AMENDED AND RESTATED STOCKHOLDER AGREEMENT
THIS AMENDED AND RESTATED STOCKHOLDER AGREEMENT (the "Agreement") is made
as of March 31, 1998, by and among IT PARTNERS, INC., a Delaware corporation
(the "Company"), XXXXXX X. XXXXX ("Xxxxx"), XXXXX XXXXX ("Blech"), XXXXXX X.
XXXXX and XXXXXXXX X. XXXXX (collectively, "Xxxxx"), XXXX XXXXXXX ("Xxxxxxx"),
XXXXXXX NICE ("Nice," together with Klein, Blech, Xxxxx, Xxxxxxx and Nice are
referred to, as the context requires, individually as an "Initial Stockholder"
or collectively as the "Initial Stockholders"), any additional stockholders of
the Company listed on the signature pages hereof (the "Subsequent
Stockholders"), CREDITANSTALT CORPORATE FINANCE, INC., a Delaware corporation
(together with any successor, assignee or transferee, the "Creditanstalt"),
FF-ITP, L.P., a Delaware limited partnership ("FF-ITP"), INDOSUEZ IT PARTNERS
(together with any successor, assignee or transferee, "Indosuez"), WACHOVIA
CAPITAL ASSOCIATES, Inc., a Georgia corporation, (together with any successor,
assignee or transferee, "Wachovia", which, together with the Creditanstalt,
FF-ITP and Indosuez are, as the context requires, referred to herein
individually as a "Purchaser" and collectively as the "Purchasers"). The
Initial Stockholders, Subsequent Stockholders, and Purchasers shall be
collectively referred to herein, as the context requires, as the
"Stockholders."
W I T N E S E T H:
WHEREAS, the Company, Klein, Blech, Kandl, Clement, Nice, Creditanstalt,
and FF-ITP are parties to that certain Stockholder Agreement, dated as of May
30, 1997, as amended by the First Amendment to Stockholder Agreement dated as
of July 11, 1997, as further amended by the Second Amendment to Stockholder
Agreement dated as of October 17, 1997, as further amended by the Third
Amendment to Stockholder Agreement dated as of October 27, 1997, as further
amended by the Fourth Amendment to Stockholder Agreement dated as of October
31, 1997, as further amended by the Fifth Amendment to Stockholder Agreement
dated as of December 16, 1997 (as amended, the "Original Stockholder
Agreement"); and
WHEREAS, the Company, Creditanstalt, FF-ITP, Indosuez, and Wachovia wish
to enter into a Second Amended and Restated Preferred Stock and Warrant
Purchase Agreement dated as of the date hereof (the "Purchase Agreement"),
which provides for the issuance by the Company of its Series B Convertible
Preferred Stock to Indosuez and Wachovia (the "Additional Equity
Investments"); and
WHEREAS, the Purchasers are willing to enter into and consummate the
transactions contemplated by the Purchase Agreement only if, among other
things, the Company and each Stockholder enter into, and perform under, this
Agreement; and
WHEREAS, the parties hereto wish to amend and restate the Original
Stockholder Agreement in order to provide for the Additional Equity
Investments and to make certain other changes set forth herein; and
WHEREAS, each Stockholder owns beneficially and of record the number of
shares or share equivalents of the issued and outstanding capital stock of the
Company as set forth on Exhibit A attached hereto; and
WHEREAS, the parties hereto acknowledge that the Company intends to
continue to engage in a program of acquiring assets (including the stock or
other ownership interests of Persons which are identified by the Company as
acquisition targets) in consideration for the Company's Capital Stock and
certain other consideration and acknowledge that each Person acquiring Capital
Stock of the Company, and any successor, assignee or transferee of a
Purchaser, will be required to execute a joinder agreement, in form and
substance substantially similar to Exhibit B attached hereto, pursuant to
which such person shall consent to be bound by all the terms and provisions
hereof. Exhibit A shall be deemed automatically amended by the Stockholders
to reflect the addition of a Subsequent Stockholder or a Purchaser pursuant to
this Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
contained in this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser, the
Stockholders, and the Company, intending to be legally bound, agree as
follows.
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms have the meanings
indicated.
"Acquisition Stock". This term shall mean Common Stock of the Company
issued subsequent to the Original Closing Date in consideration for the
acquisition of all or substantially all the assets (including the stock or
other ownership interests) of Persons that are identified by the Company as
acquisition targets, provided that the Fair Market Value of such Common Stock
as well as other consideration paid by the Company for such assets is not
unreasonably disproportionate to the fair market value of the assets being
acquired, as determined by the Company's Board of Directors or its executive
committee.
"Adjustment Event". Any event in which (a) the Company issues any shares
of Capital Stock in an Adjustment Public Offering for consideration per share
that exceeds the amount received per share by any Purchaser in connection with
the exercise of the Call Option with respect to such Purchaser; (b) any Person
acquires Capital Stock in connection with the acquisition of the beneficial
ownership of more than fifty percent (50%) of the voting securities of the
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Company, or acquires Capital Stock and the right to elect a majority of the
members of the Company's board of directors for a consideration per share or
unit that exceeds the amount received per share by any such Purchaser in
connection with the exercise of such Call Option; (c) the Company sells all or
a majority of its assets or revenue or income generating capacity for such
amount of consideration that, if the Company were liquidated on the date that
such sale is consummated, the holders of any class of Capital Stock would
receive per share distributions exceeding the amount received per share by any
such Purchaser in connection with the exercise of such Call Option; or (d) the
Company participates in any merger, consolidation, reorganization, share
exchange, recapitalization, or similar transaction or series of related
transactions involving a change of control of the Company or disposition of
all or a majority of its assets or revenue or income generating capacity,
directly or indirectly, in which the holders of any class of Capital Stock
receive per share consideration for, or distributions with respect to, their
shares in an amount that exceeds the amount received per share by such
Purchaser in connection with the exercise of such Call Option.
"Adjustment Public Offering". Each public offering of shares of any
class of Capital Stock pursuant to a registration statement filed with the
Commission.
"Affiliate". With respect to any Person, (a) a Person that, directly or
indirectly or through one or more intermediaries, controls, is controlled by,
or is under common control with, such Person; (b) any Person of which such
Person or such Person's spouse is an officer, director, security holder,
partner, or, in the case of a trust, the beneficiary or trustee, and (c) any
Person that is an officer, director, security holder, partner, or, in the case
of a trust, the beneficiary or trustee of such Person. The term "control" as
used with respect to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by contract,
or otherwise. In addition, as to any Purchaser, "Affiliate" shall include any
partnership a majority of the partners of which are officers, directors,
employees or Affiliates of such Purchaser, and as to the Company, "Affiliate"
shall not include any Purchaser or any Affiliate of any Purchaser.
"Appraised Value". The value determined in accordance with the following
procedures. For a period of thirty (30) days after the date of a Valuation
Event (the "Negotiation Period"), the Purchasers and the Company agree to
negotiate in good faith to reach agreement upon the Appraised Value of the
securities or property at issue, as of the date of the Valuation Event, which
will be the fair market value of such securities or property, without premium
for control or discount for minority interests, illiquidity, or restrictions
on transfer. In the event that the parties are unable to agree upon the
Appraised Value of such securities or other property by the end of the
Negotiation Period, then the Appraised Value of such securities or property
will be determined for purposes of this Agreement by an Appraiser. An
"Appraiser" shall be a recognized appraisal or investment firm with experience
in making determinations of value of the type required to be made under this
definition. If the Purchasers and the Company cannot agree on an Appraiser
within thirty (30) days after the end of the Negotiation Period, the Company,
on the one hand, and the Purchasers, on the other hand, shall each select an
Appraiser within forty (40) days after the end of the Negotiation Period and
those two Appraisers shall select within fifty (50) days after the end of the
Negotiation Period an independent Appraiser to determine the fair market value
of such securities or property, without premium for control or discount for
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minority interests. Such independent Appraiser shall be directed to determine
fair market value of such securities or property as soon as practicable, but
in no event later than thirty (30) days from the date of its selection. The
determination by an Appraiser of the fair market value will be conclusive and
binding on all parties to this Agreement. Appraised Value of each share of
Common Stock at a time when (i) the Company is not a reporting company under
the Securities Exchange Act of 1934, as amended, and (ii) the Common Stock is
not traded in the organized securities markets, will, in all cases, be
calculated by determining the Appraised Value of the entire Company taken as a
whole (plus the exercise price of all options, warrants and other rights to
acquire Capital Stock of the Company having an exercise price per share less
than the Fair Market Value of such Capital Stock) and dividing that value by
the sum of (x) the number of shares of Common Stock then outstanding plus (y)
the number of shares of Common Stock Equivalents, without premium for control
or discount for minority interests, illiquidity, or restrictions on transfer.
The costs of the Appraiser or Appraisers will be borne by the Company. In no
event will the Appraised Value of the Common Stock or Other Securities be less
than the per share consideration received or receivable with respect to the
Common Stock or securities or property of the same class as the Other
Securities, as the case may be, in connection with a pending transaction
involving a sale, merger, recapitalization, reorganization, consolidation,
share exchange, dissolution of the Company, sale or transfer of all or a
majority of its assets or revenue or income generating capacity, or similar
transaction. The prevailing market prices for any security or property will
not be dispositive of the Appraised Value thereof.
"Average Market Value". The average of the closing prices for the
security in question for the thirty (30) trading days immediately preceding
the date of determination.
"Book Value". With respect to shares of Common Stock an amount equal to
the quotient determined by dividing (a) the sum of (x) the total consolidated
assets of the Company shown on the most recent regularly prepared consolidated
balance sheet of the Company prior to the date of the Valuation Event in
question minus (y) the total consolidated liabilities of the Company as shown
on the most recent regularly prepared consolidated balance sheet of the
Company prior to the date of the Valuation Event by (b) the aggregate number
of shares of Common Stock and Common Stock Equivalents as of the date of the
Valuation Event.
"Business Combination Options". This term shall mean options to purchase
Common Stock of the Company that (a) are issued to employees of the Company or
of Subsidiaries of the Company hired after the Original Closing Date; (b) in
the aggregate do not exceed 12% of the Acquisition Stock issued by the
Company; and (c) have an exercise price equal to the Fair Market Value on the
date such options are granted, giving effect to any such acquisition
consummated on such date.
"Buyer". This term is defined in Section 6.02(a)(ii).
"Call Option". This term is defined in Section 5.01.
"Call Option Closing". This term is defined in Section 5.04.
"Call Option Period". This term is defined in Section 5.01.
"Capital Stock". As to any Person, its common stock and any other
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capital stock of such Person authorized from time to time, and any other
shares, options, interests, participations, or other equivalents (however
designated) of or in such Person, whether voting or nonvoting, including,
without limitation, common stock, options, warrants, preferred stock
(including the Series A Preferred Stock and the Series B Preferred Stock),
phantom stock, stock appreciation rights, convertible notes or debentures,
stock purchase rights, and all agreements, instruments, documents, and
securities convertible, exercisable, or exchangeable, in whole or in part,
into any one or more of the foregoing.
"Closing Date". March 31, 1998.
"Common Stock". The common stock, $ .01 par value, of the Company.
"Common Stock Equivalent". Any option, warrant, right, or similar
security exercisable into, exchangeable for, or convertible to Common Stock.
"Conversion Shares". Shares of Common Stock issued or issuable upon
conversion of the Series B Preferred Stock.
"Co-Sell Shares". This term is defined in Section 6.02(d).
"Co-Sellers". This term is defined in Section 6.02(d).
"Election Notice". This term is defined in Section 6.02(b).
"Event of Default". This term shall mean any default by the Company or a
Stockholder (other than a Purchaser) under this Agreement and the failure to
cure such default within thirty (30) days after notice of the same.
"Excess Consideration". The amount that a Purchaser would have realized
following the Adjustment Event had the Call Option not been exercised by the
Company until such time, minus the amount that such Purchaser realized due to
the exercise of the Call Option; provided, however, that the amount of Excess
Consideration will in all events be deemed to be at least zero.
"Exchange Common Stock". This term is defined in Section 7.12.
"Exchange Company". This term is defined in Section 7.12.
"Exchange Notice". This term is defined in Section 7.12.
"Fair Market Value".
(a) As to securities regularly traded in the organized securities
markets, the Average Market Value; and
(b) As to all securities not regularly traded in the securities
markets and other property, the fair market value of such securities or
property as determined in good faith by disinterested members of the Board of
Directors of the Company at the time it authorizes the transaction (a
"Valuation Event") requiring a determination of Fair Market Value under this
Agreement; provided, however, that, at the election of the Purchasers, or if
there are no disinterested members of the Board of Directors of the Company,
the Fair Market Value of such securities and other property will be the
Appraised Value.
"GAAP". Generally accepted accounting principles, consistently applied.
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"Issuable Warrant Shares". Shares of Common Stock or Other Securities
issuable on exercise of the Warrants.
"Issued Warrant Shares". Shares of Common Stock or Other Securities
issued on exercise of the Warrants.
"Loan Agreement". This term shall mean that Amended and Restated Loan
and Security Agreement, dated as of the Closing Date, between the Company, the
Lenders named therein, Creditanstalt as the LC Issuer, Indosuez as the Co-
Agent and Creditanstalt as the Administrative Agent and Collateral Agent (as
such agreement may be amended, restated, supplemented or modified from time to
time).
"Loan Warrant Agreement". This term shall mean the Amended and Restated
Warrant Agreement, dated as of December 16, 1997, between the Company and
Creditanstalt (as such agreement may be amended, restated, supplemented or
modified from time to time).
"Loan Warrants." This term shall mean the stock purchase warrants issued
pursuant to the Loan Warrant Agreement (in the percentages and to the extent,
and subject to adjustment, as provided in the Loan Warrant Agreement) and all
warrants issued upon the transfer or the division of, or in substitution for,
such Loan Warrants.
"Loan Warrant Shares". Shares of Common Stock or Other Securities issued
on exercise of the Loan Warrants.
"Major Stockholder". This term is defined in Section 6.01.
"New Securities". Any Capital Stock of the Company, other than Warrant
Shares, Loan Warrant Shares and the Permitted Stock.
"Notice of Sale". This term is defined in Section 6.02(a).
"Operating Cash Flow". This term shall mean, for any Person, for any
period for which the same is computed, the sum of (a) such Person's net income
(loss) for such period, plus (b) such Person's interest expense for such
period, plus (c) such Person's depreciation and amortization for financial
reporting purposes for such period, plus (d) income tax expense for such
period, computed in each case on a consolidated basis for such Person and its
consolidated Subsidiaries in accordance with GAAP.
"Original Closing Date". May 30, 1997.
"Other Securities". Any stock, other securities, property, or other
property or rights (other than Common Stock) that the Holders become entitled
to receive upon exercise of the Warrants, including, but not limited to, the
Series B Preferred Stock.
"Permitted Stock". (a) Issuable or Issued Warrant Shares, Conversion
Shares, Loan Warrant Shares and shares of the Company's Capital Stock issuable
upon conversion thereof; (b) Capital Stock of the Company issued as a dividend
on shares of the Company's Capital Stock or as a result of a stock split with
respect thereto; (c) options and warrants granted (or for which the Board of
Directors has approved the grants to specified individuals) as of the date
hereof to purchase the Company's Capital Stock, and shares of the Company's
Capital Stock issuable upon exercise thereof; (d) the Business Combination
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Options, and shares of the Company's Capital Stock issuable upon exercise
thereof; (e) options to be granted after the Original Closing Date to
employees of the Company and its Subsidiaries to purchase up to 335,286 shares
of Common Stock of the Company, at the exercise price not less than the Fair
Market Value at the time of issuance of such options, and shares of the
Company's Capital Stock issuable upon exercise thereof; (f) shares of Series A
Preferred Stock issuable pursuant to the Purchase Agreement; (g) shares of
Series B Preferred Stock issuable pursuant to the Purchase Agreement; (h)
103,093 shares of Common Stock issued to Xxxxxxxxxxx X. and Xxxxxx Xxxxxxx
(jointly) at an aggregate purchase price of $200,000; (i) solely for the
purpose of Article II of this Agreement, Acquisition Stock; (j) 29,516 shares
of Common Stock issuable to FF-ITP pursuant to the Purchase Agreement; (k)
29,516 shares of Common Stock issuable to Xxxxxxxxxxx X. and Xxxxxx Xxxxxxx
(jointly) at an aggregate purchase price of $100,000; (l) 14,758 shares of
Common Stock issuable to Xxxxxx and Xxxxxxxx Xxxxx (jointly) at an aggregate
purchase price of $50,000; and (m) 1,001 shares of Common Stock issuable to
Xxxxxx Xxxxxxx at an aggregate purchase price of $3,390. The limits in
clauses (e), (h), (j), (k), (l) and (m) shall be proportionately adjusted for
dividends and other distributions payable in and for subdivisions and
combinations of shares of Common Stock.
"Person". This term will be interpreted broadly to include any
individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, company, institution,
entity, party, or government (whether national, federal, state, county, city,
municipal, or otherwise, including, without limitation, any instrumentality,
division, agency, body, or department of any of the foregoing).
"Preferred Shares". The Series A Preferred Stock and Series B Preferred
Stock.
"Purchase Agreement". This term shall mean the Second Amended and
Restated Preferred Stock and Warrant Purchase Agreement, dated as of the
Closing Date, between the Company, the Purchasers, Xxxxx and Blech (as such
agreement may be amended, restated, supplemented or modified from time to
time).
"Purchaser". This term is defined in the preamble.
"Put Option". This term is defined in Section 4.01.
"Put Option Closing". This term is defined in Section 4.05.
"Put Option Period". This term is defined in Section 4.01.
"Put Price". This term is defined in Section 4.02.
"Put Shares". The Warrant Shares plus any other shares of Capital Stock
owned from time to time by a Purchaser which were issued in respect of the
Warrant Shares.
"Registrable Securities". (a) The Issuable Warrant Shares, (b) the
Issued Warrant Shares, (c) the Preferred Shares and (d) the Conversion Shares
that, in each case, have not been previously sold to the public.
"Regulated Holder". Any Purchaser or any Affiliate of any Purchaser
subject to the provisions of (a) the Bank Holding Company Act of 1956, as
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amended; (b) Regulation Y of the Board of Governors of the Federal Reserve
System (12 C.F.R. part 225), or (c) any law, rule or regulation that is a
successor to either of the foregoing; provided that a "Regulated Holder"
shall not include a Purchaser or an Affiliate of a Purchaser that is a small
business investment company licensed by the Small Business Administration.
"Related Party". An entity wholly owned by a Selling Stockholder or one
or more Related Parties, or an Affiliate of a Selling Stockholder.
"Selling Stockholder". This term is defined in Section 6.02.
"Securities Act". The Securities Act of 1933, as amended, and the rules
and regulations thereunder.
"Series A Preferred Stock". Series A Preferred Stock, $.01 par value, of
the Company having the rights, restrictions, privileges and preferences of the
series of preferred stock designated as "Series A Preferred Stock" set forth
in the Certificate of Incorporation of the Company.
"Series B Preferred Stock". Series B Preferred Stock, $.01 par value, of
the Company having the rights, restrictions, privileges and preferences of the
series of preferred stock designation as "Series B Preferred Stock" set forth
in the Certificate of Incorporation of the Company.
"Stockholder". This term is defined in the preamble.
"Subsequent Stockholder". This term is defined in the preamble.
"Subsidiary". Each Person of which or in which the Company or its other
Subsidiaries own directly or indirectly fifty percent (50%) or more of (i) the
combined voting power of all classes of stock having general voting power
under ordinary circumstances to elect a majority of the board of directors or
equivalent body of such Person, if it is a corporation or similar person; (ii)
the capital interest or profits interest of such Person, if it is a
partnership, joint venture, or similar entity; or (iii) the beneficial
interest of such Person, if it is a trust, association, or other
unincorporated organization.
"Valuation Amount" shall mean, as of any date, the greater of (x) zero or
(y) an amount equal to Operating Cash Flow for the most recently ended twelve
months preceding the date of determination multiplied by six (6), less the
principal amount of Indebtedness of the Company on such date of determination,
plus the aggregate amount of cash and/or cash equivalents held by the Company
on such date of determination.
"Valuation Event". This term is defined in the definition of Fair Market
Value.
"Warrants". All warrants issued pursuant to the Purchase Agreement (in
the percentages and to the extent, and subject to adjustment, as provided in
the Purchase Agreement) and all Warrants issued upon the transfer or the
division of, or in substitution for, such Warrants.
"Warrant Shares". The Issuable Warrant Shares and the Issued Warrant
Shares.
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ARTICLE II
STOCKHOLDERS' PREEMPTIVE RIGHTS
2.01 Preemptive Rights. The Company will not issue or sell any New
Securities without first complying with this Article II. The Company hereby
grants to each Stockholder the preemptive right to purchase, pro rata, all or
any part of the New Securities that the Company may, from time to time,
propose to sell or issue. Each Stockholder's pro rata share for purposes of
Article II is the ratio that the number of shares of Common Stock owned of
record by or issuable to such Stockholder upon full exercise of all
outstanding options, warrants or other rights to acquire Common Stock or
securities convertible into Common Stock and full conversion of all securities
convertible into Common Stock, all calculated immediately prior to the
issuance of the New Securities, bears to the total number of shares of Common
Stock then outstanding assuming full exercise or conversion, as the case may
be, of all outstanding securities exercisable for or convertible into Common
Stock.
2.02 Notice. In the event the Company proposes to issue or sell New
Securities, it will give each Stockholder written notice of its intention,
describing the type of New Securities and the price and terms upon which the
Company proposes to issue or sell the New Securities. Each Stockholder will
have ten (10) days from the date of receipt of any such notice and such
information as such Stockholder may reasonably request to facilitate such
Stockholder's investment decision to agree to purchase up to such
Stockholder's pro rata share of the New Securities for the price (valued at
Fair Market Value for any noncash consideration) and upon the terms specified
in the notice by giving written notice to the Company stating the quantity of
New Securities agreed to be purchased.
2.03 Allocation of Unsubscribed New Securities. In the event a
Stockholder fails to exercise such preemptive right within such ten (10) day
period, the other Stockholders, if any, will have an additional five (5) day
period to purchase such Stockholder's portion not so agreed to be purchased in
the same proportion in which such other Stockholders were entitled to purchase
the New Securities (excluding for such purposes such nonpurchasing
Stockholder). Thereafter, the Company will have ninety (90) days to sell the
New Securities not elected to be purchased by the Stockholders at the same
price and upon the same terms specified in the Company's notice described in
Section 2.02. In the event the Company has not sold the New Securities within
such ninety (90) day period, the Company will not thereafter issue or sell any
New Securities without first offering such securities in the manner provided
above.
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ARTICLE III
DILUTION FEE
In the event that, during the term of the Warrants, the Company pays any
cash dividend or makes any cash distribution to any holder of any class of its
Capital Stock with respect to such Capital Stock, each holder of the Warrants
will be entitled to receive in respect of its Warrant a dilution fee in cash
(the "Dilution Fee") on the date of payment of such dividend or distribution,
which Dilution Fee will be equal to the difference between (a) the highest
amount per share paid to any class of Capital Stock times the number of
Issuable Warrant Shares then owned by such holder, and (b) the amount of such
dividend or distribution otherwise paid to such holder as a result of its
ownership of Capital Stock. This provision shall not apply to the payment of
cash dividends on the Series A Preferred Stock.
ARTICLE IV
PUT OPTION
4.01 Grant of Option. The Company hereby grants to each Purchaser an
option to sell to the Company, and the Company is obligated to purchase from
each Purchaser under such option (the "Put Option"), all (or such portion as
is designated by any such Purchaser pursuant to Section 4.03 below) of the Put
Shares owned by such Purchaser. The Put Option will be effective at any time
or times after the five-year and six-month anniversary of the date of issuance
of such Put Shares, or at any time or times after the occurrence of the
following events (the "Put Option Period").
(a) Subject to such Purchaser obtaining any required consents or
waivers under the Loan Agreement, a merger, consolidation, share exchange, or
similar transaction involving the Company, as a result of which stockholders
of the Company immediately prior to such acquisition possess a minority of the
voting power of the acquiring entity immediately following such acquisition,
or sale in one or more related transactions of all or a substantial portion of
the assets, business, or revenue or income generating operations of the
Company or any substantial change in the type of business conducted by the
Company; or
(b) After the occurrence and during the continuance of an Event of
Default or any failure of the Company in any material respect to perform or
comply with any of its obligations hereunder; provided, however, that the Put
Option Period will continue with respect to such Event of Default or other
failure, even after the same has been cured, if notice of exercise of the Put
Option by such Purchaser is provided pursuant to this Article IV during the
continuance of such Event of Default or such other failure, as the case may
be.
4.02 Put Price. In the event that any Purchaser exercises the Put
Option, the price (the "Put Price") to be paid to each such Purchaser pursuant
to this Agreement will be cash in the sum of the amount determined by
multiplying the higher of (a) the Book Value or (b) the Fair Market Value per
share of Common Stock as of the end of the month immediately preceding the
date notice is given of the exercise of the Put Option pursuant to Section
4.03 times the number of shares of Common Stock which were issued upon
exercise of the Warrants for which the Put Option is being exercised by such
Purchaser plus the higher of (a) the Book Value or (b) the Fair Market Value
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of the Other Securities issuable upon exercise of the portion of the Warrants
subject to the Put Option.
4.03 Exercise of Put Option. The Put Option may be exercised during
the Put Option Period with respect to all or any portion of the Put Shares.
Such option shall be exercised by such Purchaser giving notice to the Company
and each other Purchaser during the Put Option Period of the Purchaser's
election to exercise the Put Option, and the date of the Put Option Closing,
which will be not less than fifteen (15) nor more than ninety (90) days after
the date of such notice. The Company will provide each Purchaser desiring to
exercise its Put Option the name and address of each other Purchaser.
Notwithstanding the foregoing, if a Purchaser receives such notice of another
Purchaser's exercise of such other Purchaser's Put Option, the Purchaser
receiving such notice may elect to exercise its Put Option and designate a Put
Option Closing simultaneous and pari passu with that of such other Purchaser.
4.04 Certain Remedies. In the event that the Company defaults in its
obligation to purchase all or any portion of the Put Shares upon exercise of
the Put Option, in addition to any other rights or remedies of each Purchaser,
the unpaid portion of the Put Price will bear interest at the lesser of (a)
eighteen percent (18%) per annum, compounded monthly, or (b) the highest rate
permitted by applicable law. The Company will, upon the request of any
Purchaser, execute and deliver to such Purchaser a promissory note in form and
substance satisfactory to such Purchaser evidencing such obligation.
4.05 Put Option Closing. The closing for the purchase and sale of all
or such portion of the Put Shares as to which the Purchaser has notified the
Company of its intention to exercise the Put Option, will take place at the
office of the Company on the date specified in such notice of exercise (a "Put
Option Closing"). At any Put Option Closing, to the extent applicable, the
Purchaser of the Put Shares will deliver the certificate or certificates
evidencing the Put Shares being purchased, duly endorsed in blank. In
consideration therefor, the Company will deliver to the Purchaser the Put
Price, which will be payable in cash.
ARTICLE V
CALL OPTION
5.01 Grant of Option. Each Purchaser hereby severally grants to the
Company an option to require such Purchaser to sell to the Company, and each
Purchaser is obligated to sell to the Company under this option (the "Call
Option"), all (but not less than all) of the Warrants and Warrant Shares
issued to such Purchaser. The Call Option will be effective after the tenth
(10th) anniversary of the Original Closing Date (the "Call Option Period").
5.02 Call Price. In the event that the Company exercises the Call
Option, the exercise price to be paid in cash to each Purchaser will be equal
to the Put Price determined in accordance with Section 4.02, except that the
Call Option will be exercised with respect to all of the Warrants and all
Warrant Shares, and will be increased by an amount in cash equal to any Excess
Consideration received within one year following the exercise of the Call
Option.
5.03 Exercise of Call Option. The Call Option may be exercised during
the Call Option Period with respect to all of the Warrants and the Warrant
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Shares of the Purchasers, by the Company giving notice to each Purchaser
during the Call Option Period of the election of the Company to exercise the
Call Option, and the date of the Call Option Closing (as defined below), which
in all events will be within at least ten (10) days after the date of such
notice.
5.04 Call Option Closing. The closing for the purchase and sale of
all of the Warrants and Warrant Shares that the Company has elected to
purchase under this Agreement, will take place at the office of the Company,
on the date specified in such notice of exercise (the "Call Option Closing").
At the Call Option Closing, the Purchasers will deliver the Warrants and the
certificate or certificates representing the Warrant Shares, duly endorsed in
blank. In consideration therefor, the Company will deliver to each Purchaser
the purchase price, which will be payable in immediately available funds.
ARTICLE VI
FIRST REFUSAL AND CO-SALE RIGHTS
6.01 Rights of Co-Sale. In the event that any Initial Stockholder or
Subsequent Stockholder owning more than one percent (1%) of the Capital Stock
(including all Issued Warrant Shares) of the Company (a "Major Stockholder")
intends to sell or transfer, directly or indirectly, any shares of any class
of Capital Stock held by it to any Person other than a Related Party, each
Purchaser will have the right to participate in such sale or transfer on the
terms set forth in this Article VI; provided, however, none of the provisions
of this Agreement will apply to any sale by a Major Stockholder of shares of
Capital Stock (a) pursuant to Rule 144 promulgated under the Securities Act;
(b) in a bona fide underwritten public offering under the Securities Act, so
long as all Purchasers have had an opportunity to participate in such offering
pursuant to the registration rights under this Agreement or under the Loan
Warrant Agreement; or (c) pursuant to the exercise of the Company's repurchase
options under those Stock Repurchase Agreements dated May 30, 1997, between
the Company and each of Xxxxxx X. Xxxxx and Xxxxx Xxxxx.
6.02 Method of Electing Sale: Allocation of Sales. No sale or
transfer by any Initial Stockholder or Subsequent Stockholder of any shares of
Capital Stock will be valid unless the transferee of such Capital Stock first
agrees in writing to be bound by the same terms and conditions that apply to
the Initial Stockholder or Subsequent Stockholder under this Agreement. In
addition, before any shares of Capital Stock held, directly or indirectly, by
any Major Stockholder may be sold or transferred to a Person other than a
Related Party, the Major Stockholder (as such, the "Selling Stockholder") will
comply with the following provisions:
(a) The Selling Stockholder will deliver or cause to be delivered a
written notice (the "Notice of Sale") to each Purchaser at least fifteen (15)
days prior to making any such sale or transfer. The Company agrees to provide
the Selling Stockholder with a list of the names and addresses of each such
Purchaser for such purpose. The Notice of Sale will include (i) a statement of
the Selling Stockholder's bona fide intention to sell or transfer; (ii) the
name and address of the prospective transferee (the "Buyer"); (iii) the number
of shares of Capital Stock of the Company to be sold or transferred; (iv) the
terms and conditions of the contemplated sale or transfer; (v) the purchase
price in cash that the Buyer will pay for such shares of Capital Stock; (vi)
the expected closing date of the transaction; and (vii) such other information
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as the Purchasers may reasonably request to facilitate their decision
as to whether or not to exercise the rights granted by this Article VI.
(b) Any Purchaser receiving the Notice of Sale may elect to
participate in the contemplated sale or transfer by exercising either (i) its
right of first refusal to purchase such Capital Stock pursuant to Section
6.02(c) or (ii), its right to co-sell its Capital Stock pursuant to Section
6.02(d). Either of such rights may be exercised in the sole discretion of the
Purchaser by delivering a written notice (an "Election Notice") to the Company
and the Selling Stockholder within fifteen (15) days after receipt of such
Notice of Sale stating the election of the Purchaser to exercise either its
right of first refusal pursuant to Section 6.02(c) or its right of co-sale
pursuant to Section 6.02(d).
(c) Each Purchaser may elect to treat the Notice of Sale as an
irrevocable offer to sell to the Purchaser up to its pro rata share
(determined in accordance with the following sentence, and including the pro
rata share of Capital Stock not purchased by other Purchasers) of the number
of shares of Capital Stock proposed to be sold to the Buyer on the same per
share terms and conditions as stated in the Notice of Sale. Each Purchaser's
pro rata share for purposes of Article VI is the ratio that the number of
shares of Common Stock issuable to such Purchaser upon exercise of its
Warrants and conversion of its shares of Series B Preferred Stock, plus the
number of shares of Common Stock that are Issued Warrant Shares or Conversion
Shares, owned by such Purchaser, bears to the sum of (x) the total number of
shares of Common Stock then outstanding, plus (y) the number of shares of
Common Stock issuable upon exercise of all Warrants and conversion of all
Series B Preferred Stock. Such offer will remain open for a period of fifteen
(15) days from delivery to the Purchaser of the Election Notice. Within such
fifteen (15) day period, the Purchaser may elect to accept such offer in whole
or in part by delivering to the Selling Stockholder written notice of its
irrevocable election to accept such offer. If the Purchaser irrevocably
accepts such offer, the closing of the purchase and sale will occur on or
before the twentieth (20th) business day following delivery of the notice of
acceptance. At such closing, the Purchaser will deliver the consideration
payable to the order of the Selling Stockholder, against delivery by the
Selling Stockholder of the Capital Stock being so purchased, free and clear of
all liens, claims, and encumbrances, other than this Agreement, endorsed in
good form for transfer to the Purchaser or its designees. If a Purchaser does
not accept such offer within the fifteen (15) day period specified above, the
offer to such Purchaser will be deemed to have been rejected, and the Selling
Stockholder, subject to Section 6.02(d), will be free to sell or transfer such
Capital Stock not purchased by the Purchasers to the Buyer on the same terms
set forth in the Notice of Sale within ninety (90) days of the expiration of
such fifteen (15) day period. If the sale to the Buyer is not so consummated,
the terms of this Article VI will again be applicable to any sale or transfer
of Capital Stock by the Selling Stockholder.
(d) Each Purchaser may elect to sell or transfer in the contemplated
transaction up to the total of the number of shares of Capital Stock then held
by it (including the Issuable Warrant Shares). Promptly after the receipt of
an Election Notice exercising such right, the Selling Stockholder will use its
best efforts to cause the Buyer to amend its offer so as to provide for the
Buyer's purchase, upon the same terms and conditions as those contained in the
Notice of Sale, of all of the shares of Capital Stock (including the Issuable
Warrant Shares) elected to be sold (the "Co-Sell Shares") in such Election
Notices. In the event that the Buyer is unwilling to amend its offer to
purchase all of the Co-Sell Shares in addition to the shares of Capital Stock
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described in the related Notice of Sale, if the Selling Stockholder
desires to proceed with the sale, the total number of shares that such Buyer
is willing to purchase will be allocated to the Selling Stockholder and each
Purchaser having given an Election Notice exercising its right pursuant to
this Section 6.02(d) (the "Co-Sellers") in proportion to the aggregate number
of shares of Capital Stock (including Issuable Warrant Shares) held by each
such Person; provided, however, that no such Person will be so allocated a
number of shares greater than the number of shares that it has sought to sell
to such Buyer in the related Notice of Sale or Election Notice. All Capital
Stock sold or transferred by the Selling Stockholder and the Co-Sellers with
respect to a single Notice of Sale under Section 6.02(b) will be sold or
transferred to the Buyer in a single closing on the terms described in such
Notice of Sale, and each such share will receive the same per share
consideration. In the event that the Buyer for whatever reason, declines to
purchase any shares from any Purchaser delivering an Election Notice, then (x)
the Selling Stockholder will not be permitted to sell or transfer any shares
of Capital Stock to such Buyer and (y) the shares of Capital Stock of the
Selling Stockholder that were to have been sold or transferred to the Buyer
will be subject to the Purchasers' right of first refusal pursuant to Section
6.02(c) for a period of fifteen (15) days thereafter on the terms and
conditions that the Buyer would have purchased such shares of Capital Stock
from the Selling Stockholder had it not declined to purchase shares from the
Co-Seller under this Section 6.02(d).
6.03 Sales to Related Parties. No sale or transfer of shares of
Capital Stock by the Stockholder to a Related Party will be subject to the
provisions of Section 6.02; provided. however that such Related Party first
agrees to assume the obligations of the Initial Stockholder or Subsequent
Stockholder (without relieving the Initial Stockholder or Subsequent
Stockholder of any obligations under this Agreement) under this Agreement with
respect to the shares of Capital Stock thereby acquired by it and to be bound
by the same terms and conditions that apply to the Initial Stockholder or
Subsequent Stockholder under this Agreement in a written joinder agreement in
a form and substance satisfactory to the Purchasers.
ARTICLE VII
LIQUIDITY
7.01 Required Registration. At any time after the earlier of May 1,
2002, and six (6) months after the effective date of the initial public
offering of the Company's Capital Stock, each Purchaser may, upon not more
than two (2) occasions, for each such Purchaser, make a written request to the
Company requesting that the Company effect the registration of a certain
number of Registrable Securities pro rata for the accounts of the Purchasers
based upon the number of Registrable Securities held by them. After receipt
of any such a request, the Company will, as soon as practicable, notify all
Purchasers of such request and use its best efforts to effect the registration
of all Registrable Securities that the Company has been so requested to
register for sale, all to the extent required to permit the disposition (in
accordance with the intended method or methods thereof) of the Registrable
Securities so registered. In no event, other than under Section 7.13, will any
Person other than a Purchaser and Persons having registration rights under the
Loan Warrant Agreement be entitled to include any shares of Capital Stock in
any registration statement filed pursuant to this Section 7.01. If the
managing underwriter or underwriters, if any, of the offering of the
Registrable Securities for which registration has been demanded advises the
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Purchasers that the success of the offering would be materially and
adversely affected by the inclusion of all the Registrable Securities for
which registration has been demanded, then the amount of securities to be
registered for the accounts of the Purchasers shall be reduced pro rata based
upon the Registrable Securities held by the Purchasers.
7.02 Incidental Registration. If the Company at any time proposes to
file on its behalf or on behalf of any of its security holders a registration
statement under the Securities Act on any form (other than a registration
statement on Form S-4 or S-8 or any successor form unless such forms are being
used in lieu of or as the functional equivalent of, registration rights) for
any class that is the same or similar to Registrable Securities, it will give
written notice setting forth the terms of the proposed offering and such other
information as the Purchasers may reasonably request to all holders of
Registrable Securities at least thirty (30) days before the initial filing
with the Commission of such registration statement, and offer to include in
such filing such Registrable Securities as any Purchaser may request. Each
Purchaser desiring to have Registrable Securities registered under this
Section 7.02 will advise the Company in writing within thirty (30) days after
the date of receipt of such notice from the Company, setting forth the amount
of such Registrable Securities for which registration is requested. The
Company will thereupon include in such filing the number of Registrable
Securities for which registration is so requested, and will use its best
efforts to effect registration under the Securities Act of such Registrable
Securities.
Notwithstanding the foregoing, if the managing underwriter or
underwriters, if any, of such offering deliver a written opinion to each
Purchaser that the success of the offering would be materially and adversely
affected by the inclusion of the Registrable Securities requested to be
included, then the amount of securities to be offered for the accounts of
Purchasers will be reduced first by reducing securities being offered for the
account of Persons other than the Purchasers, Persons having registration
rights under the Loan Warrant Agreement and the Company, and second by
reducing the Registrable Securities being offered pro rata (according to the
Registrable Securities held by each Purchaser and securities being registered
by Persons having registration rights under the Loan Warrant Agreement) to the
extent necessary to reduce the total amount of securities to be included in
such offering to the amount recommended by such managing underwriter or
underwriters.
7.03 Form S-3 Registrations. In addition to the registration rights
provided in Sections 7.01 and 7.02 above, if at any time the Company is
eligible to use Form S-3 (or any successor form) for registration of secondary
sales of Registrable Securities, any Purchaser may request in writing that the
Company register shares of Registrable Securities on such form. Upon receipt
of such request, the Company will promptly notify all Purchasers in writing of
the receipt of such request and each such Purchaser may elect (by written
notice sent to the Company within thirty (30) days of receipt of the Company's
notice) to have its Registrable Securities included in such registration
pursuant to this Section 7.03. Thereupon, the Company will, as soon as
practicable, use its best efforts to effect the registration on Form S-3 of
all Registrable Securities that the Company has so been requested to register
by such Purchaser for sale. The Company will use its best efforts to qualify
and maintain its qualification for eligibility to use Form S-3 for such
purposes. Notwithstanding this Section 7.03, the Company shall not be
obligated to effect any such registration if (a) the Purchasers, together with
the holders of any other securities of the Company entitled to inclusion in
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such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public of less than
$250,000, or (b) the Company already shall have made two registrations on Form
S-3 within the 12-month period immediately preceding the request.
Notwithstanding the foregoing, nothing herein shall restrict, prohibit, or
limit in any way a Purchaser's ability to exercise its registration rights
under Sections 7.01 or 7.02 hereof.
7.04 Rule 144 Availability. Notwithstanding the foregoing, the
Company will not be obligated to register the Registrable Securities of any
particular Purchaser as to which counsel acceptable to such Purchaser renders
an opinion in form and substance satisfactory to the Purchaser to the effect
that such Purchaser's Registrable Securities are freely saleable without
limitation as to volume, manner of sale, or otherwise within a single
three-month period under Rule 144 under the Securities Act.
7.05 Registration Procedures. In connection with any registration of
Registrable Securities under this Article VII, the Company will, as soon as
practicable:
(a) prepare and file with the Commission a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become and remain effective until the earlier
of such time as all Registrable Securities subject to such registration
statement have been disposed of or the expiration of one hundred eighty (180)
days;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the Securities Act with respect
to the sale or other disposition of all Registrable Securities covered by such
registration statement until the earlier of such time as all of such
Registrable Securities have been disposed of or the expiration of one hundred
eighty (180) days (except with respect to registrations effected on Form S-3
or any successor form, as to which no such period shall apply);
(c) furnish to each Purchaser such number of copies of the
registration statement and prospectus (including, without limitation, a
preliminary prospectus) in conformity with the requirements of the Securities
Act (in each case including all exhibits) and each amendment or supplement
thereto, together with such other documents as any Purchaser may reasonably
request;
(d) use its best efforts to register or qualify the Registrable
Securities covered by such registration statement under such other securities
or blue sky laws of such jurisdictions within the United States and Puerto
Rico as each Purchaser reasonably requests, and do such other acts and things
as may be reasonably required of it to enable such Purchaser to consummate the
disposition in such jurisdiction of the securities covered by such
registration statement;
(e) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its securities
holders, as soon as practicable, an earnings statement covering the period of
at least twelve months beginning with the first month after the effective date
of such registration statement, which earnings statement will satisfy the
provisions of Section 11(a) of the Securities Act;
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(f) provide and cause to be maintained a transfer agent and
registrar for Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such registration
statement;
(g) if requested by the underwriters for any underwritten offering
of Registrable Securities on behalf of a Purchaser pursuant to a registration
requested under Section 7.01, the Company will enter into an underwriting
agreement with such underwriters for such offering, such agreement to contain
such representations and warranties by the Company and such other terms and
provisions as are customarily contained in underwriting agreements with
respect to secondary distributions, including, without limitation, provisions
with respect to indemnities and contribution as are reasonably satisfactory to
such underwriters and the Purchasers; the Purchasers on whose behalf
Registrable Securities are to be distributed by such underwriters will be
parties to any such underwriting agreement and the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters, will also be made to and for the benefit of
such Purchaser; and no Purchaser will be required by the Company to make any
representations or warranties to or agreements with the Company or the
underwriters other than reasonable and customary representations, warranties,
or agreements regarding such Purchaser, such Purchaser's Registrable
Securities, such Purchaser's intended method or methods of disposition, and
any other representation required by law;
(h) furnish, at the written request of any Purchaser, on the date
that such Registrable Securities are delivered to the underwriters for sale
pursuant to such registration, or, if such Registrable Securities are not
being sold through underwriters, on the date that the registration statement
with respect to such Registrable Securities becomes effective, (i) an opinion
in form and substance reasonably satisfactory to such Purchasers, and
addressing matters customarily addressed in underwritten public offerings, of
the counsel representing the Company for the purposes of such registration
(who will not be an employee of the Company and who will be satisfactory to
such Purchasers), addressed to the underwriters, if any, and to the selling
holders; and (ii) a letter (the "comfort letter") in form and substance
reasonably satisfactory to such Purchasers, from the independent public
accountants of the Company, addressed to the underwriters, if any, and to the
selling Purchasers making such request (and, if such accountants refuse to
deliver the comfort letter to such Purchasers, then the comfort letter will be
addressed to the Company and accompanied by a letter from such accountants
addressed to such Purchasers stating that they may rely on the comfort letter
addressed to the Company); and
(i) during the period when the registration statement is required to
be effective, notify each selling Purchaser of the happening of any event as a
result of which the prospectus included in the registration statement contains
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and 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 material fact required to be stated therein or necessary to make the
statements therein not misleading.
It will be a condition precedent to the obligation of the Company to take
any action pursuant to this Article VII in respect of the Registrable
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Securities that are to be registered at the request of any Purchaser
that such Purchaser furnish to the Company such information regarding the
Registrable Securities held by such Purchaser and the intended method of
disposition thereof as is legally required in connection with the action taken
by the Company. The managing underwriter or underwriters, if any, for any
offering of Registrable Securities to be registered pursuant to Section 7.01
or 7.03 will be selected by the holders of a majority of the Registrable
Securities being so registered.
7.06 Allocation of Expenses. Except as provided in the following
sentence, the Company will bear all expenses arising or incurred in connection
with any of the transactions contemplated by this Article VII, including,
without limitation, (a) all expenses incident to filing with the National
Association of Securities Dealers, Inc.; (b) registration fees; (c) printing
expenses; (d) accounting and legal fees and expenses; (e) expenses of any
special audits or comfort letters incident to or required by any such
registration or qualification; and (f) expenses of complying with the
securities or blue sky laws of any jurisdictions in connection with such
registration or qualification. Each Purchaser will severally bear the expense
of its underwriting fees, discounts, or commissions relating to its sale of
Registrable Securities.
7.07 Listing on Securities Exchange. If the Company lists any shares
of Capital Stock on any securities exchange or on the National Association of
Securities Dealers, Inc. Automated Quotation System or similar system, it
will, at its expense, list thereon, maintain and, when necessary, increase
such listing of, all Registrable Securities.
7.08 Holdback Agreements.
(a) If any registration pursuant to Section 7.02 is in connection
with an underwritten public offering, each Purchaser agrees, if so required by
the managing underwriter, not to effect any public sale or distribution of
Registrable Securities (other than as part of such underwritten public
offering) during the period beginning seven (7) days prior to the effective
date of such registration statement and ending on the one hundred eightieth
(180th) day after the effective date of such registration statement; provided,
that each Stockholder and each Person that is an officer, director, or
beneficial owner of five percent (5 %) or more of the outstanding shares of
any class of Capital Stock enters into such an agreement.
(b) The Company and the Stockholders agree (i) not to effect any
public sale or distribution during the period seven (7) days (or such longer
period as may be prescribed by Rule 10b-6 under the Exchange Act) prior to the
effective date of the registration statement employed in any underwritten
public offering and ending on the one hundred eightieth (180th) day after any
such registration statement contemplated by Sections 7.01 or 7.03 has become
effective, except as part of such underwritten public offering pursuant to
such registration statement, and (ii) use their best efforts to cause each
holder of its equity securities or any securities convertible into or
exchangeable or exercisable for any of such securities, in each case purchased
from the Company at any time after the date of this Agreement (other than in a
public offering), to agree not to effect any such public sale or distribution
of such securities during such period.
7.09 Rule 144. At all times, the Company will take such action as any
Purchaser or Initial Stockholder may reasonably request, all to the extent
required from time to time to enable such Purchaser or Initial Stockholder to
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sell shares of Registrable Securities or other common stock without
registration pursuant to and in accordance with (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation adopted by the Commission. Upon the request of any
Purchaser or Initial Stockholder, the Company will deliver to such Purchaser
or Initial Stockholder a written statement as to whether it has complied with
such requirements.
7.10 Rule 144A. The Company agrees that, upon the request of any
Purchaser or any prospective purchaser of a Warrant, Warrant Shares, Preferred
Shares or Conversion Shares designated by a Purchaser, the Company will
promptly provide (but in any case within fifteen (15) days of a request) to
such Purchaser or potential purchaser, the following information:
(a) a brief statement of the nature of the business of the Company
and any Subsidiaries and the products and services they offer;
(b) the most recent consolidated balance sheets and profit and
losses and retained earnings statements, and similar financial statements of
the Company for such part of the two preceding fiscal years prior to such
request as the Company has been in operation (such financial information will
be audited, to the extent reasonably available); and
(c) such other information about the Company, any Subsidiaries, and
their business, financial condition, and results of operations as the
requesting Purchaser or purchaser of such Warrants, Warrant Shares, Preferred
Shares or Conversion Shares requests in order to comply with Rule 144A, as
amended, and the antifraud provisions of the federal and state securities
laws.
The Company hereby represents and warrants to any such requesting Purchaser
and any prospective purchaser of Warrants, Warrant Shares, Preferred Shares or
Conversion Shares from such holder that the information provided by the
Company pursuant to this Section 7.10 will not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements made, in light of the circumstances under which they were made,
not misleading.
7.11 Limitations on Subsequent Registration Rights. Except for the
registration rights under the Loan Warrant Agreement, from and after the date
of this Agreement, the Company will not, without the prior written consent of
the Purchasers, enter into any agreement with any holder or prospective holder
of any securities of the Company that would allow such holder or prospective
holder (a) to include such securities in any registration filed under Section
7.01, unless under the terms of such agreement, such holder or prospective
holder may include such securities in any such registration only to the extent
that the inclusion of its securities will not reduce the amount of the
Registrable Securities of the Holders that is included or (b) to make a demand
registration that could result in such registration statement being declared
effective prior to the effectiveness of the first registration statement
effected under Section 7.01 or within one hundred twenty (120) days of the
effective date of any registration effected pursuant to Section 7.01.
7.12 Exchange Rights. At the option of any Purchaser, any such
Purchaser may exchange its Warrant or Warrant Shares for fully paid and
nonassessable shares (calculated as to each exchange to the nearest
one-thousandth (1/1000) of a share and rounded upward) of common stock of any
Affiliate or Subsidiary of the Company that on the date of receipt of the
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Exchange Notice has a class of capital stock registered under section
12 of the Exchange Act or within one year and 120 days will have a class of
capital stock so registered (such Affiliate or Subsidiary will be referred to
in this Agreement as the "Exchange Company" and the common stock of such
Affiliate or Subsidiary will be referred to in this Agreement as "Exchange
Common Stock"). Each $1,000 worth of Warrants or Warrant Shares (valued at
Fair Market Value on the date the Exchange Notice was sent), will be
exchangeable for $1,000 worth of Exchange Common Stock (valued at Fair Market
Value on the date that the Exchange Notice was sent). To exchange Warrants or
Warrant Shares into Exchange Common Stock, the Purchaser will surrender at the
principal office of the Exchange Company the Warrants or certificate or
certificates evidencing the Warrant Shares duly endorsed or assigned to the
Company, and give written notice to the Company at such office that it elects
to exchange such Warrants or Warrant Shares (the "Exchange Notice"). Warrants
or Warrant Shares will be deemed to have been exchanged immediately prior to
the close of business on the day of the surrender for exchange in accordance
with the foregoing provisions, and the Person or Persons entitled to receive
the Exchange Common Stock issuable upon any such exchange will thereupon be
treated for all purposes as the record holder or holders of the Exchange
Common Stock. As promptly as practicable on or after the exchange date, the
Exchange Company will issue and deliver a certificate or certificates for the
number of full shares of Exchange Common Stock issuable upon exchange to the
Person or Persons entitled to receive such shares. Upon exchange of any Issued
Warrant Shares, the Company will pay or make with respect to Issued Warrant
Shares any dividends or other distributions that have been declared on the
Warrant Shares in kind or cash, as the case may be. If any Purchaser exchanges
its Warrants or Warrant Shares for shares of Exchange Common Stock pursuant to
this Section 7.12, such Purchaser will have all of the rights set forth in
this Article VII, except that for the purposes of this Article VII the term
"Company" will refer instead to the Exchange Company and the term "Registrable
Securities" will refer to the shares of Exchange Common Stock held by such
Purchaser.
7.13 Inclusion of Stock Held by Initial Stockholders and Subsequent
Stockholders. In connection with any registration effected pursuant to this
Article VII, the Initial Stockholders and Subsequent Stockholders shall be
entitled to include in such registration (on the same terms and conditions as
Purchasers selling their Registrable Securities in such registration) shares
of Common Stock held by such Initial Stockholders and Subsequent Stockholders;
provided that any limitation by the underwriter on the number of shares to be
underwritten in connection with such registration shall first be applied to
the shares so included by such Subsequent Stockholders, and, if a further
limitation is required, then to the shares so included by the Initial
Stockholders, and provided further that each such right to include shares of
Common Stock in a registration pursuant to this Section 7.13 is contingent
upon the execution of an agreement to be bound by all other applicable
restrictions contained in this Article VII. As among the Initial
Stockholders, no Initial Stockholder shall have the opportunity to include in
such registration more shares of Common Stock than are included by any other
Initial Stockholder. In connection with the foregoing rights, the Initial
Stockholders and Subsequent Stockholders shall receive all notices provided
for in Section 7.02 and 7.09 hereof in accordance with the time periods set
forth therein.
-20-
ARTICLE VIII
DIRECTORS; VOTING AGREEMENTS
8.01 Voting Agreement. To ensure compliance with this Article VIII,
each of the Stockholders hereby irrevocably covenant and agree to vote, or
give or withhold consent with respect to, all shares of Capital Stock now
owned or later acquired by each of them, all in accordance with the terms of
this Article VIII. A counterpart of this Agreement will be deposited with the
Company at its principal place of business or registered office and will be
subject to the same right of examination by a stockholder of the Company, in
person or by agent or attorney, as are the books and records of the Company.
8.02 Board of Directors.
(a) So long as the provisions of this Article VIII remain in effect,
each (now or hereafter) party to this Agreement other than the Purchasers
will, at the request of FF-ITP or its designee, vote, or give or withhold
consent with respect to, all shares of Capital Stock now owned or later
acquired by such party so that at all times an individual designated by FF-ITP
or its designee will be a director of the Company; provided however, that
FF-ITP will not have any obligation to designate or cause any individual to
serve on the board of directors of the Company. No director designated by
FF-ITP or its designee may be removed without the prior written consent of
FF-ITP.
(b) So long as the provisions of this Article VIII remain in
effect, each (now or hereafter) party to this Agreement other than Xxxxx and
the Purchasers will, at the request of Xxxxx, vote, or give or withhold
consent with respect to, all shares of Capital Stock now owned or later
acquired by such party so that at all times an individual designated by Xxxxx
will be a director of the Company; provided, however, that Xxxxx will not have
any obligation to designate or cause any individual to serve on the board of
directors of the Company. No director designated by Xxxxx may be removed
without Xxxxx'x prior written consent.
(c) So long as the provisions of this Article VIII remain in
effect, each (now or hereafter) party to this Agreement other than Blech and
the Purchasers will, at the request of Blech, vote, or give or withhold
consent with respect to, all shares of Capital Stock now owned or later
acquired by such party so that at all times an individual designated by Blech
will be a director of the Company; provided, however, that Blech will not have
any obligation to designate or cause any individual to serve on the board of
directors of the Company. No director designated by Blech may be removed
without Blech's prior written consent.
(d) So long as the provisions of this Article VIII remain in
effect, each (now or hereafter) party to this Agreement other than Xxxxx and
the Purchasers will, at the request of Xxxxx, vote, or give or withhold
consent with respect to, all shares of Capital Stock now owned or later
acquired by such party so that at all times Xxxxx will be a director of the
Company; provided, however, that Xxxxx will not have any obligation to
designate or cause himself to serve on the board of directors of the Company.
Xxxxx may not be removed as a director without his prior written consent.
(e) So long as the provisions of this Article VIII remain in
effect, each (now or hereafter) party to this Agreement other than Nice and
the Purchasers will, at the request of Nice, vote, or give or withhold consent
-21-
with respect to, all shares of Capital Stock now owned or later
acquired by such party so that at all times Nice will be a director of the
Company; provided, however, that Nice will not have any obligation to
designate or cause himself to serve on the board of directors of the Company.
Nice may not be removed as a director without his prior written consent.
(f) FF-ITP, Klein, Blech, Xxxxx, or Nice may, at any time, terminate
its right to designate a director under this Section 8.02 by providing written
notice of such termination to the Company.
(g) Notwithstanding anything to the contrary in this Section 8.02,
so long as the provisions of this Article VIII remain in effect, in the event
of any default by the Company in its covenants and obligations specified in
Sections 4.01, 4.05 and 4.06 of the Purchase Agreement, and the failure of the
Company to cure such default within thirty (30) days after written notice of
such default, FF-ITP shall have the right to call a special meeting of
stockholders of the Company, to increase the number of directors authorized by
the Company's certificate of incorporation and/or bylaws, and to designate
such number of nominees to serve as directors of the Company as is equal to a
majority of the total number of directors authorized in the Company's
certificate of incorporation and bylaws (but only by filling vacancies and not
by removing incumbent directors from the Board); each party to this Agreement
other than the Purchasers will vote the shares of the Company's Capital Stock
now owned or later acquired by such party to cause the increase in the
authorized number of directors as designated by FF-ITP and the election of
such designees of FF-ITP until the date two (2) years after the date of such
special meeting of stockholders. At any time that FF-ITP has nominated a
majority of the directors pursuant to this Section 8.02(g), the Company shall
use its reasonable efforts to assure that each individual named in Sections
8.02(a)-(e) continues to be elected to the Board, and FF-ITP shall not take,
nor will it allow its Board designees to take, any action to impair any
party's right to continue to be elected to the Board under Sections 8.02(a)-
(e). To ensure the prompt enforcement of the rights of FF-ITP under this
paragraph, each party to this Agreement other than the Purchasers hereby
grants FF-ITP an irrevocable proxy to vote such party's shares in the manner
and under the circumstances permitted by this paragraph. The parties to this
Agreement (other than the Purchasers) agree that this grant of a proxy is
coupled with an interest and is irrevocable.
8.03 Voting Agreement Relating to Board of Directors Matters.
(a) So long as the provisions of this Article VIII remain in
effect, each (now and hereafter) party to this Agreement other than the
Purchasers will vote, or give or withhold consent with respect to, all shares
of Capital Stock now owned or later acquired by such party so that at all
times the director designated by Xxxxx will be elected to the Executive
Committee of the Board of Directors of the Company, which shall consist of
five directors, two of whom shall be employees or former employees of the
Company's operating divisions or Subsidiaries.
(b) So long as the provisions of this Article VIII remain in
effect, each (now and hereafter) party to this Agreement other than the
Purchasers will vote, or give or withhold consent with respect to, all shares
of Capital Stock now owned or later acquired by such party so that at all
times the director designated by Blech will be elected to the Executive
Committee of the Board of Directors of the Company, which shall consist of
five directors, two of whom shall be employees or former employees of the
Company's operating divisions or Subsidiaries.
-22-
(c) So long as the provisions of this Article VIII remain in
effect, each (now and hereafter) party to this Agreement other than the
Purchasers will vote, or give or withhold consent with respect to, all shares
of Capital Stock now owned or later acquired by such party so that at all
times the director designated by FF-ITP or its designee will be elected to the
Executive Committee of the Board of Directors of the Company, which shall
consist of five directors, two of whom shall be employees or former employees
of the Company's operating divisions or Subsidiaries.
(d) Notwithstanding the establishment of an executive committee,
the following decisions shall, at a minimum, always require approval of the
board (and not a committee thereof): (1) a consolidation of the Company with
one or more corporations having capital stock to form a new consolidation
corporation; (2) a merger of the Company into another corporation having
capital stock or a business trust having transferable units of beneficial
interest or a limited partnership or a limited liability company; (3) a merger
of one or more corporations having capital stock into the Company or a merger
of one or more business trusts having transferable units of beneficial
interest into the Company or a merger of one or more limited partnerships into
the Company or a merger of one or more limited liability companies into the
Companies; (4) an exchange or issuance of stock in connection with an
acquisition transaction by the Company in which the aggregate consideration
(including the Fair Market Value of the shares exchanged) exceeds $30 million;
(5) a transfer of all or substantially all of the assets of the Company; (6)
an attempt by the Company to redeem or buy back any of the Company's Capital
Stock; (7) the issuance by the Company of Capital Stock for a consideration
which is unreasonably disproportionate to its fair market value per share, or
less than $5.00 per share, except for Permitted Stock; (8) the actual or
constructive liquidation of the Company; (9) the dissolution of the Company;
(10) amendments to the certificate of incorporation or the bylaws of the
Company; (11) a transaction between the Company and any of its affiliates or
subsidiaries or between the Company and any person who is currently serving on
the Board of Directors of the Company or is currently serving as an officer or
employee of the Company or any of its affiliates or subsidiaries. During any
period in which the provisions of Section 8.02(g) have been implemented, the
Company shall not have an executive committee of the Board of Directors.
8.04 Termination. All rights under this Article VIII shall terminate
in their entirety on the closing of the Company's initial public offering of
shares of Common Stock pursuant to an effective registration statement under
the Securities Act of 1933, as amended, involving net proceeds to the Company
of at least $30,000,000, after deducting applicable underwriters' commissions
and discounts.
8.05 No Revocation. The voting agreements contained herein are
coupled with an interest and may not be revoked, except by written consent of
all of the Stockholders.
8.06 Restrictive Legend. All certificates representing shares of
Capital Stock owned or hereafter acquired by the Stockholders or any
transferee of them shall have affixed thereto a legend substantially in the
following form:
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN VOTING AGREEMENTS AS SET FORTH IN A STOCKHOLDERS' AGREEMENT BY AND
AMONG THE REGISTERED OWNER OF THIS CERTIFICATE, THE COMPANY AND CERTAIN OTHER
STOCKHOLDERS OF THE COMPANY, A COPY OF WHICH IS AVAILABLE FOR INSPECTION AT
THE OFFICES OF THE SECRETARY OF THE COMPANY."
-23-
8.07 Applicability of Article VIII to Regulated Holders. Anything
herein to the contrary notwithstanding, no provision of this Article VIII,
other than the provisions of Section 8.06, shall be enforceable by any
Regulated Holder or any Affiliate of any Regulated Holder.
ARTICLE IX
MISCELLANEOUS
9.01 Default. It is agreed that a violation by any party of the terms
of this Agreement cannot be adequately measured or compensated in money
damages, and that any breach or threatened breach of this Agreement by a party
to this Agreement would do irreparable injury to the nonbreaching party. It
is, therefore, agreed that in the event of any breach or threatened breach by
a party to this Agreement of the terms and conditions set forth in this
Agreement, the nondefaulting party will be entitled, in addition to any and
all other rights and remedies that it may have in law or in equity, to apply
for and obtain injunctive relief requiring the defaulting party to be
restrained from any such breach, or threatened breach or to refrain from a
continuation of any actual breach.
9.02 Integration. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof supersedes all
previous written, and all previous or contemporaneous oral negotiations,
understandings, arrangements, and agreements. This Agreement may not be
amended or supplemented except by a writing signed by the Company and the
Stockholders in accordance with Section 9.15.
9.03 Headings. The headings in this Agreement are for convenience and
reference only and are not part of the substance of this Agreement. References
in this Agreement to Sections and Certificate are references to the Sections
and Certificate of this Agreement unless otherwise specified.
9.04 Severability. The parties to this Agreement expressly agree that
it is not their intention to violate any public policy, statutory or common
law rules, regulations, or decisions of any governmental or regulatory body.
If any provision of this Agreement is judicially or administratively
interpreted or construed as being in violation of any such policy, rule,
regulation, or decision, the provision, section, sentence, word, clause, or
combination thereof causing such violation will be inoperative (and in lieu
thereof there will be inserted such provision, sentence, word, clause, or
combination thereof as may be valid and consistent with the intent of the
parties under this Agreement) and the remainder of this Agreement, as amended,
will remain binding upon the parties to this Agreement, unless the inoperative
provision would cause enforcement of the remainder of this Agreement to be
inequitable under the circumstances.
9.05 Notices. Whenever it is provided herein that any notice, demand,
request, consent, approval, declaration, or other communication be given to or
served upon any of the parties by another, such notice, demand, request,
consent, approval, declaration, or other communication will be in writing and
will be deemed to have been validly served, given, or delivered (and "the date
of such notice" or words of similar effect will mean the date) five (5) days
after deposit in the United States mails, certified mail, return receipt
requested, with proper postage prepaid, or upon receipt thereof with written
acknowledgment of receipt (whether by non-certified mail, telecopy, telegram,
express or hand delivery, or otherwise), whichever is earlier, and addressed
to the party to be notified as follows:
-24-
If to Creditanstalt, at: Address of Creditanstalt beneath the
name of Creditanstalt on the signature pages
of this Agreement
with courtesy copies to: Xxxxxxxx Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X. X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxx, Esquire
Fax (000) 000-0000
If to the Company, at: IT Partners, Inc.
0000 Xxxxxx Xxxx Xxxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx, Chairman of the Board
Fax: (000) 000-0000
with courtesy copies to: Xxxxxxx & Berlin, Chartered
000 X Xxxxxx
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxxx X. Xxxxxxx, Esquire
Xxxxxx X. Xxx, Esquire
Fax: (000) 000-0000
If to FF-ITP, at: FF-ITP, L.P.
000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
with courtesy copies to: Wyrick, Robbins, Xxxxx & Xxxxxx, L.L.P.
0000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxx, Xx., Esquire
Fax: (000)000-0000
If to Indosuez, at: Indosuez IT Partners
0000 0xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxxx
Fax: (000) 000-0000
-25-
If to Wachovia, at Wachovia Capital Associates, Inc.
000 Xxxxxxxxx Xx., X.X.
Mailcode GA423
Xxxxxxx, Xxxxxxx 00000
Attn: Senior Vice President/ITP
Fax: (000) 000-0000
with courtesy copies to: Wachovia Capital Associates, Inc.
000 Xxxxxxxxx Xx., X.X.
Mailcode GA715
Xxxxxxx, Xxxxxxx 00000
Attn: Legal Department/WCA/ITP
Fax: (000) 000-0000
If to an Initial or Subsequent Stockholder, at: Address of such
stockholder beneath the name of such stockholder on the signature pages of
this Agreement or to such other address as each party may designate for itself
by like notice. Notice to any holder of Registrable Securities will be
delivered as set forth above to the address shown on the stock transfer books
of the Company or the Warrant Register unless such holder has advised the
Company in writing of a different address to which notices are to be sent
under this Agreement.
Failure or delay in delivering the courtesy copies of any notice, demand,
request, consent, approval, declaration, or other communication to the persons
designated above to receive copies of the actual notice will in no way
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration, or other communication.
No notice, demand, request, consent, approval, declaration, or other
communication will be deemed to have been given or received unless and until
it sets forth all items of information required to be set forth therein
pursuant to the terms of this Agreement.
9.06 Successors. This Agreement will be binding upon and inure to
the benefit of the parties and their respective successors and permitted
assigns; provided, however, that no sale, assignment or other transfer by any
party to this Agreement of any of its Capital Stock or rights hereunder to
another Person will be valid and effective unless and until the transferee or
assignee first executes a joinder agreement a form and substance reasonably
satisfactory to the Company agreeing to be bound by the terms and conditions
of this Agreement. Notwithstanding the foregoing, no party to this Agreement
except the shall have the ability to assign its rights under Article II,
Article III, Article IV, Article V and Article VI hereof.
9.07 Remedies. The failure of any party to enforce any right or
remedy under this agreement, or to enforce any such right or remedy promptly,
will not constitute a waiver thereof, nor give rise to any estoppel against
such party, nor excuse any other party from its obligations under this
Agreement. Any waiver of any such right or remedy by any party must be in
writing and signed by the party against which such waiver is sought to be
enforced.
9.08 Fees. Any and all fees, costs, and expenses, of whatever kind
and nature, including attorneys' fees and expenses, incurred by the Purchasers
in connection with the defense or prosecution of any actions or proceedings
arising out of or in connection with this Agreement will, to the extent
-26-
provided in this Agreement, be borne and paid by the Company within ten
(10) days of demand by the Purchasers.
9.09 Counterparts. This Agreement may be executed in any number of
counterparts, which will individually and collectively constitute one
agreement.
9.10 Other Business. It is understood and accepted that Purchaser
and its Affiliates have interests in other business ventures that may be in
conflict with the activities of the Company and that nothing in this Agreement
will limit the current or future business activities of such parties whether
or not such activities are competitive with those of the Company.
9.11 Choice of Law. THIS AGREEMENT WILL BE DEEMED TO HAVE BEEN MADE
IN DELAWARE, AND WILL BE INTERPRETED AND THE RIGHTS OF THE PARTIES DETERMINED
IN ACCORDANCE WITH THE LAWS OF THE UNITED STATES APPLICABLE THERETO AND THE
INTERNAL LAWS OF THE STATE OF DELAWARE APPLICABLE TO AN AGREEMENT EXECUTED,
DELIVERED AND PERFORMED THEREIN WITHOUT GIVING EFFECT TO THE CHOICE-OF-LAW
RULES THEREOF OR ANY OTHER PRINCIPLE THAT COULD REQUIRE THE APPLICATION OF THE
SUBSTANTIVE LAW OF ANY OTHER JURISDICTION.
9.12 Nominees for Beneficial Owners. In the event that any
Registrable Securities are held by a nominee for the beneficial owner of such
Registrable Securities, the beneficial owner of Registrable Securities may, at
its election, be treated as the holder of such Registrable Securities for
purposes of any request or other action by any Purchaser or holder of
Registrable Securities pursuant to this Agreement or any determination of any
number or percentage of shares of Registrable Securities held by any Purchaser
or holder of Registrable Securities contemplated by this Agreement. If the
beneficial owner of any Registrable Securities so elects, the Company may
require assurances reasonably satisfactory to it of such owner's beneficial
ownership of such Registrable Securities. In no event will a Purchaser be
required to exercise its Warrant as a condition to the registration of such
Warrant or Registrable Securities thereunder.
9.13 Fiduciary Duties. The Company acknowledges and agrees that, for
so long as any Warrant is outstanding and regardless of whether the holder has
exercised any portion of its Warrant, (a) the officers and directors of the
Company will owe the same duties (fiduciary and otherwise) to the holder as
are owed to a stockholder of the Company and (b) the holder will be entitled
to all rights and remedies with respect to such duties or that are otherwise
available to a stockholder of the Company under the Delaware General
Corporation Law, as amended from time to time.
9.14 Duties Among Purchasers. Each Purchaser agrees that no other
Purchaser will by virtue of this Agreement be under any fiduciary or other
duty to give or withhold any consent or approval under this Agreement or to
take any other action or omit to take any action under this Agreement, and
that each other Purchaser may act or refrain from acting under this Agreement
as such other Purchaser may, in its discretion, elect.
9.15 Amendment. This Agreement shall not be modified or amended, nor
shall the operation of any provision hereof be waived, except (a) by a writing
signed by the party against whom enforcement is sought, or (b) by a writing
signed by the Stockholders holding at least a majority of the Capital Stock
(on a fully diluted basis), including each Purchaser, which modification or
amendment shall be binding upon and is hereby consented to by all
Stockholders; provided, however, that the Corporation may add new holders of
-27-
its shares as parties to this Agreement as provided herein, which additions
are hereby consented to by all Stockholders; and provided further that none of
Sections 7.09, 7.13 or Article VIII shall be modified, amended or waived
except by a writing signed by all parties to this Agreement or by the party
against whom enforcement is sought.
9.16 Confidentiality. Each Purchaser agrees to keep confidential any
information delivered by the Company to such Purchaser under this Agreement
that the Company clearly indicates in writing to be confidential information;
provided, however, that nothing in this Section 9.16 will prevent such
Purchaser from disclosing such information (a) to any Affiliate of such
Purchaser or any actual or potential purchaser, participant, assignee, or
transferee of such Purchaser's rights or obligations hereunder that agrees to
be bound by the terms of this Section 9.16, (b) upon order of any court or
administrative agency, (c) upon the request or demand of any regulatory agency
or authority having jurisdiction over such Purchaser, (d) that is in the
public domain, (e) that has been obtained from any Person that is not a party
to this Agreement or an Affiliate of any such party without breach by such
Person of a confidentiality obligation known to such Purchaser, (f) in
connection with the exercise of any remedy under this Agreement, or (g) to the
certified public accountants for such Purchaser. The Company agrees that such
Purchaser will be presumed to have met its obligations under this Section 9.16
to the extent that it exercises the same degree of care with respect to
information provided by the Company as it exercises with respect to its own
information of similar character.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-28-
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
COMPANY:
IT PARTNERS, INC.
BY:
----------------------------------------
NAME:____________________________________
TITLE:
0000 Xxxxxx Xxxx Xxxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx, Chief Executive Officer
Fax: (000) 000-0000
CREDITANSTALT:
CREDITANSTALT CORPORATE FINANCE, INC.
BY:
----------------------------------------
Xxxxxx X. Xxxxxxxx
Executive Vice President
BY:
----------------------------------------
Xxxx Xxxxx
Two Xxxxxxxxx Xxxxx
0xx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxx Xxxxx
Fax: (000) 000-0000
with copies to:
Xxx Xxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxx
Fax: (000) 000-0000
-29-
FF-ITP:
FF-ITP, L.P.
BY: Franklin Street/Fairview Capital, L.L.C.,
its general partner
BY: Franklin Capital, L.L.C.,
its manager
BY: ______________________________
--------------------------------------
Xxxxx X. Xxxxxxx,
Manager
000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
INDOSUEZ:
INDOSUEZ IT PARTNERS
BY: Indosuez XX XX, Inc.
Managing General Partner
BY:
-------------------------------------
NAME:
TITLE:
BY:
--------------------------------------
NAME:
TITLE:
0000 0xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxxx
Fax: (000) 000-0000
WACHOVIA:
WACHOVIA CAPITAL ASSOCIATES, INC.
BY:
---------------------------------
NAME:
TITLE:
-00-
Xxxxxxxx Xxxxxxx Xxxxxxxxxx, Inc.
000 Xxxxxxxxx Xx., X.X.
Mailcode GA423
Xxxxxxx, Xxxxxxx 00000
Attn: Senior Vice President/ITP
Fax: (000) 000-0000
with copies to:
Wachovia Capital Associates, Inc.
000 Xxxxxxxxx Xx., X.X.
Mailcode GA715
Xxxxxxx, Xxxxxxx 00000
Attn: Legal Department/WCA/ITP
Fax: (000) 000-0000
-31-
INITIAL STOCKHOLDERS:
Xxxxxx X. Xxxxx
----------------------------------
Xxxxx X. Xxxxx
----------------------------------
Xxxxxx Xxxxx
----------------------------------
Xxxxxxxx X. Xxxxx
----------------------------------
Xxxxxxx Nice
----------------------------------
Xxxx Xxxxxxx
----------------------------------
-32-
SUBSEQUENT STOCKHOLDERS:
Xxxxxxxxxxx Xxxxxxx
----------------------------------
Xxxxxx Xxxxxxx
----------------------------------
Xxxxxx Xxxxxxx
----------------------------------
Xxxxxxx Xxxxxxxxx
----------------------------------
Xxxx Xxxxxx
____________________________________________
----------------------------------
Xxxxxx Xxxxxxxxx
----------------------------------
Xxx XxXxxx
-----------------------------------__________
Xxxxxx Xxxxxx
_____________________________________________
-----------------------------------
-00-
Xxxxxxx Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxxxxxxx, as Trustee U-A dated 10/20/72
--------------------------------------
Xxxx X. Xxxxxxxxx, as Trustee U-A dated 11/9/95
---------------------------------------
Xxxxxxx X. Xxxxxx
----------------------------------------
Xxxxxxx X. Xxx
----------------------------------------
Xxxxxxx X. Xxx
-----------------------------------------
Xxxxxxx X. Xxxxxxxxxxxx
_____________________________________________
------------------------------------------
Xxxxxx X. Xxxxxx
------------------------------------------
-34-
Xxxxxxx X. Xxxxx
----------------------------------------
Xxxx X. Xxxxxxx
-----------------------------------------_____
Xxxxxx Xxxxxxx
------------------------------------------
Xxxx Xxxxxxxx
------------------------------------------
Xxxxx Xxxxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxx
---------------------------------------
Xxxxxxx X. Xxxx
---------------------------------------
-35-
Xxxxxx X. Xxxxxxxx
--------------------------------------
Xxxx X. Xxxx, as Trustee U-A dated 12/13/95
--------------------------------------
_____________________________________________
-36-
Exhibit A
STOCKHOLDER AGREEMENT
ISSUED AND OUTSTANDING CAPITAL STOCK
as of
March 31, 1998
Name of Initial Number of Number of
Stockholder Address Shares Options
---------------- ------- ---------- ---------
Xxxxxx X. Xxxxx c/o IT Partners, Inc.
0000 Xxxxxx Xxxx Xxxx.
Xxxxx 000 10,900 Series A
Xxxxxxxx, XX 00000 550,101 Common None
Xxxxx X. Xxxxx c/o IT Partners, Inc.
0000 Xxxxxx Xxxx Xxxx.
Xxxxx 000 10,900 Series A
Xxxxxxxx, XX 00000 550,101 Common None
Xxxxxx and
Xxxxxxxx X. Xxxxx
(jointly) 00000 Xxxxxx Xxxxxx
Xxxxxx Xxxxxx, XX 00000 365,435 Common None
Xxxxxxx Nice c/o CNS, Inc.
000 Xxxx Xxxx
Xxxxxxxx, XX 00000 159,431 Common None
Xxxx Xxxxxxx 000 Xxxxxxxxxxx Xxxxxx Xx.
Xxxxxxxxx, XX 00000 151,550 Common None
Name of
Subsequent Number of Number of
Stockholder Address Shares Options
--------------- -------- --------- --------
Xxxxxxxxxxx and
Xxxxxx Xxxxxxx
(jointly) c/o A-Com, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Xxxxxxx Xxxxxxxxx c/o Financial System Consulting, Inc.
Xxx Xxxxx Xxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Xxxxxxx Xxxxxxxxx c/o Financial System Consulting, Inc.
Xxx Xxxxx Xxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Xxxx Xxxxxx c/o IT Partners, Inc.
0000 Xxxxxx Xxxx Xxxx.
Xxxxx 000
Xxxxxxxx, XX 00000
Xxxxxx Xxxxxxxxx c/o Incline Corp.
0000 Xxxxxx Xx., Xxx. X
Xxxxxxx Xxxx, XX 00000
Xxx XxXxxx c/o Incline Corp.
0000 Xxxxxx Xx., Xxx. X
Xxxxxxx Xxxx, XX 00000
Xxxxxx Xxxxxx c/o Incline Corp.
0000 Xxxxxx Xx., Xxx. X
Xxxxxxx Xxxx, XX 00000
Xxxxxxx Xxxxxx c/o Incline Corp.
0000 Xxxxxx Xx., Xxx. X
Xxxxxxx Xxxx, XX 00000
Xxxxxxx X. Xxxxxxxxxxxx,
as Trustee U-A dated
10/20/72 c/o Sequoia Diversified Products, Inc.
000 Xxxxx Xxxxxxxx Xx.
Xxxxxx Xxxxx, XX 00000
Xxxx X. Xxxxxxxxx,
as Trustee U-A
dated 11/9/95 c/o Sequoia Diversified Products, Inc.
000 Xxxxx Xxxxxxxx Xx.
Xxxxxx Xxxxx, XX 00000
Xxxxxxx X. Xxxxxx c/o Sequoia Diversified Products, Inc.
000 Xxxxx Xxxxxxxx Xx.
Xxxxxx Xxxxx, XX 00000
Xxxxxxx X. Xxx c/o Sequoia Diversified Products, Inc.
000 Xxxxx Xxxxxxxx Xx.
Xxxxxx Xxxxx, XX 00000
Xxxxxxx X. Xxx c/o Sequoia Diversified Products, Inc.
000 Xxxxx Xxxxxxxx Xx.
Xxxxxx Xxxxx, XX 00000
Xxxxxxx X. Xxxxxxxxxxxx c/o Sequoia Diversified Products, Inc.
000 Xxxxx Xxxxxxxx Xx.
Xxxxxx Xxxxx, XX 00000
Xxxxxx X. Xxxxxx c/o Sequoia Diversified Products, Inc.
000 Xxxxx Xxxxxxxx Xx.
Xxxxxx Xxxxx, XX 00000
Xxxxxxx X. Xxxxx c/o Sequoia Diversified Products, Inc.
000 Xxxxx Xxxxxxxx Xx.
Xxxxxx Xxxxx, XX 00000
Xxxx X. Xxxxxxx c/o Sequoia Diversified Products, Inc.
000 Xxxxx Xxxxxxxx Xx.
Xxxxxx Xxxxx, XX 00000
Xxxxxx Xxxxxxx c/o Sequoia Diversified Products, Inc.
000 Xxxxx Xxxxxxxx Xx.
Xxxxxx Xxxxx, XX 00000
Xxxx Xxxxxxxx c/o Sequoia Diversified Products, Inc.
000 Xxxxx Xxxxxxxx Xx.
Xxxxxx Xxxxx, XX 00000
Xxxxx Xxxxxxxxx c/o Sequoia Diversified Products, Inc.
000 Xxxxx Xxxxxxxx Xx.
Xxxxxx Xxxxx, XX 00000
Xxxxxxx X. Xxxxxx c/o Sequoia Diversified Products, Inc.
000 Xxxxx Xxxxxxxx Xx.
Xxxxxx Xxxxx, XX 00000
Xxxxxx X. Xxx c/o Sequoia Diversified Products, Inc.
000 Xxxxx Xxxxxxxx Xx.
Xxxxxx Xxxxx, XX 00000
Xxxxxxx X. Xxxx c/o Sequoia Diversified Products, Inc.
000 Xxxxx Xxxxxxxx Xx.
Xxxxxx Xxxxx, XX 00000
Xxxxxx X. Xxxxxxxx c/o Sequoia Diversified Products, Inc.
000 Xxxxx Xxxxxxxx Xx.
Xxxxxx Xxxxx, XX 00000
Xxxx X. Xxxx, as Trustee
U-A dated 12/13/95 c/o Sequoia Diversified Products, Inc.
000 Xxxxx Xxxxxxxx Xx.
Xxxxxx Xxxxx, XX 00000
Name of Number of Number of Shares
Purchaser Address Shares Subject to Warrants
----------- ------- ---------- --------------------
Creditanstalt
Corporate
Finance, Inc. Two Ravinia Drive 412,579 Loan
Suite 1680 Warrant Shares
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxx 222,222 Series B 645,587 Issuable
Fax: (000) 000-0000 200,000 Series A(1) Warrant Shares(2)
FF-ITP, L.P. 000 Xxxxxxx Xxxx
Xxxxx 000 515,724
Xxxxxxx, XX 00000 Issuable
Attn: Xxxxx X. Xxxxxxx Warrant
Fax: (000) 000-0000 110,000 Series A(1) Shares(2)
Indosuez IT Partners 0000 0xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxx
Fax: (000) 000-0000 431,965 Series B None
Wachovia Capital
Associates, Inc. 000 Xxxxxxxxx Xx., X.X.
Mailcode GA423
Xxxxxxx, XX 00000
Attn: Sr. Vice Pres./ITP
Fax: (000) 000-0000 647,948 Series B None
/TABLE
EXHIBIT B
JOINDER AGREEMENT
to
Stockholder Agreement
of
IT PARTNERS, INC.
This Joinder Agreement (the "Joinder") is made as of the day of
-----
-------------------- between IT Partners, Inc., a Delaware corporation (the
"Company"), and (the "New Stockholder").
----------------------
WHEREAS, the Company and all its stockholders are parties to a certain
Amended and Restated Stockholder Agreement dated March , 1998 (as amended,
restated, supplemented, or modified from time to time, the "Agreement"), that
governs the orderly disposition of shares of the Company's stock, among other
matters; and
WHEREAS, the Agreement permits additional holders or transferees of the
Company's shares to become parties to the Agreement upon execution of a
joinder agreement in form and substance satisfactory to the Company; and
WHEREAS, the New Stockholder desires to become a party, and the Company
desires that the New Stockholder become a party, to the Agreement;
NOW, THEREFORE, in consideration of the premises, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows.
1. The New Stockholder is hereby made a party to the Agreement with
respect to the ( ) shares of the Stock of
------------------- ----- ------------
the Company (the "Stock") owned by the New Stockholder and represented by the
Company's stock certificate no. , and the New Stockholder hereby consents to
---
be bound by all the terms and conditions of the Agreement.
2. [Complete if applicable] The New Stockholder has received the
Stock as a successor, assignee or transferee of , which
-----------------------
was a Purchaser under the Agreement.
3. The New Stockholder has reviewed this Joinder and the Agreement in
their entireties, and has had an opportunity to obtain the advice of counsel
prior to executing this Joinder and fully understands all provisions of the
Joinder and the Agreement.
4. This Joinder may be executed in any number of counterparts, each
of which shall be an original and all of which taken together shall constitute
one instrument.
IN WITNESS WHEREOF, the parties have duly executed this Joinder under
seal as of the day and year first set forth above.
"Company" IT PARTNERS, INC.
[CORPORATE By:______________________________
SEAL] -----------------------------
Title:
"New Stockholder" ------------------------------
(Printed or typed name)
-------------------------------(SEAL)
(Signature)
Address of New Stockholder:
