Exhibit 10.2
RESTRICTED STOCK PURCHASE AGREEMENT
This RESTRICTED STOCK PURCHASE AGREEMENT (this "Agreement") is made as of
the 23rd day of July 1999, by and between Data Return Corporation, a Texas
corporation (the "Corporation"), and Level 3 Communications, LLC ("Purchaser").
In consideration of the mutual covenants and representations set forth
herein, the Corporation and Purchaser agree as follows:
1. Purchase and Sale of Stock.
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Subject to the terms and conditions of this Agreement, the Corporation
hereby agrees to sell to Purchaser and the Purchaser agrees to purchase from the
Corporation on the Closing Date (as herein defined), 7,260 shares of the
Corporation's Common Stock (the "Stock") at a price of $688.67 per share, for an
aggregate purchase price of $5,000,000. The purchase price for the Stock shall
be paid by the execution and delivery by the Purchaser of a Service Credit
Agreement between the Corporation and the Purchaser in the form attached hereto
as Exhibit A.
2. Closing.
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The purchase and sale of the Stock shall occur at a Closing that shall be
held immediately after the execution of this Agreement or at such other time and
place (the "Closing Date") as agreed to by the Corporation and Purchaser. At the
Closing, Purchaser shall deliver to the Corporation the Service Credit
Agreement, and the Corporation will issue a certificate representing the Stock
registered in the name of the Purchaser.
3. Purchase Option.
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(a) From the Closing Date through December 31, 2001 (the "Vesting Period"),
all (and only all) of the Stock that has not vested pursuant to subparagraph (b)
(the "Unvested Stock") shall be subject to the right and option of the
Corporation to repurchase the Stock (the "Purchase Option") as set forth in this
Section 3. The Purchase Option shall be exercisable by the Corporation only if
either (i) Purchaser shall have materially breached the Service Credit Agreement
and such material breach shall not have been cured within the time periods
contemplated by the Service Credit Agreement or (ii) in the event that the
Delivery Condition (as defined below) shall not have been satisfied prior to
December 31, 2001 (a "Purchase Option Event"). Following a Purchase Option
Event, the Corporation shall have the right, as provided in subparagraph (c)
hereof, to purchase from the Purchaser, at the purchase price per share
originally paid as set forth in Section 1 hereof (the "Option Price"), the
Unvested Stock. For purposes of this Agreement, "Delivery Condition" shall be
satisfied if the Purchaser has honored orders submitted by the Corporation for
available connectivity services (including but not limited to "Broadband
Service" and "Private Line Service," but excluding "Colocation Space" (each as
defined in the Strategic Marketing and Sales Agreement (the "Marketing
Agreement") between the Purchaser and the Corporation dated July 1, 1999)
("Qualified Service") such that the Corporation has paid or is obligated to pay
the Purchaser a minimum of:
(i) $500,000 (cumulative) for delivery of Qualified Service from the date
of execution of the Marketing Agreement; and
(ii) $100,000 (cumulative) for delivery of Qualified Service during
calendar year 2001.
If the Corporation has not submitted orders for Qualified Service of sufficient
volume to permit the Purchaser to satisfy the Delivery Condition prior to
December 31, 2001, then the Delivery Condition shall be deemed satisfied.
(b) (i) Vesting. Provided that the Delivery Condition has been satisfied
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or is deemed satisfied, the Stock will vest on March 31, 2001, June 30, 2001,
September 30, 2001 and December 31, 2001 (each a "Vesting Date"). The number of
shares that shall vest on each Vesting Date will be in proportion to the
percentage of the service credit that is applied by the Purchaser from January
1, 2001 through the applicable Vesting Date. Notwithstanding the foregoing,
provided that the Delivery Condition has been satisfied or is deemed satisfied,
in no event shall the aggregate number of shares of Stock that have vested be
less than the following percentages as of the Vesting Date indicated: March 31,
2001 - 25%; June 30, 2001 - 50%; September 30, 2001 - 75%; December 31, 2001 -
100%.
Example. The following example is for illustration purposes: if on
March 31, 2001, the Purchaser has provided the Corporation $2,000,000 of
Services that are applied to the service credit, 40% of the Stock originally
issued or 2,904 shares shall vest. If as of June 30, 2001 (and assuming the
events of the prior sentence), the Purchaser has provided the Corporation an
additional $1,000,000 of Services that are applied to the services credit for
a total of $3,000,000 since January 1, 2001, 60% of the Stock originally
issued or an additional 1,452 shares shall vest. If, however, as of June 30,
2001 the Purchaser has provided the Corporation no additional Services that
are applied to the services credit and the Delivery Condition has been
satisfied or is demed satisfied, 50% of the Stock originally issued, or an
additional 726 shares, shall vest.
(ii) Notwithstanding the foregoing, in the event that a Purchase Option
Event occurs within the last 15 business days prior to a Vesting Date, the
vesting of the Stock that is otherwise required by subparagraph (b)(i) shall be
delayed until the expiration of the Purchase Option Period specified in
subparagraph (c) (the "Delayed Vesting Date").
(iii) Vesting Procedures. Within five business days after the later of the
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Vesting Date or the Delayed Vesting Date, the Purchaser shall deliver to the
Corporation or its transfer agent the certificate evidencing the Unvested Stock.
Within two business days after receipt of the stock certificate representing the
Unvested Stock, the Corporation or its transfer agent shall redeliver to the
Purchaser a stock certificate without a restrictive legend relating to the
Purchase Option for all stock which has vested hereunder to the Purchaser and an
additional stock certificate evidencing the remaining Unvested Stock, if
necessary.
(c) Within 15 business days following a Purchase Option Event (the
"Purchase Option Period"), the Corporation shall notify Purchaser by written
notice delivered or mailed as provided in subparagraph 9(c), as to whether it
wishes to purchase the Unvested Stock pursuant to exercise of the Purchase
Option. If the Corporation elects to purchase the Unvested Stock hereunder, the
closing of the repurchase transaction shall occur within two business days after
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receipt of such notice at a place and time specified by the Corporation, or, at
Corporation's option, such closing may be consummated by mail as provided in
Section 9(c) hereof. Immediately upon receipt of the notice contemplated by the
prior sentence, the Services Credit Agreement shall terminate and be of no
further effect and any unused portion of the credit contemplated by the Service
Credit Agreement shall be forfeited. At such closing, the Corporation shall
tender the Service Credit Agreement as payment for the Unvested Stock and the
Purchaser shall tender the certificates representing the Unvested Stock. The
Corporation shall not be obligated to pay cash for the exercise of the Purchase
Option. Thereafter, such repurchased Unvested Stock shall no longer be deemed
outstanding.
(d) In the event that a Purchase Option Event occurs and the Corporation
fails to exercise the Purchase Option during the Purchase Option Period, then
the Service Credit Agreement shall remain in full force and effect and (i) if
the Purchase Option Event resulted from a failure to satisfy the Delivery
Condition, Purchaser shall become vested in 100% of the Unvested Stock; or (ii)
if the Purchase Option Event resulted from a breach of the Service Credit
Agreement, Purchaser shall continue to become vested in the Stock pursuant to
the schedule set forth in Section 3(b)(i) above.
4. Stock Splits, etc.
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If, from time to time during the term of this Agreement:
(a) there is any stock dividend or liquidating dividend of cash and/or
property, stock split or other change in the character or amount of any of the
outstanding securities of the Corporation; or
(b) there is any consolidation, merger or sale of all, or substantially
all, of the assets of the Corporation;
then, in such event, any and all new, substituted or additional securities
or other property to which the Purchaser is entitled by reason of its ownership
of Unvested Stock shall be immediately subject to this Agreement and be included
in the definition of "Unvested Stock" for all purposes with the same force and
effect as the shares of Unvested Stock presently subject to the Purchase Option
and other terms of this Agreement. While the aggregate Option Price shall remain
the same after each such event, the Option Price per share of Unvested Stock
upon execution of the Purchase Option shall be appropriately adjusted.
Notwithstanding the foregoing, any and all new, substituted or additional
securities or other property to which the Purchaser is entitled by reason of its
ownership of Stock that has vested pursuant to the provisions of this Agreement
shall be treated as vested Stock for purposes of this Agreement.
5. Restriction on Transfer.
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The Purchaser shall not sell, transfer, pledge, hypothecate or otherwise
dispose of any shares of Unvested Stock. The Corporation shall not be required
(i) to transfer on its books any shares of Unvested Stock 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. The Corporation shall, however, be required (i)
to transfer on its books any
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shares of Stock that have vested in accordance with the provisions set forth in
this Agreement, and (ii) to treat as owner of such shares and to accord the
right to vote as such owner and to pay dividends to any transferee to whom such
shares shall have been transferred.
