EXHIBIT 10.15
FIRST REFUSAL AND TRANSFER RESTRICTION AGREEMENT
This First Refusal and Transfer Restriction Agreement (the "Agreement")
is entered into as of the 3rd day of April, 2003, by and among InterNetwork
Experts, Inc., a Delaware corporation (the "Company"), I-Sector Corporation, a
Delaware corporation ("I-Sector"), Digital Precision, Inc., a Texas corporation
("DPI"), and ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ C'▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Marriott, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ (each a "Potential Shareholder" and collectively, the "Potential
Shareholders").
The following recitals are true and constitute the basis for this
Agreement:
A. The Company and DPI are parties to that certain Asset Purchase
Agreement of even date herewith (the "Purchase Agreement"), pursuant
to which the Company is purchasing certain assets of DPI (all
capitalized terms used but not otherwise defined herein shall have
the meaning given to them in the Purchase Agreement);
B. As partial consideration for DPI's sale of the Purchased Assets to
the Company, the Company will issue to DPI 1,800,000 shares of the
Company's common stock, $0.001 par value per share, which shares are
subject to forfeiture pursuant to the terms of the Purchase
Agreement;
C. Prior to the consummation of the transactions described in the
Purchase Agreement, I-Sector owned all of the outstanding Equity
Securities (as defined below) of the Company and following the
consummation of the transactions described in the Purchase Agreement
will own approximately 90% of the Equity Securities of the Company;
D. In connection with accepting an offer of employment with the
Company, each Potential Shareholder will be eligible to receive
performance options to acquire shares of the Company's common stock;
and
E. DPI and the Potential Shareholders wish to provide further
inducement to the Company to enter into the Purchase Agreement and
acquire the Purchased Assets, as well as to employ the Potential
Shareholders and potentially grant performance options to the
Potential Shareholders pursuant to the terms of each Potential
Shareholder's offer of employment and, accordingly, are willing to
allow certain restrictions and obligations to be placed on the
Equity Securities.
NOW, THEREFORE, in consideration of the foregoing premises and certain
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Definitions.
(a) Affiliate. For purposes of this Agreement, the term "Affiliate"
shall mean 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, and with respect to any individual, shall mean his or her spouse,
sibling, child, step child, grandchild, niece, nephew or parent of such Person,
or the spouse thereof ("Immediate Family"), or a trust or family limited
partnership for the benefit of any such Person or any member of such Person's
Immediate Family. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling," "controlled by" and "under common
control with"), as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise; provided, however, that beneficial
ownership of 20% or more of the voting securities of a Person shall be deemed to
be control.
(b) Delivery. For purposes of this Agreement, the term "Delivery"
shall have the meaning set forth in Section 6 below.
(c) Equity Securities. For purposes of this Agreement, the term
"Equity Securities" shall mean any securities now or hereafter owned or held by
I-Sector, DPI or any Potential Shareholder (or a transferee in accordance with
Section 2.3 herein), having voting rights in the election of the Board of
Directors of the Company, or any securities evidencing an ownership interest in
the Company, or any securities convertible into or exercisable for any shares of
the foregoing.
(d) Holders. For purposes of this Agreement, the term "Holders"
shall mean DPI, the Potential Shareholders or persons who have acquired Equity
Securities from either DPI or any Potential Shareholder or their transferees or
assignees in accordance with the provisions of this Agreement.
(e) Person. For purposes of this Agreement, the term "Person" shall
mean any individual, firm, partnership, corporation, trust, joint venture,
association, joint stock company, limited liability company, unincorporated
organization or any other entity or organization, including a government or
agency or political subdivision thereof, and shall include any successor (by
merger or otherwise) of such entity.
