Exhibit 2(b)
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "AGREEMENT") is made and entered into
as of November 24, 2002, by and among MAPICS, Inc., a Georgia corporation
("MAPICS"), Frontstep, Inc., an Ohio corporation ("FRONTSTEP"), and the
undersigned (the "SHAREHOLDER").
PREAMBLE
The Shareholder desires that MAPICS, FP Acquisition Sub, Inc., a wholly
owned subsidiary of MAPICS ("SUB"), and Frontstep enter into an Agreement and
Plan of Merger dated the date hereof (as the same may be amended or
supplemented, the "MERGER AGREEMENT") with respect to the merger of Sub with and
into Frontstep (the "MERGER"); and
The Shareholder and Frontstep are executing this Agreement as an
inducement to MAPICS to enter into and execute, and to cause Sub to enter into
and execute, the Merger Agreement.
Capitalized terms used and not defined in this Agreement shall have the
meanings ascribed to such terms in the Merger Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by
MAPICS and Sub of the Merger Agreement and the mutual covenants, conditions and
agreements contained herein and therein, the parties agree as follows:
ARTICLE 1 REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
The Shareholder represents and warrants to MAPICS:
1.1 BENEFICIAL OWNER.
The Shareholder is the record or beneficial owner of the number of
shares (such "SHAREHOLDER'S SHARES") of common stock, no par value, of Frontstep
("FRONTSTEP COMMON STOCK") set forth below such Shareholder's name on the
signature page hereof. Except for the Shareholder's Shares (which definition
shall include any other form of securities convertible into Frontstep Common
Stock) and any other shares of Frontstep Common Stock subject hereto, the
Shareholder is not the record or beneficial owner of any shares of Frontstep
Common Stock. The Shareholder has the legal capacity and authority to enter into
and perform all of the Shareholder's obligations under this Agreement. This
Agreement has been duly authorized, executed and delivered by, and constitutes a
valid and binding agreement of, the Shareholder, enforceable in accordance with
its terms.
1.2 NO BREACH BY AGREEMENT.
Neither the execution and delivery of this Agreement nor the
consummation by the Shareholder of the transactions contemplated hereby will
result in a violation of, or a default under, or conflict with, any contract,
trust, commitment, agreement, understanding, arrangement or restriction of any
kind to which the Shareholder is a party or bound or to which the Shareholder's
Shares are subject. If the Shareholder is married and the Shareholder's Shares
constitute community property, this Agreement has been duly authorized, executed
and delivered by, and constitutes a valid and binding agreement of, the
Shareholder's spouse, enforceable against such person in accordance with its
terms. Consummation by the Shareholder of the transactions contemplated hereby
will not (i) violate, or require any consent, approval, or notice under, any
provision of any judgment, order, decree, statute, law, rule or regulation
applicable to the Shareholder or the Shareholder's Shares or (ii) conflict with
or result in a violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, commitment, arrangement, understanding, agreement or other
instrument or obligation to which such Shareholder is a party or by which such
Shareholder or any such Shareholder's properties or assets may be bound.
1.3 NO LIEN.
The Shareholder's Shares and the certificates representing such shares
are now, and at all times during the term hereof will be, held by the
Shareholder, or by a nominee or custodian for the benefit of such Shareholder,
free and clear of all liens, claims, security interests, proxies, voting trusts
or agreements, understandings or arrangements or any other encumbrances
whatsoever, except for any such encumbrances or proxies arising hereunder.
1.4 NO BROKERS.
No broker, investment banker, financial adviser or other person is
entitled to any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of the Shareholder.
1.5 INVESTMENT INTENT; ACCREDITED INVESTOR.
The Shareholder is not acquiring any MAPICS Common Stock with a view
to, or for offer or sale in connection with, any distribution thereof (within
the meaning of the Securities Act) that would be in violation of the securities
laws of the United States of America or any state thereof. The Shareholder
acknowledges that such Shareholder (i) has such knowledge and experience in
business and financial matters and with respect to investments in securities to
enable the Shareholder to understand and evaluate the risks of an investment in
the MAPICS Common Stock to be acquired by the Shareholder and to form an
investment decision with respect thereto and is able to bear the risk of such
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investment for an indefinite period and to afford a complete loss thereof and
(ii) is an "ACCREDITED INVESTOR" as defined in Rule 501 of Regulation D under
the Securities Act.
