EXHIBIT 3
to SCHEDULE 13D
EXECUTION COPY
XXXXXXX.XXX, INC.
000 XXXXX XXXXXXXXX, 00XX XXXXX
XXXXX XXXX, XXXXXXXXXX 00000
March 15, 2002
General Atlantic Partners 74, L.P.
c/o General Atlantic Service Corporation
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Ladies and Gentlemen:
This letter agreement (the "AGREEMENT") sets forth the terms upon which
General Atlantic Partners 74, L.P. (the "PURCHASER") agrees to loan on the date
hereof an aggregate of $1,000,000 (the "LOAN") to Xxxxxxx.xxx, Inc., a Delaware
corporation (the "COMPANY") in consideration of a 9% Senior Promissory Note,
dated the date hereof (the "NOTE" and, together with this Agreement, the
"TRANSACTION DOCUMENTS") made by the Company in favor of the Purchaser. The Loan
shall be subject to the terms and conditions set forth in the Transaction
Documents.
1. PURCHASE AND SALE OF NOTE. Subject to the terms and conditions
set forth in the Transaction Documents, on the date hereof, the Purchaser agrees
to fund the Loan to the Company and the Company agrees to issue to the
Purchaser, the Note in the form attached hereto as EXHIBIT A.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company (i) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and (ii) has the corporate power and authority to execute, deliver
and perform its obligations under this Agreement and the Note.
(b) The execution, delivery and performance by the
Company of this Agreement and the Note and the transactions contemplated hereby
and thereby (i) have been duly authorized by all necessary corporate action of
the Company, (ii) do not contravene the terms of the Amended and Restated
Certificate of Incorporation of the Company or the Amended and Restated Bylaws
of the Company, (iii) do not violate, conflict with or result in any breach,
default or contravention of (or with due notice or lapse of time or both would
result in any breach, default or contravention of), or the creation of any lien
or encumbrance under, any contractual obligation of the Company or its
subsidiaries or any law, statute, treaty, rule, regulation, right, privilege,
qualification, license or franchise or determination of an arbitrator or a court
or other governmental or
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regulatory authority or stock exchange applicable to the Company or its
subsidiaries and (iv) do not violate any judgment, injunction, writ, award,
decree or order of any nature of any governmental or regulatory authority
against, or binding upon, the Company or its subsidiaries.
(c) This Agreement and the Note have been duly executed
and delivered by the Company, and constitute, the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity relating to enforceability (regardless of whether
considered in a proceeding at law or in equity).
(d) The Company and its representatives used no form of
general solicitation or general advertising in connection with the offer and
sale of the Note. The offer, sale and issuance of the Note will require no
registration of the Note pursuant to the provisions of the Securities Act of
1933, as amended, or any state securities or "blue sky" laws.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
(a) The Purchaser has the requisite limited partnership
power and authority to execute, deliver and perform its obligations under this
Agreement and the Note.
(b) The execution, delivery and performance by such
Purchaser of this Agreement and and the transactions contemplated hereby and by
the Note have been duly authorized by all necessary limited partnership action
of the Purchaser.
(c) This Agreement constitutes the legal, valid and
binding obligations of the Purchaser, enforceable against it in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability (regardless of whether
considered in a proceeding at law or in equity).
4. AMENDMENT. Any amendment, supplement or modification of or to
any provision of this Agreement, any waiver of any provision of this Agreement,
and any consent to any departure by the Company or the Purchaser from the terms
of any provision of this Agreement, shall be effective (i) only if it is made or
given in writing and signed by the Company and the Purchaser and (ii) only in
the specific instance and for the specific purpose for which made or given.
5. ASSIGNMENT. The Purchaser may at any time assign its rights
and obligations under this Agreement and the Note to any of its affiliates (as
defined in Rule 12b-2 promulgated under Securities Exchange Act of 1934, as
amended). Neither this Agreement, the Note nor the rights, duties and
obligations of the Company hereunder or
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thereunder may be assigned by the Company at any time, by operation of law or
otherwise, without the prior written consent of the Purchaser.
