all
Liabilities with respect to which GAAP requires that such reserves be
established and (iv) all reserves established by the Company and set forth in
the Financial Statements were adequate for the purposes for which they were
established. As of the date of this Agreement, the Company has no
Liabilities, except for:
(A) Liabilities identified as such in the
"liabilities" column of the Financial Statements or set forth on Part
4.06(c) of the Disclosure Schedule;
(B) accounts payable (of the type required to be
reflected as current Liabilities in the "liabilities" column of a
balance sheet prepared in accordance with GAAP);
(C) the Company's obligations under the Contracts
listed in Part 4.12 of the Disclosure Schedule and under Excluded
Contracts, to the extent that the existence of such obligations is
ascertainable solely by reference to such Contracts;
(D) the CIBER Advance; and
(E) Liabilities that have arisen since the date of
the Financial Statements in the Ordinary Course of Business or
otherwise permitted in accordance with Section 4.22 or set forth on
Part 4.06(c) of the Disclosure Schedule.
(d) Other than as set forth on Part 4.06(d) of the Disclosure
Schedule and without regard to the CIBER Advance, there has been no material
adverse change in the financial condition of the Company since the date of
the Financial Statements.
(e) Upon the audit of the Company's financial statements for
the six months ended December 31, 1999 (whether separately or as part of the
audit of CIBER's
15
consolidated financial statements for such period), there shall be no
adjustment required to the Financial Statements that would cause the net
stockholders' equity set forth therein to change from the amount set forth in
the Financial Statements. CIBER and the Company acknowledge and agree that
any such audit adjustment that would cause the net stockholders' equity in
the Company to be reduced below that set forth in the Financial Statements
shall be deemed a Breach of the representation and warranty contained in this
Section 4.06(e) and the actual dollar amount of such reduction shall be
deemed to be Damages that will give rise to the indemnification obligations
set forth in Section 10.02, subject only to the limitations set forth in
Sections 10.02(e) and (f).
4.07 COMPLIANCE WITH LEGAL REQUIREMENTS. Except for such matters as
would not reasonably be expected to have a material adverse effect on the
Company:
(a) to the Company's Knowledge, the Company is in compliance
in all material respects with each Legal Requirement that is applicable to it
or to the conduct of its business or the ownership or use of any of its
assets;
(b) to the Company's Knowledge, no event has occurred and no
condition or circumstance exists that would reasonably be expected (with or
without notice or lapse of time) to constitute or result directly or
indirectly in a violation by the Company of, or a failure on the part of the
Company to comply with, any Legal Requirement; and
(c) the Company has received no notice or other communication
(in writing or otherwise) pending from any Governmental Body or any other
Person regarding (i) any actual, alleged, possible or potential violation of,
or failure to comply with, any Legal Requirement, or (ii) any actual,
alleged, possible or potential obligation on the part of the Company to
undertake, or to bear all or any portion of the cost of, any cleanup or any
remedial, corrective or response action of any nature arising under any
Environmental Law.
4.08 GOVERNMENTAL AUTHORIZATIONS.
The Company has delivered to the Purchasers accurate and complete
copies of each Governmental Authorizations that is held by the Company and is
material to its business. Each such Governmental Authorization is valid and
in full force and effect.
4.09 PROPRIETARY RIGHTS.
(a) Except as set forth in Part 4.09 of the Disclosure
Schedule and except for off-the-shelf "shrink-wrapped" software products,
there is no Proprietary Asset that is owned by or licensed to the Company
that is used in connection with and material to the Company's business.
(b) The Company has taken reasonable measures and precautions
necessary to protect the confidentiality and value of each trademark, trade
name, service ▇▇▇▇ and software license owned by the Company, and identified
or required to be identified in Part 4.09 of the Disclosure Schedule.
16
(c) To the Company's Knowledge, no employee or consultant of
the Company is in violation of any Proprietary Asset or any license or other
agreement related thereto. The Company does not believe it is or will be
necessary to utilize any inventions, trade secrets or proprietary information
of any of its employees made prior to their employment by the Company, except
for inventions, trade secrets or proprietary information that have been
assigned to the Company or are licensed by such employees as described in
Part 4.09 of the Disclosure Schedule.
(d) To the Company's Knowledge, it has conducted its business
without infringement or claim of infringement of any license, patent,
copyright, service ▇▇▇▇, trademark, trade name, trade secret or other
intellectual property right of others that would reasonably be expected to
have a material adverse effect on the business or assets of the Company. The
Company is not to its Knowledge infringing, and has not to its Knowledge at
any time infringed nor has the Company received any notice or other
communication (in writing or otherwise) of any actual, alleged, possible or
potential infringement of, any Proprietary Asset owned or used by any other
Person. To the Knowledge of the Company and CIBER, no other Person is
infringing, and no Proprietary Asset owned or used by any other Person
infringes or conflicts with, any Proprietary Asset owned or used by the
Company where such infringement would have a material adverse effect on the
Company.
(e) Except as set forth in Part 4.09(d) of the Disclosure
Schedule, the Company owns, licenses or has rights to all of the material
Proprietary Assets used by the Company. The Proprietary Assets identified in
Part 4.09 of the Disclosure Schedule constitute all of the material
Proprietary Assets necessary to enable the Company to conduct its business in
the manner in which its business is currently being conducted.
4.10 PROCEEDINGS; ORDERS.
(a) Except as set forth in Part 4.10 of the Disclosure
Schedule, there is no pending material Proceeding, and, to the Knowledge of
the Company or CIBER, no Person has threatened to commence any material
Proceeding:
(i) that involves the Company or that is directed at
the Company and otherwise relates to the Company's business or any of
the assets owned or used by the Company (whether or not the Company is
named as a party thereto); or
(ii) that challenges, or that is reasonably likely to
have the effect of preventing, delaying, making illegal or otherwise
interfering with, any of the transactions contemplated herein.
(b) The Company has delivered to the Purchasers accurate and
complete copies of all material pleadings, correspondence and other material
written materials to which the Company has access that relate to any of the
Proceedings identified in Part 4.10 of the Disclosure Schedule.
17
(c) There is no Order to which the Company, or any of the
assets owned or used by the Company, is subject.
(d) To the Company's Knowledge (excluding, for purposes of
this Section 4.10(d) only, any Knowledge held by the officer or employee in
question) no officer or employee of the Company is subject to any Order that
prohibits such officer or employee from engaging in or continuing any
conduct, activity or practice relating to the Company's business.
(e) To the Company's and CIBER's Knowledge, there is no
proposed Order directed at the Company that, if issued or otherwise put into
effect, (i) is reasonably likely to have a material adverse effect on the
Company's business, condition, assets, liabilities, operations, financial
performance, net income or prospects (or on any aspect or portion thereof) or
on the ability of the Company to comply with or perform any covenant or
obligation under this Agreement or any of the Transaction Agreements, or (ii)
is reasonably likely to have the effect of preventing, delaying, making
illegal or otherwise interfering with any of the transactions contemplated
herein.
4.11 TITLE TO ASSETS.
(a) Except as set forth on Part 4.11(a) of the Disclosure
Schedule and as contemplated by the next sentence hereof, the Company owns,
and has good, valid and marketable title to, all material assets purported to
be owned by it, including:
(i) all assets reflected on the Financial Statements;
and
(ii) all other assets reflected in the Company's books
and records as being owned by the Company.
Except as set forth in Part 4.11(a) of the Disclosure Schedule, all of said
assets are owned by the Company free and clear of any Encumbrances except
liens: (i) reflected in the Financial Statements; (ii) for current Taxes and
assessments not delinquent; or (iii) that are not material in scope or amount
and do not materially interfere with the conduct of the Company's business.
(b) Part 4.11(b) of the Disclosure Schedule identifies all
real and personal property that is being leased or licensed to the Company
and that is material to the Company's business (other than as contemplated in
Section 4.09). All leases pursuant to which the Company leases real or
personal property are in good standing and are valid and effective in all
material respects in accordance with their respective terms and there exists
no material default thereunder or occurrence or condition that would result
in a material default thereunder or termination thereof. The Company's
buildings, equipment and other tangible assets are in good operating
condition, have been subjected only to reasonable and customary wear and
tear, and are useable in the Ordinary Course of Business, and, except for the
real and personal property owned by CIBER, and specified in the Transition
Services Agreement, the Company owns, or has a valid leasehold interest in,
all real and tangible personal property necessary for the conduct of its
business as presently conducted.
18
(c) Part 4.11(c) of the Disclosure Schedule identifies (i) all
material assets owned by other Persons that are used in the Company's
business (other than (A) as set forth in Part 4.11(a) of the Disclosure
Schedule; (B) Proprietary Assets and (C) assets leased or licensed to the
Company and listed in Parts 4.11(b) or 4.26 of the Disclosure Schedule) and
(ii) the owner of each such asset.
4.12 MATERIAL CONTRACTS.
(a) Part 4.12(a) of the Disclosure Schedule identifies each
Company Contract, except for any Excluded Contract and (except for Contracts
that are the subject of Sections 4.11, 4.14 and 4.15 of this Agreement)
Contracts that involve future payments, performance of services or delivery
of goods or materials to or by the Company of an aggregate amount or value in
excess of $50,000 or that otherwise are material to the business or prospects
of the Company (collectively, including the contracts that are the subject of
Section that 4.11, 4.14 and 4.15 of this Agreement, the "MATERIAL
CONTRACTS"). All nonmaterial contracts of the Company do not in the aggregate
represent a material portion of the Liabilities of the Company. The Company
has delivered or made available to the Purchasers accurate and complete
copies of all Material Contracts identified in Part 4.12(a) of the Disclosure
Schedule, including all amendments thereto.
