Stock Exchange Agreement - CMGI Inc. and ClearBlue Technologies Inc.
STOCK EXCHANGE AGREEMENT, dated as of August 21, 2003 (this "AGREEMENT"),
by and between CMGI, Inc., a Delaware corporation ("CMGI"), and ClearBlue
Technologies, Inc., a Delaware corporation ("CLEARBLUE").
WHEREAS, ClearBlue and CMGI have each determined that the
transactions contemplated by this Agreement, on the terms and conditions of this
Agreement, would be advantageous and beneficial to their respective companies
and shareholders.
WHEREAS, the parties hereto desire to consummate the
transactions contemplated herein, pursuant to which (a) CMGI will transfer to
ClearBlue 131,579 shares (collectively, the "ClearBlue Shares") of Common Stock,
par value $0.01 per share, of ClearBlue owned by CMGI, and (b) ClearBlue will
transfer to CMGI 57,690 shares (collectively, the "NaviSite Shares") of Common
Stock, par value $0.01 per share, of NaviSite, Inc., a Delaware corporation
("NaviSite"), owned by ClearBlue.
WHEREAS, for United States federal income tax purposes, the
transactions contemplated hereby are intended to qualify as a tax-free
reorganization under Section 368 of the Internal Revenue Code of 1986, as
amended (together with all rules and regulations issued thereunder (the "Code"))
and this Agreement is intended to be adopted as a plan of reorganization for
purposes of Section 368 of the Code.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. As used herein, the following terms shall have
the following meanings:
"Act" means the Securities Act of 1933, as amended, and the
rules and regulations issued in respect thereto.
"Encumbrance" means any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
otherwise), charge against or interest in property to secure payment of a debt
or performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
"Law" means any law, statute, regulation, rule, ordinance,
requirement or other binding action or requirement of any governmental,
regulatory or administrative body, agency or authority or any court of judicial
authority.
"Order" means any decree, order, judgment, writ, award,
injunction, stipulation or consent of or by any Federal, state or local
government or any court, administrative agency or commission or other
governmental authority or agency, domestic or foreign.
"Person" means any individual, corporation, general or limited
partnership, joint venture, association, limited liability company, joint stock
company, trust, business, bank, trust company, estate (including any
beneficiaries thereof), unincorporated entity, cooperative, association,
government branch, agency or political subdivision thereof or organization of
any kind.
"Transaction Documents" means any ancillary contracts,
agreements or other documents that are to be entered into in connection with the
transactions contemplated hereby.
ARTICLE II
EXCHANGE OF STOCK
SECTION 2.1. EXCHANGE. Subject to the terms and conditions of this Agreement, at
the Closing, CMGI agrees to transfer to ClearBlue the ClearBlue Shares and
ClearBlue agrees to transfer to CMGI the NaviSite Shares. In addition , in
connection with the January 2003 business combination of Navisite and Avasta,
Inc. ("Avasta"), ClearBlue may be required to satisfy certain earnout
obligations which would require ClearBlue to issue shares of NaviSite common
stock to the former stockholders of Avasta (the "Earnout Obligation"). ClearBlue
has reserved 132,634 shares of NaviSite common stock to satisfy, if required,
the Earnout Obligation. To the extent, ClearBlue is not required to satisfy the
Earnout Obligation or the number of shares reserved by ClearBlue is greater than
the number of shares issued in satisfaction of the Earnout Obligation, ClearBlue
will issue to CMGI prior to ClearBlue's 1.99% of such shares.
SECTION 2.2. The Closing.
(a) Subject to the terms and conditions of this Agreement, the closing of
the transactions contemplated by this Agreement (the "Closing") shall
take place as promptly as possible but no later than the fifth (5th)
business day following the day the last of the conditions set forth in
Article V shall have been fulfilled or waived (other than those that
this Agreement contemplates will be satisfied at or immediately prior
to the Closing), or at such other time as shall be mutually agreed upon
by CMGI and ClearBlue (the "Closing Date").
(b) Subject to the conditions set forth in this Agreement, the parties
agree to consummate the following transactions at the Closing:
(i) ClearBlue shall assign and transfer to CMGI the NaviSite Shares, by
physically delivering to CMGI one (1) or more stock certificates
representing the NaviSite Shares being sold, duly endorsed or
accompanied by duly executed stock powers (with a medallion guaranty,
if required by NaviSite's transfer agent) sufficient to validly
transfer the NaviSite Shares to CMGI or its nominee; and
(ii) CMGI shall assign and transfer to ClearBlue the ClearBlue Shares, by
physically delivering to ClearBlue one (1) or more stock certificates
representing the ClearBlue Shares being sold, duly endorsed or
accompanied by duly executed stock powers sufficient to validly
transfer the ClearBlue Shares to ClearBlue or its nominee.
ARTICLE III
Representations and Warranties of CMGI
CMGI represents and warrants to ClearBlue that the statements contained in
this Article III are true and correct as of the date of this Agreement and will
be true and correct as of the Closing as though made as of the Closing, except
to the extent such representations and warranties are specifically made as of a
particular date (in which case such representations and warranties will be true
and correct as of such date).
SECTION 3.1. POWER AND AUTHORITY; Enforceability. CMGI is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. CMGI has all requisite capacity, power and
authority to execute, deliver and perform this Agreement. No other corporate
action on the part of CMGI is necessary to authorize the execution and delivery
by CMGI of this Agreement or the consummation by it of the Contemplated
Transactions (as defined below). This Agreement has been duly executed and
delivered and, upon execution by ClearBlue, will constitute a valid and legally
binding obligation of CMGI, enforceable against CMGI in accordance with its
terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally and (b) as limited by laws relating
to the availability of specific performance, injunctive relief, or other
equitable remedies.
SECTION 3.2. OWNERSHIP; TRANSFERABILITY. CMGI is the legal and beneficial owner
of the ClearBlue Shares, free and clear of any Encumbrance or restriction on
transfer, other than (i) restrictions under the Act, (ii) restrictions reflected
in a legend on the certificates representing the ClearBlue Shares, and (iii)
restrictions under that certain Shareholders Agreement dated September 11, 2002,
by and among Hewlett-Packard Financial Services Company, ClearBlue Atlantic,
LLC, a Delaware limited liability company, ClearBlue and CMGI. (the "ClearBlue
Shareholders Agreement").
SECTION 3.3. CONSENTS AND APPROVALS. Neither the execution, delivery and
performance of this Agreement by CMGI, nor the consummation by CMGI of any
transaction related hereto, including the transfer, sale and delivery of the
ClearBlue Shares will require any consent, approval, license, Order or
authorization of, filing, registration, declaration or taking of any other
action with, or notice to, any Person, other than such consents, approvals,
filings or actions as may be required (a) under the Federal securities laws
which have or will be made, and (b) under the ClearBlue Shareholders Agreement.
SECTION 3.4. NO CONFLICTS. The execution and delivery by CMGI of this Agreement
and the Transaction Documents to which it is or will become a party do not, and
the consummation of the transactions contemplated by this Agreement and the
Transaction Documents to which it is or will become a party (the "Contemplated
Transactions") shall not, assuming the consents, approvals, filings or actions
described in Section 3.3 are made or obtained, as the case may be, (a)
contravene, conflict with, or result in any violation or breach of any provision
of the certificate of incorporation or by-laws of CMGI, (b) result in any
violation or breach of, or constitute (with or without notice or lapse of time,
or both) a default (or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of any benefit) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, lease, contract
or other agreement, instrument or obligation to which CMGI is a party or by
which it or any of its properties or assets may be bound, or (c) conflict or
violate any permit, concession, franchise, license, judgment, Order, decree,
statute, law, ordinance, rule or regulation of any government, governmental
instrumentality or court, domestic or foreign, applicable to CMGI or any of its
properties or assets, except in the case of (b) and (c) for any such conflicts,
violations, defaults, terminations, cancellations or accelerations which would
not, individually or in the aggregate, materially and adversely affect the
ClearBlue Shares being conveyed by CMGI to ClearBlue.
SECTION 3.5. Purchase Entirely for Own Account.
(a) The NaviSite Shares to be received by CMGI will be acquired for investment
for its own account, and not with a view to the resale or distribution of any
part thereof.
(b) CMGI has no present intention of selling, granting any participation in, or
otherwise distributing the NaviSite Shares, except, in the case of (a) and (b)
of this Section 3.5, as permitted by the Act.
(c) CMGI is an "accredited investor" under Rule 501(a) promulgated under the
Act.
SECTION 3.6. Restricted Securities. CMGI understands that the NaviSite Shares
are characterized as "restricted securities" under the Federal securities laws
and that under such laws and applicable regulations such securities may be
resold without registration under the Act only in certain limited circumstances.
SECTION 3.7. Legends. It is understood that the certificate(s) evidencing the
NaviSite Shares shall bear a legend substantially in the form below:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR WITH ANY STATE
SECURITIES COMMISSION, AND MAY NOT BE TRANSFERRED OR DISPOSED OF BY THE
HOLDER IN THE ABSENCE OF A REGISTRATION STATEMENT WHICH IS EFFECTIVE
UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE LAWS AND RULES OR
UNLESS SUCH TRANSFER MAY BE EFFECTED WITHOUT VIOLATION OF THE
SECURITIES ACT OF 1933 AND OTHER APPLICABLE STATE LAWS AND RULES.
SECTION 3.8. Brokers, etc. CMGI is not obligated to pay any fee or commission to
any broker, finder or other similar Person in connection with the transactions
contemplated by this Agreement (other than any fees or commissions that are
solely for the account of CMGI).
ARTICLE IV
Representations and Warranties of ClearBlue
ClearBlue represents and warrants to CMGI that the statements
contained in this Article IV are true and correct as of the date of this
Agreement and will be true and correct as of the Closing as though made as of
the Closing, except to the extent such representations and warranties are
specifically made as of a particular date (in which case such representations
and warranties will be true and correct as of such date).
SECTION 4.1. Power and Authority; Enforceability. ClearBlue is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. ClearBlue has all requisite capacity, power and
authority to execute, deliver and perform this Agreement. No other corporate
action on the part of ClearBlue is necessary to authorize the execution and
delivery by ClearBlue of this Agreement or the consummation by it of the
Contemplated Transactions. This Agreement has been duly executed and delivered
and, upon execution by CMGI, will constitute a valid and legally binding
obligation of ClearBlue, enforceable against ClearBlue in accordance with its
terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally and (b) as limited by laws relating
to the availability of specific performance, injunctive relief, or other
equitable remedies.
SECTION 4.2. Ownership; Transferability. ClearBlue is the legal and beneficial
owner of the NaviSite Shares, free and clear of any Encumbrance or restriction
on transfer, other than (i) restrictions under the Act and (ii) restrictions
reflected in a legend on the certificates representing the NaviSite Shares.
SECTION 4.3. Consents and Approvals. Neither the execution, delivery and
performance of this Agreement by ClearBlue, nor the consummation by ClearBlue of
any transaction related hereto, including the transfer, sale and delivery of the
NaviSite Shares, will require any consent, approval, license, Order or
authorization of, filing, registration, declaration or taking of any other
action with, or notice to, any Person, other than such consents, approvals,
filings or actions as may be required (a) under the Federal securities laws
which have or will be made.
SECTION 4.4. No Conflicts. The execution and delivery by ClearBlue of this
Agreement and the Transaction Documents to which it is or will become a party do
not, and the consummation of the Contemplated Transactions shall not, assuming
the consents, approvals, filings or actions described in Section 4.3 are made or
obtained, as the case may be, (a) contravene, conflict with, or result in any
violation or breach of any provision of the certificate of incorporation or
by-laws of ClearBlue, (b) result in any violation or breach of, or constitute
(with or without notice or lapse of time, or both) a default (or give rise to a
right of termination, cancellation or acceleration of any obligation or loss of
any benefit) under any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, lease, contract or other agreement, instrument or
obligation to which ClearBlue is a party or by which it or any of its properties
or assets may be bound, or (c) conflict or violate any permit, concession,
franchise, license, judgment, Order, decree, statute, law, ordinance, rule or
regulation of any government, governmental instrumentality or court, domestic or
foreign, applicable to ClearBlue or any of its properties or assets, except in
the case of (b) and (c) for any such conflicts, violations, defaults,
terminations, cancellations or accelerations which would not, individually or in
the aggregate, materially and adversely affect the NaviSite Shares being
conveyed by ClearBlue to CMGI.
