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EXHIBIT 10.2
NOTE PURCHASE AGREEMENT
This NOTE PURCHASE AGREEMENT (this "Agreement") is entered into as of
December 19, 2000, by and among iXL Ventures PHC, Inc., a Delaware corporation
(the "Borrower"), ProAct Technologies Corp., a Delaware corporation (the
"Purchaser"), iXL Enterprises, Inc., a Delaware corporation ("iXL"), and iXL
Ventures, L.P., a Delaware limited partnership (the "Parent"). Capitalized terms
which are used but not otherwise defined herein are defined in Section 11.1.
RECITALS
WHEREAS, the Parent is the holder of all the outstanding stock of the
Borrower, and the Parent has entered into a Contribution Agreement with the
Borrower, dated as of the date hereof, whereby it contributed 10 million shares
of the common stock, $0.01 par value per share, of the Purchaser (the "Purchaser
Shares") to the Borrower;
WHEREAS, the Purchaser desires to purchase from the Borrower, and the
Borrower desires to sell to the Purchaser 5.75% Secured Convertible Notes
secured by a pledge of the Purchaser Shares, guaranteed by the Parent in the
principal amount of $20,000,000.00 (the "Notes") having the terms as set forth
herein and in the Notes; and
WHEREAS, the Purchaser and the Parent desire to effect certain
amendments to the Purchaser's Third Amended and Restated Stockholders' Agreement
dated as of June 30, 2000 by and among the Purchaser and its stockholders;
WHEREAS, the Parent desires to grant a call right to the Purchaser with
respect to 10 million shares of the Purchaser's common stock; and
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
ISSUANCE OF NOTES; CLOSING
1.1 Purchase and Sale of Note. Upon the terms and subject to the
conditions set forth herein, the Borrower will sell to the Purchaser and the
Purchaser will purchase from the Borrower the Note by paying to the Borrower an
aggregate cash purchase price of $20,000,000.00 (the "Purchase Price"). The
Purchase Price shall be paid by the Purchaser at the Closing as defined in
Section 1.2. The Note shall have the terms as set forth on the attached Exhibit
A.
1.2 Closing.
(a) The Closing shall take place after satisfaction or waiver
of the conditions set forth in Article V but in no event later than the close of
business on December 20, 2000, or at such other time and place as the Purchaser
and the Borrower may agree. At the Closing, (a) the Purchaser shall pay the
Purchase Price for the Note as required by this Section, by a confirmed wire
transfer in the amount of $20,000,000.00 in immediately available Federal funds
and (b) the
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Borrower shall deliver the Note and the Pledged Collateral to the Purchaser.
(b) The Purchaser acknowledges and agrees that (i) the
proceeds from the issuance of the Notes pursuant to this Agreement may be
distributed by the Borrower to the Parent and (ii) the Borrower expects to
immediately distribute such proceeds to the Parent. The parties agree that the
officers and directors of the Borrower shall have no personal liability to the
Purchaser (or its successors and assigns) with respect to such distribution. The
Purchaser acknowledges that, assuming the accuracy of the representations and
warranties in this Agreement, as of the closing of the purchase of the Notes by
the Purchaser and after giving effect to a distribution by the Borrower of the
proceeds thereof to the Parent, the Borrower is a solvent entity.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
AND THE PARENT
The Borrower and the Parent, jointly and severally, hereby
represent and warrant as to the Borrower, and the Parent hereby represents
warrants as to itself, as of the date of this Agreement and as of the Closing
Date as follows:
2.1 Organization and Standing; Certificate of Incorporation and
By-laws. The Borrower is a corporation duly organized and validly existing under
the laws of Delaware and is in good standing under such laws. The Borrower has
the requisite corporate power and authority and all licenses, permits and
authorizations necessary to conduct business as being conducted by it. The
Parent is a limited partnership duly organized and validly existing under the
laws of Delaware and is in good standing under such laws. The Borrower has
furnished the Purchaser with true, correct and complete copies of its (i)
Certificate of Incorporation and all amendments thereto and (ii) By-laws and all
amendments thereto. The Borrower has no Subsidiaries and does not own or hold
any rights to acquire any shares of stock or any other security or interest in
any other person other than its interest in the Purchaser Shares.
2.2 Corporate and Partnership Power. The Borrower has the
requisite corporate power to enter into this Agreement, the Loan Documents and
all other agreements and documents contemplated hereby to which it is a party
and will have at the Closing Date the requisite corporate power to sell the
Note, and to carry out and perform its obligations under the terms of this
Agreement, the Loan Document and all other agreements and documents contemplated
hereby to which it is a party. The Parent has the requisite power to enter into
this Agreement, the Loan Documents and all other agreements and documents
contemplated hereby to which it is a party and will have at the Closing Date the
requisite power to carry out and perform its obligations under the terms of this
Agreement, the Loan Documents and all other agreements and documents
contemplated hereby to which it is a party.
2.3 Capitalization. The Borrower's authorized capital stock
consists of 10,001 shares of Common Stock, of which 1 share is issued and
outstanding. 10,000 shares of Common Stock have been reserved by all necessary
corporate action for issuance of the Conversion Shares upon the conversion of
the Note by the Purchaser. All the aforesaid issued and outstanding shares are
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duly authorized and validly issued, are fully paid and nonassessable and have
been offered, issued, sold and delivered by the Borrower in compliance with
applicable Federal and state securities laws. There are no outstanding
preemptive, conversion or other rights, options, warrants or agreements granted
or issued by or binding upon the Borrower for the purchase or acquisition of, or
subscription for, any shares of its capital stock other than in connection with
the conversion of the Notes into the Conversion Shares by the Borrower. There
are no voting trusts, shareholder agreements or any other agreements or
understandings with respect to the voting of any shares of its capital stock
other than those so created by the Certificate of Incorporation or the By-laws
of the Borrower. The Borrower holds no shares of its capital stock in its
treasury. The Borrower is not subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of its
capital stock. Immediately following the conversion of the Notes, the Shares
owned by the Purchaser shall represent, at that time, 99.99% of the Borrower's
outstanding equity on a fully diluted basis.
2.4 Authorization. All corporate action on the part of the
Borrower necessary for the authorization, execution, delivery and performance by
the Borrower of this Agreement, the Loan Documents and all other agreements and
documents contemplated hereby and thereby to which the Borrower is a party and
the consummation of the transactions contemplated herein and for the
authorization and reservation of the Conversion Shares has been taken. Each of
this Agreement, the Loan Documents and all other agreements and documents
contemplated hereby and thereby to which the Borrower is a party, is or will be
a valid and binding agreement of the Borrower, enforceable in accordance with
its terms. The execution, delivery and performance by the Borrower of this
Agreement, the Loan Documents and all other agreements and documents
contemplated hereby and thereby to which the Borrower is a party, and compliance
herewith and therewith, and the issuance of the Notes or the Conversion Shares
upon the conversion of the Note will not result in any violation of and will not
conflict with, or result in a breach of any of the terms of, or constitute a
default under, or give any third party the right to accelerate any obligation
under any provision of law to which the Borrower is subject, the Certificate of
Incorporation or the By-laws of the Borrower, or any mortgage, indenture,
agreement, instrument, judgment, decree, order, rule or regulation or other
restriction to which the Borrower or any predecessor is a party or by which it
is bound, or result in the creating of any Lien upon any of the properties or
assets of the Borrower pursuant to any such term, or result in the suspension,
revocation, impairment, forfeiture or nonrenewal of any permit, license,
authorization or approval applicable to the Borrower's operations or any of its
assets or properties. No shareholder has any existing preemptive rights or
rights of first refusal by reason of the issuance of the Note or the Shares.
All action on the part of the Parent necessary for the
authorization, execution, delivery and performance by the Parent of this
Agreement, the Loan Documents and all other agreements and documents
contemplated hereby and thereby to which the Parent is a party and the
consummation of the transactions contemplated herein and for the contribution of
the Purchaser Shares has been taken. Each of this Agreement, the Loan Documents
and all other agreements and documents contemplated hereby and thereby to which
the Parent is a party, will be upon execution a valid and binding agreement of
the Parent, enforceable in accordance with its terms. The execution, delivery
and performance by the Parent of this Agreement, the Loan Documents and all
other agreements and documents contemplated hereby and thereby to which the
Parent is a party, and compliance herewith and therewith, will not result in any
violation of, and will not
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conflict with, or result in a breach of any of the terms of, or constitute a
default under, or give any third party the right to accelerate any obligation
under any provision of law to which the Parent is subject, or any mortgage,
indenture, agreement, instrument, judgment, decree, order, rule or regulation or
other restriction to which the Parent or by which it is bound, or result in the
creating of any Lien upon any of the properties or assets of the Parent pursuant
to any such term, or result in the suspension, revocation, impairment,
forfeiture or nonrenewal of any permit, license, authorization or approval
applicable to or any of its assets or properties
2.5 Absence of Liabilities. Except for liabilities under the Loan
Documents, the Borrower has no liabilities (whether fixed or contingent,
accrued, absolute, unliquidated or otherwise, whether or not known to the
Borrower, whether due or to become due).
2.6 Contracts. The Borrower is not a party to any contract,
obligation, agreement, plan, arrangement, commitment or the like (written or
oral) except the Loan Documents.
2.7 Litigation. There is neither pending nor, to the Borrower's or
the Parent's knowledge and belief, threatened, any action, suit, proceeding,
investigation, order or claim, or any basis therefor or threat thereof, whether
or not purportedly on behalf of the Borrower, affecting the Borrower; and the
Borrower or the Parent has no knowledge of any unasserted claim, the assertion
of which is likely and which, if asserted, will seek damages, an injunction or
other legal, equitable, monetary or nonmonetary.
2.8 Consents. No consent, approval, qualification, order or
authorization of, or filing with, any governmental or regulatory authority is
required in connection with the Borrower's valid execution, delivery or
performance of the applicable Loan Documents and other agreements or documents
contemplated hereby, or the offer, sale or issuance of the Note or the
Conversion Shares by the Borrower, or the consummation of any other transaction
contemplated on the part of the Borrower hereby or thereby; except no
representation or warranty is made with respect to whether any class votes are
required of shares of preferred stock of the Company pursuant to provision of
the Purchaser's certificate of incorporation.
No consent, approval, qualification, order or authorization
of, or filing with, any governmental or regulatory authority is required in
connection with the Parent's valid execution, delivery or performance of the
applicable Loan Documents and other agreements or documents contemplated hereby,
or the consummation of any other transaction contemplated on the part of the
Parent hereby or thereby.
2.9 Ownership of Assets, Purchaser Shares and Call Shares. The
Borrower has no ownership interest in any properties or assets other than its
interest in the Purchaser Shares. The Purchaser Shares are owned by the Borrower
free and clear of any Liens (other than imposed by the applicable Loan
Documents). The delivery of the Purchaser Shares by the Borrower to the
Purchaser upon an exchange as contemplated by the Exchange Agreement will convey
to the Purchaser lawful and valid title therein, free and clear of any Liens.
The Call Shares have been pledged (the "Chase Security Interest") to Chase
Manhattan Bank, N.A. ("Chase") and are otherwise owned by the Parent free and
clear of any Liens (other than this Agreement). The Parent has the right to sell
the Call Shares free and clear of any Liens, including the Chase Security
Interest, to the Purchaser upon receipt of the proceeds of the exercise of the
call rights
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under Article X.
2.10 Issuance Taxes. All taxes imposed by law, if any, in
connection with the issuance, sale and delivery of the Notes and upon conversion
of the Notes to Conversion Shares shall have been fully paid, and all laws
imposing such taxes shall have been fully complied with, prior to the Closing.
2.11 Conduct of Business. The Borrower does not conduct any
business other than as specifically authorized under its Certificate of
Incorporation and By-Laws.
2.12 Brokers. Neither the Borrower nor the Parent has paid or
become obligated to pay any fee or commission to any broker, finder, investment
banker or other intermediary in connection with the transactions contemplated by
this Agreement, the Loan Documents or any other agreements or documents
contemplated hereby.
2.13 Amendment and Restatement of the Stockholders' Agreement. Upon
execution and delivery of the Restated Stockholders' Agreement, the Restated
Stockholders' Agreement shall be effective and will be enforceable against the
Borrower and the Parent in accordance with its terms.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Borrower as
follows:
3.1 Corporate Power. The Purchaser has the requisite authority to
enter into this Agreement, the Loan Documents to which it is a party and all
other agreements and documents contemplated hereby to which it is a party and it
will have at the Closing Date the requisite power to purchase the Note and to
carry out and perform its obligations under this Agreement, the Loan Documents
to which it is a party and all other agreements and documents contemplated
hereby to which it is a party.
3.2 Authorization. All action on the part of the Purchaser
necessary for the authorization, execution, delivery and performance by the
Purchaser of this Agreement and all other agreements and documents contemplated
hereby and thereby and the consummation of the transactions contemplated herein
has been taken; except no representation or warranty is made with respect to
whether any class votes are required of shares of preferred stock of the Company
pursuant to provisions of the Purchaser's certificate of incorporation. Each of
Loan Documents to which the Purchaser is a party and all other agreements and
documents contemplated hereby and thereby, is or will be a valid and binding
agreement of the Purchaser, enforceable in accordance with its terms.
ARTICLE IV
COVENANTS
4.1 Conduct of Business Prior to Closing. Between the date of this
Agreement and
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the Closing Date, the Borrower shall, and the Parent and iXL shall cause it to:
(a) continue to operate and conduct its business as
specifically provided in its Certificate of Incorporation;
(b) use its best efforts to ensure that the representations
and warranties set forth herein are true and correct at all times prior to the
Closing.
4.2 Access to Information. From the date of this Agreement to and
including the Closing Date, the Borrower will give the Purchaser, its counsel,
financial advisors, auditors and other authorized representatives full access at
reasonable times during normal business hours to the offices, properties, books
and records of the Borrower, will furnish to the Purchaser, its counsel,
financial advisors, auditors and other authorized representatives such financial
and operating data and other information as such Persons may reasonably request
and will instruct the employees, counsel and financial advisors of the Borrower
to cooperate with the Purchaser in its investigation of the business of the
Borrower.
4.3 Notification and Filings. The Borrower will make on a prompt
and timely basis all governmental or regulatory notifications and filings,
necessary to be made by it for the consummation of the transactions contemplated
hereby.
4.4 Financial Statements and Other Information. The Borrower will
deliver to the Purchaser (if and so long as the Purchaser holds the Notes or any
Conversion Shares) and to each transferee of the Purchaser who has acquired and
holds 25% of the outstanding Notes such monthly, quarterly and annual financial
and business information regarding the Borrower as may be reasonably requested.
4.5 Notice of Event of Default. The Borrower, iXL and the Parent
shall give prompt notice of any Event of Default to the Purchaser.
4.6 Inspection of Property. The Borrower, at all times, will
permit any representatives designated by the Purchaser upon reasonable notice
and during normal business hours, to (i) visit and inspect any of the properties
of the Borrower, (ii) examine the corporate and financial records of the
Borrower and make copies thereof or extracts therefrom and (iii) discuss the
affairs, finances and accounts of the Borrower with the directors, officers, key
employees and independent accountants of the Borrower and provided that such
visits, inspections, examinations and discussions will be at such Person's
expense and will not unreasonably interfere with the Borrower's normal business
operations.
4.7 Reservation of Common Stock. The Borrower will at all times,
until the conversion or satisfaction of the Notes in full, reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of issuance upon the conversion of the Note in full, the number of
Conversion Shares issuable upon the conversion of the Note in full. The Borrower
will take all such actions as may be necessary to assure that all such
Conversion Shares may be so issued without violation of any applicable law or
governmental regulation or any requirements of any domestic securities exchange
upon which shares of stock may be listed (except for official notice of issuance
which will be promptly transmitted by the Borrower upon issuance, if
applicable).
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4.8 Negative Covenants. Until the earlier of (a) the conversion in
full of the entire amount of the Notes into the Conversion Shares, as
contemplated by this Agreement and the Notes, (b) the exchange in full of the
entire amount of the Notes into the Purchaser Shares pursuant to the Exchange
Agreement or (c) the payment in full of the entire amount of the Notes in
accordance herewith; without the prior written consent of the Purchaser, the
Parent and the Borrower shall not breach any of their respective covenants under
any of the Loan Documents.
4.9 No Sale of the Borrower. Each of iXL and the Parent agree that
the Borrower will not be sold to any other person without the consent of the
Purchaser, whether by merger, sale of assets or stock purchase transaction.
4.10 Voting of Pledged Shares. The Parent, iXL and the Borrower
each agree that the Pledged Shares (as defined in the Pledge Agreement) shall be
voted in the same manner (and proportionally) on all matters for which holders
of Purchaser Shares may vote as all other Purchaser Shares (assuming conversion
of preferred stock) held by all parties other than the Borrower, iXL, the Parent
or any of their affiliates (other than the Purchaser).
ARTICLE V
CONDITIONS TO CLOSING
5.1. Conditions Precedent to Purchaser's Obligations. The
Purchaser's obligation to purchase the Note and to pay the Purchase Price
therefor pursuant to Section 1.1 shall be subject to satisfaction of each of the
following conditions precedent, which conditions may be waived (but only in
writing) by the Purchaser in whole or in part:
(a) (i) The representations and warranties of the Borrower and
the Parent set forth in Article II shall have been true and correct in all
material respects when made and shall be true and correct in all material
respects on and as of the Closing Date as if such representations and warranties
were made on such date and (ii) the Borrower and the Parent shall have performed
in all material respects all of their respective obligations hereunder required
to be performed by it at or prior to the Closing;
(b) The Purchaser and the Borrower shall have received all
consents and approvals from and made all filings required to be obtained or made
prior to the Closing, in each case in form and substance reasonably satisfactory
to the Purchaser, including without limitation, state securities laws, and all
such consents, approvals and filings shall be in full force and effect;
(c) No provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of the
transactions contemplated hereby and no proceeding challenging this Agreement,
the Loan Documents, any other related agreement or the transactions contemplated
hereby or seeking to prohibit, alter, prevent or materially delay the Closing
shall have been instituted by any person other than the Purchaser before any
court, arbitrator or governmental body, agency or official and be pending;
(d) The Purchaser shall have received all documents it may
reasonably request relating to the valid existence and incorporation of the
Borrower and the valid existence of the Parent and the authority of the Borrower
and the Parent for this Agreement, the Loan
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Documents, and all corporate and other proceedings in connection with the
transactions contemplated hereby and all documents and instruments incident to
such transactions shall be reasonably satisfactory in form and substance to the
Purchaser;
(e) The Parent, iXL and the Borrower shall have executed each
of the Loan Documents to which it is a party; and
(f) The Restated Stockholders' Agreement shall have been
executed and delivered by iXL, and stockholders (other than iXL or the Parent)
holding at least 51% of the shares of the Purchaser's common stock (assuming
conversion of all preferred stock) held by all persons other than iXL or the
Parent.
5.2 Conditions Precedent to Borrower's Obligations. The Borrower's
obligation to sell the Note to the Purchaser pursuant to Section 1.1 shall be
subject to satisfaction of each of the following conditions precedent, which
conditions may be waived (but only in writing) by the Borrower in whole or in
part:
(a) The representations and warranties of the Purchaser set
forth in Article III shall have been true and correct in all material respects
when made and shall be true and correct in all material respects on and as of
the Closing Date as if such representations and warranties were made on such
date (except to the extent that such representations and warranties expressly
relate to an earlier date and except as otherwise contemplated by this
Agreement), and (ii) the Purchaser shall have performed in all material respects
all of its obligations hereunder required to be performed by it at or prior to
the Closing;
(b) No provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of the
transactions contemplated hereby and no proceeding challenging this Agreement or
the transactions contemplated hereby or seeking to prohibit, alter, prevent or
materially delay the Closing shall have been instituted by any Person before any
court, arbitrator or governmental body, agency or official and be pending;
(c) The Purchaser shall have executed the Restated
Stockholders' Agreement; and
(d) The Purchaser shall have executed the Exchange Agreement.
ARTICLE VI
TERMINATION
6.1 Grounds for Termination. This Agreement may be terminated at
any time prior to the Closing:
(i) by mutual written agreement of the Borrower and the
Purchaser;
(ii) by either the Borrower or the Purchaser if the Closing
shall not have been consummated on or before the close of business on December
20, 2000;
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(iii) by either the Borrower or the Purchaser if there shall
be any law or regulation that makes consummation of the transactions
contemplated hereby illegal or otherwise prohibited or if consummation of the
transactions contemplated hereby would violate any nonappealable final order,
decree or judgment of any court or governmental body having competent
jurisdiction.
6.2 Effect of Termination. If this Agreement is terminated as
permitted by Section 6.1, such termination shall be without liability of any
party (or any shareholder, director, officer, employee, agent, consultant or
representative of such party) to any other party to this Agreement; provided
that if any such termination under Section 6.1 (ii) shall result from the
willful failure of any party to fulfill a condition to the performance of the
obligations of any other party or to perform a covenant of this Agreement or
from a willful breach by any party to this Agreement, such party shall be fully
liable for any and all losses, liabilities, costs and expenses incurred or
suffered by the other parties as a result of such failure or breach. The
provisions of this Section 6.2 shall survive any termination hereof pursuant to
Section 6.1.
ARTICLE VII
CONVERSION
7.1 Conversion. The Notes are convertible (in whole but not in
part) into 10,000 fully paid and non-assessable shares of Common Stock (or any
capital stock or other securities into which such Common Stock shall have been
changed through reclassification or otherwise) (the "Conversion Shares") at the
option of the Purchaser. The Conversion Shares, upon issuance in accordance
herewith, are hereby declared to be and shall be duly authorized, validly
issued, fully paid and non-assessable, and free and clear of all Liens.
7.2 Surrender. The Notes may be converted by the Purchaser by
giving written notice thereof to the Borrower, effective upon delivery of such
notice. Upon presentation of the Notes, the Borrower shall deliver certificates
representing the Conversion Shares. Until such time as the certificates are
delivered, the Notes shall be deemed to represent the Conversion Shares.
7.3 Adjustments. The number of Conversion Shares, issuable upon
conversion shall be adjusted to reflect any stock splits, combinations,
reclassifications, stock dividends, distributions of cash or other assets, etc.
ARTICLE VIII
PAYMENT
8.1 Prepayment by the Borrower. The Borrower may prepay the Notes
in whole or in part at any time after the Purchaser has exercised a purchase
right under Section 3.2 of the Exchange Agreement; otherwise, the Notes may not
be prepaid at the option of the Borrower.
8.2 Change of Control. Upon the occurrence of a Change of Control,
the Purchaser may require the Borrower to prepay the Notes in full, upon
delivery of notice to such effect. A "Change of Control" means a transaction (in
one or a series of transactions) pursuant to which iXL Enterprises, Inc. (or one
of its direct or indirect Subsidiaries) is no longer the general partner of the
Parent.
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8.3 Payment. The principal amount of the Notes may be repaid by
the Borrower, whether by prepayment or upon maturity, by payment in cash or by
transfer of the Pledged Collateral (as defined in the Pledge Agreement). The
interest amount of the Notes may be repaid by the Borrower, whether by
prepayment or upon maturity in cash or, if the Exchange Condition (as defined in
the Exchange Agreement) has been satisfied, in shares of the Purchaser's common
stock having a Fair Value equal to the amount of interest latest then owed. In
the event the Borrower elects to make payment by transfer of additional shares,
they shall be delivered to the Purchaser free and clear of all Liens, and
pursuant to documents of transfer reasonably requested by the Purchaser.
8.4 Fair Value. The term "Fair Value" means "Appraised Value" as
defined in the Pledge Agreement.
ARTICLE IX
EVENTS OF DEFAULT
9.1 Events of Default. If any of the following events (hereafter
each called an "Event of Default") shall occur:
(a) If the Borrower shall default in the payment of any
principal or interest due under the Notes when the same shall become due and
payable, whether at maturity or by acceleration or otherwise; or
(b) If the Borrower, iXL or the Parent (the guarantor under
the Guaranty) shall make a general assignment for the benefit of creditors; or
(c) If the Borrower, iXL or the Parent shall file a voluntary
petition in bankruptcy, or shall be adjudicated bankrupt or insolvent, or shall
file any petition or answer seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under the
present or any future federal bankruptcy act or other applicable federal, state
or other statute, law or regulation, or shall file any answer admitting the
material allegation of a petition filed against the Borrower, iXL or the Parent
in such proceeding, or shall seek or consent to or acquiesce in the appointment
of any trustee, receiver or liquidator of the Borrower, iXL or the Parent of all
or any substantial part of the properties of the Borrower, iXL or the Parent, or
the Borrower, iXL or the Parent shall commence the winding up or the dissolution
or liquidation of such person or the assets of such person; or
(d) If the Guaranty ceases to be in full force and effect for
any reason or the Parent asserts at any time that the Guaranty is unenforceable
or not in full force or effect; or
(e) If an event shall occur or any condition shall exist in
respect of any indebtedness for borrowed money of iXL or the Parent, or under
any agreement securing or relating to such indebtedness:
(A) as a result of which the holder or holders of
such indebtedness, or some group of such holders or a
trustee or agent acting on their behalf, accelerates
the maturity of such indebtedness, or a portion
thereof, or
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(B) that results in any one or more of the holders
thereof or a trustee therefor requiring iXL or the
Parent pursuant to a then existing contractual right
to repurchase such indebtedness from the holders
thereof;
provided, that the aggregate amount of all obligations in
respect of all such indebtedness for borrowed money under this subsection (e)
exceeds at such time one million dollars ($1,000,000); or
(f) If the representations and warranties of the Borrower or
the Parent in this Agreement, in the Notes, in the Guaranty or in any other Loan
Documents are not true and correct as of the date that they are made and cease
to be true and correct after the Closing Date until the Maturity Date; or
(g) If the Borrower, iXL or the Parent fails to perform or
observe any of the covenants contained in any of the Loan Documents;
then, and in each and every such case, the Purchaser may by 3
(three) days advance notice in writing to the Borrower declare all amounts under
the Notes to be forthwith due and payable (except that, in the case of an Event
of Default under Section 9.1(c), the Notes shall become immediately due and
payable without notice) and thereupon the balance shall become so due and
payable, without presentation, protest or further demand or notice of any kind,
all of which are hereby expressly waived. If an Event of Default occurs with
respect to the Notes, then the unpaid principal amount of the Notes shall bear
interest from and including the Maturity Date (as defined in the Notes) to and
including the date of payment at an annual rate equal to the Overdue Rate (as
defined in the Notes).
ARTICLE X
CALL RIGHTS
10.1 General. The Parent hereby irrevocably grants to the Purchaser
call rights as described under Section 10.2 below with respect to an aggregate
of 10,000,000 shares of common stock, $0.01 par value per share, of the
Purchaser, owned by the Parent (the "Call Shares") at a purchase price per share
of $3.00 (such number and call price to be adjusted to reflect any stock splits,
combinations or the like after the date hereof).
10.2 Exercise. The Purchaser may exercise its call rights at any
time (and from time to time) prior to the close of business on January 7, 2004
by giving the Parent written notice thereof at the Parent's address for notices
set forth in Section 12.6 hereto, such notice to indicate that call rights are
being exercised under this Section 10.2, indicate the number of Call Shares to
be purchased and specify a closing date. The call rights may be exercised for
all or a portion of the Call Shares, provided, however that the minimum amount
of Call Shares purchased at any one time shall be 500,000 Call Shares (such
number to be adjusted for any stock splits, combinations or the like after the
date hereof). With the prior approval of the Purchaser's board of directors, the
Purchaser may designate another person or entity to purchase all or any portion
of the Call Shares, such designation to be set forth in the notice referred to
above; provided, that, for purposes of the foregoing board approval, iXL
Designees (as defined in the Restated Stockholders' Agreement), if any, may
participate in the meeting, if any, and vote on such
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approval by the board of directors.
10.3 Closing re: Call Shares. The closing for the purchase of the
Call Shares by the Purchaser shall be the date specified in the notice referred
to above, provided that it shall be no earlier than 15 days after, and no later
than 45 days after, delivery of the notice. At the closing, the Parent shall
deliver the certificates representing the number of Call Shares being purchased
by the Purchaser free and clear of all Liens (including without limitation the
Chase Security Interest), and the Purchaser shall pay the call price by wire
transfer to an account designated by the Parent in writing to the Purchaser at
least two business days prior to the closing, or if no such designation is made,
by check.
10.4 Termination. The call rights under Section 10.2 hereto shall
terminate upon the occurrence of the closing of a Qualified Public Offering (as
defined in the Restated Stockholders' Agreement).
10.5 Legend. The Purchaser may place a legend on the certificates
representing the Call Shares indicating that the Call Shares are subject to the
call rights provided herein.
10.6 No Restrictions. Neither the Parent nor the Borrower shall
enter into covenants or agreements which would restrict the ability of the
Parent to transfer the Call Shares in connection with the exercise of call
rights herein.
10.7 Conditions to Closing. The obligations of the Purchaser to
purchase the Call Shares and the obligations of the Parent to sell the Call
Shares are each conditioned upon release of the Chase Security Interest with
respect to the Call Shares by the secured parties thereof and receipt of the
consent of certain stockholders of the Purchaser as may be required pursuant to
the Certificate of Incorporation of the Purchaser, as amended, and pursuant to
the Stockholders' Agreement (the "Call Consent"). (Prior to the Closing, upon
request by the Purchaser, the Parent shall provide the Purchaser with evidence
in reasonable detail of such release of the Chase Security Interest.)
ARTICLE XI
DEFINITIONS
11.1 Defined Terms. As used herein the following terms shall have
the following meanings:
"Affiliate" means, as to any person, another person which
controls, is controlled by or is under common control with, such person;
provided that the Purchaser shall not be considered a Affiliate of iXL or the
Parent.
"Certificate of Incorporation" means the Borrower's
Certificate of Incorporation, as the same may be supplemented, amended and/or
restated from time to time.
"Closing" means the closing of the purchase and sale of the
Note contemplated by this Agreement.
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"Closing Date" means the date of the Closing.
"Contribution Agreement" means the Contribution Agreement
between the Borrower and the Parent, dated as of the date hereof, whereby the
Parent contributed the Purchaser Shares to the Borrower, in the form annexed as
Exhibit J hereto.
"Exchange Agreement" means the Exchange Agreement, dated as of
the date hereof, between the Borrower and the Company in the form annexed as
Exhibit E hereto.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, and any entity or official
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guaranty" means the Guaranty executed by the Parent for the
benefit of the Purchaser, dated as of the date hereof, in the form annexed as
Exhibit C hereto.
"Intercompany Agreement" means the Intercompany Agreement
between the Parent, the Borrower, and the Purchaser, dated as of the date
hereof, in the Form annexed as Exhibit H hereto.
"Keep Well Agreement" means the Keep Well Agreement between
the Parent and the Borrower, dated as of the date hereof, in the form annexed as
Exhibit I hereto.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien, charge, right of first refusal, agreement or other
restriction (including any conditional sale or other title retention agreement,
any lease in the nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code or comparable law of any
jurisdiction in connection with such Lien).
"Loan Documents" means this Note Purchase Agreement, the
Notes, the Guaranty, the Pledge Agreement, the Parent Pledge Agreement, the
Intercompany Agreement, the Exchange Agreement, the Contribution Agreement, the
Keep Well Agreement and the Restated Stockholders' Agreement.
"Note" has the meaning set forth in the Recitals, in the form
annexed as Exhibit A hereto.
"Parent Pledge Agreement" means the Pledge Agreement between
the Parent and the Purchaser, dated as of the date hereof, in the form annexed
as Exhibit D hereto.
"person" means an individual, partnership, corporation,
business trust, joint stock Company, trust, unincorporated association, joint
venture, Governmental Authority or other entity, of whatever nature.
"Pledge Agreement" means the Stock Pledge Agreement between
the Borrower and the Purchaser, dated as of the date hereof, in the form annexed
as Exhibit B hereto.
"Purchase Price" has the meaning set forth in Section 1.1.
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"Purchaser Shares" has the meaning set forth in the Recitals.
"Purchaser" means ProAct Technologies Corp., a Delaware
corporation.
"Restated Stockholders' Agreement" means the Fourth Amended
and Restated Stockholders' Agreement in the form attached as Exhibit G hereto.
"Stockholders' Agreement" means the Third Amended and Restated
Stockholders' Agreement, among the Purchaser and its stockholders, dated as of
June 30, 2000, in the form annexed as Exhibit F hereto.
"Shares" has the meaning set forth in Section 1.1.
"Subsidiary" means, as to any Person, a corporation or other
Person of which more than 50% of the outstanding capital stock or other
securities having full voting power is at the time directly or indirectly owned
or controlled by such Person, or any partnership of which such Person is a
general partner.
11.2 Other Definitional Provisions.
(a) Terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(b) All matters of an accounting nature in connection with
this Agreement and the transactions contemplated hereby shall be determined in
accordance with generally accepted accounting principles applied on a basis
consistent with prior periods, where applicable.
(c) As used herein, the neuter gender shall also denote the
masculine and feminine, and the masculine gender shall also denote the neuter
and feminine, where the context so permits.
(d) The words "hereof', "herein" and "hereunder", and words of
similar import, when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.
(e) The word "including", when used in this Agreement, means
"including, but not limited to".
ARTICLE XII
MISCELLANEOUS
12.1 Governing Law. This Agreement shall be construed and enforced
in accordance with, and governed by, the laws of the State of New York, without
regard, to the fullest extent permitted by law, to any conflict of laws rules
which might apply the laws of any other jurisdiction.
12.2 Jurisdiction; Waiver of Jury Trial. (a) Each of the Borrower
and the Parent
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irrevocably submits to the non-exclusive jurisdiction of (i) the state courts of
the State of New York, New York County, and (ii) the United States District
Court for the Southern District of New York, for the purposes of any suit,
action or other proceeding arising out of this Note or any transactions
contemplated hereby. Each of the Borrower and the Parent, for itself and in
connection with its properties, generally and unconditionally, waives any
defense of forum non conveniens, and irrevocably agrees to be bound by any
judgment rendered in connection with this Agreement.
12.3 Survival. The representations, warranties, covenants and
agreements made herein shall survive the Closing.
12.4 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors and assigns of the parties hereto; provided, however, that
the Parent, iXL or the Borrower may not assign its rights hereunder.
12.5 Entire Agreement; Amendment; Waiver. This Agreement (including
the Exhibits hereto) and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof. Neither this Agreement nor any
terms hereof may be amended, waived, discharged or terminated, except by a
written instrument signed by the Borrower and the Purchaser.
12.6 Notices, etc. Any notice required to be given hereunder shall
be sufficient if in writing, and sent by facsimile transmission and by courier
service (with proof of service), hand delivery or certified or registered mail
(return receipt requested and first-class postage prepaid), addressed as
follows:
If to the Company: If to the Borrower:
ProAct Technologies Corp. iXL Ventures PHC, Inc.
000 Xxxxxxxxxxxx Xxxx 0000 Xxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000 Xxxxxxx, Xxxxxxx 00000
Attn: C. Xxxxxxxx Xxxxxxxx Attn: Xxxxxxxx X. Xxxxx
Facsimile: 000-000-0000 Facsimile: 000-000-0000
With a copy to: With a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx Xxxxxxxxx Traurig
One New York Plaza 0000 Xxxxxxxxx Xxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000 Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxxxx/Xxxxx Xxxx Attn: Xxxxx X. Xxxxxxxxx
Facsimile: 000-000-0000 Facsimile: 000-000-0000
12.7 Specific Performance. The parties agree that irreparable
damage will result in the event that this Agreement is not specifically
enforced, and the parties agree that any damages available at law for a breach
of this Agreement would not be an adequate remedy. Therefore, the provisions
hereof and the obligations of the parties hereunder shall be enforceable in a
court of
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equity, or other tribunal with jurisdiction by a decree of specific performance,
and appropriate injunctive relief may be applied for and granted in connection
therewith. Such remedies shall, however, be cumulative and not exclusive and
shall be in addition to any other remedies which a party may have under this
Agreement or otherwise.
12.8 Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any party hereto upon any breach or default
of any other party hereto under this Agreement shall impair any such right,
power or remedy of the non-breaching or non-defaulting party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be made in writing and
shall be effective only to the extent specifically set forth in such writing.
Except as otherwise provided herein, all remedies, either under this Agreement
or by law or otherwise afforded, shall be cumulative and not alternative.
Nothing contained herein shall be deemed to be a waiver by any party of the
defense of waiver, laches or estoppel.
12.9 Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
12.10 Expenses. Except as provided in the Pledge Agreement or the
Parent Pledge Agreement, each party shall bear its own expenses and legal fees
incurred on its behalf with respect to this Agreement and the transactions
contemplated hereby.
12.11 Titles and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
12.12 United States Dollars. All dollar amounts in this Agreement
are in United States Dollars and are to be paid in immediately available federal
funds.
12.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
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iXL VENTURES PHC, INC.
By: /s/ XXXXXXXX X. XXXXXX III
-------------------------------
Name: Xxxxxxxx X. Xxxxxx III
Title: Vice President
iXL VENTURES, L.P.
By: iXL, Inc., General Partner
By: /s/ U. XXXXXXX XXXXX, XX
-------------------------------
Name: U. Xxxxxxx Xxxxx, Xx.
Title: Chief Executive Officer
iXL ENTERPRISES, INC.
By: /s/ U. XXXXXXX XXXXX, XX
-------------------------------
Name: U. Xxxxxxx Xxxxx, Xx.
Title: Chief Executive Officer
PROACT TECHNOLOGIES CORP.
By: /s/ C. XXXXXXXX XXXXXXXX
-------------------------------
Name: C. Xxxxxxxx Xxxxxxxx
Title: President
Signature Pages for Note Purchase Agreement
18
NOTE PURCHASE AGREEMENT
Table of Contents
Page
----
ARTICLE I ISSUANCE OF NOTES; CLOSING......................................................... 1
1.1 Purchase and Sale of Note.......................................................... 1
1.2 Closing............................................................................ 1
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE BORROWER AND THE PARENT..................... 2
2.1 Organization and Standing; Certificate of Incorporation and By-laws................ 2
2.2 Corporate and Partnership Power.................................................... 2
2.3 Capitalization..................................................................... 2
2.4 Authorization...................................................................... 3
2.5 Absence of Liabilities............................................................. 4
2.6 Contracts.......................................................................... 4
2.7 Litigation......................................................................... 4
2.8 Consents........................................................................... 4
2.9 Ownership of Assets, Purchaser Shares and Call Shares.............................. 4
2.10 Issuance Taxes..................................................................... 5
2.11 Conduct of Business................................................................ 5
2.12 Brokers............................................................................ 5
2.13 Amendment and Restatement of the Stockholders' Agreement........................... 5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.................................. 5
3.1 Corporate Power.................................................................... 5
3.2 Authorization...................................................................... 6
ARTICLE IV COVENANTS......................................................................... 6
4.1 Conduct of Business Prior to Closing............................................... 6
4.2 Access to Information.............................................................. 6
4.3 Notification and Filings........................................................... 6
4.4 Financial Statements and Other Information......................................... 6
4.5 Notice of Event of Default......................................................... 7
4.6 Inspection of Property............................................................. 7
4.7 Reservation of Common Stock........................................................ 7
4.8 Negative Covenants................................................................. 7
4.9 No Sale of the Borrower............................................................ 7
4.10 Voting of Pledged Shares........................................................... 7
ARTICLE V CONDITIONS TO CLOSING.............................................................. 8
5.1. Conditions Precedent to Purchaser's Obligations.................................... 8
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5.2 Conditions Precedent to Borrower's Obligations..................................... 9
ARTICLE VI TERMINATION....................................................................... 9
6.1 Grounds for Termination............................................................ 9
6.2 Effect of Termination.............................................................. 9
ARTICLE VII CONVERSION....................................................................... 10
7.1 Conversion......................................................................... 10
7.2 Surrender.......................................................................... 10
7.3 Adjustments........................................................................ 10
ARTICLE VIII PAYMENT......................................................................... 10
8.1 Prepayment by the Borrower......................................................... 10
8.2 Change of Control.................................................................. 10
8.3 Payment............................................................................ 11
8.4 Fair Value......................................................................... 11
ARTICLE IX EVENTS OF DEFAULT................................................................. 11
9.1 Events of Default.................................................................. 11
ARTICLE X CALL RIGHTS........................................................................ 12
10.1 General............................................................................ 12
10.2 Exercise........................................................................... 13
10.3 Closing re: Call Shares............................................................ 13
10.4 Termination........................................................................ 13
10.5 Legend............................................................................. 13
10.6 No Restrictions.................................................................... 13
10.7 Conditions to Closing.............................................................. 13
ARTICLE XI DEFINITIONS....................................................................... 14
11.1 Defined Terms...................................................................... 14
11.2 Other Definitional Provisions...................................................... 15
ARTICLE XII MISCELLANEOUS.................................................................... 16
12.1 Governing Law...................................................................... 16
12.2 Jurisdiction; Waiver of Jury Trial................................................. 16
12.3 Survival........................................................................... 16
12.4 Successors and Assigns............................................................. 16
12.5 Entire Agreement; Amendment; Waiver................................................ 16
12.6 Notices, etc....................................................................... 17
12.7 Specific Performance............................................................... 17
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12.8 Delays or Omissions................................................................ 17
12.9 Severability....................................................................... 18
12.10 Expenses........................................................................... 18
12.11 Titles and Subtitles............................................................... 18
12.12 United States Dollars.............................................................. 18
12.13 Counterparts....................................................................... 18
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LIST OF EXHIBITS
Exhibit A Secured Convertible Note
Exhibit B Pledge Agreement
Exhibit C Guaranty
Exhibit D Parent Pledge Agreement
Exhibit E Exchange Agreement
Exhibit F Stockholders' Agreement
Exhibit G Restated Stockholders' Agreement
Exhibit H Intercompany Agreement
Exhibit I Keep-Well Agreement
Exhibit J Contribution Agreement
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SECURED CONVERTIBLE NOTE
THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "1933 ACT"), AND
MAY NOT BE OFFERED FOR SALE OR SOLD
OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH THE 1933 ACT AND
THE RULES AND REGULATIONS THEREUNDER.
iXL Ventures PHC, Inc.
5.75% SECURED CONVERTIBLE NOTE DUE 2004
December 19, 2000
$20,000,000.00
iXL VENTURES PHC, INC., a Delaware corporation (herein, together with
its successors and assigns, called the "MAKER"), for value received hereby
promises to pay to PROACT TECHNOLOGIES CORP., a Delaware corporation (herein,
together with its successors and assigns, called the "LENDER"), the principal
sum of TWENTY MILLION DOLLARS (US$20,000,000.00), as provided herein, together
with interest (computed, in arrears, on the basis of a 360-day year of twelve
30-day months) (a) on the unpaid balance thereof, at the rate of 5.75% per
annum, compounding quarterly on the last day of each March, June, September and
December for each calendar year (the "INTEREST RATE") from the date hereof to
and including the date paid, and (b) on any due and unpaid payment (including
any due and unpaid required or optional prepayment) of principal, and to the
extent permitted by law, any due and unpaid payment of interest, at the rate of
6.75% per annum compounding quarterly (the "OVERDUE RATE").
This Note is the Maker's 5.75% Secured Convertible Note due 2004 (the
"NOTE") issued pursuant to the Note Purchase Agreement, dated as of the date
hereof (the "LOAN AGREEMENT"), between the Maker and the Lender and certain
other parties. The Note is guaranteed by iXL Ventures, L.P., a Delaware limited
partnership, as provided by the terms of the Guaranty dated the date hereof
issued by iXL Ventures, L.P. All capitalized terms, and their rules of usage,
used herein without definition shall have the meanings set forth in the Loan
Agreement.
As used herein, the term "HOLDER" means the Lender and each person (if
any) to which such named Holder sells or otherwise transfers this Note or any
Notes issued in exchange, substitution or replacement herefor in accordance with
the terms of the Loan Agreement.
SECTION 1. SECURITY; EXCHANGE AGREEMENT. This Note is secured by
certain shares of common stock of the Lender and proceeds related thereto held
by the Borrower, as provided by
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the terms of the Stock Pledge Agreement dated as of the date hereof between the
Lender and the Borrower (the "PLEDGE AGREEMENT"). Reference is hereby made to
the Loan Agreement and the Pledge Agreement for a description of and the nature
and extent of the security for the Note, and the nature and extent of the pledge
and the rights of Holder and the Maker in respect of the security or otherwise.
This Note is also subject to the terms of the Exchange Agreement dated as of the
date hereof by and between the Lender and the Borrower.
SECTION 2. PAYMENTS. All payments in respect of this Note will be made
in full when due, upon presentation of this Note at the principle executive
offices of the Lender, by wire transfer of immediately available funds; provided
that pursuant to Article VIII of the Loan Agreement, the Maker may repay (i) the
principal amount owed under this Note by transfer of the Pledged Collateral to
the Lender and (ii) the interest obligations under this Note by transfer of
Shares to the Lender having a Fair Value equal to the amount of interest owed.
In the event that the principal obligations are repaid by transfer of Pledged
Collateral in accordance with the Loan Agreement, interest shall no longer
accrue with respect to the principal. Interest on this Note will accrue
quarterly, on the last day of each March, June, September, and December,
commencing on March 31, 2001. The entire amount of unpaid principal, accrued and
unpaid interest and all other amounts payable under the Loan Documents, if any,
will be due and payable on January 7, 2004 or such earlier date as is provided
for in the Loan Agreement (in either case, the "MATURITY DATE"). Upon full
payment of the entire indebtedness represented by this Note, the Lender will
xxxx this Note "Paid in Full" and surrender this Note to the Maker for
cancellation.
SECTION 3. PREPAYMENT. This Note is subject to prepayment from time to
time only under the circumstances and in compliance with the terms and
conditions set forth in the Loan Agreement.
SECTION 4. CONVERSION OPTION. This Note can be converted, in whole or
in part, at the option of the holder, into shares of Common Stock, $.01 par
value per share, of the Maker, in the manner, and upon the terms and conditions
provided in the Loan Agreement.
SECTION 5. ABSOLUTE OBLIGATION. No reference herein to the Loan
Agreement and no provision hereof or thereof shall alter or impair the
obligation of the Maker, which is absolute and unconditional, to pay the
principal hereof and interest hereon at the respective times and places
specified herein and in the Loan Agreement.
SECTION 6. ASSIGNMENT. This Note is transferable only upon the terms
and conditions set forth in the Loan Agreement.
SECTION 7. NON-BUSINESS DAY. If any payment of interest due hereunder
becomes due and payable on a day which is not a Business Day (as defined in the
Loan Agreement), the due date thereof shall be the next preceding day which is a
Business Day, and the interest payable on such next preceding Business Day shall
be the interest which would otherwise have been payable on the due date which
was not a Business Day.
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SECTION 8. DEFAULTS; REMEDIES. Upon the occurrence of an Event of
Default, Holder may exercise any and all of the rights and remedies provided for
under any and all of the Loan Documents or otherwise available at law or in
equity. The Loan Documents provide, among other things, that upon an Event of
Default, Holder may, among other things, accelerate the Maturity Date and in
connection therewith the entire indebtedness represented by this Note will
automatically become due and payable by the Maker. Upon an Event of Default,
Holder individually may, among other things, accelerate the Maturity Date and in
connection therewith the entire Indebtedness represented by this Note will
automatically become due and payable by the Maker. In addition to all other
amounts that may at any time be payable under the Loan Documents, the
undersigned agrees to pay upon demand all expenses of any kind (including,
without limitation, reasonable attorneys' fees and expenses) incurred by the
Lender or Holder in collecting any amount due and unpaid hereunder.
SECTION 9. COLLECTION COSTS. Should any indebtedness represented by
this Note be collected at law or in equity, or in bankruptcy or other
proceedings, or should this Note be placed in the hands of attorneys for
collection after default, the undersigned agrees to pay, in addition to the
principal and interest due and payable hereon, all costs of collecting or
attempting to collect this Note, including reasonable attorneys' fees and
expenses (including those incurred in connection with any appeal), whether or
not any dispute as to the validity or enforceability of any provision of the
Note or any of the Loan Documents results in litigation and whether or not any
such litigation is prosecuted to judgment, unless judgment is entered for the
Maker in any such enforcement or collection effort in which case the Holder will
pay the reasonable attorneys' fees and expenses of the Maker.
SECTION 10. SEVERABILITY. If any provision of this Note shall be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision hereof, and
this Note shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.
SECTION 11. GOVERNING LAW. This Note shall be governed by the laws of
the State of New York, without regard, to the fullest extent permitted by law,
to any conflict of laws which might result in the application of the laws of any
other jurisdiction.
SECTION 12. JURISDICTION; WAIVER OF JURY TRIAL. The Borrower
irrevocably submits to the non-exclusive jurisdiction of (i) the state courts of
the State of New York, New York County, and (ii) the United States District
Court for the Southern District of New York, for the purposes of any suit,
action or other proceeding arising out of this Note or any transactions
contemplated hereby. The Borrower, for itself and in connection with its
properties, generally and unconditionally, waives any defense of forum non
conveniens, and irrevocably agrees to be bound by any judgment rendered in
connection with this Note.
Each of the parties hereto hereby waives its respective rights to a
jury trial of any claim or cause of action based upon or arising out of this
Note. The scope of this waiver is intended to
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be all-encompassing of any and all disputes that may be filed in any court and
that relate to the subject matter of this agreement, including without
limitation contract claims, tort claims, breach of duty claims, and all other
common law and statutory claims.
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IN WITNESS WHEREOF, the Maker has caused this 5.75% Secured Convertible
Note due 2004 to be duly executed and delivered.
iXL VENTURES PHC, INC.
By: /s/ U. XXXXXXX XXXXX
----------------------------------------
Name: U. Xxxxxxx Xxxxx
Title: President
27
STOCK PLEDGE AGREEMENT
STOCK PLEDGE AGREEMENT (this "Pledge Agreement") dated as of December
19, 2000 by and among iXL Ventures PHC, Inc., a Delaware corporation
("Borrower"), and ProAct Technologies Corp., a Delaware corporation ("Lender").
WHEREAS, Borrower, iXL Ventures, L.P., iXL Enterprises, Inc. and Lender
have entered into a Note Purchase Agreement dated as of the date hereof ("Loan
Agreement"), pursuant to which Lender has agreed to purchase $20,000,000
principal amount of 5.75% Secured Convertible Notes due 2004 (the "Notes") upon
the terms and subject to the conditions set forth therein;
WHEREAS, Borrower and Lender have entered into an Exchange Agreement
dated as of the date hereof (the "Exchange Agreement");
WHEREAS, Borrower will receive substantial benefit from the issuance of
the Notes;
WHEREAS, Borrower will grant a security interest in certain of its
assets in favor of Lender to secure its obligations under the Exchange Agreement
and the Notes; and
WHEREAS, it is a condition precedent to the obligation of Lender to
purchase the Notes that Borrower shall have executed and delivered this Pledge
Agreement.
NOW, THEREFORE, in consideration of the foregoing and in order to
induce Lender to enter into the Loan Agreement and the Exchange Agreement and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, it is agreed as follows:
Section 1. Definitions. Capitalized terms used in this Pledge
Agreement without definition shall have the meanings set forth in the Loan
Agreement. The term "Event of Default" refers to an Event of Default as defined
in the Loan Agreement or the Exchange Agreement. When used herein, the term
"including" means "including without limitation."
Section 2. Pledge. As collateral security for the prompt performance
by Borrower of its obligations under the Loan Documents (including the Exchange
Agreement), the Guarantor hereby pledges, assigns, hypothecates and transfers to
Lender (x) 10 million shares of the Common Stock of Lender held by Borrower (as
such number of shares may be adjusted for stock splits, recapitalizations, stock
dividends, etc.) (the "Pledged Shares")), and (y) all proceeds (including
dividends) payable in respect of the Pledged Shares ("Proceeds") (together with
the Pledged Shares, the "Pledged Collateral"); and represents and warrants that
such security interest shall, when UCC-1 financing statements have been properly
filed in the appropriate offices, grant a first priority security interest in
the Pledged Collateral in favor of Lender.
28
Section 3. Security for Obligations. This Pledge Agreement shall
secure, and the Pledged Collateral shall be security for, the prompt payment in
full when due, and performance of, all obligations of Borrower to Lender under
the Notes and the other Loan Documents, including the costs of collection
thereof, to Lender or any assignee, indorsee or transferee of Lender and
including, without limitation, all reasonable attorneys fees and all obligations
of Borrower under the Exchange Agreement (the "Secured Obligations"). Upon the
occurrence of any Event of Default, Lender is entitled to take for its own
account, or to dispose of, the Pledged Collateral in accordance with the terms
of this Pledge Agreement.
Section 4. Rights of Lender. This Pledge Agreement is intended to
convey to Lender all of Borrower's rights with respect to the Pledged Collateral
(including, subject to Section 7(a)(i), the right to receive monies with respect
to the Pledged Shares) and none of Borrower's duties with respect thereto.
Lender shall not be liable for failure to collect or realize upon the Secured
Obligations or the Pledged Collateral, or any part thereof, or for any delay in
so doing, nor shall Lender be under any obligation to take any action whatsoever
with regard thereto. Upon the failure of Borrower to pay any amounts owed to
Lender in respect of the Secured Obligations, all or any part of the Pledged
Collateral may be registered in the name of Lender and/or a nominee of Lender.
Borrower hereby authorizes Lender to take all actions necessary to effectuate
this Pledge Agreement as their attorney-in-fact and to execute any and all
documents, with or without designation of Lender's signing capacity, on behalf
of Borrower in connection with all activities contemplated by this Pledge
Agreement, including, without limitation, to receive, endorse and collect,
subject to Section 7(a)(i), all instruments made payable to Borrower
representing any payment or other distribution in respect of the Pledged
Collateral or any part thereof and to give full discharge for the same.
Section 5. Representations and Warranties of Borrower. Borrower
represents and warrants that:
(a) Borrower is the legal record and beneficial owner of, and has
good and marketable title to, the Pledged Collateral, subject to no pledge,
lien, mortgage, hypothecation, security interest, charge, option or other
encumbrance whatsoever;
(b) Borrower has full power, authority and legal right to pledge
all the Pledged Collateral pursuant to this Pledge Agreement; and
(c) the pledge, assignment, hypothecation, transfer and delivery
of the Pledged Collateral pursuant to this Pledge Agreement creates, when UCC-1
financing statements have been properly filed in the appropriate offices, a
valid first lien on and a fully perfected first priority security interest in
the Pledged Collateral, and the proceeds thereof, subject to no prior pledge,
lien, mortgage, hypothecation, security interest, charge, option or encumbrance
or to any agreement purporting to grant to any third party a security interest
in the Pledged Collateral except as set forth in clause (a) of this Section 5.
Section 6. Covenants. Borrower covenants and agrees that until the
Termination Date (as defined in Section 10):
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(a) Borrower will not sell, assign, transfer, exchange or
otherwise dispose of, or grant any option with respect to, the Pledged
Collateral, nor will Borrower create, incur or permit to exist any pledge, lien,
mortgage, hypothecation, security interest, charge, option or other encumbrance
with respect to the Pledged Collateral (other than the lien created by this
Pledge Agreement);
(b) Borrower will, at its sole expense, promptly execute,
acknowledge and deliver all such instruments and take all such action as Lender
from time to time may reasonably request in order to ensure to Lender the
benefits of the liens in and to the Pledged Collateral intended to be created by
this Pledge Agreement;
(c) Borrower will defend the right, title and security interest of
Lender in and to the Pledged Collateral against the claim of any entity or
person and will maintain and preserve such liens until such Pledged Collateral
is released pursuant to Section 10; and
(d) Borrower will comply with the provisions set forth in Article
IV of the Loan Agreement concerning the voting of the Pledged Shares.
Section 7. Borrower's Rights.
(a) All distributions in respect of the Pledged Collateral shall
be paid to Borrower but held in escrow by Lender pending maturity of the Notes;
all rights to such distributions and payments shall remain subject to the lien
created by this Pledge Agreement; and
(b) Borrower hereby agrees to execute and deliver (or cause to be
executed and delivered) all such instruments as Lender may reasonably request
for the purpose of enabling Borrower to exercise the rights which it is entitled
to exercise pursuant to the provisions hereof, and to receive the distributions
and payments which it is authorized to receive and retain pursuant to the
provisions hereof.
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Section 8. Defaults and Remedies.
(a) Upon any Event of Default, Lender, in addition to all rights
of Lender created under the other Loan Documents, shall have and may exercise
with respect to the Pledged Collateral, all rights and remedies available to
secured creditors under the New York Commercial Code, or otherwise at law or in
equity including, without limiting the generality of the foregoing, (i) the
right to take the Pledged Collateral (or portion thereof) for its own account as
provided in clause (b) of this Section 8 and (ii) the right to sell or assign
the Pledged Collateral, or any part thereof, at public or private sale in New
York or elsewhere as Lender may determine in good faith to be commercially
reasonable and at such prices as Lender may deem best and commercially
reasonable. The parties agree that written notice mailed to Borrower not less
than ten days prior to any public sale of the Pledged Collateral or ten days
prior to the date after which any private sale or other disposition of such
Pledge Collateral will be made shall constitute reasonable notice (all other
notices, demands or advertisements of any kind being hereby expressly waived),
but notice given in any other reasonable manner or at any other reasonable time
shall be sufficient. At any such sale, Lender shall have the right to purchase
the Pledged Collateral, or any part thereof.
To the extent Lender is restricted from making sales of Pledged
Collateral without registration under the Securities Act, the following shall
govern:
(i) at any such sale, Lender, at its discretion, may
restrict the potential bidders or purchasers to institutional investors, and/or
other persons who shall represent and warrant that they are acquiring the
Pledged Collateral for their own account, for investment only and not with a
view toward the resale or distribution thereof and which will make such further
representations and warranties as Lender may, in its discretion, deem necessary
or desirable to assure Lender that such prospective bidders or purchasers are,
with respect to applicable federal and state securities laws and rules, suitable
bidders and purchasers of such Pledged Collateral;
(ii) Lender may additionally decide to sell the Pledged
Collateral in one or more private sales or in such other manner and subject to
such restrictions and conditions as Lender, in its discretion, shall deem
necessary in order for such sale to be exempt from the registration requirement
of the Securities Act, and applicable state securities laws; and
(iii) Borrower consents to any sales made in the manner
above-described and agrees that sales made as above-described shall be deemed to
have been made in a commercially reasonable manner and Borrower further agrees
that Lender shall have no obligation to delay sale of any of the Pledged
Collateral for the period of time necessary to permit the offering and sale of
such Collateral to be registered for public sale under the Securities Act, and
applicable state securities laws, and no representation is made that any such
registration is possible or will be made.
(b) Upon the occurrence and during the continuation of any Event
of Default, Lender shall have the right, in lieu of selling Pledged Collateral
as provided in clause (a) of this Section 8, to take for its own account a
portion of the Pledged Collateral with an Appraised
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Value (as hereinafter defined) equal to the amount of the Secured Obligations as
to which Borrower shall be in default (the "Foreclosed Collateral") upon ten
(10) days prior written notice (which notice shall state the Appraised Value
ascribed thereto). In such event, Lender shall thereafter have all right, title
and interest in and to such Foreclosed Collateral free of any liens, claims or
encumbrances and Borrower's interest therein shall terminate, as if such
Foreclosed Collateral had been sold to a third party in accordance with the
procedures contemplated by clause (a) of this Section 8. "Appraised Value" shall
mean the fair market value of such Pledged Collateral on the day prior to the
date of the notice provided for herein as determined by a nationally recognized
independent investment banking firm mutually and promptly selected by Lender and
Borrower. Such firm shall make its determination as promptly as possible after
its retention. In the event that Borrower and Lender are unable to agree upon a
mutually acceptable firm within 10 days after notice from Lender to Borrower,
Lender may select a nationally recognized independent investment banking firm to
conduct the appraisal.
(c) Any cash held by or on behalf of Lender as Pledged Collateral
and all cash proceeds received by or on behalf of Lender in respect of any sale
of, liquidation of, or other realization upon or all or any part of the Pledged
Collateral shall be applied by Lender as follows:
(i) First, to the payment of the costs and expenses of
such sale or of enforcing Lender's rights under this Pledge Agreement or
the other Loan Documents, including reasonable expenses of Lender's counsel, and
all other of the expenses, liabilities and advances made or incurred by Lender
in connection therewith; and
(ii) Next, to the payment of the Secured Obligations, all
in accordance with the terms and provisions of the Loan Documents; and
(iii) Finally, after payment in full of all of the Secured
Obligations, to Borrower, or its successors or assigns, or to whomsoever may be
lawfully entitled to receive the same or as a court of competent jurisdiction
may direct, of any surplus then remaining from such proceeds.
Section 9. Waiver. No delay on the part of Lender in exercising any
power of sale, lien, option or other right hereunder, and no notice or demand
which may be given to or made upon Borrower by Lender with respect to any power
of sale, lien, option or other right hereunder, shall constitute a waiver
thereof, or limit or impair Lender's right to take any action or to exercise any
power of sale, lien, option, or any other right hereunder, or prejudice Lender's
rights as against Borrower in any respect.
Section 10. Termination. Upon payment in full of the Secured
Obligations, this Pledge Agreement shall terminate and Lender shall deliver to
Borrower such instruments of assignment or other documents of transfer as shall
be reasonably requested by Borrower and any instruments of assignment or
documents of transfer executed in connection therewith to release the Pledged
Collateral.
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Section 11. Miscellaneous. This Pledge Agreement shall be binding upon
Borrower and their respective successors and assigns, and shall inure to the
benefit of, and be enforceable by, Lender and its successors and assigns, and
none of the terms or provisions of this Pledge Agreement may be waived, altered,
modified or amended except in writing duly signed by Lender and Borrower.
Section 12. Severability. If for any reason any provision or
provisions hereof are determined to be invalid and contrary to any existing or
future law, such invalidity shall not impair the operation of or affect those
portions of this Pledge Agreement which are valid.
Section 13. Notices. Any notice required to be given hereunder shall
be sufficient if in writing, and sent by facsimile transmission and by courier
service (with proof of service), hand delivery or certified or registered mail
(return receipt requested and first-class postage prepaid), addressed as
follows:
If to the Lender: If to Borrower:
ProAct Technologies Corp. iXL Ventures PHC, Inc.
000 Xxxxxxxxxxxx Xxxx 0000 Xxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000 Xxxxxxx, Xxxxxxx 00000
Attn: C. Xxxxxxxx Xxxxxxxx Attn : Xxxxxxxx X. Xxxxx
Facsimile: 000-000-0000 Facsimile: 000-000-0000
With a copy to: With a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx Xxxxxxxxx Traurig
One New York Plaza 0000 Xxxxxxxxx Xxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000 Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxxxx/Xxxxx Xxxx Attn: Xxxxx X. Xxxxxxxxx
Facsimile: 000-000-0000 Facsimile : 000-000-0000
Section 14. Counterparts. This Pledge Agreement may be executed in any
number of counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such counterparts have
been signed by each of the parties and delivered to the other parties.
Section 15. Assignment. Lender shall have the full power, right and
authority to assign its interests under this Pledge Agreement with or without
the consent of Borrower hereunder and upon such assignment such transferee shall
have rights and benefits of Lender under this Pledge Agreement.
Section 16. Amendment. This Pledge Agreement may be amended, modified
or supplemented only by a written instrument duly executed by Lender and
Borrower.
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Section 17. Governing Law. This Pledge Agreement shall be construed
and enforced in accordance with, and governed by, the laws of the State of New
York, without regard, to the fullest extent permitted by law, to any conflict of
laws rules which might apply the laws of any other jurisdiction.
Section 18. Jurisdiction; Waiver of Jury Trial. (a) Borrower
irrevocably submits to the non-exclusive jurisdiction of (i) the state courts of
the State of New York, New York County, and (ii) the United States District
Court for the Southern District of New York, for the purposes of any suit,
action or other proceeding arising out of this Pledge Agreement or any
transactions contemplated hereby. Borrower, for itself and in connection with
its properties, generally and unconditionally, waives any defense of forum non
conveniens, and irrevocably agrees to be bound by any judgment rendered in
connection with this Pledge Agreement.
(b) Each of the parties hereto hereby waives its
respective rights to a jury trial of any claim or cause of action based upon or
arising out of this Pledge Agreement. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this Pledge Agreement, including without
limitation contract claims, tort claims, breach of duty claims, and all other
common law and statutory claims.
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed as of the date first written above.
iXL VENTURES PHC, INC.
By: /s/ U. XXXXXXX XXXXX, XX.
-----------------------------------------
Name: U. Xxxxxxx Xxxxx, Xx.
----------------------------------
Title: President
----------------------------------
PROACT TECHNOLOGIES CORP.
By: /s/ C. XXXXXXXX XXXXXXXX
-----------------------------------------
Name: /s/ C. Xxxxxxxx Xxxxxxxx
----------------------------------
Title: President
----------------------------------
Signature Page to Stock Pledge Agreement
35
GUARANTY
GUARANTY (the "Guaranty") dated as of December 19, 2000 by iXL
VENTURES, L.P., a Delaware limited partnership (the "Guarantor"), in favor of
PROACT TECHNOLOGIES CORP., a Delaware corporation (the "Lender").
WHEREAS, iXL Ventures PHC, Inc., a Delaware corporation ("Borrower"),
is a party to a Note Purchase Agreement dated as of the date hereof by and among
the Borrower, iXL Enterprises, Inc., the Guarantor and the Lender (the "Loan
Agreement");
WHEREAS, the Loan Agreement provides for a loan of $20 million to be
made by the Lender to the Borrower, secured by a first priority security
interest in 10 million shares of common stock, $.01 par value per share, of the
Lender held by the Borrower to be pledged (together with proceeds thereof) to
the Lender pursuant to the terms of a Stock Pledge Agreement dated as of the
date hereof (the "Pledge Agreement") (the "Pledged Shares");
WHEREAS, the Borrower has issued $20 million of 5.75% Secured
Convertible Notes due 2004 (the "Notes") in favor of the Lender, pursuant to the
terms of the Loan Agreement;
WHEREAS, the Borrower has agreed to the terms of an Exchange Agreement
dated as of the date hereof between the Borrower and the Lender, providing for
mutual exchange rights permitting the parties, under conditions specified
therein, to exchange the Notes for the Pledged Shares (the "Exchange
Agreement");
WHEREAS, the Lender has requested the Guarantor to provide a limited
recourse guaranty to the Lender of the Borrower's obligations to repay the Notes
plus interest thereon and other Guaranty Obligations (defined below) pursuant to
the Agreement on the terms and conditions hereinafter provided, such guaranty to
be secured by a pledge of the capital stock of the Borrower pursuant to the
terms of the Parent Pledge Agreement (defined below);
WHEREAS, Guarantor is willing to enter into this Guaranty to induce the
Lender to purchase the Notes under the Loan Agreement;
NOW, THEREFORE, Guarantor hereby agrees:
SECTION 1. GUARANTY.
1.1 Guaranty. From after the date hereof, Guarantor hereby
irrevocably and unconditionally guarantees (x) the due and punctual payment by
the Borrower of the Notes and interest thereon, on January 7, 2004 or such
sooner date as the same shall become due and payable, whether at maturity, or
otherwise under the Loan Agreement and (y) the due and punctual performance of
the Borrower's obligations under the Loan Agreement, the Notes, the Exchange
Agreement and the Pledge Agreement (collectively, the "Loan Documents") (such
obligations, the "Guaranty Obligations"). Except as set forth in Section 1.1,
Guarantor agrees
36
that its Guaranty Obligations hereunder shall be absolute, present, continuing
and unconditional, irrespective of the validity, regularity or enforceability of
the Loan Agreement, or the other Loan Documents, the absence of any action to
enforce the same, any waiver or consent by the Lender with respect to any
provision thereof, the recovery of any judgment against the Borrower or any
action to enforce the same, or any other circumstances which may otherwise
constitute a legal or equitable discharge or defense of a guarantor (except as
provided in Section 1.2 below). The term "Interest Obligations" means the
obligations of the Borrower to pay interest under the Notes; provided that (x)
if the principal amount of the Notes is repaid by transfer of Purchaser Shares
as provided under the terms of the Note Purchase Agreement, or (y) if the
Company has completely foreclosed upon the Pledged Collateral under the Pledge
Agreement or (z) an Event of Default has occurred, the Company has a right to
foreclose on the Pledged Collateral, there is no stay in effect preventing such
foreclosure, and the Company fails to take reasonable steps to effectuate a
foreclosure with respect to all of the Pledged Collateral (any such event in
clauses (x), (y) or (z), a "Cut-Off Event"), then, in each case, for purposes of
this Agreement, from and after a Cut-Off Event, Interest Obligations shall no
longer accrue with respect to the principal amount of the Notes (but interest
may continue to accrue with respect to unpaid interest).
1.2 Defenses, etc. Notwithstanding any provision of this Guaranty,
Guarantor shall have the same defenses, set-offs and claims, if any, with
respect to the enforcement against Guarantor of any Guaranty Obligations as
would the Borrower with respect to such Guaranty Obligations (except for any
defenses based upon or arising out of or in connection with the Borrower's
voluntary or involuntary bankruptcy, assignment for the benefit of creditors,
reorganization or similar proceedings affecting the Borrower or any of its
assets).
1.3 Subrogation. Guarantor shall be subrogated to all rights of
the Lender in respect of any amounts paid by (or performance by) Guarantor
pursuant to the provisions of this Guaranty; provided, however, that Guarantor
shall be entitled to enforce, or to receive any payments arising out of or based
upon, such right of subrogation with respect to any claim only after all amounts
owed by (or performance by) Guarantor and the Borrower to the Lender in respect
of the Lender, the Loan Agreement and other Loan Documents have been paid in
full (or performed in full).
1.4 Guaranty of Payment. The Guarantor further agrees that its
guaranty constitutes a guaranty of payment when due and not of collection, and
waives any right to require that any resort be had by the Lender to any of the
security held for payment of the Guaranty Obligations or to any balance of any
deposit account or credit on the books of the Lender in favor of the Borrower or
any other person.
SECTION 2. LIMITED RECOURSE TO THE GUARANTOR.
Anything contained herein to the contrary notwithstanding, no recourse
shall be had for the payment of the principal of or other amounts due on the
Notes or for any claim based
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thereon or otherwise in respect thereof or for the payment and performance of
any other obligation based on or in respect of any Loan Document (in each case
other than the Interest Obligations) against (i) the Guarantor, or (ii) any
officer, director or partner of the Guarantor and the enforcement of any
judgment for breach by the Guarantor of its obligations hereunder shall be made
only against the Collateral; provided, that with respect to the Interest
Obligations this Guaranty shall be a full recourse guaranty. The foregoing
provisions shall not (a) prevent recourse against the Borrower or with respect
to the collateral pledged pursuant to the Pledge Agreement or the Collateral
pledged pursuant to the Parent Pledge Agreement or constitute a waiver, release
or discharge of any indebtedness or obligation evidenced by the Note or any Loan
Document or secured by any Loan Document, and the same shall continue until paid
or discharged, (b) limit the right of any person to name the Guarantor or its
successor or assign as a party defendant in any action or suit for judicial
foreclosure of or in the exercise of any other remedy under the Note or under
any Loan Document, so long as no monetary judgment or judgment seeking personal
liability, the expenditure of money or the performance of any act requiring the
expenditure of money shall be sought against the Guarantor or any successor or
assign of such Guarantor, except with respect to the Interest Obligations (as to
which there is full recourse) or (c) limit or impair, in any manner, any right,
remedy or recourse Lender may have against the Guarantor for actual fraud,
willful diversion or misapplication of any portion of the Collateral by the
Guarantor or the Borrower.
SECTION 3. SECURITY.
The Guarantor authorizes the Lenders to take and hold security for the
payment of the Guaranty Obligations and exchange, enforce, waive and release any
such security, and apply such security and direct the order or manner of sale
thereof as the Lender in its sole discretion may determine in accordance with
the terms of the Parent Pledge Agreement dated as of the date hereof, by and
between the Guarantor and the Lender (the "Parent Pledge Agreement"). The term
"Collateral" has the meaning provided in the Parent Pledge Agreement.
SECTION 4. MISCELLANEOUS.
Section 4.1. Notices. All notices to Guarantor under this Guaranty and
copies of all notices to the Borrower under the Agreement shall, until Guarantor
furnishes written notice to the contrary, be in writing and mailed, faxed or
delivered to Guarantor at [address].
Section 4.2. Governing Law. This Guaranty shall be construed and
enforced in accordance with, and governed by, the laws of the State of New York,
without regard, to the fullest extent permitted by law, to any conflict of laws
rules which might apply the laws of any other jurisdiction.
Section 4.3. Jurisdiction; Waiver of Jury Trial. (a) The Guarantor
irrevocably submits to the non-exclusive jurisdiction of (i) the state courts of
the State of New York, New
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York County, and (ii) the United States District Court for the Southern District
of New York, for the purposes of any suit, action or other proceeding arising
out of this Note or any transactions contemplated hereby. The Guarantor, for
itself and in connection with its properties, generally and unconditionally,
waives any defense of forum non conveniens, and irrevocably agrees to be bound
by any judgment rendered in connection with this Guaranty.
(b) Each of the parties hereto hereby waives its respective rights
to a jury trial of any claim or cause of action based upon or arising out of
this Guaranty. The scope of this waiver is intended to be all-encompassing of
any and all disputes that may be filed in any court and that relate to the
subject matter of this Guaranty, including without limitation contract claims,
tort claims, breach of duty claims, and all other common law and statutory
claims.
Section 4.4. Interpretation. The headings of the sections and other
subdivisions of this Guaranty are inserted for convenience only and shall not be
deemed to constitute a part hereof. References to "Sections" refer to Sections
of this Guaranty unless explicitly stated otherwise.