(b) Each Material Contract is valid and in full force and
effect, and is enforceable by the Company in accordance with its terms,
except as such enforceability may be limited by applicable Legal Requirements
relating to bankruptcy or creditors' rights generally.
(c) Except for such matters as would not reasonably be
expected to have a material adverse effect on the Company:
(i) the Company is not in default under any Material
Contract and to the Company's and CIBER's Knowledge, no Person has
violated or Breached, or declared or committed any default under, any
Material Contract;
(ii) to the Company's and CIBER's Knowledge, no event
has occurred, and no circumstance or condition exists, that would
reasonably be expected (with or without notice or lapse of time) to:
(A) result in a violation or Breach of any of the provisions of any
Material Contract, (B) give any Person the right to declare a default
or exercise any remedy in respect of a default under any Material
Contract, (C) give any Person the right to accelerate the maturity or
performance of any Material Contract, or (D) give any Person the right
to cancel, terminate or modify any Material Contract;
(iii) the Company has not to its Knowledge waived any of
its material rights under any Material Contract; and
(iv) to the Company's Knowledge no party to any Material
Contract has made a claim to the effect that the Company has failed to
perform an obligation thereunder.
19
(d) Except as set forth in Part 4.12(d) of the Disclosure
Schedule:
(i) the Company is not bound by any guarantee or other
agreement to cause, insure or become liable for, and has not pledged
any of its assets to secure, the performance or payment of any
obligation or other Liability of any other Person; and
(ii) the Company is not a party to or bound by (A) any
joint venture agreement, partnership agreement, profit sharing
agreement, cost sharing agreement, loss sharing agreement or similar
Contract, or (B) any Contract that creates or grants to any Person,
or provides for the creation or grant of, any stock appreciation right,
phantom stock right or similar right or interest.
(e) The performance by the Company of its obligations under
the Material Contracts will not result in any material violation of or
failure to comply with any Legal Requirement.
(f) No Person is renegotiating, or has the right to
renegotiate, any material amount paid or payable to the Company under any
Material Contract or any other material term or provision of any Material
Contract.
(g) The Contracts identified in Parts 4.11, 4.12(a), 4.13(e),
4.14 and 4.15 of the Disclosure Schedule, the Transaction Agreements and the
Excluded Contracts collectively constitute all of the Contracts necessary to
enable the Company to conduct its application service provider business in
the manner in which such business is currently being conducted.
(h) Part 4.12(h) of the Disclosure Schedule lists each
proposed Contract as to which any written bid, offer, proposal, term sheet or
similar document has been submitted or received by the Company or by CIBER or
any of its Affiliates on behalf of the Company, other than those listed or
referred to in Parts 4.11(b), 4.14 and 4.15 of the Disclosure Schedule.
(i) To the Company's and CIBER's Knowledge, there is no plan,
intention or indication of any contracting party to any Material Contract to
cause the termination, cancellation or modification of such Material Contract
or to reduce or otherwise change its activity thereunder so as to adversely
affect the benefits derived or expected to be derived therefrom by the
Company.
4.13 EMPLOYEES; EMPLOYEE BENEFITS.
(a) Part 4.13(a) of the Disclosure Schedule contains a list
of all employees of the Company, together with their respective job titles.
To the Company's and CIBER's Knowledge (excluding from the definition of
Knowledge for the purposes of this Section 4.13(a) only any Knowledge held by
the employee or officer in question regarding the termination of such
employee's or officer's employment), no employee intends to terminate his
employment with the Company prior to or within 12 months following the
Closing.
20
(b) Part 4.13(b) of the Disclosure Schedule contains a list
of individuals who are currently performing services for the Company that are
material to the operation of its business and are classified as "consultants"
or "independent contractors" (other than individuals listed in Part 4.13(c)
of the Disclosure Schedule).
(c) Part 4.13(c) of the Disclosure Schedule contains a list
of all CIBER employees and consultants who are currently performing services
for the Company that are material to the operation of the Company's business.
(d) Except as set forth in Part 4.13(d) of the Disclosure
Schedule, the Company does not now have and has not in the past had in effect
any bonuses, profit sharing, pension, deferred compensation or similar plan
or agreement for the benefit of any of its employees.
(e) The Company has no collective bargaining agreements with
any of its employees. There is no labor union organizing activity pending or,
to the Company's or CIBER's Knowledge, threatened with respect to the
Company. Except for those employment agreements identified in Part 4.13(e) of
the Disclosure Schedule, no employee has any agreement or contract, written
or oral, regarding his employment.
(f) To the Knowledge of the Company and except for such
matters as would not reasonably be expected to have a material adverse effect
on the Company, no employee of the Company, nor any consultant with whom the
Company has contracted, is in violation of any term of any employment or
consulting contract, proprietary information agreement or any other agreement
relating to the right of any such individual to be employed by, or to
contract with, the Company. The Company has not received any notice alleging
that any such violation has occurred. The Company does not have a present
intention to terminate the employment of any officer, key employee or group
of key employees.
4.14 RECEIVABLES; MAJOR CUSTOMERS.
(a) Part 4.14(a) of the Disclosure Schedule provides an
accurate and complete list of (i) all customers that have entered into
agreements with the Company pursuant to which the Company has begun work and
a material amount of work remains to be completed as of the date hereof; (ii)
all such customers with respect to which a material amount of work has not
yet commenced as of the date hereof; (iii) all potential customers with which
the Company has entered into a letter of intent, memorandum of understanding
or similar written agreement, whether or not legally binding, or has engaged
in substantive bona fide negotiations relating to a proposed written form of
such an agreement; (iv) all potential customers to whom written material bids
or proposals have been submitted within the past 12 months as well as the
status of each such bid or proposal; and (v) all other potential customers
that are considered active prospects by the Company that are included in the
Company's pipeline report as of the date hereof. Such list indicates which
software products are agreed or proposed (as the case may be) to be supplied
to each such customer and whether the Company or the customer has any
21
understanding or agreement with the vendor(s) of such software products
regarding the provision thereof and, if so, a brief description of such
understanding or agreement.
(b) Part 4.14(b) of the Disclosure Schedule accurately
identifies, and provides a list of the gross revenues received from, each
customer or other Person that accounted for more than $50,000 of the gross
revenues of the Company for the 1999 calendar year. The Company has not
received any written notice or other written communication and neither the
Company nor CIBER has any Knowledge that an event has occurred, or a
circumstance or condition exists, excluding general industry, competitive and
economic conditions, that would reasonably be expected (with or without
notice or lapse of time) to: (A) result in any customer or Person identified
in Part 4.14(b) of the Disclosure Schedule ceasing to deal with the Company
or otherwise reducing the volume of business transacted by such customer or
person below historical levels, (B) result in a violation or Breach of any of
the provisions of any Contract with a customer or other Person identified in
Part 4.14(b) of the Disclosure Schedule, (C) give any Person the right to
declare a default or exercise any remedy in respect of a default under any
Contract with a customer or other Person identified in Part 4.14(b) of the
Disclosure Schedule or (D) give any Person the right to accelerate the
maturity or performance of any Contract with a customer or other Person
identified in Part 4.14(b) of the Disclosure Schedule.
(c) Part 4.14(c) of the Disclosure Schedule provides an
aging of all accounts receivable, notes receivable and other receivables of
the Company as of December 31, 1999.
(d) Except as set forth in Part 4.14(d) of the Disclosure
Schedule, all existing accounts receivable of the Company (including those
accounts receivable reflected on the Financial Statements that have not yet
been collected and those accounts receivable that have arisen since December
31, 1999, and that have not yet been collected):
(i) represent in all material respects valid obligations
of customers of the Company arising from bona fide transactions entered
into in the Ordinary Course of Business; and
(ii) are current and are expected (without representation
or warranty to such effect) to be collected in full (without any
counterclaim or setoff) in the Ordinary Course of Business, subject to
the reserve for doubtful accounts reflected in the Financial Statements
and the Closing Date Balance Sheet.
4.15 MAJOR SUPPLIERS.
(a) Part 4.15(a) of the Disclosure Schedule lists each of
the vendors of software that is material to the business operations of the
Company and is used by the Company in connection with its business as
currently operated as of December 31, 1999 (including software licensed or
owned directly by customers of the Company where the
22
provision, implementation or integration of such software for such customers
is part of the Company's business or with respect to which the Company
provides or has provided consulting services for such customers). Such list
also specifies the nature of the contractual relationship, if any, between
the Company and such vendor, including whether the Company is an authorized
reseller or sublicensor of such software.
(b) The Company is current on all payment obligations to such
vendors, except for invoices disputed in the Ordinary Course of Business.
(c) Part 4.15(c) of the Disclosure Schedule accurately
identifies, and provides a summary of the amounts paid to each supplier or
other Person that received more than $25,000 from the Company for the 1999
calendar year. The Company has not received any written notice or other
written communication and neither the Company nor CIBER has any Knowledge
that an event has occurred, or circumstance or condition exists, excluding
general industry, competitive and economic conditions, that would reasonably
be expected (with or without notice or lapse of time) to: (A) result in a
Breach of any of the provisions of any Contract with a software vendor or
other Person identified in Part 4.15(c) of the Disclosure Schedule, (B) give
any Person the right to declare a default or exercise any remedy in respect
of a default under any Contract with a software vendor or other Person
identified in Part 4.15(c) of the Disclosure Schedule or (C) give any Person
the right to accelerate the maturity or performance of any Contract with a
software vendor or other Person identified in Part 4.15(c) of the Disclosure
Schedule.
4.16 TAX MATTERS.
(a) The Company has timely filed all Tax Returns (federal,
state and local) required to be filed by it. The Company has never been
advised that any of its Tax Returns have been or are being audited.
(b) The Company's capital stock does not constitute a United
States real property interest as that term is defined in Section
897(c)(1)(A)(ii) of the Code. The preceding representation is based on a
determination by the Company that the Company is not and has not been a
United States real property holding corporation (as that term is defined in
Section 897(c)(2) of the Code) ("USRPHC") during the five-year period
preceding the date of this Agreement. The Company shall use its Best Efforts
to ensure that it does not at any time in the future become a USRPHC. From
time to time, upon the request of any Purchaser, the Company shall make a
determination as to its status as a USRPHC. If at any time in the future the
Company should become a USRPHC, the Company shall, as promptly as possible,
notify each Purchaser of such change in status.
(c) Except for Tax Liabilities of the consolidated group of
which CIBER is the common parent and only to the extent imposed by applicable
Legal Requirements respecting the liability of wholly-owned subsidiaries for
tax liabilities of their corporate parents and Affiliates, the Company is not
liable for Taxes incurred by any individual, trust, corporation, partnership
or other Entity other than the Company, either as a transferee or pursuant to
Treasury Regulations Section 1.1502-6, or pursuant
23
to any other provision of federal, state or local law or regulation. The
Company is not, and has never been, a party to or bound by any Tax indemnity
agreement, Tax sharing agreement, Tax allocation agreement or similar
Contract.
4.17 SECURITIES LAWS COMPLIANCE; REGISTRATION RIGHTS. The Company
has complied with all applicable federal and state securities laws in
connection with all offers and sales of securities prior to the date of this
Agreement. The Company has not heretofore granted any purchaser of its
securities the right to require the Company to register any securities under
the Securities Act.
4.18 FINDERS AND BROKERS. None of the Company, CIBER or any Person
acting on behalf of the Company or CIBER has negotiated with any finder,
broker, intermediary or any similar Person in connection with the
transactions contemplated herein, except for ▇▇▇▇▇▇▇ ▇▇▇▇▇.
4.19 ENVIRONMENTAL COMPLIANCE. The Company is in compliance in all
material respects with all applicable Environmental Laws. The Company has not
received any notice or other communication (in writing or otherwise) that
alleges that the Company is not in compliance with any Environmental Law, and
to its Knowledge there are no circumstances that may prevent or interfere
with the Company's compliance with any Environmental Law in the future. For
purposes of this Agreement, "ENVIRONMENTAL LAW" means any Legal Requirement
relating to pollution or protection of human health or the environment.
4.20 INSURANCE.
(a) Part 4.20(a) of the Disclosure Schedule contains
certificates of insurance as provided by each of the Company's insurance
carriers describing the policies referenced therein or, if such a certificate
is not available from a carrier, descriptions thereof prepared by the Company.
(b) Each of the policies identified in Part 4.20(a) of the
Disclosure Schedule is valid, enforceable and in full force and effect. All
premiums and other amounts owing with respect to said policies have been paid
in full on a timely basis. Except as set forth in Part 4.20(b) of the
Disclosure Schedule, the Company has performed in all material respects all
of its obligations, under each policy to which it is a party or that provides
coverage to it or any of its directors or officers in connection with their
performance of services to the Company.
(c) There is no pending claim under or based upon any of the
policies identified in Part 4.20(a) of the Disclosure Schedule, and, to the
Company's or CIBER's Knowledge, no event has occurred, and no condition or
circumstance exists, that might (with or without notice or lapse of time)
directly or indirectly give rise to or serve as a basis for any material
claim.
24
(d) The Company has not received:
(i) any notice or other communication (in writing
or otherwise) regarding the actual or possible cancellation or
invalidation of any of the policies identified in Part 4.20(a) of the
Disclosure Schedule or regarding any actual or possible material
adjustment in the amount of the premiums payable with respect to any
of said policies;
(ii) any notice or other communication (in writing or
otherwise) regarding any actual or possible refusal of coverage under,
or any actual or possible rejection of any claim under, any of the
policies identified in Part 4.20(a) of the Disclosure Schedule; or
(iii) any notice or other communication (in writing or
otherwise) that the issuer of any of the policies identified in Part
4.20(a) of the Disclosure Schedule may be unwilling or unable to perform
any of its obligations thereunder.
4.21 RELATED PARTY TRANSACTIONS. Except for employment
relationships and as otherwise set forth in Part 4.21 of the Disclosure
Schedule and as contemplated herein:
(a) no Related Party has, and no Related Party has at any time
since December 31, 1999, had, any direct interest of any nature in any asset
material to the business operations of the Company, including, without
limitation, any licenses, any leases of real or tangible personal property,
rights associated with any Contracts or Proprietary Assets held by any
Related Party of the Company that are either (i) currently used in the
Company's business or services or (ii) contemplated in the business plan to
be used in the Company's business or services (other than as contemplated in
the Transaction Agreements) (the "AFFILIATED ASSETS");
(b) no Related Party is, or has at any time since December 31,
1999, been, indebted to the Company (other than advances to employees for
travel or business expenses in the Ordinary Course of Business);
(c) since December 31, 1999, no Related Party has entered
into, or has had any direct material financial interest in, any Material
Contract, transaction or business dealing of any nature involving the Company;
(d) no Related Party is competing, or has at any time since
December 31, 1999, competed by providing substantially similar or substitute
services with the Company in any market served by the Company;
(e) no Related Party has any material claim against the
Company; and
(f) to the Company's and CIBER's Knowledge, no event has
occurred, and no condition or circumstance exists, that is reasonably likely
(with or without notice or lapse of time) to give rise to or serve as a basis
for any claim or right in favor of any Related Party against the Company.
25
4.22 ABSENCE OF CHANGES. Except as set forth in Part 4.22 of the
Disclosure Schedule and except for the transactions contemplated hereby,
since December 31, 1999:
(a) there has not been any material adverse change in the
Company's business, financial condition or results of operations, and no
event has occurred that would reasonably be expected to have a material
adverse effect on the Company's business, financial condition or results of
operations;
(b) there has not been any material loss, damage or
destruction to, or any interruption in the use of, any of the Company's
assets (whether or not covered by insurance);
(c) the Company has not (i) declared, accrued, set aside or
paid any dividend or made any other distribution in respect of any shares of
capital stock, or (ii) repurchased, redeemed or otherwise reacquired any
shares of capital stock or other securities;
(d) the Company has not sold or otherwise issued any shares of
capital stock or any other securities, except for the grant of options under
the Existing Plan or pursuant to the exercise of outstanding options and
warrants;
(e) the Company has not amended its certificate of
incorporation or bylaws, other than as anticipated herein, and has not
effected or been a party to any Acquisition Transaction, recapitalization,
reclassification of shares, stock split, reverse stock split or similar
transaction;
(f) the Company has not purchased or otherwise acquired any
asset from any other Person with a purchase price greater than $50,000,
except for supplies acquired by the Company in the Ordinary Course of
Business;
(g) the Company has not leased or licensed any asset from any
other Person worth in excess of $50,000;
(h) the Company has not made any capital expenditure in excess
of $50,000, other than with respect to the Data Center;
(i) the Company has not sold or otherwise transferred, and has
not leased or licensed, any material asset to any other Person except in the
Ordinary Course of Business;
(j) the Company has not written off as uncollectible, or
established any extraordinary reserve with respect to, any account receivable
or other indebtedness in excess of $50,000;
(k) the Company has not pledged or hypothecated any of its
material assets or otherwise permitted any of its material assets to become
subject to any Encumbrance;
26
(l) the Company has not made any material loan or advance to
any other Person (other than advances to employees for travel or business
expenses in the Ordinary Course of Business);
(m) the Company has not (i) established or adopted any
Employee Benefit Plan, or (ii) other than in the Ordinary Course of Business,
paid any bonus or made any profit sharing or similar payment to, or increased
the amount of the wages, salary, commissions, fringe benefits or other
compensation or remuneration payable to, any of its directors, officers or
employees;
(n) the Company has not increased the compensation of any of
its officers, or the rate of pay of its employees as a group, except as part
of regular compensation increases in the Ordinary Course of Business;
(o) there has been no resignation or termination of employment
of any officer or key employee of the Company;
(p) there has been no material labor dispute involving the
Company or its employees and none is pending or, to the Knowledge of the
Company, threatened;
(q) the Company has not incurred, assumed or otherwise become
subject to any Liability, other than:
(i) Liabilities set forth on Part 4.06(c) of the
Disclosure Schedule;
(ii) accounts payable and accrued Liabilities (e.g.
payroll) (of the type required to be reflected as current Liabilities
in the "liabilities" column of a balance sheet prepared in accordance
with GAAP);
(iii) the Company's obligations under the Contracts listed
in Part 4.12 of the Disclosure Schedule and under Excluded Contracts,
to the extent that the existence of such obligations is ascertainable
solely by reference to such Contracts;
(iv) the CIBER Advance; and
(v) Liabilities that have arisen since the date of the
Financial Statements in the Ordinary Course of Business, are otherwise
permitted in accordance with this Section 4.22, or are set forth on Part
4.06(c) of the Disclosure Schedule.
(r) the Company has not discharged any Encumbrance or
discharged or paid any indebtedness or other Liability, except for accounts
payable and accrued Liabilities that (i) are reflected as current liabilities
in the "liabilities" column of the Financial Statements or have been incurred
by the Company since December 31, 1999, in the Ordinary Course of Business,
or (ii) have been discharged or paid in the Ordinary Course of Business;
27
(s) the Company has not forgiven any debt in excess of $50,000
or otherwise released or waived any material right or claim;
(t) the Company has not changed any of its methods of
accounting or accounting practices in any material respect;
(u) the Company has not entered into any material transaction
or taken any other action outside the Ordinary Course of Business; and
(v) the Company has not agreed, committed or offered (in
writing or otherwise), and has not attempted, to take any of the actions
referred to in clauses "(c)" through "(u)" above.