6. Legends.
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(a) All certificates representing any of the shares of Unvested Stock
subject to the provisions of this Agreement shall have endorsed thereon the
following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS UPON TRANSFER AND RIGHT OF REPURCHASE AS SET FORTH IN AN AGREEMENT
BETWEEN THE CORPORATION AND THE REGISTERED HOLDER, A COPY OF WHICH IS ON FILE AT
THE PRINCIPAL OFFICE OF THE CORPORATION."
(b) All certificates representing any of the shares of Stock subject to
the provisions of this Agreement shall have endorsed thereon the following
legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED."
7. Representations of the Corporation.
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Except as set forth in the Disclosure Letter delivered to Purchaser
simultaneously with the execution of this Agreement (the "Disclosure Letter"),
the Corporation represents and warrants to the Purchaser as follows:
7.1 Organization and Standing; Articles and Bylaws. The Corporation is a
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corporation duly organized and existing under, and by virtue of, the laws of the
State of Texas and is in good standing under such laws. The Corporation has
requisite corporate power and authority to own and operate its properties and
assets, and to carry on its business as presently conducted and as currently
proposed to be conducted. The Corporation has filed all necessary documents to
qualify to do business as a foreign corporation in, and the Corporation is in
good standing under the laws of, each jurisdiction in which the conduct of the
Corporation's business or the nature of the property owned requires such
qualification, except where the failure to so qualify would not have a material
adverse effect on the business, properties, prospects, profits or condition
(financial or otherwise) of the Corporation (a "Material Adverse Effect"). The
Corporation has furnished the Purchaser with copies of its Articles of
Incorporation and Bylaws, as amended. Those copies are true, correct and
complete and contain all amendments through the Closing Date.
7.2 Corporate Power. The Corporation will have at the Closing Date all
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requisite legal and corporate power and authority to execute and deliver this
Agreement and the Service Credit Agreement, to sell and issue the Stock
hereunder and to carry out and perform its obligations under the terms of this
Agreement and the Service Credit Agreement.
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7.3 Subsidiaries. The Corporation has no subsidiaries or affiliated
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companies and does not otherwise own or control, directly or indirectly, any
equity interest in any corporation, association or business entity.
7.4 Capitalization. The authorized capital stock of the Corporation
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consists of 100,000,000 shares of Common Stock, par value $.001 per share (the
"Common Stock"), of which 76,400 shares are issued and outstanding, and
20,000,000 shares of Preferred Stock, $.001 par value per share, none of which
is issued and outstanding. The outstanding shares have been duly authorized and
validly issued, and are fully paid and nonassessable. The Corporation has
reserved 24,600 shares of Common Stock for issuance to employees, consultants or
directors under stock plans or arrangements approved by the Board of Directors.
Options to purchase 22,959 shares of Common Stock are issued and outstanding
under the Corporation's employee stock option plan. All outstanding securities
of the Corporation were issued in compliance with applicable federal and state
securities laws. Except as set forth above, there are no options, warrants or
other rights to purchase any of the Corporation's authorized and unissued
capital stock. The holders of record of the presently issued and outstanding
shares of Common Stock and options to purchase Common Stock, and the exercise
prices and periods during which such options may be exercised, are as set forth
in the Disclosure Letter.
7.5 Authorization. All corporate action on the part of the Corporation,
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its directors and shareholders necessary for the authorization, execution,
delivery and performance of this Agreement by the Corporation, the
authorization, sale, issuance and delivery of the Stock and the performance of
all of the Corporation's obligations hereunder has been taken or will be taken
prior to the Closing Date. This Agreement and the Service Credit Agreement, when
executed and delivered by the Corporation, shall constitute a valid and binding
obligation of the Corporation, enforceable in accordance with their terms,
except as enforceability thereof may be limited by any applicable bankruptcy,
reorganization, insolvency or other laws affecting creditors' rights generally
or by general principles of equity. The Stock, when issued in compliance with
the provisions of this Agreement, will be validly issued, fully paid and
nonassessable; and the Stock will be free of any liens or encumbrances, other
than any liens or encumbrances created by or imposed upon the holders thereof as
a result of this Agreement or the Service Credit Agreement or through no action
of the Corporation; provided, however, that the Stock will be subject to
restrictions on transfer under the terms of this Agreement and state and/or
federal securities laws. The Stock is not subject to any preemptive rights or
rights of first refusal.
7.6 Financial Statements. The audited balance sheet of the Corporation as
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at March 31, 1999 fairly presents the financial position of the Corporation as
at the date thereof, and the related statements of income, retained earnings and
changes in financial position for the fiscal periods ended on such date fairly
present the results of operations and changes in financial position of the
Corporation for the period indicated. All such financial statements, including
the schedules and notes thereto, were prepared in accordance with generally
accepted accounting principles ("GAAP") applied consistently throughout the
periods involved.
7.7 Absence of Changes. Since March 31, 1999: (a) the Corporation has not
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entered into any transaction which was not in the ordinary course of business;
(b) there has been no materially adverse change in the business, properties,
prospects, profits or condition (financial or otherwise) of the Corporation
other than changes which, individually or in the aggregate, have
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not had a Material Adverse Effect ; (c) there has been no damage to, destruction
of or loss of physical property (whether or not covered by insurance) that has
had a Material Adverse Effect; (d) the Corporation has not declared or paid any
dividend or made any distribution on its stock, or redeemed, purchased or
otherwise acquired any of its stock; (e) the Corporation has not increased the
compensation of any of its officers, or the rate of pay of its employees as a
group, except as part of regular compensation increases in the ordinary course
of business; (f) there has been no resignation or termination of employment of
any key officer, consultant or employee of the Corporation, and the Corporation
does not know of the impending resignation or termination of employment of any
such officer, consultant or employee that if consummated would have a Material
Adverse Effect on its business; (g) there has been no labor dispute involving
the Corporation or its employees and none is pending or, to the Corporation's
knowledge, threatened; (h) there has not been any change, except in the ordinary
course of business, in the contingent obligations of the Corporation, by way of
guaranty, endorsement, indemnity, warranty or otherwise; (i) there have not been
any loans made by the Corporation to any of its employees, officers or directors
other than travel advances and office advances made in the ordinary course of
business; (j) there has not been any acceleration or prepayment of any
indebtedness for borrowed money or the refunding of any such indebtedness; and
(k) to the best knowledge of the Corporation, there has been no other event or
condition of any character pertaining to and having a Material Adverse Effect on
the assets or business of the Corporation.
7.8 Material Liabilities. The Corporation has no material liabilities or
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obligations, absolute or contingent (individually or in the aggregate), except
(i) the liabilities and obligations set forth in the Financial Statements, (ii)
liabilities and obligations which have been incurred subsequent to March 31,
1999 in the ordinary course of business which have not caused a Material
Adverse Effect, (iii) liabilities and obligations under leases for its principal
offices and for equipment, and (iv) liabilities and obligations under sales,
procurement and other contracts and arrangements entered into in the normal
course of business.
7.9 Title to Properties and Assets; Liens, etc. The Corporation has good
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and marketable title to its properties and assets, and has good title to all its
leasehold interests, in each case subject to no mortgage, pledge, lien, lease,
encumbrance or charge, other than (i) the lien of current taxes not yet due and
payable, and (ii) mortgages, pledges, liens, leases, encumbrances or charges
that would not have a Material Adverse Effect.
7.10 Compliance with Other Instruments, None Burdensome, etc. The
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Corporation is not in violation of any term of its Articles of Incorporation or
Bylaws, or, in any material respect, of any term or provision of any material
mortgage, indebtedness, indenture, contract, agreement, instrument, judgment or
decree, and to the best of its knowledge is not in violation of any order,
statute, rule or regulation applicable to the Corporation where such violation
would cause a Material Adverse Effect. The execution, delivery and performance
of and compliance with this Agreement and the Service Credit Agreement, have not
resulted and will not result in any material violation of, or conflict with, or
constitute a material default under, the Corporation's Articles of Incorporation
or Bylaws or any of its agreements or result in the creation of, any mortgage,
pledge, lien, encumbrance or charge upon any of the properties or assets of the
Corporation.
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7.11 Patents and Other Intangible Assets. The Corporation owns, or is
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licensed or otherwise possesses rights to use, free and clear of all liens and
claims, all patents, trademarks, service marks, trade names and copyrights that
are material to the business of the Corporation as it is currently conducted
(the "Intellectual Property Rights"). No claims with respect to the
Corporation's Intellectual Property Rights have been asserted or are, to the
Corporation's knowledge, threatened by any person (i) against the use by the
Corporation of any of the Corporation's Intellectual Property Rights or (ii)
challenging the ownership or right to use by the Corporation of the
Corporation's Intellectual Property Rights.
7.12 Litigation, etc. There is no legal action, suit, arbitration or other
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legal, administrative or other governmental investigation, inquiry or proceeding
(whether federal, state, local or foreign) pending or, to the Corporation's
knowledge, threatened against or affecting the Corporation or the Corporation's
properties, assets or business. After reasonable inquiry of its directors and
officers, the Corporation is not aware of any fact which might result in or form
the basis for any such action, suit, arbitration, investigation, inquiry or
other proceeding. The Corporation is not subject to any order, writ, judgment,
injunction, decree, determination or award of any court or of any governmental
agency or instrumentality (whether federal, state, local or foreign).
7.13 Employees.
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(a) The Corporation is in full compliance with all laws regarding
employment, wages, hours, equal opportunity, collective bargaining and payment
of social security and other taxes except to the extent that noncompliance would
not, in the aggregate, have a Material Adverse Effect. The Corporation is not
engaged in any unfair labor practice or discriminatory employment practice and
no complaint of any such practice against the Corporation is filed, or, to the
Corporation's knowledge threatened to be filed with or by the National Labor
Relations Board, the Equal Employment Opportunity Commission or any other
administrative agency, federal or state, that regulates labor or employment
practices, nor is any grievance filed or, to the Corporation's knowledge,
threatened to be filed, against the Corporation by any employee pursuant to any
collective bargaining or other employment agreement to which the Corporation is
a party or is bound. The Corporation is in compliance with all applicable
foreign, federal, state and local laws and regulations regarding occupational
safety and health standards except to the extent that noncompliance will not
have a Material Adverse Effect, and has received no complaints from any foreign,
federal, state or local agency or regulatory body alleging violations of any
such laws and regulations.
(b) The employment of all persons and officers employed by the
Corporation is terminable at will without any penalty or severance obligation of
any kind on the part of the employer. All sums due for employee compensation and
benefits and all vacation time owing to any employees of the Corporation have
been duly and adequately accrued on the accounting records of the Corporation.
To the Corporation's knowledge, all employees of the Corporation are either
United States citizens or resident aliens specifically authorized to engage in
employment in the United States in accordance with all applicable laws.
(c) The Corporation is not aware that any of its employees is obligated
under any contract (including licenses, covenants or commitments of any nature)
or other agreement, or
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subject to any judgment, decree or order of any court or administrative agency,
that would interfere with the use of such employee's best efforts to promote the
interests of the Corporation or that would conflict with the Corporation's
business as proposed to be conducted.
(d) The Corporation is not aware that any officer or key employee, or
that any group of key employees, intends to terminate their employment with the
Corporation, nor does the Corporation have a present intention to terminate the
employment of any of the foregoing.
7.14 Certain Transactions. The Corporation is not indebted, directly or
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indirectly, to any of its officers, directors or shareholders or to their
respective spouses or children, in any amount whatsoever; none of said officers,
directors or, to the Corporation's knowledge, shareholders, or any members of
their immediate families, are indebted to the Corporation or have any direct or
indirect ownership interest in any firm or corporation with which the
Corporation is affiliated or with which the Corporation has a business
relationship, or any firm or corporation which competes with the Corporation,
except that officers, directors and/or shareholders of the Corporation may own
less than 1% of the stock of publicly traded companies which may compete with
the Corporation. No officer, director or shareholder, or any member of their
immediate families, is, directly or indirectly, interested in any material
contract with the Corporation. The Corporation is not a guarantor or indemnitor
of any indebtedness of any other person, firm or corporation.
7.15 Material Contracts and Obligations. All agreements, contracts,
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indebtedness, liabilities and other obligations to which the Corporation is a
party or by which it is bound that are material to the conduct and operations of
its business and properties are valid, binding and in full force and effect in
all material respects, assuming due execution by the other parties to such
agreements and contracts, except as enforceability thereof may be limited by any
applicable bankruptcy, reorganization, insolvency or other laws affecting
creditors' rights generally or by general principles of equity.
7.16 Registration Rights. Except as set forth in this Agreement, the
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Corporation is not under any contractual obligation to register (as defined in
Section 9 below) any of its presently outstanding securities or any of its
securities which may hereafter be issued.
7.17 Governmental Consent, etc. No consent, approval or authorization of
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(or designation, declaration of filing with) any governmental authority on the
part of the Corporation is required in connection with the valid execution and
delivery of this Agreement and the Service Credit Agreement, or the offer, sale
or issuance of the Stock, or the consummation of any other transaction
contemplated hereby, except qualification (or taking such action as may be
necessary to secure an exemption from qualification, if available) of the offer
and sale of the Stock under applicable state securities laws, which filings and
qualifications, if required, will be accomplished in a timely manner.
7.18 Offering. Subject to the accuracy of the Purchaser's representations
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and warranties in Section 8 hereof, the offer, sale and issuance of the Stock to
be issued in conformity with the terms of this Agreement constitute transactions
exempt from the registration requirements of Section 5 of the Securities Act of
1933, as amended (the "Securities Act").
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7.19 Brokers or Finders; Other Offers. The Corporation has not incurred,
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and will not incur, directly or indirectly, as a result of any action taken by
the Corporation, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with this Agreement.
7.20 Tax Matters. Except to the extent that it would not have a Material
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Adverse Effect, the Corporation: (i) has timely filed all tax returns that are
required to have been filed by it with all appropriate federal, state, county
and local governmental agencies (and all such returns fairly reflect the
Corporation's operations for tax purposes); (ii) has timely paid all taxes owed
by it for which it is obligated to withhold from amounts owing to any employee
(including without limitation social security taxes), creditor or third party
(other than taxes the validity of which are being contested in good faith by
appropriate proceedings); and (iii) has not waived any statute of limitations
with respect to taxes or agreed to any extension of time with respect to a tax
assessment or deficiency. The assessment of any additional taxes for periods for
which returns have been filed is not expected to exceed the recorded liability
therefor, and, to the Corporation's knowledge, there are no material unresolved
questions or claims concerning the Corporation's tax liability. The
Corporation's tax returns have not been reviewed or audited by any federal,
state, local or county taxing authority. There is no pending dispute with any
taxing authority relating to any of said returns which, if determined adversely
to the Corporation, would result in the assertion by any taxing authority of any
valid deficiency in any material amount for taxes.
7.21 Insurance. The Corporation has fire, casualty and liability insurance
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policies, in such amounts and with such coverage as it believes are reasonable
for the business in which it is engaged.
7.22 Environmental and Safety Regulations. The Corporation knows of no
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violation or violations by the Corporation, its employees or agents of any
environmental or safety statute, law or regulation that in the aggregate would
have a Material Adverse Effect, and, to the best of its knowledge, no material
expenditures are or will be required in order to comply with any such existing
statute, law or regulation. No action, proceeding, permit revocation, writ,
injunction or claim is pending or, to the Corporation's knowledge, threatened
concerning the Corporation's facilities and the Corporation is not aware of any
fact or circumstance which could involve the Corporation in any environmental
litigation or impose any material environmental liability upon the Corporation.
As of the Closing Date, no Hazardous Material (as defined below) is present on
any Corporation facility and, to the Corporation's knowledge, no reasonable
likelihood exists that any Hazardous Material present on other property will
come to be present on a Corporation facility. There are no underground storage
tanks, asbestos or PCBs present on any Corporation facility. For the purposes of
this Section 7.22 the term "Hazardous Material" shall mean any material or
substance that is prohibited or regulated by any environmental law or that has
been designated by any governmental authority to be radioactive, toxic,
hazardous or otherwise a danger to health, reproduction or the environment.
7.23 Employee Benefit Plans. The Corporation does not have any "Employee
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Benefit Plan" as defined in the Employee Retirement Income Security Act of 1974,
as amended.
7.24 Illegal or Unauthorized Payments; Political Contributions. Neither
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the Corporation nor, to the best of its knowledge (after reasonable inquiry of
its officers and
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directors), any of its officers, directors, employees, agents or other
representatives of the Corporation or any other business entity or enterprise
with which the Corporation is or has been affiliated or associated, has, on
behalf of the Corporation or in connection with its business, directly or
indirectly, made or authorized any payment, contribution or gift of money,
property, or services, whether or not in contravention of applicable law, (a) as
a kickback or bribe to any Person or (b) to any political organization, or the
holder of or any aspirant to any elective or appointive public office, in each
case except for personal political contributions not involving the direct or
indirect use of funds of the Corporation.
7.25 Disclosure. This Agreement with the Exhibits hereto, when taken as a
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whole, do not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made.
