SC 13D/A: Schedule filed to report acquisition of beneficial ownership of 5% or more of a class of equity securities
Published on May 6, 1999
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934*
(AMENDMENT NO. 3)
Excite, Inc.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
300904 10 9
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(CUSIP Number)
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
May 5, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box [ ].
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule; including all exhibits. See Section 240.13d-7(b) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 (the "Act") or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act.
SCHEDULE 13D/A
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CUSIP NO. 300904 10 9
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SCHEDULE 13D/A
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CUSIP NO. 300904 10 9
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ITEM 1. SECURITY AND ISSUER
This Amendment No. 3 relates to the Common Stock, no par value
("Common Stock"), of Excite, Inc., a Delaware corporation (the "Issuer"). The
principal executive offices of the Issuer are located at 555 Broadway, Redwood
City, California 94063.
ITEM 2. IDENTITY AND BACKGROUND
This Amendment No. 3 is filed on behalf of Intuit Inc., a
Delaware corporation ("Intuit") and its wholly-owned subsidiary Lacerte Software
Company, a Delaware corporation (the "Subsidiary"). Together Intuit and the
Subsidiary are referred to herein as the "Reporting Persons." Intuit develops,
markets and supports financial software and Web-based products and services. The
address of Intuit's principal office is 2535 Garcia Avenue, Mountain View,
California 94043. The Subsidiary also develops, markets and supports financial
software and related products and services. The address of the Subsidiary's
principal office is 13155 Noel Road, Suite 2200, Dallas, Texas 75240-5088.
Following are the current directors and executive officers of
Intuit:
BOARD OF DIRECTORS
4
5
Following are the current directors and executive officers of the Subsidiary:
BOARD OF DIRECTORS
6
EXECUTIVE OFFICERS
7
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During the last five years, neither Reporting Person nor, to the
best knowledge of the Reporting Persons, any person named in this Item 2 has
been: (a) convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors); or (b) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which, he, she or
it was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The shares of the Issuer's Common Stock (the "Shares") reported
in lines 7 and 9 of the cover page to Intuit's original Schedule 13D filing were
purchased by Intuit on June 25, 1997 pursuant to a Stock Purchase Agreement
dated as of June 11, 1997 between the Issuer and Intuit (the "Stock Purchase
Agreement"). Intuit purchased a total of 5,800,000 Shares pursuant to the Stock
Purchase Agreement. The source of funds for the initial purchase of the Shares
was Intuit's working capital. None of the funds used to purchase the Shares
consisted of funds or other consideration borrowed or otherwise obtained for the
purpose of acquiring, holding, trading or voting the Shares. Intuit sold 450,000
Shares in February 1999 (the "February Sale") and entered into a term sheet with
Credit Suisse Financial Products ("CSFP") to enter into a forward sale
arrangement with respect to 4,350,000 of the remaining Shares. The February Sale
and the CSFP term sheet were the subject of Amendment No. 2 to this Schedule
13D.
As of April 26, 1999 Intuit transferred 4,350,000 of the Shares
to Subsidiary as a contribution to capital. In connection with the
contribution, Subsidiary was assigned Intuit's rights under, and agreed to
perform Intuit's obligations under, the term sheet related to the proposed
forward sale with CSFP. The term sheet had previously been amended and restated
(as so amended and restated, the "Term Sheet") to extend until May 5, 1999 the
date for completing documentation of the forward sale.
On May 5, 1999, Subsidiary and CSFP executed the Securities
Contract contemplated by the Term Sheet. The Securities contract (the "Purchase
Agreement") provides for the sale by Subsidiary of 4,350,000 Shares of Common
Stock to CSFP for an aggregate purchase price of $451,437,000 ($103.78 per
Share), less CSFP's fee. Subsidiary also executed a pledge agreement in favor
of CSFP (the "Pledge Agreement") securing performance by Subsidiary of its
obligations under the Purchase Agreement. This Amendment No. 3 is being filed
to reflect the transfer of the Shares by Intuit to the Subsidiary and the
execution by the Subsidiary of the Purchase Agreement and Pledge Agreement.
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ITEM 4. PURPOSE OF TRANSACTION
Intuit purchased the Shares in June 1997 for investment purposes
in connection with a strategic relationship with the Issuer to develop and
provide content for a personal finance "channel" on the Internet search and
retrieval services operated by the Issuer.
(a) As of April 26, 1999, Intuit contributed 4,350,000 Shares to the
Subsidiary pursuant to a Contribution Agreement (the
"Contribution Agreement") dated as of April 7, 1999 by and
between Intuit and the Subsidiary. Pursuant to the Contribution
Agreement the Subsidiary has become a party to the Voting
Agreement between Intuit and At Home Corporation in which the
Subsidiary has agreed to vote the Shares in favor of the
proposed merger of At Home Corporation and the Issuer. The
Subsidiary has agreed to perform all of Intuit's obligations
under the Term Sheet pursuant to an Assignment Agreement among
Intuit, the Subsidiary and CSFP dated as of April 26, 1999.
On May 5, 1999 Subsidiary and CSFP executed the Purchase
Agreement and the Pledge Agreement. Pursuant to the Purchase
Agreement, Subsidiary agreed to sell, on the terms and subject
to the conditions in the Purchase Agreement, 4,350,000 Shares of
Common Stock for an aggregate purchase price of $451,437,000
($103.78 per Share), less CSFP's fee. The Purchase Agreement
provides that the closing of the Sale, and payment by CSFP for
the Shares, will occur upon the satisfaction of certain
conditions set forth in the Purchase Agreement, including
without limitation the lapse of the restrictions under the
Voting Agreement.
Except as noted above or in the previous filings of Intuit with
respect to the Shares, neither Reporting Person presently has
any plans or proposals that relate to or would result in the
acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer.
(b) Except as noted in paragraph (a) above or in the previous
filings of Intuit with respect to the Shares, neither Reporting
Person presently has any plans or proposals that relate to or
would result in an extraordinary corporate transaction, such as
a merger, reorganization or liquidation, involving the Issuer or
any of its subsidiaries.
(c) Except as noted in paragraph (a) above or in the previous
filings of Intuit with respect to the Shares, neither Reporting
Person presently has any plans or proposals that relate to or
would result in a sale or transfer of a material amount of
assets of the Issuer or of any of its subsidiaries.
(d) Except as noted in paragraph (a) above or in the previous
filings of Intuit with respect to the Shares, neither Reporting
Person presently has any plans or proposals that relate to or
would result in any changes in the present Board of Directors or
management of the Issuer, including any changes in the number or
term of directors or the filling of any existing vacancies on
the Board of Directors.
(e) Except as noted in paragraph (a) above or in the previous
filings of Intuit with respect to the Shares, neither Reporting
Person presently has any plans or proposals that relate to or
would result in any material change in the present
capitalization or dividend policy of the Issuer.
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(f) Except as noted in paragraph (a) above or in the previous filings
of Intuit with respect to the Shares, neither Reporting Person
presently has any plans or proposals that relate to or would
result in any other material change in the Issuer's business or
corporate structure.
(g) Except as noted in paragraph (a) above or in the previous filings
of Intuit with respect to the Shares, neither Reporting Person
presently has any plans or proposals that relate to or would
result in changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions that may impede the
acquisition of control of the Issuer by any person.
(h) Except as noted in paragraph (a) above or in the previous filings
of Intuit with respect to the Shares, neither Reporting Person
presently has any plans or proposals that relate to or would
result in a class of securities of the Issuer being delisted from
a national securities exchange or ceasing to be authorized to be
quoted in an inter-dealer quotation system of a registered
national securities association.
(i) Except as noted in paragraph (a) above or in the previous filings
of Intuit with respect to the Shares, neither Reporting Person
presently has any plans or proposals that relate to or would
result in a class of equity securities of the Issuer becoming
eligible for termination of registration pursuant to Section
12(g)(4) of the Securities Exchange Act of 1934, as amended.
(j) Except as noted in paragraph (a) above or in the previous
filings of Intuit with respect to the Shares, neither Reporting
Person presently has any plans or proposals that relate to or
would result in an action similar to any of those enumerated
above.
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ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Items 5(a) and (b) are addressed as of the date of this Amendment
No. 3 on the following table:
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(1) William V. Campbell, Chairman of the Board of Intuit, is the
beneficial owner of 1,676 shares of Excite Common Stock. With
respect to the 1,676 shares owned by Mr. Campbell, he has sole
power to vote and to direct the vote of, and sole power to
dispose or to direct the disposition of, 1,292 shares, and
shared power to vote and to direct the vote of, and shared power
to dispose or to direct the disposition of, 384 shares (power is
shared with his spouse). L. John Doerr, a director of Intuit, is
the beneficial owner of 92,809 shares of Excite Common Stock,
with respect to which he shares voting and dispositive power
with his spouse.
(2) Subject (as to 4,350,000 Shares) to the Voting Agreement, the
Purchase Agreement and the Pledge Agreement.
(3) Subject to the Voting Agreement.
(4) These Shares are the Shares contributed to the Subsidiary;
Intuit and the Subsidiary share beneficial ownership under Rule
13d-3 only by virtue of the fact that Subsidiary is a
wholly-owned subsidiary of Intuit.
* * * *
Responses to Items 5(c), (d), and (e) follow:
(c) As of April 26, 1999, Intuit contributed 4,350,000 Shares to the
Subsidiary pursuant to the Contribution Agreement, as further
described in Item 6. On May 5, 1999 the Subsidiary entered into
the Purchase Agreement with CSFP. Neither Reporting Person has
effected any other transactions in the Issuer's Common Stock
since Intuit's most recent filing on Schedule 13D. To the best
knowledge of the Reporting Persons, no person named in Item 2
has effected any transactions in the Issuer's Common Stock since
Intuit's most recent filing on Schedule 13D.
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(d) Except as described in this Amendment No. 3, no other person is
known to the Reporting Persons to have the right to receive or
the power to direct the receipt of dividends from, or proceeds
from the sale of, any shares of Common Stock beneficially owned
by the Reporting Persons on the date of this Amendment No. 3.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
STOCK PURCHASE AGREEMENT AND RELATED AGREEMENTS
In connection with Intuit's initial purchase of the Shares,
Intuit and the Issuer entered into the Stock Purchase Agreement, as well as a
Registration Rights Agreement, a Right of First Refusal Agreement and a
Nomination and Observer Agreement. These agreements imposed certain obligations
on Intuit, and gave Intuit certain rights, with respect to the Shares. As a
result of the proposed Merger, and the fact that Intuit no longer owns 10% or
more of the Issuer's outstanding Common Stock, the obligations and rights under
these agreements are no longer applicable to Intuit.
COMMON STOCK VOTING AGREEMENT
Intuit and At Home entered into the Common Stock Voting Agreement
(the "Voting Agreement") in connection with the proposed merger of At Home
Corporation and the Issuer. Under the terms of the Voting Agreement, Intuit has
agreed that the shares held by it (either shares owned of record or shares
beneficially owned over which Intuit exercises voting power) shall be voted (i)
in favor of adoption and approval of the merger agreement between At Home and
the Issuer and approval of the merger and (ii) against approval of (a) any
proposal made in opposition to or in competition with the consummation of the
merger, (b) any merger, consolidation, sale of assets, reorganization or
recapitalization with any party other than At Home or its affiliates or (c) any
liquidation or winding up of Issuer. Intuit has agreed that until the earlier of
the termination of the Voting Agreement or the Record Date (as defined in the
Voting Agreement), and subject to certain requirements, Intuit will not transfer
any of the Subject Securities (as defined in the Voting Agreement), unless each
transferee to which any of the Subject Securities, or any interest in any such
Subject Securities, is or may be transferred executes a counterpart to the
Voting Agreement and agrees in writing to hold such Subject Securities (or
interest in any of such Subject Securities) subject to the terms and provisions
of the Voting Agreement. Each of CSFP and Subsidiary have signed counterparts of
the Voting Agreement.
TERM SHEET FOR FORWARD SALE
Effective March 11, 1999, Intuit and CSFP entered into the
original term sheet with CSFP, outlining the terms of the forward sale
arrangements with respect to 4,350,000 shares of the Issuer's Common Stock. The
Term Sheet was amended and restated
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to extend until May 5, 1999 the deadline for entry of definitive documentation
of the forward sale and to provide that, if Intuit chose not to execute said
documentation and proceed with the sale, "Breakage Costs" under the Term Sheet
would include CSFP's fee. On April 26, 1999, Intuit contributed the 4,350,000
Shares to the Subsidiary, which assumed Intuit's obligations under the Term
Sheet.
CONTRIBUTION AGREEMENT
On April 7, 1999 Intuit and the Subsidiary entered into the
Contribution Agreement pursuant to which Intuit has contributed to the
Subsidiary 4,350,000 Shares of the Issuer's Common Stock. As a condition to
Intuit's performance of the Contribution Agreement, the Subsidiary agreed to
(a) enter into the Voting Agreement described above and (b) fulfill Intuit's
obligations under the Term Sheet with CSFP described above. As a party to the
Voting Agreement, the Subsidiary has agreed to vote the shares contributed to it
by Intuit pursuant to the Contribution Agreement and any subsequently acquired
Shares in favor of the Merger.
ASSIGNMENT AGREEMENT
Intuit, Subsidiary and CSFP are parties to an Assignment
Agreement dated as of April 26, 1999 pursuant to which Subsidiary has agreed to
perform Intuit's obligations under the Term Sheet.
SECURITIES PURCHASE AGREEMENT
On May 5, 1999 Subsidiary and CSFP executed the Purchase
Agreement. Subject to the terms and conditions of the Purchase Agreement, the
Subsidiary will deliver 4,350,000 Shares of Common Stock to CSFP after the
restrictions imposed by the Voting Agreement have terminated, and in any event
on or before September 30, 1999 (the date of such settlement, the "Settlement
Date"). On the Settlement Date, CSFP will pay the Subsidiary for the 4,350,000
Shares, with the purchase price equal to $451,437,000 ($103.78 per Share), less
CSFP's fee.
PLEDGE AGREEMENT
On May 5, 1999, Subsidiary executed a Pledge Agreement in favor
of CSFP to secure performance by Subsidiary of its obligations under the
Purchase Agreement.
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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following documents are filed as exhibits hereto:
Exhibit A Stock Purchase Agreement, dated as of June 11,
1997, between the Issuer and Intuit(1)
Exhibit B Nomination and Observer Agreement, dated as of June
25, 1997, between the Issuer and Intuit(1)
Exhibit C Registration Rights Agreement, dated as of June 25,
1997, between the Issuer and Intuit(1)
Exhibit D Right of First Refusal Agreement, dated as of June
25, 1997, between the Issuer and Intuit(1)
Exhibit E Amendment to Restated and Amended Investors' Rights
Agreement, dated as of June 25, 1997, among the
Issuer, Institutional Venture Partners VI,
Institutional Venture Management VI, IVP Founders
Fund I, L.P., Kleiner Perkins Caufield & Byers VII,
KPCB VII Founders Fund, KPCB Information Sciences
Zaibatsu Fund II and Intuit(1)
Exhibit F Common Stock Voting Agreement, dated as of January
19, 1999, between Intuit and At Home Corporation(2)
Exhibit G Summary of Terms for Excite Forward Contract, dated
March 11, 1999, by and between Intuit, the
Subsidiary of CSFP(3)
Exhibit H Amended and Restated Summary of Terms for Excite
Forward Contract, dated March 31, 1999, by and
between Intuit, the Subsidiary and CSFP
Exhibit I Contribution Agreement, dated as of April 7, 1999
between Intuit and the Subsidiary
Exhibit J Assignment Agreement, dated as of April 26, 1999
among Intuit, Subsidiary and CSFP.
