FORM 8-B
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REGISTRATION OF SECURITIES OF CERTAIN SUCCESSOR ISSUERS
Filed Pursuant to Section 12(b) or (g) of
The Securities Exchange Act of 1934
COLONIAL DATA TECHNOLOGIES CORP.
(Exact name of registrant as specified in its charter)
Delaware 04-2763229
(State of incorporation or organization) (I.R.S. Employer
Identification No.)
80 Pickett District Road, New Milford, Connecticut 06776
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Common Stock, par value $.01 per share American Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act: None
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 1. General Information
(a) The registrant was organized under the laws of the
State of Delaware as a corporation on May 10, 1995.
(b) The registrant's fiscal year ends on December 31 of
each calendar year.
Item 2. Transaction of Succession
(a) At the time of succession, the predecessor, which had
securities registered pursuant to Section 12(b) of the Securities
and Exchange Act of 1934, as amended (the "Act"), was Colonial
Data Technologies Corp., a Massachusetts corporation (the
"Predecessor").
(b) The information required by this item is incorporated
by reference to the Predecessor's Notice of Annual Meeting and
Proxy Statement dated March 24, 1995 attached hereto.
Item 3. Securities to be Registered
Presently Issued
Class Presently Presently Held in Registrant's
Authorized Issued Account
Common Stock 20,000,000 13,421,043 0
Item 4. Description of Registrant's Securities to be Registered
The authorized capital stock of the registrant consists of
20,000,000 shares of Common Stock, $.01 par value per share.
As of May 18, 1995, 13,421,043 shares of Common Stock were
issued and outstanding (not including 434,162 shares of Common
Stock issuable upon exercise of outstanding stock options and
86,345 shares issuable upon exercise of outstanding warrants).
Holders of Common Stock are entitled to one vote per share
on all matters to be voted upon by stockholders and do not have
cumulative voting rights. Accordingly, holders of a majority of
the shares of Common Stock entitled to vote in any election of
directors may elect all of the directors standing for election.
The registrant's board of directors is not classified. Holders
of Common Stock are entitled ratably to dividends which may be
paid out of legally available funds and any distributions of
assets remaining after payment of liabilities in the event of
liquidation, dissolution or winding up of the registrant. The
registrant has never declared or paid cash dividends on its
Common Stock. Shares of Common Stock are not redeemable and have
no subscription, conversion or pre-emptive rights.
Item 5. Financial Statements and Exhibits
(a) Financial Statements.
No financial statements are being filed herewith,
because the capital structure and balance sheet of the registered
is substantially the same as those of the Predecessor immediately
prior to the succession.
(b) Exhibits (* denotes filed herewith)
(** denotes confidential treatment for certain
portions of the document has been requested
concurrent with the filing of this Form 8-B)
i) Proxy Statement - Predecessor's Notice of Annual
Meeting and Proxy Statement dated March 29, 1995 (SEC
File No. 0-15562).
ii) Other Exhibits
Exhibit Description
No.
*2. Agreement and Plan of Merger dated as May 17, 1995 by and
between Colonial Data Technologies Corp. and CDT, Inc.
*3.1 Certificate of Incorporation of registrant.
*3.2 Certificate of Merger of CDT, Inc. and Colonial Data
Technologies Corp.
*3.3 By-laws of registrant.
4.1 Specimen Certificate for shares of Common Stock (Exhibit to
Predecessor's Report on Form 10-K for the year ended
December 31, 1991, File No. 0-15562).
4.2 Form of Representative's Warrants, as amended (Exhibit to
Registration Statement on Form S-4, File No. 33-30242).
4.3 Form of Agreement Amending Representative's Warrants dated
as of May 30, 1989 entered into between Predecessor and the
warrant holders (Exhibit to the Predecessor's Registration
Statement on Form S-4, File No. 33-30242).
10.1 1983 Stock Option Agreement, as amended (Exhibit to the
Predecessor's Registration Statement on Form S-18 dated
March 27, 1987, File No. 33-12339B).
10.2 Form of Nonqualified Stock Option Agreement (Exhibit to the
Predecessor's Registration Statement on Form S-18 dated
March 27, 1987, File No. 33-12339B).
10.3 First Amendment to the Rise Technology Inc. 1983 Stock
Option Plan (as amended and restated effective August 5,
1987) (Exhibit to the Predecessor's Registration Statement
on Form S-4, File No. 33-30242).
10.4 Nonqualified Stock Option Substitution Agreement for
Nonemployee Directors of Colonial Data Technologies Corp.
(Exhibit to the Predecessor's Registration Statement on
Form S-4, File No. 33-30242).
10.5 Nonqualified Stock Option Substitution Agreement for
Employees of Colonial Data Technologies Corp. (Exhibit to
the Predecessor's Registration Statement on Form S-4, File
No. 33-30242).
10.6 Technical Information and Patent License Agreement
effective as of August 1, 1987 by and between American
Telephone and Telegraph and Colonial Data Technologies
Corp. (Exhibit to Predecessor's Report on Form 10-Q for the
quarter ended September 30, 1989, No. 0-15562).
10.7 Certificate of Limited Partnership of Cee Associates
Limited Partnership (Exhibit to Predecessor's Report on
Form 10-Q for the quarter ended September 30, 1989, No. 0-
15562).
10.8 Loan Agreement dated September 2, 1983 by and between the
Connecticut Development Authority and Cee Associates
Limited Partnership (Exhibit to Predecessor's Report on
Form 10-Q for the quarter ended September 30, 1989, No. 0-
15562).
10.9 Indenture of Trust dated September 2, 1983 by and between
the Connecticut Development Authority and Citytrust, as
Trustee (Exhibit to Predecessor's Report on Form 10-Q for
the quarter ended September 30, 1989, No. 0-15562).
10.10 Guaranty dated September 2, 1983 from Christos J. Totolis,
Robert J. Schock and Frederick Masotta in favor of
Citytrust, as Trustee (Exhibit to Predecessor's Report on
Form 10-Q for the quarter ended September 30, 1989, No. 0-
15562).
10.11 Agreement dated as of May 15, 1989 by and among Colonial
Data Technologies Corp. and certain option holders
(Exhibit to Predecessor's Report on Form 10-Q for the
quarter ended September 30, 1989, No. 0-15562).
10.12 Purchase Agreement, effective October 15, 1989, by and
between Bell South Service Incorporated and Colonial Data
Technologies Corp. (Exhibit to Predecessor's Report on Form
10-Q for the quarter ended March 31, 1990, No. 0-15562).
10.13 Employment Agreement dated as of May 12, 1992, by and
between Colonial Data Technologies Corp. and Robert J.
Schock (Exhibit to Predecessor's Report on Form 10-K for
the year ended December 31, 1992, No. 0-15562).
10.14 Agreement between U.S. West Business Resources, Inc., as
agent for U.S. West Communications, Inc., and Colonial Data
Technologies Corp. as amended by Amendment No. One, dated
July 23, 1993 (Exhibit to Predecessor's Report on Form 10-Q
for the quarter the quarter ended June 30, 1993, File No.
0-15562).
10.15 Loan and Security Agreement, dated April 11, 1994, between
Colonial Data Technologies Corp. and People's Bank (Exhibit
to Predecessor's Report on Form 10-Q for the quarter ended
June 30, 1993, File No. 0-15562).
10.16 Continuing Guaranty from the Predecessor to People's Bank
(Exhibit to Predecessor's Report on Form 10-Q for the
quarter ended June 30, 1994, File No. 0-15562).
10.17 Application and Reimbursement Agreement for Irrevocable
Documentary Letter of Credit between the Predecessor and
People's Bank (Exhibit to Predecessor's Report on Form 10-Q
for the quarter ended June 30, 1994, File No. 0-15562).
10.18 Listing Agreement, dated December 29, 1993 between the
Predecessor and the American Stock Exchange (Exhibit to
Predecessor's Report on Form 10-K for the year ended
December 31, 1993, File No. 0-15562).
10.19 Colonial Data Technologies Corp. 1994 Long Term Incentive
Plan (Exhibit to Predecessor's Report on Form 10-Q for the
quarter ended June 30, 1994, File No. 0-15562).
10.20 Form of Incentive Stock Option Agreement (Exhibit to
Predecessor's Report on Form 10-Q for the quarter ended
June 30, 1994, File No. 0-15562).
10.21 First Amendment to Loan and Security Agreement, dated as of
August 29, 1994, between Colonial Data Technologies Corp.
and People's Bank (Exhibit to Predecessor's Registration
Statement on Form S-2, File No. 33-84274).
10.22 Form of Revolving Credit Note, dated August 29, 1994, from
Colonial Data Technologies Corp. to People's Bank (Exhibit
to Predecessor's Registration Statement on Form S-2, File
No. 33-84274).
10.23 Confirmation of Continuing Guaranty, dated as of August 29,
1994 from Colonial Data Technologies Corp. to People's Bank
(Exhibit to Predecessor's Registration Statement on Form S-
2, File No. 33-84274).
10.24 Strategic Alliance Agreement, dated September 1994, between
Colonial Data Technologies Corp. and Standard
Telecommunications, Ltd. (Exhibit to Predecessor's
Statement on Form S-2, File No. 33-84274).
10.25 Lease Agreement dated as of September 1, 1994 between Cee
Associations Limited Partnership and Colonial Data
Technologies Corp. (Exhibit to Predecessor's Registration
Statement on Form S-2, File No. 33-84274).
10.26 Strategic Alliance Agreement, dated as of January 16, 1995,
between Colonial Data Technologies Corp. and U.S. Order.
(Exhibit to Predecessor's Report on Form 10-K of the year
ended December 31, 1994, File No. 0-15562).
10.27 Amendment No. 2, dated September 29, 1994, to Agreement
between U.S. West Communications, Inc. and Colonial Data
Technologies Corp. (Exhibit to Predecessor's Report on
Form 10-K of the year ended December 31, 1994, File No. 0-
15562).
10.28 Letter evidencing amendment to credit facility dated March
24, 1995 from People's Bank to Colonial Data Technologies
Corp. (Exhibit to Predecessor's Report on Form 10-Q for the
quarter ended March 31, 1995, File No. 0-15562).
*10.29 Stock Exchange Agreement by and among US Order, Inc. and
Colonial Data Technologies Corp. dated as of April 6, 1995.
**10.30 Joint Venture Agreement between Barry Blau & Partners, Inc.
and Colonial Data Technologies Corp. dated as of May 16,
1995.
*10.31 Sublease made as of May 1, 1995 between TIE/Communications
Canada Inc. and CDT Canada Corp.
11. Statement regarding computation of earnings per share
(Exhibit to Predecessor's Report on Form 10-K for the year
ended December 31, 1994, File No. 0-15562).
*21. Subsidiaries of the registrant.
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
REGISTRANT
COLONIAL DATA TECHNOLOGIES CORP.
By: /s/ John N. Giamalis
_______________________________
John N. Giamalis
Vice President and Chief Financial
Officer
Date: June 1, 1995
Exhibit Index
Exhibit No. Description of Document Page In
Sequentially
Numbered
Copy
2. Agreement and Plan of Merger
dated as May 17, 1995 by and
between Colonial Data
Technologies Corp. and CDT, Inc.
3.1 Certificate of Incorporation of
registrant.
3.2 Certificate of Merger of CDT,
Inc. and Colonial Data
Technologies Corp.
3.3 By-laws of registrant.
10.29 Stock Exchange Agreement by and
among US Order, Inc. and Colonial
Data Technologies Corp. dated as
of April 6, 1995.
10.30 Joint Venture Agreement between
Barry Blau & Partners, Inc. and
Colonial Data Technologies Corp.
dated as of May 16, 1995.
10.31 Sublease made as of May 1, 1995
between TIE/Communications Canada
Inc. and CDT Canada Corp.
21. Subsidiaries of the registrant.
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Merger Agreement") dated as
of May 17, 1995 by and between Colonial Data Technologies Corp.,
a Massachusetts corporation (the "Company"), and CDT, Inc., a
Delaware corporation ("CDT").
WHEREAS, the Company is a corporation duly organized and
existing under the laws of the Commonwealth of Massachusetts;
WHEREAS, CDT is a corporation duly organized and existing
under the laws of the State of Delaware;
WHEREAS, the Company has authority to issue 20,000,000
shares of Common Stock, par value $.01 per share (the "Company's
Common Stock"), of which 13,421,043 shares are issued and
outstanding and none are held in the treasury of the Company and
6,250 shares of preferred stock, none of which has been issued;
WHEREAS, prior to the Effective Date of the Merger (as such
terms are hereinafter defined), additional shares of the
Company's Common Stock may be issued upon the exercise of options
to purchase the Company's Common Stock and pursuant to employee
benefit plans of the Company and its subsidiaries;
WHEREAS, CDT has authority to issue 20,000,000 shares of
Common Stock, par value $.01 per share (the "Delaware Common
Stock");
WHEREAS, one hundred (100) shares of the Delaware Common
Stock are issued and outstanding, all of which are owned,
beneficially and of record, by the Company;
WHEREAS, the respective Board of Directors of the Company
and CDT have determined that, for the purpose of effecting the
reincorporation of the Company in the State of Delaware, it is
advisable and in the best interest of both corporations that the
Company merge with and into CDT upon the terms and conditions
hereinafter provided and in accordance with the laws of the State
of Delaware and the Commonwealth of Massachusetts in a
transaction qualifying as a reorganization within the meaning of
Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as
amended; and
WHEREAS, the respective Board of Directors of the Company
and CDT have approved this Merger Agreement and directed that
this Merger Agreement be submitted to a vote of their respective
stockholders for approval.
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and CDT hereby agree as follows:
1. Merger. Subject to the terms and conditions of this
Merger Agreement, the Company shall be merged with and into CDT
(the "Merger") in accordance with the Delaware General
Corporation Law ("DGCL") and the Massachusetts Business
Corporation Law ("MBCL") such that CDT shall be the surviving
corporation (hereinafter sometimes referred to as the "Surviving
Corporation"). The Merger shall become effective upon the date
on which a certified copy of this Merger Agreement or a
Certificate of Merger, executed and acknowledged on behalf of the
Surviving Corporation and the Company, in accordance with the
requirements of the DGCL and the MBCL, has been filed with the
Secretary of State of the State of Delaware and the Secretary of
State of the Commonwealth of Massachusetts (the "Effective
Date").
2. Certificate of Incorporation. The Certificate of
Incorporation of CDT, as in effect on the Effective Date, shall
be the Certificate of Incorporation of the Surviving Corporation
without change or amendment until thereafter amended in
accordance with the provisions thereof and applicable laws.
3. Directors, Officers and By-Laws. The directors of the
Company immediately prior to the Effective Date shall be the
directors of the Surviving Corporation, each to hold office in
accordance with the Certificate of Incorporation and the By-Laws
of the Surviving Corporation. The officers of the Company
immediately prior to the Effective Date shall be the officers of
the Surviving Corporation, each to hold office in accordance with
the Certificate of Incorporation and the By-Laws of the Surviving
Corporation except that the person serving as Clerk of the
Company shall serve as Secretary of the Surviving Corporation.
The By-Laws of CDT, as in effect on the Effective Date, shall be
the By-Laws of the Surviving Corporation without change or
amendment until thereafter amended in accordance with the
provisions thereof and applicable laws.
4. Succession. From and after the Effective Date, the
Surviving Corporation shall succeed, insofar as permitted by law,
to all of the rights, assets, liabilities and obligations of the
Company; and the title to any real estate vested by deed or
otherwise, in either of the Company and/or the Surviving
Corporation, shall not revert or be in any way impaired by reason
of the Merger, but all rights of creditors and all liens on any
property of either of said corporation shall be reserved
unimpaired, and all debts, liabilities and duties of said
corporations shall, as of the Effective Date, attach to the
Surviving Corporation, and may be enforced against the Surviving
Corporation to the same extent as if said debts, liabilities, and
duties had been incurred or contracted by it, and any claim
existing or action or proceeding pending by or against any of
said corporations may be prosecuted as if the Merger had not
taken place, or the Surviving Corporation may be substituted in
its place. The employees and agents of the Company shall become
the employees and agents of CDT and continue to be entitled to
the same rights and benefits which they enjoyed as employees and
agents of the Company.
5. Further Assurances. From time to time as and when
requested by the Surviving Corporation or by its successors and
assigns, there shall be executed and delivered on behalf of the
Company and/or the Surviving Corporation such deeds and other
instruments, and there shall be taken or caused to be taken by it
such further and other action, as shall be appropriate or
necessary in order to vest, protect or confirm, of record or
otherwise, in the Surviving Corporation the title to and
possession of all property, interest, assets, right, privileges,
immunities, powers, franchises, and authority of the Company, and
otherwise to carry out the purposes of this Merger Agreement, and
the officers and directors of the Surviving Corporation are fully
authorized, in the name and on behalf of the Company, or
otherwise, to take any and all such action and to execute and
deliver any and all such deeds and other instruments.
6. Conversion of Shares.
(a) Upon the Effective Date, each share of the
Company's Common Stock issued and outstanding or held in the
treasury of the Company immediately prior thereto (other than
shares of the Company's Common Stock in respect of which
dissenters' rights shall properly have been exercised in
accordance with the MBCL) shall, by virtue of the Merger and
without any action on the part of any holder thereof, be changed
and converted into one (1) fully paid and nonassessable share of
CDT Common Stock.
(b) Upon the Effective Date, the one hundred (100)
shares of CDT Common Stock currently issued and outstanding in
the name of the Company shall be cancelled and retired without
any consideration being issued or paid therefor and shall resume
the status of authorized and unissued shares of CDT Common Stock,
and no shares of CDT Common Stock or other securities of the
Surviving Corporation shall be issued in respect thereof.
(c) Each outstanding option to purchase shares of the
Company's Common Stock under any of the stock option or stock
purchase plans of the Company (an "Old Option") and outstanding
immediately prior to the Effective Date shall, by virtue of the
Merger and without any action on the part of the holder thereof,
be converted into and become an option to purchase, upon the same
terms and conditions, the number of shares of Delaware Common
Stock which is equal to the same number of shares of Company's
Common Stock which may be purchased under such Old Option. The
exercise price per share under each Old Option shall be equal to
the exercise price per share immediately prior to the Effective
Date. All of the Company's stock option plans and stock options
granted thereunder, outstanding immediately prior to the
Effective Date are automatically amended to permit plan
continuance and stock option continuance and conversion into
those of CDT following the Merger notwithstanding any provisions
heretofore contained in such plans or outstanding options
providing for termination in the event of a merger in which the
Company is not the surviving corporation.
(d) Each Common Stock purchase warrant outstanding
immediately prior to the Effective Date (an "Old Warrant") by
virtue of the Merger and without any action on the part of the
holder thereof, be converted into and become a warrant to
purchase, upon the same terms and conditions, the number of
shares of Delaware Common Stock which is equal to the same number
of shares of the Company's Common Stock which may be purchased
under such Old Warrant.
7. Stock Certificates. Upon the Effective Date, each
certificate representing issued and outstanding shares of the
Company's Common Stock (other than shares of the Company's Common
Stock in respect of which dissenters' rights shall properly have
been exercised in accordance with the MBCL) shall be deemed and
treated for all purposes as representing the shares of CDT Common
Stock into which such shares of the Company's Common Stock have
been converted. Each stockholder of the Company may, but is not
required to, exchange any existing stock certificates
representing shares of the Company's Common Stock for stock
certificates representing the same number of shares of CDT Common
Stock. All shares of CDT Common Stock into which shares of the
Company's Common Stock shall have been converted pursuant to this
Merger Agreement shall be deemed to have been issued in full
satisfaction of all rights pertaining to such converted shares.
When the Merger becomes effective, the holders of certificates
representing the Company's Common Stock outstanding prior to the
Effective Date (except for shares of the Company's Common Stock
in respect of which dissenters' rights shall have been properly
exercised in accordance with the MBCL) shall cease to have any
rights with respect to such stock, and their sole rights shall be
with respect to the CDT Common Stock into which their shares of
the Company's Common Stock are to be converted by the Merger.
Upon the Effective Date, the stock transfer books of the Company
shall be closed and no transfer of shares of the Company's Common
Stock outstanding immediately prior to the Effective Date shall
thereafter be made or consummated.
8. Employee Option and Benefit Plans and Other Stock
Rights. As of the Effective Date: (a) all employee option,
benefit or compensation plans of the Company (collectively, the
"Plans") and all obligations of the Company under the Plans,
including the outstanding options granted pursuant to the Plans,
and (b) all obligations of the Company under all other benefit or
compensation plans and outstanding stock rights in effect as of
the Effective Date with respect to which employee rights or
accrued benefits or other rights are outstanding as of the
Effective Date, shall be assumed by, and continue to be the plan
of, the Surviving Corporation. To the extent any employee
option, benefit or compensation plan of the Company provided for
the issuance or purchase of, or otherwise related to, the
Company's Common Stock, after the Effective Date such plan shall
be deemed to provide for the issuance or purchase of, or
otherwise relate to, CDT Common Stock.
9. Stockholder Approval. As soon as practicable after the
date of execution and delivery of this Merger Agreement, this
Merger Agreement shall be submitted to a vote of the stockholders
of the Company and the sole stockholder of the Surviving
Corporation in accordance with the laws of the Commonwealth of
Massachusetts and the State of Delaware, respectively. In the
event that this Merger Agreement shall not be approved by the
requisite vote of 2/3 the stockholders of the Company at the
Company's 1995 annual meeting or any adjournment thereof, this
Merger Agreement shall thereupon be terminated without further
action of the parties hereto.
10. Amendment. Subject to applicable law, this Merger
Agreement may be amended, modified or supplemented by written
agreement of the parties hereto at any time prior to the
Effective Date with respect to any of the items contained herein.
11. Abandonment. At any time before the Effective Date,
this Merger Agreement may be terminated and the Merger may be
abandoned by the Board of Directors of either the Surviving
Corporation or the Company or both, notwithstanding the approval
of this Merger Agreement by the stockholders of the Company or
the sole stockholder of CDT.
12. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the Commonwealth of
Massachusetts, except to the extent the laws of the State of
Delaware shall apply mandatorily to the Merger.
IN WITNESS WHEREOF, this Merger Agreement is hereby
executed as a sealed instrument on behalf of the Company and the
Surviving Corporation by their respective duly authorized
officers.
_________________________ Colonial Data Technologies Corp.
ATTEST: (a Massachusetts corporation)
By: /s/ Robert F. Wasco By: /s/ Robert J. Schock
Its Clerk Its President
(Corporate Seal)
_________________________ CDT, Inc.
ATTEST: (a Delaware corporation)
By: /s/ John N. Giamalis By: /s/ Robert J. Schock
Its Secretary Its President
(Corporate Seal)
CERTIFICATE OF INCORPORATION
OF
CDT, Inc.
The undersigned, a natural person, for the purpose of
organizing a corporation for conducting the business and
promoting the purposes hereinafter stated, under the provisions
and subject to the requirements of the laws of the State of
Delaware (particularly Chapter 1, Title 8 of the Delaware Code
and the acts amendatory thereof and supplemental thereto, and
known, identified and referred to as the "General Corporation Law
of the State of Delaware"), hereby certifies that:
FIRST: The name of the corporation (hereinafter called the
"corporation") is
CDT, Inc.
SECOND: The address, including street, number, city, and
county, of the registered office of the corporation in the State
of Delaware is 32 Loockerman Square, Suite L-100, City of Dover,
County of Kent; and the name of the registered agent of the
corporation in the State of Delaware is The Prentice-Hall
Corporation System, Inc.
THIRD: The purpose of the corporation is to engage in any
lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of stock which the
corporation shall have the authority to issue is Twenty Million
(20,000,000). The par value of each of such shares is One Cent
($.01). All such shares are of one class and are shares of
Common Stock.
FIFTH: The name and the mailing address of the incorporator
are as follows:
NAME MAILING ADDRESS
Thomas L. Fairfield Goodwin Square
225 Asylum Street
Hartford, CT 06103
SIXTH: The corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed
between this corporation and its creditors or any class of them
and/or between this corporation and its stockholders or any class
of them, any court of equitable jurisdiction within the State of
Delaware may, on the application in a summary way of this
corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this
corporation under the provisions of section 291 of Title 8 of the
Delaware Code or on the application of trustees in dissolution or
of any receiver or receivers appointed for this corporation under
the provisions of Section 279 of Title 8 of the Delaware Code
order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this corporation, as
the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in
value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the
case may be, agree to any compromise or arrangement and to any
reorganization of this corporation as consequence of such
compromise or arrangement, the said compromise or arrangement and
the said reorganization shall, if sanctioned by the court to
which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders
or class of stockholders, of this corporation, as the case may
be, and also on this corporation.
