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AGREEMENT REGARDING REPURCHASE OF STOCK
This Agreement is made effective as of February 25, 1998, by and among
BrightStar Information Technology Group, Inc., a Delaware corporation
("BrightStar"), Xxxxxx X. Xxxxxx, Xxxxxxxx X. Xxxx, Xxxxxx X. Xxxxxxx, Xxxxxx X.
Xxxxxx, Xxxx X. Xxxxx, Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx, and Xxxxxxx Xxxxxxx
(the "Shareholders");
WHEREAS, pursuant to that certain Agreement and Plan of Exchange, dated as
of December 15, 1997 (the "Exchange Agreement"), entered into by and among
BrightStar, BIT Group Services, Inc., a Delaware corporation ("BITG"), BIT
Investors, LLC, a Texas limited liability company ("BITI"), and the holders of
the outstanding capital stock of BITG, all of the Shareholders except Xxxxxxx X.
Xxxxxx will acquire shares (the "Management Shares") of common stock of
BrightStar, par value $.001 per share (the "BrightStar Common Stock"); and
WHEREAS, pursuant to Section 3.1 of the Exchange Agreement, Xxxxxxxx X.
Xxxx, Xxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx have previously
agreed to execute and deliver a stock repurchase agreement granting BrightStar
the option to repurchase their respective Management Shares;
WHEREAS, pursuant to Section 1.2 of the Exchange Agreement, Xxxxxx X.
Xxxxxx, Xxxx X. Xxxxx and Xxxxxxx Xxxxxxx are entitled to receive the Exchange
Consideration, which is an amount of shares of BrightStar Common Stock which may
be up to the following number of shares: Xxxxxx X. Xxxxxx--42,900 shares, Xxxx
X. Xxxxx--20,000 shares, Tarrant Xxxxxxx--33,900 shares;
WHEREAS, upon the successful completion of BrightStar's initial public
offering of BrightStar Common Stock (the "IPO") and the dissolution of BITI, it
is anticipated that the following Shareholders (the "Class B Holders") will
receive the indicated number of shares of BrightStar Common Stock upon the
liquidation of the Class B Units of BITI, based on the current estimated IPO
price of the BrightStar Common Stock, although the actual number of such shares
(the "Class B Shares") may vary substantially:
NAME NO. OF SHARES
---- -------------
Xxxxxx X. Xxxxxx 15,909
Xxxxxxxx X. Xxxx 15,909
Xxxxxx X. Xxxxxxx 15,909
Xxxxxx X. Xxxxxx 15,909
Xxxx X. Xxxxx 12,727
Xxxxxxx X. Xxxxxx 3,182
NOW THEREFORE, in consideration of the mutual promises, covenants and
obligations contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
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1. Share Repurchase Agreements. The Shareholders hereby agree to execute
and deliver a stock repurchase agreement on or before the Closing Date (defined
below) in the form attached hereto as Exhibit A (the "Stock Repurchase
Agreements") granting BrightStar the option to repurchase, under certain terms
and conditions provided in the Stock Repurchase Agreements, the number of shares
of BrightStar Common Stock set forth in Section 2 hereof, and shares of
Restricted Common Stock, if any received by the Shareholders pursuant to the
Restricted Stock Exchange as set forth in Section 2.1 of the Exchange Agreement.
2. Shares Subject to Repurchase.
2.1 Management Shares. All shares of BrightStar Common Stock included in
the Exchange Consideration received by Xxxxxx X. Xxxxxx, Xxxx X. Xxxxx and
Xxxxxxx Xxxxxxx shall be subject to repurchase by BrightStar pursuant to the
terms of the Stock Repurchase Agreement.
2.2 Class B Shares. All of the Class B Shares, if any, received by the
Class B Holders shall be subject to repurchase by BrightStar pursuant to the
terms of the Stock Repurchase Agreements.
3. Closing Date. For purposes hereof, the Closing Date shall mean the date
that BrightStar receives funds in consideration for the sale of its securities
in its initial public offering.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered on
the date first hereinabove written.