(f) Transfer. For purposes of this Agreement, the term "Transfer"
shall include any sale, assignment, encumbrance, hypothecation, pledge,
conveyance in trust, gift, transfer by bequest, devise or descent, or other
transfer or disposition of any kind, including, but not limited to, transfers
pursuant to divorce or legal separation, transfers to receivers, levying
creditors, trustees or receivers in bankruptcy proceedings or general assignees
for the benefit of creditors, whether voluntary, involuntarily or by operation
of law, directly or indirectly, of any of the Equity Securities.
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2. Agreements Among the Company, I-Sector, and the Holders.
2.1 Rights of Refusal.
(a) Transfer Notice. If at any time a Holder proposes to Transfer
Equity Securities (a "Selling Holder"), then the Selling Holder shall promptly
give the Company written notice of the Selling Holder's intention to make the
Transfer (the "Transfer Notice"). The Transfer Notice shall include (i) a
description of the Equity Securities to be transferred ("Offered Shares"), (ii)
the name(s) and address(es) of the prospective transferee(s), (iii) the
consideration and (iv) the material terms and conditions upon which the proposed
Transfer is to be made. The Transfer Notice shall certify that the Selling
Holder has received a firm offer from the prospective transferee(s) and in good
faith believes a binding agreement for the Transfer is obtainable on the terms
set forth in the Transfer Notice. The Transfer Notice shall also include a copy
of any written proposal, term sheet or letter of intent or other agreement
relating to the proposed Transfer. In the event that the transfer is being made
pursuant to the provisions of Section 2.3, the Transfer Notice shall state under
which specific subsection the Transfer is being made.
(b) Company's Right of First Refusal. The Company shall have an
option for a period of 20 days from Delivery of the Transfer Notice to elect to
purchase all or any portion of the Offered Shares at the same price and subject
to the same material terms and conditions as described in the Transfer Notice.
The Company may exercise such purchase option and, thereby, purchase all or any
portion of the Offered Shares by notifying the Selling Holder in writing before
expiration of such 20 day period as to the number of such shares that it wishes
to purchase. If the Company gives the Selling Holder notice that it desires to
purchase such shares, then payment for the Offered Shares shall be by check or
wire transfer, against delivery of the Offered Shares to be purchased at a place
agreed upon between the parties and at the time of the scheduled closing
therefor, which shall be no later than 45 days after Delivery to the Company of
the Transfer Notice, unless the value of the purchase price has not yet been
established pursuant to Section 2.1(c), in which case the closing shall occur no
later than 45 days after the value of the purchase price has been determined.
(c) Should the purchase price specified in the Transfer Notice be
payable in property other than cash or evidences of indebtedness, the Company
shall have the right to pay the purchase price in the form of cash equal in
amount to the value of such property. If the Selling Holder and the Company
cannot agree on such cash value within 20 days after Delivery to the Company of
the Transfer Notice, the valuation shall be made by an appraiser of recognized
standing selected by the Selling Holder and the Company or, if they cannot agree
on an appraiser within 25 days after Delivery to the Company of the Transfer
Notice, each shall select an appraiser of recognized standing and the two
appraisers shall designate a third appraiser of recognized standing, whose
appraisal shall be determinative of such value. The cost of such appraisal shall
be shared equally by the Selling Holder and the Company. If the time for the
closing of the Company's purchase has expired but for the determination of the
value of the purchase price offered by the prospective transferee(s), then such
closing shall be held on or prior to the 5th business day after such valuation
shall have been made pursuant to this subsection.
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2.2 Non-Exercise of Rights. To the extent that the Company has not
exercised its rights to purchase the Offered Shares within the time periods
specified in Section 2.1, the Selling Holder shall have a period of 60 days from
the expiration of such rights in which to sell the Offered Shares, as the case
may be, upon terms and conditions (including the purchase price) no more
favorable than those specified in the Transfer Notice to the third-party
transferee(s) identified in the Transfer Notice. The third-party transferee(s)
shall acquire the Offered Shares subject to the rights of first refusal under
this Agreement. In the event the Selling Holder does not consummate the sale or
disposition of the Offered Shares within the 60 day period from the expiration
of these rights, the Company's first refusal rights shall continue to be
applicable to any subsequent disposition of the Offered Shares by the Selling
Holder until such right lapses in accordance with the terms of this Agreement.
