EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of June 15,
2000, between INFOCROSSING, INC., a Delaware corporation (the "Company"), and
CHARLES AUSTER, a resident of the State of New Jersey (the "Executive").
RECITALS
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WHEREAS, the Company desires to secure the services and employment of
the Executive on behalf of the Company, and the Executive desires to enter into
employment with the Company, upon the terms and conditions hereinafter set forth
in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto, each intending to be legally bound hereby,
agree as follows:
1. Employment; Duties. The Company hereby employs the Executive as the
President and Chief Executive Officer of the Company, and the Executive accepts
such employment for the Employment Term specified in Section 3 below. The
Executive shall report directly to the Company's Board of Directors (the
"Board") and its Chairman. During the Employment Term, the Company shall cause
the Executive to be elected as a director of the Company and upon such election,
the Executive agrees to so serve. The Executive shall also serve on such
committees of the Board as requested by the Board. During the Employment Term,
the Executive shall serve in such capacity, exercise such powers and perform
such duties as are customarily and ordinarily required of chief executive
officers of similar companies, and shall have such other powers and perform such
other duties as may from time to time be assigned to him by the Board.
2. Performance. The Executive shall serve the Company faithfully and
to the best of his ability and shall devote substantially all of his business
time, energy, experience and talents to the performance of his duties hereunder;
provided, however, that it shall not be a violation of this Agreement for the
Executive to manage his personal finances, investments and business affairs, or
to engage in or serve such civic, community, charitable, educational, or
religious organizations as he may reasonably select. The Executive shall also be
permitted to sit on the Board of the companies or other organizations as shown
on Exhibit A attached hereto and of such other companies as the Board shall
approve, such approval not to be unreasonably denied.
3. Employment Term. The Executive's employment under this Agreement
shall be effective commencing June 15, 2000 (the "Commencement Date"), and,
subject to termination of employment pursuant to Section 8 hereof, continue for
a period of two years until June 15, 2002, provided that, on June 15, 2002, and
on each subsequent second anniversary thereof, unless the Company or the
Executive provides written notice to the other party of his or its intention not
to renew no later than 60 days prior to June 15, 2002, or such subsequent
anniversary, as applicable, and subject to termination of employment pursuant to
Section 8 hereof, the term of employment under this Agreement shall be
automatically renewed for an additional period of two years. The term of
employment hereunder shall be the "Employment Term."
4. Compensation and Benefits.
(a) Base Salary. During the Employment Term, the Company shall pay the
Executive a base salary, payable in equal installments in accordance with normal
Company procedures, at an annual rate of Three Hundred Seventy Five Thousand US
Dollars ($375,000) (the "Base Salary"). The Base Salary shall be reviewed
periodically, but not less than annually, by the Board or the Compensation
Committee thereof and may be increased, but not decreased, from time to time by
the Board or such Committee.
(b) Performance Bonus. During the Employment Term, the Executive shall
also be eligible to receive an annual performance-based cash bonus (the
"Performance Bonus") of up to One Hundred Eighty Seven Thousand Five Hundred US
Dollars ($187,500) based upon satisfaction of performance criteria to be
mutually agreed to by the Executive and the Board (or the Compensation Committee
of the Board). The determination of whether the Executive is entitled to payment
of the Performance Bonus shall be made by the Board (or the Compensation
Committee of the Board) in its good faith discretion.
(c) Restricted Stock Award. (i) On the Commencement Date, the Company
shall award the Executive Eight Hundred Thousand (800,000) shares of the
Company's common stock (the "Restricted Shares"), which shares shall be
nontransferable and subject to forfeiture or repurchase as described in this
Section 4(c). Subject to the remaining provisions of this Section 4(c) and
Sections 6 and 7 hereof, the Restricted Shares shall vest and become
transferable and nonforeitable in an amount equal to 25% of the total number of
Restricted Shares on the first anniversary of the Commencement Date and, with
respect to the remaining 75% of the total number of Restricted Shares, shall
vest monthly after such first anniversary in equal ratable amounts, such that
subject to the remainder all such Restricted Shares shall be vested on June 15,
2004. Subject to Sections 6 and 7 hereof, the Restricted Shares shall become
fully vested upon (1) the occurrence of a "Change of Control" (as defined below)
or (2) the termination of the Executive's employment with the Company due to
termination (x) by the Company other than for "Cause" (as defined below) or
"Non-Performance" (as defined below) and other than his death or Disability (as
defined below), or (y) by the Executive for "Good Reason" (as defined below). In
addition, subject to Sections 6 and 7 hereof, (x) if the Company terminates the
Executive's employment for Non-Performance, 50% of any then unvested Restricted
Shares shall be forfeited and the remaining then unvested Restricted Shares
shall become fully vested, and (y) if the Executive's employment with the
Company terminates due to death or Disability, 25% of the Restricted Shares, or
the portion theretofore vested, if greater, shall be fully vested. For avoidance
of doubt, (x) non-renewal by the Company of the Employment Term (other than a
non-renewal which is expressly stated to be for Cause, Non-Performance or
Disability) upon the expiration of the initial term of employment shall be
deemed to be a termination of the Executive's employment other than for Cause,
Non-Performance or Disability for purposes of the vesting of Restricted Shares
described herein, and (y) non-renewal by the Executive of the Employment Term
which is expressly stated to be for Good Reason shall be treated in the same
manner as if the Executive had acted to terminate the Employment Term for Good
Reason immediately prior to the expiration of the Employment Term.
(ii) All unvested Restricted Shares that do not vest in accordance
with paragraph (i) of this Section 4(c) shall, (x) upon termination of the
Executive's employment with the Company due to Non-Performance, death or
Disability, be immediately deemed to be repurchased by the Company for an amount
equal to the sum of (A) the pro rata portion of the principal amount of any loan
described in paragraph (iii) of this Section 4(c) that is applicable to such
shares in accordance with the relationship number of shares to be repurchase (or
deemed repurchased) bears to the initial 800,000 Restricted Shares and (B) an
amount equal to all interest actually paid on such portion of such principal
amount through the date on which such portion of such principal amount is
repaid, and such Restricted Shares shall be immediately deemed to revert to the
Company and canceled; or (y) upon termination of the Executive's employment with
the Company under for Cause or upon voluntary termination by the Executive of
his employment other than for Good Reason, be immediately forfeited and be
immediately deemed to revert to the Company and canceled (in case of either
clause (x) or (y), without further action by the Company or the Executive).
(iii) The Executive shall be personally liable for satisfaction of any
taxes incurred upon the vesting of the Restricted Shares or upon such earlier
date as the Executive, in his discretion, makes an election under section 83(b)
of the Internal Revenue Code of 1986, as amended (the "Code"), with respect to
such Restricted Shares, or any portion thereof. The Company shall loan to the
Executive on a full recourse basis a sum of money equal to 50 percent of any
such tax payable as a result of such an election under Code section 83(b) with
respect to the Restricted Shares, and any such loan shall bear interest at the
rate specified by Code section 1274 and, subject to the clause (x) of the first
sentence of paragraph (ii) of this Section 4(c), shall be payable at the time
and to the extent that the Executive sells or otherwise transfers or obtains
liquidity with respect to the Restricted Shares (based on proportion of the
total number of vested Restricted Shares held by the Executive immediately prior
to such event that are so sold, transferred or liquidated) and shall be subject
to such other terms and conditions determined by the Company to be appropriate
to comply with applicable laws and regulations.
(iv) If it shall be determined that any payment to the Executive
pursuant to this Agreement would be subject to any excise tax imposed by Code
section 4999, or any similar tax payable under any United States federal, state
or local law ("Section 280G Taxes"), then the Executive shall receive a Tax
Gross-Up Payment with respect to all such Section 280G Taxes. For purposes of
this Agreement, "Tax Gross-Up Payment" shall mean the an additional amount equal
to the amount of the Section 280G Taxes payable in respect of any amounts (other
than the Tax Gross-Up Payment) due under this Agreement.
(v) For purposes of this Agreement, a "Change of Control" shall occur
upon the first to occur of (x) a third party, other than Zach Lonstein, DB
Capital Investors, L.P. or an affiliate thereof ("DB Capital"), or Sandler
Capital Management or an affiliate thereof ("Sandler" and, together with Zach
Lonstein and DB Capital, the "Control Group"), owning capital stock of the
Company representing in excess of 50% of the aggregate voting power of the
Company or the surviving entity, (y) (A) the Control Group, in the aggregate,
owning a number shares of Common Stock of the Company (calculated on a fully
diluted basis) which is less than 25% of the number shares of Common Stock of
the Company (calculated on a fully diluted basis) owned by the Control Group on
the date hereof, and (B) another person or "group" of persons (as defined
pursuant to Section13(d) of the Securities Exchange Act of 1934, as amended)
owning a greater percentage of the Common Stock of the Company (calculated on a
fully-diluted basis) than does the Control Group, in the aggregate, or (z) a
majority of the Board (or similar governing body) of the Company (or any
successor or surviving entity) being comprised of Directors who are not
Continuing Directors. For purposes of this Agreement, "Continuing Directors"
shall mean, with respect to any entity, as of the date of determination, any
person (x) who was a member of the Board of the Company on June 15, 2000, or (y)
who was nominated for election or elected to the Board (or similar governing
body) of such entity with the affirmative vote of a majority of the Continuing
Directors who are members of the Board (or similar governing body) of such
entity at the time of such nomination or election.