The business plan delivered to Purchaser by the Corporation (the "Business
Plan") is the business plan used by the Corporation in its business, subject to
changes made after the date thereof in the ordinary course of business that are
not, in the aggregate, material. The assumption upon which the projections and
estimates contained in the Business Plan are based or were derived or based upon
reasonable expectations at the time such assumptions, projections and estimates
were made. The Corporation does not believe that any assumptions of fact or
statements of opinion contained in, or providing a basis for information
contained in, the Business Plan were unreasonable, untrue or false in any
material respect at the time made, provided, that the projections contained
therein are not a guaranty of performance.
8. Representations and Warrants of the Purchaser.
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The Purchaser hereby represents and warrants to the Corporation with
respect to the purchase of the Stock as follows:
8.1 Experience. It has substantial experience in evaluating and investing
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in private placement transactions of securities in companies similar to the
Corporation so that it is capable of evaluating the merits and risks of its
investment in the Corporation and has the capacity to protect its own interests.
8.2 Investment. It is acquiring the Stock for investment for its own
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account, not as a nominee or agent, and not with the view to, or for resale in
connection with, any distribution thereof. It understands that the Stock has not
been, and will not be, registered under the Securities Act by reason of a
specific exemption from the registration provisions of the Securities Act, the
availability of which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of such Purchaser's representations as
expressed herein.
8.3 Rule 144. It acknowledges that the Stock must be held indefinitely
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unless subsequently registered under the Securities Act or unless an exemption
from such registration is available. It is aware of the provisions of Rule 144
promulgated under the Securities Act which permit limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things, the existence of a public market for
the shares, the availability of certain current public information about the
Corporation, the resale occurring not less than one year after a party has
purchased and paid for the security to be sold, the sale
being effected through a "broker's transaction" or in transactions directly with
a "market maker" and the number of shares being sold during any three-month
period not exceeding specified limitations.
8.4 No Public Market. It understands that no public market now exists for
----------------
any of the securities issued by the Corporation and that the Corporation has
made no assurances that a public market will ever exist for the Corporation's
securities.
8.5 Access to Data. It has had an opportunity to discuss the
--------------
Corporation's business, management and financial affairs with the Corporation's
management and has had the opportunity to review the Corporation's facilities,
financial statements and other information that it has requested. It has had the
opportunity to request all information that it felt was necessary to an
investment decision, and all requests have been fulfilled. It has also had an
opportunity to ask questions of officers of the Corporation, which questions
were answered to its satisfaction. It understands that such discussions, as well
as any written information issued by the Corporation, were intended to describe
certain aspects of the Corporation's business and prospects but were not a
thorough or exhaustive description.
8.6 Authorization. This Agreement and the Service Credit Agreement when
--------------
executed and delivered by the Purchaser will constitute valid and legally
binding obligations of the Purchaser, enforceable in accordance with their
respective terms, except as enforceability thereof may be limited by any
applicable bankruptcy, reorganization, insolvency or other laws affecting
creditors' rights generally or by general principles of equity.
8.7 Brokers or Finders. The Corporation has not incurred and will not
------------------
incur, directly or indirectly, as a result of any action taken by the Purchaser,
any liability for brokerage or finders' fees or agents' commissions or any
similar charges in connection with this Agreement.
8.8 Organization and Standing; Articles and Bylaws. Purchaser is a
-----------------------------------------------
limited liability company duly organized and existing under, and by virtue of,
the laws of the State of Delaware and is in good standing under such laws.
8.9 Corporate Power. Purchaser will have at the Closing Date all
---------------
requisite legal and limited liability company power and authority to execute and
deliver this Agreement and the Service Credit Agreement and to carry out and
perform its obligations under the terms of this Agreement and the Service Credit
Agreement.
8.10 Authorization. All action on the part of Purchaser necessary for the
--------------
authorization, execution, delivery and performance of this Agreement by
Purchaser and the performance of all of Purchaser's obligations hereunder has
been taken or will be taken prior to the Closing Date. This Agreement and the
Service Credit Agreement, when executed and delivered by Purchaser, shall
constitute a valid and binding obligation of Purchaser, enforceable in
accordance with their terms, except as enforceability thereof may be limited by
any applicable bankruptcy, reorganization, insolvency or other laws affecting
creditors' rights generally or by general principles of equity.
Page 11 of 30
8.11 Compliance with Other Instruments, None Burdensome, etc. The
--------------------------------------------------------
execution, delivery and performance of and compliance with this Agreement and
the Service Credit Agreement, have not resulted and will not result in any
material violation of, or conflict with, or constitute a material default under,
Purchaser's organizational documents.
8.12 No consent, approval or authorization of (or designation, declaration
of filing with) any governmental authority on the part of Purchaser is required
in connection with the valid execution and delivery of this Agreement and the
Service Credit Agreement, or the purchase of the Stock, or the consummation of
any other transaction contemplated hereby.
Section 9. Registration Rights.
-------------------
9.1 Definitions.
-----------
As used in this Section 9:
(a) the terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act (and any post-effective amendments filed or
required to be filed) and the declaration or ordering of effectiveness of such
registration statement;
(b) the term "Registrable Securities" means (i) shares of Stock, (ii) any
additional shares of Common Stock of the Corporation acquired by the Purchaser
or any transferee of the Purchaser and (iii) any capital stock of the
Corporation issued as a dividend or other distribution with respect to, or in
exchange for or in replacement of, the shares of Common Stock of the Corporation
referred to in clause (i) or (ii);
(c) the term "Holder" shall mean any holder of Registrable Securities;
(d) the term "Initiating Holder" shall mean any Holder or Holders who in
the aggregate are Holders of more than 20% of the then outstanding Registrable
Securities;
(e) "Registration Expenses" shall mean all expenses incurred by the
Corporation in compliance with Sections 9.2 and 9.3 hereof , including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Corporation, fees and expenses of one counsel
for all the Holders (up to a maximum of $10,000), blue sky fees and expenses and
the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the
Corporation, which shall be paid in any event by the Corporation); and
(f) "Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all expenses of
one counsel to the Holders in in excess of $10,000 for any offering.
9.2 Requested Registration.
----------------------
Page 12 of 30
(a) Request for Registration. If the Corporation shall receive from an
------------------------
Initiating Holder a written request that the Corporation effect any registration
with respect to all or a part of the Registrable Securities, the Corporation
will:
(i) promptly give written notice of the proposed registration,
qualification or compliance to all other Holders of Registrable Securities; and
(ii) as soon as practicable, use its diligent best efforts to effect such
registration (including, without limitation, the execution of an undertaking to
file post-effective amendments, appropriate qualification under applicable blue
sky or other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act) as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any Holder or Holders joining in
such request as are specified in a written request received by the Corporation
within 10 business days after written notice from the Corporation is given under
Section 9.2(a)(i) above; provided that the Corporation shall not be obligated to
effect, or take any action to effect, any such registration pursuant to this
Section 9.2:
(A) In any particular jurisdiction in which the Corporation would be
required to execute a general consent to service of process in effecting
such registration, qualification or compliance, unless the Corporation is
already subject to service in such jurisdiction and except as may be
required by the Securities Act or applicable rules or regulations
thereunder;
(B) After the Corporation has effected one (1) such registration
pursuant to this Section 9.2 and such registrations have been declared or
ordered effective by the Securities and Exchange Commission. The timing
for the request to have the registration statement being declared or
ordered effective by the Securities and Exchange Commission shall be
determined by the Initiating Holders.
The registration statement filed pursuant to the request of the Initiating
Holders may, subject to the provisions of Section 9.2(b) below, include other
securities of the Corporation or which are held by holders of Common Stock of
the Corporation who, by virtue of agreements with the Corporation, are entitled
to include their securities in any such registration.
The registration rights set forth in this Section 9 shall be assignable, in
whole or in part, to any transferee of at least 5% of the Stock (who shall be
bound by all obligations of this Section 9).
(b) Underwriting. If the Initiating Holders intend to distribute the
------------
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Corporation as a part of their request made pursuant to
Section 9.2.