1.6 ACKNOWLEDGEMENT.
The Shareholder understands and acknowledges that MAPICS is entering
into, and causing Sub to enter into, the Merger Agreement in reliance upon the
Shareholder's execution and delivery of this Agreement. The Shareholder
acknowledges that the irrevocable proxy set forth in Section 2.3 is granted in
consideration for the execution and delivery of the Merger Agreement by MAPICS
and Sub.
ARTICLE 2 SHAREHOLDER COVENANTS AND AGREEMENT; GRANT OF PROXY
The Shareholder agrees with, and covenants to, MAPICS as follows:
2.1 VOTING AGREEMENTS.
(a) At any meeting of shareholders of Frontstep called to vote upon the
Merger and the Merger Agreement or at any adjournment thereof or in any other
circumstances upon which a vote, consent or other approval with respect to the
Merger and the Merger Agreement is sought (the "SHAREHOLDERS' MEETING"), the
Shareholder shall vote (or cause to be voted) the Shareholder's Shares in favor
of the Merger, the execution and delivery by Frontstep of the Merger Agreement,
and the approval of the terms thereof and each of the other transactions
contemplated by the Merger Agreement, provided that the terms of the Merger
Agreement shall not have been amended to reduce the consideration payable in the
Merger to a lesser amount of MAPICS Common Stock.
(b) At any meeting of shareholders of Frontstep or at any adjournment
thereof or in any other circumstances upon which their vote, consent or other
approval is sought, the Shareholder shall vote (or cause to be voted) such
Shareholder's Shares against (i) any Acquisition Proposal (other than the
Merger), any amendment of Frontstep's Articles of Incorporation or Code of
Regulations or other proposal or transaction involving Frontstep or any of its
subsidiaries which amendment or other proposal or transaction would in any
manner impede, frustrate, prevent or nullify the Merger, the Merger Agreement or
any of the other transactions contemplated by the Merger Agreement, (iii) any
action or agreement that would result in a breach in any respect of any
covenant, representation or warranty or any other obligation or agreement of
Frontstep under the Merger Agreement or this Agreement; and (iv) except as
otherwise agreed to in writing in advance by MAPICS, against any of the
following actions or agreements (other than the Merger Agreement or the
transactions contemplated thereby): (A) any action or agreement that is
intended, or could reasonably be expected, to impede, interfere with, delay,
postpone or attempt to discourage or adversely affect the Merger and the
transactions contemplated by this Agreement and the Merger Agreement; (B) any
change in the management or Board of Directors of Frontstep, except as
contemplated by the Merger Agreement; (C) any change in the present
capitalization or dividend policy of Frontstep; or (D) any other material change
in Frontstep's corporate structure or business;
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provided, however, notwithstanding anything to the contrary herein contained,
the Shareholder may vote, consent or give approval with respect to such
Shareholder's Shares in favor of (w) any amendment of Frontstep's Articles of
Incorporation or Code of Regulations, (x) any change in the present
capitalization of Frontstep, (y) any change in the management or Board of
Directors of Frontstep, and (z) any transaction (including a series of related
transactions), in each case if the action on which such vote, consent or other
approval is sought relates to (I) the issuance of voting securities of Frontstep
(or debt or equity securities of Frontstep exchangeable for or convertible into
voting securities of Frontstep) which immediately following the issuance thereof
(treating in the case of the issuance of debt or equity securities of Frontstep
exchangeable for or convertible or exerciseable into voting securities of
Frontstep, as if the maximum number of voting securities issuable upon the
exchange, conversion or exercise thereof had been issued at the time of the
issuance of such debt or equity securities) constitutes no more than forty
percent (40%) of the total voting power of Frontstep, or (II) the sale or other
disposition (other than in the ordinary course of business) of assets of
Frontstep that, in the aggregate with all other such sales or dispositions made
or agreed to be made, constitute less than the greater of (x) twenty-five
percent (25%) of the book value of all tangible assets of Frontstep or (y)
twenty-five percent (25%) of the annual revenue generating capacity of
Frontstep. Notwithstanding anything to the contrary contained in this Agreement,
each Shareholder who is also a member of the Board of Directors of Frontstep
shall be free to act in such Shareholder's capacity as a member of the Board of
Directors of Frontstep and to discharge such Shareholder's fiduciary duty as
such. The provisions of this Section 2.1 shall constitute a voting trust under
Section 1701.49 of the Ohio Revised Code.
2.2 CERTAIN COVENANTS.
(a) TRANSFER. The Shareholder shall not, except pursuant to this
Agreement (i) transfer (which term shall include, for the purposes of this
Agreement, any sale, gift, pledge or other disposition), or consent to any
transfer of, any or all of the Shareholder's Shares or any interest therein,
except pursuant to the Merger; enter into any contract, option or other
agreement or understanding with respect to any transfer of any or all of the
Shareholder's Shares or any interest therein, (iii) grant any proxy, power of
attorney or other authorization in or with respect to the Shareholder's Shares,
except for this Agreement, or (iv) deposit the Shareholder's Shares into a
voting trust or enter into a voting agreement or arrangement with respect to the
Shareholder's Shares; provided, that the Shareholder may transfer (as defined
above) any of the Shareholder's Shares to any other person who is on the date
hereof, or to any family member of a person or charitable institution which
prior to the Shareholders Meeting and prior to such transfer becomes, a party to
this Agreement bound by all the obligations of the Shareholder hereunder.
(b) EXCHANGE OF SHARES; WAIVER OF RIGHTS OF APPRAISAL. If the requisite
number of the holders of Frontstep Stock approve the Merger and the Merger
Agreement, the Shareholder's Shares shall, pursuant to the terms of the Merger
Agreement, be exchanged for the consideration provided in the Merger Agreement.
The Shareholder hereby waives any rights of appraisal with respect to the
Merger, or rights to dissent from the Merger, that such Shareholder may have.
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(c) OTHER OFFERS. The Shareholder shall not, nor shall Shareholder
permit any investment banker, attorney or other adviser or representative of the
Shareholder to, directly or indirectly, (i) solicit, initiate, encourage or
induce the making, submission or announcement of, any Acquisition Proposal or
(ii) participate in any discussions or negotiations regarding, or furnish to any
Person or "GROUP" (as such term is defined in Section 13(d) under the Exchange
Act) any nonpublic information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Acquisition Proposal. Without limiting
the foregoing, it is understood that any violation of the restrictions set forth
in the preceding sentence by an investment banker, attorney or other adviser or
representative of the Shareholder, whether or not such person is purporting to
act on behalf of the Shareholder or otherwise, shall be deemed to be in
violation of this Section 2.2(c) by the Shareholder; provided, that it is hereby
acknowledged and agreed that neither Xxxxxx Xxxxxxx & Co. nor any of its
Affiliates is acting as an investment banker, adviser or representative to the
Company. "Acquisition Proposal" does not include the Merger and the other
transactions contemplated by the Merger Agreement or any transfer expressly
permitted by the proviso to Section 2.2(a).
(d) CONFIDENTIALITY. The Shareholder recognizes that successful
consummation of the transactions contemplated by this Agreement may be dependent
upon confidentiality with respect to the matters referred to herein. In this
connection, pending public disclosure thereof, each Shareholder hereby agrees
not to disclose or discuss such matters with anyone not a party to this
Agreement (other than counsel and advisors, if any) without the prior written
consent of MAPICS, except for filings required pursuant to the Exchange Act and
the rules and regulations thereunder or disclosures such Shareholder's counsel
advises are necessary in order to fulfill such Shareholder's obligations imposed
by laws, in which event such Shareholder shall give notice of such disclosure to
MAPICS as promptly as practicable so as to enable MAPICS to seek a protective
order from a court of competent jurisdiction with respect thereto.
(e) NO INCONSISTENT AGREEMENTS. The Shareholder shall not enter into
any agreement or understanding with any Person the effect of which would be
inconsistent or violative of the provisions of this Agreement.
2.3 GRANT OF IRREVOCABLE PROXY; APPOINTMENT OF PROXY.
(a) The Shareholder hereby irrevocably grants to, and appoints, MAPICS
and Xxxxxxx Xxxx, President and Chief Executive Officer of MAPICS, in his
capacity as officer of MAPICS, and any individual who shall hereafter succeed to
any such office of MAPICS, and each of them separately, the Shareholder's proxy
and attorney-in-fact (with full power of substitution), for and in the name,
place and stead of the Shareholder, to vote the Shareholder's Shares, or grant a
consent or approval in respect of such Shares (i) in favor of the Merger, the
execution and delivery of the Merger Agreement and approval of the terms thereof
and each of the other transactions contemplated by the Merger Agreement,
provided that the terms of the Merger Agreement shall not have been amended to
reduce the consideration payable in the Merger to a lesser amount of
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MAPICS Common Stock, and against any Acquisition Proposal, other than
transactions permitted by the proviso set forth in Section 2.1(b).
(b) The Shareholder represents that any proxies heretofore given in
respect of the Shareholder's shares that may still be in effect are not
irrevocable, and that any such proxies are hereby revoked.
(c) The Shareholder hereby affirms that the irrevocable proxy set forth
in this Section 2.3 is given in connection with the execution of the Merger
Agreement, and that such irrevocable proxy is given to secure the performance of
the duties of the Shareholder under this Agreement. The Shareholder hereby
further affirms that the irrevocable proxy is coupled with an interest and may
under no circumstances be revoked. The Shareholder hereby ratifies and confirms
all that such irrevocable proxy may lawfully do or cause to be done by virtue
hereof. Such irrevocable proxy is executed and intended to be irrevocable in
accordance with the provisions of Section 1701.48 of the Ohio Revised Code.
2.4 AGREEMENT AS TO CERTAIN EVENTS.
The Shareholder agrees that this Agreement and the obligations
hereunder shall attach to the Shareholder's Shares and shall be binding upon any
person or entity to which legal or beneficial ownership of such Shares shall
pass, whether by operation of law or otherwise, including the Shareholder's
successors or assigns. In the event of any stock split, stock dividend, merger,
reorganization, recapitalization or other change in the capital structure of
Frontstep affecting the Frontstep Common Stock, or the acquisition of additional
shares of Frontstep Common Stock or other voting securities of Frontstep by any
Shareholder, the number of Shares subject to the terms of this Agreement shall
be adjusted appropriately and this Agreement and the obligations hereunder shall
attach to any additional shares of Frontstep Common Stock or other voting
securities of Frontstep issued to or acquired by the Shareholder. The
Shareholder agrees, subject to the terms and conditions of the Restructuring
Agreement and the following provisions of this Section 2.4, at the request of
MAPICS, to exercise, exchange or convert any of such Shareholder's options (or
other securities convertible into Frontstep Common Stock) to acquire additional
shares of Frontstep Common Stock ("RIGHTS") into Shares of Frontstep Common
Stock, so as to constitute After-Acquired Shares under this Agreement; provided,
however, that MAPICS shall not require the exercise of any such stock options,
at any time when the exercise price of such stock option is more than the
then-current market price of shares of Forest Common Stock. Notwithstanding the
foregoing, the Shareholder shall have no obligation to exercise the Series A
Warrants and the Convertible Notes. In order to facilitate the exercise at the
request of MAPICS of any such Right, MAPICS shall loan to any requesting
Shareholder funds sufficient to allow such Shareholder to exercise the Right.
Such loan shall be non-recourse (except with respect to pledged securities),
shall not be interest bearing, shall be due and payable upon the earlier of
acquisition by MAPICS of the After-Acquired Shares, consummation of the Merger
or termination of this Agreement and shall be secured by a pledge of the shares
of Frontstep Common Stock acquired upon exercise of such Right. Each Shareholder
hereby agrees to promptly notify MAPICS in writing of the number of
After-Acquired
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Shares that may be acquired by such Shareholder, if any, after the date hereof.
"AFTER-ACQUIRED SHARES" means any shares of Frontstep Common Stock acquired
directly or indirectly, or otherwise beneficially owned, by any of the
Shareholders in any capacity after the date hereof and prior to the termination
hereof, whether upon the exercise of options, warrants or rights, the conversion
or exchange of convertible or exchangeable securities, or by means of a
purchase, dividend, distribution, gift, bequest, inheritance or as a successor
in interest in any capacity (including a fiduciary capacity) or otherwise; and
the phrases "BENEFICIALLY OWN" or "BENEFICIAL OWNERSHIP" with respect to any
securities shall mean having "BENEFICIAL OWNERSHIP" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including pursuant to
any agreement, arrangement or understanding, whether or not in writing (without
duplicative counting of the same securities by the same holder, securities
beneficially owned by a person shall include securities beneficially owned by
all other persons with whom such Person would constitute a "GROUP" within the
meaning of Rule 13d-5 of the Exchange Act).
2.5 STOP TRANSFER; LEGENDS.
Frontstep agrees with, and covenants to, MAPICS that Frontstep shall
not register the transfer of any certificate representing any of the
Shareholder's Shares, unless such transfer is made to MAPICS or Sub or otherwise
in compliance with this Agreement. The Shareholder agrees that the Shareholder
will tender to Frontstep, within five business days after the date thereof, any
and all certificates representing such Shareholder's Shares and Frontstep will
inscribe upon such certificates the following legend: "The shares of Common
Stock, no par value, of Frontstep, Inc. represented by this certificate are
subject to a Shareholders Agreement dated as of November 24, 2002, and may not
be sold or otherwise transferred, except in accordance therewith. Copies of such
Agreement may be obtained at the principal executive offices of Frontstep, Inc."
2.6 STANDSTILL.
Shareholder agrees that, for a period of two years from the Effective
Time, unless such shall have been specifically invited in writing by MAPICS,
neither Shareholder nor any of its directors, officers or employees
(collectively, "REPRESENTATIVES"), will in any manner, directly or indirectly,
(a) effect or seek, offer or propose (whether publicly or otherwise) to effect,
or cause or participate in or in any way assist any other person to effect or
seek, offer or propose (whether publicly or otherwise) to effect or participate
in, (i) any acquisition of any securities (or beneficial ownership thereof) or
assets of MAPICS or any of its Subsidiaries; provided that Shareholder may
acquire shares of MAPICS equal to or less than five percent (5%) of the number
of shares issued to Shareholder in the Merger, (ii) any tender or exchange
offer, merger or other business combination involving MAPICS or any of its
Subsidiaries, (iii) any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with respect to MAPICS or any of
its Subsidiaries, or (iv) any "solicitation" of "proxies" (as such terms are
used in the proxy rules of the Securities and Exchange Commission) or consents
to vote any voting securities of MAPICS, (b) form, join or in any way
participate in a "group" (as defined under the 0000 Xxx) other than any "group"
that may be deemed to be formed by this Agreement or by the Investor Rights
Agreement, (c) otherwise act,
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alone or in concert with others, to seek to control or influence the management,
board of directors or policies of MAPICS, (d) take any action which might force
the Company to make a public announcement regarding any of the types of matters
set forth in (a) above, or (e) enter into any discussions or arrangements with
any third party with respect to any of the foregoing. Shareholder also agrees
during such period not to request MAPICS (or its directors, officers, employees,
advisors or agents), directly or indirectly, to amend or waive any provision of
this paragraph (including this sentence).
Shareholder acknowledges that Shareholder is aware (and that its
Representatives who are apprised of this matter have been advised) that the
United States securities laws prohibit Shareholder, its Representatives, and any
person who has received material non-public information about MAPICS from
purchasing or selling securities of MAPICS or from communicating such
information to any other person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell such securities in
reliance on such information.
Solely for the purposes of this Section 2.6, the term "SHAREHOLDER"
shall mean Xxxxxxxx X. Xxx, Fallen Angel Equity Fund, L.P., Fallen Angel
Capital, L.L.C., MSDW Venture Partners IV, Inc., MSDW Venture Partners IV,
L.L.C., Xxxxxx Xxxxxxx Xxxx Xxxxxx Venture Partners IV, L.P., Xxxxxx Xxxxxxx
Xxxx Xxxxxx Venture Investors IV, L.P., Xxxxxx Xxxxxxx Xxxx Xxxxxx Venture
Offshore Investors IV, L.P., Xxxxxx Xxxxxxx Xxxx Xxxxxx Equity Funding, Inc.,
Originators Investment Plan, L.P., or MSDW OIP Investors, Inc., as applicable.
2.7 LOCK-UP.
Shareholder agrees that for a period beginning upon the Effective Time
of the Merger and ending 180 days thereafter, the Shareholder will not, directly
or indirectly (x) make, agree to or cause any offer, sale (including short
sale), loan, pledge, or other disposition of, or grant any options, rights or
warrants to purchase with respect to, or otherwise transfer or reduce any risk
of ownership of, directly or indirectly, any MAPICS Common Stock or (y) enter
into any swap or other arrangement that transfers all or a portion of the
economic consequences associated with the ownership of MAPICS Common Stock
(regardless of whether any of the transactions described in clause (x) or (y) is
to be settled by the delivery of MAPICS Common Stock, in cash or otherwise), nor
will the undersigned make any demand for or exercise any right with respect to
the registration of MAPICS Common Stock, without the prior written consent of
MAPICS, which shall not be unreasonably withheld, conditioned or delayed;
PROVIDED, HOWEVER, that nothing contained herein shall prohibit (i) the exercise
of stock options or other purchases of MAPICS Common Stock under stock option
plans or other incentive compensation arrangements for employees or directors
previously approved by MAPICS's Board of Directors or (ii) the gift, pledge or
assignment of any such securities without the prior consent of MAPICS if the
donee, pledgee or assignee agrees, in writing delivered to MAPICS within five
days after such gift, pledge or assignment, to be bound by the terms of this
letter. The Shareholder consents to the entry of stop-transfer instructions with
MAPICS's transfer agent against the transfer of, and authorizes MAPICS to cause
the transfer agent to decline to transfer, any of the above-described
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securities owned beneficially or of record by the undersigned. Notwithstanding
the foregoing, if MAPICS amends or waives the terms of this Section 2.7 for any
Shareholder (other than a Shareholder who immediately following the Merger is an
employee of MAPICS or the Surviving Corporation), without any further action on
the part of MAPICS or any other Person, this Section 2.7 shall be amended and
waived for all other Shareholders.
2.8 RELEASE OF CLAIMS
Except for the rights of the Shareholder to reimbursement of expenses
in accordance with the terms of the Merger Agreement and any rights to which
Shareholder or its Representatives are entitled under Section 8.14 of the Merger
Agreement, Shareholder, on behalf of itself, its Representatives, heirs,
executors, administrators, successors, and assigns, effective as of the
Effective Time (i) fully and completely releases and discharges Frontstep, its
affiliates (prior to the Effective Time), and each of their respective officers,
directors and employees (each a "Released Party") from any claim, liability,
damage, cost, action, cause of action, expense or other obligation that
Shareholder has or may have against any Released Party based upon, related to or
in any way arising out of any acts, whether of omission or commission, of any
Released Party relating to the Merger, or other events occurring or
circumstances existing at or prior to the Effective Time of the Merger, and (ii)
agrees never to commence, aid in any way, or prosecute against any Released
Party any action, lawsuit, or other proceeding based upon any claims, demands,
causes of action, obligations, damages, or liabilities covered by this Section
2.8.
2.9 CONFLICT WITH INVESTOR RIGHTS AGREEMENT
The Shareholder, as a party to that certain Amended and Restated
Investor Rights Agreement dated March 7, 2002 (the "Investor Rights Agreement"),
hereby consents that, to the extent Section 2.1, Section 2.2, Section 2.3,
Section 2.6 or Section 2.7 of this Agreement conflicts with the Investor Rights
Agreement, this Agreement will control; provided, however, that should the
Merger fail to close for any reason, the Investor Rights Agreement shall control
and the Shareholders shall continue to be bound by its provisions. The Investor
Rights Agreement will terminate on consummation of the Merger and the Closing of
the Merger Agreement.
2.10 FURTHER ASSURANCES; PUBLIC DISCLOSURE.
The Shareholder shall, upon request of MAPICS, execute and deliver any
additional documents and take such further actions as may reasonably be deemed
by MAPICS to be necessary or desirable to carry out the provisions hereof and to
vest the power to vote such Shareholder's Shares as contemplated by Section 2.3
in MAPICS and the other irrevocable proxies described therein at the expense of
MAPICS. The Shareholder hereby agrees that, subject to the Shareholder's right
of prior review and reasonable opportunity to comment, MAPICS may publish and
disclose in the Joint Proxy Statement (including all documents and schedules
filed with the SEC), such
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Shareholder's identity and ownership of Frontstep Common Stock and the nature of
such Shareholder's commitments, arrangements and understandings under this
Agreement.
ARTICLE 3 REGULATORY APPROVALS; TERMINATION
3.1 REGULATORY APPROVALS.
Each of the provisions of this Agreement is subject to compliance with
applicable regulatory conditions and receipt of any required regulatory
approvals.