Furthermore, the exercise or non-exercise of the rights of the Company under
this Section 2 to purchase the Equity Securities from a Selling Holder shall not
adversely affect its rights to make subsequent purchases from the Selling Holder
of Equity Securities.
2.3 Limitations to Rights of Refusal. Notwithstanding the provisions of
Section 2.1 of this Agreement, the first refusal rights of the Company shall not
apply to any of the following Transfers so long as no such Transfer occurs prior
to the first anniversary of this Agreement: (a) the Transfer of any Equity
Securities by DPI to its shareholders after the first anniversary of the date
hereof; (b) the Transfer of Equity Securities to any spouse or member of a
Holder's immediate family, or to a custodian, trustee (including a trustee of a
voting trust), executor, or other fiduciary for the account of the Holder's
spouse or members of the Holder's immediate family, or to a trust for the
Holder's own self, or a charitable remainder trust; or (c) any sale of Equity
Securities to the public pursuant to a registration statement filed with, and
declared effective by, the Securities and Exchange Commission under the
Securities Act of 1933, as amended, provided, however, that in the event of any
Transfer made pursuant to the exemption provided by clauses (a) and (b), (i) the
Holder shall inform the Company of such Transfer prior to effecting it and (ii)
in the case of clause (b), each such transferee or assignee, prior to the
completion of the Transfer, shall have executed documents assuming the
obligations of the Holder under this Agreement with respect to the transferred
Equity Securities. Such transferred Equity Securities shall remain "Equity
Securities" hereunder, and such pledgee, transferee or donee shall be treated as
a "Holder" for purposes of this Agreement and shall become a party to this
Agreement.
2.4 Prohibited Transfers. Except as otherwise provided in this
Agreement, each Holder will not Transfer or otherwise encumber or dispose of in
any way, all of any part of or any interest in any Equity Securities. Further,
no Holder shall voluntarily sell, assign or transfer any interest in any equity
Securities to any competitor of the Company (as determined by the sole
discretion of the Board of Directors), or propose to do so in any Transfer
Notice, without the prior written consent of the Board of Directors of the
Company. Any Transfer or other encumbrance or disposition of Equity Securities
not made in conformance with this Agreement shall be null and void, shall not be
recorded on the books of the Company and shall not be recognized by the Company.
2.5 Drag-Along Right. If I-Sector proposes to Transfer for cash or
marketable equity securities traded or quoted on a national exchange or
quotation system all of the Equity Securities held by I-Sector to a third party
that is not an Affiliate of I-Sector (a "Transferee"),
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I-Sector or such Transferee, to the extent authorized by I-Sector, may require
the Holders to participate in such Transfer and sell or transfer all the Equity
Securities held by such Holders in the manner and on the same terms and
conditions as I-Sector (the "Drag-Along Right"). No later than 20 days prior to
the consummation of the Transfer, I-Sector shall deliver a written notice to the
Holders specifying the names and address of the proposed parties to such
Transfer and the terms and conditions thereof. In the event such written notice
is given, any warrants and options held by each Holder which are then presently
exercisable (or become exercisable as a result of the transaction that is the
subject of the notice), shall be exercised by the Holders for shares of the
common stock of the Company, which common stock shall also be subject to the
Drag-Along Right, and such options and warrants to the extent not then
exercisable (or to the extent such options and warrants would not become
exercisable as a result of such transaction) shall automatically be cancelled.