4.23 POWERS OF ATTORNEY. Except as listed on Part 4.23 of the
Disclosure Schedule, the Company has not given a power of attorney to any
Person.
4.24 BENEFIT PLANS; ERISA.
(a) Part 4.24 of the Disclosure Schedule lists (i) all
Employee Benefit Plans, (ii) all employment agreements, including, but not
limited to, any individual benefit arrangement, policy or practice with
respect to any current or former employee or director of the Company, and
(iii) all other employee benefit, bonus or other incentive compensation,
stock option, stock purchase, stock appreciation, severance pay, lay-off or
reduction in force, change in control, sick pay, vacation pay, salary
continuation, retainer, leave of absence, educational assistance, service
award, employee discount, fringe benefit plans, arrangements, policies or
practices, whether legally binding or not, in each case to which the Company
or which CIBER on behalf of the Company, maintains, contributes to or has any
obligation to or liability for (collectively, the "PLANS").
(b) The Company does not maintain or contribute to any welfare
benefit plan that provides health benefits to an employee after the
employee's termination of employment or retirement except as required under
Section 4980B of the Code and Sections 601 through 608 of ERISA.
(c) Each Plan that is an Employee Benefit Plan complies by its
terms and in operation in all material respects with the requirements
provided by any and all statutes, Orders or governmental rules or regulations
currently in effect and applicable to such Plan, including but not limited to
ERISA and the Code.
(d) All reports, forms and other documents required to be
filed with any Government Body with respect to any Plan (including, without
limitation, Forms 5500 and summary annual reports) have been timely filed and
are accurate in all material respects.
(e) Each Plan intended to qualify under Section 401(a) of the
Code has been determined by the Internal Revenue Service so to qualify after
January 1, 1985, and each trust maintained pursuant thereto has been
determined by the Internal Revenue Service to be exempt from Taxation under
Section 501 of the Code. Nothing has
28
occurred since the date of the Internal Revenue Service's favorable
determination letter, if any, that could adversely affect the qualification
of the Plan and its related trust. The Company will timely and properly apply
for a written determination by the Internal Revenue Service on the
qualification of the Company's 401(k) Savings Plan and its related trust
under Section 401(a) of the Code, as amended by the Tax Reform Act of 1986
and subsequent legislation enacted through the date hereof, and Section 501
of the Code.
(f) All contributions for all periods ending prior to the
Closing Date (including periods from the first day of the current plan year
to the Closing Date) have been made prior to the Closing Date by the Company
in accordance with past practice.
(g) All insurance premiums have been paid in full, subject
only to normal retrospective adjustments in the ordinary course, with regard
to the Plans for plan years ending on or before the Closing Date.
(h) As of the Closing Date, neither the Company nor any Member
of the Controlled Group contributes to or has ever contributed to or been
obligated to contribute to a Multiemployer Plan or a plan that is subject to
Title IV of ERISA or Section 412 of the Code.
(i) With respect to each Plan:
(i) no prohibited transactions (as defined in Section
406 or 407 of ERISA or Section 4975 of the Code) have occurred for
which a statutory exemption is not available;
(ii) no action or claims (other than routine claims for
benefits made in the ordinary course of Plan administration for which
Plan administrative review procedures have not been exhausted) are
pending, threatened or imminent against or with respect to the Plan,
any employer who is participating (or who has participated) in any Plan
or any fiduciary (as defined in Section 3(21) of ERISA) of the Plan;
(iii) neither the Company nor CIBER has any Knowledge of
any facts that could give rise to any such action or claim; and
(iv) it provides that it may be amended or terminated at
any time and, except for benefits protected under Section 411(d) of the
Code, all benefits payable to current or terminated employees or any
beneficiary may be amended or terminated by the Company at any time
without liability.
(j) Neither the Company nor any Member of the Controlled Group
has any liability or, to the Knowledge of the Company, is threatened with any
liability (whether joint or several) for any excise Tax imposed by Sections
4975, 4976, 4977 or 4979 of the Code.
29
(k) All of the Plans listed in Part 4.24 of the Disclosure
Schedule, to the extent applicable, are in compliance with the continuation
of group health coverage provisions contained in Section 4980B of the Code
and Section 601 through 608 of ERISA.
(l) True, correct and complete copies of all documents
creating or evidencing any Plan listed in Part 4.24 of the Disclosure
Schedule have been made available to the Purchasers, and true, correct and
complete copies of all reports, forms and other documents required to be
filed with any governmental entity (including, without limitation, summary
plan descriptions, Forms 5500 and summary annual reports for all plans
subject to ERISA) have been made available to the Purchasers. There are no
negotiations, demands or proposals that are pending or have been made which
concern matters now covered, or that would be covered, by the type of
agreements listed in Part 4.24 of the Disclosure Schedule.
(m) All expenses and liabilities relating to all of the Plans
described in Part 4.24 of the Disclosure Schedule have been fully and
properly accrued on the Company's books and records and disclosed in
accordance with GAAP and in Plan financial statements.
4.25 FULL DISCLOSURE.
(a) Neither this Agreement (including all Schedules and
Exhibits hereto) nor any of the Transaction Agreements contains or will
contain any untrue statement of fact; and none of such documents, when taken
together, omits or will omit to state any fact necessary to make any of the
representations, warranties or other statements or information contained
therein not misleading.
(b) All of the information set forth in the Disclosure
Schedule, and all other information regarding the Company and its business,
financial condition or results of operations that has been furnished to the
Purchasers or any of their respective Representatives by or on behalf of the
Company or CIBER or any of their respective Representatives, when taken
together, is accurate and complete in all material respects.
(c) The Company and CIBER have provided the Purchasers and
their respective Representatives with full and complete access to all of the
Company's records and other documents and data.
4.26 DATA CENTER. The Company is in the process of constructing and
upgrading a data center located in Columbia, South Carolina (the "DATA
CENTER"). Part 4.26 of the Disclosure Schedule sets forth the project plan
and budget for the Data Center in addition to the expenditures to date in
respect of the Data Center and the anticipated expenditures required to
complete construction of the Data Center. Such information accurately
reflects the Company's and CIBER's plans, expenses and anticipated future
expenses with respect to the Data Center. The Company and CIBER have provided
to the Purchasers with access to all relevant information, documents and
other materials relating to the Data Center.
30
4.27 UNRELATED BUSINESS TAXABLE INCOME. Any gross income derived by
Centennial from the Company shall be in the form of dividends, interest,
capital gains and losses from the disposition of property, and rents and
royalties, but only such rents and royalties as are excluded pursuant to Code
Sections 512(b)(2) and 512(b)(3), respectively, in calculating unrelated
business Taxable income and only such dividends, interest, capital gains and
losses, and rents and royalties that are not included under Section
5.12(b)(4) of the Code in calculating unrelated business Taxable income.
4.28 PERFORMANCE BONDS, ETC. Except as set forth in Part 4.30 of
the Disclosure Schedule, there are no outstanding performance bonds, standby
letters of credit or other similar obligations of the Company in connection
with any of the Company Contracts.
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser, severally and not jointly, hereby represents and
warrants to the Company as follows:
5.01 REQUISITE POWER AND AUTHORITY. Such Purchaser has all right,
power and authority necessary to enter into and to perform its obligations
under this Agreement and the Transaction Agreements to which it is a party,
and the execution, delivery and performance by such Purchaser of this
Agreement and the Transaction Agreements to which it is a party, and the
consummation or performance of the transactions contemplated herein and
therein, have been duly authorized by all necessary action on the part of
such Purchaser. Each of this Agreement and the Transaction Agreements to
which it is a party constitutes, or upon execution and delivery will
constitute, the legal, valid and binding obligation of such Purchaser,
enforceable against such Purchaser in accordance with its terms, except as
such enforceability may be limited by applicable Legal Requirements relating
to bankruptcy or creditors' rights generally.
5.02 NON-CONTRAVENTION. Neither the execution and delivery of this
Agreement or any other Transaction Agreement, nor the consummation or
performance of any of the transactions contemplated herein or therein, will
directly or indirectly contravene, conflict with or result in a violation of
(a) any of the provisions of such Purchaser's certificate of incorporation,
bylaws, partnership agreement or other document of governance, as applicable,
or (b) any resolution adopted by such Purchaser's stockholders, such
Purchaser's board of directors or any committee of such Purchaser's board of
directors or such Purchaser's investment committee or other governing body,
as applicable.
5.03 INVESTMENT REPRESENTATIONS. Such Purchaser understands that
neither the Shares nor the Conversion Shares have been registered under the
Securities Act. Such Purchaser also understands that the Shares are being
offered and sold pursuant to an exemption from registration contained in the
Securities Act based in part upon such Purchaser's representations contained
in this Agreement.
(a) PURCHASER BEARS ECONOMIC RISK. Such Purchaser has
substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company so that it is
capable of evaluating the merits and risks
31
of its investment in the Company and has the capacity to protect its own
interests. Such Purchaser must bear the economic risk of this investment
indefinitely unless the Shares (or the Conversion Shares) are registered
pursuant to the Securities Act, or an exemption from registration is
available. Such Purchaser understands that the Company has no present
intention of registering the Shares, the Conversion Shares or any shares of
its Common Stock. Such Purchaser also understands that there is no assurance
that any exemption from registration under the Securities Act will be
available and that, even if available, such exemption may not allow such
Purchaser to transfer all or any portion of the Shares or the Conversion
Shares under the circumstances, in the amounts or at the times such Purchaser
might propose.
(b) ACQUISITION FOR OWN ACCOUNT. Such Purchaser is acquiring
the Shares and the Conversion Shares for its own account for investment only,
and not with a view towards their distribution in violation of applicable
securities laws.
(c) PURCHASER CAN PROTECT ITS INTEREST. By reason of its or of
its management's business or financial experience, such Purchaser has the
capacity to protect its own interests in connection with the transactions
contemplated by this Agreement. Further, such Purchaser is aware of no
publication of any advertisement in connection with the transactions
contemplated by this Agreement.
(d) ACCREDITED INVESTOR. Such Purchaser represents that it is
an "accredited investor" within the meaning of Regulation D under the
Securities Act.
(e) COMPANY INFORMATION. Such Purchaser has had an opportunity
to discuss the Company's business, management and financial affairs with
directors, officers and management of the Company. Such Purchaser has also
had the opportunity to ask questions of, and receive answers from, the
Company and its management regarding the terms and conditions of this
investment.
(f) RULE 144. Such Purchaser acknowledges and agrees that the
Shares and the Conversion Stock must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. Such Purchaser has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act, which permits
limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things: the
availability of certain current public information about the Company, the
resale occurring not less than one year after a party has purchased and paid
for the security to be sold, the sale being through an unsolicited "broker's
transaction" or in transactions directly with a market maker (as such term is
defined under the Securities Exchange Act of 1934, as amended) and the number
of shares being sold during any three-month period not exceeding specified
limitations.
5.04 CONSENTS. All Consents, approvals, Orders, or authorizations
of, or registration, qualification, designation, declaration or filing with
any Governmental Body or banking authority required on the part of such
Purchaser in connection with the
32
consummation of the transactions contemplated in this Agreement have been or
shall have been obtained prior to and shall be effective as of the Closing.
6. PRE-CLOSING COVENANTS
6.01 ACCESS AND INVESTIGATION. The Company and CIBER shall ensure
that, at all times during the Pre-Closing Period:
(a) the Company and CIBER and their respective Representatives
provide the Purchasers and their respective Representatives with reasonable
access to the Company's Representatives, personnel and assets and to all
existing books, records, Tax Returns, work papers, Company Contracts and
other documents and information relating to the Company;
(b) the Company and CIBER and their respective Representatives
provide the Purchasers and their respective Representatives with such copies
of existing books, records, Tax Returns, work papers and other documents and
information relating to the Company as the Purchasers may request in good
faith; and
(c) the Company and CIBER and their respective Representatives
compile and provide the Purchasers and their respective Representatives with
such additional financial, operating and other data and information regarding
the Company as the Purchasers may request in good faith.
6.02 OPERATION OF BUSINESS. During the Pre-Closing Period, the
Company shall, and CIBER shall use its Best Efforts to cause the Company to:
(a) conduct its operations exclusively in the Ordinary Course
of Business and in the same manner as such operations have been conducted
prior to the date of this Agreement and as contemplated by the Business Plan;
(b) preserve intact its current business organization, keep
available the services of its current officers and employees and maintain its
relations and good will with all suppliers, customers, landlords, creditors,
licensors, licensees, employees and other Persons having material business
relationships with the Company;
(c) keep in full force all insurance policies identified in
Part 4.20(a) of the Disclosure Schedule;
(d) cause its officers to confer regularly with the Purchasers
concerning operational matters and otherwise report regularly to the
Purchasers concerning the status of the Company's business, condition,
assets, liabilities, operations, financial performance and prospects;
(e) promptly notify the Purchasers of any inquiry, proposal or
offer from any Person relating to any Acquisition Transaction;
33
(f) not declare, accrue, set aside or pay any dividend or make
any other distribution in respect of any shares of capital stock, and not
repurchase, redeem or otherwise reacquire any shares of capital stock or
other securities (except as expressly contemplated by this Agreement);
(g) not sell or otherwise issue any shares of capital stock or
any other securities other than pursuant to the exercise of options or
warrants outstanding as of the Closing Date or the granting of new options
under the Existing Plan;
(h) not amend its certificate of incorporation or bylaws
(except as expressly contemplated by Section 6.10 of this Agreement), and not
cause or become a party to any Acquisition Transaction, recapitalization,
reclassification of shares, stock split, reverse stock split or similar
transaction (other than in connection with the Transactions contemplated by
this Agreement and the Transaction Agreements);
(i) not form any subsidiary or acquire any equity interest or
other interest in any other Entity;
(j) not make any capital expenditure, except for capital
expenditures that are made in the Ordinary Course of Business and capital
expenditures with respect to the Data Center that are contemplated by the
project plan and budget set forth in Part 4.26 of the Disclosure Schedule,
and that, when added to all other capital expenditures made on behalf of the
Company during the Pre-Closing Period, do not exceed $50,000 in the aggregate;
(k) not enter into or permit any of the assets owned or used
by the Company to become bound by any Material Contract outside of the
Ordinary Course of Business, except for any Excluded Contract;
(l) not incur, assume or otherwise become subject to any
Liability, except for current Liabilities (of the type required to be
reflected in the "liabilities" column of a balance sheet prepared in
accordance with GAAP) incurred in the Ordinary Course of Business;
(m) not, without the Consent of the Purchasers, which Consent
shall not be unreasonably withheld or delayed, establish or adopt any
Employee Benefit Plan, and, except in the Ordinary Course of Business, not
pay any bonus or make any profit sharing or similar payment to, or increase
the amount of the wages, salary, commissions, fringe benefits or other
compensation or remuneration payable to, any of its directors, officers or
employees;
(n) not change any of its methods of accounting or accounting
practices in any material respect;
(o) not make any material Tax election;
(p) promptly notify the Purchaser following the commencement
of any Proceeding involving or in any way relating to the Company;
34
(q) not enter into any transaction or take any other action of
the type referred to in Section 4.22;
(r) not enter into any transaction or take any other action,
in each case, outside the Ordinary Course of Business;
(s) not enter into any transaction or take any other action
that might cause or constitute a Breach of any representation or warranty
made by the Company or CIBER in this Agreement; and
(t) not agree, commit or offer (in writing or otherwise), and
not attempt, to take any of the actions described in clauses "(f)" through
"(s)" of this Section 6.02.
6.03 FILINGS AND CONSENTS. During the Pre-Closing Period, each of
the parties hereto shall use their Best Efforts to cause:
(a) each filing or notice required to be made or given
(pursuant to any applicable Legal Requirement, Order or Material Contract, or
otherwise) by any such party in connection with the execution and delivery of
any of the Transaction Agreements or in connection with the consummation or
performance of any of the transactions contemplated herein (including the
Notification and Report Form under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act required to be
filed with the Federal Trade Commission and the Antitrust Division of the
United States Department of Justice, Form D pursuant to Regulation D under
the Securities Act and each of the filings and notices identified in Part
4.05(i) of the Disclosure Schedule) is made or given as soon as possible
after the date of this Agreement;
(b) a response to be delivered as promptly as practicable to
all inquiries received from the Federal Trade Commission and the Antitrust
Division for additional information or documentation in connection with the
filing made under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act;
(c) each Consent required to be obtained (pursuant to any
applicable Legal Requirement, Order or Material Contract, or otherwise) by
each such party in connection with the execution and delivery of any of the
Transaction Agreements or in connection with the consummation or performance
of any of the transactions contemplated herein (including each of the
Consents identified in Part 4.05(i) of the Disclosure Schedule) as soon as
possible after the date of this Agreement and to remain in full force and
effect through the Closing Date; PROVIDED, HOWEVER, that no party shall be
required to enter into any consent decrees or incur any material costs in
order to obtain any Consent;
(d) a copy of each filing made, each notice given and each
Consent obtained by such party during the Pre-Closing Period to promptly be
made available to the other parties; and
35
(e) their respective Representatives to cooperate with the
other parties and with such parties' respective Representatives, and prepare
and make available such documents and take such other actions as such other
parties may request in good faith, in connection with any filing, notice or
Consent that such other parties are required or elect to make, give or
obtain.
6.04 NOTIFICATION; UPDATES TO DISCLOSURE SCHEDULE.
(a) During the Pre-Closing Period, the Company and CIBER shall
promptly notify the Purchasers, and the Purchasers shall promptly notify the
Company and CIBER of:
(i) the discovery of any event, condition, fact or
circumstance that occurred or existed on or prior to the date of this
Agreement and that caused or constitutes a Breach of any representation
or warranty made by the Company or CIBER in this Agreement;
(ii) any event, condition, fact or circumstance that
occurs, arises or exists after the date of this Agreement and that comes
to the knowledge of the Company or CIBER, on the one hand, or the
Purchasers, on the other hand, and that would cause or constitute a
Breach of any representation or warranty made by the Company or CIBER
in this Agreement if (A) such representation or warranty had been made
as of the time of the occurrence, existence or discovery of such event,
condition, fact or circumstance, or (B) such event, condition, fact or
circumstance had occurred, arisen or existed on or prior to the date of
this Agreement;
(iii) any Breach of any covenant or obligation of the Company
or CIBER; and
(iv) any event, condition, fact or circumstance that may
make the timely satisfaction of any of the conditions set forth in
Article 7 impossible or unlikely.
(b) If any event, condition, fact or circumstance that is
required to be disclosed pursuant to Section 6.04(a) requires any change in
the Disclosure Schedule, or if any such event, condition, fact or
circumstance would require such a change assuming the Disclosure Schedule
were dated as of the date of the occurrence, existence or discovery of such
event, condition, fact or circumstance, then the Company and CIBER shall
promptly deliver to the Purchasers an update to the Disclosure Schedule
specifying such change. No such update shall be deemed to supplement or amend
the Disclosure Schedule for the purpose of (i) determining the accuracy of
any of the representations and warranties made by the Company or CIBER in
this Agreement, or (ii) determining whether any of the conditions set forth
in Article 7 has been satisfied; PROVIDED, HOWEVER, that they shall be deemed
to be an amendment to the Disclosure Schedule for purposes of Article 10
hereof. In addition, the Company and CIBER and their respective
representatives shall provide the Purchasers and their respective
representatives with
36
(i) any additional documents and information responsive to a request of the
Purchasers that become available subsequent to the Company's or CIBER's
response to such request and (ii) any documents or information that become
available that modify, update or supplement any documents or other
information already provided to the Purchasers (or any of them), in each case
as promptly as reasonably practicable after such additional information,
documents or materials become available.
6.05 PAYMENT OF INDEBTEDNESS BY RELATED PARTIES. Except with
respect to the CIBER Advance, the Company and CIBER shall cause all material
indebtedness and other Liabilities of each Related Party to the Company
(including any such indebtedness or other Liability identified in Part 4.21
of the Disclosure Schedule, but excluding travel advances to employees of the
Company in the Ordinary Course of Business) to be discharged and paid in full
prior to the Closing.
6.06 NO NEGOTIATION. The Company and CIBER shall ensure that,
during the Pre-Closing Period, none of the Company, CIBER or any of the
Company's or CIBER's Representatives directly or indirectly:
(a) solicits or encourages the initiation of any inquiry,
proposal or offer from any Person (other than the Purchasers and any
Additional Purchasers) relating to any Acquisition Transaction;
(b) participates in any discussions or negotiations with, or
provides any non-public information to, any Person (other than the Purchasers
and any Additional Purchasers) relating to any Acquisition Transaction; or
(c) considers the merits of any unsolicited inquiry, proposal
or offer from any Person (other than the Purchasers and any Additional
Purchasers) relating to any Acquisition Transaction.
6.07 BEST EFFORTS. During the Pre-Closing Period, the Company and
CIBER shall use their respective Best Efforts to cause the conditions set
forth in Article 7 to be satisfied on a timely basis, and shall not take any
action or omit to take any action, the taking or omission of which would
reasonably be expected to result in any of the representations and warranties
set forth in this Agreement becoming untrue, in any of the conditions of
Closing set forth in Article 7 not being satisfied or in the business of the
Company becoming materially less valuable.
6.08 CONFIDENTIALITY. The Company and CIBER shall ensure that,
during the Pre-Closing Period:
(a) the Company, CIBER and their respective Representatives
keep strictly confidential the existence and terms of this Agreement, except
as otherwise required by any applicable Legal Requirement or by the terms of
this Agreement;
(b) none of the Company, CIBER or any of their respective
Representatives issues or disseminates any press release or other publicity
or otherwise makes any disclosure of any nature (to any of the Company's
suppliers, customers,
37
landlords, creditors or employees or to any other Person) regarding any of
the transactions contemplated herein, except to the extent that the Company
or CIBER is required by law to make any such disclosure regarding the
transactions contemplated herein; and
(c) if the Company is required by law to make any disclosure
regarding the transactions contemplated herein, the Company advises the
Purchasers, at least five business days (to the extent practicable) before
making such disclosure, of the nature and content of the intended disclosure.
6.09 STOCK OPTION PLAN. The Company and CIBER shall ensure that
prior to the Closing:
(a) the Company takes all necessary and appropriate steps to
amend the Existing Plan to be substantially in the form attached hereto as
EXHIBIT E.
(b) the Company takes all necessary and appropriate steps to
assure that all outstanding options under the Existing Plan have been issued
in compliance with applicable Legal Requirements and to take and complete all
appropriate corrective measures to the satisfaction of Purchasers with
respect to any options that have not been issued in compliance therewith; and
(c) the Company shall not grant any options (or commit to
grant any options) to purchase shares in the Company except under the
Existing Plan, it being understood that such options shall be granted or
committed solely (i) in connection with recruitment of new employees to the
Company and (ii) if such options have an exercise price at least equal to the
fair market value of each share of the Common Stock for which such options
are exercisable as of the date of the grant.
6.10 APPROVAL OF CERTIFICATE OF DESIGNATION; AUTHORIZATION OF
SHARES. The Company and CIBER shall ensure that during the Pre-Closing Period:
(a) the Company approves or adopts, as applicable, by all
necessary further action of its board of directors and stockholders, the
Certificate of Designation in the form attached hereto as EXHIBIT B, and
CIBER and its transferees, if applicable, shall vote their shares and execute
and deliver or cause to be executed and delivered any instruments,
certificates, actions by written consent of stockholders or other documents
or take such other actions (or refrain from taking such actions) as may
reasonably be required for the purposes of approving the adoption of the
Certificate of Designation;
(b) the Company authorizes, by all necessary further action of
its board of directors and stockholders, the sale and issuance to the
Purchasers of the Shares and the issuance and reservation of the Conversion
Shares to be issued upon conversion of the Shares; and
(c) the Shares and the Conversion Shares authorized by the
Company's board of directors and stockholders have the rights, preferences,
privileges and restrictions set forth in the Certificate of Designation.
38
6.11 AFFILIATED ASSETS. The Affiliated Assets shall either (a) be
assigned to the Company or (b) the Company shall obtain rights from the
applicable Affiliate sufficient to allow the Company to enjoy full use the
Affiliated Assets for the conduct of its business and the provision of its
services, which rights shall be satisfactory to the Purchasers in their sole
discretion; PROVIDED, HOWEVER, that the Transition Services Agreement shall
be deemed satisfactory to the Purchasers with respect to the services or
rights described therein.
7. CONDITIONS PRECEDENT TO PURCHASERS' OBLIGATIONS
The obligation of each Purchaser to purchase and pay for the Shares
to be delivered to it at the Closing shall be subject to the satisfaction (or
waiver by each such Purchaser) of the following conditions as of the Closing
Date:
7.01 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date.
7.02 EXECUTION OF AGREEMENTS. Concurrent with the Closing, (a) the
Company, the Purchasers and the existing stockholders of the Company shall
have executed and delivered the Stockholders Agreement; (b) Verio and the
Company shall have executed and delivered the Platform Services Agreement;
(c) Verio and the Company shall have executed and delivered the Adjunct
Services Agreement; (d) CIBER and the Company shall have executed and
delivered the Transition Services Agreement; and (e) CIBER and the Company
shall have executed and delivered the Alliance Agreement.
7.03 CERTIFICATE OF DESIGNATION. Prior to or concurrent with the
Closing, the Company shall have filed the Certificate of Designation in the
form attached hereto as EXHIBIT B with the Secretary of State of the State of
Delaware and shall have delivered a certified copy of such Certificate of
Designation to the Purchasers.
7.04 BUSINESS PLAN. CIBER and the Purchasers shall have prepared
and each shall have approved (a) a strategic business plan of the Company
(including a specification of the scope of the Company's business activities)
and (b) an operating budget for the Company for 2000 and 2001
7.05 CONSENTS, PERMITS, WAIVERS AND APPROVALS. The applicable
waiting period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act relating to the transactions
contemplated hereby shall have expired and the Company and the Purchasers
shall have received any and all other Consents necessary for and material to
the consummation of the transactions contemplated hereunder. In addition, any
Consents required for the transactions contemplated hereunder under the
Transaction Agreements and under any other Company Contracts shall have been
obtained.
7.06 RESERVATION OF CONVERSION SHARES. The Company shall have duly
authorized and reserved sufficient shares of Common Stock for issuance of the
Conversion Shares.
39
7.07 CORPORATE DOCUMENTS. The Company shall have delivered to the
Purchasers or their respective counsel, copies of all corporate documents of
the Company as the Purchasers shall reasonably request.
7.08 COMPLIANCE CERTIFICATE. The Company and CIBER each shall have
delivered to the Purchasers a certificate, executed by the Presidents of
CIBER and the Company, respectively, dated as of the Closing Date and
certifying that (a) each of the representations and warranties made by the
Company and CIBER, as the case may be, in this Agreement is accurate in all
material respects as of the Closing Date and (b) each of the conditions set
forth in this Article 7 has been satisfied in all respects.
7.09 DELIVERY OF LEGAL OPINION. The Purchasers shall have received
the legal opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel to the Company,
and the legal opinion of ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, counsel to CIBER, in
the form reasonably agreed by the Purchasers and the Company or CIBER, as the
case may be.
7.10 CERTIFICATION OF SECURITIES HOLDINGS. The Company shall have
provided to Centennial a certification of the direct and indirect holdings of
securities of the Company by certain persons designated by Centennial as
required by Centennial's governing documents.
7.11 NON-DISCLOSURE AND INVENTION ASSIGNMENT AGREEMENTS. All of the
employees and all of the officers of the Company and all consultants to the
Company under contract with the Company as of the Closing Date shall have
executed a Confidentiality, Anti-Solicitation And Invention Assignment
Agreement substantially in the form attached hereto as EXHIBIT D or in such
other form reasonably acceptable to the Purchasers.
7.12 AFFILIATED ASSETS. The Affiliated Assets shall either (a) be
assigned to the Company or (b) the Company shall obtain rights from the
applicable Affiliate sufficient to allow the Company to enjoy full use the
Affiliated Assets for the conduct of its business and the provision of its
services, which rights shall be satisfactory to the Purchasers in their sole
discretion; PROVIDED, HOWEVER, that the Alliance Agreement and the Transition
Services Agreement shall be deemed satisfactory to the Purchasers with
respect to the services or rights described thereunder.
7.13 AMENDMENT TO EXISTING PLAN. The Existing Plan shall have been
amended as contemplated in Section 6.09.
7.14 QUALIFICATION TO CONDUCT BUSINESS. The Company shall have
filed all required documents with the relevant Governmental Bodies to be
qualified to conduct business in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties requires such
qualifications.
7.15 EMPLOYMENT AGREEMENTS. The employment agreements between each
of ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ and ▇▇▇ ▇▇▇▇, respectively, and CIBER (in the case of
▇▇. ▇▇▇▇▇) and The Summit Group, Inc. (in the case of ▇▇. ▇▇▇▇ and ▇▇. ▇▇▇▇)
shall either: (a) be assigned to the Company or (b) be replaced by new
employment agreements between the
40
Company and each such employee, the terms of which employment agreements
shall be reasonably acceptable to the Purchasers.
7.16 INSURANCE. The Company shall procure insurance coverage
consistent with its current level of insurance coverage and provide the
Purchasers with evidence thereof, which insurance policies shall be
reasonably acceptable to the Purchasers.
7.17 COMPANY BENEFITS PLANS. The Company shall obtain its own
employee benefits plans sufficient to provide its employees with the current
level of benefits coverage, which employee benefits plans shall be reasonably
acceptable to the Purchasers.
7.18 PIPELINE REPORT. The Company shall have provided to the
Purchasers a revised pipeline report, updated to no earlier than one week
prior to the Closing Date, which report shall be in the form set forth in
Section 4.14(a).
8. CONDITIONS PRECEDENT TO THE COMPANY'S AND CIBER'S
OBLIGATIONS
The obligation of the Company and CIBER to complete the transactions
contemplated hereby shall be subject to the satisfaction (or waiver by each
of the Company and CIBER) of the following conditions as of the Closing Date:
8.01 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Purchasers contained in this Agreement shall be true and
correct on and as of the Closing Date.
8.02 EXECUTION OF AGREEMENTS. Prior to or concurrent with the
Closing, (a) the Company, the Purchasers and the existing stockholders of the
Company shall have executed and delivered the Stockholders Agreement; (b)
Verio and the Company shall have executed and delivered the Platform Services
Agreement; (c) Verio and the Company shall have executed and delivered the
Adjunct Services Agreement; (d) CIBER and the Company shall have executed and
delivered the Alliance Agreement; and (e) CIBER and the Company shall have
executed and delivered the Transition Services Agreement.
8.03 BUSINESS PLAN. CIBER and the Purchasers shall have prepared
and each shall have approved (a) a strategic business plan of the Company
(including a specification of the scope of the Company's business activities)
and (b) an operating budget for the Company for 2000 and 2001.
8.04 CONSENTS, PERMITS, WAIVERS AND APPROVALS. The applicable
waiting period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act relating to the transactions
contemplated hereby shall have expired and the Company and the Purchasers
shall have received any and all other Consents necessary for the consummation
of the transactions contemplated hereunder, including, but not limited to,
approval by each of CIBER's and Verio's respective boards of directors and
Centennial's investment committee. In addition, any Consents required for the
transactions contemplated hereunder under any Company Contracts shall have
been obtained.
41
8.05 COMPLIANCE CERTIFICATE. The Purchasers each shall have
delivered to the Company and CIBER a certificate, executed by their
respective officers, dated as of the Closing Date setting forth the
representations and warranties of the Purchasers and certifying that (a) each
of the representations and warranties made by the Purchasers in this
Agreement is accurate as of the Closing Date and (b) each of the conditions
set forth in this Article 8 has been satisfied in all respects.
9. EXPENSE REIMBURSEMENT
The Company hereby agrees to reimburse each Purchaser for its
out-of-pocket expenses incurred in connection with the transactions
contemplated hereby, including all expenses incurred in connection with its
due diligence examination of the Company, the advisory fees of Lazard Freres,
the preparation and negotiation of this Agreement, the Stockholders Agreement
and all other documents evidencing the transactions contemplated herein
(including the reasonable fees and expenses of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, as
legal counsel representing Verio, and Holland & ▇▇▇▇ LLP, as legal counsel
representing Centennial) and in connection with the enforcement of rights and
remedies of the Purchasers hereunder and under the Stockholders Agreement and
all other documents evidencing the transactions contemplated herein;
PROVIDED, HOWEVER, that each of Verio and CIBER shall pay all of the fees and
expenses of their own legal counsel in respect of the Platform Services
Agreement, the Adjunct Services Agreement, the Alliance Agreement and the
Transition Services Agreement.
10. INDEMNIFICATION, ETC.
10.01 SURVIVAL OF REPRESENTATIONS AND COVENANTS.
(a) To the extent provided in this Section 10.01(a), the
representations, warranties, covenants and obligations of each party shall
survive the Closing, any subsequent sale or other disposition of any or all
of the Shares and any subsequent Acquisition Transaction effected by or
otherwise involving the Purchasers, CIBER or the Company, but only for the
purpose of being true and correct in all material respects as of the Closing
(other than those covenants which by their specific terms require performance
after the Closing). Any representation the Breach of which the Company or
CIBER had Knowledge (as defined under subpoint (a) of the definition of
Knowledge) on or prior to the Closing (a "KNOWING BREACH") and any covenants
or obligations to be performed after the Closing shall survive and continue
for the applicable statute of limitation period or periods legally applicable
to them. The survival of the other representations, warranties (as well as
the covenants and obligations to be performed prior to the Closing Date) of
the parties shall terminate, and be deemed to have been satisfied and
discharged in full, on the earlier of (i) the first anniversary of the
Closing Date and (ii) the consummation of the Initial Public Offering.
(b) For purposes of this Agreement, each statement or other
item of information set forth in the Disclosure Schedule shall be deemed to
be part of the representations and warranties made by the Company and CIBER
in this Agreement.
42
10.02 INDEMNIFICATION BY THE COMPANY AND CIBER.
(a) The Company and CIBER shall, subject to Section 10.02(d)
jointly and severally, indemnify, defend and hold harmless the Purchasers
(collectively, the "INDEMNITEES" and individually each an "INDEMNITEE") from
and against, and shall compensate and reimburse each of the Indemnitees for,
any Damages (and in the case of any Breach of the representations and
warranties set forth in Sections 4.13(a), 4.14(a) and (b), 4.15(a) and (b),
4.21 and 4.22(o) (collectively, the "SPECIFIED REPRESENTATIONS"), Special
Damages) which are suffered or incurred by any of the Indemnitees or to which
any of the Indemnitees may otherwise become subject at any time (regardless
of whether such Damages (or Special Damages, as applicable) relate to any
third party claim) and which arise from or as a direct or indirect result of,
or are directly or indirectly connected with:
(i) any Breach of any representation or warranty made by
the Company or CIBER in this Agreement;
(ii) any Breach of any covenant or obligation of the
Company or CIBER; or
(iii) any Proceeding relating to any Breach of the type
referred to in any of the clauses listed above (including any
Proceeding commenced by any Indemnitee for the purpose of enforcing any
of its rights under this Article 10).
(b) CIBER acknowledges and agrees that, if there is any
Breach of any Specified Representation, then the Purchasers themselves shall
be deemed, by virtue of their ownership of Shares, to have incurred such
Special Damages as a result of such Breach or Liability to the extent of
their equity investment in the Company. The Company and CIBER acknowledge and
agree that in computing the amount of any Special Damages to be awarded or
indemnified hereunder, (i) the value that the Purchasers placed on the
Company was based primarily on their assessment of the Company's future
prospects and business opportunities, rather on its current asset value or
net worth and (ii) the Company's payment of a claim for Damages or Special
Damages will not give rise to a separate or additional claim hereunder.
(c) The indemnification provided herein constitutes the sole
and exclusive remedy of the Purchasers in connection with Damages or Special
Damages suffered in connection with the events specified in Sections
10.02(a)(i), (ii) and (iii).
(d) CIBER waives, acknowledges and agrees that it shall not
have and shall not exercise or assert or attempt to exercise or assert, any
right of contribution or right of indemnity or any other right or remedy
against the Company in connection with any indemnification obligation.
(e) Notwithstanding the other provisions of this Section
10.02, in no event shall the Company or CIBER be required to indemnify the
Purchasers for Damages or Special Damages until the aggregate amount of such
Damages or Special Damages
43
sustained by the Purchasers collectively exceeds $4.5 million. Once such
threshold has been met, CIBER and the Company shall indemnify the Purchasers
pursuant to this Section 10.02 for the entire amount of such Damages or
Special Damages incurred, subject to the provisions of Section 10.02(f).
(f) In no event, except with respect to a Knowing Breach, in
which case there shall be no limit on the amount of indemnification, shall
the Company be obligated to indemnify the Purchasers (or any one of them)
hereunder in an aggregate amount exceeding the aggregate purchase price paid
by the Purchasers and any Additional Purchasers (or any one of them) for the
Shares. In no event shall CIBER be obligated to indemnify the Purchasers
hereunder in an aggregate amount exceeding the CIBER Advance (other than in
the event of a breach by CIBER of its representation in the final paragraph
of Section 4.05 that results in the required return of the purchase price
paid by the Purchasers and any Additional Purchaser; PROVIDED, HOWEVER, that
any indemnifying party shall bear the reasonable costs of the Indemnitees
with respect to any valid claim for indemnification hereunder and any
Indemnitee shall bear its own enforcement costs and any reasonable costs
incurred by the indemnifying party in connection with an indemnification
claim ultimately determined to be invalid.
(g) In the case of Damages incurred by the Purchasers in
connection with a Breach by the Company or CIBER of any representation,
warranty or covenant hereunder other than any Breach of the Specified
Representations (and other than a breach by CIBER of its representation in
the final paragraph of Section 4.05 that results in the required return of
the purchase price paid by the Purchasers and any Additional Purchaser), the
Company and CIBER shall be deemed to have fulfilled their indemnification
obligations hereunder if CIBER remits the total amount of such
indemnification obligation to the Company, rather than to the Purchasers as
otherwise required herein; PROVIDED, HOWEVER, that any Damages or Special
Damages incurred as a result of a Breach of the Specified Representations or
of CIBER's representation contained in the final paragraph of Section 4.05
that results in the required return of the purchase price paid by the
Purchasers and any Additional Purchaser shall be made to the Purchasers pro
rata to their ownership of the Shares (determined as of the Closing Date) and
any required reimbursement of enforcement costs pursuant to this Section
10.02(g) shall be made directly to the Indemnitee that incurred such costs.
(h) No party shall have any liability hereunder until the
amount of Damages or Special Damages at issue has been (i) finally determined
by a court of competent jurisdiction or (ii) agreed to by CIBER and the
Company.
11. TERMINATION
11.01 RIGHTS TO TERMINATE. This Agreement may be terminated prior
to the Closing as follows:
(a) MUTUAL CONSENT. Upon the mutual written consent of
CIBER and the Purchasers.
44
(b) LITIGATION. By CIBER or the Purchasers if an injunction
or other order shall have been issued by a Governmental Body, that restrains
or otherwise makes unlawful the consummation of the transactions contemplated
by this Agreement and such injunction or other order shall have become final
and non-appealable; PROVIDED, however, that no party shall be entitled to
terminate this Agreement in reliance of this Section 11.1(b) if such
injunction or order shall have resulted from a Breach by such party of this
Agreement.
(c) CONDITIONS TO BUYER'S OBLIGATIONS NOT MET. By the
Purchasers if any of the conditions provided in Article 7 shall not have been
satisfied, complied with or performed, in any material respect, on or before
March 31, 2000, and the Purchasers have not waived such failure of
satisfaction, noncompliance or nonperformance; PROVIDED, HOWEVER that the
Purchasers shall not be entitled to terminate this Agreement in reliance on
this Section 11.1(c) if such failure of such conditions to be satisfied,
complied with or performed shall have resulted from a Breach of this
Agreement by the Purchasers.
(d) CONDITIONS TO CIBER'S AND THE COMPANY'S OBLIGATIONS NOT
MET. By CIBER, if the Closing has not occurred on or before March 31, 2000;
PROVIDED, HOWEVER that CIBER shall not be entitled to terminate this
Agreement in reliance on this Section 11.1(d) if such failure of such
conditions to be satisfied, complied with or performed shall have resulted
from a Breach of this Agreement by CIBER or the Company or the failure of
CIBER or the Company to obtain a required Consent.
11.02 EFFECT OF TERMINATION. In the event of termination of this
Agreement, this Agreement and the proposed transactions contemplated
hereunder shall terminate and each party hereto shall have no further
obligation or liability hereunder, except that the provisions of Article 10,
shall survive such termination.
12. MISCELLANEOUS
12.01 GOVERNING LAW.
(a) This Agreement shall be governed in all respects by the
laws of the State of Colorado, except that the General Corporation Law of the
State of Delaware shall govern as to matters of corporate law.
(b) Any legal action or other legal proceeding relating to
this Agreement or the enforcement of any provision of this Agreement may be
brought or otherwise commenced in any state or federal court located in the
City and County of Denver, Colorado. Each party to this Agreement:
(i) expressly and irrevocably consents and submits
to the jurisdiction of each state and federal court located in the
County of Denver, Colorado (and each appellate court located in the
State of Colorado) in connection with any such legal proceeding,
including to enforce any settlement, order or award;
45
(ii) agrees that each state and federal court
located in the City and County of Denver, Colorado shall be deemed
to be a convenient forum; and
(iii) waives and agrees not to assert (by way of motion,
as a defense or otherwise), in any such legal proceeding commenced in
any state or federal court located in the City and County of Denver,
Colorado, any claim that such party is not subject personally to the
jurisdiction of such court, that such legal proceeding has been brought
in an inconvenient forum, that the venue of such proceeding is improper
or that this Agreement or the subject matter of this Agreement may not
be enforced in or by such court.
(c) Each party hereto agrees to the entry of an Order to
enforce any resolution, settlement, Order or award made pursuant to this
Section by the state and federal courts located in the County of Denver,
Colorado and in connection therewith hereby waives, and agrees not to assert
by way of motion, as a defense, or otherwise, any claim that such resolution,
settlement, order or award is inconsistent with or violative of the laws or
public policy of the laws of the State of Colorado or any other jurisdiction.
(d) Each party to this Agreement hereby knowingly,
voluntarily, and intentionally waives the right to a trial by jury in respect
of any litigation arising out of, under or in connection with this Agreement,
this waiver being a material inducement for each such party to enter into
this Agreement.
12.02 SURVIVAL. Subject to Section 10.01, the representations,
warranties, covenants and agreements made herein shall survive any
investigation made by any Purchaser and the closing of the transactions
contemplated hereby. All statements as to factual matters contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant hereto in connection with the transactions contemplated hereby shall
be deemed to be representations and warranties by the Company and CIBER
hereunder solely as of the date of such certificate or instrument.
12.03 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto and shall inure to the benefit of and be enforceable by
each Person who shall be a holder of the Shares from time to time.
12.04 ENTIRE AGREEMENT. This Agreement, the Exhibits, the
Schedules and the other documents expressly delivered pursuant hereto,
including the Stockholders Agreement, supersede any other agreement, whether
written or oral, that may have been made or entered into by the parties
hereto relating to the matters contemplated hereby and constitute the full
and entire understanding and agreement between the parties with regard to the
subjects hereof, and no party shall be liable or bound to any other in any
manner by any representations, warranties, covenants and agreements except as
specifically set forth herein and therein.
46
12.05 SPECIFIC ENFORCEMENT. Any Purchaser shall be entitled to
specific enforcement of its rights under this Agreement. The Company and
CIBER acknowledge that money damages would be an inadequate remedy for its
Breach of this Agreement and Consent to an action for specific performance or
other injunctive relief in the event of any such Breach.
12.06 SEVERABILITY. In case any provision of this Agreement shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
12.07 AMENDMENT AND WAIVER. This Agreement may be amended or
modified only upon the mutual written Consent of (a) the Company, (b) CIBER
and (c) the holders of at least 70% of the Shares.
12.08 NOTICES. All notices required or permitted hereunder shall
be in writing and shall be deemed effectively given: (a) upon personal
delivery to the party to be notified; (b) when sent by confirmed telex or
facsimile if sent during normal business hours of the recipient, if not, then
on the next business day; (c) five days after having been sent by registered
or certified mail, return receipt requested, postage prepaid; or (d) two days
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall
be sent to the parties hereto at the respective addresses set forth below, or
as notified by such party from time to time at least 10 days prior to the
effectiveness of such notice:
if to Verio: Verio, LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY TO: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to Centennial: Centennial Fund VI, L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
47
WITH A COPY TO: Holland & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Company: ▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY TO: ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to CIBER: CIBER, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY TO: ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
12.09 COUNTERPARTS; FACSIMILE. This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of
which together shall constitute one instrument. This Agreement (or any
counterpart hereof) may be delivered by a party by facsimile, which facsimile
delivery shall be effective as if the original counterpart had been delivered.
12.10 FUTURE FINANCINGS. Nothing contained in this Agreement or
any Purchaser's prior dealings with the Company shall be deemed to constitute
a commitment on the part of any Purchaser to participate in any future
financings by the Company.
12.11 EXCULPATION AMONG PURCHASERS. Each Purchaser acknowledges
that it is not relying upon any Person, other than the Company and CIBER and
their respective officers and directors, in making its investment or decision
to invest in the Company. Each Purchaser agrees that no Purchaser nor the
respective controlling Persons, officers, directors, partners, agents, or
employees of any Purchaser, shall be liable for any action
48
heretofore or hereafter taken or omitted to be taken by any of them in
connection with the Shares and the transactions contemplated herein.
12.12 PRESS RELEASES AND ANNOUNCEMENTS. All press releases and
announcements concerning the transactions contemplated by this Agreement and
the other Transaction Agreements shall be mutually agreed to by the Company,
CIBER and each of the Purchasers, except for any such disclosure required by
law which, in the case of such disclosure by the Company, shall, to the
extent practicable under the circumstances, be first discussed with the
Purchasers and, in the case of such disclosure by the Purchasers, shall, to
the extent practicable under the circumstances, be first discussed with the
Company and CIBER.
12.13 INTERPRETATION.
(a) The various section headings are inserted for purposes
of reference only and shall not affect the meaning or interpretation of this
Agreement or any provision hereof.
(b) Each party hereto acknowledges that it has been
represented by competent counsel and participated in the drafting of this
Agreement and the other Transaction Agreements, and agrees that any
applicable rule of construction to the effect that ambiguities are to be
resolved against the drafting party shall not be applied in connection with
the construction or interpretation of this Agreement and the other
Transaction Agreements.
(c) When a reference is made in this Agreement or any other
Transactional Agreement to a section, Exhibit or Schedule, such reference
shall be to a Section of, Exhibit to or Schedule to this Agreement or such
other Transaction Agreement, unless otherwise indicated.
(d) References in this Agreement to a particular gender
shall include the other gender or the neuter.
12.14 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors
and assigns and are not for the benefit of, nor may any provision hereof be
enforced by, any other Person.
49
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth in the first paragraph hereof.
COMPANY:
▇▇▇▇▇▇▇.▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Title: President
--------------------------------------
CIBER:
CIBER, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Title: CFO/EVP
--------------------------------------
PURCHASERS:
VERIO, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
Title: Manager
--------------------------------------
CENTENNIAL FUND VI, L.P.
By: Centennial Holdings VI, LLC
Its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Managing Principal
50
CENTENNIAL ENTREPRENEURS FUND VI, L.P.
By: Centennial Holdings VI, LLC,
Its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Managing Principal
CENTENNIAL STRATEGIC PARTNERS VI, L.P.
By: CSP VI Management, LLC
Its General Partner
By: Centennial Holdings VI, LLC
Its Managing Member
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its Managing Principal
CENTENNIAL HOLDINGS I, LLC
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its President and Managing Member
51