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IN WITNESS WHEREOF, the Guarantor hereby executes and delivers this
Guaranty as of the date first above written.
iXL VENTURES, L.P.
By: iXL, Inc., General Partner
By: /s/ U. XXXXXXX XXXXX, XX.
-----------------------------------------
Name: U. Xxxxxxx Xxxxx, Xx.
Title: Chief Executive Officer
Signature page to Guaranty
40
PARENT PLEDGE AGREEMENT
PARENT PLEDGE AGREEMENT (this "Pledge Agreement") dated as of December
19, 2000 by and among iXL Ventures, L.P., a Delaware limited partnership
("Parent"), and ProAct Technologies Corp., a Delaware corporation ("Lender").
WHEREAS, iXL Ventures PHC, Inc., a Delaware corporation ("Borrower"),
iXL Enterprises, Inc., Parent and Lender have entered into a Note Purchase
Agreement dated as of the date hereof ("Loan Agreement"), pursuant to which
Lender has agreed to purchase $20,000,000 principal amount of 5.75% Secured
Convertible Notes due 2004 (the "Notes") upon the terms and subject to the
conditions set forth therein; such Notes have been guaranteed by Parent pursuant
to the Guaranty dated as of the date hereof (the "Guaranty");
WHEREAS, Borrower and Lender have entered into an Exchange Agreement
dated as of the date hereof (the "Exchange Agreement");
WHEREAS, Borrower will receive substantial benefit from the issuance of
the Notes;
WHEREAS, Parent will grant a security interest in certain of its assets
in favor of Lender to secure Parent's obligations under the Guaranty; and
WHEREAS, it is a condition precedent to the obligation of Lender to
purchase the Note that Parent shall have executed and delivered this Pledge
Agreement.
NOW, THEREFORE, in consideration of the foregoing and in order to
induce Lender to enter into the Loan Agreement and the Exchange Agreement and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, it is agreed as follows:
Section 1. Definitions. Capitalized terms used in this Pledge
Agreement without definition shall have the meanings set forth in the Loan
Agreement. The term "Event of Default" refers to a breach of the Secured
Obligations by Parent. When used herein, the term "including" means "including
without limitation."
Section 2. Pledge. As collateral security for the prompt
performance by Parent of its obligations under the Guaranty, Parent hereby
pledges, assigns, hypothecates and transfers to Lender (x) 1 share of the Common
Stock of Borrower held by Parent (as such number of shares may be adjusted for
stock splits, recapitalizations, stock dividends, etc.) (the "Pledged Shares")),
and (y) all proceeds (including dividends) payable in respect of the Pledged
Shares ("Proceeds") (together with the Pledged Shares, the "Pledged
Collateral"); and represents and warrants that such security interest shall,
when UCC-1 financing statements have been properly filed in the appropriate
offices, grant a first priority security interest in the Pledged Collateral in
favor of Lender.
41
Section 3. Security for Obligations. This Pledge Agreement shall
secure, and the Pledged Collateral shall be security for, the prompt payment in
full when due, and performance of, all obligations of Parent to Lender under the
Guaranty, including the costs of collection thereof, to Lender or any assignee,
indorsee or transferee of Lender and including, without limitation, all
reasonable attorneys fees (the "Secured Obligations"). Upon the occurrence of
any Event of Default, Lender is entitled to take for its own account, or to
dispose of, the Pledged Collateral in accordance with the terms of this Pledge
Agreement.
Section 4. Rights of Lender. This Pledge Agreement is intended
to convey to Lender all of Parent's rights with respect to the Pledged
Collateral (including, subject to Section 7(a)(i), the right to receive monies
with respect to the Pledged Shares) and none of Parent's duties with respect
thereto. Lender shall not be liable for failure to collect or realize upon the
Secured Obligations or the Pledged Collateral, or any part thereof, or for any
delay in so doing, nor shall Lender be under any obligation to take any action
whatsoever with regard thereto. Upon the failure of Borrower to pay any amounts
owed to Lender in respect of the Secured Obligations, all or any part of the
Pledged Collateral may be registered in the name of Lender and/or a nominee of
Lender. Parent hereby authorizes Lender to take all actions necessary to
effectuate this Pledge Agreement as their attorney-in-fact and to execute any
and all documents, with or without designation of Lender's signing capacity, on
behalf of Parent in connection with all activities contemplated by this Pledge
Agreement, including, without limitation, to receive, endorse and collect,
subject to Section 7(a)(i), all instruments made payable to Parent representing
any payment or other distribution in respect of the Pledged Collateral or any
part thereof and to give full discharge for the same.
Section 5. Representations and Warranties of Parent. Parent
represents and warrants that:
(a) Parent is the legal record and beneficial owner of, and has
good and marketable title to, the Pledged Collateral, subject to no pledge,
lien, mortgage, hypothecation, security interest, charge, option or other
encumbrance whatsoever;
(b) Parent has full power, authority and legal right to pledge all
the Pledged Collateral pursuant to this Pledge Agreement; and
(c) the pledge, assignment, hypothecation, transfer and delivery
of the Pledged Collateral pursuant to this Pledge Agreement creates, when UCC-1
financing statements have been properly filed in the appropriate offices, a
valid first lien on and a fully perfected first priority security interest in
the Pledged Collateral, and the proceeds thereof, subject to no prior pledge,
lien, mortgage, hypothecation, security interest, charge, option or encumbrance
or to any agreement purporting to grant to any third party a security interest
in the Pledged Collateral except as set forth in clause (a) of this Section 5.
Section 6. Covenants. Parent covenants and agrees that until the
Termination Date (as defined in Section 10):
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(a) Parent will not sell, assign, transfer, exchange or otherwise
dispose of, or grant any option with respect to, the Pledged Collateral, nor
will Parent create, incur or permit to exist any pledge, lien, mortgage,
hypothecation, security interest, charge, option or other encumbrance with
respect to the Pledged Collateral (other than the lien created by this Pledge
Agreement);
(b) Parent will, at its sole expense, promptly execute,
acknowledge and deliver all such instruments and take all such action as Lender
from time to time may reasonably request in order to ensure to Lender the
benefits of the liens in and to the Pledged Collateral intended to be created by
this Pledge Agreement; and
(c) Parent will defend the right, title and security interest of
Lender in and to the Pledged Collateral against the claim of any entity or
person and will maintain and preserve such liens until such Pledged Collateral
is released pursuant to Section 10.
Section 7. Parent's Rights.
(a) All distributions in respect of the Pledged Collateral shall
be paid to Parent but held in escrow by Lender pending maturity of the Notes;
all rights to such distributions and payments shall remain subject to the lien
created by this Pledge Agreement; provided that notwithstanding the foregoing
the Borrower may distribute the proceeds of the issuance of the Notes to the
Parent and such proceeds will not be subject to escrow or any liens hereunder;
and
(b) Parent hereby agrees to execute and deliver (or cause to be
executed and delivered) all such instruments as Lender may reasonably request
for the purpose of enabling Parent to exercise the rights which it is entitled
to exercise pursuant to the provisions hereof, and to receive the distributions
and payments which it is authorized to receive and retain pursuant to the
provisions hereof.
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Section 8. Defaults and Remedies.
(a) Upon any Event of Default, Lender, in addition to all
rights of Lender created under the other Loan Documents, shall have and may
exercise with respect to the Pledged Collateral, all rights and remedies
available to secured creditors under the New York Commercial Code, or otherwise
at law or in equity including, without limiting the generality of the foregoing,
(i) the right to take the Pledged Collateral (or portion thereof) for its own
account as provided in clause (b) of this Section 8 and (ii) the right to sell
or assign the Pledged Collateral, or any part thereof, at public or private sale
in New York or elsewhere as Lender may determine in good faith to be
commercially reasonable and at such prices as Lender may deem best and
commercially reasonable. The parties agree that written notice mailed to Parent
not less than ten days prior to any public sale of the Pledged Collateral or ten
days prior to the date after which any private sale or other disposition of such
Pledge Collateral will be made shall constitute reasonable notice (all other
notices, demands or advertisements of any kind being hereby expressly waived),
but notice given in any other reasonable manner or at any other reasonable time
shall be sufficient. At any such sale, Lender shall have the right to purchase
the Pledged Collateral, or any part thereof.
To the extent Lender is restricted from making sales of Pledged
Collateral without registration under the Securities Act, the following shall
govern:
(i) at any such sale, Lender, at its discretion,
may restrict the potential bidders or purchasers to institutional investors,
and/or other persons who shall represent and warrant that they are acquiring the
Pledged Collateral for their own account, for investment only and not with a
view toward the resale or distribution thereof and which will make such further
representations and warranties as Lender may, in its discretion, deem necessary
or desirable to assure Lender that such prospective bidders or purchasers are,
with respect to applicable federal and state securities laws and rules, suitable
bidders and purchasers of such Pledged Collateral;
(ii) Lender may additionally decide to sell the
Pledged Collateral in one or more private sales or in such other manner and
subject to such restrictions and conditions as Lender, in its discretion, shall
deem necessary in order for such sale to be exempt from the registration
requirement of the Securities Act, and applicable state securities laws; and
(iii) Parent consents to any sales made in the
manner above-described and agrees that sales made as above-described shall be
deemed to have been made in a commercially reasonable manner and Parent further
agrees that Lender shall have no obligation to delay sale of any of the Pledged
Collateral for the period of time necessary to permit the offering and sale of
such Collateral to be registered for public sale under the Securities Act, and
applicable state securities laws, and no representation is made that any such
registration is possible or will be made.
(b) Upon the occurrence and during the continuation of
any Event of Default, Lender shall have the right, in lieu of selling Pledged
Collateral as provided in clause (a) of this Section 8, to take for its own
account a portion of the Pledged Collateral with an Appraised
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Value (as hereinafter defined) equal to the amount of the Secured Obligations as
to which Borrower shall be in default (the "Foreclosed Collateral") upon ten
(10) days prior written notice (which notice shall state the Appraised Value
ascribed thereto). In such event, Lender shall thereafter have all right, title
and interest in and to such Foreclosed Collateral free of any liens, claims or
encumbrances and Parent's interest therein shall terminate, as if such
Foreclosed Collateral had been sold to a third party in accordance with the
procedures contemplated by clause (a) of this Section 8. "Appraised Value" shall
mean the fair market value of such Pledged Collateral on the day prior to the
date of the notice provided for herein as determined by a nationally recognized
independent investment banking firm mutually and promptly selected by Lender and
Parent. Such firm shall make its determination as promptly as possible after its
retention. In the event that Borrower and Lender are unable to agree upon a
mutually acceptable firm within 10 days after notice from Lender to Parent,
Lender may select a nationally recognized independent investment banking firm to
conduct the appraisal.
(c) Any cash held by or on behalf of Lender as Pledged
Collateral and all cash proceeds received by or on behalf of Lender in respect
of any sale of, liquidation of, or other realization upon or all or any part of
the Pledged Collateral shall be applied by Lender as follows:
(i) First, to the payment of the costs and
expenses of such sale or of enforcing Lender's rights under this Pledge
Agreement or the other Loan Documents, including reasonable expenses of Lender's
counsel, and all other of the expenses, liabilities and advances made or
incurred by Lender in connection therewith; and
(ii) Next, to the payment of the Secured
Obligations, all in accordance with the terms and provisions of the Loan
Documents; and
(iii) Finally, after payment in full of all of the
Secured Obligations, to Parent, or its successors or assigns, or to whomsoever
may be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct, of any surplus then remaining from such proceeds.
Section 9. Waiver. No delay on the part of Lender in exercising
any power of sale, lien, option or other right hereunder, and no notice or
demand which may be given to or made upon Parent by Lender with respect to any
power of sale, lien, option or other right hereunder, shall constitute a waiver
thereof, or limit or impair Lender's right to take any action or to exercise any
power of sale, lien, option, or any other right hereunder, or prejudice Lender's
rights as against Parent in any respect.
Section 10. Termination. Upon payment in full of the Secured
Obligations, this Pledge Agreement shall terminate and Lender shall deliver to
Parent such instruments of assignment or other documents of transfer as shall be
reasonably requested by Parent and any instruments of assignment or documents of
transfer executed in connection therewith to release the Pledged Collateral.
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Section 11. Miscellaneous. This Pledge Agreement shall be binding
upon Parent and their respective successors and assigns, and shall inure to the
benefit of, and be enforceable by, Lender and its successors and assigns, and
none of the terms or provisions of this Pledge Agreement may be waived, altered,
modified or amended except in writing duly signed by Lender and Parent.
Section 12. Severability. If for any reason any provision or
provisions hereof are determined to be invalid and contrary to any existing or
future law, such invalidity shall not impair the operation of or affect those
portions of this Pledge Agreement which are valid.
Section 13. Notices. Any notice required to be given hereunder
shall be sufficient if in writing, and sent by facsimile transmission and by
courier service (with proof of service), hand delivery or certified or
registered mail (return receipt requested and first-class postage prepaid),
addressed as follows:
If to Lender: If to Parent:
ProAct Technologies Corp. iXL Ventures PHC, Inc.
000 Xxxxxxxxxxxx Xxxx 0000 Xxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000 Xxxxxxx, Xxxxxxx 00000
Attn: C. Xxxxxxxx Xxxxxxxx Attn: Xxxxxxxx X. Xxxxx
Facsimile: 000-000-0000 Facsimile: 000-000-0000
With a copy to: With a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx Xxxxxxxxx Xxxxxxx
One New York Plaza 0000 Xxxxxxxxx Xxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000 Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxxxx/Xxxxx Xxxx Attn: Xxxxx X. Xxxxxxxxx
Facsimile: 000-000-0000 Facsimile: 000-000-0000
Section 14. Counterparts. This Pledge Agreement may be executed
in any number of counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such counterparts have
been signed by each of the parties and delivered to the other parties.
Section 15. Assignment. Lender shall have the full power, right
and authority to assign its interests under this Pledge Agreement with or
without the consent of Parent hereunder and upon such assignment such transferee
shall have rights and benefits of Lender under this Pledge Agreement.
Section 16. Amendment. This Pledge Agreement may be amended,
modified or supplemented only by a written instrument duly executed by Lender
and Parent.
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Section 17. Governing Law. This Pledge Agreement shall be
construed and enforced in accordance with, and governed by, the laws of the
State of New York, without regard, to the fullest extent permitted by law, to
any conflict of laws rules which might apply the laws of any other jurisdiction.
Section 18. Jurisdiction; Waiver of Jury Trial. (a) Each of
Borrower and Parent irrevocably submits to the non-exclusive jurisdiction of (i)
the state courts of the State of New York, New York County, and (ii) the United
States District Court for the Southern District of New York, for the purposes of
any suit, action or other proceeding arising out of this Pledge Agreement or any
transactions contemplated hereby. Each of Borrower and Parent, for itself and in
connection with its properties, generally and unconditionally, waives any
defense of forum non conveniens, and irrevocably agrees to be bound by any
judgment rendered in connection with this Pledge Agreement.
(b) Each of the parties hereto hereby waives its
respective rights to a jury trial of any claim or cause of action based upon or
arising out of this Pledge Agreement. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this Pledge Agreement, including without
limitation contract claims, tort claims, breach of duty claims, and all other
common law and statutory claims.
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed as of the date first written above.
iXL VENTURES, L.P.
By: iXL, Inc, General Partner
By: /s/ U. XXXXXXX XXXXX, XX.
------------------------------------
Name: U. Xxxxxxx Xxxxx, Xx.
---------------------------
Title: Chief Executive Officer
---------------------------
PROACT TECHNOLOGIES CORP.
By: /s/ C. XXXXXXXX XXXXXXXX
------------------------------------
Name: C. Xxxxxxxx Xxxxxxxx
---------------------------
Title: President
---------------------------
Signature Page to the Parent Pledge Agreement
48
EXCHANGE AGREEMENT
EXCHANGE AGREEMENT (the "Agreement") dated as of December 19,
2000 by and between iXL Ventures PHC, Inc., a Delaware corporation (the
"Borrower"), and ProAct Technologies Corp., a Delaware corporation (the
"Company"). Certain terms are defined in Section 1 below.
WHEREAS, the Borrower is issuing 5.75% Secured Convertible
Notes (the "Notes") in a principal amount of $20 million to the Company pursuant
to the terms of the Note Purchase Agreement dated as of the date hereof between
the Company and the Borrower and certain other persons (the "Note Purchase
Agreement");
WHEREAS, pursuant to the terms of the Note Purchase Agreement,
the Borrower is agreeing to certain amendments to the Company's stockholders
agreement; and
WHEREAS, iXL Ventures, L.P. has transferred 10 million shares
of the Company's common stock to the Borrower, and such shares have been pledged
to the Company pursuant to the Stock Pledge Agreement dated as of the date
hereof by and between the Borrower and the Company (the "Stock Pledge
Agreement"); and
WHEREAS, the parties hereto desire to provide for mutual
exchange rights whereby (x) the Company may (i) exchange the Notes for the
Pledged Collateral or (ii) may purchase the Pledged Collateral and (y) the
Borrower may exchange the Pledged Collateral for the Notes, each on the terms
and conditions hereof;
NOW, THEREFORE, the parties hereto, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
agree as follows:
SECTION 1. DEFINED TERMS. As used in this Agreement, the
following terms shall have the meanings set forth below:
"Exchange Condition" means that the exchange of Pledged
Collateral for the Notes is permitted under applicable law and the
organizational documents of the Company, and that all necessary third party
consents and approvals have been obtained.
"Pledged Collateral" has the meaning provided in the Stock
Pledge Agreement.
"Pledged Shares" has the meaning provided in the Stock Pledge
Agreement.
SECTION 2. TERM. This Agreement shall have a term beginning on
the date hereof and ending on the date that the Notes are paid in full (the
"Term").
49
SECTION 3. EXCHANGE RIGHTS.
Section 3.1. Exchange at the Option of the Company.
(a) At any time during the Term, at the option of the
Company, the Company may exchange the Notes (in whole but not in part), for the
Pledged Collateral.
(b) In order to exercise its exchange right hereunder,
the Company must provide written notice to the Borrower, such notice to specify
that an exchange is to be made hereunder and to specify the closing date for the
exchange. The closing date shall occur within 15 days of delivery of such
notice.
Section 3.2. Cash Purchase of Pledged Collateral.
(a) At any time during the Term, at the option of the
Company, the Company may purchase the Pledged Collateral for $20 million.
(b) In order to exercise its cash purchase right
hereunder, the Company must provide written notice to the Borrower, such notice
to specify that a cash purchase is to be made hereunder and to specify the
closing date for the cash purchase. The closing date shall occur within 15 days
of delivery of such notice.
Section 3.3. Exchange at the Option of the Borrower.
(a) If the Exchange Condition has been met, at the option
of the Borrower, the Borrower may exchange the Pledged Collateral (in whole but
not in part), for the Notes.
(b) In order to exercise its exchange right hereunder,
the Borrower must provide written notice to the Company, such notice to specify
that an exchange is to be made hereunder and, to specify the closing date for
the exchange and to provide reasonable evidence that the Exchange Condition has
been met. The closing date shall occur within 15 days of delivery of such
notice.
SECTION 4. CLOSING OF EXCHANGE.
Section 4.1. Release of Pledged Collateral. At the closing of
an exchange pursuant to Section 3.1 or 3.3 hereof or a cash purchase pursuant to
Section 3.2 hereof, the Pledged Collateral will automatically be released to the
Company without any action on the part of the Borrower unless such action is
requested by the Company. At the request of the Company, the Borrower shall
deliver such instruments of transfer and customary documentation as the Company
may reasonably request. The Pledged Collateral shall be transferred to the
Company free and clear of any and all encumbrances, security interests, pledges,
liens, collateral interests, rights of first refusal, etc. ("Encumbrances")
(other than any such Encumbrances as may be provided under the Loan Documents
for the benefit of the
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Company or the Company's stockholders agreement or as may have been created by
the Company).
Section 4.2. Delivery of Notes. At the closing of an exchange
pursuant to Section 3.1 or 3.3 hereof, the Company shall deliver the Notes and
such instruments of transfer and other customary documentation as the Borrower
may reasonably request, and such Notes shall be delivered free and clear of any
Encumbrances (other than as may have been created by the Borrower).
SECTION 5. SECURITY INTEREST. The Borrower has granted a
security interest in favor of the Company securing its obligations under this
Agreement, pursuant to the terms of the Stock Pledge Agreement. An "Event of
Default" shall be deemed to occur under the Stock Pledge Agreement if the
Borrower breaches any of its obligations hereunder.
SECTION 6. MISCELLANEOUS.
Section 6.1. Governing Law. This Agreement shall be construed
and enforced in accordance with, and governed by, the laws of the State of New
York, without regard, to the fullest extent permitted by law, to any conflict of
laws rules which might apply the laws of any other jurisdiction.
Section 6.2. Jurisdiction; Waiver of Jury Trial. (a) The
Borrower irrevocably submits to the non-exclusive jurisdiction of (i) the state
courts of the State of New York, New York County, and (ii) the United States
District Court for the Southern District of New York, for the purposes of any
suit, action or other proceeding arising out of this Agreement or any
transactions contemplated hereby. The Borrower, for itself and in connection
with its properties, generally and unconditionally, waives any defense of forum
non conveniens, and irrevocably agrees to be bound by any judgment rendered in
connection with this Agreement.
(b) Each of the parties hereto hereby waives its
respective rights to a jury trial of any claim or cause of action based upon or
arising out of this Agreement. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this Agreement, including without limitation
contract claims, tort claims, breach of duty claims, and all other common law
and statutory claims.
Section 6.3. Interpretation. The headings of the sections and
other subdivisions of this Agreement are inserted for convenience only and shall
not be deemed to constitute a part hereof. References to "Sections" refer to
Sections of this Agreement unless explicitly stated otherwise. The term
"including" means "including without limitation."
Section 6.4. Counterparts. This Agreement may be executed in
any number of counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such counterparts have
been signed by each of the parties and delivered to the other parties.
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Section 6.5. Specific Performance. The parties agree that
irreparable damage will result in the event that this Agreement is not
specifically enforced, and the parties agree that any damages available at law
for a breach of this Agreement would not be an adequate remedy. Therefore, the
provisions hereof and the obligations of the parties hereunder shall be
enforceable in a court of equity, or other tribunal with jurisdiction by a
decree of specific performance, and appropriate injunctive relief may be applied
for and granted in connection therewith. Such remedies shall, however, be
cumulative and not exclusive and shall be in addition to any other remedies
which a party may have under this Agreement or otherwise.
Section 6.6. Notices. Any notice required to be given
hereunder shall be sufficient if in writing, and sent by facsimile transmission
and by courier service (with proof of service), hand delivery or certified or
registered mail (return receipt requested and first-class postage prepaid),
addressed as follows:
If to the Company: If to the Borrower:
ProAct Technologies Corp. iXL Ventures PHC, Inc.
000 Xxxxxxxxxxxx Xxxx 0000 Xxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000 Xxxxxxx, Xxxxxxx 00000
Attn: C. Xxxxxxxx Xxxxxxxx Attn: Xxxxxxxx X. Xxxxx
Facsimile: 000-000-0000 Facsimile: 000-000-0000
With a copy to: With a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx Xxxxxxxxx Traurig
One New York Plaza 0000 Xxxxxxxxx Xxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000 Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxxxx/Xxxxx Xxxx Attn: Xxxxx X. Xxxxxxxxx
Facsimile: 000-000-0000 Facsimile: 000-000-0000
Section 6.7. Assignment. This Agreement is not assignable by
the Borrower. The Company may assign its rights under this Agreement provided
that the Assignee agrees to be bound by all the provisions hereof.
Section 6.8. Amendment. This Agreement may be amended,
modified or supplemented only by a written instrument duly executed by the
Company and the Borrower.
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IN WITNESS WHEREOF, the parties hereby execute and deliver
this Exchange Agreement as of the date first above written.
iXL VENTURES PHC, INC.
By: /s/ U. Xxxxxxx Xxxxx, Xx.
---------------------------
Name: U. Xxxxxxx Xxxxx, Xx.
Title: President
PROACT TECHNOLOGIES CORP.
By: /s/ C. Xxxxxxxx Xxxxxxxx
---------------------------
Name: C. Xxxxxxxx Xxxxxxxx
Title: President
Signature Page to the Exchange Agreement
53
INTERCOMPANY AGREEMENT
INTERCOMPANY AGREEMENT dated as of December 19, 2000 by and
between iXL Ventures, L.P., a Delaware limited partnership (the "Parent"), iXL
Ventures PHC, Inc., a Delaware corporation (the "Borrower"), and ProAct
Technologies Corp., a Delaware corporation (the "Company"). Certain terms are
defined in Section 1 below.
WHEREAS, the Borrower is a party to a Note Purchase Agreement
dated as of the date hereof by and among the Borrower, the Company, the Parent
and iXL Enterprises, Inc. (the "Note Purchase Agreement");
WHEREAS, the Note Purchase Agreement provides for a loan of
$20 million to be made by the Lender to the Borrower, secured by a first
priority security interest in 10 million shares of common stock, $.01 per value
per share, of the Lender held by the Borrower to be pledged (together with
proceeds thereof) to the Lender pursuant to the terms of a Stock Pledge
Agreement dated as of the date hereof (the "Pledge Agreement") (the "Pledged
Shares");
WHEREAS, the Borrower has issued $20 million of 5.75% Secured
Convertible Notes due 2004 (the "Notes") in favor of the Lender, pursuant to the
terms of the Note Purchase Agreement;
WHEREAS, the Borrower has agreed to the terms of an Exchange
Agreement dated as of the date hereof between the Borrower and the Lender,
providing for mutual exchange rights permitting the parties, under conditions
specified therein, to exchange the Notes for the Pledged Shares (the "Exchange
Agreement");
WHEREAS, the Lender has requested the Guarantor to provide a
limited recourse guaranty to the Lender (the "Guaranty") of the Borrower's
obligations to repay the Notes plus interest thereon and other Guaranty
Obligations (defined in the Guaranty);
WHEREAS, the Parent and the Borrower desire to enter into this
Agreement in order to induce the Company to enter into the Note Purchase
Agreement and related documents;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows;
SECTION 1: DEFINED TERMS. Terms not otherwise defined herein
are used as defined in the Note Purchase Agreement.
SECTION 2. SEPARATENESS OF THE BORROWER AND THE PARENT. Each
of the Borrower and the Parent hereby covenants and agrees as follows (except as
provided in the Loan Documents):
(a) The Borrower shall maintain its own bank and
investment accounts and records, and all other books of account and records
separate and distinct from those of any other person or entity, including the
Parent;
54
(b) The Borrower shall not commingle its funds or other
assets with those of any other person or entity, including the Parent, and funds
and other assets of the Borrower shall at all times be separately identified and
segregated;
(c) The Borrower shall act solely in its own name;
(d) The Borrower shall hold its assets on its own behalf
and, if assets are held on behalf of the Borrower by another person, such assets
shall be kept identifiable (in accordance with customary usages) as assets owned
by the Borrower;
(e) There will be no transfers of assets among the
Borrower, on the one hand, and any of the Parent or its affiliates, on the other
hand, other than (a) pursuant to the Loan Documents and pursuant to this
Agreement and (b) (i) capital contributions to, the Borrower; (ii) pursuant to a
tax sharing agreement or arrangement which provides for a fair and reasonable
allocation of tax liabilities and tax benefits among the Borrower and its
affiliates based on their respective separate company taxable income or loss (or
other items on which the relevant tax liability is based); (iii) in connection
with transactions documented in writing on terms and conditions that are arm's
length in all material respects, and (iv) in the case of each of the foregoing,
in compliance with corporate formalities, the Loan Documents and applicable law;
(f) The Borrower shall be, and at all times shall hold
itself out to its creditors, governmental entities and the public as, a legal
entity separate and distinct from the Parent or any other person or entity, and
the Borrower shall act and conduct business solely in its own name and through
its own authorized officers and agents, shall correct any known misunderstanding
regarding its status as a separate identity from the Parent or any other person
or entity, and shall not identify itself or any of its affiliates as a division
or part of any person or entity;
(g) The Borrower shall not maintain, prepare or issue
consolidated financial statements with any other person or entity (including,
without limitation, the Parent) unless such consolidated financial statements
clearly indicate that they consolidate the financial statements of separate
legal entities;
(h) The Borrower shall pay its debts and liabilities
(including, as applicable, shared personnel and overhead expenses, which shall
be allocated fairly and reasonably) from its own funds and assets as the same
shall become due;
(i) The Borrower shall observe all corporate and other
legal formalities and shall take all appropriate action necessary to maintain
its existence as a corporation under the laws of the State of Delaware separate
and distinct from the existence of the Parent and its affiliates and any other
person or entity;
(j) All transactions entered into by the Borrower with
the other Parties shall be pursuant to written documentation on terms and
conditions that are not materially more or less favorable to the Borrower than
the terms and conditions that would be expected to have been obtained, at the
time of each such transaction and under similar circumstances, from persons that
are not the Parent or any other affiliate of the Borrower;
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(k) The Borrower shall not guarantee or otherwise hold
out its assets or credit as being available to satisfy obligations of any kind
(other than the Loan Documents);
(l) The Borrower shall not assume any obligations of any
kind or securities of any other person or entity or any indebtedness for
borrowed money of any other person or entity;
(m) The Borrower shall exclusively use its own
stationery, invoices and checks;
(n) The Borrower will not (i) make any loans or advances,
(ii) acquire indebtedness for borrowed money, or (iii) pledge, mortgage or make
similar arrangements with respect to its assets for the benefit of any person or
entity, other than the Notes or pursuant to the Loan Documents;
(o) The Borrower shall not voluntarily dissolve or
liquidate, in whole or in part, consolidate or merge with or into any other
entity or convey or transfer its properties and assets substantially as an
entirety to any entity;
(p) The Borrower shall make all decisions with respect to
its business and daily operations independent of the direction of any other
person or entity;
(q) The Borrower shall not incur any debt or obligation,
secured or unsecured, direct or indirect, absolute or contingent (including
guaranteeing any obligation or incurring any indemnity obligation), other than
the debt outstanding from time to time under the Notes, the Exchange Agreement
and the other Loan Documents;
(r) The Borrower has done or caused to be done and shall
do all things necessary to observe organizational formalities and preserve its
existence and, without the consent of all of its shareholders, which shall be
evidenced in writing, the Borrower shall not amend, modify or otherwise change
the Certificate of Incorporation of the Borrower, this Agreement, or other
organizational documents of the Borrower, including, without limitation, with
respect to any of the covenants listed in this Section 2, and the Borrower shall
not otherwise act or fail to act in any manner that would be inconsistent with,
or frustrate the purpose or intent of, any provision of this Section 2;
(s) The Borrower shall maintain complete minutes of all
meetings of its board of directors and its stockholders;
(t) The Borrower does not and shall not hold itself out
to be responsible for the debts or obligations of any other person;
(u) The Borrower shall not, without the unanimous
approval of its board of directors, file any voluntary petition for, or
involuntary petition against any of the other Parties under the Bankruptcy Code,
or institute any proceeding to be adjudicated as bankrupt or insolvent, or
consent to the institution of bankruptcy or insolvency proceedings against it,
or file a petition or answer or consent seeking reorganization or relief under
any applicable federal or state law relating to bankruptcy, or consent to the
filing of any such petition or the appointment of a receiver, rehabilitator,
conservator, liquidator, assignee, trustee, sequestrator (or other
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56
similar official) of any such entity or of any part of its property, or order
the winding-up or liquidation of its affairs, or make any assignment for the
benefit of creditors, or admit in writing its inability to pay its debts
generally as they become due, or take any action in furtherance of any of the
foregoing; and
(v) The Borrower has not, at any time before the
execution of this Agreement, entered into any agreement, incurred any
obligation, or engaged in any other act or conduct that would constitute a
violation of any covenant set forth in this Section 2 if such act or conduct
were to occur immediately following the execution of this Agreement.