The closing of the Transfer shall be held at such time and place as I-Sector or
the Transferee shall reasonably specify. Prior to or at such closing, each
Holder shall deliver stock certificates representing its Equity Securities, duly
endorsed for transfer, and each such Holder shall represent and warrant that (i)
such Holder is the record and beneficial owner of such Equity Securities and
(ii) such Equity Securities are being transferred free and clear of any liens,
charges, claims or encumbrances (other than restrictions imposed pursuant to
applicable Federal and state securities laws and this Agreement). Each Holder
agrees to take all actions necessary and desirable in connection with the
consummation of the Transfer, including without limitation, voting in favor of
the Transfer, to the extent required, and waiving all appraisal rights available
to any such Holder under applicable law, and shall make such additional
representations and warranties as shall be customary in transactions of a
similar nature.
3. Assignments and Transfers; No Third Party Beneficiaries. This
Agreement and the rights and obligations of the parties hereunder shall inure to
the benefit of, and be binding upon, their respective successors, assigns and
legal representatives, but shall not otherwise be for the benefit of any third
party.
4. Legend. Each existing or replacement certificate for shares now
owned or hereafter acquired by a Holder shall bear the following legend upon its
face:
"THE SALE, PLEDGE, HYPOTHECATION, ASSIGNMENT OR TRANSFER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND
CONDITIONS OF A CERTAIN FIRST REFUSAL AND TRANSFER RESTRICTION
AGREEMENT BY AND BETWEEN THE SHAREHOLDER, THE COMPANY AND CERTAIN
HOLDERS OF STOCK OF THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY."
5. Effect of Change in Company's Capital Structure. Appropriate
adjustments shall be made in the number and class of Equity Securities in the
event of a stock dividend, stock split, reverse stock split, combination,
reclassification or like change in the capital structure of the Company.
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6. Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed effectively given 5 days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid and shall constitute "Delivery" of notice. All communications
shall be sent to the respective parties at the addresses set forth on the
signature pages attached hereto (or at such other addresses as shall be
specified by notice given in accordance with this Section 6).
7. Further Instruments and Actions. The parties agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement. Each Holder agrees to
cooperate affirmatively with the Company to enforce rights and obligations
pursuant hereto.
8. Term. This Agreement shall terminate and be of no further force or
effect upon (a) the consummation of the Company's sale of its common stock or
other securities pursuant to a registration statement under the Securities Act
of 1933, as amended, (other than a registration statement relating either to
sale of securities to employees of the Company pursuant to any stock option,
stock purchase or similar plan or a SEC Rule 145 transaction), or (b) the
liquidation and dissolution of the Company pursuant to Delaware corporate law.
9. Entire Agreement. This Agreement contains the entire understanding
of the parties hereto with respect to the subject matter hereof, supersedes all
other agreements between or among any of the parties with respect to the subject
matter hereof. This Agreement shall be interpreted under the laws of the State
of Delaware without reference to Delaware conflicts of law provisions.
10. Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively) only with
the written consent of the Company. Any amendment or waiver affected in
accordance with this paragraph shall be binding upon the Holders and their
respective successors and assigns.
11. Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
12. Attorney's Fees. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. In addition, the parties
agree that the counterparts of this Agreement so signed may be evidenced by
Delivery of a telecopy or other electronic
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transmission of the signature page image to this Agreement to the other parties
and that such telecopied signature pages shall be treated for all purposes as
original signature pages to this Agreement.
***REMAINDER OF PAGE INTENTIONALLY LEFT BLANK***
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
INTERNETWORK EXPERTS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇
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▇▇▇▇ ▇▇▇▇, Chief Executive Officer
Address: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
I-SECTOR CORPORATION
By: /s ▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇, Chief Executive Officer
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇
DIGITAL PRECISION, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Executive Officer
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
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Address: N/A
/s/ ▇▇▇▇ ▇▇▇▇▇▇
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Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇
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Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ Marriott
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▇▇▇▇▇▇▇▇ MARRIOTT
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇ ▇▇▇▇▇
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Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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/s/ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
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Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ C'▇▇ ▇▇▇▇
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▇▇▇▇ C'▇▇ ▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Address: ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇.▇. ▇▇▇▇▇
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▇.▇. ▇▇▇▇▇
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Address: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
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