EXHIBIT 10.12
DATED
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(1) ▇▇▇▇▇▇▇ (BERKELEY) LIMITED
(2) ▇▇▇▇▇▇▇ (BERKELEY) NOMINEE 1 LIMITED AND
▇▇▇▇▇▇▇ (BERKELEY) NOMINEE 2 LIMITED
(3) SCIENT CORPORATION
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DEED OF RELEASE OF
LEASING AGREEMENT DATED 23 MAY 2000
AND ANCILLARY DOCUMENTS AND
LETTERS OF CREDIT
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(ALTHEIMER & ▇▇▇▇ LOGO)
SOLICITORS & U.S. LAWYERS
▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Tel: ▇▇▇ (▇)▇▇ ▇▇▇▇ ▇▇▇▇
Fax: ▇▇▇ (▇)▇▇ ▇▇▇▇ ▇▇▇▇
THIS DEED OF RELEASE is made the day of 2002
BETWEEN
1 ▇▇▇▇▇▇▇ (BERKELEY) LIMITED (Company Registration number 3794879) whose
registered office is at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ("▇▇▇▇▇▇▇
Berkeley");
2 ▇▇▇▇▇▇▇ (BERKELEY) NOMINEE 1 LIMITED (Company Registration No 4219996)
and ▇▇▇▇▇▇▇ (BERKELEY) NOMINEE 2 LIMITED (Company Registration No
4220078) whose registered offices are at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
("▇▇▇ Landlord"); and
3 SCIENT CORPORATION whose principal office is situate at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of
America ( "Scient Corp").
WHEREAS
(A) This Deed is supplemental to the Leasing Agreement whereby, inter
alia, ▇▇▇▇▇▇▇ Berkeley agreed to grant and Scient Corp agreed to
accept leases of the Premises and both parties entered into various
other obligations.
(B) The property known as ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ (including the
Premises) was transferred by ▇▇▇▇▇▇▇ Berkeley to the Landlord on 19
June 2001 and is held by the Landlord on trust for ▇▇▇▇▇▇▇ Berkeley.
(C) In consideration of the Termination Premium the Landlord, ▇▇▇▇▇▇▇
Berkeley and Scient Corp have agreed to release all of the provisions
of the Leasing Agreement and to procure the cancellation of the
Letters of Credit and the Supplemental Deeds upon the terms and
conditions hereinafter contained
NOW THIS DEED WITNESSES as follows:-
1. DEFINITIONS
In this Deed:
1.1 "APPLICATION" has the meaning given thereto in Clause 11 of this Deed;
1.2 "FURNITURE" means the furniture now situate at the Third Floor
Premises
1.3 "LANDLORD'S SOLICITORS" means ▇▇▇▇▇▇▇▇ Chance Limited Liability
Company of ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (reference:
RMK/CXJM).
1.4 "LEASING AGREEMENT" means the Leasing Agreement dated 23rd May 2000
between (1) ▇▇▇▇▇▇▇ Berkeley Limited (2) Scient Corporation and (3)
▇▇▇▇▇▇▇ Group Plc the Supplemental Deeds and all other deeds and
documents supplemental to the Leasing Agreement (excluding this Deed).
1.5 "LETTERS OF CREDIT" means the letters of credit [issued by ▇▇▇▇▇ Fargo
Bank, N.A. and confirmed by HSBC Bank Plc and numbered NZS 408451
(formerly S751101), NZS 408477 (formerly S751102) and NZS 408488
(formerly S751103) together with all amendments thereto].
1.6 "PREMISES" means the aggregate of the First Floor Premises, the Second
Floor Premises and the Third Floor Premises as defined in the Leasing
Agreement.
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1.7 "SCIENT CORP GROUP" means Scient Corp and subsidiaries and subsidiary
undertakings of from time to time of Scient Corp and any holding
company and parent undertakings from time to time of Scient Corp and
any subsidiaries and subsidiary undertakings of such holding companies
or parent undertakings.
1.8 "SUPPLEMENTAL DEEDS" means three supplemental deeds each dated 23rd
May 2000 between (1) ▇▇▇▇▇▇▇ Berkeley Limited and (2) Scient
Corporation relating to the provision of security for the proposed
leases of the Premises.
1.9 "TENANT'S SOLICITORS" means Altheimer & ▇▇▇▇, ▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ (reference: MH).
1.10 "TERMINATION PREMIUM" means (pound)4,400,000.
1.11 "WORKING DAY" means any day (other than a Saturday and Sunday) on
which clearing banks in the City of London are open to the public for
the transaction of business.
2. INTERPRETATION
2.1 The headings used in this Agreement do not affect its construction.
2.2 In this Deed unless the context otherwise requires:-
2.2.1 any obligation by a party comprising more than one person is
joint and several;
2.2.2 any word importing an individual includes a company and vice
versa;
2.3 References in this Deed to any person shall (where appropriate and
unless the context otherwise requires) be deemed at any time when that
person is treated as a member of a group for the purposes of sections
43 to 43C of the Value Added Tax ▇▇▇ ▇▇▇▇ to include a reference to
the representative member of such group.
2.4 At any time when any party to this Deed is a trustee of a trust
relating to the Premises, then in relation to transactions entered
into by such person in connection with the Premises which fall to be
treated in accordance with paragraph 8 of Schedule 10 to the Value
Added Tax ▇▇▇ ▇▇▇▇, references in this Deed to such person shall
(where appropriate and unless the context otherwise requires) be
construed, where such references occur in the context of VAT, as
references to any beneficiary under such trust.
3. RELEASE
3.1 In consideration of the payment of the Termination Premium paid or to
be paid at the direction of the Landlord and ▇▇▇▇▇▇▇ Berkeley by
Scient Corp to ▇▇▇▇▇▇▇ Berkeley (the receipt of (pound)4,400,000 of
which is hereby acknowledged), the Landlord and ▇▇▇▇▇▇▇ Berkeley each
with full title guarantee release Scient Corp from all their
obligations contained in and all liabilities whatsoever under the
Leasing Agreement or otherwise in respect of the Premises or any part
thereof whether past present or future including for the avoidance of
doubt all actions, costs, claims, demands and liabilities in respect
of any outstanding breaches of such obligations and liabilities.
3.2 Scient Corp releases the Landlord, ▇▇▇▇▇▇▇ Berkeley and ▇▇▇▇▇▇▇ Group
plc from all their obligations contained in the Leasing Agreement
including for the avoidance of doubt all actions, costs, claims,
demands and liabilities in respect of any outstanding breaches of
their respective obligations contained in these documents.
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4. CONSEQUENCES OF RELEASE
The Leasing Agreement is hereby terminated and each party's rights and
obligations under the Leasing Agreement, the Supplemental Deeds and
all documents supplemental to each of them (including without
limitation the obligations to grant and take leases of the Premises)
cease immediately and each party will have no further liability and no
liability in respect of any antecedent breach or claim.
5. Notwithstanding the termination of the Leasing Agreement and the
Supplemental Deeds all the provisions of this Agreement shall continue
in full force and effect to the extent of anything that remains to be
performed or observed hereunder
6. LETTERS OF CREDIT
▇▇▇▇▇▇▇ Berkeley shall execute all necessary documents and take all
necessary actions to procure that each of the Letters of Credit are
released and cancelled with immediate effect. ▇▇▇▇▇▇▇ Berkeley
warrants that it is solely and beneficially entitled to the whole
benefit of the Letters of Credit and each of them, that it has not and
shall not assign the benefit of charge or otherwise deal in any way
with any of the Letters of Credit.
7. OVERPAID RENT
On the date that the sum of (pound)4,400,000 in respect of the
Termination Premium is paid, the Landlord shall refund any rents
service charge and insurance rent and VAT thereon paid by Scient Corp
in respect of the period after that date.
8. CONTRACT (RIGHTS OF THIRD PARTIES) ▇▇▇ ▇▇▇▇
Nothing in this Deed confers or purports to confer on any third party
any benefit or any right to enforce any term of the Deed pursuant to
the Contract (Rights of Third Parties) ▇▇▇ ▇▇▇▇.
9. JURISDICTION
The provisions of this Deed shall be subject to English Law.
10. FURNITURE
10.1 The Furniture shall be removed by Scient Corp within 25 days of the
date on which this Deed becomes unconditional .
11. VAT
11.1 Subject to the provisions of this clause 11, the Termination Premium
shall be deemed to be exclusive of any VAT chargeable on any supply or
supplies for which it is (the whole or part of) the consideration for
VAT purposes ("the ▇▇▇▇▇▇▇ Supply").
11.2 Scient Corp shall pay ▇▇▇▇▇▇▇ Berkeley as additional consideration for
the ▇▇▇▇▇▇▇ Supply an amount equal to the VAT chargeable on the
▇▇▇▇▇▇▇ Supply, such payment to be made in accordance with this clause
11 and only to the extent that Scient Corp receives payment from HM
Customs & Excise in respect of such VAT pursuant to the Application.
11.3 Subject to sub-clauses 11.4 and 11.6 of this Deed, at ▇▇▇▇▇▇▇
Berkeley's request received within one year of the date of this Deed,
Scient Corp shall make an application to HM Customs & Excise to obtain
repayment under Part XXI of the Value Added Tax Regulations 1995 from
HM Customs & Excise in respect of any VAT chargeable on the ▇▇▇▇▇▇▇
Supply ("the Application").
