Exhibit 10.55
Execution Copy
AGREEMENT
AGREEMENT, dated as of April 27, 1998, between SEER TECHNOLOGIES, INC., a
Delaware corporation (the "Company"), and WELSH, CARSON, XXXXXXXX & XXXXX VI
L.P., a Delaware limited partnership (the "Guarantor").
WHEREAS, the Guarantor is the owner of a majority of the outstanding
Common Stock, $.01 par value ("Common Stock"), of the Company; and
WHEREAS, the Company and the Guarantor have determined that it is
critical to the financial condition of the Company that the Company amend the
Credit Agreement dated as of August 8, 1996 (the "Credit Agreement") with
NationsBank, N.A., a national banking association (the "Bank"), to increase
the maximum principal amount that may be borrowed under the credit facility
from $12,500,000 to $17,000,000 (such increased amount being referred to
herein as the "Increased Amount"); and
WHEREAS, the Bank is unwilling to amend the Credit Agreement to provide
for the Increased Amount unless such amount is guaranteed by the Guarantor;
and
WHEREAS, in order to protect and enhance its existing substantial equity
investment in the Company and to ensure the Company's ongoing financial
viability, the Guarantor has agreed to make an additional equity investment in
the Company, pursuant to the Preferred Stock Purchase Agreement, dated on or
about the date hereof, among the Company, the Guarantor and the several other
purchasers listed on Schedule I thereto (the "Purchase Agreement"), and is
willing to assume additional financial risk in its role as stockholder by
giving certain guaranties with respect to the loans to be made by the Bank to
the Company with respect to the Increased Amount and certain obligations and
liabilities (the "Hedge Amount") of the Company to the Bank pursuant to
"Hedge" Agreements; and
WHEREAS, in recognition of the additional financial risk that the
Guarantor is assuming in its capacity as stockholder by making such guaranty
(and not as compensation or a payment for any services or otherwise in
connection with the pursuit of a trade or business), the Company is willing to
issue to the Guarantor shares of its Common Stock;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereby agree as follows:
I.
ISSUANCE OF COMMON STOCK
SECTION 1.01 Issuance of Common Stock. Upon the execution and delivery
by the Guarantor of the Amended and Restated Guaranty made by the Guarantors
in favor of the Bank pursuant to which the Guarantor guarantees the Increased
Amount and the Hedge Amount (the "Guaranty"), the Company agrees to issue to
the Guarantor 30,000 shares of Common Stock (the "Shares") and to issue and
deliver to the Guarantor stock certificates in definitive form, registered in
the name of the Guarantor, representing the Shares.
SECTION 1.02 Tax and Accounting Treatment. The Company and the
Guarantor agree that for federal, state and local income tax, as well as for
financial accounting, purposes the execution and delivery of the Guaranty and
the issuance of the Shares by the Company to the Guarantor is a capital
transaction and is not compensation or a payment for any services or otherwise
in connection with the pursuit of a trade or business, and each hereby agrees
to treat the issuance of the Shares in such manner for all such purposes, all
to the maximum extent permitted by applicable law.
II.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Guarantor as follows:
SECTION 2.01 Organization. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of Delaware and is duly licensed or qualified to do business as a
foreign corporation and is in good standing in each of the jurisdictions in
which it owns or leases any real property or in which the nature of business
transacted by it makes such licensing or qualification necessary and where the
failure to be so licensed or qualified would have a material adverse affect on
the business, operations or financial condition of the Company. The Company
has the corporate power and authority to own and hold its properties and to
carry on its business as currently conducted, to execute, deliver and perform
this Agreement and to issue, sell and deliver the Shares.
SECTION 2.02 Authorization of Agreement, Etc. (a) The execution,
delivery and performance by the Company of this Agreement and the issuance,
sale and delivery of the Shares, have been duly authorized by all requisite
corporate action and will not violate any provision of law, any order of any
court or other agency of government, the Restated Certificate of Incorporation
or By-laws of the Company, or any provision of any indenture, agreement or
other instrument by which the Company or any of its subsidiaries or any of
their respective properties or assets is bound, or conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any such indenture, agreement or other instrument, or result in the
creation or imposition of any lien, charge or incumbrance of any nature upon
any of the properties or assets of the Company or any of its subsidiaries.
(b) The Shares have been duly authorized and when issued in accordance
with the terms of this Agreement will be validly issued and outstanding, fully
paid and nonassessable shares of Common Stock. The issuance and delivery of
the Shares are not subject to any preemptive rights of stockholders of the
Company or to any right of first refusal or other similar right in favor of
any person.
SECTION 2.03 Validity. This Agreement has been duly executed and
delivered by the Company and constitutes the legal, valid and binding obliga-
tion of the Company, enforceable in accordance with its terms.
SECTION 2.04 Authorized Capital Stock. (a) The authorized capital stock
of the Company consists of 30,000,000 shares of Common Stock and 10,000,000
shares of Preferred Stock, par value $.01 per share, of which 2,094,143 shares
are designated Series A Convertible Preferred Stock ("Series A Preferred
Stock") and a certain number of shares as determined pursuant to the Preferred
Stock Purchase Agreement, dated as of April 27, 1998, among the Company, the
Guarantor and the several other purchasers listed therein will be designated
Series B Convertible Preferred Stock. As of the date hereof, immediately
prior to giving effect to the issuance of the Shares as contemplated hereby,
11,944,689 shares of Common Stock and 2,094,143 shares of Series A Preferred
Stock are validly issued and outstanding, fully paid and nonassessable.
(b) Except as set forth in the Company's Form 10-K for the 1997 fiscal
year or the Company's Form 10-Q for the first quarter ended December 31, 1997,
referred to in Section 2.06 of the Purchase Agreement, (i) no subscription,
warrant, option, convertible security or other right (contingent or other) to
purchase or acquire any shares of any class of capital stock of the Company is
authorized or outstanding, (ii) there is not any commitment of the Company to
issue any shares, warrants, options or other such rights or to distribute to
holders of any class of its capital stock any evidences of indebtedness or
assets, and (iii) the Company has no obligation (contingent or other) to
purchase, redeem or otherwise acquire any shares of its capital stock or any
interest therein or to pay any dividend or make any other distribution in
respect thereof.
III.
REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR
The Guarantor represents and warrants to the Company that it is acquiring
the Shares, for its own account for purposes of investment and not with a view
to or for sale in connection with any distribution thereof. The Guarantor
further represents that it understands (i) that the Shares have not been
registered under the Securities Act by reason of their issuance in transac-
tions exempt from the registration requirements of the Securities Act pursuant
to Section 4(2) thereof, (ii) the Shares must be held indefinitely unless a
subsequent disposition thereof is registered under the Securities Act or is
otherwise exempt from such registration, (iii) the Shares will bear a legend
to such effect and (iv) the Company will make a notation on its transfer books
to such effect. The Guarantor further understands that the exemption from
registration afforded by Rule 144 under the Securities Act depends on the
satisfaction of various conditions and that, if applicable, affords the basis
of sales of the Shares in limited amounts under certain conditions. The
Guarantor acknowledges that it has had a full opportunity to request from the
Company to review and has received all information deemed relevant in making a
decision to enter into this Agreement and consummate the transactions
contemplated hereby. The Guarantor is an "Accredited Investor" within the
meaning of Rule 501(a) of the Securities Act.
IV.
AGREEMENTS OF THE COMPANY
The Company covenants and agrees that any right to payment received by
the Guarantor in respect of the loans made under the Credit Agreement and its
guaranty thereof, whether by way of purchase, subrogation or otherwise, and
regardless whether and to what extent the same shall be subordinated to other
indebtedness to the Bank or shall have been waived pending certain events, may
be applied, both as to principal and accrued and unpaid interest, dollar for
dollar, by the Guarantor, as the purchase price of any equity securities
offered by the Company to investors for cash. In addition, in the event that
the Company shall be unable to make a payment under the Credit Agreement, the
Guarantor shall have the right (but not the obligation) (i) to purchase
additional equity securities of the Company and (ii) to require the Company to
use the net proceeds of such purchase to make such payment of its obligations
under the Credit Agreement. The equity securities so purchased shall be
issued at fair value, based upon current market conditions for the issuance of
equity securities. The Company shall use its best efforts to provide the
Guarantor with sufficient notice in advance of a payment default under the
Credit Agreement to enable the Guarantor to exercise its rights under this
Article IV.
V.
MISCELLANEOUS
SECTION 5.01 Expenses. Each party hereto will pay its own expenses in
connection with the transactions contemplated hereby, whether or not such
transactions shall be consummated.
SECTION 5.02 Survival of Agreements. All covenants, agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement and the issuance, sale and delivery of the Shares.
SECTION 5.03 Parties in Interest. All covenants and agreements contained
in this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto whether so expressed or not.
SECTION 5.04 Notices. All notices, requests, consent and other
communications hereunder shall be in writing and shall be mailed by first
class registered mail, postage prepaid, or sent by a recognized courier
service addressed as follows:
If to the Company to it at:
0000 Xxxxxxx Xxxxxxx
Xxxx, Xxxxx Xxxxxxxx 00000
Attention: President
If to the Guarantor to it at:
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxxx
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the other.
SECTION 5.05 Law Governing. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 5.06 Entire Agreement. This Agreement constitutes the entire
Agreement of the parties with respect to the subject matter hereof and may not
be modified or amended except in writing.
SECTION 5.07 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one in and the same instrument.
IN WITNESS WHEREOF, the Company and the Guarantor have executed this
Agreement as of the day and year first above written.
SEER TECHNOLOGIES, INC.
By /s/ Xxxxxx Xxxxxxxxxxx
Name: Xxxxxx Xxxxxxxxxxx
Title: Co-President and CFO
WELSH, CARSON, XXXXXXXX &
XXXXX VI, L.P.
By WCAS VI Partners, L.P., General
Partner
By /s/ Xxxxx XxxXxxxx
General Partner
