STANDSTILL AGREEMENT
This Standstill Agreement (the "Agreement") is dated as of October 24, 2002
between Manugistics Group, Inc., a Delaware corporation (the "Company"), and
Warburg Pincus Private Equity VIII, L.P., a Delaware limited partnership (the
"Stockholder").
WHEREAS, the Stockholder and its Affiliates (as defined herein)
beneficially own a total of 7,619,800 shares of Common Stock (as defined
herein), and the Stockholder and its Affiliates may acquire additional shares of
Common Stock from time to time;
WHEREAS, the Stockholder agrees to limit its purchases and to cause its
Affiliates to limit their respective purchases of Common Stock, subject to the
terms and conditions herein;
WHEREAS, the Company agrees not to take any actions to prevent the
Stockholder and its Affiliates from acquiring additional shares of Common Stock,
subject to the terms and conditions herein.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and undertakings contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
SECTION 1.1. Definitions. The following terms, as used herein, have the
following meanings:
"Affiliate" shall mean Warburg Pincus LLC, a New York limited liability
company, Warburg Pincus & Co., a New York general partnership ("WP & Co), and
any fund in which WP & Co is the general partner.
"Beneficial owner" has the meaning set forth in Rule 13d-3 under the
Exchange Act, and derivative terms such as "beneficially own" shall be given
corresponding meanings.
"Board of Directors" means the Board of Directors of the Company.
"Change in control" shall mean a change in control of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A, as in effect on the date hereof, promulgated under the Exchange
Act.
"Common Stock" means shares of common stock, $.002 par value, of the
Company.
"Current Shares" has the meaning set forth in Section 3.5.
"DGCL" has the meaning set forth in Section 2.5.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Extraordinary Transaction" shall mean any solicited or unsolicited tender
or exchange offer, or proposal for a merger, sale of all or substantially all
assets, reorganization, share exchange or other similar business combination
involving the Company if such transaction or combination would result in a
"change in control" of the Company.
"Group" means a group within the meaning of Section 13(d)(3) of the
Exchange Act.
"Person" means an individual, corporation, partnership, limited liability
company, association, trust and any other entity or organization, including a
government or political subdivision or any agency or instrumentality thereof.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Standstill Period" means the period beginning on the date of this
Agreement and ending on the earliest of (i) the third anniversary of the date of
this Agreement, or (ii) the date on which any Person (other than the Stockholder
and it Affiliates) acquires beneficial ownership of more than 15% of the Common
Stock if the Company shall have consented to the acquisition by such Person on
terms more favorable than those contained herein or (iii) the date on which the
Company fails to perform, or otherwise breaches with respect to, its obligations
as set forth in Section 4.1 or Section 4.5 hereof.
"Stockholder Director" has the meaning set forth in Section 4.5.
"Subsidiary" means, with respect to any Person, any corporation or other
entity (and any predecessor thereof) of which the securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are directly or
indirectly owned by such Person.
"Substitute Director" has the meaning set forth in Section 4.5.
"Withdrawing Director" has the meaning set forth in Section 4.5.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Stockholder that:
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SECTION 2.1. Corporate Existence and Power. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware and has all corporate powers required to carry on its business
as now conducted.
SECTION 2.2. Corporate Authorization; Binding Agreement. The execution,
delivery and performance of this Agreement by the Company is within the
Company's corporate powers and has been duly authorized by all necessary
corporate action on the part of the Company. This Agreement constitutes a legal
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except (a) as such enforcement is limited by
bankruptcy, insolvency and other similar laws affecting the enforcement of
creditors' rights generally and (b) for limitations imposed by general
principles of equity.
SECTION 2.3. Compliance. The execution, delivery and performance of this
Agreement by the Company requires no action by or in respect of, or filing with,
any governmental or non-governmental body, agency, official or authority other
than as required by any applicable requirements of the Exchange Act and other
filings, notifications and consents that are immaterial to the consummation of
the transactions contemplated hereby.