(d) Employee Benefits. During the Employment Term, the Executive
shall, in accordance with the applicable plan documents and applicable laws, be
eligible to participate in such retirement, medical, dental and other employee
benefit plans and programs and fringe benefit plans as the Company has in effect
from time to time, at a level consistent with his position as a senior executive
of the Company.
(e) Vacation. During the Employment Term, the Executive shall be
entitled to four (4) weeks paid vacation in accordance with the Company's
policies.
(f) Indemnification. The Company shall indemnify and hold harmless the
Executive to the extent provided in the Certificate of Incorporation and the
By-Laws of the Company and the Delaware General Corporation Law, as amended and
as applicable, for any action or inaction taken or omitted to be taken by the
Executive in good faith while serving as an officer and director of the Company.
The Company shall cover the Executive under directors and officers liability
insurance during the Employment Term in the same amount and to the same extent
as the Company covers its other officers and directors.
(g) Business Expenses. The Executive shall be reimbursed by the
Company for all reasonable expenses incurred by him in connection with the
performance of his duties hereunder in accordance with policies established by
the Company from time to time and upon receipt of appropriate documentation.
5. Stock Investment. On or prior to the Commencement Date, the
Executive shall invest ----------------- his personal funds in the purchase of
68,446 shares of the common stock of the Company at a purchase price of $14.61
per share (the "Stock Investment"). ----------------
6. Repurchase Option. Upon the occurrence of a Change of Control or a
sale or other disposition of all or substantially all of the assets of the
Company (including upon a liquidation or dissolution of the Company), if the
Company's common stock is valued at less than $14.61 per share (on a
fully-diluted basis) in such transaction, the Company (and to the extent the
Company is unable or determines not to exercise this option, DB Capital
Partners, L.P. and Sandler Capital Management (or their designated affiliates)
on a pro rata basis) shall have the right, but not the obligation, to purchase
all of the vested Restricted Shares at an aggregate purchase price equal to the
sum of (x) the amount expended by the Executive in order to pay any income taxes
with respect to such vested shares and (y) an amount equal to all interest
actually paid on such portion of such principal amount through the date on which
such portion of such principal amount is repaid, reduced, if the Company
exercises the option, by the outstanding balance of any loan referred to in
Section 4(c)(iii) hereof, which shall be forgiven upon any such purchase.
7. Stockholders Agreement. The Restricted Shares shall be subject to
the terms and conditions of the Amended and Restated Stockholders Agreement,
dated as of June 15, 2000, by and among the Company and the stockholders
signatory thereto, attached hereto as Exhibit B, as such agreement may
thereafter be amended from time to time (the "Stockholders Agreement"), to which
the Executive shall be a party.
8. Termination.
(a) Events of Termination. The employment of the Executive hereunder
and the Employment Term shall terminate as provided in Section 3 hereof or, if
earlier, upon the earliest to occur of any of the following events:
(i) the death of the Executive;
(ii) the termination of the Executive's employment by the Company due
to the Executive's Disability pursuant to Section 8(b) hereof;
(iii)the termination of the Executive's employment by the Executive
for Good Reason pursuant to Section 8(c) hereof,
(iv) the termination of the Executive's employment by the Company for
reasons other than Cause, Non-Performance or Disability upon thirty (30)
days prior written notice;
(v) the termination of employment by the Executive without Good Reason
upon sixty (60) days prior written notice to the Company; or
(vi) the termination of the Executive's employment by the Company for
Cause or for Non-Performance pursuant to Section 8(d) hereof.
(b) Disability. In the event of the Executive's Disability, the
Company shall be entitled to terminate the Executive's employment hereunder by
delivery to the Executive of a written notice of termination for Disability,
effective upon the date which is stated in such notice. The term "Disability"
shall mean the inability of the Executive to substantially perform his duties
hereunder by reason of a medically determinable physical or mental impairment,
which can reasonably be expected to continue for at least 120 days, as
determined by the Board in its good faith discretion. Any dispute as to whether
or not the Executive is Disabled within the meaning of the preceding sentence
shall be resolved by a physician reasonably satisfactory to the Executive and
the Board, and the determination of such physician shall be final and binding
upon both the Executive and the Company.
(c) Good Reason. (i) The Executive may terminate his employment
hereunder for Good Reason by written notice to the Company given within thirty
(30) days after the occurrence of a Good Reason event described in paragraph
(ii) of this Section 8(c), unless such circumstances are substantially corrected
prior to the date of termination specified in such notice of termination for
Good Reason. Any such notice shall state the specific Good Reason event set
forth in paragraph (ii) of this Section 8(c) relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination for Good Reason, and shall provide for a date of termination not
less than thirty (30) nor more than sixty (60) days after the date such notice
is given.
(ii) For purposes of this Agreement, "Good Reason" shall mean any of
the following: (1) without the express written consent of the Executive, (x) any
diminution by the Company of the Executive's title or position (including,
without limitation, not being the chief executive officer of the parent company
if the Company becomes a nonpublic subsidiary of another entity) or (y) the
assigning to the Executive of any duties inconsistent with the Executive's
existing position, authority, duties or responsibilities (except, in any case,
as a result of a prior termination of the Executive's employment for Cause or
due to Disability); (2) at any time after a Change of Control, a reduction by
the Company in the Executive's base salary or target bonus entitlements; (3) any
material breach or non-observance by the Company of any material provision of
this Agreement; (4) the relocation of the headquarters of the Company more than
fifty (50) miles from Leonia, New Jersey or relocation of the Executive's
principal work location from such location, without the Executive's express
written consent; or (5) failure to elect or re-elect the Executive as a director
of the Company, or any removal of the Executive from the Board.
(d) Cause or Non-Performance. (i) The Executive's employment hereunder
may be terminated by the Company for Cause or for Non-Performance upon delivery
to the Executive of a written notice of termination for Cause or for
Non-Performance that shall indicate the specific termination provision set forth
in paragraph (ii) or (iii) of this Section 8(d) relied upon and shall set forth
in reasonable detail the facts and circumstances which provide for a basis for
such termination for Cause or Non-Performance. The effective date of such a
termination for Cause or for Non-Performance shall be the date indicated in such
notice; provided, however, that the Executive's employment shall not terminate
if he cures the circumstances otherwise resulting in Cause or Non-Performance to
the extent permitted, and within the applicable time periods provided, in
paragraph (ii)(1), (ii)(4) or (iii) of this Section 8(d).
(ii) For purposes of this Agreement, "Cause" shall mean (1) the
Executive's willful failure to attempt to properly discharge his lawful duties,
or any breach or non-observance by the Executive of any material provision of
this Agreement, which is not fully rectified or cured, if susceptible to
rectification or cure, within thirty (30) days after written notice is given to
the Executive; (2) the Executive's conviction of, or plea of nolo contendere to,
a felony or any misdemeanor constituting an act of fraud or moral turpitude; (3)
addiction to, or continuing excessive use of, alcohol or drugs on the part of
the Executive; (4) the Executive having excessively absented himself from his
duties of employment which is not rectified by the Executive within a period of
five (5) days after written notice is given to the Executive, other than
absences incurred or sustained (x) by leave of the Company or (y) because of
physical or mental incapacity; (5) the Executive's material breach of his
fiduciary duty of care to the Company or the Executive's breach of any other
fiduciary duty owed by the Executive to the Company; or (6) breach by the
Executive of the non-competition/non-solicitation provisions contained in
Sections 10 and 11 of this Agreement.
(iii) For purposes of this Agreement, "Non-Performance" shall mean the
occurrence, prior to June 15, 2002, of each of (x) the failure by the Executive,
after 30 days' written notice and opportunity to cure (to the extent the
circumstances are susceptible to being cured by the Executive), to cause the
Company to attain in all material respects the objectives set forth in an annual
operational plan to be reasonably approved by the Board and the Executive, as
such annual operational plan shall be modified from time to time by mutual
agreement of the Board and the Executive to take account of strategic and other
material developments in the Company's operating environment and business, and
(y) the failure of the ten-day floating average of the closing prices of the
Company's common stock ending on the determination date to be at least equal to
$43.83.
9. Severance.
(a) If the Executive's employment with the Company and the Employment
Term terminate by reason of termination by the Executive of his employment for
Good Reason or termination by the Company of the Executive's employment,
including as a result of notice of nonrenewal of the Employment Term by the
Company in accordance with Section 3 hereof, and such termination is not for
Cause or Non-Performance and is not due to Disability or death, the Company
shall have no liability or further obligation to the Executive except as
follows: the Executive shall be entitled to receive (i) within thirty (30) days
of such termination of employment, any earned but unpaid Base Salary and any
unreimbursed business expenses payable pursuant to Section 4(g) for the period
prior to termination and any unpaid Performance Bonus for any prior completed
fiscal year (the "Entitlements"); (ii) within thirty (30) days of such
termination of employment, a severance payment equal to two hundred percent
(200%) of the sum of (x) the Executive's then-current annual Base Salary and (y)
the Performance Bonus earned by the Executive for the immediately preceding
fiscal year (the "Severance Payment"); provided that, notwithstanding anything
to the contrary set forth herein, prior to the first anniversary date of this
Agreement, the Severance Payment shall be deemed to be $1,120,000; and (iii) at
the time provided in such plan, any rights to which he is entitled in accordance
with plan provisions under any employee benefit plan, program or arrangement, or
any fringe benefit, incentive or stock option plan of the Company in which he
participates at the time of such termination ("Rights"). As a condition of
receiving the payments provided for under this Section 9(a), the Executive
agrees to execute a release releasing the Company and any of its affiliates from
any and all obligations and liabilities to the Executive arising from or in
connection with the Executive's employment or termination of employment with the
Company and any of its affiliates and any disagreements with respect to such
employment, except that such release shall not release the Company from its
obligation to pay the Executive the Entitlements, the Severance Payment, and the
Rights provided for in this Section 9(a).
(b) If during the Employment Term, the Executive's employment is
terminated for any reason other than as provided in Section 9(a) (including
death, termination of the Executive by the Company for Cause, Non-Performance or
Disability or termination by the Executive without Good Reason or his delivery
of a notice of nonrenewal in accordance with Section 3 hereof), the Company
shall have no liability or further obligation to the Executive except as
follows: the Executive (and his estate or designated beneficiaries under any
Company-sponsored employee benefit plan in the event of his death) shall be
entitled to receive any Entitlements and any Rights at the time provided in the
relevant plans.
10. Covenants of the Executive.
(a) During the Employment Term and, to the extent that the Executive's
employment is terminated for Cause or Disability (including, without limitation,
through the delivery by the Company of a notice of nonrenewal in accordance with
Section 3 hereof which specifically states such grounds), or the Executive
voluntarily terminates his employment other than for Good Reason, for a period
of one (1) year after such termination, (i) the Executive shall not, in any
jurisdiction world-wide, be employed by or participate in the ownership,
management, operation or control of any business of the type and character
engaged in or competitive with that conducted by the Company or any of its
affiliates and (ii) the Executive shall not solicit, in competition with the
Company, any person who is or was, at any time within the six (6) months prior
to the Executive's termination of employment with the Company, a customer of the
business conducted by the Company or any of its affiliates. During the
Employment Term and for two (2) years thereafter, the Executive shall not,
directly or indirectly, on his own behalf or on behalf of others, employ,
solicit for employment or otherwise contract for the services of any employee of
the Company or any of its affiliates at the time of this Agreement or who shall
subsequently become an employee of the Company or any of its affiliates or
encourage any employee or consultant of the Company or any of its affiliates to
leave the employ or service of the Company, nor shall the Executive assist or
encourage any person or entity to do any of the foregoing. For purposes of this
Agreement, (v) the scope of businesses areas within which the Executive has
agreed not to compete pursuant to clause (a)(i) of this Section 10 shall, for
any challenged activity of the Executive, be determined with reference to the
Company's activities during the Employment Term; (w) nothing contained herein
shall prevent the Executive from becoming affiliated as an officer, director or
in any other capacity with a charitable organization; (x) the Executive's
ownership of securities of five percent (5%) or less of any publicly traded
class of securities of a public company shall not be considered to be
competition with the Company; (y) the Executive's passive ownership of equity
interests in any entity (without other participation in the management or other
affairs of such entity) not exceeding 20% of the outstanding capital stock of
such entity, with respect to which (A) at the time of the initial investment,
such ownership does not violate the terms of Section 10 of this Agreement
(without reference to this clause (y)), (B) such entity engages after the date
of such initial investment in activity (the "Competing Activity") which would
cause the Executive's ownership of an equity interest in such entity to be
violative of this Section 10, and (C) after the commencement of the Competing
Activity, the Executive's ownership of equity interests in such entity (I)
continues to be passive (without other participation in the management or other
affairs of such entity) and (II) the Executive takes no affirmative action to
increase his ownership interest in such entity; and (z) the Executive's passive
ownership of equity interests in a private venture capital fund or other private
investment fund (each a "Fund") which such ownership (A) does not exceed a 20%
profits or voting interest in such Fund, and (B) does not entitle the Executive
to manage or direct, or participate in the management or directions of, the
management, business, affairs or investment decisions of such Fund (it being
understood that the Executive shall not participate in the management, business,
affairs or investment decisions of any such Fund).
(b) During the Employment Term and thereafter, the Executive agrees to
hold in strictest confidence and to not directly or indirectly publish,
disseminate or otherwise disclose or allow to be disclosed, any "Confidential
Information" (as defined below); provided, however, that the Executive shall
have no obligation to maintain in confidence any information that is or becomes
publicly available through no fault of the Executive. "Confidential Information"
shall mean business or proprietary information (including, without limitation,
business plans, financial information and other subject matter pertaining to any
business of the Company or any of its affiliates) that is not commonly known in
the industry. Confidential Information shall also include, for example and
without limitation, confidential knowledge, data, financial information or data,
marketing techniques and material, business plans, methods and strategies
(whether or not patentable or reduced to practice), business operations and
systems, software, computer code, flow charts, pricing policies, information
concerning employees, customers and/or vendors, trade secrets, discoveries,
inventions (whether or not patentable or reduced to practice), improvements,
research, scientific engineering information, development, databases, know-how,
show-how, designs, products, compositions, original works of authorship,
prototypes, maskworks, physical materials, manufacturing processes and other
information disclosed or submitted orally, in writing, or by any other media.
The Confidential Information as set forth above may be in any form, including
but not limited to, any intangible form such as unrecorded knowledge,
information, ideas or concepts, or may be embodied in equipment or other
tangible form such as documents, drawings, photographs, computer code, software
or other printed or electronic media.
(c) The Executive agrees that a breach of his obligations contained in
Sections 10 or 11 of this Agreement would cause irreparable damage to the
Company and any of its affiliates, the exact amount of which will be difficult
to ascertain and that the remedies at law for any such breach will be
inadequate. Accordingly, the Executive agrees that if he breaches any of the
covenants contained in Sections 10 or 11 of this Agreement, in addition to any
other remedy which may be available at law or in equity, the Company shall be
entitled to specific performance and injunctive relief, without a showing that
monetary damages will not provide an adequate remedy and without being required
to post a bond.
(d) The Company and the Executive further acknowledge that the time,
scope, geographic area and other provisions of this Section 10 have been
specifically negotiated by sophisticated commercial parties and agree that all
such provisions are reasonable under the circumstances of the activities
contemplated by this Agreement. In the event that any provision in this Section
10 shall be determined by any court of competent jurisdiction to be
unenforceable by reason of its extending for too great a time period or over too
great a geographical area or by reason of its being too extensive in any other
respect, it shall be interpreted to extend only over the maximum period of time
for which it may be enforceable and/or over the maximum geographical area as to
which it may be enforceable and/or to the maximum extent in all other respects
as to which it may be enforceable, all as determined by such court in such
action.
(e) During the Employment Term and thereafter, the Executive and the
Company and its controlled affiliates agree not to make statements or
representations, or otherwise communicate, directly or indirectly, in writing,
orally or otherwise, or take any action which may, directly or indirectly,
disparage or negatively reflect upon the Company or any of its controlled
affiliates or their respective officers, directors, employees, advisors,
businesses or reputations or the Executive and his reputation, respectively.
(f) The Executive recognizes that the Company may have received, and
in the future will receive from third parties, Confidential Information that
subjects the Company to a duty to maintain the confidentiality of such
information and to use it only for certain limited purposes. The Executive
agrees that he owes the Company, during the Employment Term and thereafter, a
duty to hold all such Confidential Information in the strictest confidence;
provided, however, that the Executive shall have no obligation to maintain in
confidence any information: (i) that is or becomes publicly available through no
fault of the Executive; or (ii) that is obtained by the Executive from a third
party that is lawfully in possession of such information and that provided such
information to the Executive without any obligation of confidentiality or
without restriction or without being in violation of any contractual or legal
obligation with respect to such information.
(g) The Executive agrees that, at the time of leaving the employ of
the Company, the Executive will promptly deliver to the Company (and will not
keep in his possession or deliver to anyone else) any and all tangible or
intangible items containing materials or information belonging to the Company or
any of its affiliates, including but not limited to documents, computer code,
computer software, computer disks, machine readable codes, data, devices,
records, photographs, notes, reports, proposals, lists, correspondence,
specifications, drawings, blueprints, sketches, materials, equipment, memoranda,
other documents or property (including, without limitation, materials relating
to intellectual property or Confidential Information as defined in this Section
10) or reproductions of any aforementioned items.
(h) The Executive agrees to reasonably cooperate with the Company,
during the Employment Term and for a reasonable period of time thereafter, by
making himself reasonably available to testify in matters involving the Company
or any of its affiliates in any action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, relating to activities occurring
during the Employment Term and to assist the Company or any of its affiliates,
in any such action, suit or proceeding, as reasonably requested, and the Company
shall pay or reimburse reasonable expenses, costs and fees incurred by the
Executive to provide such cooperation (against reasonable documentation therefor
in accordance with Company policies).
11. Intellectual Property Rights.
(a) The Executive agrees to disclose to the Company any and all
inventions, improvements, discoveries, techniques, processes, formulae,
programs, methods, products and processes, artistic works and the like, and all
other intellectual property relating to the business of the Company and any of
its affiliates, including, but not limited to, computer programming and/or the
development of software or computer applications used by the Company which are
invented, discovered, performed, perfected or learned by the Executive either
solely or jointly with others during the Employment Term, and same will be the
sole and absolute property of the Company or any of its affiliates. The Company
or any of its affiliates in their sole discretion will determine whether to seek
patent, trademark, copyright or other intellectual property protection.
(b) During the Employment Term and thereafter, the Executive shall
execute such documents in connection with domestic and foreign intellectual
property applications (including, without limitation, divisional, continuing,
reissue and extension applications for patent applications) as the Company
requests and shall transfer to the Company or any of its affiliates by written
assignment all his right, title and interest in and to such inventions,
improvements, discoveries, techniques, formulae, programs, methods, processes
and other intellectual property and any such intellectual property applications
and any registrations granted thereon (or patents issued thereon), including
extensions, renewals and reissues thereof, and will testify in legal
proceedings, sign papers, make all lawful oaths and otherwise reasonably assist
the Company and any of its affiliates to perfect, maintain and enforce the same
in any jurisdiction.
(c) All work performed by the Executive in (i) creating, developing,
modifying, enhancing and maintaining computer programs, databases and the like
and/or (ii) creating, developing or modifying artistic works and/or other works
to which copyright protection may attach during the course of the Executive's
employment with the Company shall be considered "works made for hire" to the
extent permitted under applicable copyright law and will be considered the sole
property of the Company and its affiliates. To the extent such works are not
considered "works made for hire," all right, title and interest to such works,
including, but not limited to, the copyright, is hereby assigned to the Company
or any of its affiliates and the Executive agrees to execute any necessary
documents requested by the Company or any of its affiliates at any time in
relation to said assignment as deemed reasonably necessary by the Company.
(d) After termination of employment, the Executive will cooperate with
the Company and any of its affiliates in the completion of any invention,
improvement, discovery, techniques, formulae, program, method or process that is
assignable or assigned hereunder to the Company or its affiliates, and in the
protection and enforcement of the rights and property of the Company and its
affiliates in said inventions, improvements, discoveries, techniques, formulae,
programs, methods and processes, applications for patents therefor and patents
granted thereon and any other intellectual property (including, without
limitation, trademarks and copyrights). The Executive shall be paid reasonable
compensation by the Company for the foregoing services, which "reasonable
compensation" shall be determined by agreement between the Company and the
Executive on a case, by case basis.
(e) The Executive acknowledges and agrees that the Company or any of
its affiliates is and will be the sole and absolute owner of all trademarks,
service marks, domain names, patents, copyrights, trade dress, trade secrets,
business names, inventions, proprietary know-how and information of any type,
whether or not in writing, and all other intellectual property of the Company or
any of its affiliates used in connection with their business. The Executive
further acknowledges and agrees that any and all derivative works based on
intellectual property subject to this Section 11, created during the Employment
Term shall be exclusively owned by the Company or any of its affiliates.
(f) Nothing in this Agreement shall be construed to grant the
Executive any right, title or interest in, or any license (express or implied)
to perform, practice, distribute, display or otherwise use any intellectual
property owned or used by the Company or any of its affiliates except solely in
the course of his employment with the Company.
12. Notice. Any and all notices referred to hereunder shall be
sufficient if furnished in writing, delivered by hand, or sent by registered or
certified mail, telex or facsimile copier to the following addresses:
If to the Executive, to him at his address as set forth from time to
time on the books and records of the Company, with a copy to:
Benesch, Friedlander, Coplan & Aronoff LLP
2300 BP Tower
200 Public Square
Cleveland, Ohio 44114-2378
Attn: Michael F. Wager, Esq.
Telephone: (216) 363-4500
Fax: (216) 363-4588
<PAGE>
If to the Company:
Infocrossing, Inc.
2 Christie Heights Street
Leonia, New Jersey 07605
Attn: Nicholas J. Letizia
Chief Financial Officer
Telephone: (202) 840-8717
Fax: (202) 840-7126
Notice shall be deemed received when actually received if by hand
delivery, one business day after sending if by telex or facsimile, and three
business days after sending if by mail.
13. General.
(a) Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
York applicable to contracts executed and to be performed entirely within said
State. Any judicial proceeding brought against any of the parties to this
Agreement or any dispute arising out of this Agreement which is enforceable in a
court, consistent with the provisions of Section 13(f) hereof, may be brought in
the courts of the State of New York or any United States District Court located
in the Borough of Manhattan and, by execution and delivery of this Agreement,
each of the parties to this Agreement accepts the jurisdiction of said courts,
and irrevocably agrees to be bound by any final and non-appealable judgment
rendered thereby in connection with this Agreement. The foregoing consent to
jurisdiction shall not be deemed to confer rights on any person other than the
respective parties to this Agreement.
(b) Agreements and Representations of the Executive. The Executive
agrees to verify any proper document required to carry out the terms of this
Agreement. The Executive represents that his performance of all the terms of
this Agreement will not breach any agreement to keep in confidence Confidential
Information acquired by the Executive, and the Executive has not entered into,
and agrees that he will not enter into, any oral or written agreement in
conflict herewith.
(c) Assignment, Binding Effect. The Executive may not assign his
interest in or delegate his duties under this Agreement without the prior
written consent of the Company. This Agreement is for the employment of the
Executive, personally, and for the services to be rendered by him which must be
rendered by him and no other person. This Agreement shall be binding upon and
inure to the benefit of the Company and its successors and assigns.
(d) Construction and Severability. If any provision of this Agreement
shall be held invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired, and the parties undertake
to implement all efforts which are necessary, desirable and sufficient to amend,
supplement or substitute all and any such invalid, illegal or unenforceable
provisions with enforceable and valid provisions which would produce as nearly
as may be possible the result previously intended by the parties without
renegotiation of any material terms and conditions stipulated herein.
(e) Entire Agreement, Modification. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter
hereof, supersedes all prior agreements and undertakings, both written and oral,
and may not be modified or amended in any way except in writing signed by the
parties hereto.
(f) Duration, Survival. Notwithstanding the Employment Term hereunder,
this Agreement shall continue for so long as any obligations remain under this
Agreement. The covenants set forth in Sections 10 and 11 of this Agreement shall
survive and shall continue to be binding upon the Executive as provided in
Sections 10 and 11 of this Agreement. The covenants set forth in Sections 10 and
11 of this Agreement shall be deemed and construed as separate agreements
independent of any other provision of this Agreement. The existence of any claim
or cause of action by the Executive against the Company, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by the Company of any or all such covenants.
(g) Waiver. No waiver by either party hereto of any of the
requirements imposed by this Agreement on, or any breach of any condition or
provision of this Agreement to be performed by, the other party shall be deemed
a waiver of a similar or dissimilar requirement, provision or condition of this
Agreement at the same or any prior or subsequent time. Any such waiver shall be
express and in writing, and there shall be no waiver by conduct.
(h) Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have hereunto executed this Agreement as of the day and year first written
above.
INFOCROSSING, INC.
Date: By:
---------------------- -----------------------------
Name:
Title:
Date: --------------------------------
---------------------- Charles Auster
<PAGE>
Exhibit A
---------
DIRECTORSHIPS OF THE EXECUTIVE
1. NextSet Software, Inc.
2. BroadBeam, Inc. [NetTech Systems, Inc.]
3. NetCruise.com, Inc.
<PAGE>
EXHIBIT B
---------
STOCKHOLDERS AGREEMENT
<PAGE>
================================================================================
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
Dated as of June 15, 2000
By and Among
INFOCROSSING, INC.,
DB CAPITAL INVESTORS, L.P.,
SANDLER CAPITAL PARTNERS V, L.P.,
SANDLER INTERNET PARTNERS, L.P.,
SANDLER CO-INVESTMENT PARTNERS, L.P.
THE MANAGEMENT STOCKHOLDERS
LISTED ON SCHEDULE A HERETO
and
THE NON-MANAGEMENT STOCKHOLDERS
LISTED ON SCHEDULE B HERETO
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I CERTAIN DEFINITIONS...............................................1
ss. 1.1 Certain Definitions.........................................1
ARTICLE II TRANSFER OF SHARES...............................................4
ss. 2.1 Restrictions.................................................4
ss. 2.2 Permitted Transfers..........................................4
ARTICLE III BOARD OF DIRECTORS OF THE COMPANY...............................6
ss. 3.1 Board of Directors...........................................6
ss. 3.2 Election.....................................................6
ARTICLE IV CERTAIN DECISIONS................................................7
ss. 4.1 Series A Preferred Stock Directors Approval..................7
ss. 4.2 Certain Actions..............................................8
ARTICLE V MISCELLANEOUS.....................................................8
ss. 5.1 Entire Agreement.............................................8
ss. 5.2 Captions.....................................................8
ss. 5.3 Counterparts.................................................8
ss. 5.4 Notices......................................................9
ss. 5.5 Successors and Assigns......................................10
ss. 5.6 GOVERNING LAW...............................................10
ss. 5.7 Submission to Jurisdiction..................................10
ss. 5.8 Benefits Only to Parties....................................11
ss. 5.9 Termination.................................................11
ss. 5.10 Sunset Provisions..........................................11
ss. 5.11 Publicity..................................................12
ss. 5.12 Amendments; Waivers........................................13
ss. 5.13 No Inconsistent Agreements.................................13
SCHEDULE A - Management Stockholders
SCHEDULE B - Non-Management Stockholders
<PAGE>
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
-------------------------------------------
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this "Agreement"), dated
as of June 15, 2000, by and among Infocrossing, Inc. (f/k/a Computer Outsourcing
Services, Inc.), a Delaware corporation (the "Company"), DB Capital Investors,
L.P. ("DB Capital"), Sandler Capital Partners V, L.P., Sandler Internet
Partners, L.P., Sandler Co-Investment Partners, L.P. (each individually, a
"Sandler Entity," collectively the "Sandler Entities"), the individuals listed
on Schedule A hereto (each individually, a "Management Stockholder" and,
collectively, the "Management Stockholders") and each of the Persons listed on
Schedule B hereto (each, individually a "Non-Management Stockholder" and,
collectively, the "Non-Management Stockholders") (each of DB Capital, each
Sandler Entity, the Management Stockholders and the Non-Management Stockholders
is hereinafter referred to as a "Stockholder").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Management Stockholders own shares of Common Stock, $0.01
par value of the Company (the "Common Stock");
WHEREAS, pursuant to the terms of that certain Securities Purchase
Agreement dated as of April 7, 2000 (the "Securities Purchase Agreement") by and
between the Company, DB Capital and the Sandler Entities will acquire shares of
8% Series A Cumulative Convertible Participating Preferred Stock, par value
$0.01 per share (the "Series A Preferred Stock"), together with Warrants (the
"Warrants") to purchase (the "Warrant Shares") Common Stock (the Series A
Preferred Stock, the Warrants, the Warrant Shares and the Common Stock are
referred to herein collectively as the "Securities");
WHEREAS, on May 10, 2000, the Company, and DB Capital, the Sandler
Entities, the Management Stockholders party thereto and the Non-Management
Stockholders party thereto (collectively the "Original Stockholders") entered
into a Stockholders' Agreement pursuant to which each of them granted to the
others certain rights in connection with the Securities then or thereafter owned
by them as set forth therein and assumed certain obligations;
WHEREAS, the Company has entered into an Employment Agreement dated as
of June 15, 2000 (the "Auster Employment Agreement"), with Charles Auster
("Auster"), pursuant to which Auster has agreed to become the President and
Chief Executive Officer of the Company; and
WHEREAS, the Company, the Original Stockholders and Auster wish to
amend and restate the Stockholders Agreement as set forth below.
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree to amend and
restate the Stockholders Agreement as follows:
ARTICLE I
CERTAIN DEFINITIONS
-------------------
ss. 1.1 Certain Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:
(a) "Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, or controlled, by or under direct or
indirect common control with, such Person. For purposes of this definition,
"control" when used with respect to any Person means the power to direct
the management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
(b) "Applicable Law" means (a) any United States federal, state, local
or foreign law, statute, rule, regulation, order, writ, injunction,
judgment, decree or permit of any Governmental Authority and (b) any rule
or listing requirement of any applicable national stock exchange or listing
requirement of any national stock exchange or Commission recognized trading
market on which securities issued by the Company or any of the Subsidiaries
are listed or quoted.
(c) "Board of Directors" or "Board" means the Board of Directors of
the Company or any committee thereof duly authorized to act on behalf of
such Board.
(d) "Capital Stock" means, with respect to any Person, any and all
shares, interests, participations, rights in, or other equivalents (however
designated and whether voting and/or non-voting) of such Person's capital
stock, whether outstanding on the Closing Date or issued after the Closing
Date, and any and all rights (other than any evidence of indebtedness),
warrants or options exchangeable for or convertible into such capital
stock.
(e) "Change of Control" means the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner"
(as defined in Rule 13d-3 and 13d-5 under the Exchange Act, except that a
Person shall be deemed to have "beneficial ownership" of all securities
that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the total Voting Capital Stock of the
Company or (b) the Company consolidates with, or merges with or into,
another Person or sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of its assets to any Person, or any
Person consolidates with, or merges with or into the Company, in any such
event pursuant to a transaction in which the holders of the outstanding
Voting Capital Stock of the Company immediately prior to such transaction
hold less than 50% of the outstanding Voting Capital Stock of the surviving
or transferee company or its parent company immediately after the
transaction or immediately after such transaction any "person" or "group"
(as such terms are used in Sections 13(d) and 14(d) of the Exchange Act),
is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of more than 50% of the total Voting Capital
Stock of the surviving or transferee company or its parent company
immediately after the transaction as applicable or (c) during any
consecutive two-year period, individuals who at the beginning of such
period constituted the Board of Directors (together with any new directors
whose election by the Board of Directors or whose nomination for election
by the stockholders of the Company was approved by a vote of a majority of
the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of
the Board of Directors then in office or (d) any transaction subject to
Rule 13e-3 under the Exchange Act if following such Rule 13e-3 transaction
a Person owns more than 50% of the total Voting Capital Stock of the
Company.
(f) "Closing Date" means May 10, 2000.
(g) "Commission" means the United States Securities and Exchange
Commission.
(h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(i) "Exempt Auster Shares" means those shares of Common Stock
purchased by Auster pursuant to the terms of Section 5 of the Auster
Employment Agreement
(j) "Governmental Authority" means (i) any foreign, Federal, state or
local court or governmental or regulatory agency or authority, (ii) any
arbitration board, tribunal or mediator and (iii) any national stock
exchange or Commission recognized trading market on which securities issued
by the Company or any of the Subsidiaries are listed or quoted.
(k) "Holder" means the Person in whose name any of the Securities are
registered.
(k) "Option Agreements" means each of those certain Option Agreements
dated as of the Closing Date between each of DB Capital and each of the
Sandler Entities, on the one hand, and Lonstein, on the other hand.
(l) "Person" means any individual, partnership, corporation, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or agency or political
subdivision thereof, or other entity.
(m) "Registration Rights Agreement" means the Registration Rights
Agreement, to be dated as of the Closing Date to be entered into by and
between the Company, DB Capital Investors, L.P. and Zach Lonstein.
(n) "Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the total
voting power of shares of Capital Stock or other equity interests entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors or other managing authority thereof is at the time
owned or controlled, directly or indirectly, by such Person and its
Subsidiaries.
(o) "Voting Capital Stock" means with respect to any Person,
securities of any class or classes of Capital Stock in such Person
ordinarily entitling the holders thereof (whether at all times or at the
times that such class of Capital Stock has voting power by reason of the
happening of any contingency) to vote in the election of members of the
board of directors or comparable governing body of such Person.
ARTICLE II
TRANSFER OF SHARES
------------------
ss. 2.1 Restrictions. (a) No Stockholder shall sell, assign, pledge,
hypothecate, deposit in any voting trust, or in any manner, transfer or dispose
of any of the Securities or any right or interest therein, to any Person (each
such action, a "Transfer") except as permitted by this Agreement.
(b) From and after the date hereof, all share certificates
representing Securities held by any of the Stockholders shall bear a legend
which shall state as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS AGAINST TRANSFER SET FORTH IN A STOCKHOLDERS AGREEMENT DATED
AS OF MAY 10, 2000, AS MAY BE AMENDED FROM TIME TO TIME. A COPY OF SUCH
STOCKHOLDERS AGREEMENT HAS BEEN FILED IN THE OFFICE OF THE COMPANY LOCATED
AT 2 CHRISTIE HEIGHTS STREET, LEONIA, NEW JERSEY 07605, WHERE THE SAME MAY
BE INSPECTED DAILY DURING BUSINESS HOURS.
(c) In addition to the legend required by Section 2.1(b) above, all
share certificates representing Securities held by any of the Stockholders shall
bear a legend which shall state as follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. SUCH SECURITIES MAY NOT
BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF SUCH REGISTRATION OTHER THAN PURSUANT TO AN EXEMPTION
FROM SUCH REGISTRATION REQUIREMENTS."
(d) Promptly upon execution and delivery of this Agreement, each
Stockholder shall deliver to the Secretary of the Company all certificates then
held by such Stockholder representing Securities which do not have such legends
affixed thereto as are required by Section 2.1 above. The Company shall cause
such legends to be affixed promptly to each of such certificates and such
certificates to be returned promptly to the registered Holder thereof. The
Company agrees that it will not cause or permit the Transfer of any Securities
to be made on its books unless the Transfer is permitted by this Agreement and
has been made in accordance with the terms hereof.
ss. 2.2 Permitted Transfers. (a) Notwithstanding anything to the
contrary contained herein, a Stockholder may at any time effect any of the
following Transfers (each a "Permitted Transfer" and each transferee, a
"Permitted Transferee"):
(i) A Stockholder's Transfer of any or all Securities owned by such
Stockholder following such Stockholder's death by will or intestacy to such
Stockholder's legal representative, heir or legatee.
(ii) A Stockholder's Transfer of any or all Securities owned by such
Stockholder as a gift or gifts during such Stockholder's lifetime to such
Stockholder's spouse, children, grandchildren or a trust or other legal
entity for the benefit of any Stockholder or any of the foregoing, provided
that such Stockholder retains voting control of the Securities so
transferred.
(iii) With respect to the Management Stockholders prior to the second
anniversary of the date of this Agreement, any Transfer approved in advance
by the Board of Directors.
(iv) With respect to any Management Stockholder, a Transfer of any or
all Securities owned by such Management Stockholder (a) which occurs after
the second anniversary of the date of this Agreement and (b) is (i) in any
transaction in compliance with Rule 144 under the Securities Act or any
successor rule or regulation; provided, however, that, without the consent
of the Board of Directors of the Company, no Management Stockholder shall
Transfer an amount of Securities in any twelve month period which exceeds
the number of such Securities which such Management Stockholder could
permissibly sell under Rule 144(e)(1) under the Securities Act (whether or
not such Management Stockholder is then subject to Rule 144(e)(1)), (ii) in
any transaction exempt from the registration requirements of the Securities
Act or (iii) pursuant to a registration statement.
(v) With respect to any of DB Capital, any Sandler Entity or any
Non-Management Stockholder, a Transfer of any or all Securities owned by it
(a) to an Affiliate that has agreed in writing to be bound by the terms and
provisions of Section 2.1 and 2.2 to the same extent that such party would
be bound if it beneficially owned the Securities transferred to such
Affiliate or (b) (i) in any transaction in compliance with Rule 144 under
the Securities Act or any successor rule or regulation, (ii) in a
transaction exempt from the registration requirements of the Securities Act
or (iii) pursuant to a registration statement.
(vi) With respect to any Management Stockholder, any transfer to any
Person at any time after the date on which (x) the Company has terminated
the employment of such Management Stockholder other than for cause or (y)
such Management Stockholder has terminated his employment with the Company
for "good reason" as defined in such Management Stockholder's employment
agreement or consulting agreement with the Company (or if such Management
Stockholder does not have an employment or consulting agreement with the
Company or such employment agreement or consulting agreement does not
define "good reason", as "good reason" is defined in Zach Lonstein's
("Lonstein") employment agreement with the Company).
(vii) A Transfer pursuant to a registered offering of securities which
is effected pursuant to rights granted to the transferring Stockholder
pursuant to the Registration Rights Agreement.
(viii) A Transfer by a Stockholder to the Company.
(ix) A Transfer by Lonstein to DB Capital or any Sandler Entity
pursuant to any Option Agreement.
(x) A Transfer by Auster of any Exempt Auster Shares
(b) In any such Transfer referred to above in Section 2.2(a)(i), (ii)
or (ix), the Permitted Transferee shall receive and hold such Securities subject
to the provisions of this Agreement as if such Permitted Transferee were an
original signatory hereto and such Permitted Transferee shall be deemed to be a
party to this Agreement.
(c) Not later than ten (10) days before effecting any Transfer of
Securities, the Holder proposing to make such Transfer shall give notice to the
Company (with a copy to DB Capital and the Sandler Entities) of such proposed
Transfer, specifying the method of disposition and the amount of shares to be so
Transferred.
ARTICLE III
BOARD OF DIRECTORS OF THE COMPANY
---------------------------------
ss. 3.1 Board of Directors. (a) Each Stockholder agrees to vote all of
the Securities held by such Stockholder (to the extent all such securities are
entitled to vote) so as to elect and maintain a Board composed of the following:
(i) two people designated by Lonstein; provided that so long as Lonstein is the
Chief Executive Officer of the Company one such designee shall be Lonstein, (ii)
two people designated by DB Capital (the "DB Capital Directors"), (iii) two
people designated by the Sandler Entities (the "Sandler Directors") and (iv)
four additional directors, each of whom shall be unaffiliated with the Company,
designated by mutual consent of Lonstein, DB Capital and Sandler; provided that,
notwithstanding anything to the contrary herein, if the Chief Executive Officer
of the Company has not been designated as a director of the Company pursuant to
clause (i), (ii) or (iii) of this Section 3.1(a), then one of the persons
designated as a director pursuant to this clause (iv) shall be the Chief
Executive Officer of the Company.
(b) In the event that any director designated by any Stockholder for
any reason ceases to serve as a director during his term of office, the
resulting vacancy on the Board shall be filled by a director designated by such
Stockholder.
ss. 3.2 Election. Promptly upon the execution and delivery of this
Agreement, the Stockholders shall take all such action as may be necessary
(including, but not limited to, the removal of directors).
ARTICLE IV
CERTAIN DECISIONS
-----------------
ss. 4.1 Series A Preferred Stock Directors Approval. The following
acts, expenditures, decisions and obligations made or incurred by the Company
shall require the prior written approval of (x) the DB Capital Directors and (y)
the Sandler Directors:
(i) the hiring or termination of any senior officers of the Company or
any Subsidiary including, without limitation, with respect to the Company
and Infocrossing, Inc., the Chief Executive Officer, Chief Financial
Officer, Chief Operating Officer, President or any officer reporting
directly to the President, or Chief Executive Officer and, with respect to
any other Subsidiary, the Chief Executive Officer, Chief Operating Officer
or President;
(ii) approval of the Company's annual business plan, operating budget
and capital budget;
(iii) any capital expenditure or series of related capital
expenditures by the Company or any Subsidiary to the extent (x) not
otherwise included in the approved annual capital budget or (y) such
expenditure or series of expenditures would cause, together with all other
capital expenditures to such time, the Company's capital budget to be
exceeded by $250,000 in the aggregate;
(iv) in a single transaction or series of related transactions, the
consolidation or merger with or into, or sale, assignment, transfer, lease,
conveyance or disposal of all or substantially all of the Company's assets
to, any Person; the agreement to any plan of recapitalization; consent to,
approval or recommendation of any tender offer for any class or series of
the Company's Capital Stock or consent to, approval or recommendation of
any Change of Control of, or action which is expected to result in a Change
of Control of, the Company; or adoption of a plan of liquidation or the
making of any payments in liquidation or with respect to the winding up of
the Company;
(v) the authorization or creation of, modification of the terms of or,
increase in the authorized amount of any class or series of equity
securities of the Company or the issuance or sale of any equity securities
or any equity securities which are convertible or exchangeable into or
exercisable for any equity securities of the Company, other than (i)
compensatory or incentive stock options (or any shares of Common Stock
issued upon the exercise thereof) issued pursuant to employee stock option
plans of the Company which have been approved by the Board of Directors of
the Company, (B) issuances of Common Stock to employees, officers,
directors and consultants of the Company, pursuant to employee benefit
plans approved by the Board of Directors of the Company, or (C) shares of
Common Stock issued upon (x) the conversion of the Series A Preferred Stock
or (y) the exercise of the Warrants.
(vi) the making, or permitting of any of the Subsidiaries to make, any
acquisition or divestiture in which the total consideration exceeds
$5,000,000;
(vii) incurring, guaranteeing or otherwise incurring or assuming any
obligations or any indebtedness for borrowed money or capitalized leases
(other than indebtedness of the Company to any of its wholly owned
Subsidiaries or of any Subsidiary of the Company to the Company or any
wholly owned Subsidiary of the Company) (other than trade payables in the
ordinary course of business) in excess of $2,500,000 in the aggregate;
(viii) entering into any transaction with (including, without
limitation, the purchase, lease or sale of any property of the rendering of
or contracting for any services) with any Affiliate (other than a wholly
owned Subsidiary) of the Company; provided, that the Company may issue
options or shares of Common Stock to Affiliates (other than wholly owned
Subsidiaries) of the Company to the extent such options or shares are
issued pursuant to the terms of employee benefit plans approved by the
Board of Directors of the Company; and
(ix) increasing the number of options, shares of Common Stock, or
other securities which may be granted under, or which are subject to or
underlie any employee benefits plan of the Company or any Subsidiary,
including, without limitation, any stock option plan, stock incentive plan,
restricted stock plan, stock appreciation rights plan, phantom stock plan
or other similar plan.
ss. 4.2 Certain Actions. Each Stockholder hereby agrees to take all
such action as may be required to give effect to Section 4.1, including, but not
limited to, the adoption by the Board of Directors of the Company of resolutions
giving effect to such Section, and shall take all such action as may be
necessary (including the removal of directors) to cause any Person designated by
such Stockholder as a director pursuant to Article III hereof and cause such
resolutions to be adopted.
ARTICLE V
MISCELLANEOUS
-------------
ss. 5.1 Entire Agreement. This Agreement contains the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior arrangements or understandings (whether written or oral)
with respect thereto.
ss. 5.2 Captions. The Article and Section captions used herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
ss. 5.3 Counterparts. For the convenience of the parties, any number
of counterparts of this Agreement may be executed by the parties hereto and each
such executed counterpart shall be deemed to be an original instrument.
ss. 5.4 Notices. All notices, consents, requests, instructions,
approvals and other communications provided for herein and all legal process in
regard hereto shall be validly given, made or served, if in writing and
delivered by personal delivery, overnight courier, telecopier or registered or
certified mail, return-receipt requested and postage prepaid addressed as
follows:
If to the Company, to:
Computer Outsourcing Services, Inc.
2 Christie Heights Street
Leonia, New Jersey 07605
Attention: Nicholas J. Letizia, Chief Financial Officer
Tel.: (201) 840-8717
Fax: (201) 840-7216
With a copy to:
Robinson & Cole LLP
695 E. Main St.
Stamford, CT 06904
Attention: Richard A. Krantz, Esq.
Tel.: (203) 462-7505
Fax: (203) 462-7599
if to DB Capital, to:
c/o DB Capital Partners, L.P.
130 Liberty Street
25th Floor
New York, New York 10006
Attention: Tyler T. Zachem, Managing Director
Tel.: (212) 250-8199
Fax: (212) 250-7651
With a copy to:
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Attention: S. Ward Atterbury, Esq.
Tel.: (212) 819-8331
Fax: (212) 354-8113
if to the Sandler Entities, to:
c/o Sandler Capital Management
767 Fifth Avenue, 45th Floor
New York, New York 10153
Attention: David C. Lee, Managing Director
Tel: (212) 754-8100
Fax: (212) 826-0280
if to any of the Management Stockholders or Non-Management
Stockholders, to the addresses set forth on the books and records of
the Company.
or to such other address as any such party hereto may, from time to time,
designate in writing to all other parties hereto, and any such communication
shall be deemed to be given, made or served as of the date so delivered or, in
the case of any communication delivered by mail, as of the date so received.
ss. 5.5 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Company, the Stockholders and their respective
heirs, devisees, legal representatives, successors, permitted assigns and other
permitted transferees. The rights of a Stockholder under this Agreement may not
be assigned or otherwise conveyed by any Stockholder except in connection with a
Transfer of Shares which is in compliance with this Agreement.
ss. 5.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO SUCH STATE'S CHOICE OF LAW PROVISIONS.
ss. 5.7 Submission to Jurisdiction. (a) Each of the parties hereto
hereby irrevocablY acknowledges and consents that any legal action or proceeding
brought with respect to any of the obligations arising under or relating to this
Agreement may be brought in the courts of the State of New York or in the United
States District Court for the Southern District of New York, as the party
bringing such action or proceeding may elect, and each of the parties hereto
hereby irrevocably submits to and accepts with regard to any such action or
proceeding, for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Subject to Section
5.7(b), the foregoing shall not limit the rights of any party to serve process
in any other manner permitted by law. The foregoing consents to jurisdiction
shall not constitute general consents to service of process in the State of New
York for any purpose except as provided above and shall not be deemed to confer
rights on any Person other than the respective parties to this Agreement.
(b) Each of the parties hereto hereby waives any right it may have
under the laws of any jurisdiction to commence by publication any legal action
or proceeding with respect to this Agreement. To the fullest extent permitted by
Applicable Law, each of the parties hereto hereby irrevocably waives the
objection which it may now or hereafter have to the laying of the venue of any
suit, action or proceeding arising out of or relating to this Agreement in any
of the courts referred to in Section 5.7(a) and hereby further irrevocably
waives any claim that any such court is not a convenient forum for any such
suit, action or proceeding.
(c) The parties hereto agree that any judgment obtained by any party
hereto or its successors or assigns in any action, suit or proceeding referred
to above may, in the discretion of such party (or its successors or assigns), be
enforced in any jurisdiction, to the extent permitted by Applicable Law.
(d) The parties hereto agree that the remedy at law for any breach of
this Agreement may be inadequate and that should any dispute arise concerning
the sale or disposition of any Shares or the voting thereof or any other similar
matter hereunder, this Agreement shall be enforceable in a court of equity by an
injunction or a decree of specific performance. Such remedies shall, however, be
cumulative and nonexclusive, and shall be in addition to any other remedies
which the parties hereto may have.
(e) The parties hereto agree that the prevailing party or parties, as
the case may be, in any action, suit, arbitration or other proceeding arising
out of or with respect to this Agreement or the transactions contemplated hereby
shall be entitled to reimbursement of all costs of litigation, including
reasonable attorneys' fees, from the non-prevailing party. For purposes of this
Section 5.7(e), each of the "prevailing party" and the "non-prevailing party" in
any action, suit, arbitration or other proceeding shall be the party designated
as such by the court, arbitrator or other appropriate official presiding over
such action, suit, arbitration or other proceeding, such determination to be
made as a part of the judgment rendered thereby.
ss. 5.8 Benefits Only to Parties. Nothing expressed by or mentioned in
this Agreement iS intended or shall be construed to give any Person, other than
the parties hereto and their respective successors or permitted assigns, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto and their respective successors and permitted
assigns, and for the benefit of no other Person.
ss. 5.9 Termination. This Agreement shall terminate upon the happening
of any one of the following events:
(a) the voluntary or involuntary dissolution of the Company;
(b) Each of DB Capital and the Sandler Entities ceasing to hold at
least 25% of the shares of Common Stock (calculated assuming the conversion of
the Series A Preferred Stock and the exercise of the Warrants) held by DB
Capital or the Sandler Entities, as the case may be, on the date hereof.
ss. 5.10 Sunset Provisions. (a) On the date on which Lonstein ceases
to hold at least 50% oF the shares of Common Stock (calculated assuming the
exercise of all vested in-the-money stock options) held by Lonstein on the date
hereof, then the number of persons whom Lonstein shall have the right to
designate to serve as directors of the Company under Section 3.1(a)(i) shall be
reduced to one. On the date on which Lonstein ceases to hold at least 25% of the
shares of Common Stock (calculated assuming the exercise of all vested
in-the-money stock options) held by Lonstein on the date hereof, Lonstein's
right to designate Persons to serve as directors of the Company under Section
3.1(a)(i) and 3.1(a)(iv) shall terminate as of such date.
(b) Upon the date on which DB Capital ceases to hold at least 25% of
the shares of Common Stock (calculated assuming the conversion of the Series A
Preferred Stock and the exercise of the Warrants) held by DB Capital on the date
hereof, then DB Capital's right to designate Persons to serve as directors of
the Company under Section 3.1(a)(ii) and 3.1(a)(iv) and DB Capital's right to
approve the actions specified under Section 4.1 shall terminate as of such date.
(c) Upon the date on which the Sandler Entities ceases to hold at
least 25% of the shares of Common Stock (calculated assuming the conversion of
the Series A Preferred Stock and the exercise of the Warrants) held by the
Sandler Entities on the date hereof, then the Sandler Entities' right to
designate Persons to serve as directors of the Company under Section 3.1(a)(iii)
and 3.1(a)(iv) and the Sandler Entities' right to approve the actions under
Section 4.1 shall terminate as of such date.
ss. 5.11 Publicity. Except as otherwise required by Applicable Laws,
none of the parties heretO shall issue or cause to be issued any press release
or make or cause to be made any other public statement in each case relating to
or connected with or arising out of this Agreement or the matters contained
herein, without obtaining the prior approval of DB Capital, a majority in
interest of the Sandler Entities and the Company to the contents and the manner
of presentation and publication thereof.
ss. 5.12 Amendments; Waivers. No provision of this Agreement may be
amended, modified or waiveD without approval of DB Capital, a majority in
interest of the Sandler Entities, the Company, 66-2/3% in interest of the
Management Stockholders (calculated based on ownership of Common Stock) and
66-2/3% in interest of the Non-Management Stockholders (calculated based on
ownership of Common Stock); provided that no such amendment or waiver of a
provision of this Agreement which adversely affects the rights of any
Stockholder in a manner that does not adversely affect all other Stockholders
equally may be made without such Stockholder's consent; provided that (x) the
Management Stockholders shall be considered as a group with the determination by
the holders of 66-2/3% of the outstanding shares of Common Stock held by the
Management Stockholders to be binding on all Management Stockholders and (y) the
Non-Management Stockholders shall be considered as a group with the
determination by the holders of 66-23% of the outstanding shares of Common Stock
held by the Non-Management Stockholders to be binding on all Non-Management
Stockholders; provided, further, that in no circumstances shall Article III or
Article IV be amended, modified, waived or repealed without the express written
consent of DB Capital and the Sandler Entities.
ss. 5.13 Exempt Auster Shares. Notwithstanding anything to the
contrary set forth herein anD except as set forth in Section 5.15 below and in
the proviso to this Section 5.13, Auster shall have no obligation under this
Agreement with respect to the Exempt Auster Shares; provided, that Auster hereby
agrees that, for so long as (x) he remains employed as President and Chief
Executive Officer of the Company and (y) he is designated by the Company as one
of such nominees, he will vote the Exempt Auster Shares in favor of the election
of the persons nominated to serve as Directors of the Company in accordance with
Article III hereof.
ss. 5.14 Effectiveness. This Agreement shall become effective upon the
execution and deliverY of this Agreement by each of DB Capital, the Sandler
Entities, Lonstein, Auster, 66-2/3% of the Management Stockholders (including,
without limitation, Lonstein) and 66-2/3% of the Non-Management Stockholders.
ss. 5.15 No Inconsistent Agreements. Each Stockholder hereby covenants
and agrees that neitheR it nor any of its Affiliates shall enter into any voting
agreement or grant a proxy or power of attorney with respect to the Securities
it beneficially owns which is inconsistent with this Agreement.
[SIGNATURE PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
INFOCROSSING, INC.
By:
-----------------------------------
Name:
Title:
DB CAPITAL INVESTORS, L.P.
By: DB Capital Partners, L.P.,
its general partner
By: DB Capital Partners, Inc.,
its general partner
By:
------------------------------------
Name:
Title:
<PAGE>
SANDLER CAPITAL PARTNERS V, L.P.
By: Sandler Investment Partners,
L.P., General Partner
By: Sandler Capital Management,
General Partner
By: MJDM Corp., a General Partner
By:
-----------------------------------
Name:
Title:
SANDLER INTERNET PARTNERS, L.P.
By: Sandler Investment Partners,
L.P., General Partner
By: Sandler Capital Management,
General Partner
By: MJDM Corp., a General Partner
By:
-----------------------------------
Name:
Title:
<PAGE>
SANDLER CO-INVESTMENT PARTNERS, L.P.
By: Sandler Investment Partners,
L.P., General Partner
By: Sandler Capital Management,
General Partner
By: MJDM Corp., a General Partner
By:
-----------------------------------
Name:
Title:
<PAGE>
MANAGEMENT STOCKHOLDERS
______________________________________
Name: Zach Lonstein
______________________________________
Name: Charles Auster
______________________________________
Name: Robert Wallach
______________________________________
Name: Joseph Germanotta
______________________________________
Name: Tom Loudati
______________________________________
Name: Ken DiSessa
______________________________________
Name: Nicholas J. Letitzia
______________________________________
Name: Gary Lazarewicz
______________________________________
Name: John Stewart
______________________________________
Name: John C. Platt
<PAGE>
NON-MANAGEMENT STOCKHOLDERS
PRICE FAMILY LIMITED PARTNERS
By:
-----------------------------------
Name:
Title:
BENAKE, L.P.
By:
-----------------------------------
Name:
Title:
<PAGE>
Schedule A
MANAGEMENT STOCKHOLDERS:
Zach Lonstein
Charles Auster
Robert Wallach
Warren Ousley
Joseph Germanotta
Tom Loudati
Ken DiSessa
Nicholas J. Letizia
Garry Lazarewicz
John C. Platt
John Stewart
<PAGE>
Schedule B
NON-MANAGEMENT STOCKHOLDERS:
Price Family Limited Partners
Benake, L.P.
<PAGE>
RECOURSE PROMISSORY NOTE
------------------------
$[______________] New York, New York
[June __, 2000]
FOR VALUE RECEIVED, the undersigned, Charles Auster, a resident of the
State of New Jersey (the "Borrower"), hereby promises to pay to the order of
Infocrossing, Inc. (the "Payee"), in lawful money of the United States of
America in immediately available funds, at its offices at 2 Christie Heights
Street, Leonia, New Jersey 07605 (or such other place as Payee may direct) the
principal sum of _____________________U.S. DOLLARS ($______________). Principal
shall be payable each time that the Borrower sells or otherwise transfers or
obtains liquidity (including, but not limited to, through sales of options,
forward sales or the sale or purchase of other derivative securities based on
the Shares (as defined below)) with respect to any of the Shares (each, a "Sale
Date").
From ______________ __, 2000 through payment in full of this Recourse
Promissory Note (this "Note"), the Borrower promises to pay interest on the
outstanding principal amount of this Note at a rate equal to the Applicable
Federal Rate as determined from time to time pursuant to Section 1274 of the
Internal Revenue Code of 1986, as amended (the "Code") or any successor
provision.
The proceeds of this Note shall be used to pay any federal, state or local
income taxes in respect of the 800,000 shares of restricted stock of the Payee
(the "Shares") granted to the Borrower pursuant to that certain Employment
Agreement dated as of June 15, 2000, between the Payee and the Borrower as a
result of Borrower's making a Section 83(b) election with respect to the Shares
under the Code.
This Note constitutes the legal, valid and binding obligation of the
Borrower enforceable in accordance with its terms.
This Note may be prepaid in whole or in part without penalty at any time or
from time to time by the Borrower. All moneys collected by the Borrower as
proceeds of the Shares upon a Sale Date shall be first, applied to repay accrued
and unpaid interest under this Note, second, applied to repay principal under
this Note in direct proportion to the ratio of the number of Shares sold or
otherwise transferred or monetized on such Sale Date to the total number of
Shares held by the Borrower immediately prior to such Sale Date, and, third,
retained by the Borrower.
Upon the occurrence of any of the following specified events:
(a) the Borrower shall (i) commence any case, proceeding or other action
under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, or relief
of debtors, seeking to have an order for relief entered with respect
to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization , arrangement, adjustment, winding-up, liquidation,
dissolution, composition, or other relief with respect to it or its
debts, or (ii) commence any case, proceeding, or other action seeking
appointment of a receiver, trustee, custodian, or other similar
official for it or for all or any substantial part of its assets, or
(iii) make a general assignment for the benefit of its creditors;
(b) there shall be commenced against the Borrower any case, proceeding or
other action of a nature referred to in clause (a) above that (i)
results in the entry of an order for relief or any such adjudication
or appointment, or (ii) remains undismissed, undischarged, or unbonded
for a period of sixty (60) days;
(c) there shall be commenced against the Borrower any case, proceeding or
other action seeking issuance of a warrant of attachment, execution,
distraint, or similar process against all or any substantial part of
its assets that results in the entry of an order for any such relief
that shall not have been vacated, discharged, or stayed or bonded
pending appeal within sixty (60) days from the entry thereof;
(d) the Borrower shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (a), (b), or (c) previously; or
(e) the Borrower shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due.
THEN, the outstanding principal balance hereof shall immediately and without
action by the holder hereof be due and payable and the Borrower shall
immediately pay to the holder all such amounts, with interest as provided
herein.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest, and demand and notice of protest, demand,
dishonor, and nonpayment of this Note.
Neither acceptance by the holder hereof of partial or delinquent payment
nor any failure on the part of the holder to exercise, or any delay in
exercising, any right under this Note shall operate as a waiver of any
obligation of the Borrower or any right of the holder, and no single or partial
exercise of any right under this Note shall preclude any other or further
exercise thereof or the exercise of any other right. No waiver, amendment,
alteration or other modification of any provision of this Note shall in any
event be effective unless the same shall be in writing and signed by the holder.
The remedies provided in this Note are cumulative and not exclusive of any
remedies provided by law. All of the covenants, provisions, and conditions
herein contained are made on behalf of, and shall apply to and bind the
respective distributees, personal representatives, successors, and assigns of
the Borrower, jointly and severally. The Borrower agrees to pay all collection
expenses, court costs, and reasonable attorney fees and disbursements (whether
or not litigation is commenced) that may be incurred in connection with the
collection or enforcement of this Note.
<PAGE>
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW
OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS OR
PRINCIPLES THEREOF.
--------------------------------------
Charles Auster