EIGHTH: For the management of the business and for the
conduct of the affairs of the corporation, and in further
definition, limitation and regulation of the powers of the
corporation and of its directors and of its stockholders or any
class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of
the affairs of the corporation shall be vested in its Board
of Directors. The number of directors which shall
constitute the whole Board of Directors shall be fixed by,
or in the manner provided in, the By-Laws. The phrase
"whole Board" and the phrase "total number of directors"
shall be deemed to have the same meaning, to wit, the total
number of directors which the corporation would have if
there were no vacancies. No election of directors need be
by written ballot.
2. After the original or other By-Laws of the
corporation have been adopted, amended, or repealed, as the
case may be, in accordance with the provisions of Section
109 of the General Corporation Law of the State of Delaware,
and, after the corporation has received any payment for any
of its stock, the power to adopt, amend, or repeal the By-
Laws of the corporation may be exercised by the Board of
Directors of the corporation; provided, however, that any
provision for the classification of directors of the
corporation for staggered terms pursuant to the provisions
of subsection (d) of Section 141 of the General Corporation
Law of the State of Delaware shall be set forth in an
initial By-Law or in a By-Law adopted by the stockholders
entitled to vote of the corporation unless provisions for
such classification shall be set forth in this certificate
of incorporation.
3. Whenever the corporation shall be authorized to
issue only one class of stock, each outstanding share shall
entitle the holder thereof to notice of, and the right to
vote at, any meeting of stockholders. Whenever the
corporation shall be authorized to issue more than one class
of stock, no outstanding share of any class of stock which
is denied voting power under the provisions of the
certificate of incorporation shall entitle the holder
thereof to the right to vote at any meeting of stockholders
except as the provisions of paragraph (2) of subsection (b)
of section 242 of the General Corporation Law of the State
of Delaware shall otherwise require; provided, that no share
of any such class which is otherwise denied voting power
shall entitle the holder thereof to vote upon the increase
or decrease in the number of authorized shares of said
class.
NINTH: The personal liability of the directors of the
corporation is hereby eliminated to the fullest extent permitted
by the provisions of paragraph (7) of subsection (b) of Section
102 of the General Corporation Law of the State of Delaware, as
the same may be amended and supplemented.
TENTH: The corporation shall, to the fullest extent
permitted by the provisions of Section 145 of the General
Corporation Law of the State of Delaware, as the same may be
amended and supplemented, indemnify any and all persons whom it
shall have power to indemnify under said section from and against
any and all of the expenses, liabilities or other matters
referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive
of any other rights to which those indemnified may be entitled
under any By-Law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators
of such a person.
ELEVENTH: The corporation expressly elects not to be
governed by Section 203 of the Delaware General Corporation Law.
TWELFTH: From time to time any of the provisions of this
certificate of incorporation may be amended, altered or repealed,
and other provisions authorized by the laws of the State of
Delaware at the time in force may be added or inserted in the
manner and at the time prescribed by said laws, and all rights at
any time conferred upon the stockholders of the corporation by
this certificate of incorporation are granted subject to the
provisions of this Article TWELFTH.
Signed on May 9, 1995
/s/ Thomas L. Fairfield
________________________
Thomas L. Fairfield
Incorporator
CERTIFICATE OF MERGER
of
CDT, INC.
and
COLONIAL DATA TECHNOLOGIES CORP.
UNDER SECTION 252 OF THE
GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE
Pursuant to Section 252(c) of the General Corporation
Law of the State of Delaware, CDT, Inc., a Delaware corporation
("CDT"), hereby certifies the following information relating to
the merger of Colonial Data Technologies Corp., a Massachusetts
corporation ("Colonial"), with and into CDT (the "Merger"):
FIRST: The names and states of incorporation of CDT
and Colonial, which are the constituent corporations in the
Merger (the "Constituent Corporations"), are:
Name State
CDT, Inc. Delaware
Colonial Data Technologies Corp. Massachusetts
SECOND: The Merger Agreement, dated as of May 17,
1995, by and among Colonial and CDT (the "Merger Agreement"),
setting forth the terms and conditions of the Merger, has been
approved, adopted, certified, executed and acknowledged by each
of the Constituent Corporations as follows: (i) with respect to
Colonial in accordance with the provisions of Chapter 156B,
Section 79 of the General Laws of the Commonwealth of
Massachusetts and (ii) with respect to CDT, in accordance with
the requirements of Section 252 of the General Corporation Law of
the State of Delaware.
THIRD: The name of the corporation surviving the
Merger is CDT, Inc., which shall herewith be changed to Colonial
Data Technologies Corp., a Delaware corporation.
FOURTH: That amendments or changes in the Certificate
of Incorporation of CDT, Inc., a Delaware corporation, which is
the surviving corporation, that are to be effected by the merger
are as follows:
Article FIRST of the Certificate of Incorporation is
amended to read:
"FIRST: The name of the corporation (hereinafter
called the "corporation") is Colonial
Data Technologies Corp."
FIFTH: An executed Merger Agreement is on file at the
principal place of business of the surviving corporation, which
is located at 80 Pickett District Road, New Milford, CT 06776.
SIXTH: A copy of the Merger Agreement will be
furnished by the surviving corporation, on request and without
cost, to any stockholder of either of the Constituent
Corporations.
SEVENTH: The authorized capital stock of each foreign
corporation which is a party to the merger is as follows:
Par value per share
or statement that
Corporation Class Number of shares are without
Shares par value
Colonial Data Common 20,000,000 $.01
Technologies Corp., Preferred 6,250 $.01
a Massachusetts
Corporation
EIGHTH: This Certificate of Merger shall become
effective upon its filing with the Secretary of State of the
State of Delaware.
IN WITNESS WHEREOF, the undersigned has signed his
name, this 19th day of May, 1995, and by such act affirms under
the penalties of perjury, that this instrument constitutes the
act and deed of CDT and that the facts stated herein are true.
CDT, Inc.
/s/ Robert J. Schock
By:
___________________________________
Name: Robert J. Schock
Title: President
ATTEST:
/s/ John N. Giamalis
By: _________________________
Name: John N. Giamalis
Title: Secretary
BYLAWS
OF
CDT, INC.
ARTICLE I
BUSINESS OFFICES
The corporation shall have such offices as its business may
require in or out of the State of Delaware.
ARTICLE II
REGISTERED OFFICES AND REGISTERED AGENTS
The address of the initial registered office in the State of
Delaware and the name of the initial registered agent of the
corporation at such address are set forth in the Certificate of
Incorporation. The corporation may, from time to time, designate
a different address as its registered office or a different
person as its registered agent. The corporation may also have
other offices at such other places, either within or without the
State of Delaware, as the Board of Directors may determine or as
the activities of the corporation may require.
ARTICLE III
STOCKHOLDERS' MEETINGS
A. PLACE OF MEETING. Meetings of the stockholders shall be
held at the principal office of the corporation or at any other
place (in or out of the State of Delaware) designated in the
notice or of the meeting or in a duly executed waiver of notice
thereof.
B. ANNUAL MEETING. An annual meeting of the stockholders
shall be held within one hundred and eighty (180) days after the
close of each fiscal year of the corporation, or on such other
date as the Board of Directors may designate, at a time and place
designated by the Board of Directors. The stockholders shall
elect a Board of Directors and transact other business at the
annual meeting.
C. SPECIAL MEETINGS. Special meetings of the stockholders
shall be held: (1) when directed by the President, (2) when
directed by the Board of Directors, or (3) when called by the
President or the Secretary at the request in writing of a
majority of the Board of Directors. Such request in writing
shall state the purpose or purposes of the proposed meeting.
D. NOTICE. Written notice stating the place, day, and hour
of the meeting and, in the case of a special meeting, the purpose
or purposes for which the meeting is called, shall be delivered
not less than ten (10) nor more than sixty (60) days before the
meeting, either personally or by transmitting such notice with
confirmed delivery (including, by telex, cable or other form of
recorded communication, provided that the delivery of such notice
in written form is confirmed in writing), or by first class mail,
by or at the direction of the President, the Secretary, or the
officer or persons calling the meeting to each stockholder of
record entitled to vote at such meeting. If mailed, the notice
shall be deemed to be delivered when deposited, postage prepaid,
in the United States mail addressed to the stockholder at his or
her address as it appears on the stock transfer books of the
corporation.
E. NOTICE OF ADJOURNED MEETINGS. When a meeting is
adjourned to another date, time or place, it shall not be
necessary to give any notice of the adjourned meeting if the
date, time and place to which the meeting is adjourned are
announced at the meeting at which the adjournment is taken, and
any business may be transacted at the adjourned meeting that
might have been transacted on the original date of the meeting.
If, however, after the adjournment, the Board of Directors fixes
a new record date for the adjourned meeting, a notice of the
adjourned meeting shall be given as provided herein to each
stockholder of record on the new record date entitled to vote at
such meeting.
F. WAIVER OF NOTICE. A stockholder may waive any notice
required to be given to the stockholder, whether before or after
the time stated in the notice, if a waiver thereof in writing.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the stockholders need be specified
in the written waiver of notice. Attendance of a stockholder at
a meeting shall constitute a waiver of notice of the meeting,
except when the stockholder attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the
holding of the meeting or the transacting of business at the
meeting.
G. RECORD OF STOCKHOLDERS HAVING VOTING RIGHTS. After
fixing the record date for a stockholders' meeting, the officer
or agent having charge of the stock ledger for shares of the
corporation's stock shall prepare, at least ten (10) days before
each meeting of stockholders or such shorter time as exists
between the record date and the meeting, a complete alphabetical
list of the stockholders entitled to vote at such meeting or any
adjournment thereof, with the address of and the number and class
and series, if any, of shares held by each. Said list shall be
open to the examination of any stockholder, for any purpose
germane to the meeting during ordinary business hours, for a
period of at least ten days prior to the meeting, either at a
place within the city where the meeting is to be held, which
place shall be specified, at the place where the meeting is too
be held. The list shall be available for inspection at the
meeting. Upon the willful neglect or refusal of the directors to
produce such a list at any meeting for the election of directors,
they shall be ineligible for election to any office at such
meeting.
H. STOCKHOLDER QUORUM. The holders of a majority of the
stock entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of stockholders, except as
otherwise specially provided by these By-Laws, by the Certificate
of Incorporation or by statute. The affirmative vote, at a
meeting of stockholders duly held and at which a quorum is
present, of a majority of the voting power of the shares
represented at such meeting which are entitled to vote on the
subject matter shall be the act of the stockholders, except as is
otherwise specially provided by a By-Law, by the Certificate of
Incorporation or by statute. If less than a majority of such
outstanding shares are represented at a meeting, a majority of
the shares so represented may adjourn the meeting from time to
time without further notice of the adjourned meeting if the time
and place thereof are announced at the meeting at which the
adjournment is taken. At the adjourned meeting the Corporation
may transact any business which might have been transacted at the
original meeting. If the adjournment is for more than thirty
days, or if after the adjournment, a new record date is fixed for
the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the
meeting.
I. VOTING OF SHARES. Except as may otherwise be provided
in the Certificate of Incorporation, each holder of voting stock
shall be entitled to vote in person or by proxy at each meeting
and he or she shall have one vote for each share of voting stock
registered in his or her name. However, no proxy shall be voted
three years after the date thereof, unless the proxy provides for
a longer period.
J. ACTION BY STOCKHOLDERS WITHOUT A MEETING. Any action
which may be taken at any meeting of stockholders of the
corporation may be taken without a meeting, without prior notice
and without a vote, if a consent in writing setting forth the
action so taken, is signed by the holders of outstanding stock
having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a
meeting by less than unanimous consent shall be given to those
stockholders who have not so consented.
ARTICLE IV
DIRECTORS
A. FUNCTION. All corporate powers shall be exercised by or
under the authority of, and the business and affairs of this
corporation shall be managed by or under the direction of the
Board of Directors.
B. COMPENSATION. The Board of Directors shall have
authority to fix the compensation of directors unless otherwise
provided in the Certificate of Incorporation.
C. NUMBER. The number of directors which shall constitute
the whole board shall not be less than three (3) nor more that
nine (9). The first board shall consist of four (4) directors.
Thereafter, within the limits specified above, the number of
directors may be increased or diminished from time to time by the
Board of Directors.
D. ELECTION AND TERM.
(1) Each person elected at the organization meeting as
a member of the initial Board of Directors shall hold office
until the first annual meeting of stockholders and until his or
her successor shall have been elected and qualified or until his
or her earlier resignation, removal from office or death.
(2) At the first annual meeting of stockholders and at
each annual meeting thereafter, the stockholders shall elect
directors to hold office until the next succeeding annual
meeting. Each director shall hold office for the term for which
he or she is elected and until his or her successor shall have
been elected and qualified or until his or her earlier
resignation, removal from office or death.
E. REMOVAL OF DIRECTORS. Unless otherwise provided in any
contract with the corporation, any director may resign or be
removed at any time. A director who intends to resign shall give
written notice to the president or to the secretary. Removal of
a director, with or without cause, may be effected by the
affirmative vote of the holders of a majority of the stock
entitled to vote.
F. VACANCIES. Any vacancy occurring in the Board of
Directors, including any vacancy created by reason of an increase
in the number of directors, may be filled by the affirmative vote
of a majority of the remaining directors, though less than a
quorum of the Board of Directors, or by the stockholders. A
director elected to fill a vacancy shall be elected for the
unexpired term of his predecessor and until his successor is duly
chosen.
G. QUORUM AND VOTING. At a meeting of the Board, a
majority of the number of directors fixed by these bylaws shall
constitute a quorum for the transaction of business. The act of
the majority of the directors present at a meeting at which the
quorum is present shall be the act of the Board of Directors,
unless a greater number is specially required by the By-Laws,
Certificate of Incorporation or by statute. A meeting may be
adjourned by less than a quorum if a quorum is not present at the
meeting.
H. COMMITTEES.
(1) The Board of Directors, by resolution adopted by a
majority of the whole Board of Directors, may designate one or
more directors to constitute a committee. Such committee, to the
extent provided in such resolution, shall have and may exercise
the powers of the Board of Directors, except as limited by the
laws of the State of Delaware. Any director may be removed from
a committee with or without cause by the affirmative vote of a
majority of the entire Board of Directors.
(2) The Board of Directors, by resolution adopted in
accordance with this section, may designate one or more directors
as alternate members of any such committee, who may act in the
place and stead of any absent or disqualified member or members
at any meeting of such committee.
I. PLACE OF MEETING. Regular and special meetings of the
Board of Directors may be held in or out of the State of
Delaware.
J. TIME, NOTICE AND CALL OF MEETINGS.
(1) Regular meetings of the Board of Directors shall
be held immediately following the annual meeting of stockholders
each year. Other regular or special meetings may be held at
such times thereafter as the Board of Directors may fix and at
such other times as called by the President of the corporation.
Written notice of the time and place of special meetings of the
Board of Directors shall be given to each director by either
personal delivery, telephone, telegram, or facsimile transmission
or by first class mail, at least twenty four (24) hours before
the meeting.
(2) Notice of a meeting of the Board of Directors need
not be given to any director who signs a waiver of notice either
before or after the meeting. Attendance of a director at a
meeting shall constitute a waiver of notice of such meeting and
waiver of any and all objections to the place of the meeting, the
time of the meeting, or the manner in which it has been called or
convened, except when a director states, at the beginning of the
meeting (or upon the director's arrival, if later), any objection
to the transaction of business because the meeting is not
lawfully called or convened.
(3) Members of the Board of Directors may participate
in a meeting of the board by conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other. Participation
by a director by such means shall constitute presence in person
at a meeting.
K. ACTION WITHOUT A MEETING. Any action required or
permitted to be taken at a meeting of the Board of Directors or
at a meeting of a committee thereof, may be taken without a
meeting if a all of the directors, or all the members of the
committee, as the case may be, consent in writing, and such
consent is filed in the minutes of the proceedings of the board
or of the committee. Action taken under such a consent shall
effective when the last director signs the consent (unless the
consent provides a different effective date), and shall have the
same effect as a unanimous vote.
ARTICLE V
OFFICERS
A. OFFICERS. This corporation shall have a President and a
Secretary. This corporation may have a chairman, one or more
vice presidents, a treasurer, one or more assistant secretaries
and assistant treasurers. Each officer shall be elected by the
Board of Directors and shall serve until his or her successor is
chosen and qualified or until his or her earlier removal or
termination. All other officers and agents shall be chosen,
serve for such terms and have such duties as may be determined by
the Board of Directors. Any person may simultaneously hold two
or more offices.
B. DUTIES. The officers of this corporation shall have the
following duties:
(1) The Chairman, if a chairman shall be elected,
shall preside at meetings of stockholders and directors,
discharging all duties incumbent upon a presiding officer, and
shall perform such other duties as the By-Laws provide and as the
Board of Directors may prescribe.
(2) The President shall be the chief executive officer
of the corporation, shall have general and active management of
the business and affairs of the corporation subject to the
directions of the Board of Directors, and shall preside at all
meetings of the stockholders and Board of Directors. The
president shall report to the Board of Directors and shall also
exercise such other powers and perform such other duties as the
Board of Directors may prescribe.
(3) The Vice President, at the request of the
president, or in case of his absence or inability to act, the
vice president, so appointed, shall perform the duties of the
president and, when so acting, shall have all the powers of, and
be subject to all the restrictions upon, the president.
(4) The Secretary shall keep true and complete records
of the proceedings of the meetings of the stockholders, the Board
of Directors and any committees of directors and shall file any
written consents of the stockholders, the Board of Directors and
any committees of directors with these records. It shall be the
duty of the secretary to be custodian of the records and of the
seal of the corporation. The secretary shall also attend to the
giving of all notices and shall perform such other duties as the
By-Laws may provide or the Board of Directors may assign.
(5) The Assistant Secretary, if one shall be elected,
shall have such powers and perform such duties as the president,
secretary or the Board may from time to time assign and shall
perform such other duties as may be prescribed by these By-Laws.
At the request of the secretary, or in case of his or her absence
or inability to act, the assistant secretary shall perform the
duties of the secretary and, when so acting, shall have all the
powers of, and be subject to all the restrictions upon, the
secretary.
(6) The Treasurer shall keep correct and complete
records of account showing accurately at all times the financial
condition of the Corporation. The treasurer shall also act as
legal custodian of all moneys, notes, securities, and other
valuables that may from time to time come into the possession of
the corporation, and shall promptly deposit all funds of the
corporation coming into his hands in the bank or other depository
designated by the Board of Directors and shall keep this bank
account in the name of the corporation. Whenever requested by
the Board of Directors, the treasurer shall furnish a statement
of the financial condition of the Corporation and shall perform
such other duties as the By-Laws may provide and the Board of
Directors may assign.
(7) The Assistant Treasurer, if one shall be elected,
shall have such powers and perform such duties as the president,
treasurer or Board may from time to time assign and shall perform
such other duties as may be prescribed by these By-Laws. At the
request of the treasurer, or in case of his absence or inability
to act, the assistant treasurer shall have all the powers of, and
be subject to all the restrictions upon, the treasurer.
C. REMOVAL OF OFFICERS. Unless otherwise provided in any
contract with the corporation, any officer may resign or be
removed at any time. An officer who intends too resign shall
give written notice to the President or to the Secretary.
Removal of an officer, with or without cause, may be effected by
the Board of Directors.
D. VACANCIES. Any vacancy, however occurring, in any
office may be filled by the Board of Directors.
E. TRANSFER OF AUTHORITY. In case of the absence of any
officer of the corporation of for any other reason that the Board
of Directors may deem sufficient, the Board may transfer the
powers of duties of that officer to any other officer or to any
director or employee of the corporation, provided that a majority
of the entire Board approves.
ARTICLE VI
STOCK CERTIFICATES
A. CONSIDERATION AND PAYMENT. The capital stock may be
issued for such consideration, not less than the par value of any
such stock expressed in dollars, as shall be fixed by the Board
of Directors. Payment of such consideration may be made, in
whole or in part, in money, other tangible or intangible
property, labor or services performed. No certificate shall be
issued for any share until the share is fully paid.
B. STOCK CERTIFICATE. Every holder of the capital stock of
the corporation shall be entitled to a certificate signed by, or
in the name of the corporation, by the chairman or vice-chairman,
if any, or the president or a vice-president and by the secretary
or an assistant secretary or the treasurer or an assistant
treasurer. Any of or all the signatures on the certificate may
be a facsimile. Upon each such certificate shall appear such
legend or legends as may be required by law or by any contract or
agreement to which the corporation is a party. No certificate
shall be valid without such signatures or legends as are required
hereby.
C. LOST CERTIFICATE. Whenever a person shall request the
issuance of a certificate of stock to replace a certificate
alleged to have been lost by theft, destruction or otherwise, the
Board of Directors shall require that such person make an
affidavit to the fact of such loss before the Board shall
authorize the requested issuance. Before issuing a new
certificate the Board may also require a bond of indemnity
against any claim that may be made against the corporation with
respect to the certificate alleged to have been lost.
D. TRANSFER OF STOCK. The corporation or its transfer
agent shall register a transfer of a stock certificate, issue a
new certificate and cancel the old certificate upon presentation
for transfer of a stock certificate duly endorsed or accompanied
by proper evidence of succession, assignment or authority to
transfer if there has been compliance with any applicable tax law
relating to the collection of taxes and after the corporation or
its agent has discharged any duty to inquire into any adverse
claims of which the corporation or agent has notice.
Notwithstanding the foregoing, no such transfer shall be effected
by the Corporation or its transfer agent if such transfer is
prohibited by statute, by the Certificate of Incorporation or a
By-Law of the corporation or by any contract or agreement to
which the corporation is a party.
ARTICLE VII
SPECIFIC CORPORATE ACTIONS
All checks, drafts, notes, bonds, bills of exchange, and
orders for the payment of money of the corporation; all deeds,
mortgages and other written contracts and agreements to which the
corporation shall be a party; and all assignments or
endorsements of stock certificates, registered bonds or other
securities owned by the corporation shall be signed by any
officer of the corporation and, if required by law, attested by
the secretary or an assistant secretary, unless otherwise
directed by the Board of Directors or otherwise required by
statute.
ARTICLE VIII
DIVIDENDS
A. DIVIDENDS. Subject to any limitations or conditions
contained in the Certificate of Incorporation, dividends may be
declared by a resolution duly adopted by the Board of Directors
and may be paid in cash, property or in shares of the capital
stock of the corporation.
B. RESERVES. Before payment of any dividend, the Board of
Directors may set aside out of any funds available for dividends
such sum or sums as the Board, it its absolute discretion, deems
proper as a reserve fund to meet contingencies or for equalizing
dividends or to repair or maintain property or to serve such
other purposes conducive to the interests of the corporation.
ARTICLE IX
CORPORATE SEAL
The Board of Directors may provide a corporate seal which
shall have the name of the corporation inscribed thereon, and may
be facsimile, engraved, printed or an impression seal.
ARTICLE X
AMENDMENT
A. POWER TO AMEND. These By-Laws may be altered, amended
or repealed, and new By-Laws may be adopted, by either the Board
of Directors or the stockholders.
B. REQUISITES FOR AMENDMENT BY STOCKHOLDERS. These By-Laws
(including any By-Law that may be amended by the Board of
Directors) may be amended or repealed, wholly or in part, by a
majority of the stockholders entitled to vote thereon present at
any stockholder's meeting if notice of the proposed action was
included in the notice of the meeting or is waived in writing by
a majority of the stockholders entitled to vote thereon.
ARTICLE XI
INDEMNIFICATION OF DIRECTORS AND OFFICERS
A. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Each person
who at any time is or shall have been a director or officer of
the corporation, or is or shall have been serving at the request
of the corporation a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, and his heirs, executors and administrators, shall be
indemnified by the corporation in accordance with and to the full
extent permitted by the General Corporation Law of Delaware as in
effect at the time of the adoption of these By-Laws or as amended
from time to time, and as provided in the Certificate of
Incorporation. The foregoing right of indemnification shall not
be deemed exclusive of other rights to which any director,
officer, employee, agent or other person may be entitled in any
capacity as a matter of law or under these By-Laws, vote of
stockholders or directors, or otherwise.
B. FURTHER INDEMNIFICATION. In addition to any
indemnification provided for herein, this corporation may make
such other and further indemnification or advancement of expenses
of any of its directors, officers, employees, or agents as may be
approved from time to time by the Board of Directors.
C. INSURANCE. Without limiting the generality of the
foregoing, this corporation shall have the power to (i) purchase
and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or
was serving at the request of this corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability
asserted against him or her and incurred by him or her in any
capacity, or arising out of his or her status as such, whether or
not this corporation would have the power to indemnify him or her
against such liability under applicable law and (ii) to enter
into agreements with the persons of the class identified in
clause (i) above indemnifying them against any and all
liabilities (or such lesser indemnification as may be provided in
such agreements) asserted against or incurred by them in such
capacities.
