EXHIBIT C
TRANSACTION AGREEMENT, dated as of August 21, 2003 (this
"Agreement"), by and between Xxxxx Xxxxxx ("Xxxxxx") and ClearBlue Technologies,
Inc., a Delaware corporation ("ClearBlue").
WHEREAS, the parties hereto desire to consummate the
transactions contemplated herein, pursuant to which (a) Xxxxxx will transfer to
ClearBlue 89,793 shares (collectively, the "ClearBlue Shares") of Common Stock,
par value $0.01 per share, of ClearBlue owned by Xxxxxx, (b) ClearBlue will
transfer to Xxxxxx 50,000 shares (collectively, the "NaviSite Shares") of Common
Stock, par value $0.01 per share, of NaviSite, Inc., a Delaware corporation
("NaviSite") owned by ClearBlue, and (c) ClearBlue will assign, and Xxxxxx will
assume, .75% of the outstanding principal and interest (the " Xxxxxx
Percentage") owing under that certain outstanding Promissory Note (the "Note"),
dated June 1, 2002, issued by ClearBlue in favor of Unicorn Worldwide Holdings
Limited ("Unicorn") and assigned by Unicorn to Atlantic Investors LLC, a
Delaware limited liability company ("Atlantic"), under that certain Assignment
of Promissory Note and Security Agreement, dated December 13, 2002, by and
between Unicorn and Atlantic, pursuant to the Assumption and Assignment
Agreement (the "Assumption and Assignment Agreement"), substantially in the form
attached hereto as Exhibit I.
WHEREAS, for United States federal income tax purposes, the
transactions contemplated hereby are intended to qualify as a tax-free
reorganization under Section 368 of the Internal Revenue Code of 1986, as
amended (together with all rules and regulations issued thereunder (the "Code"))
and this Agreement is intended to be adopted as a plan of reorganization for
purposes of Section 368 of the Code.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties hereto
agree as follows:
ARTICLE I
Definitions
SECTION 1.1. "Definitions". As used herein, the following terms shall have
the following meanings:
"Act" means the Securities Act of 1933, as amended, and the
rules and regulations issued in respect thereto.
"Encumbrance" means any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
otherwise), charge against or interest in property to secure payment of a debt
or performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
"Event of Default" shall have the meaning ascribed to such
term in the Note.
"Law" means any law, statute, regulation, rule, ordinance,
requirement or other binding action or requirement of any governmental,
regulatory or administrative body, agency or authority or any court of judicial
authority.
"Order" means any decree, order, judgment, writ, award,
injunction, stipulation or consent of or by any Federal, state or local
government or any court, administrative agency or commission or other
governmental authority or agency, domestic or foreign.
"Person" means any individual, corporation, general or limited
partnership, joint venture, association, limited liability company, joint stock
company, trust, business, bank, trust company, estate (including any
beneficiaries thereof), unincorporated entity, cooperative, association,
government branch, agency or political subdivision thereof or organization of
any kind.
"Transaction Documents" means any ancillary contracts,
agreements or other documents that are to be entered into in connection with the
transactions contemplated hereby (including, without limitation, the Assumption
and Assignment Agreement).
ARTICLE II
Exchange of Stock; Assumption and
Assignment of Xxxxxx Percentage Under the Note
SECTION 2.1. Exchange. Subject to the terms and conditions of this Agreement, at
the Closing, Xxxxxx agrees to transfer to ClearBlue the ClearBlue Shares and
assume the MARIN Percentage of the Note, and ClearBlue agrees to transfer to
Xxxxxx the NaviSite Shares and assign to Xxxxxx the Xxxxxx Percentage of the
Note. In connection with the January 2003 business combination of Navisite and
Avasta, Inc. ("Avasta"), ClearBlue may be required to satisfy certain earnout
obligations which would require ClearBlue to issue shares of NaviSite common
stock to the former stockholders of Avasta (the "Earnout Obligation"). ClearBlue
has reserved 132,634 shares of NaviSite common stock to satisfy, if required,
the Earnout Obligation. To the extent, ClearBlue is not required to satisfy the
Earnout Obligation or the number of shares reserved by ClearBlue is greater than
the number of shares issued in satisfaction of the Earnout Obligation, ClearBlue
will issue to Xxxxxx prior to ClearBlue's dissolution .75% of such shares.
SECTION 2.2. The Closing.
