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EXHIBIT 10.11
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SECURITIES PURCHASE AGREEMENT
BETWEEN
FUTURELINK CORP.
AND
CPQ HOLDINGS, INC.
DATED AS OF
DECEMBER 6, 1999
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.................................................................. 1
Section 1.1 "Action".......................................................... 1
Section 1.2 "Affiliate"....................................................... 1
Section 1.3 "Agreement"....................................................... 1
Section 1.4 "Board of Directors".............................................. 1
Section 1.5 "Business Day".................................................... 1
Section 1.6 "Buyer"........................................................... 1
Section 1.7 "Closing"......................................................... 2
Section 1.8 "Closing Date".................................................... 2
Section 1.9 "Commitment"...................................................... 2
Section 1.10 "Company"........................................................ 2
Section 1.11 "Company Charter"................................................. 2
Section 1.12 "Company Common Stock"............................................ 2
Section 1.13 "Company Reports"................................................. 2
Section 1.14 "Company Stock"................................................... 2
Section 1.15 "Exchange Act".................................................... 2
Section 1.16 "GAAP"............................................................ 2
Section 1.17 "Government Authority"............................................ 2
Section 1.18 "Liabilities"..................................................... 2
Section 1.19 "Liens"........................................................... 3
Section 1.20 "Master Lease Agreement".......................................... 3
Section 1.21 "Material Adverse Effect"......................................... 3
Section 1.22 "person".......................................................... 3
Section 1.23 "Purchase Price".................................................. 3
Section 1.24 "Purchased Shares"................................................ 3
Section 1.25 "Registration Rights Agreement"................................... 3
Section 1.26 "SEC"............................................................. 3
Section 1.27 "Securities Laws"................................................. 3
Section 1.28 "Subsidiaries".................................................... 3
ARTICLE II PURCHASE AND SALE OF COMPANY STOCK; CLOSING................................. 4
Section 2.1 Purchase and Sale................................................. 4
Section 2.2 Consideration..................................................... 4
Section 2.3 Additional Agreements and Closing Deliveries...................... 4
Section 2.4 Time and Place of Closing......................................... 4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............................. 5
Section 3.1 Organization and Qualification; Subsidiaries...................... 5
Section 3.2 Authority Relative to Agreements; Board Approval.................. 6
Section 3.3 No Conflicts; No Defaults; Required Filings and Consents.......... 6
Section 3.4 SEC and Other Documents; Financial Statements..................... 7
Section 3.5 Absence of Certain Changes or Events.............................. 7
Section 3.6 No Undisclosed Liabilities........................................ 8
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER..................................... 8
Section 4.1 Organization...................................................... 8
Section 4.2 Due Authorization................................................. 8
Section 4.3 Conflicting Agreements and Other Matters.......................... 8
Section 4.4 Acquisition for Investment; Sophistication........................ 9
Section 4.5 Resources......................................................... 9
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Section 4.6 Brokers or Finders................................................ 9
ARTICLE V COVENANTS RELATING TO CLOSING................................................ 10
Section 5.1 Taking of Necessary Action........................................ 10
Section 5.2 Registration Rights Agreement..................................... 10
Section 5.3 Public Announcements; Confidentiality............................. 10
ARTICLE VI CONDITIONS TO CLOSING....................................................... 11
Section 6.1 Conditions of Closing............................................. 11
Section 6.2 Conditions of Sale................................................ 12
ARTICLE VII SURVIVAL 13
Section 7.1 Survival.......................................................... 13
ARTICLE VIII MISCELLANEOUS............................................................. 13
Section 8.1 Counterparts...................................................... 13
Section 8.2 Governing Law..................................................... 13
Section 8.3 Entire Agreement.................................................. 13
Section 8.4 Notices........................................................... 14
Section 8.5 Successors and Assigns............................................ 14
Section 8.6 Headings.......................................................... 14
Section 8.7 Amendments and Waivers............................................ 15
Section 8.8 Interpretation; Absence of Presumption............................ 15
Section 8.9 Severability...................................................... 15
Section 8.10 Further Assurances................................................ 15
Section 8.11 Specific Performance.............................................. 15
Section 8.12 Interpretation of Schedules....................................... 15
EXHIBITS
Exhibit A Registration Rights Agreement
Exhibit B Lock-Up Agreement
Exhibit C Side Letter dated November 11, 1999
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THIS SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of
December 6, 1999, is made by and between FUTURELINK CORP., a Delaware
corporation (the "Company") and CPQ HOLDINGS, INC. ("Buyer").