SECTION 3. COVENANTS OF THE PARENT.
(a) The Parent will not take any actions which would
cause a breach of the provisions of Section 2 by the Borrower.
(b) Without limiting the foregoing, the Parent hereby
covenants and agrees as follows (except as provided in the Loan Documents):
(i) The Parent shall maintain its own bank and
investment accounts and records, and all other books of account and
records separate and distinct from those of the Borrower;
(ii) The Parent, as a stockholder of the
Borrower, shall not have any legal, equitable, or other interest
whatsoever in any of the assets of the Borrower other than pursuant to
Delaware law;
(iii) The Parent shall not be entitled to receive
any distributions on account of any interest in the Borrower other than
pursuant to Delaware law;
(iv) The Parent shall not commingle its funds or
other assets with those of the Borrower, and funds and other assets of
the Parent shall at all times be separately identified and segregated;
(v) The Parent shall be, and at all times shall
hold itself out to its creditors, governmental entities and the public
as, a legal entity separate and distinct from the Borrower, and the
Parent shall act and conduct business solely in its own name and
through its own authorized officers and agents, shall correct any known
misunderstanding regarding its status as a separate identity from the
Borrower, and shall not identify itself or any of its affiliates as a
division or part of the Borrower;
(vi) The Parent shall not maintain, prepare or
issue consolidated financial statements that include the Borrower
unless such consolidated financial statements clearly indicate that
they consolidate the financial statements of separate legal entities;
(vii) The Parent shall observe all corporate and
other legal formalities and shall take all appropriate action necessary
to maintain its existence as a corporation
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under the laws of the State of Delaware separate and distinct from the
existence of each of the other Parties or any other entity;
(viii) There shall be no transfers of assets among
Parent, on the one hand, and the Borrower, on the other hand, other
than (a) pursuant to the Loan Documents and (b) (i) capital
contributions or corporate dividends; (ii) pursuant to a tax sharing
agreement or arrangement which provides for a fair and reasonable
allocation of tax liabilities and tax benefits among the Parent and the
Borrower based on their respective separate company taxable income or
loss (or other items on which the relevant tax liability is based);
(iii) in connection with transactions documented in writing on terms
and conditions that are arm's length in all material respects, and (iv)
in the case of each of the foregoing, in compliance with corporate
formalities, the Loan Documents and applicable law;
(ix) The Parent shall not guarantee or otherwise
hold out its assets or credit as being available to satisfy obligations
of any kind of the Borrower, other than as provided in the Loan
Documents; and
(x) The Parent shall not cause the Borrower to
file any voluntary petition under the Bankruptcy Code, and the Parent
shall not file or cause any other person to file an involuntary
petition against the Borrower under the United States Bankruptcy Code,
or institute or cause any other person to institute any proceeding
against the Borrower for the Borrower to be adjudicated as bankrupt or
insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against the Borrower, or file a petition or answer or
consent seeking reorganization or relief for the Borrower under any
applicable federal or state law relating to bankruptcy, or consent to
the filing of any such petition or the appointment of a receiver,
rehabilitator, conservator, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Borrower or of any part of its
property, or order the winding-up or liquidation of the Borrower's
affairs, or take any action in furtherance of any of the foregoing.
SECTION 4. PERMITTED DISTRIBUTION; SOLVENCY.
(a) Notwithstanding anything to the contrary herein, (i)
the Company acknowledges and agrees that the proceeds from the issuance of the
Notes pursuant to the Note Purchase Agreement may be distributed by the Borrower
to the Parent and (ii) the officers and directors of the Borrower shall have no
personal liability to the Company (or its successors and assigns) with respect
to such distribution.
(b) The Company acknowledges that, assuming the accuracy
of the representations and warranties in the Note Purchase Agreement, as of the
closing of the purchase of the Notes by the Company and after giving effect to a
distribution by the Borrower of the proceeds thereof to the Parent, the Borrower
is a solvent entity.
SECTION 5. TERMINATION. This Agreement shall terminate upon
the earlier of (i) repayment of the Notes; (ii) exchange of the Notes pursuant
to the Exchange Agreement; or (iii) conversion of the Notes pursuant to the Note
Purchase Agreement.
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SECTION 6. MISCELLANEOUS.
Section 6.1. Governing Law. This Agreement shall be construed
and enforced in accordance with, and governed by, the laws of the State of New
York, without regard, to the fullest extent permitted by law, to any conflict of
laws rules which might apply the laws of any other jurisdiction.
Section 6.2. Jurisdiction; Waiver of Jury Trial. (a) Each of
the Borrower and the Parent irrevocably submits to the non-exclusive
jurisdiction of (i) the state courts of the State of New York, New York County,
and (ii) the United States District Court for the Southern District of New York,
for the purposes of any suit, action or other proceeding arising out of this
Note or any transactions contemplated hereby. Each of the Borrower and the
Parent, for itself and in connection with its properties, generally and
unconditionally, waives any defense of forum non conveniens, and irrevocably
agrees to be bound by any judgment rendered in connection with this Agreement.
(b) Each of the parties hereto hereby waives its
respective rights to a jury trial of any claim or cause of action based upon or
arising out of this Agreement. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this agreement, including without limitation
contract claims, tort claims, breach of duty claims, and all other common law
and statutory claims.
Section 6.3. Interpretation. The headings of the sections and
other subdivisions of this Agreement are inserted for convenience only and shall
not be deemed to constitute a part hereof. References to "Sections" refer to
Sections of this Agreement unless explicitly stated otherwise. The term
"including" means "including without limitation."
Section 6.4. Counterparts. This Agreement may be executed in
any number of counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such counterparts have
been signed by each of the parties and delivered to the other parties.
Section 6.5. Specific Performance. The parties agree that
irreparable damage will result in the event that this Agreement is not
specifically enforced, and the parties agree that any damages available at law
for a breach of this Agreement would not be an adequate remedy. Therefore, the
provisions hereof and the obligations of the parties hereunder shall be
enforceable in a court of equity, or other tribunal with jurisdiction by a
decree of specific performance, and appropriate injunctive relief may be applied
for and granted in connection therewith. Such remedies shall, however, be
cumulative and not exclusive and shall be in addition to any other remedies
which a party may have under this Agreement or otherwise.
Section 6.6. Assignment. This Agreement is not assignable by
the Borrower or the Parent. The Company may assign its rights under this
Agreement provided that the assignee agrees to be bound by all the provisions
hereof.
Section 6.7. Amendment. This Agreement may be amended,
modified or supplemented only by a written instrument duly executed by the
Company, the Parent and the Borrower.
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IN WITNESS WHEREOF, the parties hereby execute and deliver
this Intercompany Agreement as of the date first above written.
iXL VENTURES, L.P.
By: iXL, Inc., General Partner
By: /s/ U. Xxxxxxx Xxxxx, Xx.
------------------------------
Name: U. Xxxxxxx Xxxxx, Xx.
Title: Chief Executive Officer
iXL VENTURES PHC, INC.
By: /s/ Xxxxxxxx X. Xxxxxx III
------------------------------
Name: Xxxxxxxx X. Xxxxxx III
Title: Vice President
PROACT TECHNOLOGIES CORP.
By: /s/ C. Xxxxxxxx Xxxxxxxx
------------------------------
Name: C. Xxxxxxxx Xxxxxxxx
Title: President
Signature Page to the Intercompany Agreement
60
KEEP WELL AGREEMENT
KEEP WELL AGREEMENT (the "Agreement") dated as of December 19,
2000 between iXL Ventures, L.P., a Delaware limited liability company (the
"Parent"), and iXL Ventures PHC, Inc., a Delaware corporation (the "Borrower").
Terms not otherwise defined herein are used as defined in the Note Purchase
Agreement.
WHEREAS, the Borrower is issuing 5.75% Secured Convertible
Notes (the "Notes") in a principal amount of $20 million to ProAct Technologies
Corp. (the "Company") pursuant to the terms of the Note Purchase Agreement dated
as of the date hereof between the Company and the Borrower and certain other
parties (the "Note Purchase Agreement"); and
WHEREAS, the Parent has transferred 10 million shares of the
Company's common stock to the Borrower, and such shares have been pledged to the
Company pursuant to the Stock Pledge Agreement dated as of the date hereof by
and between the Borrower and the Company;
NOW, THEREFORE, the parties hereto, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
agree as follows:
Section 1. KEEP WELL. The Parent will from time to time
promptly make such capital contributions to the Borrower as may be required for
the Borrower to meet its obligations to pay any and all interest and other
amounts due (other than principal) under the terms of the Notes and the other
Loan Documents, whenever such amounts may be due and payable, and further to
provide for payment of administrative overhead and similar expenses of operating
the Borrower from time to time, in each case so long as the Notes remain
outstanding (such obligation to make contributions, the "Keep Well Obligation");
provided that for purposes of this Agreement, the Keep Well Obligation shall
terminate with respect to Interest Obligations which no longer accrue upon the
occurrence of a Cut-Off Event. The term "Interest Obligations" means the
obligations of the Borrower to pay interest under the Notes; provided that (x)
if the principal amount of the Notes is repaid by transfer of Purchaser Shares
as provided under the terms of the Note Purchase Agreement, or (y) if the
Company has completely foreclosed upon the Pledged Collateral under the Pledge
Agreement or (z) an Event of Default has occurred, the Company has a right to
foreclose on the Pledged Collateral, there is no stay in effect preventing such
foreclosure, and the Company fails to take reasonable steps to effectuate a
foreclosure with respect to all of the Pledged Collateral (any such event in
clauses (x), (y) or (z), a "Cut-Off Event"), then, in each case, for purposes of
this Agreement, from and after a Cut-Off Event, Interest Obligations shall no
longer accrue with respect to the principal amount of the Notes (but interest
may continue to accrue with respect to unpaid interest).
SECTION 2. TERM. This Agreement shall have a term beginning
on the date hereof and ending on the date that the Notes are paid in full (the
"Term").
SECTION 3. MISCELLANEOUS.
61
Section 3.1. Governing Law. This Agreement shall be construed
and enforced in accordance with, and governed by, the laws of the State of New
York, without regard, to the fullest extent permitted by law, to any conflict of
laws rules which might apply the laws of any other jurisdiction.
Section 3.2. Jurisdiction; Waiver of Jury Trial. (a) The
Borrower irrevocably submits to the non-exclusive jurisdiction of (i) the state
courts of the State of New York, New York County, and (ii) the United States
District Court for the Southern District of New York, for the purposes of any
suit, action or other proceeding arising out of this Agreement or any
transactions contemplated hereby. The Borrower, for itself and in connection
with its properties, generally and unconditionally, waives any defense of forum
non conveniens, and irrevocably agrees to be bound by any judgment rendered in
connection with this Agreement.
(b) Each of the parties hereto hereby waives its
respective rights to a jury trial of any claim or cause of action based upon or
arising out of this Agreement. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this Agreement, including without limitation
contract claims, tort claims, breach of duty claims, and all other common law
and statutory claims.
Section 3.3. Interpretation. The headings of the sections and
other subdivisions of this Agreement are inserted for convenience only and shall
not be deemed to constitute a part hereof. References to "Sections" refer to
Sections of this Agreement unless explicitly stated otherwise. The term
"including" means "including without limitation."
Section 3.4. Counterparts. This Agreement may be executed in
any number of counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such counterparts have
been signed by each of the parties and delivered to the other parties.
Section 3.5. Specific Performance. The parties agree that
irreparable damage will result in the event that this Agreement is not
specifically enforced, and the parties agree that any damages available at law
for a breach of this Agreement would not be an adequate remedy. Therefore, the
provisions hereof and the obligations of the parties hereunder shall be
enforceable in a court of equity, or other tribunal with jurisdiction by a
decree of specific performance, and appropriate injunctive relief may be applied
for and granted in connection therewith. Such remedies shall, however, be
cumulative and not exclusive and shall be in addition to any other remedies
which a party may have under this Agreement or otherwise.
Section 3.6. Assignment. This Agreement is not assignable
without the prior written consent of the Company.
Section 3.7. Amendment. This Agreement may be amended,
modified or supplemented only by a written instrument duly executed by the
Parent, the Company and the Borrower.
Section 3.8. Third Party Beneficiary. The Company is a third
party beneficiary to this Agreement and may enforce the terms of this Agreement.
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IN WITNESS WHEREOF, the parties hereby execute and deliver
this Keep Well Agreement as of the date first above written.
iXL VENTURES PHC, INC.
By: /s/ XXXXXXXX X. XXXXXX, III
---------------------------------
Name: Xxxxxxxx X. Xxxxxx, III
Title: Vice President
iXL VENTURES, L.P.
By : iXL, Inc., General Partner
By: /s/ U. XXXXXXX XXXXX, XX.
---------------------------------
Name: U. Xxxxxxx Xxxxx, Xx.
Title: Chief Executive Officer