(a) Subject to the terms and conditions of this Agreement, the closing of
the transactions contemplated by this Agreement (the "Closing") shall
take place as promptly as possible but no later than the fifth (5th)
business day following the day the last of the conditions set forth in
Article V shall have been fulfilled or waived (other than those that
this Agreement contemplates will be satisfied at or immediately prior
to the Closing), or at such other time as shall be mutually agreed upon
by Xxxxxx and ClearBlue (the "Closing Date").
(b) Subject to the conditions set forth in this Agreement, the parties
agree to consummate the following transactions at the Closing:
(i) ClearBlue shall assign and transfer to Xxxxxx the NaviSite Shares, by
physically delivering to Xxxxxx one (1) or more stock certificates
representing the NaviSite Shares being sold, duly endorsed or
accompanied by duly executed stock powers sufficient to validly
transfer the NaviSite Shares to Xxxxxx or its nominee;
(ii) Xxxxxx shall assign and transfer to ClearBlue the ClearBlue Shares, by
physically delivering to ClearBlue one (1) or more stock certificates
representing the ClearBlue Shares being sold, duly endorsed or
accompanied by duly executed stock powers sufficient to validly
transfer the ClearBlue Shares to ClearBlue or its nominee; and
(iii) Each of Xxxxxx and ClearBlue shall deliver an executed original of the
Assumption and Assignment Agreement to the other.
ARTICLE III
Representations and Warranties of Xxxxxx
Xxxxxx represents and warrants to ClearBlue that the
statements contained in this Article III are true and correct as of the date of
this Agreement and will be true and correct as of the Closing as though made as
of the Closing, except to the extent such representations and warranties are
specifically made as of a particular date (in which case such representations
and warranties will be true and correct as of such date).
SECTION 3.1. POWER AND AUTHORITY; Enforceability. Xxxxxx has all requisite
capacity, power and authority to execute, deliver and perform this Agreement.
This Agreement has been duly executed and delivered and, upon execution by
ClearBlue, will constitute a valid and legally binding obligation of Xxxxxx,
enforceable against Xxxxxx in accordance with its terms, except (a) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws
of general application affecting enforcement of creditors' rights generally and
(b) as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies.
SECTION 3.2. OWNERSHIP; TRANSFERABILITY. Xxxxxx is the legal and beneficial
owner of the ClearBlue Shares, free and clear of any Encumbrance or restriction
on transfer, other than (i) restrictions under the Act and (ii) restrictions
reflected in a legend on the certificates representing the ClearBlue Shares.
SECTION 3.3. CONSENTS AND APPROVALS. Neither the execution, delivery and
performance of this Agreement by Xxxxxx, nor the consummation by Xxxxxx of any
transaction related hereto, including the transfer, sale and delivery of the
ClearBlue Shares and the assumption of the Xxxxxx Percentage of the Note, will
require any consent, approval, license, Order or authorization of, filing,
registration, declaration or taking of any other action with, or notice to, any
Person, other than such consents, approvals, filings or actions as may be
required (a) under the Federal securities laws which have or will be made, and
(b) from Atlantic with respect to the assignment and assumption of the Xxxxxx
Percentage of the Note.
SECTION 3.4. NO CONFLICTS. The execution and delivery by Xxxxxx of this
Agreement and the Transaction Documents to which it is or will become a party do
not, and the consummation of the transactions contemplated by this Agreement and
the Transaction Documents to which it is or will become a party (the
"Contemplated Transactions") shall not, assuming the consents, approvals,
filings or actions described in Section 3.3 are made or obtained, as the case
may be, (a) contravene, conflict with, or result in any violation or breach of
any provision of the certificate of incorporation or by-laws of Xxxxxx, (b)
result in any violation or breach of, or constitute (with or without notice or
lapse of time, or both) a default (or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any benefit) under any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, contract or other agreement, instrument or obligation to which Xxxxxx is
a party or by which it or any of its properties or assets may be bound, or (c)
conflict or violate any permit, concession, franchise, license, judgment, Order,
decree, statute, law, ordinance, rule or regulation of any government,
governmental instrumentality or court, domestic or foreign, applicable to Xxxxxx
or any of its properties or assets, except in the case of (b) and (c) for any
such conflicts, violations, defaults, terminations, cancellations or
accelerations which would not, individually or in the aggregate, materially and
adversely affect the ClearBlue Shares being conveyed by Xxxxxx to ClearBlue.
SECTION 3.5. Purchase Entirely for Own Account.
(a) The NaviSite Shares to be received by Xxxxxx will be acquired for investment
for its own account, and not with a view to the resale or distribution of any
part thereof.
(b) Xxxxxx has no present intention of selling, granting any participation in,
or otherwise distributing the NaviSite Shares, except, in the case of (a) and
(b) of this Section 3.5, as permitted by the Act.