SECTION 2.4. Non-contravention. Assuming compliance with the matters
referred to in Section 2.3, the execution, delivery and performance of this
Agreement by the Company do not and will not (a) violate the certificate of
incorporation or bylaws of the Company, (b) violate any applicable law, rule,
regulation, judgment, injunction, order or decree binding upon the Company,
other than violations that would be immaterial to the Company or the
Stockholder, or (c) constitute a default under any agreement or other instrument
binding upon the Company.
SECTION 2.5. State Takeover Statutes. The Board of Directors, at a meeting
duly called (or for which notice was duly waived by all directors of the
Company) and held on October 24, 2002, has approved the acquisition of
beneficial ownership by the Stockholder and its Affiliates of up to 19.9% of the
Common Stock subject to the terms of this Agreement, and such approval by the
Board of Directors constitutes approval of the transactions contemplated by this
Agreement pursuant to which the Stockholder and its Affiliates may become an
"interested stockholder(s)" under the provisions of Section 203(a) of the
Delaware General Corporation Law (the "DGCL"), and constitutes all actions
necessary to be taken by the Company to ensure that the restrictions contained
in Section 203 of the DGCL will not apply to the Stockholder or its Affiliates
in connection with or as a result of such transactions.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
The Stockholder represents and warrants to the Company that:
SECTION 3.1. Existence and Power. The Stockholder is a limited partnership
duly organized, validly existing and in good standing under the laws of the
State of Delaware.
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SECTION 3.2. Authorization. The execution, delivery and performance of this
Agreement by the Stockholder are within the Stockholder's powers and have been
duly authorized by all necessary action on the part of the Stockholder. This
Agreement constitutes a legal, valid and binding agreement of the Stockholder,
enforceable against the Stockholder in accordance with its terms, except (a) as
such enforcement is limited by bankruptcy, insolvency and other similar laws
effecting the enforcement of creditors' rights generally and (b) for limitations
imposed by general principles of equity.
SECTION 3.3. Compliance. The execution, delivery and performance of this
Agreement by the Stockholder requires no action by or in respect of, or filing
with, any governmental or non-governmental body, agency or official or any other
Person other than as required by any applicable requirements of the Exchange Act
and other filings or notifications that are immaterial to the consummation of
the transactions contemplated hereby.
SECTION 3.4. Non-contravention. Assuming compliance with the matters
referred to in Section 3.3, the execution, delivery and performance of this
Agreement by the Stockholder does not and will not (a) violate the internal
governance documents of the Stockholder, (b) violate any applicable law, rule,
regulation, judgment, injunction, order or decree binding upon the Stockholder,
except for any such violations which would be immaterial to the Company or the
Stockholder, or (c) constitute a default under any agreement or other instrument
binding upon the Stockholder .
SECTION 3.5. Current Beneficial Ownership. The Stockholder and its
Affiliates beneficially own 7,619,800 shares of Common Stock (the "Current
Shares"). Except for the Current Shares, neither the Stockholder nor any
Affiliate beneficially owns shares of Common Stock.
ARTICLE 4.
COVENANTS OF THE PARTIES
SECTION 4.1. Acquisition of Additional Shares. Subject to the restrictions
set forth herein, the Stockholder may acquire additional shares of Common Stock
and the Company will not take any action to prevent, limit or restrict such
acquisition by means of adopting a stockholders rights agreement (creating what
is commonly referred to as a "poison pill") or similar agreement which limits or
restricts the ability of the Stockholder and its Affiliates to beneficially own
in the aggregate 19.9% of the Common Stock.
SECTION 4.2. Standstill. (a) During the Standstill Period, the Stockholder
agrees that, without the prior written consent of the Company, the Stockholder
will not and will not permit its Affiliates to:
(i) purchase or otherwise acquire, directly or indirectly, or agree or
offer to purchase or otherwise acquire, any shares of Common Stock
if, as a result thereof, the Stockholder, together with its
Affiliates and with any members
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of a Group in which the Stockholder or any of its Affiliates is a
member, would, in the aggregate, beneficially own shares of Common
Stock representing more than the 19.9% of the Common Stock;
(ii) initiate or propose any matter for a vote of the stockholders of the
Company or "solicit," or become a "participant," directly or
indirectly, in any "solicitation" of proxies (as such terms are
defined under the Exchange Act) from any holder of shares of capital
stock of the Company in connection with any vote or other action on
any matter or agree or announce its intention to vote with any
Person undertaking a "solicitation" or seek to advise, encourage or
influence any Person with respect to the voting of any voting
securities of the Company;
(iii) make any public announcement, public proposal or public offer with
respect to any Extraordinary Transaction involving the Company or
its securities or assets;
(iv) enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to any of the
foregoing, or otherwise form, join or in any way participate in a
Group in connection with any of the foregoing;
(v) deposit any shares of Common Stock in any voting trust or subject
the shares of Common Stock to any arrangement or agreement with
respect to the voting of any shares of Common Stock except as set
forth hereunder; or
(vi) (A) request permission or participate in any effort to do any of the
foregoing or (B) request the Company to amend or waive any provision
of this paragraph, in a manner which would require public disclosure
of such action under applicable law.