6. EXPENSES. The Company shall reimburse the Purchaser for all
its reasonable costs and expenses, including, without limitation, all reasonable
legal fees, disbursements and other charges of counsel, incurred in connection
with any enforcement of this Agreement and the Note and the Purchaser's rights
hereunder.
7. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF. THE COMPANY CONSENTS TO THE EXCLUSIVE
JURISDICTION AND VENUE OF THE STATE OR FEDERAL COURTS LOCATED IN THE CITY OF NEW
YORK AND THE STATE OF NEW YORK. SERVICE OF PROCESS BY THE HOLDER IN CONNECTION
WITH ANY DISPUTE SHALL BE BINDING ON THE COMPANY IF SENT TO THE COMPANY BY
REGISTERED MAIL AT THE ADDRESS SPECIFIED IN SECTION 15 OF THE NOTE. THE COMPANY
WAIVES ANY RIGHT THE COMPANY MAY HAVE TO JURY TRIAL.
8. COUNTERPARTS. This Agreement may be executed in two
counterparts and by the parties hereto in separate counterparts, both of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
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Please confirm your acceptance of and agreement to the above terms by
dating and signing this letter and returning one executed copy to the
undersigned.
Very truly yours,
XXXXXXX.XXX, INC.
By: /s/ Xxxxxx Xxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Chief Executive Officer
ACCEPTED AND AGREED:
GENERAL ATLANTIC PARTNERS 74, L.P.
By: General Atlantic Partners, LLC,
its general partner
By: /s/ Xxxxxxx Xxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxx
Title: A Managing Member
EXHIBIT A
to LETTER AGREEMENT
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES
LAWS OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS OR
PURSUANT TO A WRITTEN OPINION OF COUNSEL FOR THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.
XXXXXXX.XXX, INC.
9% SENIOR PROMISSORY NOTE
DUE APRIL 15, 2002
$1,000,000 March 15, 2002
New York, New York
FOR VALUE RECEIVED, the undersigned, Xxxxxxx.xxx, Inc., a Delaware
corporation (the "COMPANY"), hereby promises to pay, subject to the terms and
conditions of this Note, to the order of General Atlantic Partners 74, L.P. (the
"HOLDER"), the principal amount of One Million United States Dollars
($1,000,000), with interest thereon as provided herein.
1. LETTER AGREEMENT. This 9% Senior Promissory Note (this "NOTE")
is issued pursuant to the Letter Agreement, dated the date hereof, between the
Company and the Holder (as the same may be amended, supplemented or modified
from time to time, the "LETTER AGREEMENT"). The Holder is entitled to the rights
set forth in the Letter Agreement and this Note.
2. PAYMENTS.
(a) All principal and accrued and unpaid interest on this
Note shall be made in lawful money of the United States of America and in
immediately available funds to the Holder's account that the Holder shall
designate to the Company, on the earlier of (a) an Event of Default (as defined
in Section 6 below) or (b) April 15, 2002 (the "MATURITY DATE").
(b) The Company may not prepay this Note.
3. INTEREST. The Company promises to pay interest on the
outstanding principal amount of this Note at the rate of nine percent (9%) per
annum. Subject to Section 2(a), the Company shall pay accrued interest quarterly
on March 31, June 30, September 30 and December 31 of each year or, if any such
date shall not be a
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Business Day, on the next succeeding Business Day to occur after such date (each
date upon which interest shall be so payable, an "INTEREST PAYMENT DATE"),
beginning on March 31, 2002. Interest on this Note shall accrue from the date of
issuance until repayment of the principal and payment of all accrued interest in
full. Interest shall be computed on the basis of a 360-day year of twelve 30-day
months. Interest on this Note shall be paid on each Interest Payment Date in
U.S. dollars by wire transfer of immediately available funds to an account
designated in writing prior to the date thereof by the Holder. Notwithstanding
the foregoing, but subject to applicable law, any overdue principal of and
overdue interest on this Note shall bear interest, payable on demand in
immediately available funds, for each day from the date payment thereof was due
to the date of actual payment, at a rate equal to the rate of interest otherwise
in effect pursuant to this Section 3 PLUS 2% per annum, and, upon and during the
occurrence of an Event of Default, this Note shall bear interest, from the date
of the occurrence of such Event of Default until such Event of Default is cured
or waived, payable on demand in immediately available funds, at a rate equal to
the rate of interest otherwise in effect pursuant to this Section 3 PLUS 2% per
annum. Subject to applicable law, any interest that shall accrue on overdue
interest on this Note as provided in the preceding sentence and shall not have
been paid in full on or before the next Interest Payment Date to occur after the
Interest Payment Date on which the overdue interest became due and payable shall
itself be deemed to be overdue interest on this Note to which the preceding
sentence shall apply. Notwithstanding anything herein to the contrary, the
interest payable by the Company with respect to this Note shall not exceed the
maximum amount permitted by applicable law.
4. RANK. This Note shall be senior to all indebtedness of the
Company.
5. COVENANTS. The Company covenants to the Holder that
(a) from the date hereof until all amounts owing
hereunder have been paid in full, the Company shall: (i) punctually pay the
interest and principal on this Note in the manner specified in this Note, and
any other liabilities due under this Note and (ii) execute and deliver, or cause
to be executed and delivered, upon the Holder's request and at the Company's
expense, such additional documents, instruments and agreements as the Holder may
reasonably determine to be necessary or advisable to carry out the provisions of
this Note and the transactions and actions contemplated hereunder;
(b) promptly give written notice to the Holder of any
Event of Default;
(c) from the date hereof until all amounts owing
hereunder have been paid in full, the Company shall not, and shall cause its
subsidiaries not to, create, assume, incur or suffer to exist any Lien on any
asset now owned or hereafter acquired by it; and
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(d) until the aggregate principal amount of this Note is
paid in full, together with accrued and unpaid interest thereon, the Company
shall not issue, assume, guarantee or suffer to exist any indebtedness without
the consent of the Holder other than purchase money security interests, and
capital and operating leases.
6. EVENTS OF DEFAULT. Notwithstanding anything to the contrary
provided herein, the occurrence of any one or more of the following shall be an
"Event of Default" hereunder and, upon the occurrence of an Event of Default,
all principal and interest due hereunder shall be immediately due and payable:
(a) if default by the Company shall be made in the
payment when due of principal or interest under this Note, and such default
shall be continuing;
(b) if default by the Company shall be made in the due
observance or performance of any other covenant, condition or agreement on the
part of the Company to be observed or performed pursuant to the terms hereof, or
to the terms of the Letter Agreement, and such default shall continue for five
days after the earlier of (i) the date of such default and (ii) the date written
notice thereof, specifying such default and, if such default is capable of being
remedied, requesting that the same be remedied, shall have been given to the
Company by the Holder;
(c) if any representation, warranty, certification or
statement made by or on behalf of the Company in the Letter Agreement, this Note
or in any certificate or other document delivered pursuant thereto, shall have
been incorrect in any material respect when made, unless the same is capable of
being cured or corrected and is promptly cured or corrected (but in any event
not later than three days) and prior to being cured or corrected does not have a
material adverse effect on the Condition of the Company;
(d) if the Company or its subsidiaries shall: (i) fail to
pay any indebtedness the aggregate outstanding principal amount of which is in
excess of $250,000, including but not limited to indebtedness for borrowed money
(other than the payment obligations relating to payments made pursuant to the
terms of this Note) of the Company or its subsidiaries, as the case may be, or
any interest or premium thereon, when due and such failure shall continue after
any applicable grace period; or (ii) fail to perform or observe, and such
failure shall continue after any applicable grace period, any term, covenant or
condition on its part to be performed or observed under any agreement or
instrument relating to any such indebtedness the aggregate outstanding principal
amount of which as to any or all of the Company or its subsidiaries is in excess
of $250,000, when required to be performed or observed, if the effect of such
failure to perform or observe is to accelerate, or to permit the acceleration
of, after the giving of notice or passage of time, or both, the maturity of such
indebtedness; or (iii) permit any such indebtedness, the aggregate outstanding
principal amount of which is in excess of $250,000, to have been declared to be
due and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), prior to the stated maturity thereof;
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(e) if one or more final judgments with no right of
appeal for the payment of money in an aggregate amount in excess of $100,000 (to
the extent not covered by insurance) shall be rendered against the Company or
any of its subsidiaries and such judgments remain undischarged for thirty (30)
days, or any action shall be legally taken by a judgment creditor to levy upon
assets or properties of the Company or any of its subsidiaries to enforce any
such judgment;
(f) if the Company or any of its subsidiaries shall file
a petition in bankruptcy or for an arrangement or for reorganization, or, if, by
decree of a court of competent jurisdiction, the Company shall be adjudicated a
bankrupt, or be declared insolvent, or shall make an assignment for the benefit
of creditors, or shall admit in writing its inability to pay its debts generally
as they become due, or shall consent to the appointment of a receiver or
receivers of all or any part of its property; or
(g) if any of the creditors of the Company or any of its
subsidiaries shall file an involuntary petition in bankruptcy against the
Company or any of its subsidiaries, or for reorganization of the Company or any
of its subsidiaries, and if such petition shall not be discharged or dismissed
within sixty (60) days after the date on which such petition was filed.
7. CERTAIN REMEDIES. Any registered Holder of this Note shall be
entitled to an injunction or injunctions to prevent breaches of the provisions
of this Note and to enforce specifically the terms and provisions of this Note
in any court of the United States or any state thereof having jurisdiction, this
being in addition to any other remedy to which such Holder may be entitled at
law or in equity.
8. FULL RECOURSE. The Company hereby agrees and covenants that
the Holder shall have full recourse against the Company for the payment of the
entire principal amount of this Note and all accrued interest thereon.
9. REMEDIES CUMULATIVE. No remedy herein conferred upon the
Holder is intended to be exclusive of any other remedy hereunder or any other
document referred to herein, and each and every such remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute or otherwise.
10. REMEDIES NOT WAIVED. No course of dealing between the Company
and the Holder or any delay on the part of the Holder in exercising any rights
hereunder shall operate as a waiver of any right.
11. WAIVER OF PROTEST, PRESENTMENT, ETC. The Company hereby waives
protest, presentment, notice of dishonor and notice of acceleration of maturity
and agrees to continue to remain bound for the payment of principal, interest
and all other sums due under this Note, notwithstanding any change or changes by
way of release, surrender, exchange, modification or substitution of any
security for this Note or by way of any extension or extensions of time for the
payment of principal and interest.
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12. CURRENCY; BUSINESS DAY. All payments of interest and principal
under this Note shall be made in lawful money of the United States of America.
If any payment shall be required by the terms hereof to be made on a day that is
not a Business Day, such payment shall be made on the immediately succeeding
Business Day.
13. TRANSFER; ASSIGNMENT. The Holder acknowledges that this Note
has not been registered under the Securities Act, or the securities laws of any
state, and may be transferred only pursuant to an effective registration
statement under the Securities Act or pursuant to an applicable exemption from
the registration requirements of the Securities Act; PROVIDED, HOWEVER, that the
Holder may at any time transfer this Note to any of its affiliates (as defined
in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as
amended). Neither this Note nor the rights, duties and obligations of the
Company hereunder may be assigned by the Company at any time, by operation of
law or otherwise, without the prior written consent of the Holder.
14. DEFINITIONS. As used in this Note, the following terms shall
have the following meanings (with terms defined in the singular having
comparable meanings when used in the plural and vice versa), unless the context
otherwise requires.
"BUSINESS DAY" means any day except a Saturday, a Sunday, or other day
on which commercial banks in the State of New York are authorized or required by
law or executive order to close.
"COMPANY" shall have the meaning ascribed to it in the first paragraph
of this Note.
"CONDITION OF THE COMPANY" means the assets, business, properties,
prospects, operations or condition (financial or otherwise) of the Company and
its subsidiaries, taken as a whole.
"EVENT OF DEFAULT" shall have the meaning ascribed to it in Section 6
hereof.
"HOLDER" shall have the meaning ascribed to it in the first paragraph
of this Note.
"INTEREST PAYMENT DATE" shall have the meaning ascribed to it in
Section 3 hereof.
"LETTER AGREEMENT" shall have the meaning ascribed to it in Section 1
hereof.
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment, obligation, encumbrance, lien (statutory or other) or preference,
priority, right or other security interest or preferential arrangement of any
kind or nature whatsoever.
"MATURITY DATE" shall have the meaning ascribed to it in Section 2
hereof.
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"NOTE" shall have the meaning ascribed to it in Section 1 hereof.
"PERSON" means any individual, firm, corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, governmental body or other entity of any kind.
15. NOTICES. All notices, demands or other communications provided
for or permitted hereunder shall be made in writing and shall be by registered
or certified first class mail, return receipt requested, telecopier, courier
service, overnight mail or personal delivery:
(i) if to the Company:
Xxxxxxx.xxx, Inc.
000 Xxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxxxx
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx, Esq.
(ii) if to the Holder:
c/o General Atlantic Service Corporation
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
Xxxxxx X. Xxxxxx
with a copy to:
Xxxx, Xxxxx, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
Any party may by notice given in accordance with this Section 15 designate
another address or Person for receipt of notices hereunder. All such notices,
demands and other communications shall be deemed to have been duly given when
delivered by hand, if
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personally delivered; when delivered by courier or overnight mail, if delivered
by commercial courier service or overnight mail; and when receipt is
mechanically acknowledged, if telecopied.
16. AMENDMENT. Any amendment, supplement or modification of or to
any provision of this Note, any waiver of any provision of this Note, and any
consent to any departure by the Company or the Holder from the terms of any
provision of this Note, shall be effective (i) only if it is made or given with
respect to all Convertible Notes in writing and signed by the Company and the
Holder and (ii) only in the specific instance and for the specific purpose for
which made or given. Except where notice is specifically required by this Note,
no notice to or demand on the Company in any case shall entitle the Company to
any other or further notice or demand in similar or other circumstances.
17. EXPENSES. The Company shall reimburse the Holder for all its
reasonable costs and expenses, including, without limitation, all reasonable
legal fees, disbursements and other charges of counsel, incurred in connection
with any enforcement of this Note and the Holder's rights hereunder.
18. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF. THE COMPANY CONSENTS TO THE EXCLUSIVE
JURISDICTION AND VENUE OF THE STATE OR FEDERAL COURTS LOCATED IN THE CITY OF NEW
YORK AND THE STATE OF NEW YORK. SERVICE OF PROCESS BY THE HOLDER IN CONNECTION
WITH ANY DISPUTE SHALL BE BINDING ON THE COMPANY IF SENT TO THE COMPANY BY
REGISTERED MAIL AT THE ADDRESS SPECIFIED IN SECTION 15 HERETO. THE COMPANY
WAIVES ANY RIGHT THE COMPANY MAY HAVE TO JURY TRIAL.
19. SUCCESSORS AND ASSIGNS. This Note shall inure to the benefit
of and be binding upon the successors and permitted assigns of the parties
hereto.
20. HEADINGS. The headings in this Note are inserted for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof and do not constitute part of this Note.
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IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed by its duly authorized officer as of the day and year first above
written.
XXXXXXX.XXX, INC.
By: _______________________________________
Name: Xxxxxx Xxxxxxx
Title: Chief Executive Officer
