AMENDED AND RESTATED OPTION AGREEMENT
AMENDED AND RESTATED OPTION AGREEMENT (this "Agreement") dated as of
December 18th, 2000 between Sandler Capital Partners V, L.P. ("Optionee"), a
Delaware limited partnership, and Zach Lonstein ("Lonstein"), an individual
domiciled in the State of New York.
W I T N E S S E T H:
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WHEREAS, Optionee is a purchaser under that certain Securities Purchase
Agreement (the "Purchase Agreement") dated as of April 7, 2000 by and among
Infocrossing, Inc. (the "Company") and certain purchasers set forth on Exhibit A
attached thereto; and
WHEREAS, Lonstein owns of record and beneficially 1,673,349 shares of the
Common Stock, par value $.01 per share, of the Company ("Common Stock"); and
WHEREAS, in order to induce Optionee to consummate the transactions
contemplated by the Purchase Agreement, Lonstein has agreed to grant to Optionee
the Option (as hereinafter defined) and the other rights provided herein.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Option.
(a) Grant of Option. Lonstein hereby grants to Optionee an irrevocable
option (the "Option") to purchase up to 242,075 shares of Common Stock (the
"Option Shares") at a purchase price of $25.00 per share (as adjusted from time
to time pursuant to the next sentence, the "Purchase Price"). If at any time the
outstanding shares of the Company's capital stock are changed into a different
number of shares or a different class by reason of any reclassification,
recapitalization, split-up, combination, exchange of shares or readjustment or
if a stock dividend thereon is declared with a record date prior to the
termination of this Agreement, then the number of Option Shares subject to the
Option and the per share consideration to be paid by Purchaser upon exercise of
the Option shall be appropriately adjusted.
(b) Exercise of Option. The Option may be exercised in whole or in part, at
any time, or from time to time, during the period commencing on the date hereof
and ending on May 10, 2007 (the "Exercise Period"); provided, that to the extent
that the exercise of the Option requires notification to be made under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), the Exercise Period shall be extended until that day which is the first
to occur of (i) the thirtieth (30th) day following the expiration or termination
of all applicable waiting periods under the HSR Act; (ii) the issuance, on any
date after May 10, 2007, of a final, non-appealable determination by a court of
competent jurisdiction prohibiting the exercise of the Option; or (iii) the
determination by Optionee, on any date after May 10, 2007,
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that it will withdraw its Exercise Notice (as defined below) or withdraw or
abandon any action contesting an unfavorable determination by the applicable
authority under the HSR Act.
(c) Exercise. Optionee shall exercise the Option by delivering a notice
(the "Exercise Notice") to Lonstein specifying (i) the number of Option Shares
with respect to which it intends to exercise the Option, and (ii) a date not
less than three business days nor more than ten business days after the date on
which the Exercise Notice is dated, on which the purchase and sale contemplated
thereby is to be consummated (the "Option Closing Date"); provided, that, to the
extent necessary, any Option Closing Date shall be automatically delayed until
that date which is three business days after the termination or expiration of
all applicable waiting periods under the HSR Act. No Exercise Notice shall be
delivered after May 10, 2007. On the Option Closing Date, Lonstein will deliver
to Optionee, at the offices of White & Case LLP, 1155 Avenue of the Americas,
New York, New York, a certificate or certificates representing the Option Shares
being purchased. Optionee will purchase such Option Shares from Lonstein by
delivering to Lonstein an amount equal to the then effective Purchase Price per
share of Common Stock multiplied by the number of Option Shares to be purchased
on the relevant Option Closing Date. The aggregate Purchase Price with respect
to the purchased Option Shares shall be paid by certified or bank cheque
delivered in the amount of the aggregate Purchase Price tendered to Lonstein at
the Option closing; provided that upon notice to Optionee given not less than
two business days prior to the Closing Date, Lonstein may require that the
aggregate Purchase Price with respect to the purchased Option Shares be paid by
wire transfer of immediately available funds to an account or accounts
designated by Lonstein at least two business day prior to the Option Closing
Date.
(d) HSR Filing. Optionee and Lonstein agree to file with the Federal Trade
Commission and the Antitrust Division of the United States Department of Justice
all required pre-merger notification and report forms and other documents and
exhibits required to be filed under the HSR Act to permit the exercise of the
Option and to cooperate with each other to obtain the early termination of all
applicable waiting periods.
2. Representations and Warranties of Lonstein. Lonstein hereby represents
and warrants to Optionee as follows:
(a) Ownership of Shares. Lonstein is the record and beneficial owner
of the Option Shares. Lonstein has sole power of disposition, sole power of
conversion and sole power to agree to all of the matters set forth in this
Agreement, in each case with respect to all Option Shares, with no
limitations, qualifications or restrictions on such rights, subject to
applicable securities laws and the terms of this Agreement.
(b) Power; Binding Agreement. Lonstein has the legal capacity, power
and authority to enter into and perform all of his obligations under this
Agreement. The execution, delivery and performance of this Agreement by
Lonstein will not violate any other agreement to which Lonstein is a party
including, without limitation, any voting agreement, stockholders agreement
or voting trust. This Agreement constitutes a valid and binding agreement
of Lonstein, enforceable against Lonstein in accordance with its terms.
There is no beneficiary or holder of a voting trust certificate or other
interest of
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any trust of which Lonstein is trustee whose consent is required for the
execution and delivery of this Agreement or the consummation by Lonstein of
the transactions contemplated hereby.
(c) No Conflict. No filing with, and no permit, authorization, consent
or approval of, any state or federal public body or authority is necessary
for the execution of this Agreement by Lonstein and the consummation by
Lonstein of the transactions contemplated hereby and none of the execution
and delivery of this Agreement by Lonstein, the consummation by Lonstein of
the transactions contemplated hereby or compliance by Lonstein with any of
the provisions hereof shall result in a violation or breach of, or
constitute (with or without notice of lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which Lonstein is a party or by which such order,
writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to Lonstein or any of Lonstein's properties or assets.
(d) No Finder's Fees. Except as disclosed in the Purchase Agreement,
no broker, investment banker, financial advisor or other person is entitled
to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated hereby based
upon arrangements made by or on behalf of Lonstein.
(e) No Encumbrances. The Option Shares and the certificates
representing such shares are now, and at all times during the term hereof
will be, held by Lonstein, or by a nominee or custodian for the benefit of
Lonstein, free and clear of all liens, claims, charges, security interests,
options (other than the Option), rights, pledges, rights of first refusal
or other adverse claims (as defined in the Uniform Commercial Code of the
State of New York) or encumbrances whatsoever (collectively,
"Encumbrances"), other than Encumbrances contained in that certain Amended
and Restated Stockholders Agreement dated as of June 15, 2000 (the
"Stockholders' Agreement") by and among the Company, DB Capital Investors,
L.P., Sandler Capital Partners V FTE, L.P., Sandler Capital Partners V,
L.P., Sandler Internet Partners, L.P., Sandler Co-Investment Partners,
L.P., certain Management Stockholders of the Company and certain
Non-Management Stockholders of the Company.
(f) Reliance by Optionee. Lonstein understands and acknowledges that
Optionee is entering into the Purchase Agreement in reliance upon
Lonstein's execution and delivery of this Agreement.
3. Representations of Optionee. Optionee represents and warrants to
Lonstein that: (i) Optionee is a limited partnership duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with full partnership power and authority to execute and deliver
this Agreement and to perform its obligations hereunder; (ii) the execution and
delivery of this Agreement by such entity and the performance by it of its
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obligations hereunder have been duly authorized by all necessary corporate
action on the part of such entity; and (iii) this Agreement constitutes the
legal, valid and binding obligation of such entity enforceable against such
entity in accordance with its terms, except as such enforcement may be limited
by bankruptcy, insolvency and other similar laws affecting creditors' rights
generally or by general principles, of equity.
4. Covenants of Lonstein. Lonstein covenants and agrees that Lonstein shall
(a) at all times during the Exercise Period hold, free and clear of all
Encumbrances (other than Encumbrances contained in the Stockholders' Agreement)
that number of shares necessary to satisfy its obligations under this Agreement
and (b) upon delivery of the Option Shares, the Option Shares will be subject to
no (i) voting trust or shareholders agreement, proxy or other voting agreement,
arrangement or understanding or (ii) Encumbrance.
5. Further Assurance and Adjustments. Lonstein shall, upon the reasonable
request of Optionee, execute and deliver any additional documents necessary or
desirable to effect any of the terms and provisions of this Agreement. If at any
time the Option Shares are changed into a different number of shares or a
different class by reason of any reclassification, recapitalization, split-up,
combination, exchange of shares or readjustment of the Company's capital stock
or if a stock dividend thereon is declared with a record date prior to the
termination of this Agreement, then the number of Option Shares subject to this
Agreement shall be appropriately adjusted.
6. Specific Performance. The parties hereto agree that if for any reason
Lonstein failed to perform any of Lonstein's obligations under this Agreement,
Optionee would be irreparably damaged and money damages would not constitute an
adequate remedy. Accordingly, Optionee shall be entitled to specific performance
and injunctive and other equitable relief to enforce the performance of such
obligations by Lonstein. This provision is without prejudice to any other rights
Optionee may have against Lonstein for failure to perform any of Lonstein's
obligations under this Agreement.
7. Term. This Agreement shall commence on the date hereof and the Option
shall end upon the later to occur of (x) 11:59 p.m. on May 10, 2007 or (y) the
termination of the Exercise Period.
8. Binding Agreement. All authority and rights herein conferred or agreed
to be conferred by Lonstein shall survive the death or incapacity of Lonstein.
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective heirs, personal representatives, successor and
assigns.
9. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be hand delivered, delivered by courier
with receipt acknowledged or mailed first class, certified mail, with postage
prepaid, as follows:
If to Parent or Optionee, to:
c/o Sandler Capital Management
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767 Fifth Avenue
45th Floor
New York, New York 10013
Attention: David C. Lee, Managing Director
If to Lonstein, to:
c/o Infocrossing, Inc.
2 Christie Heights Street
Leonia, New Jersey 07605
With a copy to:
Robinson & Cole LLP
695 E. Main Street
Stamford, Connecticut 06904
Attention: Richard Krantz, Esq.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to the
principles of conflicts of law thereof.
11. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which, taken together, shall
constitute one instrument.
12. Severability. In case any provision in this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof will not in any way be affected or impaired
thereby, unless the provisions held invalid shall substantially impair the
benefits of the remaining portions of this Agreement.
13. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
other prior agreement and understandings, both written and oral, between the
parties with respect to the subject matter hereof.
14. Amendments, Waivers, Etc. This Agreement may not be amended, changed,
supplemented, waived or otherwise modified or terminated, except upon the
execution and delivery of a written agreement executed by the relevant parties.
15. No Waiver. The failure of any party hereto to exercise any right, power
or remedy provided under this Agreement or otherwise available in respect hereof
at law or in equity, or to insist upon compliance by any other party hereto with
its obligations hereunder, and any custom or practice of the parties at variance
with the terms hereof shall not constitute a
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waiver by such party of its right to exercise any such or other right, power or
remedy or to demand such compliance.
16. Descriptive Headings. The descriptive headings used herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
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IN WITNESS WHEREOF, Optionee and Lonstein have caused this Agreement to be
duly executed as of the day and year first written above.
ZACH LONSTEIN
/s/ Zach Lonstein
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SANDLER CAPITAL PARTNERS V, L.P.
By: Sandler Investment Partners, L.P.,
General Partner
By: Sandler Capital Management,
General Partner
By: MJDM Corp., General Partner
By: /s/ Moira Mitchell
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Name: Moira Mitchell
Title: President