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11.4 Scient Corp:
11.4.1 subject to the terms of this clause 11, shall pursue the
Application with reasonable diligence and care;
11.4.2 shall not be obliged to take any action under this clause 11:
(a) which in its reasonable opinion:
(i) would be illegal or would constitute a
material misrepresentation or negligence,
recklessness or fraud; or
(ii) would involve formally appealing against
any decision of HM Customs & Excise to the
Application;
(b) once HM Customs & Excise have determined in writing
that in their view the consideration from ▇▇▇▇▇▇▇
Berkeley to Scient Corp for the Termination Payment
falls outside the scope of VAT;
11.4.3 shall keep ▇▇▇▇▇▇▇ Berkeley informed of all material matters
relating to the Application and provide ▇▇▇▇▇▇▇ Berkeley with
copies of all material correspondence sent and received in
respect thereof;
11.4.4 shall provide ▇▇▇▇▇▇▇ Berkeley with copies of all material
correspondence relating to the Application which it intends
to submit to HM Customs & Excise and give consideration to
any comments which ▇▇▇▇▇▇▇ Berkeley may have in respect of
the same provided ▇▇▇▇▇▇▇ Berkeley has sent its comments to
Scient Corp in writing within a reasonable time before the
time at which Scient Corp is to or is required to submit the
relevant correspondence to HM Customs & Excise;
11.5 If Scient Corp receives any repayment of VAT pursuant to the
Application, it shall pay the amount it receives to ▇▇▇▇▇▇▇ Berkeley
within 10 Business Days of receipt.
11.6 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall provide all such information which is in its
possession or control and shall procure the provision of all such
information which is in the possession or control of any person
connected with it which Scient Corp requests in writing and which is
reasonably necessary for Scient Corp to discharge its obligations
under this clause 11.
IN WITNESS whereof the parties hereto have executed this document as a Deed.
EXECUTED as a DEED by )
▇▇▇▇▇▇▇ (BERKELEY) )
LIMITED acting by a director )
and its secretary or by two directors )
)
Director/Secretary: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
Director: /s/ Julian Gleek
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EXECUTED as a DEED by )
▇▇▇▇▇▇▇ (BERKELEY) )
NOMINEE 1 LIMITED )
acting by a
director and its secretary or by two directors)
Director/Secretary: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Director: /s/ Julian Gleek
EXECUTED as a DEED by )
▇▇▇▇▇▇▇ (BERKELEY) )
NOMINEE 2 LIMITED )
acting by a director and its secretary)
or by two directors)Director/Secretary:
Director: /s/ Julian Gleek
EXECUTED as a DEED by )
SCIENT CORPORATION )
acting by:- )
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (Chief Financial Officer)
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Scient Corporation
***
Certain information omitted and filed separately with the Commission
pursuant to confidential treatment request under
Rule 406 of the Commission.
LEASE AMENDMENT, LEASE TERMINATION
AND SECURITY RELINQUISHMENT AGREEMENT
This Lease Amendment, Lease Termination and Security Relinquishment
Agreement (the "AGREEMENT") is made by and between ***, a Delaware limited
liability company ("LANDLORD"), and SCIENT CORPORATION, a Delaware corporation
("TENANT").
RECITALS
A. Landlord and Tenant have entered into the following written
lease documents (collectively, and as amended hereby, the "LEASE") for certain
premises (the "PREMISES") located at ***, New York, New York (the "BUILDING").
- Lease dated April 14, 2000, by which Tenant leased Premises
consisting of approximately *** rentable square feet
located on the ***;
- Letter (on or about) July 28, 2000, by which Tenant exercised
its expansion option;
- Letter of August 22, 2000, captioned "Notice of Initial
Expansion Space," by which the Premises were expanded to
include 23,778 rentable square feet located *** floors of
the Building;
- First Amendment to Lease and Surrender Agreement dated as of
December 4, 2001, by which Tenant surrendered the ***
floors of the Building; and
- Settlement Agreement made as of December 4, 2001.
B. Taking into account the foregoing Lease documents, the
Premises now consist of all of *** rentable square feet.
C. Pursuant to the terms and provisions of Article 34 of the
Lease (as amended), Landlord is presently holding as security for the
performance of Tenant's obligations under the Lease the following
(collectively, and as otherwise amended with Landlord's consent, the "LETTER OF
CREDIT"):
- Norwest Bank Minnesota, National Association ("NORWEST"),
Letter of Credit No. S751079 in the amount of $15,524,740,
issued April 27, 2000 (the "NORWEST L/C");
- Amendment to Norwest L/C issued by ▇▇▇▇▇ Fargo Bank
Minnesota, National Association ("▇▇▇▇▇ MINNESOTA"), as
successor to Norwest, stating that the face amount of the
Norwest L/C has been increased to a new total of $18,140,320;
- Notice dated August 21, 2001, given by Wells Minnesota,
stating that Norwest has changed its name to ▇▇▇▇▇ Fargo Bank
Minnesota, National Association and that the Norwest L/C is
now identified as ▇▇▇▇▇ Fargo Bank Letter of Credit No.
NZS408042 (the "WELLS MINNESOTA L/C");
- Amendment Number 1 dated December 6, 2001, relating to Wells
Minnesota L/C and decreasing its amount to $15,943,480; and
- Amendment Number 2 dated January 15, 2002, changing the name
of the beneficiary of the Wells Minnesota L/C to "***"
D. Under the terms of the Lease, the Lease terminates on the
15th anniversary of the Rent Adjustment Date, as more fully described in the
Lease. As of the date of this Agreement, if the Lease terminated due to the
occurrence of an Event of Default under the Lease by Tenant, Landlord and
Tenant acknowledge that Landlord's damage claims against Tenant, as calculated
and determined in accordance with the Lease and applicable law, would exceed
the amount of the Letter of Credit and Tenant's annual rental obligation to
Landlord exceeds $7,500,000.
E. The parties have disagreed about whether Tenant has taken
possession or has deemed to have taken possession of any part of the Premises.
Nothing in this Agreement constitutes an admission, acknowledgment, or waiver
by either party regarding that issue.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. All defined terms as used in this Agreement shall have the
same meanings as set forth in the Lease. Landlord and Tenant represent, warrant
and covenant to the other that Recitals A through E are true and accurate in
all material respects.
2. The Lease shall be fully and finally surrendered and
terminated and be of no further force or effect on, from, and after the
"Termination Date" (as hereinafter defined). Effective as of the Termination
Date, Tenant waives, surrenders, and relinquishes such rights of possession or
occupancy, if any, as Tenant has under the Lease. The parties acknowledge,
however, that they have not resolved whether Landlord has in fact delivered any
of the Premises to Tenant.
3. Upon the execution of this Agreement, Tenant acknowledges and
agrees that Landlord shall be and be deemed to be entitled to make a draw under
the Letter of Credit (the "DRAW") in the amount of $14,100,000 (the "RETAINED
PROCEEDS") and Landlord agrees that it shall on or before the end of the second
business day following the day upon which the parties execute this Agreement
make the Draw. Contemporaneously with the making of such Draw, Landlord shall
inform Wells Minnesota, in writing, that following the payment of the Retained
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Proceeds to Landlord in good and immediately available funds, the Letter of
Credit shall be discharged and of no further force and effect.
4. As used herein, "TERMINATION DATE" shall mean the date when
both: (a) Landlord has received the Retained Proceeds in good and immediately
available funds; and (b) (x) Landlord shall have delivered the Letter of Credit
for discharge (with notice to Tenant) with respect to the balance of funds
represented thereby within two business days following Landlord's draw
thereunder as contemplated by the provisions of Section 3 hereof and (y) the
applicant under the Letter of Credit and/or Tenant (if a different entity)
receives written confirmation thereof.
5. On the Termination Date, Landlord and Tenant (which shall
include Scient, Inc., a Delaware corporation, for purposes of this paragraph)
shall each be, except as specifically provided herein, fully and
unconditionally released and discharged from their respective obligations
arising from or in connection with the provisions of the Lease, including, but
not limited to, any rights Tenant may have to the unfunded balance (if any) of
Landlord's Contribution. Except as specifically provided herein, this Agreement
shall fully and finally settle all demands, charges, claims, accounts, or
causes of action of any nature, including, without limitation, both known and
unknown claims and causes of action that arose out of or in connection with the
Lease. This Agreement constitutes a mutual release with respect to the Lease.
The release of liability contained in this paragraph shall not preclude
Landlord from enforcing any indemnification rights it has against Tenant under
the Lease for any lien, charge, encumbrance or claim against the Premises or
claim against Landlord for which Tenant is responsible.
6. The parties agree that the Retained Proceeds represent agreed
liquidated damages and are intended to compensate Landlord for the detriment to
Landlord resulting from the early termination of the Lease, and consideration
for Landlord's agreement to terminate the Lease on the Termination Date. The
Retained Proceeds do not constitute rent under the Lease but instead constitute
a negotiated settlement payment on account of Tenant's early termination of the
Lease. Provided the Lease is terminated and the parties are released as
provided herein, the Retained Proceeds shall be and remain the sole property of
Landlord, and Tenant hereby forever waives, relinquishes and disclaims any
interest in the Retained Proceeds. Tenant irrevocably consents to the Draw.
Tenant agrees that the Draw complies with Article 34 of the Lease and with the
Letter of Credit. If, for any reason, the Retained Proceeds (or any portion
thereof) are rescinded or must be returned by Landlord for any reason,
including, without limitation, the insolvency, bankruptcy, liquidation or
reorganization of Tenant (the "DISGORGED PROCEEDS"), then Landlord may, at its
option (1) (a) elect to treat the Lease (or any part of the Lease as Landlord
designates) as being reinstated and in default; and (b) exercise Landlord's
rights and remedies for default under the Lease; and/or (2) require Tenant to
pay Landlord upon demand an amount equal to the Disgorged Proceeds, and Tenant
shall immediately do so, provided that any payment pursuant to this clause (2)
shall not be duplicative of any payment pursuant to clause (1) above.
7. On the Termination Date, to the extent (if any) that Tenant
is in possession, or is deemed to be in possession, of the Premises: (a) Tenant
shall surrender possession of the Premises to Landlord pursuant to the
provisions of the Lease that relate to the surrender of the
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Premises except that with respect to the condition of the Premises and/or any
obligation to perform work at the Premises or the Building, the Premises shall
be delivered in its current "as is" condition and Tenant shall have no
obligation to perform any such work; and (b) if Tenant fails to surrender such
possession on the Termination Date, WITH TIME BEING OF THE ESSENCE, then
without limiting Landlord's other rights and remedies Tenant shall upon demand
pay Landlord holdover rent in accordance with Section 22.2 of the Lease.
8. Each party represents that except as expressly identified and
set forth in the Lease it has not made any assignment (except pursuant to
Landlord's mortgage(s) of the Building and any related assignment(s) of
leases), sublease, transfer, conveyance, or other disposition of the Lease, or
interest in the Lease, or any claim, demand, obligation, liability, action, or
cause of action arising from the Lease.
9. Section 35.3 of the Lease is incorporated by reference as if
set forth in full, and shall apply to all claims of Tenant against Landlord,
and all obligations of Landlord, arising under this Agreement.
10. The parties have read this Agreement and the releases
contained herein, and on advice of counsel they have freely and voluntarily
entered into this Agreement.
11. If either party commences an action against the other party
arising out of or in connection with this Agreement, the prevailing party shall
be entitled to recover from the losing party reasonable attorneys' fees and
costs of suit.
12. Tenant represents that it has dealt with no broker in
connection with this Agreement (other than ***). Tenant shall hold Landlord
harmless from and against any and all liability, loss, damage, expense, claim,
action, demand, suit or obligation arising out of or relating to a breach by
Tenant of this representation provided that Tenant's indemnity shall not extend
to any claim made by *** ("***"), under any written agreement between *** and
Landlord (or any of Landlord's affiliates). Landlord shall hold Tenant harmless
from and against any and all liability, loss, damage, expense, claim, action,
demand, suit or obligation arising out of or relating to or under any written
agreement between *** and Landlord (or any of Landlord's affiliates). In
addition, Tenant shall hold Landlord harmless from and against any and all
liability, loss, damage, expense, claim, action, demand, suit or obligation
arising out of or relating to or under any written agreement between *** and
Tenant (or any of Tenant's affiliates).
13. This Agreement shall be binding on and inure to the benefit
of the parties and their successors.
14. This Agreement may be signed in counterpart or duplicate
copies or via facsimile transmission, and any signed counterpart or duplicate
copy or executed facsimile copy hereof shall be equivalent to a signed original
for all purposes. The parties acknowledge that, although each party shall
endeavor to provide to the other signed original counterparts of this
Agreement, any failure to deliver such originals shall not affect the
enforceability of fully-executed facsimile counterparts hereof.
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15. Each of Landlord and Tenant represents and warrants to the
other party that (a) such party has the full power, capacity, authority and
legal right to execute and deliver this Agreement, (b) the person executing
this Agreement on behalf of such party has the full right and authority to
execute this Agreement on behalf of such party and to bind such party; (c) as
of the date set forth beneath such party's signature below, any and all
necessary consents or approvals of any third party (including the lenders to
each party) respecting this Agreement have been obtained; and (d) this
agreement does not violate any agreement, document, instrument, or judgment by
which such party is bound.
16. Landlord and Tenant each agree that the terms of this
Agreement shall be maintained in strict confidence and no disclosure of such
information will be made, whether before or after the Termination Date, except
to such attorneys, accountants, lenders, prospective investors and others as
are reasonably required to evaluate and consider the transaction evidenced by
this Agreement. Nothing in this paragraph shall prevent Landlord or Tenant from
disclosing any information otherwise deemed confidential under this paragraph
either: (a) in connection with any enforcement of this Agreement or (b)
pursuant to any legal requirement, any statutory reporting requirement, or any
auditing or accounting disclosure requirement. Notwithstanding the above, in no
event may Tenant (and/or Scient, Inc.) refer in any disclosure which may occur
pursuant to clause (b) above to Landlord, Landlord's affiliates, the Premises
and/or the Building.
17. As of the date hereof, Landlord represents and warrants that
it has not executed and delivered a lease or written agreement regarding
occupancy of the Premises or any part of the Premises by any person except
Tenant.
18. This Agreement may be executed in any number of duplicate
originals and each duplicate original shall be deemed to be an original. This
Agreement may be executed in several counterparts, each of which counterparts
shall be deemed an original instrument and all of which together shall
constitute a single Agreement.
* * * *
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Agreement
in quadruplicate on the dates set forth below and this Agreement shall be
binding as of the latter of such dates.
LANDLORD: TENANT:
***, SCIENT CORPORATION,
a Delaware limited liability company a Delaware corporation
By: /s/ By: Jacques Tortorli
--------------------------------- -----------------------------------
Its: Its: CFO
-------------------------------- ----------------------------------
Date: February 1, 2002 Date: January 31, 2002
The undersigned has joined in the execution and delivery of the foregoing
Agreement for the purposes set forth in Sections 5 and 16 thereof.
SCIENT INC., a Delaware corporation
By: Jacques Tortorli
---------------------------------
Its: CFO
--------------------------------
Date: January 31, 2002
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TERMINATION, RELEASE AND SETTLEMENT AGREEMENT
THIS TERMINATION, RELEASE AND SETTLEMENT AGREEMENT (this "AGREEMENT")
is made and entered into this 20th day of March, 2002 ("Termination Date"), by
and between TMG/ONE MARKET, L.P., a Delaware limited liability partnership
("LANDLORD") and SCIENT CORPORATION, a Delaware corporation ("TENANT").
RECITALS:
A. Landlord and Tenant entered into an Amended and Restated
Lease dated as of April 23, 2001, as amended by a First Amendment to Amended
and Restated Office Lease dated as of September 28, 2001 ("LANDMARK LEASE") for
those certain premises described in the Landmark Lease ("LANDMARK PREMISES")
and located at The Landmark @ One Market Street, in the City of San Francisco,
County of San Francisco, and State of California ("LANDMARK").
B. Landlord and Tenant had previously entered into an Office
Sublease dated as of April 30, 2000, as amended by a First Amendment to Office
Sublease dated April 23, 2001 and as further amended by a Second Amendment to
Office Sublease dated as of September 28, 2001 ("ANNEX SUBLEASE") for those
certain premises described in the Annex Sublease ("ANNEX PREMISES") and located
at The Annex @ One Market Street, in the City of San Francisco, County of San
Francisco, and State of California ("ANNEX"). The Annex Sublease and the
Landmark Lease shall be collectively referred to in this Agreement as the
"LEASE". The Landmark Premises and the Annex Premises shall be collectively
referred to in this Agreement as the "PREMISES".
C. Landlord and Epicentric, Inc. ("EPICENTRIC") entered into a
Lease dated as of April 23, 2001 ("EPICENTRIC LEASE") for certain premises at
the Landmark previously leased to Tenant. As a condition to entering into the
Epicentric Lease, Landlord required Tenant to guaranty the obligations of
Epicentric under the Epicentric Lease and Tenant executed a Lease Guaranty
dated as of April 23, 2001 ("EPICENTRIC GUARANTY").
D. Landlord and Autodesk, Inc. entered into a Lease dated as of
September 28, 2001 ("AUTODESK LEASE") for certain premises at the Landmark
previously leased to Tenant and a Sublease dated as of September 28, 2001
("AUTODESK SUBLEASE") for certain premises at the Annex previously subleased to
Tenant. As a condition to Landlord entering into the Autodesk Lease and
Autodesk Sublease, Landlord required Tenant to guaranty the obligations of
Autodesk under the Autodesk Lease and Autodesk Sublease and Tenant executed a
Lease Guaranty dated as of September 28, 2001 ("AUTODESK GUARANTY").
E. Tenant has breached the Lease by failing to pay to Landlord
the Rent due on March 1, 2002. Tenant's failure to pay Rent after the cure
period provided for in the Lease entitles Landlord to elect, among several
remedies available to Landlord, to terminate the Lease.
F. As a result of Tenant's failure to pay Rent due on March 1, 2002,
Landlord has exercised its right to draw $4,839,721.00 under that certain
Standby Letter of Credit Number
5751008 issued by ▇▇▇▇▇ Fargo Bank Minnesota, National Association (the "Letter
of Credit") as permitted under the Lease.
G. Landlord has advised Tenant that Landlord does not desire to
terminate the Lease due to the unfavorable leasing market in San Francisco and
the substantial economic loss that Landlord will incur in connection with any
such termination.
H. Tenant and Landlord further acknowledge that in connection
with Tenant's default and the termination of the Lease, Landlord would contend
that its damages would be in excess of the Letter of Credit, and that Tenant
would dispute such contention. As a result of such dispute, litigation would
likely ensue.
I. Accordingly, Landlord and Tenant desire to avoid such
possible litigation and the parties desire to terminate the Lease and settle
Landlord's claim to damages arising out of the termination.
NOW, THEREFORE, in reliance upon the above Recitals which are
incorporated by reference herein and made a part hereof, and for good and
valuable consideration, the receipt whereof and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Termination of the Lease. The Lease is hereby terminated and
canceled on and as of the Termination Date. The rights of Tenant to occupy the
Premises, and the rights of Tenant under the Lease, shall automatically and
without further action on the part of Landlord terminate at 8:00 a.m. on the
Termination Date. Not later than 8:00 a.m. on the Termination Date, Tenant
shall surrender possession of the Premises, and shall deliver exclusive
possession and occupancy thereof and all keys thereto, to Landlord. The
Premises shall be surrendered in their AS-IS condition, with all faults. All
personal property located on the Premises as of 8:00 a.m. on the Termination
Date shall automatically be deemed transferred, conveyed and assigned to
Landlord and Tenant shall have no further rights, title or interest in or to
any such personal property. Tenant shall cooperate with Landlord to execute any
additional documents that Landlord may require to memorialize the transfer of
any such personal property.