Exhibit K Securities Contract, dated as of May 5, 1999
between Subsidiary and CSFP.
Exhibit L Pledge Agreement, dated as of May 5, 1999 among
the Subsidiary, CSFP and Credit Suisse First
Boston, New York Branch
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(1) Incorporated by reference to Intuit's initial Schedule 13D with
respect to the Issuer, filed with the Securities and Exchange
Commission on July 7, 1997.
(2) Incorporated by reference to Intuit's Schedule 13D, Amendment
No. 1 with respect to the Issuer, filed with the Securities and
Exchange Commission on February 25, 1999.
(3) Incorporated by reference to Intuit's Schedule 13D, Amendment
No. 2 with respect to the Issuer, filed with the Securities and
Exchange Commission on March 11, 1999.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: May 5, 1999
INTUIT INC.
By: /s/ Greg J. Santora
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Name: Greg J. Santora
Title: Senior Vice President and Chief Financial Officer
LACERTE SOFTWARE CORPORATION
By: /s/ Randall Zeller
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Name: Randall Zeller
Title: President
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EXHIBIT INDEX
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EXHIBIT H
INTUIT/EXCITE FORWARD CONTRACT
SUMMARY OF TERMS FOR EXCITE FORWARD CONTRACT
Seller: Intuit Inc. (the "Company")
Purchaser: Credit Suisse First Boston or an affiliate
("CSFB")
Contract: Forward Contract (the "Contract") with respect
to the common stock (the "Common Stock") of
Excite, Inc. ("XCIT")
Contract Price: To be set as the actual gross average per share
sale price by CSFB in hedge execution sales made
in a manner consistent with the volume and
"manner of sale" restrictions of Rule 144 under
the Securities Act of 1933 of a number of shares
equal to the Underlying Shares (the "Rule 144
Sales")
Underlying Shares: 4,350,000 shares of XCIT Common Stock
Aggregate Forward Equal to Contract Price times Underlying Shares
Contract Price:
Aggregate Purchase Price: Aggregate Forward Contract Price, less the Fee.
Issue Date: The date the Rule 144 Sales are completed
Settlement Date: To be set at the Company's option, no earlier
than the date the Company is able to deliver
4,350,000 freely tradeable shares of XCIT Common
Stock (or the appropriate number of shares
received in exchange therefor), registered or
not requiring registration and without voting
restrictions ("Free Shares"), and no later than
September 30, 1999
Settlement: On the Settlement Date, (i) the Company will
deliver to the Purchaser 4,350,000 Free Shares,
and (ii) CSFB will deliver to the Company the
Aggregate Purchase Price
Note: We understand that you fully understand the potential risks and rewards of
this transaction and that you have independently determined that the transaction
is appropriate for you given your objectives, experience, financial and
operational resources, and other relevant circumstances. CSFB is acting solely
in an arm's length capacity and not as your financial advisor or fiduciary in
any transaction unless we have agreed to so act in writing. This document is not
to be used or considered as an offer to sell or solicitation of an offer to buy
any securities. Information and opinions contained herein have been compiled or
arrived at by CSFB from sources believed to be reliable, but CSFB does not
accept liability for any loss arising from the use thereof, nor makes any
representation as to their accuracy or completeness. This document is not to be
relied upon as such or used in substitution for the exercise of independent
judgment. Unless otherwise permitted by law in the applicable jurisdiction, only
authorized affiliates of CSFB will effect orders for securities from customers
in such jurisdiction.
INTUIT/EXCITE FORWARD CONTRACT
Collateral Arrangements: On or prior to the Issue Date, the Company will
deposit 4,350,000 shares of XCIT Common Stock in
a Collateral Account with the Purchaser as
security in favor of the Purchaser. Upon deposit
of the shares, CSFB will become a party to the
Company Voting Agreement with respect to such
4,350,000 shares with such modifications as are
acceptable to both parties. The Collateral
Agreement will include provisions for dividends
and voting, including the Collateral Agent's
payment to the Purchaser of any dividends and
Intuit's retention of voting rights with respect
to XCIT shares deposited as collateral.
Any other shares of XCIT common stock held by
the Company will not be subject to any
restrictions under the Contract.
Events of Default: The following will constitute Events of Default:
(i) failure to materially perform any covenant
applicable to the Contract for 60 days
after notice of breach;
(ii) Certain events of collateral default,
cross-default, bankruptcy, insolvency or
reorganization with respect to the
Company;
(iii) CSFB becoming unable at any time prior to
the Settlement Date to borrow 4,350,000
Free Shares; or
(iv) Failure to deliver 4,350,000 Free Shares
on the Settlement Date
Upon the occurrence of an Event of Default, the
holder of the Contract may terminate the
Contract. Upon such event, the Company will be
required to deliver 4,350,000 Free Shares, and
CSFB will deliver the Aggregate Purchase Price.
To the extent the XCIT Common Shares held in the
collateral account are not then Free Shares, the
Company will deliver such shares and will
reimburse CSFB for its costs and expenses
related to its inability to use such XCIT Common
Shares as Free Shares.
Note: We understand that you fully understand the potential risks and rewards of
this transaction and that you have independently determined that the transaction
is appropriate for you given your objectives, experience, financial and
operational resources, and other relevant circumstances. CSFB is acting solely
in an arm's length capacity and not as your financial advisor or fiduciary in
any transaction unless we have agreed to so act in writing. This document is not
to be used or considered as an offer to sell or solicitation of an offer to buy
any securities. Information and opinions contained herein have been compiled or
arrived at by CSFB from sources believed to be reliable, but CSFB does not
accept liability for any loss arising from the use thereof, nor makes any
representation as to their accuracy or completeness. This document is not to be
relied upon as such or used in substitution for the exercise of independent
judgment. Unless otherwise permitted by law in the applicable jurisdiction, only
authorized affiliates of CSFB will effect orders for securities from customers
in such jurisdiction.
INTUIT/EXCITE FORWARD CONTRACT
Nature of Contract: The Contract will be a secured forward contract
of the Company.
Conditions Precedent: Consummation of the Contract is subject to the
Company's agreement and compliance with the
above terms and conditions, the availability for
borrow of 4,350,000 Free Shares, legal opinions
customary for secured transactions and no
material decrease in the float or daily trading
volume of the Common Stock.
Breakage Costs: If hedging is commenced based on this termsheet
and if the Company declines to execute final
documentation consistent with this termsheet
(the "Final Documentation") by May 5, 1999, then
the Purchaser shall have the right to unwind its
hedging activities and to require the Company to
pay all market related costs and expenses
related thereto. In such circumstances the
Company will also pay, in addition to all market
related costs and expenses thereto, the Fee
referred to in the last paragraph hereof, based
on an Aggregate Forward Contract Price of
$460,650,000.
Final Documentation: The terms hereof shall be operative until the
Final Documentation is executed, at which time
such Final Documentation will supersede this
Termsheet.
Fee: 2.00% of the Aggregate Forward Contract Price
Understood and Agreed to,
This 31st day of March, 1999,
By:
INTUIT INC.
/s/ Linda Fellows
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Note: We understand that you fully understand the potential risks and
rewards of this transaction and that you have independently determined
that the transaction is appropriate for you given your objectives,
experience, financial and operational resources, and other relevant
circumstances. CSFB is acting solely in an arm's length capacity and not
as your financial advisor or fiduciary in any transaction unless we have
agreed to so act in writing. This document is not to be used or
considered as an offer to sell or solicitation of an offer to buy any
securities. Information and opinions contained herein have been compiled
or arrived at by CSFB from sources believed to be reliable, but CSFB
does not accept liability for any loss arising from the use thereof, nor
makes any representation as to their accuracy or completeness. This
document is not to be relied upon as such or used in substitution for
the exercise of independent judgment. Unless otherwise permitted by law
in the applicable jurisdiction, only authorized affiliates of CSFB will
effect orders for securities from customers in such jurisdiction.
Name:
Title:
And By:
CREDIT SUISSE FINANCIAL PRODUCTS
- ----------------------------------------------
Name:
Title:
Note: We understand that you fully understand the potential risks and
rewards of this transaction and that you have independently determined
that the transaction is appropriate for you given your objectives,
experience, financial and operational resources, and other relevant
circumstances. CSFB is acting solely in an arm's length capacity and not
as your financial advisor or fiduciary in any transaction unless we have
agreed to so act in writing. This document is not to be used or
considered as an offer to sell or solicitation of an offer to buy any
securities. Information and opinions contained herein have been compiled
or arrived at by CSFB from sources believed to be reliable, but CSFB
does not accept liability for any loss arising from the use thereof, nor
makes any representation as to their accuracy or completeness. This
document is not to be relied upon as such or used in substitution for
the exercise of independent judgment. Unless otherwise permitted by law
in the applicable jurisdiction, only authorized affiliates of CSFB will
effect orders for securities from customers in such jurisdiction.
EXHIBIT I
CONTRIBUTION AGREEMENT
BETWEEN
INTUIT INC.
AND
LACERTE SOFTWARE CORPORATION
This CONTRIBUTION AGREEMENT ("Agreement") is made effective as of April
7, 1999, (the "Agreement Date") by and between INTUIT INC., a Delaware
corporation ("PARENT"), and LACERTE SOFTWARE CORPORATION, a Delaware corporation
and a wholly-owned subsidiary of PARENT ("SUB").
RECITALS
WHEREAS, SUB is a wholly owned subsidiary of Parent; and
WHEREAS, PARENT desires to contribute certain assets to SUB and SUB has
agreed to accept those assets and assume certain obligations of PARENT relating
to such assets, on the terms and subject to the conditions set forth in this
Agreement:
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, covenants and
obligations contained herein, the parties agree as follows:
1. CONTRIBUTION OF ASSETS
1.1. Capital Contribution. At the Closing (as defined in Section 0),
PARENT shall make a capital contribution to SUB of 4,350,000 shares of common
stock of Excite, Inc., a Delaware corporation (the "Excite Shares"). SUB shall
accept and receive from PARENT, all rights, title, and interest in the Excite
Shares.
1.2. Closing. The Closing of the transaction contemplated hereby (the
"Closing") shall take place at such time and place as the parties hereto shall
mutually determine, which shall be no later than the fifth business day after
satisfaction or waiver of the conditions set forth in Section 5.
1.3. No Stock Issuance. Since PARENT owns all of the issued and
outstanding capital stock of SUB, and SUB has no outstanding options, warrants
or rights to purchase its capital shares, no new shares will be issued by SUB in
consideration for the Excite Shares.
2. REPRESENTATIONS AND WARRANTIES OF SUB
SUB hereby represents and warrants to PARENT as follows:
2.1. SUB is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
2.2. SUB has full corporate power and authority to enter into this
Agreement, and to carry out the transactions contemplated hereby. The Board of
Directors of SUB has taken all action required to authorize the execution,
delivery and performance of this Agreement, and the consummation of the
transactions contemplated hereby. This Agreement has been duly and validly
authorized, executed and delivered by SUB, and constitute valid and binding
obligations of SUB enforceable against it in accordance with their terms.
2.3. The execution, delivery and performance by SUB of this Agreement
does not and will not (i) violate or breach the certificate of incorporation or
bylaws of SUB, (ii) violate or conflict with any applicable law, (iii) violate,
breach, cause a default under or otherwise give rise to a right of termination,
cancellation or acceleration with respect to (presently, with the giving of
notice or the passage of time) any material agreement, contract or instrument to
which SUB is a party or by which any of its assets is bound, or (iv) result in
the creation or imposition of any lien, pledge, mortgage, claim, charge or
encumbrance upon any assets of SUB.
2.4. No consent, authorization, license, permit, registration or
approval of, or exemption or other action by, any governmental authority or
other person is required in connection with SUB's execution and delivery of this
Agreement or with the performance by SUB of its obligations hereunder or
thereunder, except in each case for any consent, authorization, license, permit,
registration or approval as have been obtained and remain in full force and
effect.
2.5. The authorized capital stock of SUB consists of 100 shares of
Common Stock, 100 of which are issued and outstanding. All of such outstanding
shares are duly and validly authorized and issued, fully paid and nonassessable
and are owned of record by PARENT. SUB does not have outstanding any rights
(preemptive or other) or options to subscribe for or purchase, or any warrants
or other agreements providing for or requiring the issuance by SUB of, any of
its capital stock or securities convertible into or exchangeable for its capital
stock.
2.6. Immediately after the execution of this Agreement and completion of
the transaction contemplated hereby, SUB will remain a wholly-owned subsidiary
of PARENT.
2
3. REPRESENTATIONS AND WARRANTIES OF PARENT
PARENT hereby represents and warrants to SUB as follows:
3.1. PARENT is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
3.2. PARENT has full corporate power and authority to enter into this
Agreement, and to carry out the transactions contemplated hereby. The Board of
Directors of PARENT has taken all action required to authorize the execution,
delivery and performance of this Agreement, and the consummation of the
transactions contemplated hereby. This Agreement has been duly and validly
authorized, executed and delivered by PARENT, and constitute valid and binding
obligations of PARENT enforceable against it in accordance with its terms.
3.3. The execution, delivery and performance by PARENT of this Agreement
does not and will not (i) violate or breach the certificate of incorporation or
bylaws of PARENT, (ii) violate or conflict with any applicable law, (iii)
violate, breach, cause a default under or otherwise give rise to a right of
termination, cancellation or acceleration with respect to (presently, with the
giving of notice or the passage of time) any material agreement, contract or
instrument to which PARENT is a party or by which any of its assets is bound, or
(iv) result in the creation or imposition of any lien, pledge, mortgage, claim,
charge or encumbrance upon any assets of PARENT.
3.4. No consent, authorization, license, permit, registration or
approval of, or exemption or other action by, any governmental authority or
other person is required in connection with PARENT's execution and delivery of
this Agreement or with the performance by PARENT of its obligations hereunder or
thereunder, except in each case for any consent, authorization, license, permit,
registration or approval as have been obtained and remain in full force and
effect.
4. COVENANTS OF SUB
4.1. Company Voting Agreement. Concurrently with the execution of this
Agreement, SUB shall execute and become a party to the Company Voting Agreement
dated as of January 19, 1999 between At Home Corporation and PARENT.