STOCK EXCHANGE AGREEMENT
BY AND AMONG
US ORDER, INC.
AND
COLONIAL DATA TECHNOLOGIES CORP.
APRIL 6, 1995
TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . 2
1.1. Agreement . . . . . . . . . . . . . . . . . . . . 2
1.2. Colonial Data . . . . . . . . . . . . . . . . . . 2
1.3. Colonial Data Common Stock . . . . . . . . . . . 2
1.4. First Closing . . . . . . . . . . . . . . . . . . 2
1.5. First Closing Colonial Data Common Stock
Purchase Price . . . . . . . . . . . . . . . . . 2
1.6. First Closing Date . . . . . . . . . . . . . . . 3
1.7. First Closing US Order Common Stock Purchase
Price . . . . . . . . . . . . . . . . . . . . . . 3
1.8. Law . . . . . . . . . . . . . . . . . . . . . . . 3
1.9. Second Closing . . . . . . . . . . . . . . . . . 3
1.10. Second Closing Colonial Data Common Stock
Purchase Price . . . . . . . . . . . . . . . . . 4
1.11. Second Closing Date . . . . . . . . . . . . . . . 4
1.12. Second Closing Purchase Price . . . . . . . . . . 4
1.13. Second Closing US Order Common Stock Purchase
Price . . . . . . . . . . . . . . . . . . . . . . 5
1.14. US Order . . . . . . . . . . . . . . . . . . . . 5
1.15. US Order Common Stock . . . . . . . . . . . . . . 5
1.16. US Order Initial Public Offering . . . . . . . . 5
ARTICLE 2. INITIAL PURCHASE AND SALE OF COLONIAL DATA
COMMON STOCK AND US ORDER COMMON STOCK . . . . . 6
2.1. Sale and Delivery . . . . . . . . . . . . . . . . 6
2.2. First Closing Colonial Data Common Stock
Purchase Price and First Closing US Order Common
Stock Purchase Price . . . . . . . . . . . . . . 6
ARTICLE 3. SUBSEQUENT PURCHASE AND SALE OF COLONIAL DATA
COMMON STOCK AND US ORDER COMMON STOCK . . . . . 7
3.1. Sale and Delivery . . . . . . . . . . . . . . . . 7
3.2. Second Closing Colonial Data Common Stock
Purchase Price and Second Closing US Order
Common Stock Purchase Price . . . . . . . . . . . 8
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF COLONIAL DATA . 9
4.1. Organization and Capital Structure . . . . . . . 9
4.2. Authorization; Enforceability . . . . . . . . . . 9
4.3. No Violation or Conflict by Colonial Data . . . . 9
4.4. Private Placement . . . . . . . . . . . . . . . . 10
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF US ORDER . . . 13
5.1. Organized and Capital Structure . . . . . . . . . 13
5.2. Authorization; Enforceability . . . . . . . . . . 13
5.3. No Violation or Conflict . . . . . . . . . . . . 14
5.4. Private Placement . . . . . . . . . . . . . . . . 14
ARTICLE 6. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
COLONIAL DATA WITH RESPECT TO THE FIRST CLOSING
AND THE SECOND CLOSING . . . . . . . . . . . . . 17
6.1. Compliance with Agreement . . . . . . . . . . . . 17
6.2. Compliance with the Strategic Alliance
Agreement . . . . . . . . . . . . . . . . . . . . 18
6.3. Representations and Warranties . . . . . . . . . 18
6.4. Authorization of Transaction . . . . . . . . . . 18
6.5. Closing of the US Order Initial Public Offering . 18
ARTICLE 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF US
ORDER WITH RESPECT TO THE FIRST CLOSING AND THE
SECOND CLOSING . . . . . . . . . . . . . . . . . 18
7.1. Compliance with Agreement . . . . . . . . . . . . 19
7.2. Compliance with the Strategic Alliance
Agreement . . . . . . . . . . . . . . . . . . . . 19
7.3. Representations and Warranties . . . . . . . . . 19
7.4. Authorization of Transaction . . . . . . . . . . 19
7.5. Closing of the US Order Initial Public Offering . 20
ARTICLE 8. INDEMNITIES AND ADDITIONAL COVENANTS . . . . . . 20
8.1. Registration Rights . . . . . . . . . . . . . . . 20
8.2. Restrictions on Disposition of Shares by
Colonial Data . . . . . . . . . . . . . . . . . . 20
8.3. Restrictions on Disposition of Shares by US
Order . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 9. TERMINATION . . . . . . . . . . . . . . . . . . . 22
9.1. Termination . . . . . . . . . . . . . . . . . . . 22
9.2. Waiver of Conditions . . . . . . . . . . . . . . 23
ARTICLE 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . 23
10.1. Entire Agreement; Amendment . . . . . . . . . . . 23
10.2. Governing Law . . . . . . . . . . . . . . . . . . 23
10.3. Assignment . . . . . . . . . . . . . . . . . . . 24
10.4. Survival of Representations and Warranties . . . 24
10.5. Notices . . . . . . . . . . . . . . . . . . . . . 24
10.6. Counterparts; Headings . . . . . . . . . . . . . 25
10.7. Interpretation . . . . . . . . . . . . . . . . . 25
10.8. Severability . . . . . . . . . . . . . . . . . . 25
10.9. No Reliance . . . . . . . . . . . . . . . . . . . 25
STOCK EXCHANGE AGREEMENT
STOCK EXCHANGE AGREEMENT, made as of the 6th day of April,
1995 by and among US ORDER, INC., a Delaware corporation, and
COLONIAL DATA TECHNOLOGIES CORP., a Massachusetts corporation.
RECITALS
A. Colonial Data and US Order have entered into a Strategic
Alliance Agreement, dated January 16, 1995.
B. US Order desires initially to sell and Colonial Data
desires initially to purchase certain shares of US Order's
capital stock. US Order desires subsequently to sell and
Colonial Data desires subsequently to purchase additional shares
of US Order's capital stock.
C. Colonial Data desires initially to sell and US Order
desires initially to purchase certain shares of Colonial Data's
capital stock. Colonial Data desires subsequently to sell and US
Order desires subsequently to purchase additional shares of
Colonial Data's capital stock.
NOW, THEREFORE, in consideration of the Recitals and of the
mutual covenants, conditions and agreements set forth herein and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed
that:
ARTICLE 1. DEFINITIONS
When used in this Agreement, the following terms shall
have the meanings specified:
1.1. Agreement. "Agreement" shall mean this Stock Exchange
Agreement, together with the Exhibits attached hereto, as the
same may be amended from time to time in accordance with the
terms hereof.
1.2. Colonial Data. "Colonial Data" shall mean Colonial
Data Technologies Corp., a Massachusetts corporation.
1.3. Colonial Data Common Stock. "Colonial Data Common
Stock" shall mean the common stock of Colonial Data, $.01 par
value.
1.4. First Closing. "First Closing" shall mean the
conference held at the offices of Hunton & Williams, 2000
Pennsylvania Avenue, N.W., Washington, D.C. at 10:00 a.m., local
time, on the First Closing Date, or at such other place and time
as the parties may mutually agree in writing. all transactions
occurring at the First Closing shall be deemed to have occurred
simultaneously, and no none transaction shall be deemed to be
complete until all transactions are completed.
1.5. First Closing Colonial Data Common Stock Purchase
Price. The "First Closing Colonial Data Common Stock Purchase
Price" for the Colonial Data Common Stock shall be a dollar
amount equal to (i) 230,000 times (ii) the initial public
offering price for US Order Common Stock in the US Order Initial
Public Offering, payable solely in shares of US Order Common
Stock. The number of shares of US Order Common Stock to be
delivered at the First Closing by US Order on account of the
First Closing Colonial Data Common Stock Purchase Price shall be
230,000.
1.6. First Closing Date. "First Closing Date" shall mean
the day on which the US Order Initial Public Offering closes.
1.7. First Closing US Order Common Stock Purchase Price.
The "First Closing US Order Common Stock Purchase Price" for the
US Order Common Stock shall be a dollar amount equal to the First
Closing Colonial Data Common Stock Purchase Price, payable solely
in shares of Colonial Data Common Stock. The number of shares of
Colonial Data Common Stock to be delivered at the First Closing
by Colonial Data on account of the First Closing US Order Common
Stock Purchase Price shall be a number equal to the quotient of
(i) the First Closing Colonial Data Common Stock Purchase Price
divided by (ii) the average closing price of Colonial Data Common
Stock as reported on the American Stock Exchange, or such other
principal securities exchange on which Colonial Data Common Stock
is traded at that time, for each of the 20 trading days prior to
the fifth day preceding the First Closing Date.
1.8. Law. "Law" shall mean any federal, state, local or
other law or governmental requirement of any kind, and the rules,
regulations and orders promulgated thereunder.
1.9. Second Closing. "Second Closing" shall mean the
conference held at the offices of Hunton & Williams, 2000
Pennsylvania Avenue, N.W., Washington, D.C. at 10:00 a.m., local
time, on the Second Closing Date, or at such other place and time
as the parties may mutually agree in writing. All transactions
occurring at the Second Closing shall be deemed to have occurred
simultaneously, and no one transaction shall be deemed to be
complete until all transactions are completed.
1.10. Second Closing Colonial Data Common Stock Purchase
Price. The "Second Closing Colonial Data Common Stock Purchase
Price" for the Colonial Data Common Stock shall be the Second
Closing Purchase Price, payable solely in shares of US Order
Common Stock. The number of shares of US Order Common Stock to
be delivered at the Second Closing by US Order on account of the
Second Closing Colonial Data Common Stock Purchase Price shall be
a number equal to the quotient of (i) the Second Closing Purchase
Price divided by (ii) the average closing price of US Order
Common Stock as reported on the NASDAQ National Market for each
of the 20 trading days prior to the fifth day preceding the
Second Closing Date.
1.11. Second Closing Date. "Second Closing Date" shall
mean April 15, 1996.
1.12. Second Closing Purchase Price. The "Second Closing
Purchase Price" shall be a dollar amount equal to the lesser of
(i) $3,000,000.00, (ii) the dollar amount equal to 200,000 times
the average closing price of US Order Common Stock as reported on
the NASDAQ National Market for each of the 20 trading days prior
to the fifth day preceding the Second Closing Date, and (iii) the
dollar amount equal to 200,000 times the average closing price of
Colonial Data Common Stock as reported on the American Stock
Exchange, or such other principal securities exchange on which
Colonial Data Common Stock is traded at that time, for each of
the 20 trading days prior to the fifth day preceding the Second
Closing Date.
1.13. Second Closing US Order Common Stock Purchase Price.
The "Second Closing US Order Common Stock Purchase Price" for the
US Order Common Stock shall be the Second Closing Purchase Price,
payable solely in shares of Colonial Data Common Stock. The
number of shares of Colonial Data Common Stock to be delivered at
the Second Closing US Order Common Stock Purchase Price shall be
a number equal to the quotient of (i) the Second Closing Purchase
Price divided by (ii) the average closing price of Colonial Data
Common Stock as reported on the American Stock Exchange, or such
other principal securities exchange on which Colonial Data Common
Stock is traded at that time, for each of the 20 trading days
prior to the fifth day preceding the Second Closing Date.
1.14. US Order. "US Order" shall mean US Order, Inc., a
Delaware corporation.
1.15. US Order Common Stock. "US Order Common Stock" shall
mean the common stock of US Order, $.001 par value.
1.16. US Order Initial Public Offering. "US Order Initial
Public Offering" shall mean the public offering of US Order
Common Stock made pursuant to the registration statement on Form
S-1 filed on April 6, 1995, which shall become effective not
later than September 30, 1995.
ARTICLE 2. INITIAL PURCHASE AND SALE OF COLONIAL DATA
COMMON STOCK AND US ORDER COMMON STOCK
2.1. Sale and Delivery.
(a) Subject to the terms and conditions of this
Agreement, Colonial Data agrees to sell to US Order and US Order
agrees to purchase from Colonial Data, on the First Closing Date,
the number of shares of Colonial Data Common Stock, free and
clear of all security interest, liens or adverse claims, that
constitute the First Closing Colonial Data Common Stock Purchase
Price.
(b) Subject to the terms and conditions of this
Agreement, US Order agrees to sell to Colonial Data and Colonial
Data agrees to purchase from US Order, on the First Closing Date,
the number of shares of US Order Common Stock, free and clear of
all security interest, liens or adverse claims, that constitute
the First Closing US Order Common Stock Purchase Price.
2.2. First Closing Colonial Data Common Stock Purchase Price
and First Closing US Order Common Stock Purchase Price.
(a) Subject to the terms and conditions of this
Agreement, Colonial Data will pay on the First Closing Date to US
Order, as the aggregate purchase price of the US Order Common
Stock, the amount equal to the First Closing US Order Common
Stock Purchase Price.
(b) Subject to the terms and conditions of this
Agreement, US Order will pay on the First Closing Date to
Colonial Data, as the aggregate purchase price for the Colonial
Data Common Stock, the amount equal to the First Closing Colonial
Data Common Stock Purchase Price.
(c) Upon the delivery of the Colonial Data Common
Stock at the First Closing to US Order, US Order will deliver to
Colonial Data certificates representing the US Order Common Stock
which is the First Closing Colonial Data Common Stock Purchase
Price.
(d) Upon the delivery of the US Order Common Stock at
the First Closing to Colonial Data, Colonial Data will deliver to
US Order certificates representing the Colonial Data Common Stock
which is the First Closing US Order Common Stock Purchase Price.
ARTICLE 3. SUBSEQUENT PURCHASE AND SALE OF COLONIAL DATA
COMMON STOCK AND US ORDER COMMON STOCK
3.1. Sale and Delivery.
(a) Subject to the terms and conditions of this
Agreement, Colonial Data agrees to sell to US Order and US Order
agrees to purchase from Colonial Data, on the Second Closing
Date, the Second Closing colonial Data Common Stock Purchase
Price, fee and clear of all security interests, liens or adverse
claims, that constitute the Second Closing Colonial Data Common
Stock Purchase Price.
(b) Subject to the terms and conditions of this
Agreement, US Order agrees to sell to Colonial Data and Colonial
Data agrees to purchase from US Order, on the Second Closing
Date, the Second Closing US Order Common Stock Purchase Price,
free and clear of all security interests, liens or adverse
claims, that constitute the Second Closing US Order Common Stock
Purchase Price.
3.2. Second Closing Colonial Data Common Stock Purchase
Price and Second Closing US Order Common Stock Purchase
Price.
(a) Subject to the terms and conditions of this
Agreement, Colonial Data will pay on the Second Closing Date to
US Order, as the aggregate purchase price for the US Order Common
Stock, the amount equal to the Second Closing US Order Common
Stock Purchase Price. US Order shall receive on the Second
Closing Date the Second Closing US Order Common Stock Purchase
Price.
(b) Subject to the terms and conditions of this
Agreement, US Order will pay on the Second Closing Date to
Colonial Data, as the aggregate purchase price for the Colonial
Data Common Stock, the amount equal to the Second Closing
Colonial Data Stock Purchase Price. Colonial Data shall receive
on the Second Closing Date the Second Closing colonial Data
Common Stock Purchase Price.
(c) Upon the delivery of the Colonial Data Common
Stock at the Second Closing to US Order, US Order will delivery
to Colonial Data certificates representing the US Order Common
Stock which is the Second Closing Colonial Data Common Stock
Purchase Price.
(d) Upon the delivery of the US Order Common Stock at
the Second Closing to Colonial Data, Colonial Data will deliver
to US Order certificates representing the Colonial Data Common
Stock which is the Second Closing US Order Common Stock Purchase
Price.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF COLONIAL DATA
Colonial Data represents and warrants to US Order that:
4.1. Organization and Capital Structure. Colonial Data is
a corporation duly organized and validly existing and in good
standing under the laws of the Commonwealth of Massachusetts.
Colonial Data has full corporate power to enter into this
Agreement and to perform its obligations hereunder.
The capital stock of Colonial Data consists of preferred
stock, $.01 par value (6,250 shares authorized, no shares issued
and outstanding), and Colonial Data Common Stock (20,000,000
shares authorized, 13, 390,253 shares issued and outstanding as
of March 20, 1995). All outstanding shares of Colonial Data
capital stock were validly issued, fully paid and nonassessable.
4.2. Authorization; Enforceability. The execution,
delivery and performance by Colonial Data of this Agreement and
of all of the documents and instruments contemplated by this
Agreement are within the corporate power of Colonial Data and
have been duly authorized by all necessary corporate action of
Colonial Data. This Agreement is, and the other documents and
instruments required hereby will be, when executed and delivered
by the parties hereto, the valid and binding obligations of
Colonial Data, enforceable against Colonial Data in accordance
with their respective terms.
4.3. No Violation or Conflict by Colonial Data. The
execution, delivery and performance of this Agreement by Colonial
Data does not and will not conflict with or violate any Law,
judgement, order or decree binding on Colonial Data, or the
Articles of Organization or By-laws of Colonial Data or any
contract or agreement to which Colonial Data is a party or by
which it is bound.
4.4. Private Placement.
(a) Colonial Data understands that the US Order Common
Stock has not been registered under the Securities Act, and the
US Order Common Stock is being offered and sold under an
exemption from registration provided by the Securities Act and
the rules and regulations thereunder in reliance, in good faith,
upon the representations and warranties of colonial Data
contained herein.
(b) Colonial Data has received, read, carefully
considered and fully understands this Agreement and all documents
related to US Order and its operations requested by and furnished
to Colonial Data (such documents are herein collectively referred
to as the ("US Order Company Information"). Colonial Data has
not been furnished with or solicited by any offering literature,
leaflet, public promotional meeting, circular, newspaper or
magazine article, radio or television advertisement, or any other
form of general advertising.
(c) Colonial Data is able (i) to bear the economic
risk of its investment in the US Order Common Stock and (ii) to
hold the US Order Common Stock for an indefinite period of time.
(d) Colonial data understands the business in which US
Order is engaged and has such knowledge and experience in
financial and business matters that it is capable of evaluating
the merits and risks of its investment in the US Order Common
Stock and of making an informed investment decision with respect
thereto. Colonial Data has obtained sufficient information to
evaluate the merits and risks of its investment and to make such
a decision.
(e) In making its decision to invest in the US Order
Common Stock, Colonial Data has relied upon independent
investigations made by it and by its own professional advisors.
Colonial Data and its advisors have been given the opportunity to
obtain information and to examine this Agreement and the US Order
Company Information and to ask questions of, and to receive
answers from, US Order or any person acting on its behalf
concerning the US Order Common Stock US Order and terms and
conditions of this investment, and to obtain any additional
information to verify the accuracy of any information previously
furnished. All such questions have been answered to Colonial
Data's full satisfaction.
(f) Colonial Data confirms that neither US Order nor
any of its affiliates or agents have made any representations or
warranties (oral or written) concerning Colonial Data's
investment in the US Order common Stock, US Order, its business,
prospects or anticipated financial results, or other matters.
(g) The US Order Common Stock is being purchased
solely for Colonial Data's own account, as principal, for
investment and not for the interest of any other entity and not
with a view to, or in connection with, any resale, distribution,
subdivision, or fractionalization of such US Order Common Stock.
Colonial Data has no agreement or other arrangement with any
person to sell or transfer any part of the US Order Common Stock
subscribed for or any agreement or arrangement which would
guarantee it any profit or against any loss with respect to such
US Order Common Stock, and it has no plans to enter into any such
agreement or arrangement.
(h) Colonial Data understands that:
(i) Colonial Data must bear the economic risk of
the investment for an indefinite period of time because the
US Order Common Stock cannot be resold unless subsequently
registered under the Securities Act or unless an exemption
from such registration is available, as established by an
opinion of counsel satisfactory to US Order.
(ii) The certificates evidencing the US Order
Common Stock will bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES OR "BLUE SKY" LAWS, AND MAY NOT BE
OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF UNLESS REGISTERED PURSUANT
TO THE PROVISIONS OF SUCH ACT AND BLUE SKY LAWS OR
AN EXEMPTION THEREFROM IS AVAILABLE AS ESTABLISHED
BY A WRITTEN OPINION OF COUNSEL ACCEPTABLE TO US
ORDER, INC.
(iii) No federal or state agency has passed on or
made any recommendations or endorsements of the investment
in the US Order Common Stock.
(iv) Colonial Data's investment in US Order
involves certain risks in that, among other factors, (A)
successful operation of US Order may depend on factors
beyond the control of US Order, and (B) the US Order Common
Stock may not be transferred or sold, except in accordance
with the terms of this Agreement and, accordingly, it may
not be possible for colonial Data to liquidate its
investment in case of imminent need of funds or any other
emergency, if at all.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF US ORDER
US Order represents and warrants to Colonial Data that:
5.1. Organized and Capital Structure. US Order is a
corporation duly organized and validly existing and in good
standing under the laws of the State of Delaware, and has full
corporate power to enter into and perform its obligations under
this Agreement.
The capital stock of US Order consists of preferred stock,
par value $.10 (11,010,000 shares authorized, no shares issued or
outstanding), and US Order Common Stock (30,000,000 shares
authorized, 14,349,846 shares issued and outstanding). All
outstanding shares of US Order capital stock were validly issued,
fully paid and nonassessable.
5.2. Authorization; Enforceability. The execution,
delivery and performance by US Order of this Agreement and all
agreements and instruments contemplated by this Agreement are
within the corporate power of US Order and have been duly
authorized by all necessary corporate action by US Order. This
Agreement is, and the other documents and instruments required
hereby will be, when executed and delivered by the parties
hereto, the valid and binding obligation of US Order enforceable
against US Order in accordance with their respective terms.
5.3. No Violation or Conflict. The execution, delivery and
performance of this Agreement by US Order does not and will not
conflict with or violate any Law, judgment, order or decree
binding on US Order, or the Certificate of Incorporation or
Bylaws of US Order or any contract or agreement to which US Order
is a party or by which it is bound.
5.4. Private Placement.
(a) US Order understands that the Colonial Data Common
Stock has not been registered under the Securities Act, and the
Colonial Data Common Stock is being offered and sold under an
exemption from registration provided by the Securities Act and
the rules and regulations thereunder in reliance, in good faith,
upon the representations and warranties of US Order contained
herein.
(b) US Order has received, read, carefully considered
and fully understands this Agreement and all documents related to
Colonial Data and its operations requested by and furnished to US
Order (such documents are herein collectively referred to as the
"Colonial Data Company Information"). US Order has not been
furnished with or solicited by an offering literature, leaflet,
public promotional meeting, circular, newspaper or magazine
article, radio or television advertisement, or any other form of
general advertising.
(c) US Order is able (i) to bear the economic risk of
its investment in the Colonial Data Common Stock and (ii) to hold
the Colonial Data Common Stock for an indefinite period of time.
(d) US Order understands the business in which
Colonial Data is engaged and has such knowledge and experience in
financial and business matters that it is capable of evaluating
the merits and risks of its investment in the Colonial Data
Common Stock and of making and informed investment decision with
respect thereto. US Order has obtained sufficient information to
evaluate the merits and risks of its investment and to make such
a decision.
(e) In making its decision to invest in the Colonial
Data Common Stock, US Order has relied upon independent
investigations made by it and by its own professional advisors.
US Order and its advisors have been given the opportunity to
obtain information and to examine this Agreement and the Colonial
Data Company Information and to ask questions of, and to receive
answers from, Colonial Data or any person acting on its behalf
concerning the Colonial Data Common Stock, Colonial Data and
terms and conditions of this investment, and to obtain any
additional information to verify the accuracy of any information
previously furnished. All such questions have been answered to
US Order's full satisfaction.
(f) US Order confirms that neither Colonial Data nor
any of its affiliates or agents have made any representations or
warranties (oral or written) concerning US Order's investment in
the Colonial Data Common Stock, Colonial Data, its business,
prospects or anticipated financial results, or other matters.
(g) The Colonial Data Common Stock is being purchased
solely for US Order's own account, as principal, for investment
and not for the interest of any other entity and not with a view
to, or in connection with, any resale, distribution, subdivision,
or fractionalization of such Colonial Data Common Stock. US
Order has no agreement or other arrangement with any person to
sell or transfer any part of the Colonial Data Common Stock
subscribed for or any agreement or arrangement which would
guarantee it any profit or against any loss with respect to such
Colonial Data Common Stock, and it has no plans to enter into any
such agreement or arrangement.