(c) Xxxxxx is an "accredited investor" under Rule 501(a) promulgated under the
Act.
SECTION 3.6. Restricted Securities. Xxxxxx understands that the NaviSite Shares
are characterized as "restricted securities" under the Federal securities laws
and that under such laws and applicable regulations such securities may be
resold without registration under the Act only in certain limited circumstances.
SECTION 3.7. Legends. It is understood that the certificate(s) evidencing the
NaviSite Shares shall bear a legend substantially in the form below:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR WITH ANY STATE
SECURITIES COMMISSION, AND MAY NOT BE TRANSFERRED OR DISPOSED OF BY THE
HOLDER IN THE ABSENCE OF A REGISTRATION STATEMENT WHICH IS EFFECTIVE
UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE LAWS AND RULES OR
UNLESS SUCH TRANSFER MAY BE EFFECTED WITHOUT VIOLATION OF THE
SECURITIES ACT OF 1933 AND OTHER APPLICABLE STATE LAWS AND RULES.
SECTION 3.8. Brokers, etc. Xxxxxx is not obligated to pay any fee or commission
to any broker, finder or other similar Person in connection with the
transactions contemplated by this Agreement (other than any fees or commissions
that are solely for the account of Xxxxxx).
SECTION 3.9. NaviSite Non-Public Information. Xxxxxx acknowledges that it is
aware that ClearBlue may have material non-public information concerning itself
and NaviSite, as ClearBlue a direct significant shareholder of NaviSite.
ARTICLE IV
Representations and Warranties of ClearBlue
ClearBlue represents and warrants to Xxxxxx that the statements contained
in this Article IV are true and correct as of the date of this Agreement and
will be true and correct as of the Closing as though made as of the Closing,
except to the extent such representations and warranties are specifically made
as of a particular date (in which case such representations and warranties will
be true and correct as of such date).
SECTION 4.1. POWER AND AUTHORITY; ENFORCEABILITY. ClearBlue is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. ClearBlue has all requisite capacity, power and
authority to execute, deliver and perform this Agreement. No other corporate
action on the part of ClearBlue is necessary to authorize the execution and
delivery by ClearBlue of this Agreement or the consummation by it of the
Contemplated Transactions. This Agreement has been duly executed and delivered
and, upon execution by Xxxxxx, xxxx constitute a valid and legally binding
obligation of ClearBlue, enforceable against ClearBlue in accordance with its
terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally and (b) as limited by laws relating
to the availability of specific performance, injunctive relief, or other
equitable remedies.
SECTION 4.2. OWNERSHIP; TRANSFERABILITY. ClearBlue is the legal and beneficial
owner of the NaviSite Shares, free and clear of any Encumbrance or restriction
on transfer, other than (i) restrictions under the Act and (ii) restrictions
reflected in a legend on the certificates representing the NaviSite Shares.
SECTION 4.3. CONSENTS AND APPROVALS. Neither the execution, delivery and
performance of this Agreement by ClearBlue, nor the consummation by ClearBlue of
any transaction related hereto, including the transfer, sale and delivery of the
NaviSite Shares and the assignment of the Xxxxxx Percentage of the Note, will
require any consent, approval, license, Order or authorization of, filing,
registration, declaration or taking of any other action with, or notice to, any
Person, other than such consents, approvals, filings or actions as may be
required (a) under the Federal securities laws which have or will be made, and
(b) from Atlantic with respect to the assignment and assumption of the Xxxxxx
Percentage of the Note.
SECTION 4.4. NO CONFLICTS. The execution and delivery by ClearBlue of this
Agreement and the Transaction Documents to which it is or will become a party do
not, and the consummation of the Contemplated Transactions shall not, assuming
the consents, approvals, filings or actions described in Section 4.3 are made or
obtained, as the case may be, (a) contravene, conflict with, or result in any
violation or breach of any provision of the certificate of incorporation or
by-laws of ClearBlue, (b) result in any violation or breach of, or constitute
(with or without notice or lapse of time, or both) a default (or give rise to a
right of termination, cancellation or acceleration of any obligation or loss of
any benefit) under any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, lease, contract or other agreement, instrument or
obligation to which ClearBlue is a party or by which it or any of its properties
or assets may be bound, or (c) conflict or violate any permit, concession,
franchise, license, judgment, Order, decree, statute, law, ordinance, rule or
regulation of any government, governmental instrumentality or court, domestic or
foreign, applicable to ClearBlue or any of its properties or assets, except in
the case of (b) and (c) for any such conflicts, violations, defaults,
terminations, cancellations or accelerations which would not, individually or in
the aggregate, materially and adversely affect the NaviSite Shares being
conveyed by ClearBlue to Xxxxxx or result in an Event of Default under the Note.