2. Guarantees. The Epicentric Guaranty and the Autodesk Guaranty
shall terminate and be null and void and of no force or effect from and after
the Termination Date. The provisions of this Paragraph 2 shall only be
effective upon receipt by Landlord of written approval of this Paragraph 2 by
the current lender on the property. Tenant shall remain fully obligated under
the Autodesk Guaranty and the Epicentric Guaranty until such approval is
obtained.
3. Rent. Tenant shall have no further obligation to pay Rent
from and after the Termination Date.
4. Mutual Releases. Tenant for itself and for its officers,
members, employees, agents, successors and assigns, forever releases Landlord
and its officers, members, employees, agents, successors and assigns, and
Landlord for itself and its officers, members, employees, successors and
assigns, forever releases Tenant and its members, officers, employees, agents,
-2-
successors ands assigns, from and against any and all claims, causes of action,
demands, damages and liability of any kind whatever, whether known or unknown,
liquidated or unliquidated, existing or arising in any manner from the
beginning of time and continuing to and including the Termination Date,
including, but not limited to, any claims which were or could have been alleged
in connection with the Landmark Lease, Annex Sublease, Epicentric Guaranty and
Autodesk Guaranty or the negotiation of such instruments or the transactions
contemplated thereby, provided that the foregoing releases shall not extend to
claims arising out of the Letter of Credit, or the rights, obligations,
representations and warranties made by each of the respective parties in this
Agreement.
5. Landlord Representations. Landlord represents and warrants
that (i) Landlord has not sold, assigned, transferred, hypothecated or in any
other manner conveyed to any other person or entity Landlord's interest in the
Landmark Lease, Annex Sublease, Epicentric Guaranty and Autodesk Guaranty; (ii)
Landlord has the authority to enter into this Agreement and the consent of any
necessary third parties, including Landlord's lenders, has been obtained; and
(iii) this Agreement does not violate or conflict with any agreement to which
Landlord is bound.
6. Tenant Representations. Tenant represents and warrants as of
the date hereof and as of the Termination Date that (i) Tenant owns and holds
the entire interest of the Tenant under the Lease and the Subtenant under the
Sublease; (ii) Tenant has not pledged its interest in the Lease or the Annex
Sublease as collateral or otherwise sold, transferred, assigned or subleased
all or any portion of the Landmark Lease or Annex Sublease; (iii) Tenant has
not received and has no notice of any claim, injury or cause of action which
has occurred, whether or not filed, by or for any party, relating to the
Landmark Lease or Annex Sublease (other than claims of Landlord and claims, if
any, of parties claiming by, through or under Landlord); (iv) No contracts for
the furnishing of any labor or materials with respect to improvements or
alterations in or about the Landmark Premises or Annex Premises have been
awarded by Tenant or are outstanding that have not been performed and
satisfied; (v) There are no subleases, concessions or other rights of use and
occupancy of the Landmark Premises or Annex Premises by, through or under
Tenant and no cause of action against Landlord exists as of the date hereof nor
will exist hereafter by any party to a sublease, concession or agreement for
use or occupancy by, through or under Tenant based on inducing the breach of a
contract with respect to same; (vi) Tenant has not done or suffered to be done
anything whereby the Landmark Premises or Annex Premises or Landlord's title
thereto are in any manner encumbered or charged; and (vii) Tenant has full
authority to execute and deliver this Agreement.
7. Warrants. Provided Landlord obtains its lender's consent to
release Tenant from the Epicentric Guaranty and the Autodesk Guaranty, Tenant
shall deliver to Landlord warrants to purchase 50,000 shares of stock of
Scient, Inc. in the form of EXHIBIT A attached hereto. Such warrants shall be
delivered to Tenant promptly after the date Landlord notifies Tenant that it
has obtained lender consent.
8. Payments. Tenant shall pay Landlord the sum of $850,000
("PAYMENT"), in installments, as follows:
(a) $250,000 on June 17, 2002; and
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(b) $50,000 on March 15, 2003, and on the 15th day of
each calendar quarter thereafter (e.g., June 15, September 15,
December 15, March 15) through and including December 15, 2005, for a
total of $600,000.
9. Default. If Tenant fails to make any payment due under
Paragraph 8 above within five (5) days after the date such payment is due, and
such failure continues for five (5) business days after written notice from
Landlord to Tenant, Landlord's sole remedy shall be to pursue such action at
law to collect any unpaid amounts then due or otherwise enforce the provisions
of this Agreement.
10. Reinstatement. Notwithstanding any provision of this
Agreement to the contrary, if any portion of the amount drawn down on the
Letter of Credit in connection with Tenant's default is challenged and
recovered from Landlord, or if for any reason whatsoever Landlord is obligated
to reimburse Tenant for all or any portion of any such amount, then
automatically, without any action by Landlord or Tenant, Landlord's claim
against Tenant for damages for Tenant's default and the termination of the
Lease shall be reinstated, but Landlord's recovery shall be limited to
$5,689,721, less amounts retained by Landlord. This provision shall be of no
force and effect beginning on the ninety-first (91st) day after the date
Landlord draws down on the Letter of Credit provided that Tenant has not
declared bankruptcy within such ninety-one (91) day period.
11. Notices. All notices required or permitted to be given
hereunder shall be in writing and delivered by Federal Express or similar
overnight carrier or by daytime courier or mailed postage prepaid by certified
mail, return receipt requested, addressed to Landlord or Tenant, as the case
may be, as follows:
If to Landlord: TMG/One Market, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Tenant: Scient Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer and
General Counsel
with a copy to: Altheimer & ▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
or to such other additional or different address or addresses as is given to
the other party not less than ten (10) days in advance. Notice shall be deemed
delivered on the date received or rejected in the return receipt or on the date
delivered or attempted to be delivered by courier or overnight carrier.
-4-
12. Broker Indemnification. The parties represent and warrant to
each other that it has not dealt with any broker in connection with this
Agreement. Each party covenants and agrees to indemnify and hold each other
harmless from and against any and all claims, liabilities, obligations, costs,
expenses, including, without limitation, attorneys' fees, arising from a breach
of the foregoing representation.
13. Sole Agreement. This Agreement constitutes the sole and
complete agreement between the parties with respect to the matters covered
hereby and this Agreement supersedes any prior or contemporaneous agreements,
understandings or undertakings, written or oral, by or between the parties.
This Agreement may be modified only by a writing signed by all parties. Should
legal action be necessary to enforce this Agreement or any portion of this
Agreement, the prevailing party shall be entitled to an award of reasonable
attorneys' fees.
14. Counterparts and Interpretation. This Agreement may be
executed in two or more counterparts and such counterparts together shall
constitute one and the same instrument binding upon all the parties hereto
notwithstanding that all of such parties may not have executed the same
counterpart. This Agreement shall be construed and interpreted in accordance
with the laws of the State of California.
[The Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
LANDLORD: TENANT:
TMG/ONE MARKET, L.P., SCIENT CORPORATION,
a Delaware limited partnership a Delaware corporation
By: ▇▇▇▇▇▇/One Market, LLC, By: /s/ Jacques Tortoli
a California limited -----------------------------------
liability company Its: CFO
Its General Partner ----------------------------------
By: TMG Partners,
a California corporation
Its Managing Member
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------
Its: EVP
------------------------
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EXHIBIT A
Warrants to Purchase Stock
[See Attached]
-7-
WARRANT AGREEMENT
between
Scient, Inc.
and
TMG/Landmark, L.P.
Dated as of
April 15, 2002
WARRANT AGREEMENT
This WARRANT AGREEMENT is dated as of April 15, 2002 (the "Agreement")
and entered into by and between Scient, Inc., a Delaware corporation (the
"Company"), and TMG/Landmark, L.P. ("▇▇▇▇▇▇" and together with subsequent
holders of the Warrants subject hereto, a "Holder").
WHEREAS, for good and valuable consideration, the Company is issuing
to ▇▇▇▇▇▇ warrants (these warrants and any warrants delivered in substitution
or exchange therefor as provided herein are collectively referred to as, the
"Warrants") to purchase up to an aggregate of 50,000 shares (subject to
adjustment as provided herein) of the Company's fully paid and non-assessable
Common Stock (as defined below) (as so adjusted, the shares of Common Stock
issuable upon exercise of the Warrants being referred to herein as the "Warrant
Shares");
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. Certain Definitions. For purposes of this Agreement, the following
terms have shall have the meanings set forth below:
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which banks are required or authorized by law to be closed in New York.
"Common Stock" means (i) the Company's common stock, par value $0.0001
per share, (b) any securities of the Company which the holders of the Company's
common stock, par value $0.0001 per share, shall be entitled to receive, or
shall have received, in connection with any stock splits, stock dividends or
similar events with respect to the Company's common stock, par value $0.0001
per share and (c) any other securities into which or for which any of the
Company's common stock, par value $0.0001 per share, may be converted or
exchanged pursuant to a plan of recapitalization, reorganization or otherwise.
"Fair Market Value" means on any particular date (i) the closing bid
price per Common Stock on such date on the national securities exchange or
automated quotation system on which the Common Stock is then listed or if there
is no such price on such date, then the closing bid price on such exchange or
quotation system on the date nearest preceding such date, or (ii) if the Common
Stock is not then listed on a national securities exchange or automated
quotation system, the closing bid price for each Common Stock in the
over-the-counter market, as reported by the National Quotation Bureau
Incorporated (or similar organization or agency succeeding to its functions of
reporting prices) at the close of business on such date.
2. Warrant Certificates. Simultaneously with the execution hereof, the
Company will issue and deliver to ▇▇▇▇▇▇ a certificate or certificates
evidencing the Warrants (the "Warrant
-1-
Certificates"). Such certificate or certificates shall be substantially in the
form set forth as Exhibit A attached hereto. Warrant Certificates shall be
dated the date of issuance by the Company.