(h) US Order understands that:
(i) US Order must bear the economic risk of the
indefinite period of time because the Colonial Data Common
Stock cannot be resold unless subsequently registered under
the Securities Act or unless an exemption from such
registration is available, as established by an opinion of
counsel satisfactory to Colonial Data.
(ii) The certificates evidencing the Colonial
Data Common Stock will bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES OR "BLUE SKY" LAWS, AND MAY NOT BE
OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF UNLESS REGISTERED PURSUANT
TO THE PROVISIONS OF SUCH ACT AND BLUE SKY LAWS OR
AN EXEMPTION THEREFROM IS AVAILABLE AS ESTABLISHED
BY A WRITTEN OPINION OF COUNSEL ACCEPTABLE TO
COLONIAL DATA TECHNOLOGIES CORP.
(iii) No federal or state agency has passed on or
made any recommendations or endorsements of the investment
in the Colonial Data Common Stock.
(iv) US Order's investment in Colonial Data
involves certain risks in that, among other factors, (A)
successful operation of Colonial Data may depend on factors
beyond the control of Colonial Data, and (B) the Colonial
Data Common Stock may not be transferred or sold, except in
accordance with the term of this Agreement and, accordingly,
it may not be possible for US Order to liquidate its
investment in case of imminent need of funds or any other
emergency, if at all.
ARTICLE 6. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
COLONIAL DATA WITH RESPECT TO THE FIRST CLOSING
AND THE SECOND CLOSING
Each and every obligation of Colonial Data to be performed
on the First Closing Date and on the Second Closing Date shall be
subject to the satisfaction prior to or at the First Closing and
prior to or at the Second Closing of the following express
conditions precedent.
6.1. Compliance with Agreement. US Order shall have
performed and complied in all material respects with all of its
respective obligations under this Agreement that are to be
performed or complied with by it prior to or on the First Closing
Date and prior to or on the Second Closing Date.
6.2. Compliance with the Strategic Alliance Agreement. US
Order shall have complied in all material respects with all of
its respective obligations under the Strategic Alliance
Agreement, dated January 16, 1995, between US Order and Colonial
Data that are to be performed or complied with by it as of the
First Closing Date and as of the Second Closing Date and such
agreement shall be in full force and effect as of such dates.
6.3. Representations and Warranties. The representations
and warranties made by US Order in this Agreement shall be true
and correct in all material respects as of the date of this
Agreement and as of the First Closing Date and as of the Second
Closing Date with the same force and effect as though such
representations and warranties had been made on the First Closing
Date and the Second Closing Date, respectively.
6.4. Authorization of Transaction. All action necessary to
authorize the performance of this Agreement by US Order shall
have been duly and validly taken by US Order's board of
directors.
6.5. Closing of the US Order Initial Public Offering.
There shall have occurred the closing of the US Order Initial
Public Offering.
ARTICLE 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF US
ORDER WITH RESPECT TO THE FIRST CLOSING AND THE
SECOND CLOSING
Each and every obligation of US Order to be performed on the
First Closing Date and on the Second Closing Date shall be
subject to the satisfaction prior to or at the First Closing and
prior to or at the Second Closing and the following express
conditions precedent:
7.1. Compliance with Agreement. Colonial Data shall have
performed and complied in all material respects with all of its
obligations under this Agreement that are to be performed or
complied with by its prior to or on the First Closing Date and
prior to or on the Second Closing Date.
7.2. Compliance with the Strategic Alliance Agreement.
Colonial Data shall have complied in all material respects with
all of its respective obligations under the Strategic Alliance
Agreement, dated January 16, 1995, between US Order and Colonial
Data that are to be performed or complied with by it as of the
First Closing Date and as of the Second Closing Date and such
agreement shall be in full force and effect as of such dates.
7.3. Representations and Warranties. The representations
and warranties made by Colonial Data in this Agreement shall be
true and correct in all material respects as of the date of this
Agreement and as of the First Closing Date and as of the Second
Closing Date with the same force and effect as though such
representations and warranties had been made on the First Closing
Date and on the Second Closing Date, respectively.
7.4. Authorization of Transaction. All action necessary to
authorize and performance of this Agreement by Colonial Data
shall have been duly and validly taken by Colonial Data's board
of directors.
7.5. Closing of the US Order Initial Public Offering.
There shall have occurred the closing of the US Order Initial
Public Offering.
ARTICLE 8. INDEMNITIES AND ADDITIONAL COVENANTS
8.1. Registration Rights. Beginning January 1, 1996,
Colonial Data and US Order shall each have certain "piggyback"
registration rights with respect to the US Order Common Stock and
the Colonial Data Common Stock, respectively, as described in
Exhibit 8.1.
8.2. Restrictions on Disposition of Shares by Colonial
Data.
(a) Without the prior written consent of US Order,
Colonial Data shall not directly or indirectly sell, transfer any
beneficial interest in, assign, pledge, hypothecate or otherwise
dispose of or encumber any US Order Common Stock absent an
exemption therefor under the Securities Act of 1933 or compliance
with the registration provisions of the Securities Act of 1933.
Colonial Data may pledge the US Order Common Stock, provided that
the pledgee agrees in writing to be bound by the restrictions on
transfer of US Order Common Stock contained in this Agreement.
(b) Colonial Data agrees that it will not transfer any
US Order Common Stock, unless Colonial Data shall first deliver
to US Order a copy of any bona fide offer to purchase such US
Order Common Stock, together with a written offer (the "Colonial
Data Offer") to sell such US Order Common Stock to US Order upon
the same or no less favorable terms, or, in the event of a
proposed transfer in accordance with Rule 144 under the
Securities Act of 1933, at a purchase price equal to the average
closing price of US Order Common Stock of the Gnostic National
Market, or such other principal securities exchange on which US
Order Common Stock is traded at that time, for the 20 trading
days prior to the date of the Colonial Offer. US Order shall
have five business days following receipt of the Colonial Data
Offer within which to accept such Colonial Data Offer with
respect to all, and not less than all, of the US Order Common
Stock offered thereby. Closing shall occur on the fifth business
day following US Order's acceptance of the Colonial Data Offer.
With respect to a Rule 144 transaction by Colonial Data with
respect to which US Order does not accept the Colonial Data
Offer, Colonial Data shall have 30 days following the date of the
Colonial Data Offer to engage in such transaction. This
subsection 8.2(b) shall not apply to transfers of US Order Common
Stock registered pursuant to Section 8.1.
8.3. Restrictions on Disposition of Shares by US Order.
(a) Without the prior written consent of Colonial
Data, US Order shall not directly or indirectly sell, transfer
any beneficial interest in, assign, pledge, hypothecate or
otherwise dispose of or encumber any Colonial Data Common Stock
absent an exemption therefor under the Securities Act of 1933 or
compliance with the registration provisions of the Securities Act
of 1933. US Order may pledge the Colonial Data Common Stock,
provided that the pledgee agrees in writing to be bound by the
restrictions on transfer of Colonial Data Common Stock contained
in this Agreement.
(b) US Order agrees that it will not transfer any
Colonial Data Common Stock, unless US Order shall first deliver
to Colonial Data a copy of any bona fide offer to purchase such
Colonial Data Common Stock, together with a written offer (the
"US Order Offer") to sell such Colonial Data Common Stock to
Colonial Data upon the same or no less favorable terms, or, in
the event of a proposed transfer in accordance with Rule 144
under the Securities Act of 1933, at a purchase price equal to
the average closing price of Colonial Data Common Stock on the
American Stock Exchange, or such other principal securities
exchange on which Colonial Data Common Stock is traded at that
time, for the 20 trading days prior to the date of the US Order
Offer. Colonial Data shall have five business days following
receipt of the US Order Offer within which to accept such US
Order Offer with respect to all, and not less than all, of the
Colonial Data Common Stock offered thereby. Closing shall occur
on the fifth business day following Colonial Data's acceptance of
the US Order Offer. With respect to a Rule 144 transaction by US
Order with respect to which Colonial Data does not accept the US
Order Offer, US Order shall have 30 days following the date of
the US Order Offer to engage in such transaction. This
subsection 8.3(b) shall not apply to transfers of Colonial Data
Common Stock registered pursuant to Section 8.1.
ARTICLE 9. TERMINATION
9.1. Termination. This Agreement may be terminated only by
mutual consent of Colonial Data and US Order.
9.2. Waiver of Conditions. Subject to applicable law, (i)
if any of the conditions specified in Article 6 hereof has not
been satisfied, Colonial Data may waive such condition and elect
to proceed with the transactions contemplated thereby; and (ii)
if any of the conditions specified in Article 7 hereof has not
been satisfied, US Order may waive such condition and elect to
proceed with the transactions contemplated hereby.
ARTICLE 10. MISCELLANEOUS
10.1. Entire Agreement; Amendment. This Agreement and the
documents referred to herein and to be delivered pursuant hereto
constitute the entire agreement between the parties pertaining to
the subject matter hereof, and supersede all prior and
contemporaneous agreements, understandings, negotiations and
discussions of the parties, whether oral or written, and there
are no warranties, representations or other agreements between
the parties in connection with the subject matter hereof, except
as specifically set forth herein or therein. No amendment,
supplement, modification, waiver or termination of this Agreement
shall be binding unless executed in writing by the party to be
bound thereby. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any
other provision of this Agreement, whether or not similar, nor
shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
10.2. Governing Law. This Agreement shall be construed and
interpreted according to the laws of the State of Delaware.
10.3. Assignment. This Agreement and each party's
respective rights hereunder may not be assigned by either party
without the prior written consent of the other party.
10.4. Survival of Representations and Warranties. The
representations and warranties made by Colonial Data and US Order
in this Agreement shall survive until the registration statements
provided for in the Registration Rights Agreement attached as
Exhibit 8.1 are declared effective by the Securities and Exchange
Commission.
10.5. Notices. All communications, notices and disclosures
required or permitted by this Agreement shall be in writing and
shall be deemed to have been given at the earlier of the date
when actually delivered to an officer of the other party, sent by
facsimile transmission or when deposited in the United States
mail, certified or registered mail, postage prepaid, return
receipt requested and addressed as follows, unless and until
either of such parties notifies the other in accordance with
this Section of a change of address:
If to US Order:
US Order, Inc.
13573 Park Center Road
Suite 353
Herndon, Virginia 22071
Attention: John C. Backus, Jr.
With a copy to:
David M. Carter
Hunton & Williams
951 East Byrd Street
Richmond, Virginia 23219
If to Colonial Data:
Mr. Walter M. Fiederowicz
Colonial Data Technologies Corp.
80 Pickett District Road
New Milford, Connecticut 06776
With a copy to:
Thomas L. Fairfield
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
225 Asylum Street
Hartford, Connecticut 06130
10.6. Counterparts; Headings. This Agreement may be
executed in several counterparts, each of which shall be deemed
an original, but such counterparts shall together constitute but
one and the same Agreement. The Table of Contents and Article
and Section headings in this Agreement are inserted for
convenience of reference only and shall not constitute a part
hereof.
10.7. Interpretation. Unless the context requires
otherwise, all words used in this Agreement in the singular
number shall extend to and include the plural, all words in the
plural number shall extend to and include the singular and all
words in any gender shall extend to and include all genders.
10.8. Severability. If any provision, clause or part of
this Agreement, or the application thereof under certain
circumstances, is held invalid, the remainder of this Agreement,
or the application of such provision, clause or part under other
circumstances, shall not be affected thereby.
10.9. No Reliance. No third party is entitled to rely on
any of the representations, warranties and agreements of Colonial
Data and US Order contained in this Agreement. Colonial Data and
US Order assume no liability to any third party because of any
reliance on the representations, warranties and agreements of
Colonial Data and US Order contained in this Agreement.
IN WITNESS WHEREOF, the parties have caused this Stock
Exchange Agreement to be duly executed as of the day and year
first above written.
U.S. ORDER, INC.
By: ______________________________
Name:
Title:
COLONIAL DATA TECHNOLOGIES CORP.
By: ______________________________
Name:
Title:
Exhibit 8.1
REGISTRATION RIGHTS
(a) Definitions. As used in this Exhibit 8.1, unless
the context otherwise requires, the following terms have the
following respective meanings:
"Colonial Data Registrable Securities" shall mean
any shares of Colonial Data Common Stock issued to US Order
pursuant tot the Agreement and any securities issued or issuable
with respect to any such Colonial Data Common Stocky by way of
stock dividend or stock split or in connection with a combination
of shares, recapitalization, merger, consolidation or other
reorganization or otherwise. Colonial Data Registrable
Securities shall cease to be Colonial Data Registrable Securities
when they can be sold pursuant to Rule 144 without holding
periods or volume limitations.
"Commission" shall mean the United States
Securities and Exchange Commission or any federal agency
administering the 1993 Act in the future.
"Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and any successor statute thereto.
"1933 Act" shall mean the Securities Act of 1933,
as amended, and any successor statute thereto.
"Person" shall mean any corporation, association,
partnership, business entity, individual, governmental or
political subdivision thereof, or governmental agency.
"Registration Expenses" shall mean all expenses
incident to US Order's or Colonial Data's performance of or
compliance with this Exhibit 8.1, including, without limitation,
all registration, filing and listing fees, all fees and expenses
of complying with federal or state securities laws with respect
to the initial registration of the US Order Common Stock and the
Colonial Data Common Stock and maintaining the effectiveness of
such registration, all word processing, duplicating and printing
expenses, messenger and delivery expenses, the fees and expenses
of counsel for Colonial Data and US Order and of Colonial Data's
and US Order's independent auditors, including the expenses of
any opinions of counsel for Colonial Data or US Order in
connection with a sale of Colonial Data Registrable Securities or
US Order Registrable Securities, as applicable, under the
Registration Statements required under this Exhibit 8.1, and
premiums and other costs of insurance policies obtained by
Colonial Data and US Order against liabilities arising out of any
registration effected pursuant to this Exhibit 8.1. Registration
Expenses shall not include any underwriting discount, sales
commissions, fees and expenses of separate counsel to Colonial
Data or US Order as selling shareholder, or other expenses
incurred by Colonial Data or US Order as selling shareholder.
"US Order Registrable Securities" shall mean any
shares of US Order Common Stock issued to Colonial Data pursuant
to the Agreement and any securities issued or issuable with
respect to any such US Order Common Stock by way of stock
dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other
reorganization or otherwise. US Order Registrable Securities
shall cease to be US Order Registrable Securities when they can
be sold pursuant to Rule 144 without holding periods or volume
limitations.
(b) Incidental Registration under Securities Act.
(i) Right to Include Colonial Data Registrable
Securities. If Colonial Data proposes to register any of its
securities under the 1933 Act (other than by a registration on
Form S-3 (if the registration of Colonial Data Registrable
Securities on such Form S-3 would make Colonial Data ineligible
for use of such form), Form S-4, Form S-8 or any successor or
similar form to any of the above listed forms) for sale for its
own account or for any shareholders of Colonial Data other than
own account or for any shareholders of Colonial Data other than
US Order, it will give prompt written notice to US Order of its
intention to do so and of US Order's rights under this subsection
(b). Upon the written request of US Order received by Colonial
Data within fifteen (15) days after the date of any such notice
(which request shall specify the amount of the Colonial Data
Registrable Securities intended to be disposed of by US Order and
the intended method of disposition thereof), Colonial Data will
use its best efforts to effect the registration under the 1933
Act of all Colonial Data Registrable Securities which Colonial
Data has been so requested to register by US Order, to the extent
requisite to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Colonial Data
Registrable Securities to be registered; provided, however, that
if, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the
registration statement filed in connection with such
registration, Colonial Data shall determine for any reason not to
register or to delay registration of such securities, Colonial
Data may, at its election, give written notice of such
determination to US Order and, thereupon, (A) in the case of a
determination not to register, shall be relieved of its
obligation to register any Colonial Data Registrable Securities
in connection with such registration (but not from its obligation
to pay the Registration Expenses in connection therewith), and
(B) in the case of a determination to delay registering, shall be
permitted to delay registering any Colonial Data Registrable
Securities for the same period as the delay in registering such
other securities. US Order shall be entitled to exercise the
registration rights described in this subsection (b) only twice;
provided that the registration statement registering such
Colonial Data Registrable Securities as requested by US Order
becomes effective as described in subsection (c). Colonial Data
will pay all Registration Expenses in connection with each
registration of Colonial Data Registrable Securities requested
pursuant to this subsection (b).
(ii) Right to Include US Order Registrable
Securities. If US Order proposes to register any of its
securities under the 1933 Act (other than by a registration on
Form S-3 (if the registration of US Order Registrable Securities
on such Form S-3 would make US Order ineligible for use of such
form), Form S-4, Form S-8 or any successor or similar form to any
of the above listed forms) for sale for its own account or for
any shareholders of US Order other than Colonial Data, it will
give prompt written notice to Colonial Data of its intention to
do so and of Colonial Data's rights under this subsection (b).
Upon the written request of Colonial Data received by US Order
within fifteen (15) days after the date of any such notice (which
request shall specify the amount of the US Order Registrable
Securities intended to be disposed of by Colonial Data and the
intended method of disposition thereof), US Order will use its
best efforts to effect the registration under the 1933 Act of all
US Order Registrable Securities which US Order has been so
requested to register by Colonial Data, to the extent requisite
to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the US Order Registrable
Securities to be registered; provided, however, that if, at any
time after giving written notice of its intention to register any
securities and prior to the effective date of the registration
statement filed in connection with such registration, US Order
shall determine for any reason not to register or to delay
registration of such securities, US Order may, at its election,
give written notice of such determination to Colonial Data and,
thereupon, (A) in the case of a determination not to register,
shall be relieved of its obligation to register any US Order
Registerable Securities in connection with such registration (but
not from its obligation to pay the Registration Expenses in
connection therewith), and (B) in the case of a determination to
delay registering, shall be permitted to delay registering any US
Order Registrable Securities for the same period as the delay in
registering such other securities. Colonial Data shall be
entitled to exercise the registration rights described in this
subsection (b) only twice; provided that the registration
statement registering such US Order Registrable Securities as
requested by Colonial Data becomes effective as described in
subsection (c). US Order will pay all Registration Expenses in
connection with each registration of US Order Registrable
Securities requested pursuant to this subsection (b).
(iii) Limitations on Incidental
Registrations. If (A) a registration pursuant to this subsection
(b) involves an underwritten offering of the securities being
registered for sale for the account of Colonial Data, or for any
of shareholders of Colonial Data other than US Order, to be
distributed (on a firm commitment basis) by or through one or
more underwriters under underwriting terms appropriate for such a
transaction, and (B) the managing underwriter of such
underwritten offering shall inform Colonial Data of its belief
that the number of Colonial Data Registrable Securities requested
to be included in such registration exceeds the number which can
be sold in (or during the time of) such offering, or that the
inclusion would materially adversely affect the marketing of the
securities to be sold by Colonial Data therein, then Colonial
Data may include all securities proposed by Colonial Data to be
sold for its own account and may decrease the number of Colonial
Data Registrable Securities so requested, and the securities of
shareholders of Colonial Data other than US Order, to be included
in such registration (pro rata on the basis of the percentage of
Colonial Data Registrable Securities requested to be so
registered by US Order and any securities to be included by
shareholders of Colonial Data other than US Order, such proration
to be to the extent to which Colonial Data is entitled to
decrease a selling shareholder's shares of Colonial Data Common
Stock in accordance with the documents providing registration
rights to such shareholder) to the extent necessary to reduce the
number of securities to be included in the registration to the
level recommended by the managing underwriter. If (A) a
registration pursuant to this subsection (b) involves an
underwritten offering of the securities being registered for sale
for the account of US Order, or for any of shareholders of US
Order other than Colonial Data, to be distributed (on a firm
commitment basis) by or through one or more underwriters under
underwriting terms appropriate for such a transaction, and (B)
the managing underwriter of such underwritten offering shall
inform US Order of its belief that the number of US Order
Registrable Securities requested to be included in such
registration exceeds the number which can be sold in (or during
the time of) such offering, or that the inclusion would
materially adversely affect the marketing of the securities to be
sold by US Order therein, then US Order may include all
securities proposed by US Order to be sold for its own account
and may decrease the number of US Order Registrable Securities so
requested, and the securities of shareholders of US Order other
than Colonial Data, to be included in such registration (pro rata
on the basis of the percentage of US Order Registrable Securities
requested to be so registered by Colonial Data and any securities
to be included by shareholders of US Order other than Colonial
Data, such proration to be to the extent to which US Order is
entitled to decrease a selling shareholder's shares of US Order
Common Stock in accordance with the documents providing
registration rights to such shareholder) to the extent necessary
to reduce the number of securities to be included in the
registration to the level recommended by the managing
underwriter.
(c) Registration Procedures. If and whenever Colonial
Data or US Order is under an obligation pursuant to the
provisions of this Exhibit 8.1 to effect the registration of the
Colonial Data Registrable Securities or US Order Registrable
Securities, respectively, Colonial Data or US Order shall, as
expeditiously as practicable:
(i) Prepare and file with the Commission the
registration statement specified herein with respect to such
securities and cause such registration statement to become
effective and remain updated in accordance with subsection (c)
(ii) hereof;
(ii) As long as such registration statement
remains effective under the 1933 Act, prepare and file with the
Commission all amendments and supplements to such registration
statement, and the prospectus used in connection therewith, take
all other action and make all other filings as are required to
update such registration statement or prospectus, as the case may
be, and comply with the provisions of the 1933 Act with respect
to the sale or other disposition of all Colonial Data Registrable
Securities or all US Order Registrable Securities, as applicable,
covered by such registration statement;
(iii) Furnish to each seller of Colonial Data
Registrable Securities or US Order Registrable Securities under
the respective registration statement such number of conformed
copies of such registration statement (including all exhibits),
each such amendment and supplement thereto, including such number
of copies of the prospectus contained in such registration
statement (including each preliminary prospectus, and any summary
prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the
Securities Act, and such other documents, as such seller may
reasonably request;
(iv) As long as such registration statement
remains effective under the 1933 Act, use its best efforts to
register, or obtain exemption from registration or qualification
for, all Colonial Data Registrable Securities and all US Order
Registrable Securities, as applicable, under such other
securities or blue sky laws of such jurisdictions as each seller
shall reasonably request, to update such registration,
qualification or exemption and take any other action which may be
reasonably necessary or advisable to enable such seller to
consummate the disposition in such jurisdictions of the Colonial
Data Registrable Securities or US Order Registrable Securities
owned by such seller, except that Colonial Data and US Order
shall not for any such purpose be required to qualify generally
to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this subsection
(c) (iv) be obligated to be so qualified, to consent to general
service of process in any such jurisdiction or to comply with any
requirement or condition to registration or qualification which
would impose an unreasonable burden on Colonial Data and US Order
or any of its officers, directors or shareholders;
(v) Use its best efforts to cause all Colonial
Data Registrable Securities and US Order Registrable Securities
covered by each respective registration statement to be
registered with or approved by such other governmental agencies
or authorities as may be necessary to enable Colonial Data or US
Order which is selling such securities to consummate the
disposition of such US Order Registrable Securities or Colonial
Data Registrable Securities, respectively;
(vi) If a prospectus is required to be delivered
under the 1933 Act, notify each seller of Colonial Data
Registrable Securities or US Order Registrable Securities, as
applicable, covered by the respective registration statement upon
discovery that, or upon the happening of any event as a result of
which, the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact
or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made, and at the
request of any such seller promptly to furnish to such seller a
reasonable number of copies of a supplement to or an amendment of
such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus
shall not include an untrue statement of a material fact or omit
to state a material fact necessary to make the statements made
not misleading in the light of the circumstances under which they
were made;
(vii) Otherwise use its best efforts to
comply with all applicable rules and regulations of the
Commission and shall not file any amendment or supplement to such
registration statement or prospectus which does not comply in all
material respects with the requirements of the 1933 Act or of the
rules or regulations thereof;
(viii) Provide and cause to be maintained a
transfer agent for all Colonial Data Registrable Securities and
all US Order Registrable Securities covered by the respective
registration statement from and after a date not later than the
effective date of such registration statement;
(ix) Use its best efforts to list all Colonial
Data Registrable Securities and all US Order Registrable
Securities covered by such registration statement on any
securities exchange on which any of the shares of Colonial Data
Common Stock or US Order Common Stock is then listed, or in the
event such securities are not so listed, to include such
securities on the Nasdaq National Market or any comparable
quotation system, if any of the shares of Colonial Data Common
Stock or US Order Common Stock are then so qualified; and
(x) From time to time provide such opinions of
counsel (including, without limitation, opinions as to the
effectiveness of the respective registration statement),
certificates and any other documentation, and take such actions,
including entering into such agreements, as are reasonably
requested by Colonial Data or US Order in connection with
Colonial Data or US Order's satisfaction of its obligations under
this Exhibit 8.1.
(e) Incidental Underwritten Offerings.
(i) Incidental Underwritten Offerings. If
Colonial Data at any time proposes to register any of its
securities under the 1933 Act as contemplated by subsection (b),
and its securities are to be distributed by or through one or
more underwriters, Colonial Data will, if requested by US Order
as provided in subsection (b) and subject to the provisions of
subsection (b) (iii), arrange for such underwriters to include
all the Colonial Data Registrable Securities to be offered and
sold by US Order among the securities to be distributed by such
underwriters. The holders of the Colonial Data Registrable
Securities to be distributed by such underwriters shall be
parties to the underwriting agreement between Colonial Data and
such underwriters. Any such holder shall not be required to make
any representations or warranties to or agreements with Colonial
Data or the underwriters other than representations, warranties,
or agreements regarding such holder, such holder's Colonial Data
Registrable Securities and such holders intended method of
distribution, any other information supplied in writing by such
holder to Colonial Data specifically for use in such registration
statement and any other representation required by law. If US
Order at any time proposes to register any of its securities
under the 1933 Act as contemplated by subsection (b), and its
securities are to be distributed by or through one or more
underwriters, US Order will, if requested by Colonial Data as
provided in subsection (b) and subject to the provisions of
subsection (b) (iii), arrange for such underwriters to include
all the US Order Registrable Securities to be offered and sold by
Colonial Data among the securities to be distributed by such
underwriters. The holders of the US Order Registrable Securities
to be distributed by such underwriters shall be parties to the
underwriting agreement between US Order and such underwriters.
Any such holder shall not be required to make any representations
or warranties to or agreements with US Order or the underwriters
other than representations, warranties, or agreements regarding
such holder, such holder's US Order Registrable Securities and
such holder's intended method of distribution, any other
information supplied in writing by such holder to US Order
specifically for use in such registration statement and any other
representation required by law.
(ii) Holdback Agreements. Each holder of Colonial
Data Registrable Securities or US Order Registrable Securities to
be distributed by such underwriters agrees, if so required by the
managing underwriter, not to effect any sale or distribution of
any equity securities of Colonial Data of US Order, as
applicable, during a period of up to 180 days beginning on the
effective date of any underwritten registration pursuant to
subsection (b) in which its securities are included (except as
part of such underwritten registration). Notwithstanding the
foregoing, Colonial Data may exclude from registration the
Colonial Data Registrable Securities of US Order and US Order may
exclude from registration the US Order Registrable Securities of
Colonial Data if it refuses to enter into an agreement having a
duration greater than 180 days if the managing underwriter
requires such an agreement.
(e) Preparation; Reasonable Investigation. In
connection with the preparation and filing of the registration
statements pursuant to this Exhibit 8.1, Colonial Data will give
the holders of Colonial Data Registrable Securities and US Order
will give the holders of US Order Registrable Securities
registered under the respective registration statements and their
counsel the opportunity to participate in the preparation of such
registration statement to the extent necessary, in the opinion of
such holders' counsel to conduct a reasonable investigation
within the meaning of the 1933 Act, provided that Colonial Data
may condition its disclosure of information upon receipt of
agreements in form acceptable to counsel to Colonial Data
restricting trading by such holders in violation of applicable
securities laws, and provided that US Order may condition its
disclosure of information upon receipt of agreements in form
acceptable to counsel to US Order restricting trading by such
holders in violation of applicable securities laws.
(f) Indemnification.
(i) Indemnification by Colonial Data. Colonial
Data will, and hereby does, indemnify and hold harmless US Order
if it sells Colonial Data Registrable Securities covered by the
registration statement required under this Exhibit 8.1, and such
other Person, if any, who controls US Order within the meaning of
the 1933 Act or the Exchange Act, against any losses, claims,
damages or liabilities (as determined by a court of competent
jurisdiction), joint or several, to which US Order or controlling
Person may become subject under the 1933 Act, the Exchange Act,
state securities or blue sky laws or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained (or incorporated
by reference) in any registration statement (or any amendment or
supplement thereto) under which such Colonial Data Registrable
Securities were registered under the 1933 Act, any preliminary
prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission
or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and Colonial Data will reimburse US Order and such
controlling Person for any legal or any other expenses reasonably
incurred by them in connection with investigating or defending
any such loss, claim, liability, action or proceeding; provided
that Colonial Data shall not be liable in any such case to the
extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is
based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement,
any such preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to Colonial Data by
US Order for use in the preparation thereof. Such indemnity
shall remain in full force and effect regardless of any
investigation made by or on behalf of US Order or any such
controlling Person of US Order and shall survive the transfer of
such securities by US Order. Colonial Data may require, as a
condition to including any Colonial Data Registrable Securities
in the registration statement required under this Exhibit 8.1,
that Colonial Data shall have received an undertaking
satisfactory to it from US Order, to indemnify and hold harmless
(in the same manner and to the same extent as set forth in
subdivision (ii) of this subsection (f), Colonial Data, its
directors, officers, employees, agents and affiliates and each
other Person, if any, who controls Colonial Data within the
meaning of the 1933 Act or the Exchange Act, with respect to any
statement or alleged statement in or omission or alleged omission
from such registration statement, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, if such statement or alleged
statement or omission or alleged omission was made in reliance
upon and in conformity with information furnished to Colonial
Data by US Order for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Such indemnity shall remain
in full force and effect, regardless of any investigation made by
or on behalf of Colonial Data or any such director, officer,
employee, agent, affiliate or controlling Person and shall
survive the transfer of such securities by US Order.
(ii) Indemnification by US Order. US Order will,
and hereby does, indemnify and hold harmless Colonial Data if it
sells US Order Registrable Securities covered by the registration
statement required under this Exhibit 8.1, and such other Person,
if any, who controls Colonial Data within the meaning of the 1933
Act or the Exchange Act, against any losses, claims, damages or
liabilities (as determined by a court of competent jurisdiction),
joint or several, to which Colonial Data or controlling Person
may become subject under the 1933 Act, the Exchange Act, state
securities or blue sky laws or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue
statement of any material fact contained (or incorporated by
reference) in any registration statement (or any amendment or
supplement thereto) under which such US Order Registrable
Securities were registered under the 1933 Act, any preliminary
prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission
or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and US Order will reimburse Colonial Data and such
controlling Person for any legal or any other expenses reasonably
incurred by them in connection with investigating or defending
any such loss, claim, liability, action or proceeding; provided
that US Order shall not be liable in any such case to the extent
that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is
based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement
any such preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to US Order by
conformity with written information furnished to US Order by
Colonial Data for use in the preparation thereof. Such indemnity
shall remain in full force and effect regardless of any
investigation made by or on behalf of US Order or any such
controlling Person of Colonial Data and shall survive the
transfer of such securities by Colonial Data. US Order may
require, as a condition to including any US Order Registrable
Securities in the registration statement required under this
Exhibit 8.1, that US Order shall have received an undertaking
satisfactory to it from Colonial Data, to indemnify and hold
harmless (in the same manner and to the same extent as set forth
in subdivision (i) of this subsection (f) US Order, its
directors, officers, employees, agents and affiliates and each
other Person, if any, who controls US Order within the meaning of
the 1933 Act or the Exchange Act, with respect to any statement
or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, if such statement or alleged
statement or omission or alleged omission was made in reliance
upon and in conformity with information furnished to US Order by
Colonial Data for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Such indemnity shall remain
in full force and effect, regardless of any investigation made by
or on behalf of US Order or any such director, officer, employee,
agent, affiliate or controlling Person and shall survive the
transfer of such securities by Colonial Data.
(iii) Notices of Claims; Right to Assume
Defense. Promptly after receipt by an indemnified party of
notice of the commencement of any action or proceeding involving
a claim referred to in the preceding subdivisions of this
subsection (f), such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action;
provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of
its obligations under the preceding subdivisions of this
subsection (f), except to the extent that the indemnifying party
is actually prejudiced by such failure to give notice. In case
any such action is brought against an indemnified party and
indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to
assume the defense thereof, jointly with nay other indemnifying
party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall,
without the consent of the indemnified party, consent to entry of
any judgement or enter into any settlement which does not include
as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.
(iv) Contribution. If the indemnification
provided for in this subsection (g) is for any reason unavailable
or insufficient to hold harmless an indemnified party under
subsection (f) (i), subsection (f) (ii) or subsection (f) (iii),
then the indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in this subsection (f)
in such proportion as is appropriate to reflect the relative
fault of Colonial Data on the one hand and US Order on the other
in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. Relative fault shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by Colonial Data or US Order included in the
offering and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue
statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11 (f) of the
1933 Act) shall be entitled to contribution from any Person who
was not guilty of such fraudulent misrepresentation. Each party
entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action
instituted against it in respect of which contribution may be
sought, it shall promptly give written notice of such service, to
the party or parties from whom contribution may be sought, but
the omission so to notify such party or parties of any such
service shall not relieve the party from whom contribution may be
sought from any obligation it may have hereunder or otherwise.
(g) Rule 144 Requirements. Colonial Data and US Order
agree to:
(i) For so long as Colonial Data and US Order
have a class of securities registered under the Exchange Act,
comply, on a timely basis, with all the reporting requirements of
the Exchange Act and comply with all other public information
reporting requirements of the Commission as a condition to the
availability of an exemption from the 1933 Act under Rule 144
thereunder, as amended from time to time, or successor rule
thereto, for the sale of Colonial Data Registrable Securities by
US Order, and for the sale of US Order Registrable Securities by
Colonial Data;
(ii) Provide, at the expense of the selling
shareholder, such opinion of counsel as may be reasonably
requested by the transfer agent of Colonial Data Common Stock or
US Order Common Stock in connection with a sale of Colonial Data
Registrable Securities or US Order Registrable Securities, as
applicable, pursuant to an exemption from the registration
requirements of the 1933 Act (under Rule 144 thereunder, as
amended from time to time, or successor rule thereto or
otherwise) or otherwise; and
(iii) Whenever any holder of Colonial Data
Registrable Securities is able to demonstrate to Colonial Data
(and its respective counsel), or whenever any holder of US Order
Registrable Securities is able to demonstrate to US Order (and
its respective counsel), that the provisions of Rule 144(k) under
the 1933 Act are available to such holder, such holder shall be
entitled to receive from Colonial Data or US Order, at Colonial
Data's or US Order's expense, a new certificate that does not
bear the restrictive legend set forth in Section 4.4 (h) and
Section 5.4 (h), respectively, of the Agreement.
Colonial Data Technologies Corp. (the "Registrant") has omitted
from this Exhibit 10.30 portions of the agreement for which the
Registrant has requested confidential treatment from the
Securities and Exchange Commission. The portions of this
agreement for which confidential treatment has been requested are
marked "Confidential Treatment" and such confidential portions
have been filed separately with the Securities and Exchange
Commission.
JOINT VENTURE AGREEMENT
AGREEMENT made effective May 16, 1995, by and between BARRY
BLAU & PARTNERS, INC., a Delaware corporation with its principal
offices at 1960 Bronson Road, Fairfield, Connecticut 06430
("Blau") and COLONIAL DATA TECHNOLOGIES CORP., a Delaware
corporation, with its principal offices at 80 Pickett District
Road, New Milford, Connecticut 06776 ("Colonial").
WITNESSETH:
WHEREAS, the parties, either on their joint bid or on the
bid of either one of them, expect to be awarded certain contracts
to provide telecommunications products combined with marketing
services to the telecommunications and other appropriate
industries ("Contracts"); and
WHEREAS, the parties desire that their interests in the
products to be provided, services to be rendered and work to be
done under the Contracts, and any profits or losses derived
therefrom, be defined by an agreement in writing.
NOW, THEREFORE, the parties hereby constitute themselves as
joint venturers solely for the purpose of providing the labor,
materials and finished products necessary for performing the
Contracts; and to carry out their joint venture, the parties
hereby agree as follows:
1. Name of Joint Venture. The Contracts shall be entered
into in the name of Worldwide Telecom Partners, Inc., and the
joint venture shall be known as Worldwide Telecom Partners, Inc.,
a joint venture of Barry Blau & Partners, Inc., and Colonial Data
Technologies Corp. ("Worldwide" or the "Joint Venture").
2. Formation of Corporation.
a. The parties shall form a corporation (the
"Corporation") for the purpose of performing the Contracts. The
Corporation shall be named Worldwide Telecom Partners, Inc.,
shall be incorporated in Delaware, and shall qualify to do
business as a foreign corporation in Connecticut and other
jurisdictions as deemed appropriate by the parties.
b. The capital stock of the Corporation shall be
owned 50% each by Blau and Colonial unless and until the parties
mutually agree to sell part of their respective stock holdings in
the Corporation to any third parties. Any such subsequent sales
of Corporation stock shall be on terms mutually agreed upon by
Blau and Colonial.
c. Officers and Directors of the Corporation shall be
as follows:
Walter Fiederowicz President and Chairman of the Board
Ron Friedman Vice Chairman and Director
Joe Cline Vice President and Director
Fred Kaseff Secretary, Treasurer and Director
d. A designee of the Corporation shall act as sole
incorporator of the Corporation (the "Sole Incorporator"). As
soon as reasonably possible after the execution of this
Agreement, the Sole Incorporator shall cause a Certificate of
Incorporation in substantially the form attached hereto as
Exhibit A to be filed with the Secretary of State of the State of
Delaware. From and after the organization of the Corporation,
all activities of the Joint Venture shall be conducted by and in
the name of the Corporation unless the parties expressly agree
otherwise in writing and all references in this Agreement to the
"Joint Venture" shall be deemed to refer to the Corporation,
unless the context clearly requires a different interpretation.
e. Promptly upon the incorporation of the
Corporation, the Sole Incorporator shall take actions
substantially as set forth in the Sole Incorporator's Action
attached hereto as Exhibit B, which actions include:
(1) adopting By-laws in substantially the form
attached to Exhibit B; and
(2) electing the individuals described in Section
2.c. above to serve as the initial directors of the Corporation.
f. Initial Directors' Actions. The parties hereto
agree to use their best efforts to cause the initial directors to
take the following board actions:
(1) authorize the issuance and sale of 45 shares
of the Corporation's common stock to Blau in exchange
for a capital investment of *CONFIDENTIAL TREATMENT*
(*CONFIDENTIAL TREATMENT* per share) and the issuance
and sale of 45 shares of the Corporation's common stock
to Colonial in exchange for a capital investment of
*CONFIDENTIAL TREATMENT* (*CONFIDENTIAL TREATMENT* per
share); and
(2) appoint the individuals identified in Section
2.c above to serve as the initial officers of the
Corporation in the capacities set forth in Section 2.c
above.
3. Election and Removal of Directors and Officers. The
parties hereto shall, from time to time and at all times, vote
their shares of Common stock of the Corporation and otherwise use
their best efforts to cause the following to occur:
(a) to elect as Directors two (2) individuals
nominated by Blau (the "Blau Directors") and two (2) individuals
nominated by Colonial (the "Colonial Directors") (for purposes of
this Agreement, Messrs. Fiederowicz and Cline shall constitute
the initial Colonial Directors and Messrs. Friedman and Kaseff
shall constitute the initial Blau Directors);
(b) to remove a Blau Director from the Board of
Directors upon the written request of Blau and only upon the
written request of Blau and, correspondingly, to remove a
Colonial Director from the Board of Directors upon the written
request of Colonial and only upon the written request of
Colonial.
4. Purchase of Common Stock. Each of Blau and Colonial
agrees to purchase from the Corporation forty-five (45) shares of
the Corporation's Common Stock, par value of $0.01 per share, at
a purchase price of *CONFIDENTIAL TREATMENT* per share, for an
aggregate purchase price of *CONFIDENTIAL TREATMENT*. Blau and
Colonial shall each pay to the Corporation the sum of
*CONFIDENTIAL TREATMENT* promptly upon the authorization of the
issuance of such shares by the Corporation pursuant to Section
1.c. hereof in exchange for certificates representing such shares
(the "Shares").
5. Certificate of Trade Name. A Certificate of Trade Name
in the name of Worldwide Telecom Partners, Inc., shall be
registered in the towns of Fairfield, Connecticut, and New
Milford, Connecticut, and in such other towns as may be required
or deemed appropriate.
6. Certificate of Trademark. A Certificate of Trademark
in the name of Worldwide Telecom Partners, Inc., shall be
registered with the Secretary of State of the State of
Connecticut and in such other state or federal jurisdictions as
may be required or deemed appropriate.
7. Term of Joint Venture. The Joint Venture shall
commence its business as of the effective date of this Agreement
and shall continue from year to year, except that either party
hereto may unilaterally terminate the Joint Venture for any
reason in its sole discretion including, without limitation, such
party's desire to pursue individually business opportunities or
contracts of the type contemplated to be jointly undertaken
hereby upon adequate notice to the other party so as to allow for
completion of performance of any then-outstanding contracts
(which notice shall be given, in any event, at least thirty (30)
days prior to the proposed termination date set forth therein).
Upon termination of the Joint Venture, the officers of the
Corporation shall collect the assets of the Joint Venture, both
tangible and intangible, pay the debts of the Joint Venture
including, without limitation, assets and debts of the
Corporation, and distribute the remaining assets equally to the
parties. Upon termination of the Joint Venture, the parties
shall cause the Corporation to be promptly liquidated and
dissolved in accordance with applicable laws governing
dissolution of Delaware corporations. Upon termination of this
Agreement, neither party shall have any rights in the name
"Worldwide Telecom Partners, Inc." or any variation thereof, or
in any other intellectual property rights of the Corporation
unless the parties otherwise mutually agree in writing.
8. Mutual Exclusivity.
a. In consideration of the valuable expertise and
other considerations being provided by each of the parties to the
Joint Venture, each of the parties agrees that the Joint Venture
shall have the exclusive right to perform the types of contracts
contemplated by this Joint Venture Agreement. Neither party
shall, on its own or in conjunction with any other entity not
party to this Agreement, attempt to secure or perform the types
of contracts contemplated by this Joint Venture Agreement, except
that the following situations shall not be deemed Contracts
subject to the terms of this Agreement:
(1) where either party has entered into a contract
prior to the effective date of this Agreement which, but for its
predating the effective date of this Agreement, would be deemed a
Contract;
(2) where the parties jointly or individually bid to a
third party to be awarded a Contract and said third party wishes
to engage the services of one, but not both, of the parties; or
(3) where the Joint Venture has been awarded a
Contract but the parties disagree as to the performance of
certain portions of said Contract ("Disputed Portions"), and one
of the parties wishes to perform the Disputed Portions, and the
parties agree that the Disputed Portions are severable from the
Contract in terms of performance and compensation therefor, and
the parties agree on a basis for compensation for performance of
the Disputed Portions, the Disputed Portions shall not be deemed
part of said Contract.
b. Each of the parties further agrees that Contracts
of the Joint Venture and new business relationships established
by the Joint Venture shall remain the property of the Joint
Venture, and not the property of either of the parties to this
Agreement.
c. Notwithstanding the foregoing, this Agreement in
no way precludes either party from continuing to provide the
types of services or products it currently provides independent
of the Joint Venture. Moreover, the exclusivity provisions above
shall not be deemed to limit or restrict either party's right to
terminate the Joint Venture as described in Section 7 above.
d. The selection by Bell Atlantic of Colonial to
provide services to market Bell Atlantic's Caller ID telephone
service, pursuant to Request for Quotation No. 94JSK0391 (letter
dated March 10, 1995 evidencing such selection attached hereto as
Appendix A), shall be considered a Contract for the purposes of
this Agreement.
9. Share of Profits and Losses. It is the intent of the
parties that the respective interests of the parties in and to
the Contracts, any and all property and equipment acquired in
connection with the performance thereof and any and all money
derived from the performance thereof, and the obligations and
liabilities of each of the parties hereto as among themselves in
connection with services and products to be provided and with
respect to any and all liabilities and losses in connection
therewith, shall be shared 50% by each of Blau and Colonial. In
furtherance of this intent, each of Blau and Colonial will
purchase 50% of the capital stock of the Corporation. To the
extent that both parties, acting in good faith, recognize that
such stock ownership does not equitably achieve the intended
sharing of interests, profits or losses as described above, the
parties agree to make adequate payment or provision to equitably
achieve such intended results. Each party indemnifies the other
against any loss or liability exceeding the proportions
hereinabove stated by reason of any liability incurred or loss
sustained in performing the Contracts.
10. Working Capital.
a. The Board of Directors of the Corporation shall
approve an operating budget for the Joint Venture and shall
notify the parties of any required capital contributions
necessary to fund such budget. All necessary working capital,
when and as required, in accordance with such Board of Directors
notice, shall be provided 50% each by Blau and Colonial. The
parties shall open a bank account in the name of the Corporation
into which all funds contributed hereunder for providing services
and products pursuant to the Contracts, as well as funds received
on account thereof shall be deposited. Withdrawals shall be made
from such bank account in such manner and in such form as the
parties may from time to time direct.
b. All working capital contributed or advanced shall be
repaid to the party contributing or advancing the same prior to
the distribution of any profits hereunder.
11. Compensation of Key Individuals. The Joint Venture
may, from time to time, engage certain key individuals on an
independent contractor or other basis to perform services on
behalf of the Joint Venture. The parties hereto agree that the
compensation of such individuals, and any other costs related
thereto, shall be included in the operating budget described in
section 9.a. above and shall be borne 50% by each of Blau and
Colonial.
12. Labor, Materials and Finished Products.
a. All labor required from the parties for the Joint
Venture to be able to secure and perform the Contracts shall be
provided by the respective parties at *CONFIDENTIAL TREATMENT*.
b. All materials and finished products required from
the parties for the Joint Venture to be able to perform the
Contracts shall be provided by the respective parties at
*CONFIDENTIAL TREATMENT*.
13. Credit. Loans, notes or mortgages needed for the
Joint Venture may be obtained in the name of the Joint Venture
only with the written consent of both parties and only for the
purposes of the Joint Venture. No note or other document
evidencing such obligation shall be enforceable against the Joint
Venture unless signed by a duly authorized representative of each
party to this Agreement.
14. Selection of Representatives. To facilitate the
handling of all matters and questions in connection with the
performance of the Contracts by the parties to the Joint Venture,
each of the parties shall appoint a representative with full and
complete authority to act on its behalf in relation to any
matters or things in connection with, arising out of, or relating
to the Joint Venture and in relation to any matters or things
involving the performance of the Contracts. Blau appoints Ron
Friedman as its representative. Colonial appoints Joe Cline as
its representative. Either party may change its representative
at any time, but must provide written notice of such change to
the other party for such change to become effective.
15. Actions of Representatives. The representatives of
the parties shall meet from time to time as required to act on
necessary matters pertaining to the purpose of the Joint Venture.
All decisions, commitments, agreements, undertakings,
understandings, or other matters involving a minimum of $10,000
and pertaining to the performance of the Contracts shall be
mutually agreed upon by unanimous consent of such
representatives. No representative shall be liable to the
parties by reason of his acts as such, except in the case of his
gross negligence or actual fraudulent or dishonest conduct.
The officers of the Corporation shall open the Joint Venture
bank account in the name of the Corporation in a bank in
Connecticut agreed upon by the parties to the Joint Venture. The
proceeds of the initial subscriptions by the parties for the
Corporation's capital stock shall be deposited in said account.
All capital and income of the Joint Venture shall be deposited in
said account. The funds in said account shall be used solely for
the business of the Joint Venture, pending distribution to the
parties to the Joint Venture. The Corporation shall be
authorized to carry out and perform this Agreement and to
transact the business of the Joint Venture in accordance with
this Agreement and its Certificate of Incorporation and By-laws.
Unless otherwise agreed to in the future by the unanimous
agreement of the parties to the Joint Venture, the
representatives of the parties shall not receive any compensation
for services rendered by them under this Agreement.
16. Books.
(a) Separate books of account for the performance of
the Contracts and all matters pertaining thereto shall be kept
and maintained at the main office of the Joint Venture. All
records of the Joint Venture shall be open for inspection of the
parties at all reasonable times.
(b) A periodic accounting of such books shall be made
by independent auditors as agreed upon by unanimous vote of the
parties to the Joint Venture. The cost of any such accounting
shall be borne by the Joint Venture.
17. Insolvency. Upon the bankruptcy or insolvency of
either party to the Joint Venture, or should either party commit
any act of bankruptcy or take advantage of any bankruptcy or
reorganization statute, then, from and after such date, such
insolvent party and its representative (as set forth in Section
13) shall cease to have any voice in the management of the Joint
Venture. All acts, consents and decisions with respect to the
Joint Venture shall thereafter be taken by the other party and
its representative. Notwithstanding the foregoing, the insolvent
party shall remain liable for its share of any losses, and shall
be entitled to receive its share of any profits to be paid at the
time and in the manner provided in this Agreement.