If the Corporation or holders of securities of the Corporation other than
Registrable Securities who are entitled, by contract with the Corporation or
otherwise, to have securities included in such a registration (the "Other
Stockholders") request such inclusion, the Corporation shall offer to include
the securities of such Other Stockholders in the underwriting and may condition
such offer on their acceptance of the further applicable provisions of this
Page 13 of 30
Section 9. The Holders whose shares are to be included in such registration and
the Corporation shall (together with all Other Stockholders proposing to
distribute their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected for such underwriting by the Holders and
reasonably acceptable to the Corporation. Notwithstanding any other provision
of this Section 9.2, if the representative advises the Holders in writing that
marketing factors require a limitation on the number of shares to be
underwritten, the securities of the Corporation to be issued by the Corporation
or held by Other Stockholders shall be excluded from such registration to the
extent so required by such limitation. If, after the exclusion of such shares,
further reductions are still required, the number of shares included in the
registration by each Holder shall be reduced on a pro rata basis (based on the
number of shares held by such Holder), by such minimum number of shares as is
necessary to comply with such request. No Registrable Securities or any other
securities excluded from the underwriting by reason of the underwriter's
marketing limitation shall be included in such registration. If any of the
Holders or any Other Stockholder who has requested inclusion in such
registration as provided above disapproves of the terms of the underwriting,
such person may elect to withdraw therefrom by written notice to the
Corporation, the underwriter and the Initiating Holders. The securities so
withdrawn shall also be withdrawn from registration.
(d) Notwithstanding the foregoing, if the Corporation shall furnish to the
Holders requesting the filing of a registration statement pursuant to this
Section 9.2, a certificate signed by the Chairman of the Board of Directors,
Chief Executive Officer or Chief Financial Officer of the Corporation stating
that in the good faith judgment of the Board of Directors of the Corporation, it
would be seriously detrimental to the Corporation and its stockholders for such
registration statement to be filed and it is therefore essential to defer the
filing of such registration statement, then the Corporation shall have the right
to defer such filing for a period of not more than 120 days after receipt of the
request of the Initiating Holders; provided, however, that the Corporation may
not utilize this right more than once in any twelve (12) month period.
9.3 Corporation Registration.
------------------------
(a) Inclusion in Registration. If the Corporation shall determine after
-------------------------
the Qualified Public Offering to register any of its equity securities either
for its own account or for the account of a security holder or holders
exercising their respective demand registration rights, other than a
registration relating solely to employee benefit plans, or a registration
relating solely to a transaction specified in Rule 145 promulgated under the
Securities Act, or a registration on any registration form which does not permit
secondary sales or does not include substantially the same information as would
be required to be included in a registration statement covering the sale of
Registrable Securities, the Corporation will:
(i) promptly give to each of the Holders a written notice thereof (which
shall include a list of the jurisdictions in which the Corporation intends to
attempt to qualify such securities under the applicable blue sky or other state
securities laws); and
(ii) include in such registration (and any related qualification under blue
sky laws or other compliance), and in any underwriting involved therein, all the
Registrable Securities
Page 14 of 30
specified in a written request or requests, made by the Holders within fifteen
(15) days after receipt of the written notice from the Corporation described in
clause (i) above, except as set forth in Section 9.3(b) below. Such written
request may specify all or a part of the Holders' Registrable Securities. The
Corporation shall not be required to include any Registrable Securities in any
registration unless the Holder furnishes to the Corporation in writing such
information with respect to the Holder and the distribution of such Registrable
Securities as the Corporation may from time to time reasonably request in
writing.
(b) Underwriting. If the registration of which the Corporation gives
------------
notice is for a registered public offering involving an underwriting, the
Corporation shall so advise each of the Holders as a part of the written notice
given pursuant to Section 9.3(a)(i). In such event, the right of each of the
Holders to registration pursuant to this Section 9.3 shall be conditioned upon
such Holders' participation in such underwriting and the inclusion of such
Holders' Registrable Securities in the underwriting to the extent provided
herein. The Holders whose shares are to be included in such registration shall
(together with the Corporation and the Other Stockholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected for underwriting by the Corporation. Notwithstanding any other
provision of this Section 9.3, if the representative determines that marketing
factors require a limitation on the number of shares to be underwritten the
representative may (subject to the allocation priority set forth below) limit
the number of Registrable Securities to be included in the registration and
underwriting. The Corporation shall so advise all Holders of securities
requesting registration, and the number of shares of securities that are
entitled to be included in the registration and underwriting shall be allocated
in the following manner: the securities of the Corporation held by officers,
directors and Other Stockholders of the Corporation (other than securities held
by holders who by contractual right initiated the demand for such registration
("Demanding Holders")) shall be excluded from such registration and underwriting
to the extent required by such limitation, and, if a limitation on the number of
shares is still required, the number of shares that may be included in the
registration and underwriting by each of the Holders and Demanding Holders shall
be reduced, on a pro rata basis (based on the number of shares proposed to be
sold by such Holder or Demanding Holder), by such minimum number of shares as is
necessary to comply with such limitation. If any of the Holders or any Other
Stockholder disapproves of the terms of any such underwriting, such person may
elect to withdraw therefrom by written notice to the Corporation and the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
(c) Qualified Public Offering. For purposes of this Agreement, Qualified
-------------------------
Public Offering shall mean an initial public offering which places a pre-money
valuation on the Common Stock of the Corporation equal to at least two (2) times
$688.67 (subject to adjustment for the events outlined in Section 4 above) and
in which the aggregate net proceeds to the Company are at least $30 million.
Page 15 of 30
9.4 Expenses of Registration
------------------------
All Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to this Section 9 shall be borne by the
Corporation, and all Selling Expenses shall be borne by the Holders of the
securities so registered pro rata on the basis of the number of their shares so
registered.
9.5 Registration Procedures
-----------------------
In the case of each registration effected by the Corporation pursuant to
this Section 9, the Corporation will keep the Holders, as applicable, advised in
writing as to the initiation of each registration and as to the completion
thereof. The Corporation will:
(a) keep such registration effective for a period of (i) with respect to a
registration statement filed on the Securities and Exchange Commission's ("SEC")
Form S-3 or any replacement form thereof, 120 days with respect to an offering
initiated by the Holders or for the period contemplated by the plan of
distribution in the case of a registration initiated by the Corporation or an
Other Stockholder or until the Holders, as applicable, have completed the
distribution described in the registration statement relating thereto, whichever
first occurs and (ii) with respect to a registration statement filed on the
SEC's Form S-1 or any replacement form thereof 60 days with respect to an
offering initiated by the Holders or for the period contemplated by the plan of
distribution in the case of a registration initiated by the Corporation or an
Other Stockholder or until the Holders, as applicable, have completed the
distribution described in the registration statement relating thereto, whichever
first occurs; provided, however, that such period specified in either clause
(i) or (ii) above shall be extended for a period of time equal to the period
during which the Holders, as applicable, refrain from selling any securities
included in such registration in accordance with the provisions hereof;
(b) furnish such number of prospectuses and other documents incident
thereto as each of the Holders, as applicable, from time to time may reasonably
request;
(c) notify the Holder, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing,
and, at the request of the Holder, the Corporation will prepare a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any fact necessary to make the
statements therein not misleading, or of the determination by the Corporation
that a post-effective amendment to a registration statement would be required
under the Securities Act, and, at the request of the Holder, the Corporation
will prepare and file a post-effective amendment to the registration statement
as required under the Securities Act; provided, however, that, if the
Corporation shall furnish to Holders a certificate signed by the Chairman of the
Board of Directors, Chief Executive Officer or Chief Financial Officer of the
Corporation stating that in the good faith judgment of the Board of Directors of
the Corporation, it would be seriously detrimental to the Corporation and its
stockholders for sales to be made pursuant to
Page 16 of 30
such registration statement to be filed and it is therefore essential to defer
the sale of securities pursuant to such registration statement, then the
Corporation shall have the right to prevent the sale of securities pursuant to
such registration statement for a period of not more than 120 days; provided,
further, however, that the Corporation may not utilize this right more than once
in any twelve (12) month period; and
(d) furnish, on the date that such Registrable Securities are delivered to
the underwriters for sale, if such securities are being sold through
underwriters or, if such securities are not being sold through underwriters, on
the date that the registration statement with respect to such securities becomes
effective, (1) an opinion, dated as of such date, of the counsel representing
the Corporation for the purposes of such registration, in form and substance as
is customarily given to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders participating
in such registration, addressed to the underwriters, if any, and to the Holders
participating in such registration and (2) a letter, dated as of such date, from
the independent certified public accountants of the Corporation, in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering and reasonably satisfactory to a
majority in interest of the Holders participating in such registration,
addressed to the underwriters, if any, and if permitted by applicable accounting
standards, to the Holders participating in such registration.
(e) Each Holder agrees that upon receipt of any notice from the Corporation
of the happening of any event of the kind described in Section 9.5(c), such
person will forthwith discontinue such person's disposition of Registrable
Securities pursuant to the registration statement relating to such Registrable
Securities until such person's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 9.5(c) and, if so directed by the
Corporation, will deliver to the Corporation all copies, other than permanent
file copies, then in such person's possession of the prospectus relating to such
Registrable Securities current at the time of receipt of such notice, or certify
as to the destruction of the same.
9.6 Indemnification.
---------------
(a) The Corporation will indemnify each of the Holders, as applicable, each
of its officers, directors and partners, and each person controlling each of the
Holders, with respect to each registration which has been effected pursuant to
this Section 9, and each underwriter, if any, and each person who controls any
underwriter, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Corporation of the Securities
Act or any rule or regulation thereunder applicable to the Corporation and
relating to action or inaction required of the Corporation in connection with
any such registration, qualification or compliance, and will reimburse each of
the Holders, each of its officers, directors and partners, and each person
controlling each of the Holders, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating and defending any such claim, loss,
damage, liability or action, provided that the
Page 17 of 30
Corporation will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission based upon written information furnished to the
Corporation by the Holders or underwriter and stated to be specifically for use
therein.
(b) Each of the Holders will, if Registrable Securities held by it are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Corporation, each of its directors
and officers and each underwriter, if any, of the Corporation's securities
covered by such a registration statement, each person who controls the
Corporation or such underwriter, each Other Stockholder and each of their
officers, directors, and partners, and each person controlling such Other
Stockholder against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document made by such Holder,
or any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements by such Holder therein
not misleading, and will reimburse the Corporation and such Other Stockholders,
directors, officers, partners, persons, underwriters or control persons for any
legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Corporation by such
Holder and stated to be specifically for use therein; provided, however, that
the obligations of each of the Holders hereunder shall be limited to an amount
equal to the net proceeds to such Holder of securities sold as contemplated
herein.
(c) Each party entitled to indemnification under this Section 9.7 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld) and the Indemnified Party may participate in such
defense at such party's expense (unless the Indemnified Party shall have
reasonably concluded that there may be a conflict of interest between the
Indemnifying Party and the Indemnified Party in such action, in which case the
fees and expenses of counsel shall be at the expense of the Indemnifying Party;
provided, that, under no circumstances shall the Indemnifying Party be required
to pay the fees and expenses of more than one counsel for the Indemnified
Parties), and provided further that the failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 9 unless the Indemnifying Party is materially
prejudiced thereby. If defense is assumed by the Indemnifying Party, the
Indemnifying Part shall not be subject to any liability for any settlement
requiring the payment of money or any other obligation by the Indemnifying Party
that is required to be performed made by the Indemnified Party without its
consent. No Indemnifying Party, in the defense of any such claim or litigation
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the
Page 18 of 30
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation. Each Indemnified Party shall furnish
such information regarding itself or the claim in question as an Indemnifying
Party may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 9.7 is held by a
court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage or expense referred to herein,
then the Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, liability, claim, damage or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection
with the statements or omissions which resulted in such loss, liability, claim,
damage or expense, as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue (or alleged
untrue) statement of a material fact or the omission (or alleged omission) to
state a material fact relates to information supplied by the Indemnifying Party
or by the Indemnified Party and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with any underwritten public offering contemplated by this
Agreement are in conflict with the foregoing provisions, the provisions in such
underwriting agreement shall be controlling.
(f) The foregoing indemnity agreement of the Corporation and the Holders is
subject to the condition that, insofar as they relate to any loss, claim,
liability or damage made in a preliminary prospectus but eliminated or remedied
in the amended prospectus on file with the Securities and Exchange Commission at
the time the registration statement in question becomes effective or the amended
prospectus filed with the Securities and Exchange Commission pursuant to Rule
424(b) promulgated under the Securities Act (the "Final Prospectus"), such
indemnity agreement shall not inure to the benefit of any underwriter if a copy
of the Final Prospectus was furnished to the underwriter and was not furnished
to the person asserting the loss, liability, claim or damage at or prior to the
time such action is required by the Securities Act.
9.7 Information by the Holders.
--------------------------
Each of the Holders holding securities included in any registration shall
furnish to the Corporation such information regarding such Holder and the
distribution proposed by such Holder as the Corporation may reasonably request
in writing and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Section 9.
Page 19 of 30
9.8 Rule 144 Reporting.
------------------
With a view to making available the benefits of certain rules and
regulations of the Securities and Exchange Commission which may permit the sale
of restricted securities to the public without registration, the Corporation
agrees to:
(a) make and keep public information available as those terms are
understood and defined in Rule 144, at all times from and after ninety (90) days
following the effective date of the first registration under the Securities Act
filed by the Corporation for an offering of its securities to the general
public;
(b) use its best efforts to file with the Securities and Exchange
Commission in a timely manner all reports and other documents required of the
Corporation under the Securities Act and the Securities Exchange Act of 1934
(the "Exchange Act") at any time after it has become subject to such reporting
requirements; and
(c) so long as the Holder owns any Registrable Securities, furnish to the
Holder upon request, a written statement by the Corporation as to its compliance
with the reporting requirements of Rule 144 (at any time from and after ninety
(90) days following the effective date of the first registration statement filed
by the Corporation for an offering of its securities to the general public), and
of the Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements), a copy of the most recent annual or
quarterly report of the Corporation, and such other reports and documents so
filed as the Holder may reasonably request in availing itself of any rule or
regulation of the Securities and Exchange Commission allowing the Holder to sell
any such securities without registration.
9.9 Termination.
-----------
The registration rights set forth in this Section 9 shall expire (i) as to
any Holder if, in the opinion of counsel to the Corporation, all of the
Registrable Securities then owned by such Holder could be sold in any 90-day
period pursuant to Rule 144 under the Securities Act (without giving effect to
the provisions of Rule 144(k)) and (ii) as to all Holders whose rights have not
expired pursuant to clause (i), on the seventh anniversary of the Closing Date.
Section 10. Purchaser's Conditions to Closing
---------------------------------
The Purchaser's obligation to purchase the Stock on the Closing Date is
subject to the fulfillment of the following conditions, unless waived in writing
by the Purchaser:
10.1 Representations and Warranties Correct. The representations and
---------------------------------------
warranties made by the Corporation in Section 7 hereof shall be true and correct
when made, and shall be true and correct on the Closing Date
10.2 Covenants. All covenants, agreements and conditions contained in
----------
this Agreement to be performed by the Corporation on or prior to the Closing
Date shall have been performed or complied with in all material respects.
Page 20 of 30
10.3 Compliance Certificate. The Corporation shall have delivered to the
-----------------------
Purchaser a certificate of the Corporation, executed by the President of the
Corporation, dated on the Closing Date, and certifying, among other things, the
fulfillment of the conditions specified in Sections 10.1 and 10.2 of this
Agreement.
10.4 Compliance with State Securities Laws. The Corporation shall have
--------------------------------------
obtained all permits and qualifications required by any state for the offer and
sale of the Stock, or shall have the availability of exemptions therefrom.
10.5 Legal Matters. All material matters of a legal nature which pertain
--------------
to this Agreement and the transactions contemplated hereby shall have been
reasonably approved by counsel to the Purchaser.
10.6 Service Credit Agreement. The Corporation shall have entered into
------------------------
the Service Credit Agreement.
10.8 Voting Agreement. The Corporation, Sunny X. Xxxxxxxxxx and Xxxxxxxx
----------------
Xxxxxxxx shall have entered into the Voting Agreement in the form attached
hereto as Exhibit B.
10.8 Opinion of Corporation's Counsel. The Purchaser shall have received
---------------------------------
from Xxxxxxxx & Xxxxxx, P.C., counsel to the Corporation, an opinion dated the
Closing Date, in form and substance satisfactory to the Purchaser, to the effect
that, except as set forth in the Disclosure Letter:
(a) The Corporation is a corporation duly organized, validly existing and
in good standing under the laws of the State of Texas, and the Corporation has
the requisite corporate power and authority to own its properties and to conduct
its business as currently conducted
(b) The Corporation has the requisite corporate power and authority to
execute, deliver and perform this Agreement. The Agreement has been duly and
validly authorized by the Corporation, duly executed and delivered by an
authorized officer of the Corporation and constitutes a legal, valid and binding
obligation of the Corporation, subject to bankruptcy and other laws of general
application affecting the rights and remedies of creditors and except insofar as
the enforceability of the indemnification provisions of Section 9 of the
Agreement may be limited by applicable laws and except that no opinion need be
given as to the availability of equitable remedies.
(d) The capitalization of the Corporation is as follows:
(i) Preferred Stock. 20,000,000 shares of Preferred Stock, none of which
are issued and outstanding.
(ii) Common Stock. 100,000,000 shares of Common Stock, of which 76,400
shares have been duly authorized, issued and delivered and are validly
outstanding, fully paid and nonassessable .
(iii) Except for 24,600 shares of Common Stock reserved for issuance to
prospective employees upon exercise of outstanding employee stock options, to
such counsel's knowledge,
Page 21 of 30
there are no preemptive rights or options, warrants, conversion privileges or
other rights (or agreements for any such rights) outstanding to purchase or
otherwise obtain any of the Corporation's securities.
(iv) The Stock has been duly authorized, validly issued and assuming
payment of the consideration contemplated by this Agreement by the Purchaser
upon such payment will be fully paid and nonassessable.
(e) The certificates representing shares of Stock are in due and proper
form and have been duly and validly executed by the officers of the Corporation
named thereon.
(f) The execution, delivery, performance and compliance with the terms of
this Agreement do not violate any provision of any applicable federal, state or
local law, rule or regulation or of any judgment, writ, decree or order
customarily applicable to transactions of the type contemplated by this
Agreement and applicable to the Corporation or any provision of the
Corporation's Articles of Incorporation or Bylaws.
(g) All consents, approvals, orders or authorizations of, and all
qualifications, registrations, designations, declarations or filings with, and
federal or state governmental authority on the part of the Corporation, in each
case as is customarily applicable to transactions of the type contemplated by
the Agreement and applicable to the Corporation required in connection with the
consummation of the transactions contemplated by this Agreement have been
obtained and to such counsel's knowledge are effective as of the Closing Date,
and such counsel is not aware of any proceedings, or threat thereof, which
question the validity thereof.
(h) Based in part upon the representations of the Purchaser in this
Agreement, the offer and sale of the Stock pursuant to the terms of this
Agreement is exempt from the registration requirements of Section 5 of the
Securities Act by virtue of Section 4(2) thereof and from the qualification
requirements of the securities laws of the state of Texas and Colorado, or all
requisite permits, qualifications and orders have been obtained.
(i) Such counsel is not aware of any action, proceeding or investigation
pending against the Corporation or any of its officers, directors or employees,
or that any of the foregoing has received any threat thereof, which questions
the validity of the Agreement, the Service Credit Agreement, the Marketing
Agreement or the Voting Agreement or the right of the Corporation or its
officers, directors and employees to enter into such agreements or which might
result, either individually or in the aggregate, in any Material Adverse Effect,
nor is such counsel aware of any litigation pending against the Corporation or
any of its officers, directors or employees, or that any of the foregoing has
received any threat thereof, by reason of the proposed activities of the
Corporation, the past employment relationships of its officers, directors or
employees, or negotiations by the Corporation or any of its officers or
directors with possible investors in the Corporation or its business.
(j) The Marketing Agreement, the Service Credit Agreement and the Voting
Agreement have each been duly authorized, executed and delivered by the parties
thereto and assuming due authorization, execution and delivery by the Purchaser,
such agreements constitute legal, valid and binding obligations of the
Corporation, subject to bankruptcy and other laws of
Page 22 of 30
general application affecting the rights and remedies of creditors and except
that no opinion need be given as to the availability of equitable remedies.
(k) To such counsel's knowledge, the Corporation is not in violation of any
provisions of its Articles of Incorporation or Bylaws, and neither of such
documents is in violation of any provision of the Corporation Law of the State
of Texas.
10.9 Receipt of Waiver of Preemptive Rights. The Xxxxxx Xxxxxx Family
---------------------------------------
Limited Partnership shall have permanently waived in writing all preemptive
rights held in connection with the transactions contemplated by this Agreement
and such waiver shall be in full force and effect on the Closing Date.
Section 11. Corporation's Conditions to Closing
-----------------------------------
The Corporation's obligation to issue the Stock on the Closing Date is
subject to the fulfillment of the following conditions, unless waived in writing
by the Corporation:
11.1 Representations and Warranties Correct. The representations and
---------------------------------------
warranties made by the Purchaser in Section 8 hereof shall be true and correct
when made, and shall be true and correct on the Closing Date.
11.2 Covenants. All covenants, agreements and conditions contained in
----------
this Agreement to be performed by the Purchaser on or prior to the Closing Date
shall have been performed or complied with in all material respects.
11.3 Compliance Certificate. The Purchaser shall have delivered to the
-----------------------
Corporation a certificate of the Corporation, executed by a Vice President of
the Purchaser, dated the Closing Date, and certifying, among other things, the
fulfillment of the conditions specified in Sections 11.1 and 11.2 of this
Agreement.
11.4 Legal Matters. All material matters of a legal nature which pertain
--------------
to this Agreement and the transactions contemplated hereby shall have been
reasonably approved by counsel to the Corporation.
11.5 Opinion of Purchaser's Counsel. The Corporation shall have received
--------------------------------
from the General Counsel or the Assistant General Counsel of the Purchaser, an
opinion dated the Closing Date, in form and substance satisfactory to the
Purchaser, to the effect that:
(a) The Purchaser is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware, and the
Corporation has the requisite power and authority to own its properties and to
conduct its business.
(b) The Purchaser has the requisite corporate power and authority to
execute, deliver and perform this Agreement. The Agreement has been duly and
validly authorized by the Purchaser, duly executed and delivered by an
authorized officer of the Purchaser and constitutes a legal, valid and binding
obligation of the Purchaser, subject to bankruptcy and other laws of general
application affecting the rights and remedies of creditors and except insofar as
the enforceability of the indemnification provisions of Section 9 of the
Agreement may be limited by
Page 23 of 30
applicable laws and except that no opinion need be given as to the availability
of equitable remedies.
(c) To such counsel's knowledge, the execution, delivery, performance and
compliance with the terms of this Agreement do not violate any provision of any
applicable federal, state or local law, rule or regulation or of any judgment,
writ, decree or order customarily applicable to transactions of the type
contemplated by this Agreement and applicable to Purchaser or any provision of
Purchaser's Operating Agreement.
(d) All consents, approvals, orders or authorizations of, and all
qualifications, registrations, designations, declarations or filings with, and
federal or state governmental authority on the part of Purchaser, in each case
as is customarily applicable to transactions of the type contemplated by the
Agreement and applicable to Purchaser required in connection with the
consummation of the transactions contemplated by this Agreement have been
obtained, and such counsel is not aware of any proceedings, or threat thereof,
which question the validity thereof.
(e) Such counsel is not aware of any action, proceeding or investigation
pending against Purchaser or any of its officers, directors or employees, or
that any of the foregoing has received any threat thereof, which questions the
validity of the Agreement, the Service Credit Agreement, the Marketing Agreement
or the Voting Agreement or the right of Purchaser or its officers, directors and
employees to enter into such agreements.
(f) The Marketing Agreement, the Service Credit Agreement and the Voting
Agreement have each been duly authorized, executed and delivered by the
Purchaser and assuming due authorization, execution and delivery by the other
parties thereto, such agreements constitute legal, valid and binding obligations
of the Purchaser, subject to bankruptcy and other laws of general application
affecting the rights and remedies of creditors and except that no opinion need
be given as to the availability of equitable remedies..
Section 12. Affirmative Covenants of the Corporation
----------------------------------------
The Corporation hereby covenants and agrees as follows:
12.1 Financial Information. Subject to Section 12.3, the Corporation will
----------------------
mail the following reports to the Purchaser for so long as the Purchaser is a
holder of any of the Stock:
(a) As soon as practicable after the end of each fiscal year, and in any
event within 90 days thereafter, consolidated balance sheets of the Corporation
and its subsidiaries, if any, as of the end of such fiscal year, and
consolidated statements of operations and consolidated statements of cash flows
of the Corporation and its subsidiaries, if any, for such year, prepared in
accordance with GAAP and setting forth in each case in comparative form similar
information for the previous fiscal year, all in reasonable detail and audited
by independent public accountants of national standing selected by the
Corporation.
(b) As soon as practicable after the end of the first, second and third
quarterly accounting periods in each fiscal year of the Corporation and in any
event within 45 days thereafter, a consolidated balance sheet of the Corporation
and its subsidiaries, if any, as of the
Page 24 of 30
end of each such quarterly period, and consolidated statements of operations and
consolidated statements of cash flows of the Corporation and its subsidiaries,
if any, for such period and for the current fiscal year to date, prepared in
accordance with GAAP (other than for accompanying notes), all in reasonable
detail and certified by an officer of the Corporation, subject to changes
resulting from year-end audit adjustments, by the principal financial or
accounting officer of the Corporation.
(c) Contemporaneously with their delivery to holders of the Corporation's
Common Stock, a copy of each report or other communication delivered to holders
of its Common Stock.
12.2 Additional Information. Subject to Section 12.3, as long as the
-----------------------
Purchaser holds not less than 50% of the Stock, as adjusted for
recapitalizations, stock splits, stock dividends and the like, the Corporation
will deliver or provide to the Purchaser:
(a) As soon as practicable after the end of each fiscal month, and in any
event within 30 days thereafter, unaudited consolidated balance sheets of the
Corporation as of the end of such month, unaudited consolidated statements of
operations and unaudited consolidated statement of cash flows (with respect to
the statement of cash flows, if regularly prepared by the Corporation) for each
month and for the current fiscal year to date. Such fiscal statements shall be
prepared in accordance with GAAP consistently applied (other than accompanying
notes), all in reasonable detail and signed, subject to year-end audit
adjustments, by the principal financial or accounting officer of the
Corporation.
(b) Within 30 days prior to the beginning of each fiscal year, an "Annual
Plan." The Annual Plan shall set forth full and complete forecasted balance
sheets, statements of operations, and statements of cash flows for such fiscal
year and for each month within that year. The Annual Plan shall also describe
the marketing, production, research and development, organization and staffing,
and financial strategies which support the Annual Plan's forecasted figures.
(c) Promptly after each meeting or the execution of an action by written
consent, copies of the minutes of proceedings or actions by written consent of
Corporation's Board of Directors and shareholders.
(d) With reasonable promptness, such other information and data with
respect to the Corporation and its subsidiaries, if any, as the Purchaser may
from time to time reasonably request.
(e) For so long as the Purchaser is eligible to receive reports under
this Section 12.2, it shall also have the right, at its expense, to visit and
inspect any of the properties of the Corporation or any of its subsidiaries, to
examine its books of account and records, and to discuss their affairs, finances
and accounts with their officers, all at such reasonable times as often as may
be reasonably requested.
12.3 Termination of Covenants. The covenants set forth in Sections 12.1
-------------------------
and 12.2 shall terminate and be of no further force or effect at such time as
the Corporation is required to file reports pursuant to Sections 13 or 15(d) of
the Exchange Act. The covenants set forth in Sections 12.4 through 12.7 shall
terminate upon the closing of a Qualified Public Offering.
Page 25 of 30
12.4 Other Insurance. From and after the Closing, the Corporation shall,
----------------
subject to the approval of the Board of Directors, use its best efforts to
obtain and maintain such insurance with coverages and in amounts as shall be
determined by the Board of Directors, including officers' and directors'
liability insurance, to the extent that such insurance is available on
commercially reasonable terms.
12.5 Taxes and Other Liabilities. The Corporation will pay and discharge,
----------------------------
before the same become delinquent and before penalties accrue thereon, all
taxes, assessments and governmental charges upon or against it or any of its
properties, and all its other material liabilities at any time existing, except
to the extent and so long as (a) the same are being contested in good faith and
by appropriate proceedings in such manner as not to cause any Material Adverse
Effect or the loss of any right of redemption from any sale thereunder and (b)
the Corporation shall have set aside on its books reserves (segregated to the
extent required by generally accepted accounting principles) deemed by it
adequate with respect thereto.
12.6 Notice of Litigation and Disputes. The Corporation will promptly
----------------------------------
notify the Purchaser of any suits or litigation instituted against it, or
disputes that have a high probability of resulting in a suit which, if
determined adversely to the Corporation, would have a Material Adverse Effect on
the Corporation.
12.7 Election of Directors. The Corporation will use its best efforts to
----------------------
cause a representative of the Purchaser, who shall be an employee of the
Purchaser, to be elected to the Corporation's Board of Directors, and in the
event of any vacancy on the Board of Directors, the Corporation and the
Purchaser will use their best efforts to fill the vacancy such that the Board
will include such representative.
13. Miscellaneous.
--------------
13.1 Governing Law, Venue. This Agreement shall be governed in all
---------------------
respects by the internal laws of the State of Texas. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the State
of Colorado, County of Denver, or, if it has or can acquire jurisdiction, in the
United States District Court for the District of Colorado, and each of the
parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.
13.2 Survival. The representations, warranties, covenants and agreements
---------
made herein shall survive any investigation made by the Purchaser and the
closing of the transactions contemplated hereby.
13.3 Successors and Assigns. Except as otherwise provided herein, the
-----------------------
provisions hereof shall inure to the benefit of, and be binding upon, the
successors and assigns of the parties hereto; provided, however, that the rights
of the Purchaser to purchase the Stock shall not be assignable without the
consent of the Corporation.
13.4 Entire Agreement: Amendment. This Agreement and the other documents
----------------------------
delivered pursuant hereto on the Closing Date and the Nondisclosure Agreement
executed by the
Page 26 of 30
Purchaser and the Corporation constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof,
and no party shall be liable or bound to any other party in any manner by any
warranties, representations or covenants except as specifically set forth herein
or therein. Except as expressly provided herein, neither this Agreement nor any
term hereof may be amended, waived, discharged or terminated other than by a
written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought.
13.5 Notices, etc. All notices and other communications required or
-------------
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, sent by facsimile, or otherwise delivered by
hand or by a nationally-recognized overnight courier, addressed (a) if to a
Purchaser, as follows:
Xxxxx 0 Communications, LLC
0000 Xxxxxxxx Xxxx.
Xxxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile: 000-000-0000
or at such other address or facsimile number as the Purchaser shall have
furnished to the Corporation in writing, or (b) if to any other holder of any
Stock at such address or facsimile number as such holder shall have furnished
the Corporation in writing, or, until any such holder so furnishes an address or
facsimile number to the Corporation, then to and at the address or facsimile
number of the last holder of such Stock who has so furnished an address or
facsimile number to the Corporation, or (c) if to the Corporation, as follows:
Data Return Corporation
000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxx 00000
Attention: Chief Executive Officer
Facsimile: 000-000-0000
or at such other address or facsimile number as the Corporation shall have
furnished to the Purchaser.
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given (x) in the case of
personal delivery or delivery by facsimile, on the date of such delivery, (y) in
the case of a nationally-recognized overnight courier, on the next business day
after the date when sent and (z) in the case of mailing, on the third business
day following that on which the piece of mail containing such communication has
been deposited in a regularly maintained receptacle for the deposit of the
United States mail, addressed and mailed as aforesaid.
13.6 Delays or Omissions. Except as expressly provided herein, no delay or
--------------------
omission to exercise any right, power or remedy accruing to any holder of any
Stock, upon any breach or default of the Corporation under this Agreement, shall
impair any such right, power or remedy of
Page 27 of 30
such holder nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any holder of any breach or default under this Agreement, or any
waiver on the part of any holder of any provisions or conditions of this
agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any holder, shall be cumulative and
not alternative.
13.7 Expenses. The Corporation and the Purchaser shall bear its own
---------
expenses incurred on its behalf with respect to this Agreement and the
transactions contemplated hereby.
13.8 Counterparts. This Agreement may be executed in any number of
-------------
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
13.9 Severability. In the event that any provision of this Agreement
-------------
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.
13.10 Titles and Subtitles. The titles and subtitles used in this
---------------------
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement.
13.11 Publicity. Neither party shall issue any public announcement or
---------
press release relating to the execution of this Agreement without the prior
approval of the other party, which approval shall not be unreasonably withheld.
In this event either party shall be required to disclose all or any part of this
Agreement in, or attach all or any part of this Agreement to, any regulatory
filing or statement, each party agrees to discuss and work cooperatively, in
good faith, with the other party, to protect, to the extent possible, those
items or matters which the other party deems confidential and which may, in
accordance with applicable laws, be deleted therefrom.
13.12 Definition of Knowledge.
-----------------------
(a) For purposes of this Agreement and all documents delivered on the
Closing Date, knowledge or aware shall mean with respect to an individual, that
individual will be deemed to have knowledge or to be aware of a particular fact
or other matter if: (a) such individual is actually aware of such fact or other
matter; or (b) a prudent individual could be expected to discover or otherwise
become aware of such fact or other matter in the course of conducting a
reasonably comprehensive investigation concerning the existence of such fact or
other matter. A corporation, limited liability company or firm shall be deemed
to have knowledge or to be aware of a particular fact or other matter if any
individual who is serving, or who has served, as a director, manager, officer or
partner of such corporation, limited liability company or firm has, or at any
time had, knowledge or awareness of such fact or other matter.(b) When any
provision of this Agreement requires the knowledge or awareness of the
Corporation, knowledge or awareness shall mean the knowledge or awareness (as
defined in clause (a) above) of the
Page 28 of 30
Corporation's Chief Executive Officer, President and Chief Operating Officer,
Vice President - Chief Financial Officer and Senior Vice President, Marketing,
Sales and Business Development.
[Signature page follows.]
Page 29 of 30
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
DATA RETURN CORPORATION
By: /s/ Sunny X. Xxxxxxxxxx
---------------------------------------
Name: Sunny X. Xxxxxxxxxx
Title: CEO
XXXXX 0 COMMUNICATIONS, LLC
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chief Financial Officer
Page 30 of 30