4.2. Term Sheet; Pledge Agreement. SUB acknowledges that the Excite
Shares are the subject of a Term Sheet (the "Term Sheet") between PARENT and
Credit Suisse Financial Products ("CSFP"). SUB agrees that it hereby assumes and
will perform all obligations of PARENT pursuant to the Term Sheet and will take
no action with respect to the Excite Shares not in compliance with the Term
Sheet. SUB further agrees that it will, as of the Closing, execute the Pledge
Agreement by and among PARENT, CSFP and Credit Suisse First Boston, New York
Branch contemplated as part of the transaction described in the Term Sheet.
3
4.3. Regulatory Filings. SUB shall promptly cooperate with PARENT in
undertaking all required regulatory disclosures and filings, including without
limitation, making appropriate filings pursuant to Section 13(d) of the
Securities Act.
4.4 Further Assurances. SUB shall cooperate with PARENT in taking any
further action necessary to effectuate this Agreement, whether before or after
the Closing.
5. CONDITIONS TO THE OBLIGATION OF PARENT
The obligations of PARENT to effect the contribution of the Excite Stock
shall be subject to the fulfillment by SUB of the following conditions:
5.1 Representations Correct. The representations and warranties of SUB
are true and correct in all respects as of the Closing Date.
5.2 Covenants Performed. The covenants of SUB required to be performed
on or before the Closing have been performed.
5.3 Board Approval. The Board of Directors of PARENT shall have approved
of the transactions contemplated by this Agreement.
5.4 No Material Adverse Change. There shall have been no material
adverse change in the business, financial condition or prospects of SUB since
the date of SUB's most recent financial statements furnished to PARENT prior to
the date of this Agreement.
6. GENERAL
6.1. Entire Agreement. This Agreement constitutes the entire agreement
between the parties concerning the subject matter hereof and supersedes all
prior statements, representations, discussions, negotiations and agreements,
both oral and written.
6.2. Force Majeure. No default, delay or failure to perform on the part
of either party shall be considered a breach of this Agreement if such default,
delay or failure to perform is shown to be caused by any event constituting
force majeure, or causes beyond the reasonable control of the defaulting party,
including without limitation war, embargo, severe weather, fire, or earthquake,
provided that the party so relieved of its obligations shall take steps to
prevent, correct or amend such act or event which renders such obligations
impossible.
6.3. Further Assurances. The parties agree to do all such things and to
execute such further documents as may reasonably be required to give full effect
to this Agreement.
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6.4. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
6.5. Post-Transfer Covenant. The parties agree that in case at any time
after the Agreement Date any further action is necessary to carry out the
purposes of this Agreement, PARENT and SUB shall take further action including
the execution and delivery of instruments and documents as either PARENT or SUB
may request.
6.6. Headings. The descriptive headings contained herein are for
convenience only and shall not control or affect the meaning, interpretation or
construction of any provision of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate by their duly authorized representatives.
INTUIT INC., a Delaware corporation LACERTE SOFTWARE CORPORATION,
a Delaware Corporation
By: /s/ Greg J. Santora By: /s/ Randall Zeller
------------------------------ ------------------------------
Greg J. Santora, Randall Zeller
Senior Vice President and President
Chief Financial Officer
5
EXHIBIT J
ASSIGNMENT AGREEMENT
AMONG
INTUIT INC.,
LACERTE SOFTWARE CORPORATION,
CREDIT SUISSE FINANCIAL PRODUCTS
AND
CSFP CAPITAL, INC., AS AGENT
This ASSIGNMENT AGREEMENT ("Agreement") is made effective as of April
26, 1999, (the "Agreement Date") by and among INTUIT INC., a Delaware
corporation ("PARENT"), LACERTE SOFTWARE CORPORATION, a Delaware corporation and
a wholly-owned subsidiary of PARENT ("SUB"), Credit Suisse Financial Products
("CSFP") and CSFP Capital, Inc. ("Agent"), as agent.
RECITALS
WHEREAS, SUB is a wholly owned subsidiary of Parent;
WHEREAS, PARENT owns 4,350,000 shares (the "Owned Shares") of common
stock (the "Common Stock") of Excite, Inc., a Delaware corporation, which are
being contributed to SUB on the date hereof pursuant to the Contribution
Agreement (the "Contribution Agreement") dated as of April 7, 1999 between
PARENT and SUB;
WHEREAS, PARENT and CSFP have executed the Summary Terms for Excite
Forward Contract, dated as of March 11, 1999, (as amended and restated by the
Summary Terms for Excite Forward Contract, executed by PARENT and CSFP and dated
as of March 31, 1999, the "Term Sheet") pursuant to which PARENT and CSFP have
agreed, subject to definitive documentation, to the terms of a proposed
transaction pursuant to which Parent would sell and CSFP would purchase
4,350,000 shares of Common Stock, subject to the terms and conditions of the
Term Sheet and such definitive documentation;
WHEREAS, pursuant to the paragraph of the Term Sheet entitled
"Collateral Arrangements", PARENT has pledged (the "Pledge") to CSFP the Owned
Shares to secure its obligations pursuant to the Term Sheet;
WHEREAS, SUB has covenanted pursuant to Section 4.2 of the Contribution
Agreement to assume and perform the obligations of PARENT pursuant to the Term
Sheet; and
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WHEREAS, PARENT wishes to assign to SUB and SUB wishes to receive and
assume all of PARENT'S rights and obligations under the Term Sheet;
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, covenants and
obligations contained herein, the parties agree as follows:
1. ASSIGNMENT OF TERM SHEET
1.1. Assignment. PARENT hereby assigns and delegates to SUB all of
PARENT'S rights and obligations under the Term Sheet, and SUB hereby accepts and
assumes the assignment and delegation of such rights and agrees to be bound by
such obligations. As a result of this transfer and assignment, SUB shall assume
all of the rights and obligations of PARENT under the Term Sheet.
2. REPRESENTATIONS AND WARRANTIES OF SUB
SUB hereby represents and warrants to PARENT and CSFP as follows:
2.1. SUB is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
2.2. SUB has full corporate power and authority to enter into this
Agreement, and to carry out the transactions contemplated hereby. The Board of
Directors of SUB has taken all action required to authorize the execution,
delivery and performance of this Agreement, and the consummation of the
transactions contemplated hereby. This Agreement has been duly and validly
authorized, executed and delivered by SUB, and constitutes the valid and binding
obligation of SUB enforceable against it in accordance with its terms.
2.3. SUB has full corporate power and authority to enter into a Pledge
Agreement (the "Pledge Agreement") among SUB, CSFP and Credit Suisse First
Boston, New York Branch, as collateral agent (the "Collateral Agent"), and a
Securities Contract (the "Securities Contract") among SUB, CSFP and Agent, which
will constitute definitive documentation of the transaction contemplated by the
Term Sheet, in the form attached hereto as Annex A and Annex B, respectively.
-2
2.4. The execution, delivery and performance by SUB of this Agreement
does not and will not, the execution, delivery and performance by SUB of the
Pledge Agreement would not, and the execution, delivery and performance by SUB
of the Securities Contract would not (i) violate or breach the certificate of
incorporation or bylaws of SUB, (ii) violate or conflict with any applicable
law, (iii) violate, breach, cause a default under or otherwise give rise to a
right of termination, cancellation or acceleration with respect to (presently,
with the giving of notice or the passage of time) any material agreement,
contract or instrument to which SUB is a party or by which any of its assets is
bound, or (iv) result in the creation or imposition of any lien, pledge,
mortgage, claim, charge or encumbrance upon any assets of SUB, except as
contemplated by the Term Sheet and the Pledge Agreement.
2.5. No consent, authorization, license, permit, registration or
approval of, or exemption or other action by, any governmental authority or
other person is required in connection with SUB's execution and delivery of this
Agreement or with the performance by SUB of its obligations hereunder or
thereunder, except in each case for any consent, authorization, license, permit,
registration or approval as have been obtained and remain in full force and
effect.
3. REPRESENTATIONS AND WARRANTIES OF PARENT
PARENT hereby represents and warrants to SUB and CSFP as follows:
3.1. PARENT is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
3.2. PARENT has full corporate power and authority to enter into this
Agreement, and to carry out the transactions contemplated hereby. The Board of
Directors of PARENT has taken all action required to authorize the execution,
delivery and performance of this Agreement, and the consummation of the
transactions contemplated hereby. This Agreement has been duly and validly
authorized, executed and delivered by PARENT, and constitute valid and binding
obligations of PARENT enforceable against it in accordance with its terms.
3.3. The execution, delivery and performance by PARENT of this Agreement
does not and will not (i) violate or breach the certificate of incorporation or
bylaws of PARENT, (ii) violate or conflict with any applicable law, (iii)
violate, breach, cause a default under or otherwise give rise to a right of
termination, cancellation or acceleration with respect to (presently, with the
giving of notice or the passage of time) any material agreement, contract or
instrument to which PARENT is a party or by which any of its assets is bound, or
(iv) result in the creation or imposition of any lien, pledge, mortgage, claim,
charge or encumbrance upon any assets of PARENT, except as contemplated by the
Term Sheet and the Pledge Agreement.
3.4. No consent, authorization, license, permit, registration or
approval of, or exemption or other action by, any governmental authority or
other person is required in
-3
connection with PARENT's execution and delivery of this Agreement or with the
performance by PARENT of its obligations hereunder or thereunder, except in each
case for any consent, authorization, license, permit, registration or approval
as have been obtained and remain in full force and effect (including without
limitation the consent and approval of CSFP granted pursuant to Article 7).
4. COVENANTS OF SUB
4.1. Regulatory Filings. SUB shall promptly cooperate with PARENT in
undertaking all required regulatory disclosures and filings, including without
limitation, making appropriate filings pursuant to Section 13(d) of the
Securities Act.
5. CONSENT OF CSFP
CSFP hereby consents to the assignment and delegation contemplated
hereby; provided that such consent shall be subject to the fulfillment of the
following conditions:
5.1 Representations Correct. The representations and warranties of SUB
and PARENT are true and correct in all respects as of the Closing.
5.2 Covenants Performed. The covenants of SUB and PARENT required to be
performed on or before the Closing have been performed.
5.3 Board Approval. The Board of Directors of SUB and PARENT shall have
approved the transactions contemplated by this Agreement.
6. GENERAL
6.1. Entire Agreement. This Agreement constitutes the entire agreement
between the parties concerning the subject matter hereof and supersedes all
prior statements, representations, discussions, negotiations and agreements,
both oral and written.
6.2. Further Assurances. The parties agree to do all such things and to
execute such further documents as may reasonably be required to give full effect
to this Agreement.
6.3. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
-4
6.4. Headings. The descriptive headings contained herein are for
convenience only and shall not control or affect the meaning, interpretation or
construction of any provision of this Agreement.
6.5 Matters Related to Agent. Agent shall act as "agent" for the parties
hereto within the meaning of Rule 15a-6 under the Securities Exchange Act of
1934.
-5
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate by their duly authorized representatives.
INTUIT INC., a Delaware corporation LACERTE SOFTWARE CORPORATION,
a Delaware Corporation
By: /s/ Greg J. Santora By: /s/ Randall Zeller
------------------------------ ------------------------------
Randall Zeller, President
Agreed and Accepted:
CREDIT SUISSE FINANCIAL PRODUCTS
By: /s/ Edmond Curtin By: /s/ Therese Cochrane
------------------------------ ------------------------------
Edmond Curtin Therese Cochrane
Director-Legal and Director-Legal and
Compliance Department Compliance Department
CSFP CAPITAL, INC.,
as Agent
By: /s/ Manuel J. Alvarez
------------------------------
Manuel J. Alvarez
Director
-6
EXHIBIT K
SECURITIES CONTRACT
dated as of
May 5, 1999
among
LACERTE SOFTWARE CORPORATION,
CREDIT SUISSE FINANCIAL PRODUCTS
and
CSFP CAPITAL, INC., as Agent
TABLE OF CONTENTS
SECURITIES CONTRACT
THIS AGREEMENT is made as of this 5th day of May, 1999 among LACERTE
SOFTWARE CORPORATION, a Delaware corporation ("SELLER"), CSFP CAPITAL, INC., as
agent (the "AGENT") hereunder, and CREDIT SUISSE FINANCIAL PRODUCTS ("BUYER").
WHEREAS, Seller owns shares of common stock (the "COMMON STOCK") of
Excite, Inc., a Delaware corporation (the "ISSUER"), or security entitlements in
respect thereof;
WHEREAS, Seller has agreed, pursuant to the Pledge Agreement (as defined
herein), to grant Buyer a security interest in certain shares of Common Stock to
secure the obligations of Seller hereunder;
WHEREAS, Seller and Buyer are willing to sell and purchase such shares
of Common Stock, or security entitlements in respect thereof, at the time and on
the terms set forth herein;
NOW, THEREFORE, in consideration of their mutual covenants herein
contained, the parties hereto, intending to be legally bound, hereby mutually
covenant and agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. As used herein, the following words and
phrases shall have the following meanings:
"ACCELERATION EVENT" has the meaning provided in Section 7.01.
"AT HOME" means At Home Corporation, a Delaware corporation.
"BANKRUPTCY CODE" has the meaning provided in Section 5.05.
"BASE AMOUNT" has the meaning provided in Section 2.01.
"BUSINESS DAY" means any day on which commercial banks are open for
business in New York City.
"CALCULATION AGENT" means Credit Suisse Financial Products.
"CLOSING PRICE" of any security on any date of determination means the
closing sale price (or, if no closing sale price is reported, the last reported
sale price) of such security on the Exchange on such date or, if such security
is not listed on a national securities exchange or quoted on a national
automated quotation system, the last quoted bid price for such security in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market value of such
security on such date as determined by the Calculation Agent in a commercially
reasonable manner.
"COLLATERAL AGENT" has the meaning provided in the Pledge Agreement.
"COMPANY VOTING AGREEMENT" means the Company Voting Agreement dated as
of January 19, 1999 between At Home Corporation and Seller.
"CONTRACT SHARES" has the meaning provided in Section 2.03(b).
"EXCHANGE" means, at any time, the principal national securities
exchange or automated quotation system, if any, on which the Common Stock is
listed or quoted at such time.
"EXCHANGE BUSINESS DAY" means any day that is (or, but for the
occurrence of a Market Disruption Event, would have been) a trading day on the
Exchange, other than a day on which trading on the Exchange is scheduled to
close prior to its regular weekday closing time.
"EXCHANGE RATE" has the meaning provided in Section 2.03(c).
"FREE STOCK" means Common Stock (or security entitlements in respect
thereof) that is not subject to any Transfer Restrictions in the hands of Seller
immediately prior to delivery to Buyer hereunder and would not upon delivery to
Buyer be subject to any Transfer Restrictions in the hands of Buyer.
"LIEN" means any lien, mortgage, security interest, pledge, charge or
encumbrance of any kind.
"MARKET DISRUPTION EVENT" means the occurrence or the existence on any
Exchange Business Day during the one-half hour period ending at the close of
trading on the relevant exchange of any suspension of or limitation in trading
(by reason of movements in price exceeding limits permitted by the relevant
exchange or otherwise) in the Common Stock or in listed options on the Common
Stock, if
2
any, if, in the determination of the Calculation Agent, such suspension or
limitation is material.