18. Limits of Joint Venture. The relationship between the
parties shall be limited to the performance of the Contracts.
This Agreement shall be construed and deemed to be a Joint
Venture for said sole purpose. Nothing herein shall be construed
to create a general partnership between the parties or to
authorize any party to act as general agent for any other party,
or to permit any party to bid for or to undertake any other
contracts for the other party.
19. Assignment. Neither this Agreement nor any interest of
either of the parties hereto in connection with the Joint Venture
may be assigned, pledged, transferred, or hypothecated, without
the prior written consent of the parties hereto.
20. Notice. Each party designates its representative as
the appropriate recipient of any written notice by the other
party pursuant to this Agreement. Notice shall be sent as
follows:
If to Blau: Barry Blau & Partners, Inc.
1960 Bronson Road
Fairfield, CT 06430
Attention: Ron Friedman (or successor
representative)
If to Colonial: Colonial Data Technologies Corp.
80 Pickett District Road
New Milford, CT 06776
Attention: Joe Cline (or successor
representative)
Copies of any such notices shall also be sent to Walter
Fiederowicz, in care of Colonial, and Fred Kaseff, in care of
Blau. All such notices (including any requests, consents and
other communications pursuant to this Agreement) shall be either
(i) delivered by hand, (ii) made by telex, telecopy or facsimile
transmission, (iii) sent by overnight courier, or (iv) sent by
registered mail, return receipt requested, postage prepaid. All
notices, requests, consents and other communications hereunder
shall be deemed to have been given either (i) if by hand, at the
time of delivery thereof to the receiving party at the address of
such party set forth above, (ii) if made by telex, telecopy or
facsimile transmission, at the time that receipt thereof has been
acknowledged by electronic confirmation or otherwise, (iii) if
sent by overnight courier, on the next business day following the
day such notice is delivered to the courier service, or (iv) if
sent by registered mail, on the fifth business day following the
day such mailing is made.
21. Entire Agreement. This Agreement reflects the entire
understanding between the parties hereto and supersedes any prior
agreements. No modification or waiver of any of the terms of
this Agreement shall be valid unless in writing and signed by
each of the parties hereto.
22. Governing Law. This Agreement shall be governed by the
laws of the State of Connecticut.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the date and year first above written.
BARRY BLAU & PARTNERS, INC.
By: /S/ BARRY BLAU
________________________________
COLONIAL DATA TECHNOLOGIES CORP.
By: /S/ ROBERT J. SCHOCK
________________________________
THIS SUBLEASE made as of May 1, 1995
Pursuant to the Short Forms of Leases Act of Ontario
B E T W E E N:
TIE/COMMUNICATIONS CANADA INC.
(the "Sublandlord")
THE PARTY OF THE FIRST PART
-and-
CDT CANADA CORP.
(the "Subtenant")
THE PARTY OF THE SECOND PART
WHEREAS by a lease (the "Head Lease") made as of November 1,
1991, a copy of which is attached hereto as Schedule A, Gimbro
Enterprises Ltd. (the "Head Landlord") leased to the Sublandlord,
for a term commencing on November 1, 1991 and terminating on
October 31, 1996, upon and subject to the terms of the Head
Lease, the whole of the building municipally known as 27
Armthorpe Road, Brampton, Ontario (the "building"), which
premises are more particularly described in the Head Lease
including, inter alia, that portion of the Building which portion
contains 15,750 square feet and is shown cross-hatched on the
floor plan attached hereto as Schedule B (the "Sublet Premises");
AND WHEREAS the Sublandlord and the Subtenant have agreed to
enter into this Sublease on the terms hereinafter set forth;
NOW THEREFORE in consideration of the rents, covenants and
agreements hereinafter set forth and other good and valuable
consideration and the sum of $10.00 paid by each party to each
other party, the receipt and sufficiency of which are hereby
acknowledged by each party, the parties covenant and agree as
follows:
1. Capitalized Terms
Each capitalized term used herein shall have the meaning
ascribed to it herein and if not herein then in the Head Lease.
2. Demise and Subterm
Subject to the consent of the Head Landlord, the Sublandlord
demises and subleases the Sublet Premises to the Subtenant and
the Subtenant subleases the Sublet Premises from the Sublandlord,
for a term (hereinafter called the "Subterm") commencing on May
1, 1995 (hereinafter called the "Commencement Date") and
terminating on October 31, 1996, upon and subject to the terms of
this Sublease.
3. Basic Rent
The Subtenant covenants to pay as Basic Rent to the
Sublandlord without deduction or set off:
(a) for that period of the Subterm commencing on the
Commencement Date and ending on October 31, 1995 the sum of
$90,562.50 per annum in equal monthly installments of
$7,546.88 payable in advance on the first day of each and
every month during such period; and
(b) for that period of the Subterm commencing on November
1, 1995 and ending on October 31, 1996 the sum of $94,500.00
per annum in equal monthly installments of $7,875.00 payable
in advance on the first day of each and every month during
such period.
4. Additional Rent
The Subtenant covenants to pay as Additional Rent during the
Subterm the following amounts:
(a) the Subtenant's Share of all utilities payable by the
Sublandlord under the Head Lease;
(b) the Subtenant's Proportion of operating costs (other
than utilities or items paid directly by the Subtenant)
payable by the Sublandlord under the Head Lease;
(c) the Subtenant's Proportion of the Taxes payable by the
Sublandlord under the Head Lease; and
(d) all other costs which are the responsibility of the
Sublandlord under the Head Lease as such costs relate to the
Sublet Premises.
The Subtenant's Share means a fraction having as its
numerator the Non-warehouse Area of the Sublet Premises and as
its denominator the Non-warehouse Area of all premises (including
the Sublet Premises) leased by the Sublandlord under the Head
Lease. The Non-warehouse Area shall be that portion of all
premises not exclusively designated as warehouse space by the
parties hereto, acting reasonably.
The Subtenant's Proportion means a fraction having as its
numerator the Rentable Area of the Sublet Premises and as its
denominator the Rentable Area of all premises (including the
Sublet Premises) leased by the Sublandlord under the Head Lease.
The Rentable Area has the meaning set forth in Section 1.13 of
the Head Lease.
5. Payments
With the exception of the Subtenant's Share of utilities,
all payments provided for in this Sublease shall be made to the
Sublandlord on the first day on each and every month. The
Subtenant shall be entitled to the Subtenant's Proportion of any
credit to the Sublandlord by the Head Landlord and shall be
responsible for the Subtenant's Proportion of any deficiency owed
to the Head Landlord. The Subtenant's Share of utilities shall
be payable by the Subtenant to the Sublandlord within five (5)
days of receiving an invoice from the Sublandlord for the
Subtenant's Share of utilities.
All payments provided for in this Sublease shall be in
Canadian currency and shall be made by the Subtenant to the
Sublandlord at its address provided in Section 16 hereof or as
the Sublandlord otherwise directs by notice.
Subtenant shall be entitled to review any supporting
documents of the Sublandlord relating to payments made for
Additional Rent.
6. Subtenant's Covenant
The Subtenant also covenants and agrees with the
Sublandlord:
(a) to perform all of the obligations of the Tenant under
the Head Lease thereof and to be bound by the Terms of the
Head Lease, in each case as they relate to the Sublet
Premises or the rent payable hereunder only and in each case
as such obligation may be qualified by another provision of
this Sublease and in each case as if named therein with each
reference therein to the Landlord being deemed to include
the Sublandlord and with each reference therein to the
Tenant being deemed to mean the Subtenant;
(b) to perform all of the obligations of the Subtenant
under this Sublease;
(c) not to do or omit to do any act in or around the Sublet
Premises which would cause a breach of the Sublandlord's
obligations as tenant under the Head Lease;
(d) to promptly pay when due to the authorities having
jurisdiction all Taxes (whether imposed upon the Subtenant
or otherwise) attributable to the personal property, trade
fixtures, business, income or occupancy of the Subtenant and
to any Leasehold Improvements or fixtures within the Sublet
Premises, and to the use by the Subtenant of any of the
Common Facilities and the amount by which Taxes (whether
imposed upon the Subtenant or otherwise) are increased above
the Taxes which would have otherwise been payable as a
result of the Sublet Premises or the Subtenant or any other
occupant of the Sublet Premises being taxed or assessed in
support of the separate schools; and
(e) to indemnify and save harmless the Sublandlord against
and from any and all expenses, costs, damages, suits,
actions or liabilities arising or growing out of the failure
of the Subtenant to perform any of its obligations hereunder
and from all claims and demands of every kind and nature
made by any person or persons to or against the Sublandlord
for all and every manner of costs, damages or expenses
incurred by or injury or damage to such person or persons or
his, her or their property, if such claims or demands arise
out of the use and occupation of the Sublet Premises by the
Subtenant or any other person authorized by the Subtenant or
any of the above-mentioned and from all costs, counsel fees,
expenses and liabilities incurred in and about any such
claim or any action or proceeding brought thereon.
7. Subtenant's Breach
If the Subtenant fails to perform any of its obligations
herein, the Sublandlord shall have all of the remedies against
the Subtenant which the Head Landlord has under the Head Lease
for a breach thereof.
8. Sublandlord's Covenants
Subject to the due performance by the Subtenant of its
obligations herein, the Sublandlord covenants and agrees with the
Subtenant:
(a) for quiet enjoyment of the Sublet Premises;
(b) to enforce against the Head Landlord for the benefit of
the Subtenant the obligations of the Head Landlord under the
Head Lease which materially affect the Sublet Premises;
(c) to perform all of the obligations of the Sublandlord
under this Sublease;
(d) not to do or omit to do any act in or around the Leased
Premises which would cause a breach of the Head Lease which
would materially affect the Subtenant's right to the Sublet
Premises;
(e) to perform all of the obligations of the Tenant under
the Head Lease which materially affect the Sublet Premises;
(f) the Sublandlord will not exercise its right of early
termination under Section 3.02 of the Lease nor will it
otherwise voluntarily surrender the Leased Premises before
October 31, 1996 or amend the Head Lease in such a way that
would materially affect the Subtenant's rights hereunder;
(g) to indemnify and save harmless the Subtenant against
and from any and all expenses, costs, damages, suits,
actions or liabilities arising or growing out of the failure
of the Sublandlord to perform any of its obligations
hereunder and from all claims and demands of every kind and
nature made by any person or persons to or against the
Subtenant for all and every manner of costs, damages or
expenses incurred by or injury or damage to such person or
persons or his, her or their property, if such claims or
demands arise out of the use and occupation of the Building
by the Sublandlord or any other person authorized by the
Sublandlord or any of the above-mentioned and from all
costs, counsel fees, expenses and liabilities incurred in
and about any such claim or any action or proceeding brought
thereon; and
(h) the Sublandlord shall provide the Subtenant with copies
of any notices received from the Head Landlord as they
relate to the Sublet Premises.
9. Use
The Sublet Premises shall be used by the Subtenant solely
for the purpose permitted in the Head Lease and for no other
purpose.
10. Insurance
The Subtenant shall take out and maintain throughout the
Subterm insurance with respect to the Sublet Premises upon the
terms required of the Sublandlord in the Head Lease and both the
Head Landlord and the Sublandlord shall be shown as named
insureds on all such policies.
11. Subtenant's Assigning, Subletting, etc.
The Subtenant agrees that the Subtenant shall not be
entitled to sublet or assign the whole or any part of the Sublet
Premises or this Sublease.
12. Other Terms of Head Lease Incorporated
In addition to the specific sections of the Head Lease which
are incorporated elsewhere in this Sublease and subject to the
exceptions, if any, listed in subsection 6(a) and subject to
Section 13 and Section 17 hereof, all of the terms of the Head
Lease are also incorporated, mutatis mutandis, into and applied
to this Sublease with each reference to the Landlord in the Head
Lease being deemed to include the Sublandlord and with each
reference therein to the Tenant being deemed to mean the
Subtenant.
If any term of this Sublease is inconsistent with any term
of the Head Lease, the term of this Sublease shall prevail.
13. Head Landlord's Covenants
Wherever, in the Head Lease, a covenant is made by the Head
Landlord in favor of the Tenant thereunder, such covenant shall
not, except as otherwise provided herein, be a covenant made by
the Head Landlord and/or the Sublandlord in favor of the
Subtenant.
14. Exercise of Rights
The exercise by the Head Landlord of any of its rights
contained in the Head Lease shall, upon written notice by the
Head Landlord to the Subtenant of such exercise, be binding upon
the Subtenant. Notwithstanding the exercise by the Head Landlord
of any of its rights contained in the Head Lease, the Sublandlord
may also exercise its rights hereunder in the same manner as the
Head Landlord.
15. No Greater Right Acknowledgement
The Subtenant acknowledges and agrees that it has no greater
interest in the Sublet Premises than the Sublandlord under the
Head Lease.
16. Notices
All notices, consents and approvals permitted or required to
be given hereunder shall be in writing and shall be delivered to
the Sublandlord or the Subtenant, as the case may be, as follows:
to the Sublandlord at: 27 Armthorpe Road
Brampton, Ontario
L6T 4M4
Attention: President
to the Subtenant at: 27 Armthorpe Road
Brampton, Ontario
L6T 4M4
Attention: Vice-President &
Chief Financial Officer
Any notice so made shall be deemed to have been given and
received on the date of delivery. Any party may, from time to
time by notice given pursuant to this Section, change its address
for the purpose hereof.
17. Exclusions from Lease
The Subtenant agrees and acknowledges that Section 3.02,
10.10 and 16.02 of the Head Lease shall not apply to the
Subtenant.
18. Subtenant Improvements
The Subtenant shall be entitled to install a demising wall
where indicated on the floor plan attached as Schedule B hereto
and, if necessary, washroom facilities in the Sublet Premises
(the "Work"); provided that:
(a) the Subtenant shall apply for the Sublandlord's consent
and furnish such plans, specifications and designs as shall
be necessary to fully describe the Work. The Sublandlord's
consent thereto shall not be unreasonably withheld or
delayed; provided that, without limitation, any refusal to
grant consent based on grounds that such Work is not in
compliance with the building standard or that the Subtenant
has not posted security with the Sublandlord shall be
conclusively deemed not to be an unreasonable withholding of
consent;
(b) subject to the Sublandlord's consent having been
obtained and the Sublandlord's reasonable requirements
(including the posting of reasonable security, if requested)
being met, the Sublandlord recognizes the right of the
Subtenant to install such interior partitions and other
leasehold improvements as are necessary or appropriate to
its use and occupancy of the Sublet Premises;
(c) any Work shall, if the Sublandlord so elects, be
performed by employees or contractors who have been
designated by the Sublandlord and who have contracted
directly with the Subtenant and agreed to carry out such
Work in a good and workmanlike manner and at a cost to the
Subtenant which is not unreasonable when compared with the
amounts which would be charged by reputable contractors
performing the same work. In the absence of any such
election by the Sublandlord, such Work may be performed by
contractors retained by the Subtenant pursuant to written
contracts which have been approved by the Sublandlord (such
approval not to be unreasonably withheld) and are subject to
all reasonable conditions which the Sublandlord imposes. In
either event, the Sublandlord shall have the right to
inspect such Work and require any Work not being properly
done to be corrected, and to approve on a reasonable basis
(which may include considerations involving trade union
affiliations or the lack of them and work jurisdiction,
where in the opinion of the Sublandlord there is a risk of
labor disputes which might adversely affect the Sublandlord)
the contractors, tradesmen or the Subtenant's own employees
(as the case may be) employed by the Subtenant in connection
therewith;
(d) at the end of the Subterm, if the Head Landlord so
requires, the Subtenant shall remove the Work and any
alterations it has made or caused to be made and shall make
good any damage caused by the installation or removal of
such alterations; and
(e) all reasonable costs associated with the Work shall be
the responsibility of the Subtenant and the Sublandlord on a
fifty/fifty basis.
19. Successors and Assigns
Except as otherwise provided herein, all of the rights and
obligations of a party hereto to inure to the benefit of and are
binding upon the successors and assigns of that party.
20. Net Sublease
This Sublease and the Basic Rent payable hereunder shall be
absolutely net to the Sublandlord. Any obligations or expense
associated with the Sublet Premises which is not stated to be
that of the Sublandlord herein shall be deemed to be that of the
Subtenant. For greater certainty, but without limitation, each
of the parties hereto confirm that the Subtenant is fully
responsible for each of the Sublandlord's obligations pursuant to
the Head Lease as they relate to the Sublet Premises.
21. Parking
The Subtenant shall be permitted to use __________ parking
spaces in areas designated by the Head Landlord on the same terms
and conditions as contained in the Head Lease.
22. Further Assurances
Each of the parties hereto agrees to do, make and execute
all such further documents, agreements, assurances, acts, matters
and things and take such further action as may be reasonably
required by any other party hereto in order to more effectively
carry out the true intent of this Sublease.
23. Counterparts
This Sublease may be executed in multiple counterparts, each
of which when so executed will be deemed to be an original and
all of which taken together will constitute one and the same
agreement.
IN WITNESS WHEREOF the parties have duly executed this Sublease
as of the date set out above.
SUBLANDLORD:
TIE/COMMUNICATIONS CANADA INC.
Per: /s/ Gordon R. Lingets
______________________________
I have authority to bind the
corporation.
SUBTENANT:
CDT CANADA CORP.
Per: /s/ Robert J. Schock
______________________________
Per: /s/ Robert F. Wasco
______________________________
I/We have authority to bind
the corporation.
Schedule A
LEASE
THIS INDENTURE made the 1st day of November 1991, IN
PURSUANCE OF THE SHORT FORMS OF LEASES ACT:
BETWEEN:
GIMBRO ENTERPRISES LTD, and (hereinafter called the "Landord")
OF THE FIRST PART
-and-
TIE COMMUNICATIONS CANADA INC. (hereinafter called the "Tenant")
OF THE SECOND PART.
24. DEFINITIONS
In this lease:
(a) "Alterations" means the Tenant's alterations or
improvements to the Leased Premises referred to in section 13.01;
(b) "Basic Rent" means the rent payable pursuant to section
4.01;
(c) "Building" means the building erected on the Lands;
(d) "Initial Term" has the meaning set forth in section
3.01;
(e) "Landlord" means the party of the first part but
includes its successors and its assigns as landlord under this
lease;
(f) "Landlord's Bank" means a Canadian chartered bank
designated by the Landlord from time to time as its bank;
(g) "Lands" means Parcel Block 7-4, Section 43M-880 being
part of Block 7 on Plan 43M-880 designated as Part 21 on Plan
43R-16528, City of Brampton, Regional Municipality of Peel;
(h) "Leased Premises" means all the premises in the
Building;
(i) "Leasehold Improvements" means all fixtures,
improvements, installations, alterations and additions from time
to time made, erected or installed by the Tenant in the Leased
Premises (with the exception of all trade fixtures and furniture
and equipment not of the nature of fixtures) but includes all
partitions however affixed including moveable partitions and all
wall-to-wall carpeting with the exception of such carpeting where
laid over vinyl tile or other finished floor and affixed so as to
be readily removed without damage;
1.10 "Parking Areas" means those areas designated by the
Landlord from time to time for parking;
1.11 "Prime Rate" means the reference rate of interest
quoted from time to time by the Landlord's Bank for commercial
loans in Canada;
1.12 "Regulations" means the regulations, if any, attached
as Schedule A hereto and such further and other reasonable
regulations and amendments and changes therein as may hereafter
be made by the Landlord and notified to the Tenant;
1.13 "Rentable Area of the Leased Premises" means 31,500
square feet;
1.14 "Taxes" means all taxes, rates, duties, levies and
assessments whatsoever, whether municipal, parliamentary, or
otherwise, levied, imposed or assessed against the Lands or
Building or upon the Landlord in respect thereof or from time to
time levied, imposed or assessed for education, schools and local
improvements or in respect of leasehold improvements, trade
fixtures, other fixtures, equipment and property moved or
installed by tenants or occupants of the Building, and
specifically including realty taxes and all goods and services
taxes, value added taxes, business transfer taxes and any other
tax imposed on or with respect to Basic Rent, Additional Rent and
other charges payable hereon and including commercial
concentration tax, if any;
1.15 "Tenant" means the party of the second part but
includes its successors and its assigns as permitted under this
lease;
1.16 "Term" means the Initial Term of this lease;
1.17 "Unavoidable Delay" means any cause beyond the control
of the party which prevents the performance by such party of any
obligations hereunder and not caused by its financial inability
or by its default or act of commission or omission and not
avoidable by the exercise or reasonable effort of foresight by
such party, but including, without limiting the generality of the
foregoing, strikes or other labor or industrial disturbances,
civil disturbance, acts, orders, legislation, regulations or
directives of any government or other public authorities, act of
the public enemy, war, riot, sabotage, blockade, embargo,
shortage of materials and supplies, shortage of labor, lightning,
earthquakes, fire, storm, hurricane, flood, washout, explosion,
act of God, and delays caused by any other party hereto other
than the party relying upon such Unavoidable Delay.
2. DEMISE
2.01 In consideration of the rents, covenants and agreements
hereinafter reserved and contained on the part of the Tenant to
be paid, observed and performed, the Landlord does hereby demise
and lease the Leased Premises unto the Tenant.
3. TERM
3.01 Initial Term. TO HAVE AND TO HOLD the Leased Premises
for and during the term of five (5) years commencing on the first
day of November, 1991 and ending on the last day of October, 1996
subject to the provisions for early termination contained herein
(the "Initial Term").
3.02 Early Termination. Provided that the Tenant is not in
default of this Lease, the Tenant shall be entitled to terminate
this Agreement or the said Lease as of the Termination Date
(defined below) by giving written notice to the Landlord three
months before the Termination Date (defined below) by giving
written notice to the Landlord three months before the
Termination Date specified in the said notice (which notice shall
include payment, by certified check payable to the Landlord, of
the amount required below), upon compliance with the following
conditions:
(a) the Termination Date shall be either the first day
of the fourth year of the Term or the first day of
the fifth year of the Term, in the Tenant's sole
discretion;
(b) if the Termination Date elected by the Tenant is
the first day of the fourth year of the Term, the
Tenant shall pay to the Landlord, without set off
or deduction, and in addition to all Basic Rent,
Additional Rent and other amounts payable
hereunder, the sum of $110,564.00;
(c) if the Termination Date elected by the Tenant is
the first day of the fifth year of the Term, the
Tenant shall pay to the Landlord, without set-off
or deduction, and in addition to all Basic Rent,
Additional Rent and other amounts payable
hereunder, the sum of $94,500.
Termination of this Lease pursuant to this provision shall not
release or otherwise relieve the Tenant from any of its
obligations and liabilities thereunder arising on or prior to the
Termination Date.
4. BASIC RENT
4.01 The Tenant covenants to pay to the Landlord rent
("Basic Rent") in advance, without deduction or set-off, and in
the lawful money of Canada as follows:
a) for the period commencing November 1, 1991 and
ending on October 31, 1992, the sum of $157,500
payable in equal monthly installments of $13,125
in advance on the first day of each and every
month commencing on November 1, 1991;
b) for the period commencing November 1, 1992 and
ending on October 31, 1993, the sum of $165,375
payable in equal monthly installments of
$13,781.25 in advance on the first of each and
every month commencing on November 1, 1992;
c) for the period commencing November 1, 1993 and
ending on October 31, 1994, the sum of $173,250
payable in equal monthly installments of
$14,437.50 in advance on the first day of each and
every month commencing on November 1, 1993;
d) for the period commencing November 1, 1994 and
ending on October 31, 1995, the sum of $181,125
payable in equal monthly installments of
$15,093.75 in advance on the first day of each and
every month commencing on November 1, 1994;
e) for the period commencing November 1, 1995 and
ending on October 31, 1996, the sum of $189,000
payable in equal monthly installments of $15,750
in advance on the first day of each and every
month commencing on November 1, 1995.
4.02 If the Term commences on any day other than the date of
commencement or ends on any day other than the last day of a
calendar month, all Rent for the fractions of a month at the
commencement or expiration of the Term shall be pro-rated on a
per diem basis based on a period of three hundred and sixty-five
(365) days.
5. POST-DATED CHECKS
5.01 The Tenant agrees to provide the Landlord with a series
of monthly post-dated checks for the Basic Rent and the
Additional Rent as defined and payable pursuant to section 8.01
hereof, for each year during the Term.
6. NET LEASE
6.01 The Tenant acknowledges that it is intended that this
lease shall be a completely carefree net lease for the Landlord,
except as expressly hereinafter set out, that the Landlord shall
not be responsible during the Term for any costs, charges,
expenses and outlays of any nature whatsoever arising from or
relating to the Leased Premises or the contents thereof, and the
Tenant shall pay all charges, impositions, costs and expenses of
every nature and kind relating to the Leased Premise but without
limiting the generality of the foregoing, all expenses and costs
relating to the Leased Premises on account of realty taxes,
taxes, hydro-electric charges, insurance costs, heating charges,
air conditioning charges and maintenance charges.
7. USE OF PREMISES
7.01 The Tenant shall use the Leased Premises only for and
in conjunction with, the supply and repair of telecommunication
equipment and related office purposes provided that the Tenant
shall not use or occupy the Leased Premises for any purpose which
violates or does not comply with, any and all relevant municipal,
governmental or zoning/building by-laws, laws, orders and
regulations, now or hereafter in force. The Tenant shall
continuously, actively and diligently use and occupy the Leased
Premises for such permitted use and in the use and occupation of
the Leased Premises and in the prosecution or conduct of the
foregoing business therein, shall comply with the requirements of
all laws, ordinances, rules and regulations of the federal,
provincial and municipal authorities and with any direction or
certificate of occupancy issued pursuant to any laws by any
public officer or officers. The Tenant shall not use or permit
to be used any part of the Leased Premises for any dangerous,
noxious, or offensive trade or business and will not cause or
maintain any nuisance in, at, or on the Leased Premises. Without
limiting the generality of the foregoing, the Tenant shall not
place, deposit or store or permit to be placed, deposited or
stored any pollutant, dangerous, toxic or hazardous substance or
contaminant (as that term is defined by the Environmental
Protection Act, as amended, on, in or under any part of the
Leased Premises.
8. ADDITIONAL RENT
8.01 All Amounts Payable as Additional Rent. Any and all
sums of money or charges required to be paid by the Tenant under
this lease shall be deemed and paid as Additional Rent, whether
or not the same are designated as "Additional Rent" hereunder, or
whether or not the same are paid to the Landlord or otherwise,
and all such sums are to be payable in lawful money of Canada
without any deduction, set-off or abatement whatsoever.
Additional Rent is due and payable with each monthly installment
of Basic Rent, unless otherwise provided herein. Additional Rent
may be estimated, from time to time, by the Landlord acting
reasonably and such estimated amount shall be payable in equal
monthly installments in advance.
8.02 Monthly Installments of Additional Rent. The Tenant
hereby acknowledges and agrees that for the purpose of this
lease, the initial payments to be made by the Tenant on account
of such expenses shall be calculated on the basis of $1.50 per
square foot per annum. The initial Additional Rent shall be
payable in advance, without deduction, in equal monthly
installments of $3,937.50 subject to any and all escalations in
accordance with section 8.01.
8.03 Management Fee. In addition to Basic Rent, Additional
Rent and all other amounts payable by the Tenant hereunder, the
Tenant shall pay to the Landlord a further amount equal to 15% of
the aggregate Additional Rent per annum as a management fee which
fee shall be payable on the first day of each and every month in
equal monthly installments which may be estimated from time to
time by the Landlord.
9. BASIC RENT AND ADDITIONAL RENT PAST DUE
If the Tenant fails to pay any Basic Rent or Additional
Rent, or the management fee set out in paragraph 8.03 when the
same is due and payable, such unpaid amount shall bear interest
from the due date thereof to the date of payment at three percent
(3%) in excess of the Prime rate.
10. TENANT'S COVENANTS
10.01 Payment of Rent. The Tenant covenants to pay
Basic Rent and Additional Rent in the manner and at the times
herein reserved.
10.02 Business Taxes. In each and every year during the
Term, the Tenant shall pay when due all taxes, rates, duties,
assessments and other charges that may be levied, rated, charged
or assessed against or in respect of all improvements, equipment
and facilities on or in the Leased Premises and every tax and
license fee in respect of any and every business carried on
thereon or therein or in respect of the use or occupancy thereof
by the Tenant and any and every permitted occupancy of the Leased
Premises (other than corporate income, profits or excess profit
taxes assessed upon the income of the Landlord), whether any such
assessment tax, rate, duty or license fee is charged by a
federal, municipal, provincial, school or other bodies during the
Term. The Tenant shall and does hereby indemnify and shall keep
indemnified the Landlord from and against payment for all losses,
costs, charges and expenses, occasioned by or arising from any
and all such taxes, levies, rates, duties, assessments, license
fees (including Taxes pursuant to section 10.3 hereof), and any
and all taxes which may in the future be levied in lieu thereof.
Any such loss, costs, charges and expenses suffered by the
Landlord pursuant to this section 10.2 may be collected by the
Landlord as rent with all rights of distress and otherwise as
reserved to the Landlord in respect of rent in arrears. The
Tenant further covenants and agrees that upon the request of the
Landlord, the Tenant will promptly deliver to the Landlord for
inspection receipts for payment of all taxes, rates, duties,
assessments and other charges payable by the Tenant pursuant to
this section 10.2 which were due and payable up to one month
prior to such request and will furnish such other information in
connection therewith as the Landlord may reasonably require.
10.03 Taxes. The Tenant shall pay to the Landlord, as
Additional Rent, the amount of all Taxes. Taxes shall be
determined as if the Building were fully assessed in the year in
question. The Tenant shall in any event pay any increased Taxes
attributable to an election made by it (if any) to be a separate
school supporter. The Tenant shall pay any and all costs and
expenses incurred by the Landlord or the Tenant, as the case may
be, in respect of any appeal or contestation of the Taxes
conducted by the Landlord or the Tenant (with the prior consent
of the Landlord).
10.04 Utilities. The Tenant shall be solely responsible
for and shall promptly pay all charges for water, gas,
electricity, telephone, sewer and any and all other utilities
used or consumed in, or any other charge levied or assessed on or
in respect to, and allocated to the Leased Premises, and for all
fittings, machines, apparatus or other things leased in respect
thereof, and for all work or services performed by any
corporation or commission in connection with such public or
private utilities. In no event shall the Landlord be liable for,
nor have any obligation with respect to, any interruption or
cessation of, or any failure in the supply of any such utilities,
services or system, including, without limitation, the water and
sewage system, to the Leased Premises whether or not supplied by
the Landlord or others.
10.05 Repairs by the Tenant. Save as provided in
sections 19 and 20 hereof, the Tenant shall at its own expense,
operate, maintain and keep the Leased Premises and the structures
and equipment on the Leased Premises in an order and condition of
property maintained by a careful and prudent owner and promptly
make all needed repairs and replacements in and to the structures
and equipment, including without limitation, plumbing, water
pipes, sprinkler, if any, wiring, heating, air conditioning and
other appurtenances used by the Tenant in connection with the
operation of the Leased Premises, and shall at the end of the
Term, leave the Leased Premises in a good state of repair,
provided that the Landlord shall assume the cost for all major
structural repairs or replacements to the roof and walls
affecting the Leased Premises unless the damage or need for
replacement has been caused by the Tenant or its guests,
employees or assigns in which case the cost of repair or
replacement shall be for the account of the Tenant.
10.06 Entry by Landlord. It shall be lawful for the
Landlord and its agent(s) at all reasonable times during the Term
to enter the Leased Premises to inspect the condition thereof.
Where an inspection reveals that repairs or replacements are
necessary that are the Tenant's responsibility hereunder, the
Landlord shall give to the Tenant notice in writing, and
immediately thereafter the Tenant will proceed as soon as it is
practicable or prudent to do so, having regard to the nature and
gravity of the required repair, to make all necessary repairs or
replacements in a good and workmanlike manner and to the
satisfaction of the Landlord acting reasonably, so as to complete
same within the time or times provided for in the notice
delivered by the Landlord as aforesaid. The failure by the
Landlord to give notice shall not relieve the Tenant from any of
its obligations to repair or replace in accordance with the
provisions hereof. Provided further that if the Tenant refuses
or neglects to repair promptly and to the reasonable satisfaction
of the Landlord as required pursuant to the provisions of section
10.05 hereof or in accordance with any notice received from the
Landlord pursuant to the provisions of this section 10.06, the
Landlord may, but shall not be obligated to make such repairs or
replacements without liability to the Tenant for any loss or
damage which may occur to the Tenant's property or to the
Tenant's business by reason thereof and upon completion, the
Tenant shall forthwith pay upon demand the Landlord's cost for
making any such repairs or replacements plus a sum equal to
fifteen percent (15%) thereof for overhead, as Additional Rent.
The Tenant agrees that the making of any repairs or replacements
by the Landlord pursuant to this section 10.6 is not a re-entry
or a breach of any covenant for quiet enjoyment contained in this
lease.
10.07 Surrender of Leased Premises. At the expiration
or sooner termination of the Term, the Tenant shall peaceably
surrender and yield up vacant possession of the Leased Premises
with all improvements, erections and appurtenances which at any
time or times during the Term shall be made, placed or erected
therein or thereon to the Landlord in as good condition and
repair as the Tenant is required to maintain the Leased Premises
throughout the Term. The Tenant shall surrender all keys for the
Leased Premises to the Landlord at the place then fixed for the
payment of rent and shall inform the Landlord of all combination
of any locks, safes and vaults of any kind in the Leased
Premises.
10.08 Heat and Air Conditioning. The Tenant shall at
its own expense air condition and heat the Leased Premises to a
degree sufficient to protect the Leased Premises and their
contents from damage. Further, the Tenant will, at the
expiration or sooner termination of the Term, peacefully yield up
unto the Landlord such heating and air conditioning equipment and
all other equipment and appurtenances thereto in good and
substantial repair and condition.
10.09 Public Orders. The Tenant shall, at its sole cost
and expense, comply with all provisions of law, including without
limiting the generality of the foregoing, the requirements of all
federal, provincial and municipal legislative enactments, by-laws
or regulations now or hereafter in force which relate to the
Leased Premises or the conduct of business therein. The Tenant
will further comply with all police, fire, health and sanitary
regulations imposed by any governmental authorities or made by
fire insurance underwriters.
10.10 Assignment and Subletting.
10.10.1 The Tenant shall not assign this lease in
whole or in part nor sublet or part with or share the
possession of all or any part of the Leased Premises,
nor mortgage or encumber this lease or the Leased
Premises or any part thereof, nor suffer or permit the
occupation of or part with or share the possession of
or the Leased Premises by or with any person without
the prior written consent of the Landlord in each
instance, which consent, subject to section 10.10.2,
may not be unreasonably withheld or delayed. This
prohibition against assigning, subletting, mortgaging,
encumbering, permitting the occupation of, parting with
or sharing possession of all or part of the Leased
Premises shall be construed so as to include a
prohibition against same by operation of law.
10.10.2 If the Tenant desires to assign, sublet, part
with or share the possession of all or any part of the
Leased Premises, or mortgage or encumber this lease or
the Tenant's interest herein or to transfer this lease
in any other manner, in whole or in part or any estate
or interest thereunder, then and so often as such event
shall occur, the Tenant shall give prior written notice
to the Landlord of such desire, specifying therein the
proposed assignee, transferee or subtenant and the
Landlord shall, within 30 days thereafter, notify the
Tenant in writing either, that: (i) it consents, or
(ii) it does not consent as aforesaid to the
assignment, sub-letting or parting with or sharing
possession, or mortgaging or encumbering of this lease
or (iii) it elects to cancel and terminate this lease.
In the event the Landlord elects to cancel this lease
as aforesaid, the Tenant shall notify the Landlord in
writing within 15 days thereafter of the Tenant's
intention either to refrain from such assigning,
subletting or parting with or sharing possession,
mortgaging or encumbering, as the case may be, or to
accept the cancellation of the lease. Should the
Tenant fail to deliver such notice within such period
of 15 days, this lease will thereby be terminated upon
the expiration of the 15 day period.
10.10.3 Notwithstanding anything in this lease to the
contrary, the Landlord may require that as a condition
to granting its consent to any mortgaging or
encumbering of this lease or the Tenant's interest
herein by the Tenant, the Tenant obtain the covenant of
the mortgagee, in form prepared by the Landlord's
solicitors, whereby the mortgagee upon default of the
Tenant, shall assume the Tenant's obligations for the
payment of rent and for the full and faithful
observance and performance of the covenants, terms, and
conditions herein contained. Any such request by the
Landlord is hereby acknowledged to be reasonable.
10.10.4 All reasonable legal fees and expenses
incurred by the Landlord in connection with the review
by the Landlord and/or its solicitors of the Tenant's
request pursuant to this section, together with any
reasonable legal fees and disbursements incurred in the
preparation and review of any documentation therewith,
shall be the responsibility of the Tenant and shall be
paid forthwith on demand. Failure to pay such fees and
expenses shall be treated by the Landlord in the same
manner as Rent in arrears.
10.10.5 The Tenant shall provide the Landlord prior to
the Landlord having to make its election pursuant to
section 10.10.3 with such financial information about
the proposed sublessee or assignee as may be reasonably
required by the Landlord.
10.11 Nuisance. The Tenant will not do or omit to do or
permit to be done or omitted, anything upon or in respect of the
Leased Premises, the doing or omission of which, as the case may
be, shall be or result in any nuisance or menace to the Landlord
and including, without limitation, the Tenant shall not keep in,
on or around the Leased Premise any animals, birds or other pets;
and that no machinery shall be used on the Leased Premises which
shall cause any undue vibration in or to the Leased Premises
having regard to the general usage of the Building and the nature
and reasonable requirements of the Tenant's business, and if the
Landlord shall complain that any machinery or operation thereof
in or on the Leased Premises is a nuisance to it, upon receiving
notice thereof, the Tenant will immediately cease such nuisance.
10.12 Maintenance. The Tenant agrees to pay as
Additional Rent all maintenance and repair costs, whether major
or minor in nature, incurred by the Landlord with respect to the
Building.
11. INSURANCE
11.01 Tenant's Insurance. The Tenant shall, throughout
the Term, at its sole cost and expense, take out and keep in full
force and effect, in the name of the Tenant, the Landlord and any
mortgagees, as their respective interests may appear, the
following insurance:
11.01.1 Fire and standard extended risks coverage
insurance, including sprinkler leakage (where
applicable), in an amount equal to the full replacement
cost thereof upon property of every description and
kind owned by the Tenant or for which the Tenant is
legally liable or installed by or on behalf of the
Tenant and which is located within or on the Leased
Premises, including without limitation, Leasehold
Improvements;
11.01.2 Public liability and property damage
insurance, including public injury, liability,
employers liability, non-owned automobile liability,
landowners' and contractors' protective insurance
coverage with respect to the Leased Premises and the
Tenant's use thereof, coverage to include the
activities and operations conducted by the Tenant from
the Leased Premises, and by the Tenant and any person
performing work on behalf of the Tenant and those for
whom the Tenant is in law responsible. Such policies
shall be written on a comprehensive basis with
inclusive limits of not less than $1,000,000 for bodily
injury to any one or more persons or property damage or
such higher limits as the Landlord, acting reasonably,
or the mortgagee required from time to time; and shall
contain a severability of interest clause and a cross-
liability clause.
11.01.3 Comprehensive general liability insurance in
the amount of not less than $1,000,000 to cover any
work done by the Tenant's contractors and sub-trades
pursuant to section 13 herein; provided that the cost
of such general liability insurance shall be the
responsibility of the Tenant; and
11.01.4 Any other form of insurance as the Tenant or
the Landlord acting reasonably, or the mortgagee acting
reasonably requires from time to time in form, in
amounts and for insurance risks against which a prudent
tenant would insure.
11.02 Form of Insurance. All property damage policies
required to be written on behalf of the Tenant shall contain a
waiver of subrogation rights which the Tenant's insurers may have
against the Landlord, and against those for whom the Landlord is
in law responsible, including the Landlord's employees. All
policies of insurance required herein to be placed by the Tenant
shall where applicable name the Landlord and the Tenant as the
insured as their interests may appear, and, where applicable,
shall name as additional insured any mortgagee of the Landlord's
interest in the Leased Premises. All insurance provided for
herein shall be effected under valid and enforceable policies
issued by insurance companies of recognized responsibility
satisfactory to the Landlord, and authorized to provide insurance
in the Province of Ontario. Each policy of insurance shall
provide that no cancellation thereof shall be effective until at
least 10 days after receipt by the Landlord and Tenant of written
notice thereof. The Tenant shall deliver to the Landlord within
10 days after execution of this lease original or duplicate
policies or certificates of insurers evidencing all the insurance
which is then required to be maintained and paid for by the
Tenant hereunder.
11.03 Landlord's Insurance. The Landlord shall at its
sole option carry insurance on the Leased Premises and the
machinery, boilers and equipment contained therein against damage
by fire and extended periods coverage on a replacement cost basis
in such amounts and with such deductions as would be carried by a
prudent owner of a reasonably similar building in which the
Leased Premises are situate having regard to size, age and
location; and public liability and property damage insurance in
such amounts and with such deductions as would be carried by a
prudent owner of a reasonably similar building, having regard to
size, age and location; and such other form or forms of insurance
as the Landlord considers advisable. The Tenant shall be
responsible for the payment of the costs of all such insurance as
Additional Rent. The Landlord hereby releases the Tenant for
damage caused by it to the extent that the Landlord receives
insurance proceeds therefor.
12. MUTUAL COVENANTS
Provided, and it is expressly agreed:
12.01 Seizure and Bankruptcy. In case, without the
written consent of the Landlord, the Leased Premises shall become
and remain vacant or not be used for a period of 10 days, or
shall be used by any person other than the Tenant unless
otherwise permitted pursuant to the terms of this lease, or in
case the Term or any of the goods and chattels of the Tenant
shall be at any time seized or taken in execution or in
attachment by any creditor of the Tenant, or the Tenant shall
make any assignment for the benefit of creditors or give any bill
of sale without complying with the Bulk Sales Act (Ontario) or
become bankrupt or insolvent, or take the benefit or any Act now
or hereafter in force for bankrupt or insolvent debtors or file
any proposal or make an assignment for the benefit of creditors
or if a receiver is appointed for all or a portion of the
Tenant's property or if any order is made for the winding up of
the Tenant, or if the Tenant shall make a sale in bulk, or if the
Tenant abandons or attempts to abandon the Leased Premises or to
sell or dispose of any of the goods and chattels of the Tenant or
to remove them from the Leased Premises otherwise than in the
ordinary course of business so that there would not in the event
of such sale or disposal be sufficient goods on the Leased
Premises subject to distress to satisfy all rentals due or
accruing due hereunder, or if re-entry is permitted under any
other terms of this lease, then, and in every such case, the then
current month's Basic Rent and Additional Rent and the next
ensuing three (3) months' Basic Rent and Additional Rent shall
immediately become due and payable as accelerated rent, and, in
addition to any other rights available to the Landlord at law, at
the option of the Landlord this lease shall cease and determine
and the Term hereby demised shall immediately become forfeited
and void, in which event the Landlord may re-enter and take
possession of the Leased Premises as though the Tenant or any
occupant of the Leased Premises was holding over after the
expiration of the Term without any rights whatsoever.
12.02 No Exceptions for Distress. Notwithstanding the
benefit or any present of future statute taking away or limiting
the Landlord's right of distress, none of the goods and chattels
of the Tenant on the Leased Premises at any time during the Term
shall be exempt from levy by distress for Basic Rent and/or
Additional Rent in arrears.
12.03 Public Liability. The Landlord shall not be
liable for any injury or damage to persons or property resulting
from fire, explosion, falling plaster, steam, gas, electricity,
water, rain, snow or leaks from or into any part of the Leased
Premises or from the pipes, appliances, plumbing works, roof, or
subsurface of any floor or ceiling or from the street or any
other place or by dampness or by any cause of whatsoever nature.
The Landlord shall not be liable for any such damage caused by
persons in the Leased Premises or by occupants of adjacent
property or the public, or caused by construction or by any
private, public or quasi-public work. All property of the Tenant
kept or stored on the Leased Premises shall be so kept or stored
at the risk of the Tenant only and the Tenant shall hold the
Landlord harmless from and against any claims arising out of
damages to the same, including subrogation claims by the Tenant's
insurers.
12.04 Holding Over. If the Tenant shall continue to
occupy the Leased Premises at the expiration of this lease with
the consent of the Landlord, and without any further written
agreement, the Tenant shall be a monthly tenant at a monthly
rental equal to 150% of the Basic Rent payable for the last month
of the Term and otherwise on the terms and conditions herein set
forth, except as to the length of tenancy.
12.05 Over-Loading. The Tenant will not bring upon the
Leased Premises or any part thereof, any machinery, equipment,
article or thing that by reason of its weight, size or use might,
in the opinion of the Landlord acting reasonably having regard to
the nature and reasonable requirements of the Tenant's business,
damage the Leased Premises and will not at any time overload the
floors or any other part or parts of the Building and equipment
or goods of the Landlord by any machinery, equipment, article or
thing or by overloading, or by any act, neglect or misuse on the
part of the Tenant, or any of its servants, agents or employees,
or by any person having business with the Tenant, the Tenant
shall forthwith repair the same or pay to the Landlord the cost
of making good the same.
12.06 Tenant not to Overload Facilities. The Tenant
will not install any equipment which would exceed or overload the
capacity of the utility facilities in the Leased Premises
(including any increased capacity resulting from the Tenant's
installation of additional utility facilities), and agrees that
if any equipment installed by the Tenant shall require additional
utility facilities, the same shall be installed, if available,
and subject to the Landlord's prior written approval thereto
(which approval shall not be unreasonably withheld or delayed),
at the Tenant's sole cost and expense in accordance with plans
and specifications to be approved in advance by the Landlord in
writing. If the Landlord is required to retain the services of a
third party consultant or expert to review such requests as made
by the Tenant under this section 12.6, the cost of such services
shall be the full responsibility of the Tenant.
12.07 Plumbing Facilities. The plumbing facilities (if
any) in the Leased Premises shall not be used for any other
purpose than that for which they are constructed, and no foreign
substance of any kind shall be thrown therein and the expense of
any breakage, stoppage or damage resulting from a violation of
this provision shall be borne by the Tenant, as Additional Rent,
payable forthwith on demand.
12.08 Indemnification. Notwithstanding any other terms,
covenants and conditions contained in this lease, but subject to
section 11.03, the Tenant shall and does hereby indemnify the
Landlord and save it harmless from and against any and all loss
(including loss of all rentals payable by the Tenant pursuant to
this lease), claims, actions, damages, liability and expense in
connection with loss of life, personal injury, damage to property
and any other loss or injury whatsoever arising from or out of
this lease or any occurrence in, upon or at the Leased Premises,
or the occupancy or use by the Tenant of the Leased Premises or
any part thereof, or occasioned wholly or in part by any act or
omission of the Tenant or by anyone permitted to be on the Leased
Premises by the Tenant. If the Landlord shall, without fault on
its part, be made a party to any litigation commenced by or
against the Tenant, then, the Tenant shall protect, indemnify and
hold the Landlord harmless and shall pay all costs, expenses and
reasonable legal fees incurred or paid by the Landlord in
connection with any such litigation. The Tenant shall pay all
costs, expenses and legal fees (on a solicitor and his client
basis) that may be incurred or paid by the Landlord in enforcing
the terms, covenants and conditions in this lease, unless a court
shall decide otherwise. The Tenant is expressly not required to
indemnify the Landlord in regard to any costs or damages arising
from a negligent act or omission of the Landlord.
12.09 Refuse. The Tenant will not allow any ashes,
refuse, garbage or other loose or objectionable material to
accumulate in or about the Leased Premises, and will at all times
keep the Leased Premises in a reasonably clean and tidy
condition. Provided further the Tenant will not store or cause
to be stored outside the Leased Premises, any of its inventory,
stock-in-trade, or raw materials.
12.10 Estoppel Certificate and Evidence of Payment by
the Tenant. The Tenant shall from time to time at the request of
the Landlord produce to the Landlord an estoppel certificate or
certificate of standing in the Landlord's form and any and all
further assurances or documents required by the Landlord,
confirming the terms of the Lease and further confirming that due
payment has been made by the Tenant of all amounts required to be
made by the Tenant under this lease.
12.11 Tenant Shall Discharge All Liens. The Tenant
shall promptly pay all its contractors, suppliers and materialmen
and shall do any and all things necessary to preclude the
possibility of a lien attaching to the Leased Premises and should
any such lien be made or filed, the Tenant shall discharge the
same forthwith (after notice thereof is given to the Tenant) at
the Tenant's expense. In the event the Tenant shall fail to
cause any such lien to be discharged, as aforesaid, then, in
addition to any other right or remedy of the Landlord, the
Landlord may, but it shall not be so obligated, discharge same by
paying the amount claimed to be due into Court or directly to any
such lien claimant and the amount so paid by the Landlord and all
costs and expenses including solicitor's fees (on a solicitor and
his client basis) incurred herein for the discharge of such lien
shall be due and payable by the Tenant to the Landlord as
Additional Rent on demand.
13. FIXTURES, REMODELING AND RESTORATION BY TENANT
13.01 Conditions. If the Tenant is desirous of making
any alterations, decorations, additions, or improvements
(sometimes hereinafter collectively called "Alterations") to any
part of the Leased Premises, it may do so at its own expense, at
any time and from time to time, provided that the Tenant's rights
to make such Alterations shall be subject to the following
conditions:
13.01.1 Before undertaking any such Alterations, the
Tenant shall submit to the Landlord a plan showing the
proposed Alterations and shall obtain the written
approval and consent of the Landlord to the same and
any amendments, modifications, substitutions or changes
to the same, and such approval and consent shall not be
unreasonably withheld, provided such Alterations are
not of a structural nature;
13.01.2 All such Alterations shall conform to all
building and zoning by-laws, if any, then in force
affecting the Leased Premises, and such Alterations
shall be completed in a good and workmanlike manner;
and
13.01.3 Subject to section 13.1.1, such Alterations
will not, in the sole opinion of the Landlord, be of
such kind or extent as to in any manner affect the
structure or first class character of the Building
after the Alterations are completed or reduce the value
of the Leased Premises, in which case the Landlord may
withhold its consent to same.
13.02 Ownership of Alterations. All Alterations made by
the Tenant, or made by the Landlord on Tenant's behalf, shall
immediately become the property of the Landlord without
compensation therefor to the Tenant. Subject to section 13.03,
such Alterations shall not be removed from the Leased Premises
either during or at the expiration of the Term or sooner
determination.
13.03 Removal of Alterations. The Tenant shall, at the
end of the Term and at its own cost, remove all Alterations as
the Landlord shall require to be removed. The Tenant shall, in
the case of every such removal, make good any damage caused to
the Leased Premises by the installation or removal of any such
Alterations.
13.04 Acceptance of Building. The Tenant accepts the
Building in its present condition and agrees that the Landlord's
obligations pursuant to Agreement to Lease dated February 19,
1991 have been fully satisfied.
14. RE-ENTRY
14.01 Right to Re-enter. Proviso for re-entry by the
Landlord on non-payment of rent or non-performance of covenants.
14.02 Landlord May Relet. If the Landlord elects to re-
enter, as herein provided, or if it takes possession pursuant to
legal proceedings or pursuant to any notice provided for by law,
it may either terminate this lease or it may from time to time
without terminating this lease, make such alterations and repairs
as may be necessary, in order to relet the Leased Premises, or
any part thereof for such term or terms (which may before a term
or terms extending beyond the Term of this lease) and at such
rental or rentals and upon such other terms and conditions as the
Landlord in its sole discretion may deem advisable. Upon each
such reletting all rentals received by the Landlord from such
reletting shall be applied, first, to the payment of any
indebtedness, other than rent due hereunder, owing by the Tenant
to the Landlord; second, to the payment of any costs and expenses
of such reletting, including brokerage fees, solicitors fees and
the costs of such alterations and repairs; third, to the payment
of all rentals due and unpaid hereunder, and the residue, if any,
shall be held by the Landlord and applied in payment of future
rent as the same may become due and payable hereunder. If the
rentals received from such reletting during any month shall be
less than that to be paid during that month by the Tenant
hereunder, the Tenant shall pay any such deficiency to the
Landlord. Such deficiency shall be calculated and paid monthly.
No such re-entry or taking possession of the Leased Premises by
the Landlord shall be construed as an election on its part to
terminate this lease unless a written notice of such intention is
given to the Tenant. Notwithstanding any such reletting without
termination, the Landlord may at any time thereafter elect to
terminate this lease for such previous breach. Should the
Landlord at any time terminate this lease for any breach, in
addition to any remedies it may have, it may recover from the
Tenant all damages it has incurred or may incur by reason of such
breach, including the cost of recovering the Leased Premises,
reasonable solicitor's fees, and including the worth at the time
of such termination of the excess, if any, of the amount of rent
and charges equivalent to the rent reserved in this lease for the
remainder of the stated Term over the then reasonable rental
value as determined by the Landlord for the remainder of the
stated Term, all of which amounts shall be immediately due and
payable from the Tenant to the Landlord.
15. EXPENSES AND REMOVAL OF CHATTELS
15.01 In case suit shall be brought for recovery of
possession of the Leased Premises, or, for the recovery of rent
or any other amounts due under the provisions of this lease, or
because of the breach of any other covenants herein contained on
the part of the Tenant to be kept or performed, and a breach
shall be established, the Tenant shall pay to the Landlord all
expenses incurred therefor, including its reasonable legal fees.
15.02 In case of removal by the Tenant of the goods and
chattels of the Tenant from the Leased Premises, the Landlord may
follow same for 30 days in the same manner as is provided for in
the Landlord and Tenant Act (Ontario).
16. LANDLORD MAY CURE TENANT'S DEFAULT
16.01 If the Tenant shall fail to pay, when due, any
amounts or charges required to be paid pursuant to this lease,
the Landlord, after giving 5 days' notice in writing to the
Tenant, may, but shall not be obligated to, pay all or any part
of the same. If the Tenant is in default in the performance of
any of its covenants or obligations hereunder (other than payment
of Basic Rent, Additional Rent or other sums required to be paid
pursuant to the terms of this lease), the Landlord may from time
to time after the giving of such notice as it shall deem
sufficient, having regard to the circumstances applicable (or no
notice in the case of an emergency or apprehended emergency)
perform or cause to be performed any of such covenants or
obligations or any part thereof, and for such purpose may do such
things as may be requisite, including without limitation,
entering upon the Leased Premises and doing such things upon or
in respect of the Leased Premises or any part thereof as the
Landlord may reasonably consider requisite or necessary. All
reasonable expenses incurred and expenditures made by or on
behalf of the Landlord under this Section 16.01, plus a sum equal
to 15% thereof shall be Additional Rent hereunder and shall be
paid by the Tenant upon demand. The Landlord shall have no
liability to the Tenant for any loss or damage resulting from any
such action by the Landlord, and any entry by the Landlord under
the provisions of this Section 16.1 shall not constitute a breach
of the covenant for quiet enjoyment or an eviction.
16.02 SECURITY DEPOSIT. The Tenant has deposited with
the Landlord and the Landlord acknowledges receipt of a security
deposit in the amount of $16,875.00 (the "Security Deposit").
The Security Deposit shall be held by the Landlord, without
liability for interest, as security for the faithful performance
by the Tenant of all of the terms, covenants and conditions of
this lease by the Tenant to be kept, observed and performed. If
at any time during the Term the Tenant breaches any of the terms,
covenants and conditions of this lease to be kept, observed and
performed by the Tenant, then the Landlord at its option may, in
addition to any and all other rights and remedies, appropriate
and apply the entire Security Deposit, or so much thereof as is
necessary to compensate the Landlord for loss or damage sustained
or suffered by the Landlord due to such breach of the part of the
Tenant. If the entire or any portion of the Security Deposit is
so appropriated and applied by the Landlord, then the Tenant
shall, upon written demand of the Landlord, forthwith remit to
the Landlord a sufficient amount in cash to restore the Security
Deposit to the original sum deposited and the Tenant's failure to
do so within 5 days after receipt of such demand constitutes a
breach of the lease. If the Tenant complies with all the terms,
covenants and conditions, the Security Deposit shall be returned
in full to the Tenant without interest within 60 days after the
end of the Term or within 60 days after the earlier termination
of the Term, as the case may be.
17. DEFAULT IN THE PAYMENT OF ADDITIONAL RENT
17.01 If the Tenant shall be in default in the payment
of any Additional Rent or other charges required to be paid
pursuant to the terms of this lease, they shall, if not paid when
due, be collectible as rent with the next monthly installment of
Rent thereafter falling due hereunder, but nothing herein
contained shall be deemed to suspend or delay the payment of any
amount, money or charge at the time same becomes due and payable
hereunder, or limit any other remedy of the Landlord. The Tenant
covenants and agrees that the Landlord may, at its option, apply
or allocate any sums received from or due to the Tenant against
any amounts due and payable hereunder in such manner as the
Landlord in its sole discretion, sees fit.
18. QUIET ENJOYMENT
18.01 Upon the payment by the Tenant of the rents herein
provided and upon the observance and performance of all
covenants, terms and conditions on the Tenant's part to be
observed and performed, the Tenant shall peaceable and quietly
hold and enjoy the Leased Premises for the Term hereby demised
without hindrance or interruption by the Landlord, or any other
person or persons lawfully claiming by, through or under the
Landlord, subject, nevertheless, to the terms and conditions of
this lease.
19. RIGHT OF ENTRY
19.01 The Landlord or its agents shall have the right to
enter the Leased Premises, at all reasonable times (i) to examine
the Leased Premises, (ii) to exhibit them to prospective
purchasers, lessees, or mortgagees, and (iii) to make such
repairs, alterations, improvements or additions to the Leased
Premises as the Landlord may deem necessary or desirable, without
any obligation upon the Landlord to do so, provided that the
Landlord shall take all reasonable steps to ensure that the
business of the Tenant is not materially disturbed or
interrupted. The Landlord shall be allowed to bring all material
into and upon the Leased Premises as the Landlord may deem
necessary or desirable, without the same constituting an eviction
of the Tenant in whole or in part, and the Rent reserved
hereunder shall not abate while such repairs, alterations,
improvements or additions are being made due to any loss or
interruption of the business of the Tenant or otherwise. If the
Landlord's repairs are required as a result of damage caused by
the negligent act or omission of the Landlord, or are caused by
acts beyond the control of the Landlord that would constitute an
insurable risk that would be covered in insurance policies usual
for this type of building, then the Tenant's Rent shall abate
proportionately to the portion of the Leased Premises rendered
temporarily unusable to the Tenant. The Landlord shall not be
liable for any damage, injury or death caused to any person or
property of the Tenant or of any others located on the Leased
Premises as a result of the entry. During the 6 months prior to
the expiration of the Term, the Landlord may exhibit the Leased
Premises to prospective tenants and place upon the Leased
Premises its standard notice containing the words "To Let" or
words to that effect, which notice the Tenant shall permit to
remain thereon without molestation. If no officer or employee of
the Tenant is present to open and permit entry into the Leased
Premises at a time where entry is necessary or permissible, the
Landlord or its agents may enter the same by use of a master key
or may forceably enter the same, without rendering the Landlord
or its agents liable therefor, and without in any manner
affecting any of the obligations and covenants under this lease.
Nothing herein contained, however, shall be deemed or construed
to impose upon the Landlord any obligation, responsibility or
liability whatsoever for the care, maintenance or repair of the
Leased Premises or any part thereof except as otherwise herein
specifically provided.
20. ROOF REPAIRS
20.01 The Landlord covenants that during the Term of
this lease to maintain the roof of the Leased Premises unless the
damage to be repaired was caused by the act or omission of the
Tenant, its agents, servants, invitees or those for whom the
Tenant is at law responsible in which event such repairs shall be
made by the Tenant at its expense, or by the Landlord at the
Tenant's expense.
21. FIRE
21.01 Provided it is hereby expressly agreed that if and
whenever during the Term the Leased Premises shall be destroyed
or damaged by fire, then and in every such event:
21.01.1 If the damage or destruction renders 50% or
more of the area of the Building wholly unfit for
occupancy, the Landlord may, at its option, terminate
this lease by notice in writing to the Tenant in which
event, this lease and the Term hereby demised shall
cease and be at an end as of the date of such
destruction or damage and the Rent and all other
payments for which the Tenant is liable under the terms
of this lease shall be apportioned and paid in full to
the date of such destruction or damage.
21.01.2 If the damage or destruction is such that the
damage to the Leased Premises cannot in the Landlord's
reasonable opinion be repaired with reasonable
diligence within 180 days from the date of such damage
or destruction, then either the Landlord or the Tenant
may terminate this lease by notice in writing to the
other, in which event this lease and the Term shall
cease and be at an end as of the date of such
destruction or damage and the Rent and all other
payments for which the Tenant is liable under the terms
of this lease shall be apportioned and paid in full to
the date of such destruction or damage. In the event
that a dispute arises between the Landlord and the
Tenant as to whether or not the Leased Premises can be
repaired with reasonable diligence within the above
time period, then the parties shall mutually appoint an
independent architect who shall make such determination
on behalf of the parties. If the Landlord does not
terminate this lease, then the Landlord shall enter and
repair the Leased Premises with all reasonable speed.
22. ASSIGNMENT BY LANDLORD
22.01 Landlord may Assign. The Tenant acknowledges that
the Landlord may, as of right, assign, mortgage, pledge, grant as
security or otherwise encumber its rights under this lease
without the consent of or notice to the Tenant, and in such
event, it is expressly agreed between the Landlord and the Tenant
that this lease shall not be cancelled or modified for this
reason alone.
23. LIMITATION OF LANDLORD'S LIABILITY
23.01 The term "Landlord" as used in this lease shall,
with regard to the covenants and obligations on the part of the
Landlord, be limited to and include only the owner or owners of
the Leased Premises at the time in question, it being understood
and acknowledged by the Tenant that the Landlord may, in addition
to its rights under section 22, assign, sell, convey or transfer
its rights and ownership in the Leased Premises without the
consent of or notice to the Tenant. In the event of any
assignment, sale, conveyance or transfer of ownership by the
Landlord herein named, and in the case of any subsequent
assignment, sale, transfer or conveyance, the then vendor or
transferror shall be automatically freed and relieved, from and
after the effective date thereof of all liability in respect of
the performance of any covenants or obligations on the part of
the Landlord contained in this lease thereafter to be performed,
provided that:
23.01.1 Any funds at such time in the hands of the
Landlord or the then vendor or transferror in which the
Tenant has an interest, shall be turned over to the
assignee, purchaser or transferee and any amount then
due the Tenant by the Landlord or the then vendor or
transferror under any provision of this lease shall be
paid to the Tenant; and
23.01.2 Upon any such assignment, sale, transfer or
conveyance, the assignee, purchaser or transferee shall
be deemed to have assumed, subject to the limitations
of this section 23, all of the terms, covenants and
conditions contained in this lease to be performed on
the part of the Landlord.
23.02 It is the intention of the parties pursuant to
this section 23 that the covenants and obligations contained in
this lease on the part of the Landlord shall, subject as
aforesaid, be binding upon the Landlord, its successors and
assigns,--only during and in respect of their respective periods
of ownership.
24. SIGNS
24.01 The Tenant shall not paint, place, affix, inscribe
or display any sign, picture, direction, lettering, advertisement
or notice on any of the windows of the Leased Premises or on any
part of the outer walls of the Leased Premises without the prior
written consent of the Landlord.
25. WAIVER OF BREACH
25.01 Waiver by the Landlord or the Tenant of any breach
of a term, covenant or condition of this lease will not be
considered to be a waiver of a subsequent term, covenant or
condition or any other term, covenant or condition. The
subsequent acceptance of Rent by the Landlord shall not be
considered to be a waiver of a preceding breach by the Tenant of
a term, covenant or condition of this lease, regardless of the
Landlord's knowledge of such preceding breach at the time of
acceptance of the Rent. No covenant, term or condition of this
lease shall be deemed to have been waived by the Landlord unless
such waiver is in writing and signed by the Landlord.
26. NOTICES
26.01 Any notice, claim, request or other instrument
required or contemplated by any provision of this lease shall be
delivered in person to an officer or employee of the Landlord or
of the Tenant or sent by registered mail, postage prepaid, and
shall be addressed if to the Landlord at:
75 Fernstaff Court, Unit 8
Concord, Ontario
L4K 3P8
or at such other address as the Landlord designates by written
notice and if to the Tenant, at the Leased Premises.
Any such notice, demand, request or consent shall be deemed
to have been given when delivered, or if mailed, then four (4)
days following the date of mailing, as the case may be. Either
party may at any time give notice in writing to the other of any
change of address and from or after the giving of such notice,
the address therein specified shall be deemed to be the address
to which notices are to be mailed to such party. Provided,
however, if the postal service is interrupted or substantially
delayed for any reason whatsoever, then, any notice, demand,
request or other instrument shall be delivered in person only and
served on an officer or employee of either the Landlord or the
Tenant, as the case may be.
27. SUBORDINATION
27.01 This lease and all of the rights of the Tenant
hereunder are, and shall at all times, be subject and subordinate
to any and all mortgages, trust deeds or the charge or lien
resulting from any other method of financing or refinancing or
any renewals or extensions thereof, now or hereafter in force
against the Lands or the Building. Upon the request of the
Landlord, the Tenant will subordinate this lease and all of its
rights hereunder in such form or forms as the Landlord may
require to any such mortgage, trust deeds or the charge or lien
resulting from any other method of financing or refinancing and
to all advances made or hereafter to be made upon the security
thereof, and will, if requested, attorn to the holder thereof.
No subordination by the Tenant shall have the effect of
permitting the holder of any mortgage or charge or other security
to disturb the occupation and possession by the Tenant of the
Leased Premises and each mortgagee shall execute a nondisturbance
agreement to this effect, so long as the Tenant shall perform all
of the terms, covenants, conditions, agreements and provisos
contained in this lease and so long as the Tenant executes
contemporaneously, a document of attornment required by any such
mortgagee or other encumbrancer. If with ten (10) days after the
date of any request in respect thereof, the Tenant has not
executed and delivered to the Landlord any instruments or
certificates required pursuant to the provisions of this section
27, hereof, then, the Tenant hereby irrevocably appoints the
Landlord as the Tenant's attorney with full power and authority
to execute and deliver in the name of the Tenant any such
instruments or certificates.
28. UNAVOIDABLE DELAY
28.01 Notwithstanding anything to the contrary contained
in this lease, if either party hereto is bona fide delayed or
hindered in or prevented from the performance of any term,
covenant or act required hereunder by reason of any Unavoidable
Delay, then the performance of such term, covenant or act is
excused for the period of the delay and the party so delayed
shall be entitled to perform such term, covenant or act within
the appropriate time period after the expiration of the period of
such delay. However, the provisions of this section 28 shall not
in any way operate to excuse the Tenant from the prompt payment
of Basic Rent or Additional Rent or any other payments required
under this lease.
29. MISCELLANEOUS
The Landlord and the Tenant agree that:
29.01 Successors and Assigns. All rights and
liabilities herein given to or imposed upon the respective
parties hereto shall extend to and bind their respective heirs,
executors, administrators, successors and assigns of the parties,
and if there shall be more than one Tenant, they shall be bound
jointly and severally by the terms, covenants and agreements
contained herein. No rights, however, shall enure to the benefit
of any assignee of the Tenant unless the assignment to such
assignee has been approved by the Landlord in writing as provided
in section 10.10 hereof.
29.02 Accord and Satisfaction. No payment by the Tenant
or receipt by the Landlord of a lesser amount than the amount of
Rent or Additional Rent herein stipulated shall be deemed to be
other than on account of the earliest stipulated rent, nor shall
any endorsement or statement on a check or a letter accompanying
any check or payment as Rent be deemed an accord and
satisfaction, and the Landlord may accept such check or payment
without prejudice to the Landlord's right to recover the balance
of such Rent or pursue any other remedy in this lease provided.
29.03 Entire Agreement. This lease and the schedules
and riders, if any, attached hereto and forming a part hereof,
together with the Regulations set forth all the covenants,
promises, agreements, conditions and understandings between the
Landlord and the Tenant concerning the Leased Premises and there
are no covenants, promises, agreements, conditions or
understandings, either oral or written, between them other than
are herein set forth. Except as herein otherwise provided, no
subsequent alteration, amendment, change or addition to this
lease executed after the date of this lease, shall be binding
upon the Landlord or the Tenant unless in writing and signed by
each of them.
29.04 Captions and Section Numbers. The captions,
section numbers, article numbers, and table of contents appearing
in this lease are inserted only as a matter of convenience and in
no way define, limit, construe or describe the scope or intent of
such sections or articles of this lease, nor in any way affect
this lease.
29.05 Extended Meanings. The word "Tenant" shall be
deemed to include the word "lessee" and shall mean each and every
person or party mentioned as a tenant herein, be the same one or
more, and if there shall be more than one Tenant, any notice
required or permitted by the terms of this lease may be given by
or to anyone thereof, and shall have the same force and effect as
if given by or to all thereof. Any reference to "Tenant" shall
include, where the context allows, the servants, employees,
agents, and invitees of the Tenant and all others over whom the
Tenant exercises control. Wherever the word "Landlord" is used
in this lease, it shall be deemed to include the word "lessor"
and to include the Landlord and its duly authorized
representatives. The words "hereof", "herein", "hereunder" and
similar expressions used in any section or subsection relate to
the whole of this lease, and not to that section or that
subsection only, unless otherwise expressly provided. "Rent"
shall, unless the context otherwise requires, mean Basic Rent and
Additional Rent.
The use of the neuter singular pronoun to refer to the
Landlord or the Tenant shall be deemed a proper reference even
though the Landlord or the Tenant may be an individual, a
partnership, a corporation, or a group of two or more individuals
or corporations. The necessary grammatical changes required to
make the provisions of this lease apply in the plural sense where
there is more than one Landlord or Tenant and to either
corporations, associations, partnerships, or individuals (males
or females), shall in all instances be assumed as though in each
case fully expressed.
29.06 Partial Invalidity. If any term, covenant or
condition of this lease or the application thereof to any person
or circumstance shall to any extent, be invalid or unenforceable,
the remainder of this lease, or the application of such term,
covenant or condition or persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not
be affected thereby and each term, covenant or condition of this
lease shall be valid and enforced to then fullest extent
permitted by law.
29.07 Registration. The Tenant shall not register this
lease without the prior written consent of the Landlord.
However, upon the request of either party hereto, the other party
shall join in the execution of a memorandum or so-called "short
form" of lease for the purposes of registration. Said memorandum
or short form of lease shall only describe the parties, the
Leased Premises and the Term of this lease, and shall be (1)
prepared by the Tenant's solicitors, (2) subject to the approval
of the Landlord and its solicitors, the legal costs for which
shall be the Tenant's responsibility and (3) registered at the
Tenant's expense.
29.08 Governing Law. This lease shall be construed in
accordance with, and governed by, the laws of the Province of
Ontario.
29.09 Time of the Essence. Time shall be of the essence
of this lease and of every part hereof.
29.10 Notice by Tenant. The Tenant shall, when it
becomes aware of same, or when the Tenant, acting reasonably,
should have become aware of same, notify the Landlord of any
damage to, or deficiency or defect in any part of the Leased
Premises, and any equipment or utility systems, or any
installation located therein, notwithstanding the fact that the
Landlord may have no obligation with respect to same.
29.11 Arbitration. Unless other provision is made
herein, upon any controversies or claims arising between the
parties in respect of this lease, either of the parties may
appoint an arbitrator and give notice of such appointment to the
other party. Such notices shall contain a specific description
of the subject matter in dispute. The other party shall within
10 days of such notice nominate and appoint a second arbitrator
and give notice thereof to the other party and to the first
appointed arbitrator. If the other party shall fail to make such
appointment, the first appointed arbitrator shall determine the
matter at issue. In the event there are two arbitrators
appointed, they shall forthwith agree upon a third arbitrator and
the decision of any two of them or failing the agreement of any
two of them, the decision of such third arbitrator shall
determine the matter at issue. If the two arbitrators first
appointed are unable to agree on a third arbitrator within 10
days of the date of the appointment of the second arbitrator, the
appointment of the third arbitrator shall be made by the Senior
Judge of the District Court, Judicial District of York within 10
days of the date of the appointment of the second arbitrator, the
appointment of the third arbitrator shall be made by the Senior
Judge of the District Court, Judicial District of York within 10
days of the date of the making of an application to such Court.
Such application to be made within 10 days of the appointment of
the second arbitrator. Any decision of the arbitrator or
arbitrators as the case may be shall be final and binding and
there shall be no appeal therefrom. All expenses of arbitration,
including expenses of witnesses, shall be paid as ordered by the
arbitrator, as the case may be.
AND IN WITNESS WHEREOF, the corporate seals and signatures
of the Landlord and the Tenant duly attested to by the hands of
their proper officers authorized in that behalf.
Landlord:
Gimbro Enterprises Ltd.
Per: /s/ c/s
_______________________
Tenant:
TIE/COMMUNICATIONS CANADA INC.
Per: /s/ c/s
_______________________
List of Subsidiaries
Colonial Data Technologies Corp.
a Delaware corporation
Subsidiary State of
Incorporation
Colonial Technologies Corp. Delaware
d/ba/ Colonial Data Technologies Corp.
CDT Canada Corp. Province of Ontario,
Canada
Worldwide Telecom Partners, Inc. Delaware