SECTION 4.5. Purchase Entirely for Own Account.
(a) The ClearBlue Shares to be received by ClearBlue will be acquired for
investment for its own account, and not with a view to the resale or
distribution of any part thereof.
(b) ClearBlue has no present intention of selling, granting any participation
in, or otherwise distributing the ClearBlue Shares, except, in the case of (a)
and (b) of this Section 4.5, as permitted by the Act.
(c) ClearBlue is an "accredited investor" under Rule 501(a) promulgated under
the Act.
SECTION 4.6. Restricted Securities. ClearBlue understands that the ClearBlue
Shares are characterized as "restricted securities" under the Federal securities
laws and that under such laws and applicable regulations such securities may be
resold without registration under the Act only in certain limited circumstances.
SECTION 4.7. Legends. It is understood that the certificate(s) evidencing the
ClearBlue Shares shall bear a legend substantially in the form below:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR WITH ANY STATE
SECURITIES COMMISSION, AND MAY NOT BE TRANSFERRED OR DISPOSED OF BY THE
HOLDER IN THE ABSENCE OF A REGISTRATION STATEMENT WHICH IS EFFECTIVE
UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE LAWS AND RULES OR
UNLESS SUCH TRANSFER MAY BE EFFECTED WITHOUT VIOLATION OF THE
SECURITIES ACT OF 1933 AND OTHER APPLICABLE STATE LAWS AND RULES.
SECTION 4.8. Brokers' Fees. ClearBlue has no liability or obligation to pay any
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement (other than any fees or commissions
that are solely for the account of ClearBlue).
SECTION 4.9. Non-Public Information. ClearBlue acknowledges that it is aware
that Xxxxxx may have material non-public information concerning NaviSite and
ClearBlue as Xxxxxx is a shareholder of each of NaviSite and ClearBlue.
SECTION 4.10. Note. As of the date hereof, the amount of principal outstanding
under the Note is $23,059,406 and the amount of unpaid interest under the Note
is $2,253,721. No Event of Default has occurred and is continuing.
ARTICLE V
Conditions Precedent; Related Covenants
SECTION 5.1. CLOSING EFFORTS. Each of the parties hereto shall use its
commercially reasonable efforts ("Reasonable Efforts") to take all actions and
to do all things necessary, proper or advisable to consummate the transactions
contemplated by this Agreement, including using its Reasonable Efforts to ensure
that (i) its representations and warranties remain true and correct in all
material respects through the Closing Date, and (ii) the conditions to the
obligations of the other parties to consummate the transaction are satisfied.
SECTION 5.2. CONDITIONS PRECEDENT TO OBLIGATIONS OF CLEARBLUE. The obligations
of ClearBlue to transfer the NaviSite Shares, purchase the ClearBlue Shares and
assign the MARIN Percentage of the Note at the Closing are subject to the
fulfillment of the condition that, at the Closing, the representations and
warranties of Xxxxxx set forth in this Agreement that are qualified as to
materiality shall be true and correct in all respects, and all other
representations and warranties of Xxxxxx set forth in this Agreement shall be
true and correct in all material respects, in each case as of the date of this
Agreement and as of the Closing as though made as of the Closing, except to the
extent such representations and warranties are specifically made as of a
particular date (in which case such representations and warranties shall be true
and correct as of such date).
SECTION 5.3. CONDITIONS PRECEDENT TO OBLIGATIONS OF XXXXXX. The obligations of
Xxxxxx to sell the ClearBlue Shares, purchase the NaviSite Shares and assume the
MARIN Percentage of the Note at the Closing are subject to the fulfillment of
the condition that, at the Closing, the representations and warranties of
ClearBlue set forth in this Agreement that are qualified as to materiality shall
be true and correct in all respects, and all other representations and
warranties of ClearBlue set forth in this Agreement shall be true and correct in
all material respects, in each case as of the date of this Agreement and as of
the Closing as though made as of the Closing, except to the extent such
representations and warranties are specifically made as of a particular date (in
which case such representations and warranties shall be true and correct as of
such date).
SECTION 5.4. CONDITIONS PRECEDENT TO THE OBLIGATION OF CLEARBLUE AND XXXXXX. The
obligations of ClearBlue and Xxxxxx to consummate the Contemplated Transactions
at the Closing shall also be subject to the fulfillment of the following
conditions:
(a) The parties shall have received the consent of Atlantic to the
assignment by ClearBlue and the assumption by Xxxxxx of the Xxxxxx
Percentage of the Note.
(b) The parties shall have received from Atlantic, in form and substance
reasonably satisfactory to ClearBlue and Xxxxxx:
(i) confirmation of the outstanding principal and interest under the
Note as of the Closing Date;
(ii) confirmation that there are no Events of Default as of the Closing
Date; and
(iii) agreement that the Xxxxxx Percentage of the Note, when assigned to
and assumed by Xxxxxx, xxxx be a general, unsecured obligation of
Xxxxxx without the benefit of the Security Agreement described in
the Note.
ARTICLE VI
TERMINATION
SECTION 6.1. TERMINATION BY MUTUAL CONSENT. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned at any time
prior to the Closing by the written consent of each party hereto.
SECTION 6.2. TERMINATION BY EITHER XXXXXX OR CLEARBLUE. This Agreement may be
terminated (upon written notice from the terminating party hereto to the other
party hereto) and the transactions contemplated hereby may be abandoned by
action of any party hereto, if (a) the Closing shall not have occurred on or
prior to August 21, 2003, or (b) any Federal, state or local government or any
court, administrative agency or commission or other governmental authority or
agency, domestic or foreign shall have issued a Law or Order permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated
hereby and such Law or Order shall have become final and nonappealable.
SECTION 6.3. EFFECT OF TERMINATION AND ABANDONMENT. In the event of termination
of this Agreement pursuant to this Article VI hereof, no party hereto or, its
directors or officers or other controlling persons shall have any liability or
further obligation to any other party hereto pursuant to this Agreement, except
that Article VIII hereof shall survive termination of this Agreement and nothing
herein will relieve any party hereto from liability for any breach of this
Agreement occurring prior to such termination.
ARTICLE VII
RESERVED
ARTICLE VIII
GENERAL PROVISIONS; OTHER AGREEMENTS
SECTION 8.1. PRESS RELEASES. Other than any required filings under the Federal
securities laws, none of the parties hereto will, without first obtaining the
approval of the other, make any public announcement, directly or indirectly,
regarding this Agreement, nor the nature of the transaction contemplated by this
Agreement, to any person except as required by law or regulatory bodies and
other than to the respective principals or other representatives of the Parties,
each of whom shall be similarly bound by such confidentiality obligations. If
any such press release or public announcement is so required by either party
(except in the case of any disclosure required under the Federal securities laws
to be made in a filing with the Securities and Exchange Commission), the
disclosing party shall consult with the other parties prior to making such
disclosure, and the parties shall use all reasonable efforts, acting in good
faith, to agree upon a text for such disclosure which is satisfactory to each of
the parties.
SECTION 8.2. TAX-FREE TRANSACTION. From and after the date of this Agreement,
ClearBlue shall use all reasonable efforts to cause the transactions
contemplated hereby to qualify, and shall not knowingly take any actions or
permit any actions to be taken that could reasonably be expected to prevent said
transactions from qualifying as a "reorganization" under Section 368(a) of the
Code. This Agreement shall be, and hereby is, adopted by ClearBlue as a plan of
reorganization for purposes of Section 368 of the Code.
SECTION 8.3. EXPENSES. Regardless of whether the transactions contemplated
hereby are consummated, all legal and other costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party hereto incurring such costs and expenses.
SECTION 8.4. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to the
conflicts of laws provisions thereof.
SECTION 8.5. HEADINGS. Article and Section headings used in this Agreement are
for convenience only and shall not affect the meaning or construction of this
Agreement.
SECTION 8.6. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements and
understandings, both written and oral, with respect to the subject matter
hereof.
SECTION 8.7. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Signatures on this
Agreement may be communicated by facsimile transmission and shall be binding
upon the parties hereto so transmitting their signatures. Counterparts with
original signatures shall be provided to the other parties hereto following the
applicable facsimile transmission; provided that the failure to provide the
original counterpart shall have no effect on the validity or the binding nature
of this Agreement.
SECTION 8.8. AMENDMENT. Any term of this Agreement may be modified or amended
only by an instrument in writing signed by each of the parties hereto.
SECTION 8.9. Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforced in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have caused this
Transaction Agreement to be duly executed and delivered as of the date set forth
above.
----------------------------
Xxxxx Xxxxxx
00 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
CLEARBLUE TECHNOLOGIES, INC.
00 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
By: _______________________________
Name: Xxxxxx Xxxxxx
Title: Vice President
EXHIBIT I
ASSUMPTION AND ASSIGNMENT AGREEMENT