3.2 TERMINATION.
This Agreement, and all rights and obligations of the parties
hereunder, shall terminate upon the date upon which the Merger Agreement is
terminated in accordance with its terms; provided that if an "EXTENSION EVENT"
shall have occurred as of or prior to termination of the Merger Agreement, then,
for a period of nine months following such termination, (i) the rights and
obligations of the parties hereto under Sections 2.1(b), 2.2(a)(ii), 2.3(a)(ii),
2.4 and 2.6 hereof shall continue in full force and effect and (ii) the
Shareholder shall not transfer any or all of the Shareholder's Shares in
connection with any Acquisition Proposal. For purposes of the foregoing, an
"EXTENSION EVENT" means any of the following events: (A) the shareholders
meeting to approve the Merger Agreement shall not have been held or the approval
of the Merger at such meeting by the holders of two-thirds of the outstanding
shares of Frontstep Common Stock shall not have been obtained, (B) any person
(other than MAPICS or any Subsidiary of MAPICS) after the date of this Agreement
shall have made, or re-affirmed, or publicly disclosed an intention to make or
re-affirm, an Acquisition Proposal, or (C) any person shall have formally
protested any application filed with any regulatory authorities pursuant to
Section 8.4(a) of the Merger Agreement by MAPICS or any of its Affiliates in
connection with the Merger.
ARTICLE 4 MISCELLANEOUS
4.1 DEFINITIONS.
(a) Except as otherwise provided herein, the capitalized terms set
forth below shall have the following meanings:
"ACQUISITION PROPOSAL" means any proposal (whether
communicated to Frontstep or publicly announced to Frontstep's
shareholders) by any Person (other than MAPICS or any of its
Affiliates) for an Acquisition Transaction involving Frontstep or any
of its present or future consolidated Subsidiaries, or any combination
of such Subsidiaries, the assets of which constitute 25% or more of the
consolidated assets of Frontstep as reflected on Frontstep's
consolidated statement of condition prepared in accordance with GAAP.
"ACQUISITION TRANSACTION" means any transaction or series of
related transactions (other than the transactions contemplated by this
Agreement)
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involving: (i) any acquisition or purchase from Frontstep by any Person
or "Group" (other than MAPICS or any of its Affiliates) of 40% or more
in interest of the total outstanding voting securities of Frontstep or
any of its Subsidiaries, or any tender offer or exchange offer that if
consummated would result in any Person or "Group" (other than MAPICS or
any of its Affiliates) beneficially owning 40% or more in interest of
the total outstanding voting securities of Frontstep or any of its
Subsidiaries, or any merger, consolidation, business combination or
similar transaction involving Frontstep pursuant to which the
shareholders of Frontstep immediately preceding such transaction hold
less than 60% of the equity interests in the surviving or resulting
entity (which includes the parent corporation of any constituent
corporation to any such transaction) of such transaction; (ii) any sale
or lease (other than in the ordinary course of business), or exchange,
transfer, license (other than in the ordinary course of business),
acquisition or disposition of 25% or more of the assets of Frontstep;
or (iii) any liquidation or dissolution of Frontstep.
"AFFILIATE" of a Person means (i) any other Person directly,
or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such Person; any officer,
director, partner, employer, or direct or indirect beneficial owner of
any 10% or greater equity or voting interest of such Person; or (iii)
any other Person for which a Person described in clause (ii) acts in
any such capacity.
Notwithstanding the foregoing, for purposes of this Agreement,
the Affiliate of any Xxxxxx Xxxxxxx Shareholder shall be deemed to be
limited solely to MSDW Venture Partners IV, Inc., MSDW Venture Partners
IV, L.L.C., Xxxxxx Xxxxxxx Xxxx Xxxxxx Partners IV, L.P., Xxxxxx
Xxxxxxx Xxxx Xxxxxx Venture Investors IV, L.P., Xxxxxx Xxxxxxx Xxxx
Xxxxxx Equity Funding, Inc., Originator Investment Plan, L.P., Xxxxxx
Xxxxxxx Xxxx Xxxxxx Venture Off-Shore Investors IV, L.P. and MSDW OIP
Investors, Inc.
"PERSON" means a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability company, limited liability partnership, trust, business
association, group acting in concert, or any person acting in a
representative capacity.
(b) The terms set forth below shall have the meanings ascribed thereto
in the referenced sections:
TERM PAGE TERM PAGE
After-Acquired Shares............7 MAPICS........................1
Agreement........................1 Merger........................1
Extension Event.................10 Released Party................9
Frontstep........................1 Representatives...............7
Investor Rights Agreement........9 Rights........................6
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TERM PAGE TERM PAGE
Shareholder......................1 Shareholders' Meeting............3
Shareholder's....................1 Sub..............................1
(c) Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
(d) Capitalized terms used and not otherwise defined in this Agreement
shall have the respective meanings assigned to them in the Merger Agreement.
4.2 NOTICES.
All notices, requests, claims, demands and other communications under
this Agreement shall be in writing and shall be deemed given if delivered
personally or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice): (i) if to Frontstep or MAPICS, to its
respective address provided in the Merger Agreement; and (ii) if to the
Shareholder; to such Shareholder's address shown below such Shareholder's
signature on the last page hereof.
4.3 INTERPRETATION.
The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. When a reference is made in this Agreement to a section, such
reference shall be to a section in this Agreement unless otherwise indicated.
The descriptive headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
4.4 COUNTERPARTS.
This Agreement may be executed in two or more counterparts, all of
which shall be considered one and the same agreement.
4.5 ENTIRE AGREEMENT.
This Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement, and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof and is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder.
4.6 GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Ohio, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof.
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4.7 NO ASSIGNMENT.
Neither this Agreement nor any of the rights, interests or obligations
under this Agreement shall be assigned, in whole or in part, by operation of law
or otherwise, by any of the parties without the prior written consent of the
other parties, except as expressly contemplated by Section 2.2(a) and provided
that MAPICS, without obtaining the consent of any other party hereto, shall be
entitled to assign this Agreement or all or any of its rights or obligations
hereunder (i) to any one or more Affiliates of MAPICS and (ii) to any lender to
MAPICS or Sub as collateral security but no assignment by MAPICS under this
Section 4.7 shall relieve MAPICS of its obligations under this Agreement. Any
assignment in violation of the foregoing shall be void.
4.8 SPECIFIC PERFORMANCE.
The Shareholder agrees that irreparable damage would occur and that
MAPICS would not have any adequate remedy at law in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that MAPICS
shall be entitled to an injunction or injunctions to prevent breaches by the
Shareholder of this Agreement and to enforce specifically the terms and
provisions of this Agreement in any court of the United States located in the
State of Ohio or in Ohio state court, this being in addition to any other remedy
to which they are entitled at law or in equity. The parties expressly agree and
acknowledge that the State of Ohio has a reasonable relationship to the parties
and/or this Agreement. As to any dispute, claim, or litigation arising out of or
relating in any way to this Agreement or the transaction at issue in this
Agreement, the parties hereto hereby agree and consent to be subject to the
exclusive jurisdiction of the United States District Court for the District of
Ohio. If jurisdiction is not present in federal court, then the parties hereby
agree and consent to the exclusive jurisdiction of the state courts of Franklin
County, Ohio. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by Law, (a) any objection that it may now or hereafter have to laying
venue of any suit, action or proceeding brought in such court, (b) any claim
that any suit, action or proceeding brought in such court has been brought in an
inconvenient forum, and (c) any defense that it may now or hereafter have based
on lack of personal jurisdiction in such forum.
If any term, provision, covenant or restriction herein, or the
application thereof to any circumstance, shall, to any extent, be held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions herein and the
application thereof to any other circumstances, shall remain in full force and
effect, shall not in any way be affected, impaired or invalidated, and shall be
enforced to the fullest extent permitted by law.
4.9 AMENDMENTS.
No amendment, modification or waiver in respect of this Agreement shall
be effective against any party unless it shall be in writing and signed by such
party.
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[Signatures on next page]
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IN WITNESS WHEREOF, the undersigned parties have executed and delivered
this Shareholder Agreement as of the day and year first above written.
MAPICS, INC.
By:______________________________
President
FRONTSTEP, INC.
By:______________________________
President
SHAREHOLDER:
Name:______________________________
Address:____________________________
Number of Shares
Beneficially Owned:__________________