"MARKET VALUE" means, as of any date with respect to any share of Common
Stock, the Closing Price per share of Common Stock for the Exchange Business Day
prior to such date.
"MARKETABLE SECURITIES" means shares of common stock of a
Publicly-Traded Entity that are not subject to any Transfer Restrictions.
"MATURITY DATE" means, unless the Maturity Date shall have occurred
under Section 6.02 or Section 7.01 of this Agreement, the earlier of: (i)
September 30, 1999 or (ii) a Business Day selected by Seller upon three Business
Days' written notice to Buyer and the Calculation Agent. Seller hereby agrees to
select a Maturity Date to occur not later than immediately following the
effectiveness of the proposed Merger (the "MERGER") of Countdown Acquisition
Corp. ("MERGER SUB") a wholly-owned subsidiary of At Home, with and into the
Issuer pursuant to the Agreement and Plan of Reorganization dated as of January
19, 1999 among At Home, Merger Sub and the Issuer. If Seller does not select a
Maturity Date to occur prior to the effectiveness of the Merger, the Maturity
Date shall occur immediately following the effectiveness of the Merger.
"NEW COMMON STOCK" has the meaning provided in Section 6.01(c).
"ORIGINAL COMMON STOCK" has the meaning provided in Section 6.01(c).
"PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"PLEDGE AGREEMENT" means the Pledge Agreement among Seller, Buyer and
the Collateral Agent, as amended from time to time.
"PUBLICLY-TRADED ENTITY" means a surviving or continuing corporation of
the Issuer (or any successor) following a Reorganization Event, or a corporation
the capital stock of which is distributed in a Spin-Off, the common stock of
which is traded on any national securities exchange or automatic interdealer
quotation system in the United States; provided that, in the case of a
Reorganization Event, the product of (i) the Closing Price of such surviving or
continuing corporation's common stock on the Exchange Business Day immediately
succeeding such Reorganization Event multiplied by (ii) the number of shares of
such surviving or continuing corporation's common stock held by non-affiliates
of such corporation
3
shall not be less than the product of (A) the Closing Price of the Common Stock
on the Exchange Business Day immediately preceding such Reorganization Event and
(B) the number of shares of Common Stock held by non-affiliates of the Issuer.
"POTENTIAL ADJUSTMENT EVENT" has the meaning provided in Section 6.01.
"PURCHASE PRICE" has the meaning provided in Section 2.02.
"REORGANIZATION EVENT" has the meaning provided in Section 6.02.
"RESTRICTION TERMINATION DATE" means June 25, 1999.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SPIN-OFF" has the meaning provided in Section 6.01.
"TRADING DAY" is defined as any Exchange Business Day on which there is
not a Market Disruption Event.
"TRANSFER RESTRICTION" means, with respect to any share of Common Stock
(or security entitlements in respect thereof) or other item of collateral
pledged under the Pledge Agreement, any condition to or restriction on the
ability of the holder thereof to sell, assign or otherwise transfer such share
of Common Stock (or security entitlements in respect thereof) or other item of
collateral or to enforce the provisions thereof or of any document related
thereto whether set forth in such item of Collateral itself or in any document
related thereto, including, without limitation, (i) any requirement that any
sale, assignment or other transfer or enforcement of such share of Common Stock
(or security entitlements in respect thereof) or other item of collateral be
consented to or approved by any Person, including, without limitation, the
issuer thereof or any other obligor thereon, (ii) any limitations on the type or
status, financial or otherwise, of any purchaser, pledgee, assignee or
transferee of such share of Common Stock (or security entitlements in respect
thereof) or other item of collateral, (iii) any requirement of the delivery of
any certificate, consent, agreement, opinion of counsel, notice or any other
document of any Person to the issuer of, any other obligor on or any registrar
or transfer agent for, such share of Common Stock (or security entitlements in
respect thereof) or other item of collateral, prior to the sale, pledge,
assignment or other transfer or enforcement of such share of Common Stock (or
security entitlements in respect thereof) or other item of collateral and (iv)
any registration or qualification requirement or prospectus delivery requirement
for such share of Common Stock (or security entitlements in respect thereof) or
other item of collateral pursuant to any federal, state or foreign
4
securities law (including, without limitation, any such requirement arising as a
result of Rule 144 or Rule 145 under the Securities Act); provided that the
required delivery of any assignment, instruction or entitlement order from the
seller, pledgor, assignor or transferor of such share of Common Stock (or
security entitlements in respect thereof) or other item of collateral, together
with any evidence of the corporate or other authority of such Person, shall not
constitute a "TRANSFER RESTRICTION".
ARTICLE 2
SALE AND PURCHASE
SECTION 2.1. Sale and Purchase. Upon the terms and subject to the
conditions of this Agreement, Seller agrees to sell to Buyer, and Buyer agrees
to purchase and acquire from Seller, the number of shares of Common Stock (or
security entitlements in respect thereof) equal to the product of 4,350,000 (the
"BASE AMOUNT") and the Exchange Rate.
SECTION 2.2. Purchase Price. The purchase price (the "PURCHASE PRICE")
shall be equal to $451,437,000.
SECTION 2.3. Payment for and Delivery of Contract Shares. (a) Upon the
terms and subject to the conditions of this Agreement, Buyer shall deliver to
Seller the Purchase Price on the Maturity Date at the offices of Davis Polk &
Wardwell, 450 Lexington Avenue, New York, New York 10017, or at such other place
as shall be agreed upon by Buyer and Seller, paid by certified or official bank
check or checks duly endorsed to, or payable to the order of, Seller, or in
immediately available funds by wire transfer to an account designated by Seller.
(b) On the Maturity Date, Seller agrees to deliver to Buyer a number of
shares of Free Stock (the "CONTRACT SHARES") equal to the product of (A) the
Base Amount and (B) the Exchange Rate, rounded down to the nearest whole number,
and cash in an amount equal to the Market Value as of the Maturity Date of any
fractional share not delivered as a result of such rounding. If (x) by 10:00
A.M., New York City time on the Maturity Date, Seller has not otherwise effected
such delivery of Common Stock (or security entitlements in respect thereof) and
(y) the Common Stock and security entitlements in respect thereof then held by
the Collateral Agent as collateral under the Pledge Agreement is Free Stock,
then the delivery provided by this Section 2.03(b) shall be effected by delivery
by the Collateral Agent to Buyer of a number of shares of Free Stock then held
by the Collateral Agent as collateral under the Pledge Agreement equal to the
number
5
thereof required to be delivered by Seller to Buyer pursuant to this Section
2.03(b).
(c) The "EXCHANGE RATE" shall be one (1).
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of Seller. Seller represents
and warrants to Buyer that:
(a) Seller is a corporation duly organized and existing in good
standing under the laws of its jurisdiction of incorporation and has the
requisite corporate power to own its properties and to carry on its
business as now being conducted.
(b) The execution and delivery of this Agreement and the Pledge
Agreement and the performance by Seller of its obligations hereunder and
thereunder do not violate or conflict with any law applicable to it, any
order or judgment of any court or other agency of government applicable
to it or any of its assets or any contractual restriction binding on or
affecting it or any of its assets.
(c) All government and other consents that are required to have
been obtained by it with respect to this Agreement or the Pledge
Agreement have been obtained and are in full force and effect and all
conditions of any such consents have been complied with.
(d) It has the requisite corporate power and authority to enter
into and perform this Agreement and the Pledge Agreement and to deliver
the Contract Shares in accordance with the terms hereof. The execution
and delivery of this Agreement and the Pledge Agreement by Seller and
the consummation by Seller of the transactions contemplated hereby and
thereby (including the delivery by Seller of the Contract Shares) have
been duly authorized by all necessary corporate action. This Agreement
and the Pledge Agreement have been duly executed and delivered by
Seller. Its obligations under this Agreement and the Pledge Agreement
constitute its legal, valid and binding obligations, enforceable in
accordance with their respective terms (subject to applicable
bankruptcy, reorganization,
6
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
(e) No Acceleration Event or event that, with the giving of notice
or the lapse of time or both, would constitute an Acceleration Event has
occurred and is continuing and no such event would occur as a result of
its entering into or performing its obligations under this Agreement or
the Pledge Agreement.
(f) There is not pending or, to its knowledge, threatened against
it or any of its affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality,
validity or enforceability against it of this Agreement or the Pledge
Agreement or its ability to perform its obligations under this Agreement
or the Pledge Agreement.
(g) It is acting for its own account, and has made its own
independent decision to enter into this Agreement and the Pledge
Agreement and as to whether this Agreement and the Pledge Agreement are
appropriate or proper for it based upon its own judgment and upon advice
of such advisors as it deems necessary. It acknowledges and agrees that
it is not relying, and has not relied, upon any communication (written
or oral) of Buyer or any affiliate, employee or agent of Buyer with
respect to the legal, accounting, tax or other implications of this
Agreement and the Pledge Agreement and that it has conducted its own
analyses of the legal, accounting, tax and other implications hereof and
thereof; it being understood that information and explanations related
to the terms and conditions of this Agreement or the Pledge Agreement
shall not be considered investment advice or a recommendation to enter
into this Agreement or the Pledge Agreement. It is entering into this
Agreement and the Pledge Agreement with a full understanding of all of
the terms and risks hereof and thereof (economic and otherwise) and is
capable of evaluating and understanding (on its own behalf or through
independent professional advice), and understands and accepts, the
terms, conditions and risks. It is also capable of assuming (financially
and otherwise), and assumes, those risks. It acknowledges that neither
Buyer nor any affiliate, employee or agent of Buyer is acting as a
fiduciary for or an advisor to it in respect of this Agreement or the
Pledge Agreement.
7
(h) It is not an "affiliate", within the meaning of Rule 144 under
the Securities Act, of the Issuer. From the date three months prior to
the date hereof until the Restriction Termination Date, Seller has not,
without the written consent of Buyer, sold any shares of Common Stock
(or security entitlements in respect thereof) or hedged (through swaps,
options, short sales or otherwise) any long position in the Common Stock
(or security entitlements in respect thereof), except for sales of
450,000 shares of Common Stock through an affiliate of Buyer acting as
broker and any other sales that Seller has disclosed in writing to
Buyer. Seller does not know or have any reason to believe that the
Company has not complied with the reporting requirements contained in
Rule 144(c)(1) under the Securities Act.
(i) Delivery of shares of Common Stock (or security entitlements
in respect thereof) by it pursuant to this Agreement will pass to Buyer
title to such shares (or security entitlements) free and clear of any
Liens or Transfer Restrictions, except for those created pursuant to the
Pledge Agreement.
SECTION 3.2. Representations and Warranties of Buyer. Buyer represents
and warrants to Seller that:
(a) Buyer is a corporation duly organized and existing in good
standing under the laws of its jurisdiction of incorporation and has the
requisite corporate power to own its properties and to carry on its
business as now being conducted.
(b) The execution and delivery of this Agreement and the Pledge
Agreement and the performance by Buyer of its obligations hereunder and
thereunder do not violate or conflict with any law applicable to it, any
order or judgment of any court or other agency of government applicable
to it or any of its assets or any contractual restriction binding on or
affecting it or any of its assets.
(c) All government and other consents that are required to have
been obtained by it with respect to this Agreement or the Pledge
Agreement have been obtained and are in full force and effect and all
conditions of any such consents have been complied with.
(d) It has the requisite corporate power and authority to enter
into and perform this Agreement and the Pledge Agreement. The execution
and delivery of this Agreement and the Pledge Agreement by
8
Buyer and the consummation by Buyer of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate
action. This Agreement and the Pledge Agreement have been duly executed
and delivered by Buyer. Its obligations under this Agreement and the
Pledge Agreement constitute its legal, valid and binding obligations,
enforceable in accordance with their respective terms (subject to
applicable bankruptcy, reorganization, insolvency, moratorium or similar
laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application
(regardless of whether enforcement is sought in a proceeding in equity
or at law)).
(e) There is not pending or, to its knowledge, threatened against
it or any of its affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality,
validity or enforceability against it of this Agreement or the Pledge
Agreement or its ability to perform its obligations under this Agreement
or the Pledge Agreement.
(f) Buyer will conduct its activities in connection with the
transactions contemplated hereby in a manner that Buyer reasonably
believes complies with applicable law. If Buyer or any of its affiliates
have sold or will sell shares of Common Stock in connection with hedging
the transactions contemplated hereby in the ordinary course of its
business, such sales have been and will be conducted in a manner
consistent with the requirements of paragraphs (e) and (f) of Rule 144
under the Securities Act.
(g) Buyer is an "ACCREDITED INVESTOR" as that term is defined in
Rule 501(a)(3) of Regulation D under the Securities Act. Buyer is not
relying on any representation or warranty of Seller in connection with
the transactions contemplated hereby except for the representations and
warranties expressly set forth in Section 6 hereof.
ARTICLE 4
CONDITIONS TO OBLIGATIONS
SECTION 4.1. Conditions to Buyer's Obligations. The obligation of Buyer
to deliver the Purchase Price on the Maturity Date is subject to the
satisfaction of the following conditions:
9
(a) The representations and warranties of Seller contained in
Article 3 and in the Pledge Agreement shall be true and correct as of
the Maturity Date.
(b) Seller shall have performed all of the covenants and
obligations to be performed by it hereunder and under the Pledge
Agreement on or prior to the Maturity Date.
(c) Seller shall have delivered to Buyer on the date hereof an
opinion of nationally recognized counsel acceptable to Buyer to the
effect set forth in Annex A.
SECTION 4.2. Conditions to Seller's Obligations. The obligation of
Seller to deliver the Contract Shares on the Maturity Date is subject to the
satisfaction of the following conditions:
(a) The representations and warranties of Buyer contained in
Article 3 shall be true and correct as of the Maturity Date.
(b) Buyer shall have performed all of the covenants and
obligations to be performed by it hereunder on or prior to the Maturity
Date.
ARTICLE 5
COVENANTS
SECTION 5.1. Taxes. Seller shall pay any and all documentary, stamp,
transfer or similar taxes and charges that may be payable in respect of the
entry into this Agreement and the transfer and delivery of any Common Stock (or
security entitlements in respect thereof) pursuant hereto.
SECTION 5.2. Notices. Seller will cause to be delivered to Buyer and the
Calculation Agent:
(a) Promptly upon Seller or any officer of Seller becoming aware
of the occurrence of any Acceleration Event hereunder, notice of such
occurrence;
10
(b) In case at any time prior to the Maturity Date Seller or any
officer of Seller receives notice that any event requiring that an
adjustment be calculated pursuant to Article 6 hereof shall have
occurred or be pending, then Seller shall promptly cause to be delivered
to Buyer a notice identifying such event and stating, if known to
Seller, the date on which such event occurred or is to occur and, if
applicable, the record date relating to such event. Seller shall cause
further notices to be delivered to Buyer if Seller or any officer of
Seller shall subsequently receive notice of any further or revised
information regarding the terms or timing of such event or any record
date relating thereto; and
(c) Immediately upon the termination of the Company Voting
Agreement, notice of such termination.
SECTION 5.3. Further Assurances. From time to time from and after the
date hereof through the Maturity Date, each of the parties hereto shall use its
reasonable best efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper and advisable to consummate and
make effective as promptly as practicable the transactions contemplated by this
Agreement in accordance with the terms and conditions hereof, including (i)
using reasonable best efforts to remove any legal impediment to the consummation
of such transactions and (ii) the execution and delivery of all such deeds,
agreements, assignments and further instruments of transfer and conveyance
necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Agreement in accordance with the terms and conditions
hereof.
SECTION 5.4. Actions That Could Cause Seller to Become an Affiliate .
Seller shall notify Buyer immediately of its intention to (i) purchase Common
Stock (or security entitlements in respect thereof) or any other equity security
of the Issuer, (ii) accept any contractual or other right to appoint or
designate any officer or director of the Company, (iii) take any action that
would cause Seller to possess, directly or indirectly, the power to direct or
cause the direction of the management and policies of the Issuer, whether by
ownership of voting securities, by contract or otherwise, or (iv) take any other
action that could reasonably be expected to result in Seller becoming an
"affiliate," within the meaning of Rule 144 under the Securities Act, of the
Issuer. Seller shall not take any such action unless a period of fifteen
Business Days shall have elapsed after receipt of such notice by Buyer and Buyer
shall not have objected in writing to such action during such period.
11
SECTION 5.5. Securities Contract. The parties hereto recognize that the
Collateral Agent is a "financial institution" within the meaning of Section
101(22) of Title 11 of the United States Code (the "BANKRUPTCY CODE") and is
acting as agent and custodian for Buyer in connection with this Agreement and
that Buyer is a "customer" of the Collateral Agent within the meaning of said
Section 101(22). The parties hereto further recognize that this Agreement is a
"securities contract," as such term is defined in Section 741(7) of the
Bankruptcy Code, entitled to the protection of Section 555 of the Bankruptcy
Code.
SECTION 5.6. Sales of Common Stock. Seller agrees that it shall promptly
notify Buyer in writing if it shall sell any shares of Common Stock (or security
entitlements in respect thereof) or hedge (through swaps, options, short sales
or otherwise) any long position in the Common Stock (or security entitlements in
respect thereof) until the Restriction Termination Date.
SECTION 5.7. Dividend Payments. Promptly following the payment of any
cash dividend or distribution (whether ordinary or extraordinary) with respect
to the Common Stock (but in any case on or prior to the third Business Day
immediately following the date of payment of such dividend or distribution) that
a Person that held Common Stock on any date from March 11, 1999 through the
Maturity Date would be entitled to receive, Seller shall pay to Buyer an amount
in cash equal to the product of (i) the per share amount of such cash dividend
or distribution and (ii) the Base Amount on the date of determination of holders
entitled to receive such dividend or distribution.
ARTICLE 6
ADJUSTMENTS
SECTION 6.1. Dilution Adjustments. (a) Following the declaration by the
Issuer of the terms of any Potential Adjustment Event occurring prior to the
Maturity Date, the Calculation Agent will determine whether such Potential
Adjustment Event has a diluting or concentrative effect on the theoretical value
of the Common Stock and, if so, will (i) make the corresponding adjustment, if
any, to any one or more of the Base Amount, the Exchange Rate, any Closing Price
and any other variable relevant to the exercise, settlement or payment terms
hereof or of the Pledge Agreement as the Calculation Agent reasonably determines
appropriate to account for that diluting or concentrative effect and (ii)
determine the effective date of the adjustment. The Calculation Agent may (but
need not) determine the appropriate adjustment by reference to the adjustment in
respect of
12
such Potential Adjustment Event made by an options exchange to options on the
Common Stock traded on that options exchange.
(b) For these purposes, "POTENTIAL ADJUSTMENT EVENT" means any of the
following:
(i) a subdivision, consolidation or reclassification of shares of
Common Stock (which does not constitute a Reorganization Event), or a
free distribution or dividend of any shares of Common Stock to existing
holders of Common Stock by way of bonus, capitalization or similar
issue;
(ii) a distribution or dividend to existing holders of Common Stock
of (A) shares of Common Stock, or (B) other share capital or securities
granting the right to payment of dividends and/or the proceeds of
liquidation of the Company equally or proportionately with such payments
to holders of Common Stock, or (C) other types of securities, rights or
warrants or other assets, in any case for payment (cash or other) at
less than the prevailing market price;
(iii) a cash dividend with respect to which Seller does not receive
a pro rata portion;
(iv) a call by the Issuer in respect of shares of Common Stock that
are not fully paid;
(v) a repurchase by the Issuer of shares of Common Stock, whether
out of profits or capital and whether the consideration for such
repurchase is cash, securities or otherwise, at other than the
prevailing market price; or
(vi) any other similar event that has a diluting or concentrative
effect on the theoretical value of the Common Stock.
(c) Notwithstanding the foregoing, in the event of a distribution of
shares of capital stock of a subsidiary of the Issuer that is a Publicly-Traded
Entity (a "SPIN-OFF") made to holders of shares of Common Stock, the Exchange
Rate in effect immediately prior to such Spin-Off shall be adjusted so that
Buyer shall thereafter be entitled to receive, on the Maturity Date, in addition
to the number of shares of Common Stock required to be delivered on the Maturity
Date, the number of shares of common stock of such Publicly-Traded Entity that
Buyer would have owned or been entitled to receive immediately following such
Spin-Off had the shares of Common Stock required to be delivered to Buyer
hereunder
13
on the Maturity Date been delivered immediately prior to such Spin-Off.
Following a Spin-Off, "Original Common Stock" shall mean the common stock of the
Issuer and "New Common Stock" shall mean the common equity securities of the
Publicly-Traded Entity resulting from such Spin-Off.
SECTION 6.2. Reorganization Events. In the event of (i) any
consolidation or merger of the Issuer with or into another entity (other than a
merger or consolidation in which the Issuer is the continuing corporation and in
which the Common Stock outstanding immediately prior to the merger or
consolidation is not exchanged for cash, securities or other property of the
Issuer or another corporation), (ii) any sale, transfer, lease or conveyance of
the property of the Issuer as an entirety or substantially as an entirety, (iii)
any statutory exchange of securities of the Issuer with another corporation
(other than in connection with a merger or acquisition) or (iv) any liquidation,
dissolution or winding up of the Issuer (any such event, a "REORGANIZATION
EVENT"), then (A) if the surviving or continuing corporation is a
Publicly-Traded Entity, the Exchange Rate in effect immediately prior to such
Reorganization Event shall be adjusted so that Buyer shall thereafter be
entitled to receive, on the Maturity Date, the number of shares of common stock
of the Publicly-Traded Entity that Buyer would have owned or been entitled to
receive immediately following such Reorganization Event had the shares of Common
Stock required to be delivered to Buyer hereunder on the Maturity Date been
delivered immediately prior to such Reorganization Event or (B) if the surviving
or continuing corporation is not a Publicly-Traded Entity, the "MATURITY DATE"
shall occur immediately prior to the effectiveness of such Reorganization Event,
and Seller and Buyer shall become obligated to make the payments and deliveries
specified in Article 2. Notwithstanding the foregoing, if Seller is unable to
deliver shares of Free Stock to Buyer on the Maturity Date occurring as a result
of this Section 6.02, then in lieu of the payments and deliveries specified in
Article 2, the Calculation Agent shall determine the net value of the contract
to Seller or Buyer, as the case may be, by subtracting (i) the aggregate Market
Value as of the Maturity Date of a number of shares of Common Stock equal to the
number of shares of Free Stock that Seller is obligated to deliver to Buyer
pursuant to Section 2.03(b) from (ii) the amount equal to (A) the Purchase Price
minus (B) the amount of any loss or cost suffered by Buyer as a result of
Seller's inability to deliver shares of Free Stock, including without limitation
any loss of bargain, cost of funding or, without duplication, loss or cost
incurred as a result of Buyer terminating, liquidating, obtaining or
reestablishing any hedge or related trading or stock borrowing position. If such
calculation results in a negative number, then Seller shall pay to Buyer the
amount of such net value in immediately available funds by wire transfer to an
account designated by Buyer. If such calculation results in a positive number,
then Buyer
14
shall pay to Seller the amount of such net value in immediately available funds
by wire transfer to an account designated by Seller.
SECTION 6.3. Provisions Relating to Reorganization Events and Spin-Offs.
If a Reorganization Event occurs and clause (B) of the first sentence of Section
6.02 does not apply, the surviving or continuing corporation shall be deemed to
be the "Issuer" and the common equity securities of such corporation shall be
deemed to be the "Common Stock". If a Spin-Off occurs, the Issuer and the
Publicly-Traded Entity resulting from the Spin-Off shall each be deemed to be
the "Issuer" and the Original Common Stock and the New Common Stock shall each
be deemed to be the "Common Stock". Following any Spin-Off, the Calculation
Agent shall calculate further adjustments pursuant to this Article 6 by applying
the methodology set forth in this Article 6 to both the Original Common Stock
and the New Common Stock.
ARTICLE 7
ACCELERATION
SECTION 7.1. Acceleration. If one or more of the following events (each
an "ACCELERATION EVENT") shall occur:
(a) any legal proceeding shall have been instituted or any other
event shall have occurred or condition shall exist that in Buyer's
judgment calls into question the validity or binding effect of any
agreement of Seller hereunder or under the Pledge Agreement;
(b) Seller makes an assignment for the benefit of creditors, files
a petition in bankruptcy, is adjudicated insolvent or bankrupt,
petitions or applies to any tribunal for any receiver of or any trustee
for Seller or any substantial part of Seller's property, commences any
proceeding relating to Seller under any reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect, or there is commenced
against or with respect to Seller or any substantial portion of Seller's
property any such proceeding and an order for relief is issued or such
proceeding remains undismissed for a period of 30 days;
(c) at any time, any representation made or repeated or deemed to
have been made or repeated by Seller under this Agreement or the Pledge
Agreement or any certificate delivered pursuant hereto or thereto
15
would be incorrect or misleading in any material respect if made or
repeated as of such time;
(d) Seller fails to deliver shares of Common Stock (or security
entitlements in respect thereof) on the Maturity Date as required by
this Agreement;
(e) Seller fails to fulfill or discharge when due any of its other
obligations, covenants or agreements under or relating to this Agreement
or the Pledge Agreement (other than the obligation referred to in
Section 7.01(d)), and such failure remains unremedied for 60 days
following notice from Buyer;
(f) due to the adoption of, or any change in, any applicable law
after the date hereof, or due to the promulgation of, or any change in,
the interpretation by any court, tribunal or regulatory authority with
competent jurisdiction of any applicable law after the date hereof, it
becomes unlawful for Seller to perform any absolute or contingent
obligation to make payment or delivery hereunder or to comply with any
other material provision of this Agreement or the Pledge Agreement;
(g) in the reasonable judgment of the Calculation Agent, Buyer is
unable to hedge Buyer's exposure to this Agreement in the ordinary
course of Buyer's business through share borrowing arrangements because
of the lack of sufficient shares of Common Stock being made available by
lenders;
(h) there occurs a default under any indebtedness for money
borrowed by Seller or its affiliates, whether such indebtedness now
exists or shall hereafter be created, which indebtedness, individually
or in the aggregate, is in excess of $100,000,000 principal amount,
which default shall constitute a failure to pay any portion of the
principal of such indebtedness when due and payable after the expiration
of any applicable grace or cure period with respect thereto or shall
have resulted in such indebtedness becoming or being declared due and
payable prior to the date on which it would otherwise have become due
and payable; or
(i) a Collateral Event of Default within the meaning of the Pledge
Agreement shall occur;
then, upon notice to Seller from Buyer at any time following an Acceleration
Event, the "MATURITY DATE" shall occur, and Seller and Buyer shall become
obligated to make the
16
payments and deliveries specified in Article 2 and, in the case of an
Acceleration Event of the type described in paragraph (b) above, Buyer shall
have the right to liquidate this Agreement in whatever commercially reasonable
manner it may elect, including without limitation performance of this agreement
by both parties in accordance with its terms. Notwithstanding the foregoing, if
Seller is unable to deliver shares of Free Stock to Buyer on the Maturity Date
occurring as a result of this Section 7.01, then in lieu of the payments and
deliveries specified in Article 2, the Calculation Agent shall determine the net
value of the contract to Seller or Buyer, as the case may be, by subtracting (i)
the aggregate Market Value as of the Maturity Date of a number of shares of
Common Stock equal to the number of shares of Free Stock that Seller is
obligated to deliver to Buyer pursuant to Section 2.03(b) from (ii) the amount
equal to (A) the Purchase Price minus (B) the amount of any loss or cost
suffered by Buyer as a result of Seller's inability to deliver shares of Free
Stock, including without limitation any loss of bargain, cost of funding or,
without duplication, loss or cost incurred as a result of Buyer terminating,
liquidating, obtaining or reestablishing any hedge or related trading or stock
borrowing position. If such calculation results in a negative number, then
Seller shall pay to Buyer the amount of such net value in immediately available
funds by wire transfer to an account designated by Buyer. If such calculation
results in a positive number, then Buyer shall pay to Seller the amount of such
net value in immediately available funds by wire transfer to an account
designated by Seller.
ARTICLE 8
MISCELLANEOUS
SECTION 8.1. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard forms of telecommunication. Notices to Buyer shall
be directed to it care of CSFP Capital, Inc., Eleven Madison Avenue, New York,
New York 10010, Telecopy No. (212) 325-8175, Attention: Ricardo Harewood;
notices to Seller shall be directed to it at Lacerte Software Corporation, 13155
Noel Road, Suite 2200, Dallas, Texas 75240-5088, Telecopy No. (927) 490-8500,
Attention: Randall Zeller, with a copy to Lacerte Software Corporation, 13155
Noel Road, Suite 2200, Dallas, Texas 75240-5088, Telecopy No. (927) 490-8500,
Attention: Mark Portner.
SECTION 8.2. Governing Law; Submission to Jurisdiction; Severability;
Waiver of Jury Trial. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without reference to choice of
law doctrine and each party hereto submits to the jurisdiction of the Courts of
the
17
State of New York and the United States District Court located in the Borough of
Manhattan in New York City.
(b) To the extent permitted by law, the unenforceability or invalidity of
any provision or provisions of this Agreement shall not render any other
provision or provisions herein contained unenforceable or invalid.
(c) SELLER AND BUYER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 8.3. Confidentiality. Except as required by law or judicial or
administrative process, or as requested by a regulatory authority or
self-regulatory organization, each party hereto agrees to keep this Agreement
and the Pledge Agreement and the transactions contemplated hereby and thereby
confidential. In the event disclosure is permitted pursuant to the preceding
sentence, the disclosing party shall (i) provide prior notice of such disclosure
to the other party, and (ii) use its reasonable best efforts to minimize the
extent of such disclosure. This Section 8.03 shall not prevent Seller or Buyer
from disclosing information as necessary to third-party advisors in connection
with the transactions contemplated hereby or in the Pledge Agreement; provided
that Seller or Buyer, as the case may be, shall cause such advisors to comply
with the provision of this Section 8.03 as if a party hereto.
SECTION 8.4. Entire Agreement. Except as expressly set forth herein,
this Agreement constitutes the entire agreement and understanding among the
parties with respect to its subject matter hereof and supersedes all oral
communications and prior writings with respect thereto.
SECTION 8.5. Amendments, Waivers. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Buyer and Seller or, in the case of a
waiver, by the party against whom the waiver is to be effective. No failure or
delay by either party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 8.6. No Third Party Rights, Successors and Assigns. This
Agreement is not intended and shall not be construed to create any rights in any
person other than Seller, Buyer and their respective successors and assigns and
no
18
other person shall assert any rights as third party beneficiary hereunder.
Whenever any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party. All the covenants
and agreements herein contained by or on behalf of the Seller and Buyer shall
bind, and inure to the benefit of, their respective successors and assigns
whether so expressed or not, and shall be enforceable by and inure to the
benefit of Buyer and its successors and assigns.
SECTION 8.7. Calculation Agent. The determinations and calculations of
the Calculation Agent shall be binding in the absence of manifest error. The
Calculation Agent will have no responsibility for good faith errors or omissions
in the determination of any Closing Price, the Exchange Rate or any other amount
as provided herein. The Calculation Agent shall make all determinations and
calculations hereunder in a commercially reasonable manner.
SECTION 8.8. Matters Related to CSFP Capital, Inc., as Agent. (a) CSFP
Capital, Inc. is acting as "agent" for Buyer and Seller within the meaning of
Rule 15a-6 under the Securities Exchange Act of 1934.
(b) The Agent is not a principal to this Agreement and shall have no
responsibility or liability (including, without limitation, by way of guarantee,
endorsement or otherwise) to Buyer or Seller in respect of this Agreement,
including, without limitation, in respect of the failure of Buyer or Seller to
pay or perform under this Agreement.
(c) Each of Buyer and Seller agrees to proceed solely against the other
to collect or recover any securities or money owing to it in connection with or
as a result of this Agreement. The Agent shall otherwise have no liability in
respect of this Agreement, except for its gross negligence or willful misconduct
in performing its duties as Agent hereunder.
(d) As a broker-dealer registered with the Securities and Exchange
Commission, CSFP Capital, Inc., in its capacity as Agent, will be responsible
for (i) effecting the transaction contemplated in this Agreement, (ii) issuing
all required notices, confirmations and statements to Buyer and Seller and (iii)
maintaining books and records relating to this Agreement.
SECTION 8.9. Counterparts. This Agreement may be executed in any number
of counterparts, and all such counterparts taken together shall be deemed to
constitute one and the same agreement.
19
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date and year first above written.
SELLER:
LACERTE SOFTWARE CORPORATION
By: /s/ RANDALL ZELLER
-----------------------------------
Name: Randall Zeller
Title: President
BUYER:
CREDIT SUISSE FINANCIAL
PRODUCTS
By: /s/ EDMOND CURTIN
-----------------------------------
Name: Edmond Curtin
Title: Director - Legal and
Compliance Department
By: /s/ DAVID BONHAM
-----------------------------------
Name: David Bonham
Title: Director - Legal and
Compliance Department
AGENT:
CSFP CAPITAL, INC.
By: /s/ MANUEL J. ALVAREZ
-----------------------------------
Name: Manuel J. Alvarez
Title: Director
20
ANNEX A
(a) Seller is a corporation duly organized and existing in good
standing under the laws of its jurisdiction of incorporation.
(b) The execution and delivery of this Agreement and the Pledge
Agreement and the performance by Seller of its obligations hereunder and
thereunder do not violate or conflict with any law applicable to it, any
order or judgment of any court or other agency of government known to
such counsel applicable to Seller or any of its assets or any
contractual restriction known to such counsel binding on or affecting
Seller or any of its affiliates or any of its assets (including without
limitation the Company Voting Agreement).
(c) All government and other consents that are known to such
counsel to be required to have been obtained by Seller with respect to
this Agreement or the Pledge Agreement have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with.
(d) Seller has the requisite corporate power and authority to
enter into and perform this Agreement and the Pledge Agreement and to
deliver the Contract Shares in accordance with the terms hereof. The
execution and delivery of this Agreement and the Pledge Agreement by
Seller and the consummation by Seller of the transactions contemplated
hereby and thereby (including the delivery by Seller of the Contract
Shares) have been duly authorized by all necessary corporate action by
Seller. This Agreement and the Pledge Agreement have been duly executed
and delivered by Seller. Seller's obligations under this Agreement and
the Pledge Agreement constitute its legal, valid and binding
obligations, enforceable in accordance with their respective terms
(subject to applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding
in equity or at law)).
(e) Upon the delivery to Buyer of certificates evidencing Common
Stock, duly endorsed to Buyer or in blank, pursuant to this Agreement,
and assuming that Buyer paid the Purchase Price and has no notice of any
adverse claim to such Common Stock, the Buyer will be a
A-1
protected purchaser (within the meaning of Section 8-303 of the UCC) of
such Common Stock.
(f) Upon the delivery to Buyer of certificates evidencing Common
Stock, duly endorsed to Buyer or in blank, to the Collateral Agent in
accordance with Section 6(c)(A) of the Pledge Agreement, the Collateral
Agent will have, for the benefit of Secured Party (as defined in the
Collateral Agreement), a valid and, as long as the Collateral Agent
retains possession of such certificates, assuming that the Collateral
Agent and Secured Party have no notice of any adverse claim to such
Common Stock, perfected security interest therein, in respect of which
the Collateral Agent will have control, and the Collateral Agent will be
a protected purchaser (within the meaning of Section 8-303 of the UCC)
of such security interest.
(g) No registration, recordation or filing with any governmental
body, agency or official is required in connection with the execution
and delivery of this Agreement or necessary for the validity or
enforceability hereof or for the perfection or enforcement of the
Security Interests (as defined in the Pledge Agreement).
A-2
EXHIBIT L
PLEDGE AGREEMENT
dated as of
May 5, 1999
among
LACERTE SOFTWARE CORPORATION,
CREDIT SUISSE FINANCIAL PRODUCTS
and
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH, as Collateral Agent
TABLE OF CONTENTS
PLEDGE AGREEMENT
THIS AGREEMENT is made as of this 5th day of May, 1999, among LACERTE
SOFTWARE CORPORATION ("PLEDGOR"), CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH,
as collateral agent (the "COLLATERAL AGENT") hereunder for the benefit of CREDIT
SUISSE FINANCIAL PRODUCTS ("SECURED Party"), and Secured Party.
WHEREAS, pursuant to the Securities Contract (as amended from time to time,
the "SECURITIES CONTRACT") dated as of the date hereof among Pledgor, CSFP
Capital, Inc., as Agent, and Secured Party, Pledgor has agreed to sell and
Secured Party has agreed to purchase shares of common stock (the "COMMON STOCK")
of Excite, Inc., a Delaware corporation (the "ISSUER") (or security entitlements
in respect thereof), subject to the terms and conditions of the Securities
Contract;
WHEREAS, it is a condition to the obligations of Secured Party under the
Securities Contract that Pledgor, the Collateral Agent and Secured Party enter
into this Agreement and that Pledgor grant the pledge provided for herein;
NOW, THEREFORE, in consideration of their mutual covenants contained herein
and to secure the performance by Pledgor of its obligations under the Securities
Contract and the observance and performance of the covenants and agreements
contained herein and in the Securities Contract, the parties hereto, intending
to be legally bound, hereby mutually covenant and agree as follows:
SECTION 1. The Security Interests. In order to secure the full and punctual
observance and performance of the covenants and agreements contained herein and
in the Securities Contract:
(a) Pledgor hereby assigns and pledges to the Collateral Agent, as
agent of and for the benefit of Secured Party, and grants to the Collateral
Agent, as agent of and for the benefit of Secured Party, security interests in
and to, and a lien upon and right of set-off against, and transfers to the
Collateral Agent, as agent of and for the benefit of Secured Party, as and by
way of a security interest having priority over all other security interests,
with power of sale, all of its right, title and interest in and to (i) the
Pledged Items described in paragraph (b); (ii) all additions to and
substitutions for such Pledged Items (including, without limitation, any
securities, instruments or other property delivered or pledged pursuant to
Section 5(a) or 6(b)); (iii) all income, proceeds and collections received or to
be received, or derived or to be derived, now or any time hereafter
1
(whether before or after the commencement of any proceeding under applicable
bankruptcy, insolvency or similar law, by or against Pledgor, with respect to
Pledgor) from or in connection with the Pledged Items (including, without
limitation, any shares of capital stock issued by the Issuer in respect of any
Common Stock (or security entitlements in respect thereof) constituting
Collateral or any cash, securities or other property distributed in respect of
or exchanged for any Common Stock (or security entitlements in respect thereof)
constituting Collateral, or into which any such Common Stock (or security
entitlements in respect thereof) is converted, in connection with any Merger
Event, and any security entitlements in respect of any of the foregoing); and
(iv) all powers and rights now owned or hereafter acquired under or with respect
to the Pledged Items (such Pledged Items, additions, substitutions, proceeds,
collections, powers and rights being herein collectively called the
"COLLATERAL"). The Collateral Agent shall have all of the rights, remedies and
recourses with respect to the Collateral afforded a secured party by the UCC, in
addition to, and not in limitation of, the other rights, remedies and recourses
afforded to the Collateral Agent by this Agreement.
(b) On the date hereof, Pledgor shall deliver to the Collateral Agent in
pledge hereunder Eligible Collateral consisting of a number of shares of Common
Stock (or security entitlements in respect thereof) equal to the Base Amount, in
the manner provided in Section 6(c).
(c) In the event that the Issuer at any time issues to Pledgor in respect
of any Common Stock (or security entitlements in respect thereof) constituting
Collateral hereunder any additional or substitute shares of capital stock of any
class (or any security entitlements in respect thereof), Pledgor shall
immediately pledge and deliver to the Collateral Agent in accordance with
Section 6(c) all such shares and security entitlements as additional Collateral
hereunder.
(d) The Security Interests are granted as security only and shall not
subject the Collateral Agent or Secured Party to, or transfer or in any way
affect or modify, any obligation or liability of Pledgor or the Issuer with
respect to any of the Collateral or any transaction in connection therewith (it
being understood that the Collateral Agent or Secured Party may be required to
execute a counterpart of the Company Voting Agreement in connection with the
grant of the Security Interests hereunder).
SECTION 2. Definitions. Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to them in the Securities Contract. As
used herein, the following words and phrases shall have the following meanings:
2
"AUTHORIZED OFFICER" of Pledgor means any officer as to whom Pledgor shall
have delivered notice to the Collateral Agent that such officer is authorized to
act hereunder on behalf of Pledgor.
"COLLATERAL" has the meaning provided in Section 1(a).
"COLLATERAL AGENT" means the financial institution identified as such in
the preliminary paragraph hereof, or any successor appointed in accordance with
Section 9.
"COLLATERAL EVENT OF DEFAULT" means, at any time, the occurrence of either
of the following: (A) failure of the Collateral to include, as Eligible
Collateral, at least the Maximum Deliverable Number of shares of Common Stock or
(B) failure at any time of the Security Interests to constitute valid and
perfected security interests in all of the Collateral, subject to no prior or
equal Lien, or assertion of such by Pledgor in writing.
"DEFAULT SETTLEMENT DATE" has the meaning provided in Section 8(a).
"ELIGIBLE COLLATERAL" means Common Stock or security entitlements in
respect thereof, provided that Pledgor has good and marketable title thereto,
free of all Liens (other than the Security Interests) and Transfer Restrictions
(other than the Existing Transfer Restrictions) and that the Collateral Agent
has a valid, first priority perfected security interest therein, a first lien
thereon and control with respect thereto, and provided further that to the
extent the number of shares of Common Stock or security entitlements in respect
thereof pledged hereunder exceeds at any time the Maximum Deliverable Number
thereof, such excess shares shall not be Eligible Collateral.
"EXISTING TRANSFER RESTRICTIONS" means (i) Transfer Restrictions imposed by
Rule 144 under the Securities Act as a result of the relevant shares of Common
Stock being "restricted securities" as defined in Rule 144 under the Securities
Act, or (ii) Transfer Restrictions imposed by the Company Voting Agreement.
"LOCATION" means, with respect to any party, the place such party is
"deemed located" within the meaning of Section 9-103(3)(d) of the UCC.
"MAXIMUM DELIVERABLE NUMBER" means, on any date, a number of shares of
Common Stock or security entitlements in respect thereof equal to the Base
Amount on such date multiplied successively by each adjustment that shall have
been calculated on or prior to such date pursuant to Article 7 of the Securities
Contract.
3
"OTHER LIENS" has the meaning specified in Section 4(e).
"PLEDGED ITEMS" means, as of any date, any and all securities and
instruments delivered by Pledgor to be held by the Collateral Agent under this
Agreement as Collateral.
"SECURITY INTERESTS" means the security interests in the Collateral created
hereby.
"UCC" means the Uniform Commercial Code as in effect in the State of New
York.
SECTION 3. Representations and Warranties of Pledgor. Pledgor hereby
represents and warrants to the Collateral Agent and Secured Party that:
(a) All of the Eligible Collateral delivered pursuant to Section 1(b) was
"acquired from the Issuer," as such terms are used in paragraph (d) of Rule 144
under the Securities Act, on June 25, 1997, and Pledgor owns and, subject to the
Collateral Agent's right to rehypothecate Collateral pursuant to Section 6(i),
at all times prior to the release of the Collateral pursuant to the terms of
this Agreement, will own the Collateral free and clear of any Liens (other than
the Security Interests) or Transfer Restrictions (other than the Existing
Transfer Restrictions) and Pledgor is not and will not become a party to or
otherwise bound by any agreement, other than this Agreement or, in the case of
clause (x), the Company Voting Agreement, that (x) restricts in any manner the
rights of any present or future owner of the Collateral with respect thereto or
(y) provides any person other than the Pledgor, the Collateral Agent, the
Secured Party or any securities intermediary through whom any Collateral is held
(but, in the case of any such securities intermediary, only with respect of
Collateral held through it) with control (as defined in Section 8-106 of the
UCC) with respect to any Collateral.
(b) Other than financing statements or other similar or equivalent
documents or instruments with respect to the Security Interests, no financing
statement, security agreement or similar or equivalent document or instrument
covering all or any part of the Collateral is on file or of record in any
jurisdiction in which such filing or recording would be effective to perfect a
lien, security interest or other encumbrance of any kind on such Collateral.