3. Execution of Warrant Certificates. Warrant Certificates shall be
signed on behalf of the Company by its Chairman of the Board or its Chief
Executive Officer, President or any Vice President. Each Warrant Certificate
shall also be signed on behalf of the Company by its Secretary or an Assistant
Secretary.
4. Restrictions on Transfer; Registration of Transfers and Exchanges.
Prior to any proposed transfer of the Warrants or the Warrant Shares, unless
such transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), the transferring
Holder will deliver to the Company an opinion of counsel, reasonably
satisfactory in form and substance to the Company, to the effect that the
Warrants or Warrant Shares, as applicable, may be sold or otherwise transferred
without registration under the Securities Act. Notwithstanding anything to the
contrary, the Warrants shall be transferable by a Holder, in whole or in part,
to one or more of such Holder's affiliates, members, managers or partners, in
each case, without the consent of the Company, so long as (a) the Company is
notified of such a transfer, (b) any such transferee is an "accredited
investor" (as defined in the Securities Act) and (c) there are no more than ten
(10) transfers to more than ten (10) such affiliates, members, managers or
partners pursuant to this provision.
Within 15 days of the fulfillment of the foregoing requirements of
this Section 4, the Company will, at its expense, issue to a transferee of the
Warrants a new Warrant in like tenor for such number of Warrant Shares or other
securities as the Warrants are then exercisable.
Upon original issuance thereof, and until such time as the same shall
have been registered under the Securities Act or sold pursuant to Rule 144
promulgated thereunder (or any similar rule or regulation) each Warrant
Certificate shall bear the legend included on the first page of Exhibit A,
unless in such opinion of counsel, such legend is no longer required by the
Securities Act.
5. Warrants; Exercise of Warrants. Subject to the terms of this
Agreement, each Holder shall have the right to receive from the Company the
number of fully paid and nonassessable Warrant Shares (and such other
consideration) which the Holder may at the time be entitled to receive on
exercise of such Warrants, in whole or in part, and payment of the Exercise
Price for such Warrant Shares. Each Warrant, in whole or in part, may be
exercised at any time and from time to time during the period commencing on the
date hereof, and ending at 5:00 p.m., New York, New York time, on April 15,
2007 (the "Expiration Date"). Each Warrant not exercised prior to 5:00 p.m.,
New York, New York time, on the Expiration Date shall become void and all
rights thereunder and all rights in respect thereof under this Agreement shall
cease as of such time.
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Subject to adjustment as hereinafter provided, the price at which each
Warrant shall be exercisable (the "Exercise Price") shall be equal to $0.13 per
share of Common Stock.
A Warrant may be exercised upon surrender to the Company, at its
office designated for such purpose, of the Warrant Certificate or Warrant
Certificates to be exercised with the form of election to purchase (in the form
attached hereto as Appendix 1) attached thereto duly filled in and signed, and
upon payment to the Company of the Exercise Price for the number of Warrant
Shares in respect of which such Warrants are then exercised. Payment of the
aggregate Exercise Price shall be made, at the election of the Holder, (i) in
cash, by certified or official bank check payable to the order of the Company,
(ii) by cashless exercise as set forth in the following paragraph, or (iii) any
combination thereof.
The Holder shall have the right to surrender each Warrant, in whole or
in part, to the Company together with a notice of cashless exercise, in which
event the Company shall exchange such Warrant determined as follows:
X=Y multiplied by (A-B)/A
where:
X=the number of Common Stock to be issued to the Holder
Y=the number of Warrant Shares with respect to which the Warrant is
being exercised
A=the average of the per share Fair Market Value of the Common Stock
for the five (5) trading days immediately prior to (but not including)
the date of exercise
B=the Exercise Price
Subject to the provisions of Section 6 hereof, upon such surrender of
Warrant Certificates and payment of the Exercise Price, the Company shall, at
its expense, issue and cause to be delivered, as promptly as practicable, and
in any event within ten (10) days after the Company's receipt of the Holder's
notice of exercise form, (i) to or upon the written order of the Holder and in
such name or names as such Holder may designate a certificate or certificates
for the number of full Warrant Shares issuable upon the exercise of such
Warrants (and such other consideration as may be deliverable upon exercise of
such Warrants) together with cash for fractional Warrant Shares as provided in
Section 10 and (ii) a Warrant(s) in like tenor as such exercised Warrants to
purchase the number of Warrant Shares in respect of which such Warrants shall
not have been exercised. The certificate or certificates for such Warrant
Shares shall be deemed to have been issued and the person so named therein
shall be deemed to have become a holder of record of such Warrant Shares as of
the date of the surrender of such Warrants and payment of the Exercise Price,
irrespective of the date of delivery of such certificate or certificates for
Warrant Shares.
-3-
Each Warrant shall be exercisable, at the election of the Holder
thereof, either in full or from time to time in part and, in the event that a
Warrant Certificate is exercised in respect of fewer than all of the Warrant
Shares issuable on such exercise at any time prior to the date of expiration of
the Warrants, a new certificate evidencing the remaining Warrant or Warrants
will be issued and delivered pursuant to the provisions of this Section and of
Section 3 hereof.
All Warrant Certificates surrendered upon exercise of Warrants shall
be canceled and disposed of by the Company. The Company shall keep copies of
this Agreement and any notices given or received hereunder available for
inspection by the Holders during normal business hours at its office.
6. Payment of Taxes. The Company will pay all documentary stamp taxes and
other governmental charges (excluding all foreign, federal or state income,
franchise, property, estate, inheritance, gift or similar taxes) in connection
with the issuance or delivery of the Warrants hereunder, as well as all such
taxes attributable to the initial issuance or delivery of Warrant Shares upon
the exercise of Warrants and payment of the Exercise Price. The Company shall
not, however, be required to pay any tax that may be payable in respect of any
subsequent transfer of the Warrants or any transfer involved in the issuance
and delivery of Warrant Shares in a name other than that in which the Warrants
to which such issuance relates were registered, and, if any such tax would
otherwise be payable by the Company, no such issuance or delivery shall be made
unless and until the person requesting such issuance has paid to the Company
the amount of any such tax, or it is established to the reasonable satisfaction
of the Company that any such tax has been paid.
7. Mutilated or Missing Warrant Certificates. If a mutilated Warrant
Certificate is surrendered to the Company, or if the Holder of a Warrant
Certificate claims and submits an affidavit or other evidence satisfactory to
the Company to the effect that the Warrant Certificate has been lost, destroyed
or wrongfully taken, the Company shall issue a replacement Warrant Certificate.
If reasonably required by the Company, such Holder must provide an indemnity
bond, or other form of indemnity, sufficient in the reasonable judgment of the
Company to protect the Company from any loss which it may suffer if a Warrant
Certificate is replaced. If ▇▇▇▇▇▇ or any other institutional Holder (or
nominee thereof) is the owner of any such lost, stolen or destroyed Warrant
Certificate, then the affidavit of an authorized officer of such owner, setting
forth the fact of loss, theft or destruction and of its ownership of the
Warrant Certificate at the time of such loss, theft or destruction shall be
accepted as satisfactory evidence thereof and no further indemnity shall be
required as a condition to the execution and delivery of a new Warrant
Certificate other than the unsecured written agreement of such owner to
indemnify the Company.
8. Reservation of Warrant Shares. The Company shall at all times reserve
and keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued Common Stock or its authorized and issued Common Stock
held in its treasury, for the purpose
-4-
of enabling it to satisfy any obligation to issue in full of all Warrant Shares
issuable upon exercise in full of all Warrants, the maximum number of shares of
Common Stock which may then be deliverable upon the exercise in full of all
outstanding Warrants.
The Company or, if appointed, any transfer agent for the Common Stock
and each transfer agent for any shares of the Company's capital stock issuable
upon the exercise of any of the Warrants (collectively, the "Transfer Agent")
will be irrevocably authorized and directed at all times to reserve such number
of authorized shares as shall be required for such purpose. The Company shall
keep a copy of this Agreement on file with any such Transfer Agent. The Company
will supply any such Transfer Agent with duly executed certificates for such
purposes and will provide or otherwise make available all other consideration
that may be deliverable upon exercise of the Warrants. The Company will furnish
any such Transfer Agent a copy of all notices of adjustments and certificates
related thereto, transmitted to each Holder pursuant to Section 11 hereof.
Before taking any action which would cause an adjustment of the
Exercise Price, the number or type of Warrant Shares issuable upon the exercise
of the Warrants pursuant to Section 9 hereof, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares at the Exercise Price, in each case, as so
adjusted.
The Company covenants that all Warrant Shares and other capital stock
issued upon exercise of Warrants will, upon payment of the Exercise Price
therefor and issue thereof, be validly authorized and issued, fully paid,
nonassessable, free of preemptive rights and free, subject to Section 6 hereof,
from all taxes, liens, charges and security interests with respect to the issue
thereof.
9. Adjustment of Exercise Price and Warrant Number. The number of shares
of Common Stock issuable upon the exercise of each Warrant (the "Warrant
Number") is initially one. The Exercise Price, the type of Warrant Shares and
the Warrant Number are subject to adjustment from time to time upon the
occurrence of the events enumerated in, or as otherwise provided in, this
Section 9.
(a) Adjustment for Change in Capital Stock.
If the Company:
(i) pays, makes or declares a dividend or a distribution on its Common
Stock in shares of its Common Stock;
(ii) subdivides or reclassifies its outstanding shares of Common Stock
into a greater number of shares;
-5-
(iii) combines or reclassifies its outstanding shares of Common Stock
into a smaller number of shares; or
(iv) issues by reclassification of its Common Stock any shares of its
capital stock (other than reclassification arising solely as a result
of a change in the par value or no par value of the Common Stock);
then the Warrant Number, the type of Warrant Shares and the Exercise Price in
effect immediately prior to such action shall be proportionately adjusted so
that the Holder of any Warrant thereafter exercised shall receive the aggregate
number and kind of shares of capital stock of the Company which it would have
received immediately following such action if such Warrant had been exercised
immediately prior to such action for the same aggregate consideration that such
Holder would have paid if such Warrant had been exercised immediately prior to
such action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
Such adjustment shall be made successively whenever any event listed
above shall occur.
The Company shall not issue shares of Common Stock as a dividend or
distribution on any class of capital stock other than Common Stock unless (i)
the Holders also receive such dividend or distribution on a ratable basis or
(ii) the appropriate adjustment to the Warrant Number and Exercise Price is
made under this Section 9.
(b) Reorganizations.
In case of (i) any capital reorganization or reclassification, other
than in the cases referred to in Section 9(a) hereof, (ii) the consolidation,
amalgamation or merger of the Company with or into another corporation (other
than a merger or consolidation in which the Company is the continuing
corporation and which does not result in any reclassification of the
outstanding shares of the Company's capital stock into shares of other stock or
other securities or property), (iii) the sale of the property or assets of the
Company as an entirety or substantially as an entirety, or (iv) any other
transaction in which the Common Stock is changed into or exchanged for stock or
securities of any other person, company or entity (collectively, such actions
being hereinafter referred to as "Reorganizations"), there shall thereafter be
deliverable upon exercise (at the aggregate Exercise Price in effect at the
time of the consummation of any such Reorganization for all Common Stock
issuable upon such exercise immediately prior to the consummation of any such
transaction) of any Warrant (in lieu of the number of shares of Common Stock
theretofore deliverable) the number of shares of stock or other securities or
property to which a holder of the number of shares of Common Stock that would
otherwise have been deliverable
-6-
upon the exercise of such Warrant would have been entitled upon such
Reorganization if such Warrant had been exercised in full immediately prior to
such Reorganization. In case of any Reorganization, appropriate adjustment, as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a duly adopted resolution certified by the
Company's Secretary or Assistant Secretary, shall be made in the application of
the provisions herein set forth with respect to the rights and interests of
Holders so that the provisions set forth herein shall thereafter be applicable
in relation to any shares or other property thereafter deliverable upon
exercise of Warrants.
The Company shall not effect any such Reorganization unless prior to
or simultaneously with the consummation thereof, (i) notice of such
Reorganization shall be given to each of the Holders of the Warrants, (ii) the
successor corporation (if other than the Company) resulting from such
Reorganization or the corporation purchasing or leasing such assets or other
appropriate corporation or entity shall expressly assume, by a supplemental
Warrant Agreement or other acknowledgment executed and delivered to, and
reasonably satisfactory to, the Holder(s), the obligation to deliver to each
such Holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, such Holder may be entitled to purchase, and all
other obligations and liabilities under this Agreement and the Warrants and
(iii) if the Company shall survive the consummation of such Reorganization,
such assumption shall be in addition to, and shall not release the Company
from, any continuing obligations of the Company under this Agreement or the
Warrants.
(c) Notice of Adjustment.
Whenever any event described in Sections 9(a) or 9(b) occurs, the
Company shall provide the notices required by Section 11 hereof.
(d) Form of Warrants.
Irrespective of any adjustments in the Exercise Price or the number or
kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement but shall nevertheless be exercisable for the
adjusted number of Warrant Shares or kind of shares purchasable upon the
exercise of the Warrants, in each case at the adjusted Exercise Price.
10. Fractional Interests. The Company shall not be required to issue
fractional Warrant Shares on the exercise of Warrants. If more than one Warrant
shall be presented for exercise in full at the same time by the same Holder,
the number of full Warrant Shares which shall be issuable upon the exercise
thereof shall be computed on the basis of the aggregate number of Warrant
Shares purchasable on exercise of the Warrants so presented. If any fraction of
a
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Warrant Share would, except for the provisions of this Section 10, be issuable
on the exercise of any Warrants (or specified portion thereof), the Company
shall, pay an amount in cash equal to the Fair Market Value of the Warrant
Share so issuable, multiplied by such fraction.
11. Notices to Warrant Holders. Upon any adjustment pursuant to Section 9
hereof, the Company shall promptly thereafter (i) cause to be filed with the
Company a certificate of an officer of the Company setting forth the Warrant
Number and Exercise Price after such adjustment and setting forth in reasonable
detail the method of calculation and the facts upon which such calculations are
based, and (ii) cause to be given to each of the Holders at its address
appearing on the Warrant Register written notice of such adjustments. Where
appropriate, such notice may be given in advance and included as a part of the
notice required to be mailed under the other provisions of this Section 11.
In case:
(a) the Company shall authorize the issuance to all holders of
shares of Common Stock of rights, options or warrants to subscribe for
or purchase shares of Common Stock or of any other subscription rights
or warrants;
(b) the Company shall authorize the distribution to all holders
of shares of Common Stock of assets, including cash, evidences of its
indebtedness, or other securities;
(c) of any consolidation or merger to which the Company is a
party and for which approval of any shareholders of the Company is
required, or of the conveyance or transfer of the properties and
assets of the Company substantially as an entirety, or of any
reclassification or change of Common Stock issuable upon exercise of
the Warrants (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a
subdivision or combination), or a tender offer or exchange offer for
shares of Common Stock;
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company proposes to take any action that would require an
adjustment to the Warrant Number pursuant to Section 9 hereof;
then the Company shall cause to be given to each of the Holders at its address
appearing on the Warrant Register, at least 20 Business Days prior to the
applicable record date hereinafter specified, or the date of the event in the
case of events for which there is no record date, in accordance with the
provisions of Section 12 hereof, a written notice stating (i) the date as of
which the holders of record of shares of the capital stock of the Company to be
entitled to receive any such rights, options, warrants or distribution are to
be determined, or (ii) the initial expiration date set forth in any tender
offer or exchange offer for shares of the capital stock of the Company, or
(iii) the date on which any such consolidation, merger, conveyance, transfer,
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dissolution, liquidation or winding up is expected to become effective or
consummated, and the date as of which it is expected that holders of record of
shares of the capital stock of the Company shall be entitled to exchange such
shares for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up. The failure to give the notice required by this
Section 11 or any defect therein shall not affect the legality or validity of
any distribution, right, option, warrant, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up, or the vote upon any action.
Nothing contained in this Agreement or in any Warrant Certificate
shall be construed as conferring upon the Holders (prior to the exercise of
such Warrants) the right to vote or to consent, or any rights whatsoever as
shareholders of the Company; provided, however, that nothing in the foregoing
provision is intended to detract from any rights explicitly granted to any
Holder hereunder.
12. Notices to the Company and Warrant Holders. All notices and other
communications provided for or permitted hereunder shall be made by
hand-delivery, first-class registered or certified mail, postage prepaid,
telex, facsimile, or overnight air courier guaranteeing next day delivery:
(a) if to ▇▇▇▇▇▇, to the address specified on the signature page
executed by ▇▇▇▇▇▇; and
(b) if to the Company, to the address specified on the signature page
executed by the Company.
All such notices and communications shall be deemed to have been duly
given: (i) at the time delivered by hand, if personally delivered; (ii) five
(5) Business Days after being deposited in the mail, postage prepaid, if mailed
(so long as a fax copy is sent and receipt acknowledged within two (2) business
days after mailing); (iii) when answered back if telexed; (iv) when receipt
acknowledged, if faxed; and (v) the next business day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
The parties may change the addresses to which notices are to be given by giving
five (5) days' prior written notice of such change in accordance herewith.
13. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company shall bind and inure to the benefit of its
respective successors and assigns hereunder.
14. Termination. This Agreement shall terminate if all Warrants, all of
the rights represented by the Warrants and all obligations owed by the Company
to the Holders have been exercised or shall have expired or been canceled
pursuant to this Agreement.
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15. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF DELAWARE (PROVIDED THAT DETERMINATIONS RELATING TO
CORPORATE LAW SHALL BE CONSTRUED IN ACCORDANCE WITH THE DELAWARE GENERAL
CORPORATION LAW). THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF ANY DELAWARE STATE COURT SITTING IN DELAWARE, OR ANY FEDERAL
COURT SITTING IN DELAWARE IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT AND THE WARRANTS, AND IRREVOCABLY ACCEPTS
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
JURISDICTION OF THE AFORESAID COURTS. THE COMPANY AGREES THAT IT WILL NOT
COMMENCE ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY OTHER JURISDICTION. THE
COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM. NOTWITHSTANDING THE FOREGOING, NOTHING HEREIN SHALL
AFFECT THE RIGHT OF ANY HOLDER OF A WARRANT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST THE COMPANY IN ANY OTHER JURISDICTION.
EACH OF THE PARTIES HERETO HEREBY WAIVES THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OF THE OTHER DOCUMENTS, OR ANY DEALINGS BETWEEN THEM RELATING
TO THE SUBJECT MATTER OF ▇▇▇▇▇▇'▇ INVESTMENT IN THE COMPANY CONTEMPLATED
HEREBY. THE SCOPE OF THIS JURY TRIAL WAIVER SHALL BE LIMITED TO DISPUTES
BETWEEN THE COMPANY AND ▇▇▇▇▇▇ AND SHALL NOT EXTEND TO DISPUTES BETWEEN THE
COMPANY AND ANY OTHER PERSON.
16. Benefits of This Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Holders and the Holders' successors and assigns, any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Holders and the Holders' successors
and assigns.
17. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
-10-
18. Amendments and Waivers. This Agreement and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought. Subject to Section 13, the Company agrees it will not
solicit, request or negotiate for or with respect to any proposed waiver or
amendment of any of the provisions of this Agreement or any Warrant unless each
Holder (irrespective of the amount of Warrants then owned by it) shall
substantially concurrently be informed thereof by the Company and shall be
afforded the opportunity of considering the same and shall be supplied by the
Company with sufficient information (including any offer of remuneration) to
enable it to make an informed decision with respect thereto which information
shall be the same as that supplied to each other Holder.
19. Entire Agreement. This Agreement and the Warrants 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. If the terms of this Agreement are
inconsistent or conflict with the terms of any Warrant, the terms of this
Agreement shall govern and control.
[Signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be duly executed as of the day and year first above written.
Address for Notices: SCIENT, INC.
Attn: General Counsel
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: CFO, Treasurer & Secretary
--------------------------------
Addresses for Notices:
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ TMG/LANDMARK, L.P.,
General Counsel a Delaware limited partnership
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇/One Market LLC,
Executive Vice President a California limited liability
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ company,
26th Floor Its: General Partner
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: TMG Partners,
a California corporation,
its Managing Member
By: /s/
--------------------------
Name:
------------------------
Title:
-----------------------
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EXHIBIT A
[Form of Warrant Certificate]
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES ACTS, AND MAY
NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACTS OR PURSUANT TO RULE 144 OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE STOCK
No.:
Issue Date: April 15, 2002
Expiration Date: April , 2007
THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for other
good and valuable consideration, TMG/LANDMARK, L.P. (such holder or its
permitted transferees or assigns being, the "Holder") is entitled to purchase
up to 50,000 (subject to adjustment as provided herein) fully paid and
nonassessable shares of Common Stock (as defined below) (as so adjusted, the
"Warrant Shares") of SCIENT, INC. (the "Company") at the initial exercise price
per Warrant Share of $0.13 (the "Exercise Price") as adjusted pursuant to
Article 2 of this Warrant, subject to the provisions and upon the terms and
conditions set forth of this Warrant.
"Common Stock" means (i) the Company's common stock, par value $0.0001 per
share, (b) any securities of the Company which the holders of the Company's
common stock, par value $0.0001 per share, shall be entitled to receive, or
shall have received, in connection with any stock splits, stock dividends or
similar events with respect to the Company's common stock, par value $0.0001
per share and (c) any other securities into which or for which any of the
Company's common stock, par value $0.0001 per share, may be converted or
exchanged pursuant to a plan of recapitalization, reorganization or otherwise.
ARTICLE 1. EXERCISE
1.1 Method of Exercise. At any time, and from time to time, after the
Issue Date and on or prior to the Expiration Date, Holder may exercise this
Warrant, in whole or in part, by delivering a duly executed Notice of Exercise
(in substantially the form attached hereto as Appendix 1) to the principal
office of the Company. Payment of the aggregate Exercise Price
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shall be made, at the election of the Holder, (i) in cash, by certified or
official bank check payable to the order of the Company, (ii) by cashless
exercise as set forth in Section 1.2, or (iii)any combination thereof.
1.2 Cashless Exercise. The Holder shall have the right to surrender
each Warrant, in whole or in part, to the Company together with a notice of
cashless exercise, in which event the Company shall exchange such Warrant
determined as follows:
X=Y multiplied by (A-B)/A
where:
X=the number of Common Stock to be issued to the Holder
Y=the number of Warrant Shares with respect to which the Warrant is
being exercised
A=the average of the per share Fair Market Value of the Common Stock
for the five (5) trading days immediately prior to (but not including)
the date of exercise
B=the Exercise Price
1.3 Fair Market Value. "Fair Market Value" means on any particular
date (i) the closing bid price per Common Stock on such date on the national
securities exchange or automated quotation system on which the Common Stock is
then listed or if there is no such price on such date, then the closing bid
price on such exchange or quotation system on the date nearest preceding such
date, or (ii) if the Common Stock is not then listed on a national securities
exchange or automated quotation system, the closing bid price for each Common
Stock in the over-the-counter market, as reported by the National Quotation
Bureau Incorporated (or similar organization or agency succeeding to its
functions of reporting prices) at the close of business on such date.
1.4 Delivery of Certificate and New Warrant. Promptly after Holder
exercises this Warrant, and in any event within ten (10) days after the
Company's receipt of the Holder's Notice of Exercise, the Company shall deliver
(i) to or upon the written order of the Holder and in such name or names as
such Holder may designate a certificate or certificates for the number of full
Warrant Shares issuable upon the exercise of such Warrants (and such other
consideration as may be deliverable upon exercise of such Warrants) together
with cash for fractional Warrant Shares and (ii) a Warrant(s) in like tenor as
such exercised Warrants to purchase the number of Warrant Shares in respect of
which such Warrants shall not have been exercised.
1.5 Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, if reasonably
required by the Company, on delivery of an indemnity agreement
-2-
reasonably satisfactory in form and amount to the Company or, in the case of
mutilation, or surrender and cancellation of this Warrant, the Company at its
expense shall execute and deliver, in lieu of this Warrant, a new warrant in
substantially identical form.
ARTICLE 2. ADJUSTMENTS TO THE EXERCISE PRICE AND WARRANT NUMBER
The Exercise Price, the type of Warrant Shares and the number of
shares of Common Stock issuable upon the exercise of each Warrant (the "Warrant
Number") are subject to adjustment from time to time upon the occurrence of the
events enumerated in, or as otherwise provided in, this Article 2.
2.1 Adjustment for Change in Capital Stock. If the Company:
(i) pays, makes or declares a dividend or a distribution on its Common
Stock in shares of its Common Stock;
(ii) subdivides or reclassifies its outstanding shares of Common Stock
into a greater number of shares;
(iii) combines or reclassifies its outstanding shares of Common Stock
into a smaller number of shares; or
(iv) issues by reclassification of its Common Stock any shares of its
capital stock (other than reclassification arising solely as a result
of a change in the par value or no par value of the Common Stock);
then the Warrant Number, the type of Warrant Shares and the Exercise Price in
effect immediately prior to such action shall be proportionately adjusted so
that the Holder of any Warrant thereafter exercised shall receive the aggregate
number and kind of shares of capital stock of the Company which it would have
received immediately following such action if such Warrant had been exercised
immediately prior to such action for the same aggregate consideration that such
Holder would have paid if such Warrant had been exercised immediately prior to
such action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
Such adjustment shall be made successively whenever any event listed
above shall occur.
The Company shall not issue shares of Common Stock as a dividend
or distribution on any class of capital stock other than Common Stock unless
(i) the Holder also receives such
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dividend or distribution on a ratable basis or (ii) the appropriate adjustment
to the Warrant Number and Exercise Price is made under this Section 2.1.
2.2 Reorganizations.
In case of (i) any capital reorganization or reclassification, other
than in the cases referred to in Section 2.1 hereof, (ii) the consolidation,
amalgamation or merger of the Company with or into another corporation (other
than a merger or consolidation in which the Company is the continuing
corporation and which does not result in any reclassification of the
outstanding shares of the Company's capital stock into shares of other stock or
other securities or property), (iii) the sale of the property or assets of the
Company as an entirety or substantially as an entirety, or (iv) any other
transaction in which the Common Stock is changed into or exchanged for stock or
securities of any other person, company or entity (collectively, such actions
being hereinafter referred to as "Reorganizations"), there shall thereafter be
deliverable upon exercise (at the aggregate Exercise Price in effect at the
time of the consummation of any such Reorganization for all Common Stock
issuable upon such exercise immediately prior to the consummation of any such
transaction) of any Warrant (in lieu of the number of shares of Common Stock
theretofore deliverable) the number of shares of stock or other securities or
property to which a holder of the number of shares of Common Stock that would
otherwise have been deliverable upon the exercise of such Warrant would have
been entitled upon such Reorganization if such Warrant had been exercised in
full immediately prior to such Reorganization. In case of any Reorganization,
appropriate adjustment, as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a duly adopted
resolution certified by the Company's Secretary or Assistant Secretary, shall
be made in the application of the provisions herein set forth with respect to
the rights and interests of Holders so that the provisions set forth herein
shall thereafter be applicable in relation to any shares or other property
thereafter deliverable upon exercise of Warrants.
The Company shall not effect any such Reorganization unless prior to
or simultaneously with the consummation thereof, (i) notice of such
Reorganization shall be given to each of the Holders of the Warrants, (ii) the
successor corporation (if other than the Company) resulting from such
Reorganization or the corporation purchasing or leasing such assets or other
appropriate corporation or entity shall expressly assume, by a supplemental
Warrant Agreement or other acknowledgment executed and delivered to, and
reasonably satisfactory to, the Holder(s), the obligation to deliver to each
such Holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, such Holder may be entitled to purchase, and all
other obligations and liabilities under this Agreement and the Warrants and
(iii) if the Company shall survive the consummation of such Reorganization,
such assumption shall be in addition to, and shall not release the Company
from, any continuing obligations of the Company under this Agreement or the
Warrants.
2.3 No Impairment. The Company shall not, by amendment of its Articles
of Incorporation or through a reorganization, transfer of assets,
consolidation, merger, dissolution,
-4-
issue, or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed under this Warrant by the Company, but shall at all times in good
faith assist in carrying out of all the provisions of this Article 2 and in
taking all such action as may be necessary or appropriate to protect Holder's
rights under this Article against impairment. If the Company takes any action
affecting the Warrant Shares or its Common Stock other than as described above
that adversely affects Holder's rights under this Warrant, the Exercise Price
shall be adjusted downward and the number of Warrant Shares issuable upon
exercise of this Warrant shall be adjusted upward in such a manner that the
aggregate Exercise Price of this Warrant is unchanged.
2.4 Fractional Shares. No fractional Warrant Shares shall be issuable
upon exercise or conversion of the Warrant and the number of Warrant Shares to
be issued shall be rounded down to the nearest whole Warrant Share. If a
fractional share interest arises upon any exercise or conversion of the
Warrant, the Company shall eliminate such fractional share interest by paying
the Holder an amount computed by multiplying the fractional interest by the
Fair Market Value of a full Warrant Share.
2.5 Certificate as to Adjustments. Upon each adjustment as set forth
in this Article 2, the Company at its expense shall promptly compute such
adjustment, and furnish Holder with a certificate of an officer of the Company
setting forth such adjustment and the facts upon which such adjustment is
based. The Company shall, upon written request, furnish Holder a certificate
setting forth the Exercise Price and the number of Warrant Shares issuable upon
exercise or conversion of the Warrant in effect upon the date thereof and the
series of adjustments leading to any adjustments thereof.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY
3.1 Representations and Warranties. The Company hereby represents and
warrants to the Holder that: (i) the Company is a corporation duly
incorporated, validly existing and in good standing under the laws of Delaware;
(ii) the Warrant Agreement and the Warrant have been duly authorized, executed
and delivered by the Company and are valid and binding agreements of the
Company, enforceable against the Company in accordance with their respective
terms; and (iii) the authorized capital stock of the Company, immediately prior
to the date hereof, consist of 500,000,000 shares of Common Stock, par value
$.0001, and 10,000,000 shares of Preferred Stock, par value $.0001. The Company
hereby represents and warrants to the Holder that all Warrant Shares which may
be issued upon the exercise of the purchase right represented by this Warrant,
and all securities, if any, issuable upon conversion of the Warrant Shares,
shall, upon issuance in accordance with the terms of this Warrant, be duly
authorized, validly issued, fully paid and nonassessable, and free of any liens
and encumbrances except for restrictions on transfer provided for herein or
under applicable federal and state securities laws.
-5-
3.2 Notices to Warrant Holders. Upon any adjustment pursuant to
Article 2 hereof, the Company shall promptly thereafter (i) cause to be filed
with the Company a certificate of an officer of the Company setting forth the
Warrant Number and Exercise Price after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculations are based, and (ii) cause to be given to each of the Holders at
its address appearing on the Warrant Register written notice of such
adjustments. Where appropriate, such notice may be given in advance and
included as a part of the notice required to be mailed under the other
provisions of this Section 3.2.
In case:
(a) the Company shall authorize the issuance to all holders of shares
of Common Stock of rights, options or warrants to subscribe for or
purchase shares of Common Stock or of any other subscription rights or
warrants;
(b) the Company shall authorize the distribution to all holders of
shares of Common Stock of assets, including cash, evidences of its
indebtedness, or other securities;
(c) of any consolidation or merger to which the Company is a party and
for which approval of any shareholders of the Company is required, or
of the conveyance or transfer of the properties and assets of the
Company substantially as an entirety, or of any reclassification or
change of Common Stock issuable upon exercise of the Warrants (other
than a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or
combination), or a tender offer or exchange offer for shares of Common
Stock;
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company proposes to take any action that would require an
adjustment to the Warrant Number pursuant to Article 2 hereof;
then the Company shall cause to be given to each of the Holders at its address
appearing on the Warrant Register, at least 20 Business Days prior to the
applicable record date hereinafter specified, or the date of the event in the
case of events for which there is no record date, in accordance with the
provisions of Section 6.5 hereof, a written notice stating (i) the date as of
which the holders of record of shares of the capital stock of the Company to be
entitled to receive any such rights, options, warrants or distribution are to
be determined, or (ii) the initial expiration date set forth in any tender
offer or exchange offer for shares of the capital stock of the Company, or
(iii) the date on which any such consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up is expected to become effective or
consummated, and the date as of which it is expected that holders of record of
shares of the capital stock of the Company shall be entitled to exchange such
shares for securities or other property, if any,
-6-
deliverable upon such reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up. The failure to give the
notice required by this Section 3.2 or any defect therein shall not affect the
legality or validity of any distribution, right, option, warrant,
consolidation, merger, conveyance, transfer, dissolution, liquidation or
winding up, or the vote upon any action.
Nothing contained in this Warrant Certificate shall be construed as
conferring upon the Holders (prior to the exercise of such Warrants) the right
to vote or to consent, or any rights whatsoever as shareholders of the Company;
provided, however, that nothing in the foregoing provision is intended to
detract from any rights explicitly granted to any Holder hereunder.
ARTICLE 4. REPRESENTATIONS OF HOLDER
In connection with the proposed purchase of the Warrant, Holder hereby
represents to the Company as of the Issue Date as follows:
4.1 Investment. Holder is purchasing the Warrant for its own account
for investment purposes only and not with a view to, or for the resale in
connection with, any "distribution" thereof for purposes of the Securities Act
of 1933, as amended (the "Securities Act").
4.2 Knowledge. Holder is aware of the Company's business affairs and
financial condition, and has acquired sufficient information about the Company
to reach an informed and knowledgeable decision to acquire the Warrant.
4.3 Registration. Holder understands that the Warrant has not been
registered under the Securities Act in reliance upon a specific exemption
therefor, which exemption depends upon, among other things, the bona fide
nature of Holder's investment intent as expressed herein. Holder further
understands that the Warrant must be held indefinitely unless subsequently
registered under the Securities Act or unless an exemption from registration is
otherwise available. Moreover, Holder understands that the Company is under no
obligation to register the Warrant. In addition, Holder understands that the
certificate evidencing the Warrant will be imprinted with the legend referred
to in the Warrant until such time as the same shall have been registered under
the Securities Act of 1933, as amended (the "Securities Act") or sold pursuant
to Rule 144 promulgated thereunder (or similar rule or regulation), unless in
the reasonable opinion of the Holder's counsel, such legend is no longer
required by the Securities Act.
4.4 Rule 144.
(i) Resale Conditions. Holder is aware of the provisions of Rule
144, promulgated under the Securities Act, which, in substance, permit limited
public resale of
-7-
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non-public offering subject
to the satisfaction of certain conditions, if applicable.
(ii) Resale Restrictions. Holder further understands that at the
time it wishes to sell the Warrant there may be no public market upon which to
make such a sale, and that, even if such a public market upon which to make
such a sale then exists, the Company may not be satisfying the current public
information requirements of Rule 144, and that, in such event, Holder may be
precluded from selling the Warrant under Rule 144 even if any applicable
one-year minimum holding period has been satisfied.
(iii) Non-Rule 144 Exemption. Holder further understands that, in
the event all of the requirements of Rule 144 are not satisfied, then
registration under the Securities Act, compliance with Regulation A, or some
other exemption from registration will be required in order for the Holder to
sell the Warrant.
ARTICLE 5. VESTING
5.1 Vesting. This Warrant is fully vested.
ARTICLE 6. MISCELLANEOUS
6.1 Term; Notice of Expiration. This Warrant is exercisable, in whole
or in part, at any time and from time to time on or before the Expiration Date
set forth above.
6.2 Legends. This Warrant and the Warrant Shares (and the securities
issuable, directly or indirectly, upon conversion of the Warrant Shares, if
any) shall be imprinted with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES ACTS, AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACTS
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
6.3 Compliance with Securities Laws on Transfer. Prior to any proposed
transfer of the Warrants or the Warrant Shares, unless such transfer is made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act"), the transferring Holder will deliver
to the Company an opinion of counsel, reasonably satisfactory in form and
substance to the Company, to the effect that the Warrants or Warrant Shares, as
applicable, may be sold or otherwise transferred without registration under the
Securities Act. Notwithstanding anything to the contrary, the Warrants shall be
transferable by a Holder, in whole or in part, to
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one or more of such Holder's affiliates, members, managers or partners, in
each case, without the consent of the Company, so long as (a) the Company is
notified of such a transfer, (b) any such transferee is an "accredited
investor" (as defined in the Securities Act) and (c) there are no more than
ten (10) transfers to more than ten (10) such affiliates, members, managers or
partners pursuant to this provision.
6.4 Transfer Procedure. Subject to the provisions of Section 6.3,
Holder may transfer all or any of the Warrant Shares issued upon exercise of
this Warrant (or the securities issuable, directly or indirectly, upon
conversion of the Warrant Shares, if any) by giving the Company notice of the
Warrant Shares being transferred, setting forth the name, address and taxpayer
identification number of transferees and surrendering the certificate(s) for
the Warrant Shares being transferred to the Company for reissuance to the
transferee(s) (and Holder if applicable).
6.5 Notices. All notices and other communications from the Company to
the Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, telex, facsimile or overnight air courier guaranteeing next day
delivery at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such holder from time
to time. Until otherwise instructed in writing by Holder, the notice address
for Holder shall be c/o The ▇▇▇▇▇▇ Group located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Until otherwise instructed in writing by the
Company, the notice address for the Company shall be Scient, Inc. located at ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
6.6 Waiver. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
6.7 Attorneys' Fees. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
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6.8 Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to its
principles regarding conflicts of law.
COMPANY:
SCIENT, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. Formant
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▇▇▇▇▇▇▇▇▇▇▇ ▇. Formant
President
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Secretary
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APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase shares of the
Common Stock of pursuant to the
terms of the attached Warrant, and tenders herewith payment of the purchase
price of such shares in full.
2. The undersigned hereby elects to convert the attached Warrant into
Shares/cash [strike one] in the manner specified in the Warrant. This
conversion is exercised with respect to of the Shares
covered by the Warrant.
3. Please issue a certificate or certificates representing said shares
in the name of the undersigned or in such other name as is specified below:
-----------------------------------------
(Name)
-----------------------------------------
-----------------------------------------
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(Address)
4. The undersigned represents it is acquiring the shares solely for
its own account and not as a nominee for any other party and not with a view
toward the resale or distribution thereof except in compliance with applicable
securities laws.
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(Signature)
-----------------------------
(Date)
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