RECITALS:
WHEREAS, concurrently herewith Buyer and Company are entering into the
Master Lease and Financing Agreement, dated the date hereof, providing for a
$20,000,000 lease line of credit ("Master Lease Agreement"); and
WHEREAS, Buyer wishes to purchase from the Company, and the Company
wishes to sell to Buyer, for an aggregate purchase price of $2.2 million in
cash, 112,590 shares of the Company's common stock, par value $0.0001 per share
(the "Company Common Stock") on the terms set forth herein;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
ARTICLE I
Definitions
As used in this Agreement, the following terms shall have the following
respective meanings:
Section 1.1 "Action" shall mean any action, suit, arbitration, inquiry,
proceeding or investigation by or before any Government Authority.
Section 1.2 "Affiliate" shall have the meaning ascribed thereto in Rule
12b- 2 promulgated under the Exchange Act, and as in effect on the date hereof.
Section 1.3 "Agreement" shall have the meaning set forth in the first
paragraph hereof.
Section 1.4 "Board of Directors" shall mean the Board of Directors of
the Company.
Section 1.5 "Business Day" shall mean any day other than a Saturday, a
Sunday or a bank holiday in New York, N.Y.
Section 1.6 "Buyer" shall have the meaning set forth in the first
paragraph hereof, together with the successors and assigns of such entity.
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Section 1.7 "Closing" shall mean the closing of the transactions
contemplated by this Agreement.
Section 1.8 "Closing Date" shall mean the date on which the closing of
the transactions contemplated by this Agreement shall occur.
Section 1.9 "Commitment" shall have the meaning set forth in Section
3.5.
Section 1.10 "Company" shall mean FutureLink Corp., a Delaware
corporation.
Section 1.11 "Company Charter" shall mean the Certificate of
Incorporation of the Company and any amendment or supplement thereto, as in
effect on the date hereof.
Section 1.12 "Company Common Stock" shall have the meaning set forth in
the third paragraph hereof.
Section 1.13 "Company Reports" shall have the meaning set forth in
Section 3.4(a).
Section 1.14 "Company Stock" shall mean, collectively, the Company
Common Stock and any other shares of capital stock of the Company.
Section 1.15 "Exchange Act" shall have the meaning set forth in Section
3.3(a)(iv).
Section 1.16 "GAAP" shall have the meaning set forth in Section 3.4(b).
Section 1.17 "Government Authority" shall mean any government or state
(or any subdivision thereof) of or in the United States, or Canada, or any
agency, authority, bureau, commission, department or similar body or
instrumentality thereof, or any governmental court or tribunal.
Section 1.18 "Liabilities" shall mean, as to any person, all debts,
adverse claims, liabilities and obligations, direct, indirect, absolute or
contingent of such person, whether known or unknown, accrued, vested or
otherwise, whether in contract, tort, strict liability or otherwise and whether
or not actually reflected, or required by GAAP to be reflected, in such person's
or entity's balance sheets or other books and records, including, without
limitation, (i) obligations arising from non-compliance with any law, rule or
regulation of any Government Authority or imposed by any court or any arbitrator
of any kind, (ii) all indebtedness or liability of such person for borrowed
money, or for the purchase price of property or services (including trade
obligations), (iii) all obligations of such person as lessee under leases,
capital or other, (iv) liabilities of such person in respect of plans covered by
Title IV of ERISA, or otherwise arising in respect of plans for Employees or
former Employees or their respective families or beneficiaries, (v)
reimbursement obligations of such person in respect of letters of credit, (vi)
all
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obligations of such person arising under acceptance facilities, (vii) all
liabilities of other persons or entities, directly or indirectly, guaranteed,
endorsed (other than for collection or deposit in the ordinary course of
business) or discounted with recourse by such person or with respect to which
the person in question is otherwise directly or indirectly liable, (viii) all
obligations secured by any Lien on property of such person, whether or not the
obligations have been assumed, and (ix) all other items which have been, or in
accordance with GAAP would be, included in determining total liabilities on the
liability side of the balance sheet.
Section 1.19 "Liens" shall mean all liens, mortgages, deeds of trust,
deeds to secure debt, security interests, pledges, claims, charges, easements
and other encumbrances of any nature whatsoever.
Section 1.20 "Master Lease Agreement"shall have the meaning set forth in
the second paragraphs hereof.