(c) All shares of Common Stock at any time pledged hereunder (or in
respect of which security entitlements are pledged hereunder) are and will be
issued by an issuer organized under the laws of the United States, any State
thereof or the District of Columbia and (i) certificated (and the certificate or
certificates in respect of such shares of Common Stock are and will be located
in
4
the United States) and registered in the name of Pledgor or held through a
securities intermediary whose securities intermediary's jurisdiction (within the
meaning of Section 8-110(e) of the UCC) is located in the United States or (ii)
uncertificated and either registered in the name of Pledgor or held through a
securities intermediary whose securities intermediary's jurisdiction (within the
meaning of Section 8-110(e) of the UCC) is located in the United States.
(d) Subject to the Collateral Agent's right to rehypothecate Collateral
pursuant to Section 6(i), upon (i) the delivery of certificates evidencing any
Common Stock to the Collateral Agent in accordance with Section 6(c)(A) or the
registration of uncertificated Common Stock in the name of the Collateral Agent
or its nominee in accordance with Section 6(c)(B), the Collateral Agent will
have, for the benefit of Secured Party, a valid and, as long as the Collateral
Agent retains possession of such certificates or such uncertificated Common
Stock remains so registered, perfected security interest therein, in respect of
which the Collateral Agent will have control, subject to no prior Lien and (ii)
the crediting of any Common Stock to a securities account of the Collateral
Agent in accordance with Section 6(c)(C), the Collateral Agent will have, for
the benefit of Secured Party, a valid and, so long as such Common Stock
continues to be credited to the account of the Collateral Agent with the
applicable securities intermediary, perfected security interest in a securities
entitlement in respect thereof, in respect of which the Collateral Agent will
have control subject to no prior Lien.
(e) No registration, recordation or filing with any governmental body,
agency or official is required in connection with the execution and delivery of
this Agreement or necessary for the validity or enforceability hereof or for the
perfection or enforcement of the Security Interests.
(f) Pledgor has not performed and will not perform any acts that might
prevent the Collateral Agent from enforcing any of the terms of this Agreement
or that might limit the Collateral Agent in any such enforcement.
(g) The Location of Pledgor is the address set forth in Section 10(d), and
under the Uniform Commercial Code as in effect in such Location, no local filing
is required to perfect a security interest in collateral consisting of general
intangibles.
SECTION 4. Representations, Warranties and Agreements of the Collateral
Agent. The Collateral Agent represents and warrants to, and agrees with, Pledgor
and Secured Party that:
5
(a) The Collateral Agent is a duly incorporated, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, and has
all powers and all material governmental licenses, authorizations, consents and
approvals required to enter into, and perform its obligations under, this
Agreement.
(b) The execution, delivery and performance by the Collateral Agent of
this Agreement have been duly authorized by all necessary action on the part of
the Collateral Agent and do not and will not violate, contravene or constitute a
default under any provision of applicable law or regulation or of the
constitutive documents of the Collateral Agent or of any material agreement,
judgment, injunction, order, decree or other instrument binding upon the
Collateral Agent.
(c) This Agreement constitutes a valid and binding agreement of the
Collateral Agent enforceable against the Collateral Agent in accordance with its
terms.
(d) Subject to Section 6(i), the Collateral Agent has not and will not
enter into any agreement pursuant to which any person other than the Pledgor,
the Collateral Agent, the Secured Party or any securities intermediary through
whom any Collateral is held (but in the case of any such securities intermediary
only in respect of Collateral held through it) has or will have control (within
the meaning of Section 8-106 of the UCC) with respect to any Collateral.
(e) The Collateral Agent hereby agrees that all liens, pledges and other
security interests of any kind or nature held by it (other than liens, pledges
and security interests arising hereunder) in any of the Collateral securing any
obligation to the Collateral Agent (either in such capacity or in any other
capacity) (collectively, "OTHER LIENS") shall be subordinate and junior to the
liens, pledges and security interests in the Collateral arising hereunder and
that the Collateral Agent will take no action to enforce any Other Liens so long
as any obligation under the Securities Contract or hereunder (whether or not
then due) should remain unsatisfied.
SECTION 5. Certain Covenants of Pledgor. Pledgor agrees that, so long as
any of its obligations under the Securities Contract remain outstanding:
(a) Pledgor shall ensure at all times that a Collateral Event of Default
shall not occur, and shall pledge additional Collateral in the manner described
in Sections 6(b) and 6(c) as necessary to cause such requirement to be met.
6
(b) Pledgor shall, at the expense of Pledgor and in such manner and form
as Secured Party or the Collateral Agent may reasonably require, give, execute,
deliver, file and record any financing statement, notice, instrument, document,
agreement or other papers that may be necessary in order to create, preserve,
perfect, substantiate or validate any security interest granted pursuant hereto
or to enable the Collateral Agent to exercise and enforce its rights and the
rights of Secured Party hereunder with respect to such security interest. To the
extent permitted by applicable law, Pledgor hereby authorizes the Collateral
Agent to execute and file, in the name of Pledgor or otherwise, UCC financing or
continuation statements (which may be carbon, photographic, photostatic or other
reproductions of this Agreement or of a financing statement relating to this
Agreement) that the Collateral Agent in its sole discretion may deem necessary
or appropriate to further perfect, or maintain the perfection of, the Security
Interests, provided that the Collateral Agent shall first request that Pledgor
to execute and file any such UCC financing or continuation statements and give
Pledgor a reasonable amount of time to comply with such request.
(c) Pledgor shall warrant and defend its title to the Collateral, subject
to the rights of the Collateral Agent and Secured Party and subject to the
Company Voting Agreement, against the claims and demands of all persons. The
Collateral Agent and Secured Party (or, as they may agree, one of them) may
elect, but without an obligation to do so, to discharge any Lien of any third
party on any of the Collateral.
(d) Pledgor agrees that it shall not change (1) its name, identity or
corporate structure in any manner or (2) its Location, unless in either case (A)
it shall have given the Collateral Agent not less than 30 days' prior notice
thereof and (B) such change shall not cause any of the Security Interests to
become unperfected or subject any Collateral to any other Lien.
(e) Pledgor agrees that it shall not (1) create or permit to exist any
Lien (other than the Security Interests) or any Transfer Restriction (other than
the Existing Transfer Restrictions) upon or with respect to the Collateral, (2)
sell or otherwise dispose of, or grant any option with respect to, any of the
Collateral or (3) enter into or consent to any agreement pursuant to which any
person other than the Pledgor, the Collateral Agent, the Secured Party and any
securities intermediary through whom any of the Collateral is held (but in the
case of any such securities intermediary only in respect of Collateral held
through it) has or will have control (within the meaning of Section 8-106 of the
UCC) in respect of any Collateral.
7
SECTION 6. Administration of the Collateral and Valuation of the
Securities.
(a) The Collateral Agent shall determine on each Business Day whether a
Collateral Event of Default shall have occurred.
(b) Pledgor may pledge additional Collateral hereunder at any time.
Concurrently with the delivery of any additional Eligible Collateral, Pledgor
shall deliver to the Collateral Agent a certificate of an Authorized Officer of
Pledgor substantially in the form of Exhibit A hereto and dated the date of such
delivery, (A) identifying the additional items of Eligible Collateral being
pledged and (B) certifying that with respect to such items of additional
Eligible Collateral the representations and warranties contained in paragraphs
(a), (b), (c), (d) and (e) of Section 3 are true and correct with respect to
such Eligible Collateral on and as of the date thereof. Pledgor hereby covenants
and agrees to take all actions required under Section 6(c) and any other actions
necessary to create for the benefit of the Collateral Agent a valid, first
priority, perfected security interest in, and a first lien upon, such additional
Eligible Collateral.
(c) Any delivery of Common Stock (or security entitlement in respect
thereof) as Collateral to the Collateral Agent by Pledgor shall be effected (A)
in the case of Collateral consisting of certificated Common Stock registered in
the name of Pledgor, by delivery of certificates representing such Common Stock
to the Collateral Agent, accompanied by any required transfer tax stamps, and in
suitable form for transfer by delivery or accompanied by duly executed
instruments of transfer or assignment in blank, with signatures appropriately
guaranteed, all in form and substance satisfactory to the Collateral Agent, (B)
in the case of Collateral consisting of uncertificated Common Stock registered
in the name of Pledgor, by transmission by Pledgor of an instruction to the
issuer of such Common Stock instructing such issuer to register such Common
Stock in the name of the Collateral Agent or its nominee, accompanied by any
required transfer tax stamps, and the issuer's compliance with such instructions
or (C) in the case of Common Stock in respect of which security entitlements are
held by Pledgor through a securities intermediary, by the crediting of such
Common Stock, accompanied by any required transfer tax stamps, to a securities
account of the Collateral Agent at such securities intermediary or, at the
option of the Collateral Agent, at another securities intermediary satisfactory
to the Collateral Agent. Upon delivery of any such Pledged Item under this
Agreement, the Collateral Agent shall examine such Pledged Item and any
certificates delivered pursuant to Section 6(b) or otherwise pursuant to the
terms hereof in connection therewith to determine that they comply as to form
with the requirements for Eligible Collateral.
8
(d) If on any Business Day the Collateral Agent determines that a
Collateral Event of Default shall have occurred, the Collateral Agent shall
promptly notify Pledgor of such determination by telephone call to an Authorized
Officer of Pledgor followed by a written confirmation of such call.
(e) If on any Business Day the Collateral Agent determines that no
acceleration Event or failure by Pledgor to meet any of its obligations under
Sections 5 or 6 hereof has occurred and is continuing, Pledgor may obtain the
release from the Security Interests of any Collateral upon delivery to the
Collateral Agent of a written notice from an Authorized Officer of Pledgor
indicating the items of Collateral to be released so long as, after such
release, no Collateral Event of Default shall have occurred.
(f) On the Maturity Date, unless (i) Pledgor shall have otherwise effected
the deliveries required by Section 2.03(b) of the Securities Contract on the
Maturity Date or (ii) the Common Stock (or security entitlements in respect
thereof) then held by the Collateral Agent hereunder is not Free Stock, the
Collateral Agent shall deliver (and Pledgor hereby irrevocably instructs the
Collateral Agent to deliver, in whole or partial, as the case may be,
satisfaction of Pledgor's obligations to deliver shares of Common Stock (or
security entitlements in respect thereof) to Secured Party on the Maturity Date
pursuant to the Securities Contract) to Secured Party shares of Common Stock (or
security entitlements in respect thereof) then held by it hereunder representing
the number of shares of Common Stock (or security entitlements in respect
thereof) required to be delivered under the Securities Contract on the Maturity
Date. Upon any such delivery, Secured Party shall hold such shares of Common
Stock (or security entitlements in respect thereof) absolutely and free from any
claim or right whatsoever (including, without limitation, any claim or right of
Pledgor).
(g) The Collateral Agent may at any time or from time to time, in its sole
discretion, cause any or all of the Common Stock pledged hereunder (or in
respect of which security entitlements are pledged hereunder) registered in the
name of Pledgor or its nominee to be transferred of record into the name of the
Collateral Agent or its nominee. Pledgor shall promptly give to the Collateral
Agent copies of any notices or other communications received by Pledgor with
respect to Common Stock (or security entitlements in respect thereof) pledged
hereunder registered, or held through a securities intermediary, in the name of
Pledgor or its nominee and the Collateral Agent shall promptly give to Pledgor
copies of any notices and communications received by the Collateral Agent with
respect to Common Stock (or security entitlements in respect thereof) pledged
hereunder registered, or held through a securities intermediary, in the name of
the Collateral Agent or its nominee.
9
(h) Pledgor agrees that it shall forthwith upon demand pay to the
Collateral Agent:
(i) the amount of any taxes that the Collateral Agent or Secured
Party may have been required to pay by reason of the Security Interests or
to free any of the Collateral from any Lien thereon, and
(ii) the amount of any and all out-of-pocket expenses, including the
reasonable fees and disbursements of any one firm of attorneys and of any
other experts, that the Collateral Agent or Secured Party may incur in
connection with (A) the enforcement of this Agreement, including such
expenses as are incurred to preserve the value of the Collateral and the
validity, perfection, rank and value of the Security Interests, (B) the
collection, sale or other disposition of any of the Collateral, (C) the
exercise by the Collateral Agent of any of the rights conferred upon it
hereunder or (D) any Acceleration Event.
Any such amount not paid on demand shall bear interest (computed on the basis of
a year of 360 days and payable for the actual number of days elapsed) at a rate
per annum equal to Secured Party's cost of borrowing as determined by the
Calculation Agent.
(i) Without limiting the rights and obligations of the parties under this
Agreement, and subject to the Existing Transfer Restrictions, the Collateral
Agent shall, notwithstanding Section 9-207 of the UCC, have the right to sell,
lend, pledge, rehypothecate, assign, or otherwise use in its business
(collectively, "REHYPOTHECATE"), any Collateral it holds, free from any claim or
right of any nature whatsoever of Pledgor, including any equity or right of
redemption by Pledgor; provided that the Collateral Agent will not lend any
Collateral except pursuant to arrangements that give the Collateral Agent the
right to take possession of such Collateral (or substitute Collateral) upon five
Business Days' notice, and the Collateral Agent shall exercise such right upon
notice from Pledgor or Secured Party.
SECTION 7. Income and Voting Rights in Collateral.
(a) The Collateral Agent shall have the right to receive and retain as
Collateral hereunder all proceeds of the Collateral, other than cash dividends
or distributions (such proceeds, "PROCEEDS"), and Pledgor shall take all such
action as the Collateral Agent shall deem necessary or appropriate to give
effect to such right. All such Proceeds that are received by Pledgor shall be
received in trust for the benefit of the Collateral Agent and Secured Party and,
if the Collateral Agent so directs, shall be segregated from other funds of
Pledgor and shall, forthwith upon demand by the
10
Collateral Agent, be paid over to the Collateral Agent as Collateral in the same
form as received (with any necessary endorsement). The Collateral Agent is
hereby authorized and instructed to pay, and shall pay to Secured Party, any and
all cash dividends or distributions received by it hereunder, in satisfaction of
Pledgor's obligations under Section 5.07 of the Securities Contract.
(b) Unless an Acceleration Event shall have occurred and be continuing,
Pledgor shall have the right, from time to time, to vote and to give consents,
ratifications and waivers with respect to the Collateral, and the Collateral
Agent shall, upon receiving a written request from Pledgor accompanied by a
certificate of an Authorized Officer of Pledgor stating that no Acceleration
Event has occurred and is continuing, deliver to Pledgor or as specified in such
request such proxies, powers of attorney, consents, ratifications and waivers in
respect of any of the Collateral that is registered, or held through a
securities intermediary, in the name of the Collateral Agent or its nominee as
shall be specified in such request and shall be in form and substance
satisfactory to the Collateral Agent.
(c) If an Acceleration Event shall have occurred and be continuing, the
Collateral Agent shall have the right, to the extent permitted by law, and
Pledgor shall take all such action as may be necessary or appropriate to give
effect to such right, to vote and to give consents, ratifications and waivers,
and to take any other action with respect to any or all of the Collateral with
the same force and effect as if the Collateral Agent were the absolute and sole
owner thereof.
SECTION 8. Remedies upon Acceleration Events.
(a) If any Acceleration Event shall have occurred and be continuing, the
Collateral Agent may exercise on behalf of Secured Party all the rights of a
secured party under the Uniform Commercial Code (whether or not in effect in the
jurisdiction where such rights are exercised) and, in addition, without being
required to give any notice, except as herein provided or as may be required by
mandatory provisions of law, shall: (i) deliver all Collateral consisting of
shares of Common Stock (or security entitlements in respect thereof) (but not in
excess of the number thereof deliverable under the Securities Contract at such
time) to Secured Party on the Maturity Date occurring as a result of such
Acceleration Event (the "DEFAULT SETTLEMENT DATE") in satisfaction of Pledgor's
obligations to deliver Common Stock (or security entitlements in respect
thereof) under the Securities Contract, whereupon Secured Party shall hold such
shares of Common Stock (or security entitlements in respect thereof) absolutely
free from any claim or right of whatsoever kind, including any equity or right
of redemption of Pledgor that may be waived or any other right or claim of
Pledgor, and Pledgor, to the extent permitted by law, hereby specifically waives
all rights of redemption, stay or appraisal that it has or may have under any
law now existing or hereafter adopted; and (ii) if such delivery shall be
insufficient
11
to satisfy in full all of the obligations of Pledgor under the Securities
Contract or hereunder, sell all of the remaining Collateral, or such lesser
portion thereof as may be necessary to generate proceeds sufficient to satisfy
in full all of the obligations of Pledgor under the Securities Contract or
hereunder, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery, and at such
price or prices as the Collateral Agent may deem satisfactory. Pledgor covenants
and agrees that it will execute and deliver such documents and take such other
action as the Collateral Agent deems necessary or advisable in order that any
such sale may be made in compliance with law. Upon any such sale the Collateral
Agent shall have the right to deliver, assign and transfer to the buyer thereof
the Collateral so sold. Each buyer at any such sale shall hold the Collateral so
sold absolutely and free from any claim or right of whatsoever kind, including
any equity or right of redemption of Pledgor that may be waived or any other
right or claim of Pledgor, and Pledgor, to the extent permitted by law, hereby
specifically waives all rights of redemption, stay or appraisal that it has or
may have under any law now existing or hereafter adopted. The notice (if any) of
such sale required by Section 9-504 of the UCC shall (1) in case of a public
sale, state the time and place fixed for such sale, (2) in case of sale at a
broker's board or on a securities exchange, state the board or exchange at which
such sale is to be made and the day on which the Collateral, or the portion
thereof so being sold, will first be offered for sale at such board or exchange,
and (3) in the case of a private sale, state the day after which such sale may
be consummated. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Collateral Agent may
fix in the notice of such sale. At any such sale the Collateral may be sold in
one lot as an entirety or in separate parcels, as the Collateral Agent may
determine. The Collateral Agent shall not be obligated to make any such sale
pursuant to any such notice. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned. In case of any sale of all or any part of the Collateral on credit or
for future delivery, the Collateral so sold may be retained by the Collateral
Agent until the selling price is paid by the buyer thereof, but the Collateral
Agent shall not incur any liability in case of the failure of such buyer to take
up and pay for the Collateral so sold and, in case of any such failure, such
Collateral may again be sold upon like notice. The Collateral Agent, instead of
exercising the power of sale herein conferred upon it, may proceed by a suit or
suits at law or in equity to foreclose the Security Interests and sell the
Collateral, or any portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction.
12
(b) Pledgor hereby irrevocably appoints the Collateral Agent its true and
lawful attorney, with full power of substitution, in the name of Pledgor, the
Collateral Agent or Secured Party or otherwise, for the sole use and benefit of
the Collateral Agent and Secured Party, but at the expense of Pledgor, to the
extent permitted by law, to exercise, at any time and from time to time while an
Acceleration Event has occurred and is continuing, all or any of the following
powers with respect to all or any of the Collateral:
(i) to demand, sue for, collect, receive and give acquittance for any
and all monies due or to become due upon or by virtue thereof,
(ii) to settle, compromise, compound, prosecute or defend any action
or proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or with the same
or the proceeds or avails thereof, as fully and effectually as if the
Collateral Agent were the absolute owner thereof (including, without
limitation, the giving of instructions and entitlement orders in respect
thereof), and
(iv) to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto;
provided that the Collateral Agent shall give Pledgor not less than one day's
prior written notice of the time and place of any sale or other intended
disposition of any of the Collateral, except any Collateral that threatens to
decline speedily in value, including, without limitation, equity securities, or
is of a type customarily sold on a recognized market. The Collateral Agent and
Pledgor agree that such notice constitutes "reasonable notification" within the
meaning of Section 9-504(3) of the UCC.
(c) Upon any delivery or sale of all or any part of any Collateral made
either under the power of delivery or sale given hereunder or under judgment or
decree in any judicial proceedings for foreclosure or otherwise for the
enforcement of this Agreement, the Collateral Agent is hereby irrevocably
appointed the true and lawful attorney of Pledgor, in the name and stead of
Pledgor, to make all necessary deeds, bills of sale, instruments of assignment,
transfer or conveyance of the property, and all instructions and entitlement
orders in respect of the property thus delivered or sold. For that purpose the
Collateral Agent may execute all such documents, instruments, instructions and
entitlement orders. This power of attorney shall be deemed coupled with an
interest, and Pledgor hereby ratifies and confirms that which its attorney
acting under such power, or such attorney's successors or agents, shall lawfully
do by virtue of this Agreement. If so requested by the Collateral Agent, by
Secured Party or by any buyer of the Collateral or a
13
portion thereof, Pledgor shall further ratify and confirm any such delivery or
sale by executing and delivering to the Collateral Agent, to Secured Party or to
such buyer or buyers at the expense of Pledgor all proper deeds, bills of sale,
instruments of assignment, conveyance or transfer, releases, instructions and
entitlement orders as may be designated in any such request.
(d) In the case of an Acceleration Event, the Collateral Agent may proceed
to realize upon the security interest in the Collateral against any one or more
of the types of Collateral, at any time, as the Collateral Agent shall determine
in its sole discretion subject to the foregoing provisions of this Section 8.
The proceeds of any sale of, or other realization upon, or other receipt from,
any of the Collateral shall be applied by the Collateral Agent in the following
order of priorities:
first, to the payment to the Collateral Agent of the expenses of such
sale or other realization, including reasonable compensation to the
Collateral Agent and its agents and counsel, and all expenses, liabilities
and advances incurred or made by the Collateral Agent in connection
therewith, including brokerage fees in connection with the sale by the
Collateral Agent of any Collateral;
second, to the payment to Secured Party (x) of an amount equal to the
aggregate Market Value of a number of shares of Common Stock equal to (i)
the number of shares of Common Stock (or security entitlements in respect
thereof) that would be required to be delivered under Section 7.01 of the
Securities Contract on the Default Settlement Date without giving effect to
the proviso therein minus (ii) the number of shares of Common Stock (or
security entitlements in respect thereof) delivered by the Collateral Agent
to Secured Party on the Default Settlement Date as described in Section
8(a) and (y) of an amount equal to the amount owed by Pledgor pursuant to
Section 6.08 of the Securities Contract;
finally, if all of the obligations of Pledgor hereunder and under the
Securities Contract have been fully discharged or sufficient funds have
been set aside by the Collateral Agent at the request of Pledgor for the
discharge thereof, any remaining proceeds shall be released to Pledgor.
SECTION 9. The Collateral Agent.
(a) Secured Party hereby irrevocably appoints and authorizes the
Collateral Agent to take such action as agent on its behalf and to exercise such
powers under this Agreement as are delegated to the Collateral Agent by the
terms hereof, together with all such powers as are reasonably incidental
thereto.
14
(b) The obligations of the Collateral Agent hereunder are only those
expressly set forth in this Agreement.
(c) The Collateral Agent may consult with legal counsel, independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.
(d) Neither the Collateral Agent nor any of its directors, officers,
agents or employees shall be liable for any action taken or not taken by it in
connection with this Agreement (1) with the consent or at the request of Secured
Party or (2) in the absence of its own gross negligence or willful misconduct.
The Collateral Agent shall not incur any liability by acting in reliance upon
any notice, consent, certificate, statement, or other writing (which may be a
bank wire, telex or similar writing) believed by it to be genuine or to be
signed by the proper party or parties.
(e) Pledgor shall indemnify the Collateral Agent against any cost, expense
(including counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from the Collateral Agent's gross negligence or
willful misconduct) that the Collateral Agent may suffer or incur in connection
with this Agreement or any action taken or omitted by the Collateral Agent
hereunder.
(f) Beyond the exercise of reasonable care in the custody thereof, the
Collateral Agent shall have no duty as to any Collateral in its possession or
control or in the possession or control of any agent, bailee, clearing
corporation or securities intermediary or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining
thereto. The Collateral Agent shall be deemed to have exercised reasonable care
in the custody and preservation of the Collateral if the Collateral is accorded
treatment substantially equal to that which it accords its own property, and
shall not be liable or responsible for any loss or damage to any of the
Collateral, or for any diminution in the value thereof, by reason of the act or
omission of any agent, bailee, clearing corporation or securities intermediary
selected by the Collateral Agent in good faith (or selected by an agent, bailee,
clearing corporation or securities intermediary so selected by the Collateral
Agent or by any agent, bailee, clearing corporation or securities intermediary
selected in accordance with this parenthetical phrase).
(g) Any corporation or association into which the Collateral Agent may be
converted or merged, or with which it may be consolidated, or to which it may
15
sell or transfer its agency business and assets as a whole or substantially as a
whole, or any corporation or association resulting from any such conversion,
sale, merger, consolidation or transfer to which it is a party, shall, subject
to the prior written consent of Secured Party, be and become a successor
Collateral Agent hereunder and vested with all of the title to the Collateral
and all of the powers, discretions, immunities, privileges and other matters as
was its predecessor without, except as provided above, the execution or filing
of any instrument or any further act, deed or conveyance on the part of any of
the parties hereto, anything herein to the contrary notwithstanding.
SECTION 10. Miscellaneous.
(a) Whenever any of the parties hereto is referred to, such reference
shall be deemed to include the successors and assigns of such party. All the
covenants and agreements herein contained by or on behalf of Pledgor and the
Collateral Agent shall bind, and inure to the benefit of, their respective
successors and assigns whether so expressed or not, and shall be enforceable by
and inure to the benefit of Secured Party and its successors and assigns.
(b) Any provision of this Agreement may be amended or waived if, and only
if, such amendment or waiver is in writing and signed, in the case of an
amendment, by Pledgor, the Collateral Agent and Secured Party or, in the case of
a waiver, by the party against whom the waiver is to be effective. No failure or
delay by either party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
(c) All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
forms of telecommunication. Notices to Pledgor shall be directed to it at
Lacerte Software Corporation, 13155 Noel Road, Suite 2200, Dallas, Texas
75240-5088, Telecopy No. (927) 490-8500, Attention: Randall Zeller, with a copy
to Lacerte Software Corporation, 13155 Noel Road, Suite 2200, Dallas, Texas
75240-5088, Telecopy No. (927) 490-8500, Attention: Mark Portner; notices to the
Collateral Agent shall be directed to it Five World Trade Center, New York, New
York 10048, Telecopy No. (212) 325-0728, Attention: Carl Paravati; notices to
the Secured Party shall be directed to it in care of CSFP Capital, Inc., Eleven
Madison Avenue, New York, New York 10010, Telecopy No. (212) 325-8175,
Attention: Ricardo Harewood.
16
(d) This Agreement shall in all respects be construed in accordance with
and governed by the laws of the State of New York without reference to choice of
law doctrine (provided that as to Pledged Items located in any jurisdiction
other than the State of New York, the Collateral Agent on behalf of Secured
Party shall, in addition to any rights under the laws of the State of New York,
have all of the rights to which a secured party is entitled under the laws of
such other jurisdiction) and each party hereto submits to the jurisdiction of
the Courts of the State of New York. The parties hereto hereby agree that the
Collateral Agent's jurisdiction, within the meaning of Section 8-110(e) of the
UCC, insofar as it acts as a securities intermediary hereunder or in respect
hereof, is the State of New York. To the extent permitted by law, the
unenforceability or invalidity of any provision or provisions of this Agreement
shall not render any other provision or provisions herein contained
unenforceable or invalid.
(e) EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(f) This Agreement may be executed, acknowledged and delivered in any
number of counterparts and all such counterparts taken together shall be deemed
to constitute one and the same agreement.
SECTION 11. Termination of Pledge Agreement. This Agreement and the rights
hereby granted by Pledgor in the Collateral shall cease, terminate and be void
upon fulfillment of all of the obligations of Pledgor under the Securities
Contract and hereunder. Any Collateral remaining at the time of such termination
shall be fully released and discharged from the Security Interests and delivered
to Pledgor by the Collateral Agent, all at the request and expense of Pledgor.
17
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date and year first above written.
PLEDGOR:
LACERTE SOFTWARE CORPORATION
By: /s/ Randall Zeller
---------------------------------
Name: Randall Zeller
Title: President
COLLATERAL AGENT:
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH
as Collateral Agent
By: /s/ Peter J. Murray
---------------------------------
Name: Peter J. Murray
Title: Managing Director
By: /s/ W.A. Dueker
---------------------------------
Name: W.A. Dueker
Title: Director
SECURED PARTY:
CREDIT SUISSE FINANCIAL PRODUCTS
By: /s/ Edmond Curtin
---------------------------------
Name: Edmond Curtin
Title: Director-Legal and
Compliance Department
By: /s/ David Bonham
---------------------------------
Name: David Bonham
Title: Director-Legal and
Compliance Department
18
Exhibit A
to
Pledge Agreement
CERTIFICATE FOR ADDITIONAL COLLATERAL
The undersigned, an Authorized Officer of Lacerte Software Corporation
("PLEDGOR"), hereby certifies, pursuant to Section 6(b) of the Pledge Agreement,
dated as of May 5, 1999, among Pledgor, Credit Suisse First Boston, New York
Branch, as Collateral Agent, and Credit Suisse Financial Products (the "PLEDGE
AGREEMENT"; terms defined in the Pledge Agreement being used herein as defined
therein), that:
1. Pledgor is delivering, or causing to be delivered in accordance
with Section 6(c) of the Pledge Agreement, the following securities (or
security entitlements in respect thereof) to the Collateral Agent to be
held by the Collateral Agent as additional Collateral (the "ADDITIONAL
COLLATERAL"):
2. Pledgor hereby represents and warrants to the Collateral Agent that
the Additional Collateral is Eligible Collateral and that the
representations and warranties contained in paragraphs (a), (b), (c), (d)
and (e) of Section 3 of the Pledge Agreement are true and correct with
respect to the Additional Collateral on and as of the date hereof.
This Certificate may be relied upon by Secured Party as fully and to the
same extent as if this Certificate had been specifically addressed to Secured
Party.
IN WITNESS WHEREOF, the undersigned has executed this Certificate this ___
day of __________, ____.
By:
--------------------------------------
Name:
------------------------------------
Title:
------------------------------------
A-1