Stockholder will reasonably promptly advise the Company of any proposal
made to it by a third party with respect to any of the foregoing.
(b) Nothing contained in this Section shall be deemed in any way to
prohibit or limit any transactions in the ordinary course of business between
the Company and any of its Subsidiaries or between the Stockholder and any of
its Affiliates or between the Stockholder and its Affiliates and their portfolio
companies.
SECTION 4.3. Shareholder Meetings. The Stockholder agrees that during the
Standstill Period and so long as it and its Affiliates beneficially own in the
aggregate at least 10% of the Common Stock, it will be present, in person or
represented by proxy, at all annual and special meetings of shareholders of the
Company so that all shares of Common Stock owned by the
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Stockholder and its Affiliates and then entitled to vote may be
counted for the purpose of determining the presence of a quorum at
such meetings.
SECTION 4.4. Sale or Other Transfer of Common Stock.
(a) In the event that the Stockholder shall transfer any shares of Common
Stock which it owns to an Affiliate, such Affiliate shall be bound by all of the
provisions of Article 4. Prior to such a transfer by the Stockholder, the
Affiliate shall execute and deliver to the Company a valid and binding agreement
reasonably satisfactory to the Company to the effect that the Affiliate is bound
by Article 4, and until such agreement is executed and delivered, the shares
transferred shall have no voting rights.
(b) During the Standstill Period, the Stockholder agrees to provide the
Company prompt written notice following any sale or other transfer of any shares
of Common Stock, whether to an Affiliate or otherwise.
SECTION 4.5. Board of Directors.
(a) Election of Directors. From and after the date hereof, and for as long
as the Stockholder and its Affiliates beneficially own in the aggregate at least
ten percent (10%) of the Common Stock, the Company will nominate and use its
reasonable efforts to have one individual designated by the Stockholder and
reasonably acceptable to the Company elected to the Board of Directors (the
"Stockholder Director"). Notwithstanding any other provision of this Agreement,
for purposes of this Section 4.5(a), the Stockholder and its Affiliates shall
not be deemed to own beneficially any Common Stock held by any members of a
Group other than the Stockholder and its Affiliates. For the purposes of this
Agreement, Xx. Xxxxxxx X. Xxxxxxx shall be deemed to be acceptable to the
Company.
(b) Replacement Directors. In the event that the Stockholder Director (a
"Withdrawing Director") designated in the manner set forth in Section 4.5(a)
hereof is unable to serve, or once having commenced to serve, is removed or
withdraws from the Board, such Withdrawing Director's replacement (the
"Substitute Director") will be designated by the Stockholder provided, however
that such Substitute Director is reasonably acceptable to the Company. The
Company agrees to nominate and use its reasonable efforts to cause the election
of such Substitute Director, promptly following his or her nomination pursuant
to this Section 4.5(b).
(c) Resignation of Directors. In the event that the Stockholder
beneficially owns less than 10% of the outstanding shares of Common Stock as a
result of the sale, transfer or disposition of shares of Common Stock by the
Stockholder, then the Company may at such time request the Stockholder Director
to resign from the Board, and within five days following such request, the
Stockholder Director shall resign from the board. In the event that the
Stockholder beneficially owns less than 7.5% of the outstanding shares of Common
Stock as a result of any action other than the sale, transfer or disposition of
shares of Common Stock by the Stockholder (the "7.5% Condition"), then the
Stockholder shall, for a sixty (60) day period (which sixty (60)
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day period shall be extended to take into account any blackout periods
applicable to the Stockholder or the Stockholder Director that would restrict
its ability to acquire shares of Common Stock), after receiving notice from the
Company that such 7.5% Condition has not been met, have the right to acquire, in
the open market or in privately negotiated transactions, additional shares of
Common Stock in order to satisfy the 7.5% Condition. Notwithstanding any other
provision of this Agreement, for purposes of this Section 4.5(c), the
Stockholder and its Affiliates shall not be deemed to own beneficially any
Common Stock held by any members of a Group other than the Stockholder and its
Affiliates.
SECTION 4.6. Disclosure of Agreement. Except for any filings by either
party made pursuant to the Exchange Act, the Company and the Stockholder shall
agree on the form and content of any public announcements which shall be made
concerning this Agreement or the transactions contemplated hereby, and neither
the Company nor the Stockholder shall make any such public announcement without
the consent of the other, which consent shall not be unreasonably withheld;
provided, that if, in the reasonable opinion of its counsel, a party is required
to make any such disclosure by law, then such party shall, to the extent
practicable, prior to making such disclosure, consult with the other party and
provide it with a copy of any proposed written disclosure (or discuss with
representatives of such other party in full detail the substance of any proposed
oral disclosure) and use its best efforts to amend such written or oral
disclosure as such other party may reasonably request.
ARTICLE 5.
MISCELLANEOUS
SECTION 5.1. Notices. All notices, requests and other communications to any
party hereunder shall be in writing and shall be deemed duly given, effective
(a) three business days later, if sent by registered or certified mail, return
receipt requested, postage prepaid, (b) when sent by telecopier or fax, provided
that the telecopy or fax is promptly confirmed by telephone confirmation
thereof, (c) when served, if delivered personally to the intended recipient, and
(d) one business day later, if sent by overnight delivery via a national courier
service, and in each case, addressed,
if to the Stockholder, to:
Warburg Pincus Private Equity VIII, L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
if to the Company, to:
Manugistics Group, Inc
0000 Xxx Xxxx Xxxxxx
0
Xxxxxxxxx, XX 00000
Attn: General Counsel
Fax: (000) 000-0000
Any party may change the address to which notices or other communications
hereunder are to be delivered by giving the other party notice in the manner
herein set forth.
SECTION 5.2. Amendments and Waivers. Any provision of this Agreement may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed, in the case of an amendment, by each party to this Agreement, or in the
case of a waiver, by the party against whom the waiver is to be effective. No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative.
SECTION 5.3. Expenses. All costs and expenses incurred in connection with
this Agreement shall be paid by the party incurring such cost or expense.
SECTION 5.4. Assignment. The rights and obligations of the parties
hereunder cannot be assigned or delegated; provided that the Stockholder may,
subject to its compliance with Section 4.4, assign its rights and obligations to
any Affiliate.
SECTION 5.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of Delaware, without regard to
the conflicts of law rules of such state.
SECTION 5.6. Counterparts; Third Party Beneficiaries. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other party hereto. No
provision of this Agreement is intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder.
SECTION 5.7. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.
SECTION 5.8. Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
SECTION 5.9. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the
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application thereof to any Person or any circumstance, is invalid or
unenforceable, (a) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision and (b) the
remainder of this Agreement and the application of such provision to other
Persons or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any
other jurisdiction.
SECTION 5.10. Specific Performance. The parties hereto agree that the
remedy at law for any breach of this Agreement will be inadequate and that any
party by whom this Agreement is enforceable shall be entitled to specific
performance in addition to any other appropriate relief or remedy. Such party
may, in its sole discretion, apply to any court of competent jurisdiction for
specific performance or injunctive or such other relief as such court may deem
just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable law, each party waives any
objection to the imposition of such relief.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
MANUGISTICS GROUP, INC.
By: /s/ Raghavan Rajavi
------------------------------
Name: Raghavan Rajavi
Title: Executive Vice President and
Chief Financial Officer
WARBURG PINCUS PRIVATE EQUITY VIII, L.P.
By: Warburg Pincus & Co.,
As General Partner
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Partner
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