Section 1.21 "Material Adverse Effect" shall mean a material adverse
effect on the financial condition, results of operations, business or prospects
of the Company and its Subsidiaries taken as a whole.
Section 1.22 "person" shall mean any individual, corporation,
partnership, limited liability company, joint venture, trust, unincorporated
organization, other form of business or legal entity or Government Authority.
Section 1.23 "Purchase Price" shall have the meaning set forth in
Section 2.1.
Section 1.24 "Purchased Shares" shall have the meaning set forth in
Section 2.1.
Section 1.25 "Registration Rights Agreement" shall have the meaning set
forth in Section 2.3.
Section 1.26 "SEC" shall mean the Securities and Exchange Commission.
Section 1.27 "Securities Laws" shall have the meaning set forth in
Section 3.4(a).
Section 1.28 "Subsidiaries" shall mean with respect to any person, any
corporation, partnership, limited liability company, joint venture, business
trust or other entity, of which such person, directly or indirectly, owns or
controls 50% or more of the securities or other interests entitled to vote in
the election of directors or others performing similar functions with respect to
such corporation or other organization, or to otherwise control such
corporation, partnership, limited liability company, joint venture, business
trust or other entity.
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ARTICLE II
Purchase and Sale of Company Stock; Closing
Section 2.1 Purchase and Sale. Subject to the terms and conditions
hereof, the Company will sell, convey, assign, transfer, and deliver, and Buyer
will purchase and acquire from the Company, an aggregate of 112,590 shares of
Company Common Stock (the "Purchased Shares").
Section 2.2 Consideration. Subject to the terms and conditions hereof,
at the Closing, Buyer shall deliver to the Company the amount of $2,200,000 (the
"Purchase Price") by wire transfer of immediately available funds in U.S.
dollars to the account or accounts specified in writing by the Company.
Section 2.3 Additional Agreements and Closing Deliveries.
(a) At the Closing the Company and the Buyer shall enter into a
registration rights agreement substantially in the form attached as Exhibit A
(the "Registration Rights Agreement").
(b) In addition to the other things required to be done hereby, at the
Closing, the Company shall deliver, or cause to be delivered, to the Buyer the
following: (i) a certificate representing the Purchased Shares, (ii) a
certificate, dated the Closing Date and validly executed on behalf of the
Company, as contemplated by Section 6.1(a), (iii) if not previously delivered to
the Buyer all certificates and other instruments and documents required by this
Agreement to be delivered by the Company to the Buyer at or prior to the
Closing, and (iv) such other instruments reasonably requested by the Buyer, as
may be necessary or appropriate to confirm or carry out the provisions of this
Agreement.
(c) In addition to the delivery of the Purchase Price and the other
things required to be done hereby, at the Closing, Buyer shall deliver, or cause
to be delivered, to the Company such instruments reasonably requested by the
Company, as may be necessary or appropriate to confirm or carry out the
provisions of this Agreement.
Section 2.4 Time and Place of Closing. The Closing shall take place at
10:00 a.m. New York time on the first business day following satisfaction or
waiver of all conditions to the obligations of the parties hereunder (other than
conditions relating to deliveries of instruments, certificates and opinions to
be delivered by the parties or their representatives at the Closing itself), at
the offices of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, 399 Park Avenue, New York,
New York, or at such other place and time as the Company and Buyer shall
mutually agree.
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ARTICLE III
Representations and Warranties of the Company
The Company hereby represents and warrants to Buyers as follows:
Section 3.1 Organization and Qualification; Subsidiaries.
(a) The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware. The Company has all
requisite corporate power and authority to own, operate, lease and encumber its
properties and carry on its business as now conducted, and to enter into this
Agreement and the Registration Rights Agreement, and to perform its obligations
hereunder and thereunder.
(b) Each Subsidiary of the Company is a corporation, partnership or
limited liability company duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization, and has
the corporate, partnership or limited liability company power and authority to
own its properties and to carry on its business as it is now being conducted.
(c) Except as set forth on Schedule 3.1(c), each of the Company and its
Subsidiaries is duly qualified to do business and in good standing in each
jurisdiction in which the ownership of its property or the conduct of its
business requires such qualification, except for any failures to be so qualified
or to be in good standing as would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
(d) The authorized capital stock of the Company as of the date hereof
consists of 300,000,000 shares of Common Stock, par value $0.0001 per share, and
20,000,000 shares of Preferred Stock, no par value (the "Company Preferred
Stock"). As of the date hereof, after giving effect to the issuance of the
Purchased Shares, there are 45,623,078 shares of Company Common Stock issued and
outstanding and no shares of Company Preferred Stock issued and outstanding. All
such issued and outstanding shares of Company Common Stock are duly authorized,
validly issued, fully paid, nonassessable and free of preemptive rights. Except
as set forth on Schedule 3.1(d), the Company has no outstanding bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or which are convertible into or exercisable for securities the holders of
which have the right to vote) with the stockholders of the Company on any
matter. As of the date hereof, except as set forth in Schedule 3.1(d) to this
Agreement, there are no existing options, warrants, calls, subscriptions,
convertible securities, or other rights, agreements or commitments which
obligate the Company to issue, transfer or sell any shares of capital stock or
other equity interests of the Company. No person has any preemptive rights with
respect to the issuance of the Purchased Shares.
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Section 3.2 Authority Relative to Agreements; Board Approval.
(a) The execution, delivery and performance of this Agreement and the
Registration Rights Agreement have been duly and validly authorized by all
necessary corporate action on the part of the Company. This Agreement and the
Registration Rights Agreement have been duly executed and delivered by the
Company and constitute the valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights or general principles of equity.
(b) The Board of Directors of the Company has, as of the date hereof,
approved this Agreement and the Registration Rights Agreement and the
transactions contemplated hereby and thereby.
(c) The shares of Company Common Stock to be acquired pursuant to this
Agreement have been duly authorized for issuance, and upon issuance will be duly
and validly issued, fully paid and nonassessable.
(d) The issue and sale of the shares of the Purchased Shares hereunder
will not give any person the right to demand payment for its shares or give rise
to any preemptive or similar rights.
Section 3.3 No Conflicts; No Defaults; Required Filings and Consents.
(a) Neither the execution and delivery by the Company of this Agreement
nor the consummation by the Company of the transactions contemplated hereby in
accordance with the terms hereof will:
(i) conflict with or result in a breach of any provision of the
Company Charter or the by-laws of the Company;
(ii) violate or conflict with any statute, regulation, judgment,
order, writ, decree or injunction applicable to the Company or its
Subsidiaries;
(iii) violate or conflict with or result in a breach of any
provision of, or constitute a default (or any event which, with notice
or lapse of time or both, would constitute a default) under, or result
in the termination or in a right of termination or cancellation of, or
accelerate the performance required by, or result in the creation of any
Lien upon any of the properties of the Company or its Subsidiaries
under, or result in being declared void, voidable or without further
binding effect, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust or any license, franchise,
permit, lease, contract, agreement or other instrument, commitment or
obligation to which the Company or any of its Subsidiaries is a party,
or by which the Company or any of its Subsidiaries or any of their
respective properties is bound or affected; or
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(iv) require any consent, approval or authorization of, or
declaration, filing or registration with, any Government Authority,
other than any filings required under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(b) Subject to the accuracy of the representations and
warranties of Buyer contained in Article IV, neither the Company nor any agent
acting for it has offered any of the securities being sold hereunder or
solicited offers to buy such securities in violation of the Securities Act or
any applicable state "blue sky" securities laws (and without limitation of the
foregoing, neither the Company nor any of its agents have offered such
securities through any general solicitation or advertising); and neither the
Company nor any of its agents shall take any action which would cause the offer
and sale of securities as contemplated by this Agreement to be in violation of
such laws.
Section 3.4 SEC and Other Documents; Financial Statements.
(a) The Company has delivered or made available to Buyer each
registration statement, report, proxy statement or information statement and all
exhibits, amendments and supplements thereto prepared by it or relating to its
properties (including exhibits and any amendments and supplements thereto) filed
with the SEC since January 1, 1999, each in the form so filed (collectively, the
"Company Reports"). Except as set forth on Schedule 3.4(a), the Company Reports
were filed with the SEC in a timely manner and constitute all forms, reports and
documents required to be filed by the Company under the Securities Act, the
Exchange Act and the rules and regulations promulgated thereunder (the
"Securities Laws"). Except as set forth on Schedule 3.4(a), as of their
respective dates, the Company Reports (i) complied as to form in all material
respects with the applicable requirements of the Securities Laws and (ii) did
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.