BRIGHTSTAR INFORMATION
TECHNOLOGY GROUP, INC.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
--------------------------------
Xxxxxx X. Xxxxxx
--------------------------------
Xxxxxxxx X. Xxxx
--------------------------------
Xxxxxx X. Xxxxxxx
--------------------------------
Xxxxxx X. Xxxxxx
--------------------------------
Xxxx X. Xxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
--------------------------------
Tarrant Xxxxxxx
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EXHIBIT A
STOCK REPURCHASE AGREEMENT
This Stock Repurchase Agreement (this "Agreement") dated as of
____________________, 1997 is entered into by and between BRIGHTSTAR
INFORMATION TECHNOLOGY GROUP, INC., a Delaware corporation (the "Company") and
_________________________ (the "Grantor") .
W I T N E S S E T H:
WHEREAS, Grantor owns certain shares of common stock of the Company
(the "Common Stock");
WHEREAS, the Company desires that Grantor grant to the Company an
option to purchase certain shares of Common Stock on the terms and conditions
hereinafter set forth:
NOW, THEREFORE, for and in consideration of the mutual promises,
covenants and obligations contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. SHARES SUBJECT TO PURCHASE OPTION. Grantor currently owns
_________ shares of Common Stock (the "Shares"), all of which shall initially
be subject to the terms, provisions and conditions of the Purchase Option (as
hereafter defined). The term "IPO" means the first underwritten public
offering of the Company's common stock other than any offering pursuant to any
registration statement (i) relating to any capital stock of the Company or
options, warrants or other rights to acquire any such capital stock issued or
to be issued primarily to directors, officers or employees of the Company, or
any of its subsidiaries (ii) relating to any employee benefit plan or interest
therein, (iii) relating principally to any preferred stock or debt securities
of the Company, or (iv) filed pursuant to Rule 145 under the Securities Act of
1933, as amended, or any successor or similar provisions.
2. PURCHASE OPTION.
a. The Shares shall be subject to the option (the
"Purchase Option") set forth in this Section 2. In the event that Grantor
shall cease to [serve as a director of the Company] [be engaged, either as a
consultant or as an employee, by the Company (including a parent or subsidiary
of the Company)] under the circumstances set forth in Section 2(b) of this
Agreement (the "Section 2(b) Event"), the Company shall have the right, at any
time within 90 days after the date Grantor ceases to be so engaged (the "Option
Period"), to exercise the Purchase Option, which consists of the right to
purchase from Grantor at a purchase price of $.10 per share (as adjusted
pursuant to Section 4 below) (the "Option Price"), up to but not exceeding the
number of Shares specified in Section 2(b) below, upon the terms hereinafter
set forth.
b. If any of the following items (i) or (ii) occurs:
i. Grantor [voluntarily ceases to serve as a
director of the Company] [repudiates or renounces that certain
Employment Agreement between the Company and Grantor (the "Employment
Agreement") or voluntarily ceases his engagement with the Company]
(other than by reason of death or disability) prior to the date which
is 12 months
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following the date of the successful completion of the IPO without the
prior written consent of the Company; or
ii. Grantor's [service as a director of the
Company] [engagement by the Company under the Employment Agreement] is
terminated by the Company at any time prior to the date which is 12
months following the date of the successful completion of the IPO,
with "Cause," (as defined below);
prior to the occurrence of any Termination Event (as defined in Section 9),
then the Company may exercise the Purchase Option at the Option Price as to the
number of Shares determined as follows:
(A) Prior to the IPO, the Company may exercise the
Purchase Option as to all of the Shares;
(B) Following the IPO, the Company may exercise the
Purchase Option as to a number of Shares equal to the total number of
Shares less an aggregate number of Shares equal to the product
(rounded down to the nearest whole Share) of (i) 1/12 times (ii) the
aggregate number of full calendar months following the IPO that
Grantor has [served as a director of the Company] [been engaged as an
employee to the Company], times (iii) the total number of Shares
(_____________).
For the purposes of this Agreement, "Cause" means the conviction of Grantor of
a crime involving fraud against the Company or any of its affiliates or the
theft or embezzlement of assets of the Company or any of its affiliates.
The Company shall not have the right to exercise the Purchase Option
in the event Grantor's [service as a director of the Company] [employment by
the Company under the Employment Agreement] is terminated for death,
disability, without "Cause" or for any other reason except as provided in
Section 2(b) above.
c. The Purchase Option may be exercised by the Company by giving
notice to the Grantor in accordance with Section 13.1 hereof stating that the
Company has elected to acquire the Shares subject to the Purchase Option. Each
sale and purchase in accordance with the rights so exercised shall be
thereafter completed without avoidable delay by the transfer and assignment of
such Shares to the Company and payment of the Option Price. The Option Price
shall be payable, at the option of the Company, by cancellation of all or a
portion of any outstanding indebtedness of the Grantor to the Company or by
payment in cash (by check), or both.
d. Nothing in this Agreement shall affect in any manner
whatsoever the right or power of the Company, or a parent or subsidiary of the
Company, to terminate Grantors' [service as a director of the Company]
[engagement with the Company], for any reason, with or without cause as
provided in the [Bylaws of the Company] [applicable Employment Agreement].
3. ASSIGNMENT. Neither the Company nor Grantor may assign this
Agreement or any of its respective rights and obligations hereunder.
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4. ADJUSTMENTS. If, from time to time during the term of the
Purchase Option (i) there is any dividend of stock or other securities or
liquidating dividend of cash or property, stock split, reverse stock split,
subdivision, combination, recapitalization, reorganization, reclassification or
other change in the character or amount of any of the outstanding securities of
the Company, or (ii) there is any transaction involving the consolidation or
merger of the Company in which the Company is the surviving entity
(collectively, (i) and (ii) shall be referred to as a "Reorganization"), then,
in such event, any and all new, substituted or additional securities or other
property to which Grantor is entitled by reason of Grantor's ownership of the
Shares shall be immediately subject to the Purchase Option and be included in
the term "Shares" for all purposes of the Purchase Option with the same force
and effect as the Shares subject to the Purchase Option under the terms of
Section 2 hereof. In the event that the outstanding Common Stock is at any
time increased or decreased solely by reason of a Reorganization, appropriate
adjustments to the Option Price shall be made effective as of the date of such
occurrence so that the total Option Price upon exercise of the Purchase Option
will be the same as it would have been had the Company exercised the Purchase
Option immediately prior to the occurrence of such event.
5. LEGENDS. All certificates representing any of the Shares
subject to the provisions of this Agreement shall have endorsed thereon a
legend substantially as follows:
"ANY DISPOSITION, GRANT OR OTHER TRANSFER OF ANY
INTEREST IN THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO RESTRICTIONS, AND THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO AN OPTION, CONTAINED IN A
CERTAIN AGREEMENT EXECUTED BY THE RECORD HOLDER HEREOF, THE
CORPORATION AND CERTAIN OTHER PARTIES, A COPY OF WHICH WILL BE
MAILED TO ANY HOLDER OF THIS CERTIFICATE WITHOUT CHARGE AFTER
RECEIPT BY THE CORPORATION OF A WRITTEN REQUEST THEREFOR."
Upon presentation to the Company or any authorized transfer agent of
certificates representing the Shares, the number of Shares represented thereby
which are no longer subject to the Purchase Option shall be exchanged for
certificates not bearing such legend, and all Shares, if any, which remain
subject to the Purchase Option, shall be represented by certificates endorsed
with the legend set forth above.
6. NO RESALE OR TRANSFER. Grantor shall not sell, assign or
otherwise transfer (otherwise than by operation of law) any of the Shares which
are subject to the Purchase Option or any interest therein, or grant or
otherwise allow to exist any lien, claim or other encumbrance on or with
respect to any of the Shares then subject to the Purchase Option.
7. NO TRANSFER. The Company shall not be required (i) to
transfer on its books any of the Shares which shall have been sold or
transferred in violation of any of the provisions set forth in this Agreement
or (ii) to treat as owner of such Shares or to accord the right to vote as such
owner or to pay dividends to any transferee to whom such Shares shall have been
so transferred.
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8. RIGHTS AS A SHAREHOLDER. Subject to the provisions of Section
7 above, Grantor shall, during the term of this Agreement, exercise all rights
and privileges of a shareholder of the Company with respect to the Shares.
9. TERMINATION. This Agreement and the Purchase Option granted
hereunder shall terminate on the earlier to occur of any of the following
events (each a "Termination Event"):
a. the 91st calendar day immediately succeeding the date
which is 12 months following the date of the successful completion of
the IPO;
b. upon expiration of the Option Period;
c. the commencement by the Company of a voluntary case
or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the
consent to the entry of a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against it, or the filing of a petition or answer
or consent seeking reorganization or relief under any applicable
federal or state law, or the consent to the filing of such petition or
to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee trustee, sequestrator or other similar official
of the Company or of any substantial part of its property, or the
making of an assignment for the benefit of creditors, or the admission
in writing of inability to pay debts generally as they become due, or
the taking of corporate action by the Company in furtherance of any
such action; or
d. the sale of all or substantially all of the assets of
the Company.
10. FURTHER ASSURANCES. The parties agree to execute such further
instruments and to take such further actions as may reasonably be necessary to
carry out the purposes and intent of this Agreement.
11. FAILURE TO DELIVER SHARES. If Grantor becomes obligated to
sell any Shares to the Company under this Agreement and fails to deliver such
Shares in accordance with the terms of this Agreement, the Company may, at its
option, in addition to all other remedies it may have, send to the Grantor the
purchase price for such Shares as is herein specified. Thereupon, the Company
upon written notice to the Grantor, (a) shall cancel on its books the
certificate or certificates representing the Shares to be sold and (b) shall
issue, in lieu thereof, in the name of the Company a new certificate or
certificates representing such Shares, and thereupon all of the Grantor's
rights in and to such Shares shall terminate.
12. SPECIFIC ENFORCEMENT. Grantor expressly agrees that the
Company will be irreparably damaged if this Agreement is not specifically
enforced. Upon a breach of the terms, covenants and/or conditions of this
Agreement by Grantor, the Company shall, in addition to all other remedies, be
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entitled to a temporary or permanent injunction, without showing any actual
damage, and/or a decree for specific performance, in accordance with the
provisions hereof.
13. MISCELLANEOUS.
a. Notice. For purposes of this Agreement, notices and
all other communications provided for herein shall be in writing and
shall be deemed to have been duly given when personally delivered or
when mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Company: BrightStar Information Technology
Group, Inc.
00000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
If to Grantor, at the address identified on the signature page
hereof, or to such other address as either party may furnish to the
other in writing in accordance herewith, except that notices of
changes of address shall be effective only upon receipt.
b. Applicable Law. The substantive laws of the State of
Texas, excluding any law, rule or principle which might refer to the
substantive law of another jurisdiction, will govern the
interpretation, validity and effect of this Agreement without regard
to the place of execution or the place for performance thereof. This
Agreement is to be negotiated, executed and performed in Xxxxxx
County, Texas, and, as such, the Company and Grantor agree that
personal jurisdiction and venue shall be proper with the state or
federal courts situated in Xxxxxx County, Texas, to hear such disputes
arising under this Agreement.
c. No Waiver. No failure by either party hereto at any
time to give notice of any breach by the other party of, or to require
compliance with, any condition or provision of this Agreement shall be
deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.
d. Severability. If a court of competent jurisdiction
determines that any provision of this Agreement, including any
appendices attached hereto, is invalid or unenforceable, then the
invalidity or unenforceability of that provision shall not affect the
validity or enforceability of any other provision of this Agreement,
and all other provisions shall remain in full force and effect.
Further, such provisions shall be reformed and construed to the extent
permitted by law so that it may be valid, legal and enforceable to the
maximum extent possible.
e. Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original,
but all of which together will constitute one and the same Agreement.
f. Headings. The section headings have been inserted
for purposes of convenience and shall not be used for interpretive
purposes.
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g. Successors. This Agreement shall inure to the
benefit of the permitted successors and assigns of the Company and be
binding upon Grantor and his or her heirs, executors, administrators
and successors.
h. Construction. Each party to this Agreement has had
the opportunity to review this Agreement with legal counsel. This
Agreement shall not be construed or interpreted against any party on
the basis that such party drafted or authored a particular provision,
parts of or the entirety of this Agreement.
i. Entire Agreement. This Agreement and the agreements
referred to herein constitute the entire agreement of the parties with
regard to the subject matter hereof, and contains all the covenants,
promises, representations, warranties and agreements between the
parties with respect to the subject matter hereof. Each party to this
Agreement acknowledges that no representation, inducement, promise or
agreement, oral or written, with regard to the subject matter hereof,
has been made by either party, or by anyone acting on behalf of either
party, which is not embodied herein, and that no agreement, statement
or promise relating to the subject matter hereof which is not
contained in this Agreement or in such other agreements shall be valid
or binding.
j. Amendments. No amendment or modification to this
Agreement will be effective unless it is in writing and signed by the
Company and Grantor.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first above written.
COMPANY:
BRIGHTSTAR INFORMATION
TECHNOLOGY GROUP, INC.
By:____________________________________
Name:__________________________________
Title:_________________________________
SPOUSE OF GRANTOR (IF APPLICABLE) GRANTOR:
____________________________ _______________________________________
Name:
____________________________ _______________________________________
Address:_______________________________
_______________________________
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