SECTION 4.5. Purchase Entirely for Own Account.
(a) The ClearBlue Shares to be received by ClearBlue will be acquired for
investment for its own account, and not with a view to the resale or
distribution of any part thereof.
(b) ClearBlue has no present intention of selling, granting any participation
in, or otherwise distributing the ClearBlue Shares, except, in the case of (a)
and (b) of this Section 4.5, as permitted by the Act.
(c) ClearBlue is an "accredited investor" under Rule 501(a) promulgated under
the Act.
SECTION 4.6. Restricted Securities. ClearBlue understands that the ClearBlue
Shares are characterized as "restricted securities" under the Federal securities
laws and that under such laws and applicable regulations such securities may be
resold without registration under the Act only in certain limited circumstances.
SECTION 4.7. Legends. It is understood that the certificate(s) evidencing the
ClearBlue Shares shall bear a legend substantially in the form below:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR WITH ANY STATE
SECURITIES COMMISSION, AND MAY NOT BE TRANSFERRED OR DISPOSED OF BY THE
HOLDER IN THE ABSENCE OF A REGISTRATION STATEMENT WHICH IS EFFECTIVE
UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE LAWS AND RULES OR
UNLESS SUCH TRANSFER MAY BE EFFECTED WITHOUT VIOLATION OF THE
SECURITIES ACT OF 1933 AND OTHER APPLICABLE STATE LAWS AND RULES.
SECTION 4.8. Brokers' Fees. ClearBlue has no liability or obligation to pay any
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement (other than any fees or commissions
that are solely for the account of ClearBlue).
SECTION 4.9. Capitalization of ClearBlue. There are outstanding 6,628,947 shares
of ClearBlue common stock, and CMGI is the owner of 1.99% of such outstanding
shares.
SECTION 4.10. Ownership of NaviSite Shares. ClearBlue is the legal or beneficial
owner of 12,227,226 shares of NaviSite common stock.
ARTICLE V
CONDITIONS PRECEDENT; RELATED COVENANTS
SECTION 5.1. CLOSING EFFORTS. Each of the parties hereto shall use its
commercially reasonable efforts ("Reasonable Efforts") to take all actions and
to do all things necessary, proper or advisable to consummate the transactions
contemplated by this Agreement, including using its Reasonable Efforts to ensure
that (i) its representations and warranties remain true and correct in all
material respects through the Closing Date, and (ii) the conditions to the
obligations of the other parties to consummate the transaction are satisfied.
SECTION 5.2. CONDITIONS PRECEDENT TO OBLIGATIONS OF CLEARBLUE. The obligations
of ClearBlue to transfer the NaviSite Shares and purchase the ClearBlue Shares
at the Closing are subject to the fulfillment of the condition that, at the
Closing, the representations and warranties of CMGI set forth in this Agreement
that are qualified as to materiality shall be true and correct in all respects,
and all other representations and warranties of CMGI set forth in this Agreement
shall be true and correct in all material respects, in each case as of the date
of this Agreement and as of the Closing as though made as of the Closing, except
to the extent such representations and warranties are specifically made as of a
particular date (in which case such representations and warranties shall be true
and correct as of such date).
SECTION 5.3. CONDITIONS PRECEDENT TO OBLIGATIONS OF CMGI. The obligations of
CMGI to sell the ClearBlue Shares and purchase the NaviSite Shares at the
Closing are subject to the fulfillment of the condition that, at the Closing,
the representations and warranties of ClearBlue set forth in this Agreement that
are qualified as to materiality shall be true and correct in all respects, and
all other representations and warranties of ClearBlue set forth in this
Agreement shall be true and correct in all material respects, in each case as of
the date of this Agreement and as of the Closing as though made as of the
Closing, except to the extent such representations and warranties are
specifically made as of a particular date (in which case such representations
and warranties shall be true and correct as of such date).
ARTICLE VI
TERMINATION
SECTION 6.1. TERMINATION BY MUTUAL CONSENT. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned at any time
prior to the Closing by the written consent of each party hereto.
SECTION 6.2. TERMINATION BY EITHER CMGI OR CLEARBLUE. This Agreement may be
terminated (upon written notice from the terminating party hereto to the other
party hereto) and the transactions contemplated hereby may be abandoned by
action of any party hereto, if (a) the Closing shall not have occurred on or
prior to August 21, 2003, or (b) any Federal, state or local government or any
court, administrative agency or commission or other governmental authority or
agency, domestic or foreign shall have issued a Law or Order permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated
hereby and such Law or Order shall have become final and nonappealable.
SECTION 6.3. EFFECT OF TERMINATION AND ABANDONMENT. In the event of termination
of this Agreement pursuant to this Article VI hereof, no party hereto or, its
directors or officers or other controlling persons shall have any liability or
further obligation to any other party hereto pursuant to this Agreement, except
that Article VIII hereof shall survive termination of this Agreement and nothing
herein will relieve any party hereto from liability for any breach of this
Agreement occurring prior to such termination.
ARTICLE VII
RESERVED
ARTICLE VIII
GENERAL PROVISIONS; OTHER AGREEMENTS
SECTION 8.1. PRESS RELEASES. Other than any required filings under the Federal
securities laws, none of the parties hereto will, without first obtaining the
approval of the other, make any public announcement, directly or indirectly,
regarding this Agreement, nor the nature of the transaction contemplated by this
Agreement, to any person except as required by law or regulatory bodies and
other than to the respective principals or other representatives of the Parties,
each of whom shall be similarly bound by such confidentiality obligations. If
any such press release or public announcement is so required by either party
(except in the case of any disclosure required under the Federal securities laws
to be made in a filing with the Securities and Exchange Commission), the
disclosing party shall consult with the other parties prior to making such
disclosure, and the parties shall use all reasonable efforts, acting in good
faith, to agree upon a text for such disclosure which is satisfactory to each of
the parties.
SECTION 8.2. TAX-FREE TRANSACTION. From and after the date of this Agreement,
ClearBlue shall use all reasonable efforts to cause the transactions
contemplated hereby to qualify, and shall not knowingly take any actions or
permit any actions to be taken that could reasonably be expected to prevent said
transactions from qualifying as a "reorganization" under Section 368(a) of the
Code. This Agreement shall be, and hereby is, adopted by ClearBlue as a plan of
reorganization for purposes of Section 368 of the Code.
SECTION 8.3. EXPENSES. Regardless of whether the transactions contemplated
hereby are consummated, all legal and other costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party hereto incurring such costs and expenses.
SECTION 8.4. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to the
conflicts of laws provisions thereof.
SECTION 8.5. HEADINGS. Article and Section headings used in this Agreement are
for convenience only and shall not affect the meaning or construction of this
Agreement.
SECTION 8.6. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements and
understandings, both written and oral, with respect to the subject matter
hereof.
SECTION 8.7. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Signatures on this
Agreement may be communicated by facsimile transmission and shall be binding
upon the parties hereto so transmitting their signatures. Counterparts with
original signatures shall be provided to the other parties hereto following the
applicable facsimile transmission; provided that the failure to provide the
original counterpart shall have no effect on the validity or the binding nature
of this Agreement.
SECTION 8.8. AMENDMENT. Any term of this Agreement may be modified or amended
only by an instrument in writing signed by each of the parties hereto.
SECTION 8.9. SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforced in accordance with its terms.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Stock
Purchase Agreement to be duly executed and delivered as of the date set forth
above.
CMGI, INC.
425 Medford Street
Charlestown, MA 02192
By:____________________________
Name:
Title:
CLEARBLUE TECHNOLOGIES, INC.
55 Francisco Street, Suite 100
San Francisco, California 94133
By: _______________________________
Name: Arthur Becker
Title: Vice President