(b) Each of the balance sheets included in or incorporated by reference
into the Company Reports (including the related notes and schedules) fairly
presented the financial position of the entity or entities to which it relates
as of its date and each of the statements of operations, stockholders' equity
(deficit) and cash flows included in or incorporated by reference into the
Company Reports (including any related notes and schedules) fairly presented the
results of operations, retained earnings or cash flows, as the case may be, of
the entity or entities to which it relates for the periods set forth therein, in
each case in accordance with United States generally accepted accounting
principles ("GAAP") consistently applied during the periods involved, except as
may be noted therein and except, in the case of the unaudited statements, (i)
for the absence of notes thereto, and (ii) subject to normal recurring year-end
adjustments which have not been and will not be material in nature or amount.
Section 3.5 Absence of Certain Changes or Events. Except as disclosed in
the Company Reports filed with the SEC prior to the date hereof, the Company and
each of its Subsidiaries has conducted its business only in the ordinary
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course, and there has not been (a) any change, circumstance or event that could
reasonably be expected to result in a Material Adverse Effect, (b) any
declaration, setting aside or payment of any dividend or other distribution with
respect to the Company Common Stock, (c) any commitment, contractual obligation,
borrowing, capital expenditure or transaction (each, a "Commitment") entered
into by the Company or any of its Subsidiaries outside the ordinary course of
business, or (d) any material change in the Company's accounting principles,
practices or methods.
Section 3.6 No Undisclosed Liabilities. Except as and to the extent set
forth (i) in Schedule 3.6 or (ii) in the Company Reports and the Company's
financial statements filed with the SEC or in any Schedule hereto, none of the
Company or any of its Subsidiaries has any Liabilities (nor do there exist any
circumstance which are likely to give rise to Liabilities) other than
Liabilities incurred in the ordinary course of business and consistent with past
practice since June 30, 1999.
Section 3.7 Brokers or Finders. No agent, broker, investment banker or
other firm or person, including any of the foregoing that is an Affiliate of the
Company, is or will be entitled to any broker's or finder's fee or any other
commission or similar fee from the Company or any Buyer in connection with this
Agreement or any of the transactions contemplated hereby.
ARTICLE IV
Representations and Warranties of Buyer
Buyer hereby represents and warrants to the Company as follows:
Section 4.1 Organization. Buyer is a corporation, duly incorporated,
validly existing and in good standing under the laws of the State of Delaware.
Such Buyer has all requisite corporate power and authority to carry on its
business as now conducted, to enter into this Agreement and the Registration
Rights Agreement and to perform its obligations hereunder and thereunder.
Section 4.2 Due Authorization. The execution, delivery and performance
of this Agreement and the Registration Rights Agreement have been duly and
validly authorized by all necessary action on the part of Buyer. This Agreement
has been duly executed and delivered by Buyer and constitutes the valid and
legally binding obligations of Buyer, enforceable against Buyer in accordance
with its terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights or general principles of
equity.
Section 4.3 Conflicting Agreements and Other Matters. Neither the
execution and delivery of this Agreement nor the performance by Buyer of its
obligations hereunder will conflict with, result in a breach of the terms,
conditions or provisions of, constitute a default under, result in the creation
of any mortgage, security interest, encumbrance, lien or charge of any kind upon
any of the properties or assets of Buyer pursuant to, or require any consent,
approval or other action by or any notice to or filing
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with any Government Authority pursuant to, the organizational documents or
agreements of Buyer or any agreement, instrument, order, judgment, decree,
statute, law, rule or regulation by which Buyer is bound.
Section 4.4 Acquisition for Investment; Sophistication.
(a) Buyer is acquiring the Company Common Stock being purchased by it
for its own account for the purpose of investment and not with a view to or for
sale in connection with any distribution thereof, and Buyer has no present
intention or plan to effect any distribution of shares of Company Common Stock.
The certificates representing the Purchased Shares shall bear a prominent legend
with respect to the restrictions on transfer under the Securities Act and under
applicable state securities laws. Prior to any proposed transfer of any
Purchased Shares, unless such transfer is made pursuant to an effective
registration statement under the Securities Act, Buyer will deliver to the
Company an opinion of counsel, reasonably satisfactory in form and substance to
the Company, to the effect that the Purchased Shares may be sold or otherwise
transferred without registration under the Securities Act. The Company will
remove the legend relating to Securities Act restrictions from any Purchased
Shares at any time two years after issuance if such Buyer delivers to the
Company an opinion of counsel, reasonably satisfactory in form and substance to
the Company, to the effect that such Purchased Shares are no longer subject to
transfer restrictions under the Securities Act. 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 or
successor rule or regulation) each certificate for the Purchased Shares shall
bear any restricted securities legend required hereby, unless such legend is no
longer required hereunder. Buyer is able to bear the economic risk of the
acquisition of Purchased Shares pursuant hereto and can afford to sustain a
total loss on such investment, and has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the proposed investment.
(b) Buyer is an "accredited investor" as such term is defined in
Regulation D promulgated under the Securities Act.
Section 4.5 Resources. Buyer has requisite cash, cash equivalents,
equity commitments or other sources of financing available to consummate the
transactions contemplated hereby.
Section 4.6 Brokers or Finders. Buyer has not engaged any agent, broker,
investment banker or other firm or person that will be entitled to any broker's
or finder's fee or any other commission or similar fee in connection with this
Agreement or any of the transactions contemplated hereby for which the Company
or any of its Affiliates will be responsible.
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ARTICLE V
Covenants Relating to Closing
Section 5.1 Taking of Necessary Action. Each party hereto agrees to use
its commercially reasonable best efforts promptly to take or cause to be taken
all action and promptly to do or cause to be done all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement and the Registration
Rights Agreement, subject to the terms and conditions hereof and thereof,
including all actions and things necessary to cause all conditions precedent set
forth in Article VI to be satisfied.
Section 5.2 Registration Rights Agreement. At the Closing, the Company
and Buyer shall enter into the Registration Rights Agreement.
Section 5.3 Public Announcements; Confidentiality.
(a) Subject to each party's disclosure obligations imposed by law and
any stock exchange or similar rules and the confidentiality provisions contained
in Section 5.3(b), the Company and Buyer will cooperate with each other in the
development and distribution of all news releases and other public information
disclosures with respect to this Agreement and any of the transactions
contemplated hereby. If a party is required by law or any stock exchange or
similar rule to issue a news release or other public announcement with respect
to this Agreement and any of the transactions contemplated hereby, it shall
advise the other party in advance thereof and use reasonable best efforts to
cause a mutually agreeable release or announcement to be issued.
(b) Buyer agrees that all information provided to it or any of its
representatives pursuant to this Agreement shall be kept confidential, and Buyer
shall not (x) disclose such information to any persons other than the directors,
officers, employees, financial advisors, investors, lenders, legal advisors,
accountants, consultants and Affiliates of Buyer who reasonably need to have
access to the confidential information and who are advised of the confidential
nature of such information or (y) use such information in a manner which would
be detrimental to the Company; provided, however, the foregoing obligation of
Buyer shall not (i) relate to any information that (1) is or becomes generally
available to the public other than as a result of unauthorized disclosure by
Buyer or by persons to whom Buyer has made such information available, (2) is or
becomes available to Buyer on a non-confidential basis from a third party that
is not, to Buyer's knowledge, bound by any other confidentiality agreement with
the Company, or (ii) prohibit disclosure of any information if required by law,
rule, regulation, court order or other legal or governmental process, provided
that in such event the party which believes it is so required to make any such
disclosure shall (x) give the Company reasonable advance notice thereof to the
extent practicable, (y) to the extent practicable, give the Company the
opportunity, at its expense, to oppose any such required disclosure or seek
confidential treatment thereof by the recipient of such information and (z)
cooperate with the Company in connection therewith. Buyers
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acknowledge that United States securities laws restrict trading in securities
while in possession of material non-public information, and they shall not,
directly or indirectly, alone or with others, in any manner acquire or attempt
to acquire or dispose of any securities of the Company in violation of such
laws.
ARTICLE VI
Conditions to Closing
Section 6.1 Conditions of Closing. The obligation of Buyer to purchase
and pay for the Purchased Shares to be purchased by it hereunder is subject to
satisfaction or waiver of each of the following conditions precedent:
(a) Representations and Warranties; Covenants. The representations and
warranties of the Company contained herein shall have been true and correct in
all respects on and as of the date hereof, and shall be true and correct in all
respects on and as of the time of the Closing, with the same effect as though
such representations and warranties had been made on and as of the Closing Date
(except for representations and warranties that speak as of a specific date or
time other than the Closing Date (which need only be true and correct in all
respects as of such date or time)), other than, in all such cases, such failures
to be true and/or correct as would not in the aggregate reasonably be expected
to have a Material Adverse Effect; provided, however, that if any of the
representations and warranties are already qualified in any respect by
materiality or as to Material Adverse Effect, for purposes of this Section
6.1(a) such materiality or Material Adverse Effect qualification will be in all
respects ignored (but subject to the overall standard as to Material Adverse
Effect set forth immediately prior to this proviso). The Company shall have
delivered to Buyer at the Closing a certificate of an appropriate officer in
form and substance reasonably satisfactory to Buyer dated the Closing Date to
such effect.
In making any determination as to Material Adverse Effect under this
Section 6.1(a), the matters referred to in such Section shall be aggregated and
considered together.
(b) No Material Adverse Change. Since December 31, 1998 there shall not
have been any change, circumstance or event which has had, or presents a
substantial possibility of, a Material Adverse Effect.
(c) Registration Rights Agreement. The Registration Rights Agreement
shall have been executed and delivered by the parties thereto.
(d) No Injunction, etc. There shall not be in effect any final order,
decree or injunction of a court or Governmental Authority of competent
jurisdiction which enjoins or prohibits consummation of the transactions
contemplated hereby; there shall be no threatened or pending Action by any
Governmental Authority seeking to enjoin or prohibit such consummation; and
there shall be no pending or threatened Actions which would reasonably be
expected to have a material adverse effect on the
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Company or any Subsidiary or on the ability of the Company to consummate the
transactions contemplated hereby or to issue the Company Common Stock.
(e) No Defaults. The Company shall not have taken any action or omitted
to take any action which action or omission shall have caused a material default
or breach of its covenants or agreements hereunder.
Section 6.2 Conditions of Sale. The obligations of the Company to issue
and sell the Company Common Stock at the Closing are subject to satisfaction or
waiver of each of the following conditions precedent:
(a) Representations and Warranties; Covenants. The representations and
warranties of Buyer contained herein shall have been true and correct in all
respects on and as of the date hereof, and shall be true and correct in all
respects on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing Date
(except for representations and warranties that speak as of a specific date or
time other than such Closing Date (which need only be true and correct in all
respects as of such date or time)), other than, in all such cases, such failures
to be true and/or correct as would not in the aggregate reasonably be expected
to have a Material Adverse Effect on Buyer's ability to consummate the
transactions contemplated hereby; provided, however, that if any of the
representations and warranties is already qualified in any respect by
materiality or as to Material Adverse Effect, for purposes of this Section
6.2(a) such materiality or Material Adverse Effect qualification will be in all
respects ignored (but subject to the overall standard as to Material Adverse
Effect set forth immediately prior to this proviso). The covenants and
agreements of Buyer to be performed on or before the Closing Date in accordance
with this Agreement shall have been duly performed in all respects, other than
such failures as would not in the aggregate reasonably be expected to have a
Material Adverse Effect on Buyer's ability to consummate the transactions
contemplated hereby (provided, however, that if any such covenant or agreement
is already qualified in any respect by materiality or as to Material Adverse
Effect for purposes of determining whether this condition has been satisfied,
such materiality or Material Adverse Effect qualification will be in all
respects ignored and such covenant or agreement shall have been performed in all
respects without regard to such qualification (but subject to the overall
exception as to Material Adverse Effect set forth immediately prior to this
proviso)).
(b) Buyer shall have entered into (i) the Master Lease Agreement and
(ii) the lock-up agreement in the form attached hereto as Exhibit B.
(c) No Injunction. There shall not be in effect any final order, decree
or injunction of a court or Governmental Authority of competent jurisdiction
which enjoins or prohibits consummation of the transactions contemplated hereby.
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ARTICLE VII
Survival
Section 7.1 Survival. All representations, warranties and covenants and
agreements of the parties contained herein, or in any Schedule or Exhibit
hereto, or any certificate, document or other instrument delivered in connection
herewith shall survive the Closing until 5:00 p.m. New York time on December 6,
2000 except for representations, warranties and covenants and agreements of the
parties contained in sections 3.2, 3.3 and 3.7 which shall survive until the
expiration of the applicable statute of limitations. No Action or proceeding may
be brought with respect to any of the representations and warranties, or any of
the covenants or agreements unless written notice thereof, setting forth in
reasonable detail the claimed misrepresentation or breach of warranty or breach
of covenant or agreement, shall have been delivered to the party alleged to have
breached such representation or warranty or such covenant or agreement on or
prior to the expiration of the right of action hereunder.
ARTICLE VIII
Miscellaneous
Section 8.1 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each
party hereto and delivered to each other party. Copies of executed counterparts
transmitted by telecopy, telefax or other electronic transmission service shall
be considered original executed counterparts for purposes of this Section,
provided receipt of copies of such counterparts is confirmed.
Section 8.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without reference
to the choice of law principles thereof.
Section 8.3 Entire Agreement. This Agreement, the Side Letter dated
November 11, 1999 attached as Exhibit C and the agreements referenced herein and
the Schedules and Exhibits hereto contain the entire agreement between the
parties with respect to the subject matter hereof and there are no agreements,
understandings, representations or warranties between the parties other than
those set forth or referred to herein. This Agreement is not intended to confer
upon any person not a party hereto (and their successors and assigns) any rights
or remedies hereunder. The confidentiality agreement relating to the
transactions contemplated hereby is superseded hereby.
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Section 8.4 Notices. All notices and other communications hereunder
shall be sufficiently given for all purposes hereunder if in writing and
delivered personally, sent by documented overnight delivery service or, to the
extent receipt is confirmed, telecopy, telefax or other electronic transmission
service to the appropriate address or number as set forth below. Notices to the
Company shall be addressed to:
FutureLink Corp.
▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telecopy: 415-217-5333
or at such other address and to the attention of such other person as the
Company may designate by written notice to Buyer. Notices to Buyer shall be
addressed to:
CPQ Holdings, Inc.
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇-▇/▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
CPQ Holdings, Inc.
▇▇▇▇▇ ▇.▇. ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Section 8.5 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, provided that the rights of Buyer under the other provisions hereof
shall not be binding upon or inure to the benefit of any transferee in a public
offering or in a Rule 144 sale.
Section 8.6 Headings. The Section, Article and other headings contained
in this Agreement are inserted for convenience of reference only and will not
affect the meaning or interpretation of this Agreement. All references to
Sections or
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Articles contained herein mean Sections or Articles of this Agreement unless
otherwise stated.
Section 8.7 Amendments and Waivers. This Agreement may not be modified
or amended except by an instrument or instruments in writing signed by the party
against whom enforcement of any such modification or amendment is sought. Either
party hereto may, only by an instrument in writing, waive compliance by the
other party hereto with any term or provision hereof on the part of such other
party hereto to be performed or complied with. The waiver by any party hereto of
a breach of any term or provision hereof shall not be construed as a waiver of
any subsequent breach.
Section 8.8 Interpretation; Absence of Presumption.
(a) For the purposes hereof, (i) words in the singular shall be held to
include the plural and vice versa and words of one gender shall be held to
include the other gender as the context requires, (ii) the terms "hereof",
"herein", and "herewith" and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole (including all of the
Schedules and Exhibits hereto) and not to any particular provision of this
Agreement, and Article, Section, paragraph, Exhibit and Schedule references are
to the Articles, Sections, paragraphs, Exhibits and Schedules to this Agreement
unless otherwise specified, (iii) the word "including" and words of similar
import when used in this Agreement shall mean "including, without limitation,"
unless the context otherwise requires or unless otherwise specified, (iv) the
word "or" shall not be exclusive, and (v) provisions shall apply, when
appropriate, to successive events and transactions.
(b) This Agreement shall be construed without regard to any presumption
or rule requiring construction or interpretation against the party drafting or
causing any instrument to be drafted.
Section 8.9 Severability. Any provision hereof which is invalid or
unenforceable shall be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining provisions hereof.
Section 8.10 Further Assurances. The Company and Buyer agree that, from
time to time, whether before, at or after any Closing Date, each of them will
execute and deliver such further instruments of conveyance and transfer and take
such other action as may be necessary to carry out the purposes and intents
hereof.
Section 8.11 Specific Performance. Buyer and the Company acknowledge
that, in view of the uniqueness of the parties hereto, the parties hereto would
not have an adequate remedy at law for money damages in the event that this
Agreement were not performed in accordance with its terms, and therefore agree
that the parties hereto shall be entitled to specific enforcement of the terms
hereof in addition to any other remedy to which the parties hereto may be
entitled at law or in equity.
Section 8.12 Interpretation of Schedules. Any matter set forth on any
Schedule shall be deemed to be referred to on all other Schedules to which such
matter
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logically relates and where such reference would be appropriate and can
reasonably be inferred from the matters disclosed on the first Schedule as if
set forth on such other Schedules.
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IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of
each of the parties hereto as of the day first above written.
FUTURELINK CORP.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
CPQ HOLDINGS, INC.
By: /s/
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Name:
Title:
