SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
Form 10-QSB/A
(Mark One)
[X] QUARTERLY REPORTS UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1996
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-21662
Strategia Corporation
(formerly Dataguard Recovery Services, Inc.)
(Exact name of registrant as specified in its charter)
Kentucky 61-1064606
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10301 Linn Station Road, P.O. Box 37144, Louisville, KY 40233-7144
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 502-426-3434
Former name, former address, and former fiscal year, if changed since last
report.
Dataguard Recovery Services, Inc.
Indicate by check [X] whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date - 3,010,885.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
*10.1 - Acquisition Assistance Agreement, as amended among Copex
Limited (UK), Copex Limited (Swiss), Dataguard Limited, and Strategia
Corporation.
10.2 - Promissory Note due January 5, 1997 between the Company
and EPI Corporation.
10.3 - Revised Term Lease Supplement with IBM Credit Corporation
dated August 21, 1996.
10.4 - Computer Lease Agreement dated March 7, 1996 between
Twinsys Dataguard SA and Bull SA.
10.5 - Form of Stock Purchase Warrant Agreement between the
Company and certain investors (including EPI Corporation and John P. Snyder).
10.6 - Extension of Revolving Credit Agreement dated November 8,
1996 with Star Bank, N.A.
*27 - Financial Data Schedule
________________________________
* Previously filed with Company's Form 10QSB for quarter ended
September 30, 1996.
(b) Reports on Form 8-K
None
SIGNATURES
In accordance with the requirements of the Exchange Act of 1934, the registrant
has caused this amendment to its quarterly report to be signed on its behalf by
the undersigned, hereunto duly authorized.
STRATEGIA CORPORATION
Date: November 19, 1996 By: /s/ Richard W. Smith
Richard W. Smith, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Richard W. Smith President and Director November 19, 1996
Richard W. Smith (Chief Executive Officer)
(Chief Financial Officer)
(Chief Accounting Officer)
</TABLE>
EXHIBIT 10.2
PROMISSORY NOTE
$800,000.00 October 8, 1996
Louisville, Kentucky
For value received, STRATEGIA CORPORATION, a Kentucky corporation (the
"Maker"), hereby promises to pay to the order of EPI CORPORATION, a Kentucky
corporation (the "Lender"), the principal sum of Eight Hundred Thousand
Dollars ($800,000.00), together with interest on the principal balance of
this Note from time to time outstanding at an annual rate equal to the "Prime
Rate," as from time to time in effect, plus one and one-half percent (1 1/2%).
Interest on this Note shall accrue from the date of this Note until the
entire principal balance of and all accrued interest on this Note have been
paid in full.
The term of this Note shall be ninety (90) days including the date of this
Note. On January 5, 1997, the Maker shall pay to the holder of this Note
the entire outstanding principal balance of, and all accrued but unpaid
interest due under, this Note.
This Note is a renewal promissory note to supersede promissory notes dated
July 13, 1992 (the "Original Note") for $300,000 and an additional $500,000
loan on January 17, 1995 (the "Subsequent Note") extended by Lender to Maker.
The Original Note and the Subsequent Note were issued in connection with a
Security Agreement (the "Security Agreement") and a Second Mortgage (the
"Mortgage"), respectively, between the Maker and the Lender and dated as of
the date of the Original Note and amended as of January 17, 1995. This Note
is secured as provided in the Security Agreement and in the Mortgage, and
references therein to the "Note" shall hereafter relate to this Note. Upon
delivery of this Note, the Subsequent Notes shall terminate and be of no
further force or effect.
All payments of principal and interest on this Note shall be paid to the
holder at EPI Corporation, 9707 Shelbyville Road, Louisville, Kentucky 40223,
or to such other person or entity or at such other place as may be designated
in writing by the holder of this Note.
As used in this Note, "Prime Rate" shall mean the annual interest rate most
recently published in The Wall Street Journal, Midwest Edition, from time to
time, which is designated as the Prime Rate. The interest rate of this Note
shall be adjusted, from time to time, on the same day on which the Prime Rate
is published in The Wall Street Journal, Midwest Edition. As of the date of
this Note, the Prime Rate is 8.25%, and the annual interest rate for this
Note is 9.75%. All interest on this Note shall be computed on the basis of
the actual number of days elapsed over an assumed year of three hundred sixty
(360) days. Interest shall accrue and shall have accrued from the date of
this Note even if it is signed at a later date.
The Maker may prepay, in whole or in part, the principal of this Note without
premium or penalty. All prepayments shall, at the holder's option, first be
applied to applicable costs and penalties, next to accrued interest, and
finally to the principal balance.
Failure of the holder of this Note to exercise any of its rights and remedies
shall not constitute a waiver of any provision of this Note or of the
Security Agreement or the Mortgage, or of any of such holder's rights and
remedies, nor shall it prevent the holder from exercising any rights or
remedies with respect to the subsequent happening of the same or similar
occurrences. All remedies of the holder hereof shall be cumulative to the
greatest extent permitted by law. Time shall be of the essence for payment of
all payments of interest and principal of this Note.
The occurrence of an Event of Default (as defined in the Security Agreement
or in the Mortgage) shall be a default under this Note. Upon any default
under this Note, the holder of this Note may declare the entire outstanding
principal balance of, and all accrued but unpaid interest on, this Note to be
immediately due and payable.
If there is any default under this Note, and this Note is placed in the hands of
an attorney for collection, or is collected through any court, including,
without limitation, any bankruptcy court, the Maker promises to pay to the
order of the holder hereof such holder's reasonable attorney's fees and court
costs incurred in collecting or attempting to collect or securing or
attempting to secure this Note or enforcing the holder's rights with respect
to any collateral securing this Note, to the extent allowed by the laws of
the Commonwealth of Kentucky or any state in which any collateral for this
Note is situated.
This Note has been delivered in, and shall be governed by and construed in
accordance with, the laws (including, without limitation, the conflicts of
law rules) of the Commonwealth of Kentucky.
Except as otherwise expressly provided herein or in the Security Agreement
or in the Mortgage, all parties to this instrument, whether makers, sureties,
guarantors, endorsers, accommodation parties or otherwise, shall be jointly
and severally bound, and jointly and severally waive presentment, demand,
notice of dishonor, protest, notice of protest, notice of nonpayment or
nonacceptance and any other notice and all due diligence or promptness that
may otherwise be required by law, and all exemptions to which they may now
or hereafter be entitled under the laws of the Commonwealth of Kentucky or
of the United States of America or any state thereof. The holder of this
instrument may, with or without notice to any party, and without affecting
the obligations of any maker, surety, guarantor, endorser, accommodation
party or any other party to this Note (1) extend the time for payment of
either principal or interest from time to time, (2) release or discharge any
one or more parties liable on this Note, (3) suspend the right to enforce
this Note with respect to any persons, (4) change, exchange or release any
property in which the holder has any interest securing this Note,
(5) justifiably or otherwise, impair any collateral securing this Note or
suspend the right to enforce against any such collateral, and (6) at any time
it deems it necessary or proper, call for and should it be made available,
accept, as additional security, the signature or signatures of additional
parties or a security interest in property of any kind or description or both.
STRATEGIA CORPORATION
By: /s/ Richard W. Smith
Title: President
EXHIBIT 10.3
<TABLE>
<CAPTION>
ORIGINAL ORIGINAL REVISED REVISED ORIG. REVISED
IBM M (*) PURCH LEASE LEASE RENT RENT MO. MO.
CUST MACH E SERIAL LSE PURCH. PRICE START END EFFECTIVE END MO. LEASE LEASE
NUM TYPE MODEL S NUM OPTION OPTION FIN DATE DATE DATE DATE TERM PAYMNT PAYMNT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2632835 3390 A38 A6032 B+ FM $142,368 1993-11-14 1997-05-15 1996-10-01 2000-09-30 48 $4,140 $ 963
2632835 3390 B3C BA026 B+ FM $191,400 1993-11-14 1997-05-15 1996-10-01 2000-09-30 48 $5,566 $1,295
2632835 3390 B3C BA029 B+ FM $191,400 1993-11-14 1997-05-15 1996-10-01 2000-09-30 48 $5,566 $1,295
2632835 3490 A10 62158 B+ FM $ 47,622 1993-11-14 1997-05-15 1996-10-01 2000-09-30 48 $1,362 $ 317
2632835 3490 B20 68079 B+ FM $ 50,609 1993-11-14 1997-05-15 1996-10-01 2000-09-30 48 $1,447 $ 337
2632835 3490 B40 71546 B+ FM $ 79,430 1993-11-14 1997-05-15 1996-10-01 2000-09-30 48 $2,271 $ 528
2632835 3990 G03 15054 L N/A $175,852 1993-11-14 1998-11-14 1996-10-01 2000-09-30 48 $1,271 $ 296
2632835 9993 001 0005034 S N/A $ 1,500 1991-11-15 1997-05-15 1996-10-01 2000-09-30 48 $ 45 $ 10
2632835 9996 REST S N/A $119,611 N/A N/A 1996-10-01 2000-09-30 48 N/A $3,269
TOTAL $21,668 $8,310
<FN>
(*) See Page 2 for explanations, definitions and additional terms.
</FN>
</TABLE>
This Revised Term Lease Supplement amends and supersedes Term Lease
Supplement(s) # 173283
THE LEASE AGREEMENT REFERENCED ABOVE AND THIS SUPPLEMENT CONTAIN THE TERMS
FOR THIS TRANSACTION. LESSEE AUTHORIZES LESSOR TO CHANGE THE AMOUNT FINANCED
AND THE RENT IF LESSEE'S SUPPLIER CHANGES LESSEE'S PURCHASE PRICE. LESSEE
FURTHER AUTHORIZES LESSOR TO INSERT SERIAL NUMBERS ON THIS SUPPLEMENT WITHOUT
FURTHER AUTHORIZATION FROM LESSEE. BY SIGNING BELOW, BOTH PARTIES ACKNOWLEDGE
THAT THEY HAVE READ AND UNDERSTAND THE AGREEMENTS AND AGREE TO THE TERMS,
FURTHER, LESSEE AGREES THAT THESE TERMS SUPERSEDE ALL PROPOSALS OR PRIOR
AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN BOTH
PARTIES. ONCE THIS SUPPLEMENT IS SIGNED BY BOTH PARTIES, IT SHALL BE DEEMED
TO HAVE BEEN ACCEPTED BY LESSOR AT ITS HEADQUARTERS OR ITS LOCATION IN
BETHESDA, MARYLAND AND ANY REPRODUCTION OF THIS AGREEMENT MADE BY RELIABLE
MEANS (FOR EXAMPLE PHOTOCOPY, IMAGE OR FACSIMILE SHALL IN ALL RESPECTS BE
CONSIDERED EQUIVALENT TO AN ORIGINAL).
Accepted by:
IBM Credit Corporation DATAGUARD RECOVERY SERVICES
For or as Lessor Lessee
By:/s/ Pat Ireland By: /s/ Dewey D. Minton, Jr.
Authorized Signature Authorized Signature
Pat Ireland 11/96 Dewey D. Minton, Jr. 8/21/96
Name (Type or Print) Date Name (Type or Print) Date
TERM LEASE SUPPLEMENT
Additional Terms and Conditions
OPTION CODES
B, B+, C, C+ Lease with fair market value end of lease renewal
and purchase options
B', C' Lease with prestated end of lease purchase and
renewal options
B$, C$ Lease with a one dollar ($1) end of lease purchase
option
L Lease for Used Equipment
S Financing of IBM One-Time Charges
T Financing of non-IBM One-Time Charges
PURCH. OPTION (PURCHASE OPTION - END OF LEASE ONLY)
FM Fair market sales value, as determined by Lessor, at
the end of Lease.
CL Contact IBM Credit for purchase price
NA Not Applicable
$1 Purchase Price is One Dollar ($1.00)
Number Prestated Purchase Percent - Purchase price will be
the Unit Purchase Price times this percent.
MAINT. INCLUD. (Maintenance Included)
Y Lease includes maintenance coverage
TERM
The initial Term starts on the Rent Commencement Date and continues
for the number of Payment Periods stated under Term. If the Term
has a Prefix of "CO" then the Lease is coterminous with the Lease
for the Equipment with the referenced serial number.
ESTIMATED COMMENCEMENT
For Leases, the month stated is the month the Lease must commence
for Lessee to receive the stated Lease Rate. For Financing, the
date stated is the intended start date of the Financing.
INTEREST RATE
The Interest Rate, if stated, is the Annual Percentage Rate (APR)
for the Lease or Financing. In the State of Texas the interest
rate for the Lease or Financing will not exceed the stated interest
rate.
RENEWAL OF LEASES WITH PRESTATED PURCHASE OPTIONS
Lessee may renew a Lease with a prestated purchase option for a
Term of one year. The Rent will be one-half of the Prestated
Purchase Percent times the Unit Purchase Price stated in the
Supplement. Renewal Rent payments will be annual and due and
payable in advance.
LEASES WITH MAINTENANCE INCLUDED
For Leases that basic maintenance coverage, Lessor will arrange for
maintenance service on the Equipment. The coverage starts at the
end of the warranty period and ends with thee initial Term. The
cost will be included in the Rent. Coverage beyond the basic
maintenance will be Lessee's responsibility. The maintenance
service provided alone will be responsible for fulfilling all
contractual commitments. Lessee may finance additional maintenance
coverage at the end of the initial Term under then current terms.
LESSEE RESPONSIBILITIES FOR LEASES WITH MAINTENANCE.
Lessee agrees, that before requesting maintenance service, to
ensure that:
1. Operational problems have been corrected;
2. Error recovery procedures have been followed;
3. Failures are clearly identified and logged; and
4. Customer Problem Analysis and Resolution (CPAR)
procedures have been completed for equipment requiring
maintenance under this Lease.
Lessee also agrees to complete, and return to IBM, a self-initialization
review form ("Form"). Lessee agrees to ensure that the Equipment location
qualifies as a qualified customer locations (as determined by IBM).
Lessee acknowledges having received a copy of that Form. If Lessee has
a Corporate Service Option Attachment to the IBM Customer Agreement then
Lessee agrees to perform all "Customer" obligations under that agreement
for the Equipment on a lease that includes maintenance.
LESSEE REPRESENTATIONS
Lessee represents that for Financing in:
1. Ohio, Maryland, Mississippi, Virginia or West Virginia,
Lessee is a corporation as defined by the applicable
state law;
2. Pennsylvania, Lessee is a business corporation as defined
by Pennsylvania laws; and
3. Alabama or Wisconsin, the Financed items are not being
purchased for agricultural purposes.
AUTHORITY TO SIGN FINANCING STATEMENTS
Lessee authorized Lessor or its agent as attorney-in-fact to
prepare, execute in Lessee's name and file any Uniform Commercial
Code financing statements or similar documents covering this
Equipment. Lessee authorizes Lessor to fill in serial numbers on
this Supplement after execution by Lessee for the Equipment listed
on the Supplement.
BASE EXTENSIONS
For machines designated as "Base Extension," this Supplement
supersedes the prior Lease for these machines and incorporates the
terms of the Term Lease Master Agreement effective for this
Supplement, including these terms with respect to Purchase of
Equipment, which may be different than the terms governing the
superseded Lease. This Lease amends and supersedes the prior Lease
for these machines with respect to Term, Lease Rate, Rent, Payment
Period, Purchase Option Code, and Lease Option. These changes
shall become effective on the Rent Commencement Date specified in
this Supplement.
AMENDMENT TO TERM LEASE MASTER AGREEMENT
This amends the Term Lease Master Agreement referenced on page 1.
1. In the preamble in line 4 after "(IBM)," insert "to
Lessee's Supplier;" in line 9 after "programs" delete
balance of the sentence.
2. Replace all subsequent occurrences of "IBM" with
"Lessee's Supplier" except in Paragraph 23, 26, 37 and 41
or where it appears as IBM Corporation or except as it
appears in this Supplement.
3. Delete all occurrences of "or Effective Date for
Additional License."
4. Replace all occurrences of "Estimate Shipment Date" with
"Estimated Commencement."
5. Replace all occurrences of "License Agreement" with
"license agreement."
6. Paragraph 1 - Options - delete the last sentence.
7. Paragraph 7 - Assignment to Lessor - replace lines 7
through 16 with "the buyer as defined in Lessee's
Supplier's contract in effect at the time the Lease is
accepted by Lessor (Purchase Agreement) shall apply to
Lessee."
8. Paragraph 13 - Rent Commencement Date - in line 3 replace
"the date payment is due IBM under the applicable
referenced agreement" with "the date Lessee designates on
the Certificate of Acceptance."
9. Paragraph 15 - Rate Protection - replace in its entirety
with the following: "The Lease Rates stated on the
Supplement are not subject to change provided the Lease
or Financing commences within the month of the Estimated
Commencement."
10. Paragraph 18 - Purchase of Equipment - in line 4 replace
"Option A or B" with "Options B, B+, C or C+;" In line 19
after "encumbrances" insert "arising solely from claims
against Lessor."
11. Paragraph 19 - Optional Extension - in line 7 replace
"Option A or B" with "Options B, B+, C or C+."
12. Paragraph 24 - Lease for Modifications and Additions - in
line 7 replace "by Lessee from IBM" with "by Lessee's
Supplier from IBM for Lessee."
13. Paragraph 34 - Financing - replace the first two
sentences with "Financing of LPM Charges for software
licensed by IBM shall be designated as Option S.
Financing of other LPM Charges, charges for non-IBM
equipment, or other charges shall be designated as Option
T. For charges not financed payment shall be made by
Lessee directly to Lessee's Supplier."
14. Delete Paragraph 43.
EXHIBIT 10.4
Lease Research & Information
Systems
Rent & Maintenance
Bull Contract Booklet 1996
N#AMZE/ AJL0229/ 1996
Client Code Number Year
Opening Social Denomination: Twinsys-Dataguard
Capital/Social From SA 250 0008
Social Seat Tour Mirabeau
39, quai Andre Citroen 75015 Paris
Represented by- M. Roland ESNIS
Title- Director General
Hereafter referred to as the "Client", first part
and Bull SA-Societe Anonyme au capital de 1073048000F.-RCS Versailles
B 642 058 739 Social Seat 68 Rue de Versailles- 78430 Louveciennes
Represented by- M. Alain LAPIERRE
Title- Commercial Engineer
Hereafter referred to as "Bull", other part
it is agreed that the following:
The conditions represented in the 1996 Bull contract booklet, which have been
read and accepted by the client:
- - Bull read by the client, who accepts the equipment designated and present
in the Honorable Order for a minimum initial period of 24 months,
- - Bull concedes that the client who accepts the initial and non-transferable
and non-exclusive use of the software designated and present in the Honorable
Order for the duration of the physical lease,
- - Bull procures from the client, who accepts the client's service for the
products designed and present in the ratified agreement for the duration of
the lease and the mentioned products.
The stipulations present in the Bull contract booklet are fulfilled by the
following special conditions accepted by the client:
A. The equipment designated and present in the ratified agreement are at the
disposition of the client for the duration indicated and present in the
ratified agreement remains the exclusive property of Bull; the client may
not cede it, sublet, take or give in guarantee or in any other manner;
B. The client maintains in good condition all property mentioned and carried
under equipment;
C. The client continues to use the equipment in conformity with the conditions
of use and sees to its' preservation with all required diligence;
******************************************************************************
Made by (signature) /s/Roland Esnis Twinsys Dataguard the 7th March, 1996
Made by (signature) /s/ M. Alain Lapierre Bull SA the 7th March, 1996
(*)Signifying the name and title of the signataries, made precedent by the
signed mention " Read and Approved"
The two copies sent March 7, 1996, are to be returned to Bull, SA to the
attention of (name & address)
Alain LaPierre 4C15 Bull Louveciennes
A copy will be returned to the client after signing by a representative of
Bull, SA.
******************************************************************************
D. Bull renounces any assurances made and all recourse against the client for
the destruction or loss of the equipment present in the ratified
agreement, or the damages inflicted to the equipment subject to the damages
or losses resulting from displacement, modification, or in connection with
other equipment effected in agreement with Bull. The utilization of
furnishings or informational supports not furnished by Bull and non-
conforming with Bull's standards, or the direct or indirect effects of
explosions, the disengagement of heat, flooding, the effects of the trans-
mutation of an atomic nucleus or radioactivity;
E. Client agrees by contract to assume as surety for all damage to equipment
not covered by Bull in accordance with the terms of the articles below.
The given Honorable Order must be returned by the client signed and without
modification no later than 15 days after reception. By default, Bull cannot
guarantee responsibility for the products ( delays, opening dates, costs).
Clause Attesting Competence
All difficulties relating to the application of the present contract will be
subject to the decision of an out of court agreement/ hearing by the tribunals
in Paris where the parties prove territorial competence, where testimony will
be given in lieu of an oath, where the defendant resides. Each clause of the
agreement, by expressed agreement of the parties, applies in each instance
referred to.
Quantity Lot Lot Designation
1 Lot #1 Rental- outside maintenance
Product Price Monthly
Quantity References Designation Units Installments
1
1 CLU 8501 Cooling of water
4
1
1
1
1 * see special clauses
INSTALLMENT: Week eleven is under reserve by signature
no later than March 7, 1996 (in exception to DCPC002 for
which the extension is 10 weeks)
Quantity Lot Lot Designation
1 Lot #2 Maintenance
Product Price Monthly
Quantity References Designation Units Installments
1
(4);=V= Wind L=location/lease M=Maintenance
Redistribution of lease- maintenance- see special conditions
Special Conditions- Addresses
The general conditions of the lease-maintenance contract are modified as
follows:
Contractual duration for 36 months for rental maintenance
Maintenance:
As an exception, Bull agrees that, in the case of annual revision in accord
of protocol with the outline agreement for maintenance between Twinsys-
Dataguard and Bull (maturity 7/31), the new conditions of protocol are applied
retroactively towards the maintenance of equipment objects of the 36 month
rental contract.
If a system is not able to be maintained under the assembled outline, Twinsys-
Dataguard under the first special condition, in actuality, against protocol,
be maintained by Bull, so that the special condition of the offered contract
will be under Bull's maintenance.
Conditions of Payment
- -The first nine monthly fees of the rental/maintenance agreement are increased
each (See document) 336 143 FHT. The 27 following monthly fees are raised
each 336 143.
- -Payment to be made before the 10th of each month by an automatic withdrawal.
- -Twinsys-Dataguard engages in paying Bull a guaranteed deposit, signing the
present contract a sum to be forfeited equivalent to three months rent of
the rental mentioned in the agreement. Each sum will be considered definitive
agreement that Bull, in the case of non-payment by Twinsys-Dataguard of fees
due in the execution of the maintenance contract in the event of sums to be
paid.
Termination of the Contract
Bull may, at liberty, end all or part of the rental-maintenance contract and
other rights falling under the product and otherwise report to a financial
organization who will be notified as regards the client of the condition of
the financial agreement.
The client accepts the present expression and without reservation the eventual
closure below and the resulting release of Bull. The client pays Bull in
advance by formal completion according to article 1690 of the Civil Code and
recognizes that by the end of the lease he will be fully opposable by the
completion of the following formalities, at Bull's choice:
- -Signing an agreement electing to end the agreement, or
- -Simple notification of termination made by letter to recommend by demand
notice of receipt.
The client engages in signing if needed, at the request of Bull or the
financial administrator, all other documents necessary for legal regulations
and administrative operation. The client agrees equally, that he will have
knowledge of the termination of the lease by one of the methods below: to
settle, with the financial administrator, all sums due in pursuance of the
rental agreement without bringing about compensation and any deductions
whatever.
Special Conditions/Addressments
It is understood between the parties that Bull, may, after the termination of
the present contract, intervene by agent for the execution and collection of
rentals due by right under the present lease agreement.
In the event of a termination brought about by the conditions below, and
estimated accounts called by the judgement of the financial officer, it will
not be necessary to have interdependence or indivisibility between the rental
agreement and other contracts signed by the client with other suppliers. As a
result the client renounces all recourse against the financial agency and will
invest profitably the rights directly close to the suppliers in case of
litigation affecting these contracts and namely, the guarantee, the
maintenance of equipment, and/or the support of the software.
Modification of the Rental Agreement
At all times, Twinsys-Dataguard may demand from Bull a statement of sale and
maintenance of equipment under contract at the location for 36 months,
for as much as Bull has custody/guardianship under the rental agreement.
EXHIBIT 10.5
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR THE LAWS OF ANY STATE, AND MAY
NOT BE SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF SUCH REGISTRATION AND QUALIFICATION WITHOUT AN
OPINION OF LEGAL COUNSEL ACCEPTABLE TO THE CORPORATION THAT SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
STRATEGIA CORPORATION
------------------------------------------------------------
STOCK PURCHASE WARRANT
-------------------------------------------------------------
I. Grant.
Strategia Corporation, a Kentucky corporation (the
"Corporation"), for value received hereby grants to
________________, or his registered assigns (the "Holder") under
the terms herein, and subject to future dilution, the right to
purchase __________ Shares (the "Shares") of the Corporation's
common stock ("Common Stock") for $3.75 per Share (the "Purchase
Price").
II. Expiration.
The right to exercise this Warrant shall expire on September
30, 2001.
III. Exercise Procedure.
This Warrant may be exercised in whole or in part in
increments of at least 1,000 Shares by presenting it and tendering
the Purchase Price in legal tender or by bank cashier's or
certified check for the number of Shares purchased at the principal
office of the Corporation along with a written subscription
substantially in the form of Appendix A attached hereto.
The Corporation shall promptly issue and deliver at its
expense (including the payment of issue taxes) the proper number of
Shares, and such Shares shall be deemed issued for all purposes as
of the opening of business on the date on which this Warrant is
exercised (the "Exercise Date") notwithstanding any delay in the
actual issuance.
IV. Adjustments in Certain Events.
The number, class, and price of securities for which this
Warrant may be exercised are subject to adjustment from time to
time upon the happening of certain events as follows:
(a) If the outstanding shares of the Corporation's Common
Stock are divided into a greater number of Shares or a dividend in
stock is paid on the Common Stock, the number of Shares obtainable
on exercise of the Warrants shall be proportionately increased and
the Purchase Price in effect immediately prior to such subdivision
or at the record date of such dividend shall, simultaneously with
the effectiveness of such subdivision or immediately after the
record date of such dividend, be proportionately reduced; and,
conversely, if the outstanding shares of Common Stock are combined
into a smaller number of shares of Common Stock, the number of
Shares obtainable upon exercise of the Warrants shall be
proportionately reduced and the Purchase Price in effect
immediately prior to such combination shall, simultaneously with
the effectiveness of such combination, be proportionately
increased. The increases and reductions provided for in this
subsection IV(a) shall be made with the intent and, as nearly as
practicable, with the effect that neither the percentage of the
total equity of the Corporation obtainable on exercise of the
Warrants nor the price payable for such percentage upon such
exercise shall be affected by any event described in this
subsection IV(a).
(b) No adjustment of the Purchase Price will be made if the
amount of the adjustment is less than one cent per share, but in
that case any adjustment that would otherwise be required to be
made will be carried forward and will be made at the time of and
together with the next adjustment of the Purchase Price which,
together with any adjustment carried forward, amounts to one cent
per share or more.
(c) In case of any change in the Common Stock of the
Corporation through merger, share exchange, reclassification,
reorganization, partial or complete liquidation, or other similar
change in the capital structure of the Corporation (not including
the issuance of additional shares of Common Stock by the
Corporation other than by stock split or stock dividend), then, as
a condition of the change in the capital structure of the
Corporation, lawful and adequate provision shall be made so that
the Holder will have the right thereafter to receive upon the
exercise of the Warrants the kind and amount of shares of stock or
other securities or property to which he would have been entitled
if, immediately prior to such merger, share exchange,
reclassification, reorganization, recapitalization, or other change
in the capital structure, he had held the number of Shares
obtainable upon the exercise of the Warrants. In any such case,
appropriate adjustment shall be made in the application of the
provisions set forth herein with respect to the rights and interest
thereafter of the Holder, to the end that the provisions set forth
herein shall thereafter be applicable, as nearly as reasonably may
be, in relation to any shares of stock or other property thereafter
deliverable upon the exercise of the Warrants. The Corporation
will not permit any change in its capital structure to occur unless
the issuer of the shares of stock or other securities to be
received by the Holder of this Warrant Certificate, if not the
Corporation, agrees to be bound by and comply with the provisions
of this Warrant Certificate. If any change in capital structure to
which this subsection IV(c) applies involves an election on the
part of the Corporation's securities holders which would have been
made by the Holder if, immediately prior to the record date with
respect to such election, the Holder exercised the Warrants in
full, then Holder shall, on or before the election date, make an
election as if he had exercised the Warrants in full and the
Warrants shall thereafter be exercisable to purchase the securities
or other property which the Holder would have received had he
exercised the Warrants immediately prior to the record date with
respect to the change in capital structure and made the same
election.
(d) When any adjustment is required to be made in the number
of Shares, other securities, or the property purchasable upon
exercise of the Warrants, the Corporation shall promptly determine
the new number of shares or other securities or property
purchasable upon exercise of the warrants and (i) prepare and
retain on file a statement describing in reasonable detail the
method used in arriving at the new number of shares or other
securities or property purchasable upon exercise of the Warrants
and (ii) cause a copy of such statement to be mailed to Holders
within thirty (30) days after the date when the event giving rise
to the adjustment occurred.
(e) No fractional shares of Common Stock or other securities
will be issued in connection with the exercise of any Warrants, but
the Corporation shall pay, in lieu of fractional shares, a cash
payment therefor on the basis of the mean between the high bid and
low asked prices in the over-the-counter market or the closing
price on a national securities exchange on the day immediately
prior to exercise.
(f) If preferred securities of the Corporation or securities
of any subsidiary of the Corporation are distributed pro rata to
holders of any or all of the Corporation's securities, such number
of securities shall be distributed to the Holder or his assignee
upon exercise of his rights hereunder as such Holder or assignee
would have been entitled to if this Warrant Certificate had been
exercised prior to such distribution. The provisions with respect
to adjustment of the Corporation's Common Stock provided in this
section IV shall also apply to the preferred securities and
securities of any subsidiary to which the Holder or his assignee
shall be entitled under this subsection IV(f).
(g) Notwithstanding anything herein to the contrary, there
shall be no adjustment made hereunder on account of the sale and
issuance of the Shares or other securities purchasable upon
exercise of the Warrants.
V. Reservation of Shares.
The Corporation agrees that the number of shares of Common
Stock or other securities sufficient to provide for the exercise of
the Warrants upon the basis set forth above shall at all times
during the term of the Warrants be reserved for exercise.
VI. Redemption of Warrants.
(a) The Warrants outstanding at the time of a redemption may
be redeemed at the option of the Corporation, in whole or in part
on a pro-rata basis, at any time on or after April 1, 1997 if, at
the time notice of such redemption is given by the Corporation as
provided in Paragraph B, below, the Daily Price has exceeded $7.50
for the ten consecutive trading days immediately preceding the date
of such notice, at a price equal to $0.25 per share of Common Stock
issuable upon the exercise of the Warrant (the "Redemption Price").
For the purpose of the foregoing sentence, the term "Daily Price"
shall mean, for any relevant day, the closing bid price on that day
as reported by the principal exchange or quotation system on which
prices for the Common Stock are reported. On the redemption date
the holders of record of redeemed Warrants shall be entitled to
payment of the Redemption Price upon surrender of such redeemed
Warrants to the Corporation at its principal in Louisville,
Kentucky.
(b) Notice of redemption of Warrants shall be given at least
30 days prior to the redemption date by mailing, by registered or
certified mail, return receipt requested, a copy of such notice to
all of the holders of record of Warrants at their respective
addresses appearing on the books or transfer records of the
Corporation or such other address designated in writing by the
holder of record to the Corporation not less than 40 days prior to
the redemption date.
(c) From and after the redemption date, all rights of the
Warrantholders (except the right to receive the Redemption Price)
shall terminate. No later than five (5) business days after the
surrender of the Warrants on or after the redemption date, the
Corporation shall pay the Redemption Price to the holder of record
of the redeemed and surrendered Warrant.
(d) If the Corporation fails to pay the Redemption Price as
provided above, the holder of any Warrants called for redemption
may at the option of the holder (a) by notice to the Corporation
declare the notice of redemption a nullity as to such holder, or
(b) maintain an action against the Corporation for the Redemption
Price. If the holder brings such an action, the Corporation will
pay reasonable attorneys' fees of the holder. If the holder fails
to bring an action against the Corporation for the Redemption Price
within 60 days after the redemption date, the holder shall be
deemed to have elected to declare the notice of redemption to be a
nullity as to such holder and such notice shall be without any
force or effect as to such holder. Except as otherwise
specifically provided in this Paragraph VI(d), a notice of
redemption, once mailed by the Corporation as provided in Paragraph
VI(b) shall be irrevocable.
VII. Sale of Warrant or Shares.
(a) The Holder shall not, without the prior written consent
of Corporation, directly or indirectly, offer, sell, contract to
sell, grant any option for the sale of, or otherwise dispose of or
transfer any Warrants or shares of Common Stock exercisable upon
the exercise of Warrants until the earlier to occur of (i) the
first anniversary of the date of this Warrant, or (ii) the Daily
Price shall have been at least $10.00 for ten consecutive trading
days.
(b) Neither this Warrant nor the Shares have been registered
under the Securities Act of 1933, as amended (the Act ), or under
the securities laws of any state. Neither this Warrant nor the
Shares when issued may be sold, transferred, pledged or
hypothecated in the absence of (i) an effective registration
statement for this Warrant or the Shares, as the case may be, under
the Act and such registration or qualification as may be necessary
under the securities laws of any state, or (ii) an opinion of
counsel reasonably satisfactory to the Corporation that such
registration or qualification is not required. The Corporation
shall cause a certificate or certificates evidencing all or any of
the Shares issued upon exercise of the rights herein prior to said
registration and qualification of such shares to bear the following
legend:
The shares evidenced by this certificate have
been acquired for investment and have not been
registered under the Securities Act of 1933 as
amended (the "Act"), or any state securities
laws. The shares may not be sold,
transferred, pledged or hypothecated or
otherwise disposed of in the absence of an
effective registration statement or an opinion
of counsel reasonably satisfactory to the
Corporation that the transaction would not be
in violation of the Act or any applicable
state securities law.
VIII. Transfer.
This Warrant shall be registered on the books of the
Corporation which shall be kept at its principal office for that
purpose, and shall be transferable in whole or in part but only on
such books by the Holder in person or by the Holder's duly
authorized attorney with written notice substantially in the form
of Appendix B attached hereto, and only in compliance with the pre-
ceding paragraph. The Corporation may issue appropriate stop
orders to its transfer agent to prevent a transfer in violation of
the preceding paragraph.
IX. Replacement of Warrant.
At the request of the Holder and on production of evidence
reasonably satisfactory to the Corporation of the loss, theft,
destruction or mutilation of this Warrant and (in the case of loss,
theft, or destruction) if required by the Corporation, upon
delivery of an indemnity agreement with a surety in such reasonable
amount as the Corporation may determine, the Corporation, at its
expense, will issue a new Warrant of like tenor in lieu thereof.
X. Investment Covenant.
The Holder by its acceptance hereof covenants that this
Warrant is, and any Shares issued hereunder will be, acquired for
investment purposes, and that the Holder will not distribute the
same in violation of any state or federal law or regulation.
XI. Notice.
Any notices required or permitted to be given hereunder shall
be in writing and may be serviced personally or by mail; and if
serviced shall be addressed as follows:
If to the Corporation:
10301 Linn Station Road
P.O. Box 37144
Louisville, Kentucky 40232-7144
Attention: President
If to the Holder:
[at the address furnished by the
Holder to the Company
for the purpose of notice.]
Any notice so given by mail shall be deemed effectively given
48 hours after mailing when deposited in the United States mail,
registered or certified mail, return receipt requested, postage
prepaid and addressed as specified above. Any party may by written
notice to the other specify a different address for notice
purposes.
XII. Applicable Law.
This Warrant shall be construed according to the laws of
the Commonwealth of Kentucky.
IN WITNESS WHEREOF, the Corporation has caused this Warrant to
be signed on its behalf, in its corporate name, by its President,
and its corporate seal to be hereunto affixed and the said seal to
be attested by its Secretary, as of this ____ day of September,
1996.
ATTEST: STRATEGIA CORPORATION
By: ________________________ By:_________________________
Secretary President
Appendix A
IRREVOCABLE SUBSCRIPTION
To: STRATEGIA CORPORATION
Louisville, Kentucky
Gentlemen:
The undersigned hereby elects to exercise his right under the
attached Warrant by purchasing shares of the
common stock of your company, and hereby irrevocably subscribes to
such issue. The certificates for such shares shall be issued in
the name of
_________________________________________________________________
(Name)
_________________________________________________________________
(Address)
_________________________________________________________________
(Taxpayer Number)
and delivered to
__________________________________________________________________
(Name)
_________________________________________________________________
(Address)
The exercise price of $__________________________is enclosed.
Date:_______________________________
Signed: ____________________________
__________________________________________________________________
(Address)
____________________________________
(Signature)
Appendix B
ASSIGNMENT
for value received _________________ hereby assigns to
_________________________________________________________________
(Name)
__________________________________________________________________
(Address)
________________________the attached Warrant together with all
right, title and interest therein, and does hereby irrevocably
appoint _________________________________________________________
attorney to transfer said Warrant on the books of Strategia
Corporation, with full power of substitution in the premises.
Done this _____ day of ______________, _____.
Signed: _________________________________
By:______________________________________
Its:_____________________________________
EXHIBIT 10.6
November 8, 1996
Mr. Richard W. Smith
President
Strategia Corporation
P.O. Box 37144
Louisville, KY 40233-7144
RE: The Revolving Credit and Term Loan Agreement dated July 1, 1992 and
subsequently amended by and between Star Bank, N.A. (the "Bank") and
Dataguard Recovery Services, Inc. (the "Company") now known as Strategia
Corporation (said agreement shall hereinafter be referred to as the
"Agreement").
Dear Mr. Smith:
This letter, when duly and validly accepted by the Company, shall evidence
the intention of the Bank to amend the above referenced Agreement and
Promissory Note such that:
1) The Maturity Date of the Revolving Credit facility shall be extended
to October 31, 1997.
2) The Revolving Note shall bear interest at 2.0% over the Bank's prime
rate (the "Prime Rate"). The Prime Rate is currently 8.25%.
3) The Company hereby agrees to reduce the subject Revolving Credit Facility
to zero upon execution of this Agreement and any future advances shall be
upon approval of the Bank.
As a condition to the effectiveness of this amendment, the Company shall pay
the Bank a $100 renewal fee and execute the promissory note attached hereto.
All representations and warranties of the Company set forth in the Agreement
are true and correct as of the date hereof. Except as amended herein, all
other terms, conditions and covenants of the Agreement shall remain in full
force and effect.
If the above terms represent our understanding, please indicate your
agreement by signing one copy of this letter and returning it to me.
Sincerely,
/s/ Edward L. Dwyer
Edward L. Dwyer
Vice President
Accepted this 18th day of November, 1996.
Strategia Corporation
By: /s/ Richard W. Smith
