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Exhibit 10.15
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (this "Agreement"), is made and entered into as of
August 13, 1999, by and among DYNACS ENGINEERING COMPANY, INC. a Florida
corporation (the "Company"), XXXXXXXX X. XXXXX, an existing stockholder of the
Company (the "Existing Stockholder"), XXXXXXX XXXXX ("Xxxxx"), XXXXXXX DALLAS
("Dallas"), XXX XXXXXXXXXX ("Feltheimer") and OFFENSE GROUP ASSOCIATES, LP
("OGA") (Xxxxx, Xxxxxx, Feltheimer and OGA are sometimes collectively referred
to in this Agreement as the "Investors" and each as an "Investor").
RECITALS
A. The Company and the Investors are parties to that certain Contribution
and Exchange Agreement, dated as of August 12, 1999 (the "Contribution
Agreement") which agreement provides for, among other things, the issuance by
Cerulean FXs, Inc., a Florida corporation ("FX") of 80,000 shares of its common
stock, par value $0.01 per share (the "FX Common Stock") to the Company and the
issuance of an aggregate of 20,000 shares of FX Common Stock to the Investors in
exchange for the contribution by the Company and each of the Investors of
certain securities owned by them.
B. In connection with the Contribution Agreement, the Company and the
Investors have agreed to provide for the exchange of their shares of FX Common
Stock for shares of common stock, par value $.001 per share, of the Company (the
"Company Common Stock") upon the occurrence of certain events, all as set forth
in this Agreement. The execution and delivery of this Agreement by each of the
parties to this Agreement are conditions precedent to the closing of the
Contribution Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of foregoing premises and of the mutual
covenants and agreements contained in this Agreement, on the terms and subject
to the conditions set forth in this Agreement, the parties to this Agreement
agree as follows:
1. Definitions. Capitalized terms used in this Agreement and not defined
in this Agreement shall have the meanings given those terms in the Contribution
Agreement. Otherwise, the following terms have the following meanings, unless
the context otherwise requires:
"Affiliate" means, with respect to a specified Person, any Person
that directly or indirectly through one or more intermediaries controls or is
controlled by, or is under common control with, the specified Person.
"Commission" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
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"Exchange" means the issuance of the Exchange Shares in exchange for
all of the FX Shares as provided in this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Shares" means the shares of Company Common Stock to be
issued to the Holders at the closing of the Exchange.
"Family Member" means, with respect to any Person, any descendant of
the grandfather of the Person, the Person's spouse or any descendant of the
grandfather of the Person's spouse.
"Holder" or "Holders" means, prior to the Exchange, any holder of
record of the FX Shares and, following the Exchange, any holder of record of the
Exchange Shares.
"Liquidation Event" means the occurrence of any of the following:
(i) the Company voluntarily or involuntarily dissolves, liquidates or winds up
its affairs; (ii) the Company becomes insolvent or makes a general assignment
for the benefit of creditors; (iii) a petition in bankruptcy is filed by the
Company or against the Company and not opposed by the Company; (iv) the Company
is adjudicated a bankrupt or insolvent; (v) a xxxx in equity or other proceeding
for the appointment of a receiver of the Company or other custodian for the
Company's business or assets is filed and consented to by the Company; (vi) a
receiver or other custodian (permanent or temporary) of the Company's assets or
property, or any part thereof is appointed by any court of competent
jurisdiction; or (vii) proceedings for a composition with creditors under any
state or federal law is instituted by or against the Company.
"Member Representative" shall have the meaning given such term in
Section 2.2 of the Contribution Agreement.
"FX Shares" shall consist of the shares of FX Common Stock acquired
by the Investors pursuant to the Contribution Agreement, and any securities
issued by FX with respect to those shares by way of dividend or stock split or
similar transaction, and any securities issued by FX or a successor to FX with
respect to those shares in connection with any recapitalization, merger,
consolidation or other reorganization.
"Optional Exchange Event" means the occurrence of any of (i) a
Qualified Private Placement, (ii) the second anniversary of the date of this
Agreement, (iii) a Sale of Voting Control or (iv) a Liquidation Event.
"Person" means any individual, corporation, partnership, firm, joint
venture, association, joint-stock company, trust, incorporated organization or
other entity.
"pro rata" means, with respect to any determination, that the
determination is based on the relative percentages of shares of Company Common
Stock then held by all of the stockholders of the Company after giving pro forma
effect to the issuance by the Company, and the ownership by
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the Holders, of all of the Exchange Shares at the time the determination is
made, as if all of the Exchange Shares had been then issued.
"Qualified Private Placement" means the closing of a sale by the
Company of any debt and/or equity securities of the Company that (i) does not
constitute a Qualified Public Offering and (ii) raises gross proceeds (proceeds
before discounts, commissions and offering expenses) of at least $5 million.
"Qualified Public Offering" means the closing of (i) an underwritten
public offering of Company Common Stock pursuant to an effective Registration
Statement, or (ii) the merger of the Company with and into another entity
pursuant to which the shareholders of the Company immediately prior to the
effective date of the merger receive, upon consummation of the merger, shares of
voting securities of the surviving entity or its parent that are registered
under the Exchange Act and trade on the New York Stock Exchange, the American
Stock Exchange, the Nasdaq National Market or the Nasdaq SmallCap Market.
"Registration Statement" means a registration statement under the
Securities Act.
"Sale of Voting Control" means any transfer, or series of related
transfers, of shares of Company Common Stock to any Person who, in the aggregate
with all Family Members and Affiliates of such Person, and any other Persons who
are part of a syndicate or group (as defined in Section 13(d)(3) of the Exchange
Act) with such Person, would (after giving effect to the transfer but
disregarding any shares of Company Common Stock held by the Person, his or her
Family Members and Affiliates, and syndicate or group prior to the transfer or
series of related transfers) own shares of Company Common Stock constituting
more than 50% of the voting power of the then issued and outstanding shares of
Company Common Stock (after giving pro forma effect to the issuance by the
Company, and the ownership by the Holders, of all of the Exchange Shares at the
time the determination is made, as if all of the Exchange Shares had been then
issued).
"Securities Act" means the Securities Act of 1933, as amended.
"transfer" means any direct or indirect sale, assignment, transfer.
pledge, hypothecation, gift, encumbrance or other disposition of securities.
2. Exchange.
(a) Optional Exchange by the Holders. Each of the FX Shares may be
exchanged, together with all other FX Shares and not in part, at the option of
the Member Representative at any time on the date of or subsequent to an
Optional Exchange Event, for that number of fully paid and non-assessable shares
of Company Common Stock determined in accordance with the provisions of Section
4 of this Agreement. If the Member Representative desires to exchange the FX
Shares for Company Common Stock pursuant to this Section 2(a), the Member
Representative shall have written notice to the Company pursuant to the
provisions of Section 3 below. The closing of the Exchange will take place at
the time and place and in the manner set forth in Section 5 below.
Notwithstanding the later closing of the Exchange, the effective date of the
Exchange will be the date notice is first given by the Member Representative to
the Company in accordance with Section 3 below, and the
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Holders entitled to receive the Exchange Shares issuable upon the Exchange will
be treated for all purposes as the record holders of the Exchange Shares on that
date.
(b) Optional Exchange by the Company. Each of the FX Shares may be
exchanged, together with all other FX Shares and not in part, at the option of
the Company at any time on or subsequent to the fifth anniversary of the date of
this Agreement, for that number of fully paid and non-assessable shares of
Company Common Stock determined in accordance with the provisions of Section 4
of this Agreement. If the Company desires to exchange Company Common Stock for
the FX Shares pursuant to this Section 2(b), the Company shall give written
notice to the Member Representative pursuant to the provisions of Section 3
below. The closing of the Exchange will take place at the time and place and in
the manner set forth in Section 5 below. Notwithstanding the later closing of
the Exchange, the effective date of the Exchange will be the date notice is
first given by the Company to the Member Representative in accordance with
Section 3 below, and the Holders entitled to receive the Exchange Shares
issuable upon the Exchange will be treated for all purposes as the record
holders of the Exchange Shares on that date.
(c) Automatic Exchange. Each of the FX Shares then outstanding will
be automatically exchanged, without election or further action by the Company or
the holders of the FX Shares, for the number of fully paid and non-assessable
shares of Company Common Stock determined in accordance with the provisions of
Section 4 of this Agreement, upon the effective date of a Registration Statement
filed by the Company with the Commission in connection with a Qualified Public
Offering. The Company shall give notice of the Exchange under this Section 2(c)
to the Member Representative in accordance with Section 3 below. The closing of
the Exchange will take place at the time and place and in the manner set forth
in Section 5 below. Notwithstanding the later closing of the Exchange, the
effective date of the Exchange will be the date the Registration Statement for
the Qualified Public Offering is declared effective by the Commission, and the
Holders entitled to receive the Exchange Shares issuable upon the Exchange will
be treated for all purposes as the record holders of the Exchange Shares on that
date.
(d) Fractional Shares. No fractional shares of Company Common Stock
will be issued upon the exchange of the FX Shares. If any fractional shares of
Company Common Stock would, except for the provisions of this Section 2(d), be
deliverable upon the exchange of any FX Shares the Company will, in lieu of
delivering the fractional share therefor, adjust the fractional interest by
rounding up the number of Exchange Shares to be issued to the Holder to the
nearest whole share.
(e) Reservation of Stock. The Company will at all times reserve and
keep available out of its authorized but unissued shares of Company Common
Stock, solely for the purpose of effecting the Exchange, the number of shares of
Company Common Stock as shall from time to time be sufficient to effect the
Exchange, and if at any time the number of authorized but unissued shares of
Company Common Stock shall not be sufficient to effect the Exchange. the Company
will promptly seek what corporate action may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Company Common Stock
to the number of shares as shall be sufficient for the purpose of effecting the
Exchange. In the event of the consolidation or merger of the Company with
another corporation where the Company is not the surviving corporation,
provision shall be made in the documents of merger or consolidation, or
otherwise, of the surviving
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corporation so that the surviving corporation will at all times reserve and keep
available a sufficient number of shares of common stock or other securities or
property to provide for the exchange of the FX Shares in accordance with the
provisions of this Section 2.
(f) Payment of Costs and Taxes. The Company shall pay all costs and
expenses of the Exchange, including all taxes, fees and other governmental
charges (other than any income or other taxes imposed upon the profits realized
by the recipient) that may be imposed in respect of the issue or delivery of the
Exchange Shares or other securities or property upon the Exchange, including,
without limitation, any tax or other charge imposed in connection with any
transfer involved in the issue and delivery of Exchange Shares or other
securities in a name other than that in which the FX Shares so exchanged were
registered.
3. Exchange Notice. Notice of the Exchange (the "Exchange Notice") shall
be provided by the Company or the Member Representative as set forth in this
Section 3.
(a) The Member Representative shall elect to consummate the Exchange
pursuant to Section 2(a) of this Agreement by giving the Company written notice
of the election. The notice shall specify the names in which the Holders desire
the certificates for their respective Exchange Shares to be issued.
(b) The Company shall elect to consummate the Exchange pursuant to
Section 2(b) of this Agreement by giving the Member Representative written
notice of the election. Following receipt by the Member Representative of the
notice and prior to the closing of the Exchange, the Member Representative will
provide notice to the Company specifying the names in which the Holders desire
the certificates for their respective Exchange Shares to be issued.
(c) The Company shall provide notice to the Member Representative of
a proposed Qualified Public Offering at least 30 days prior to the date the
Registration Statement for the Qualified Public Offering is first filed by the
Company with the Commission. The notice shall set forth the anticipated
effective date of the Registration Statement. Following receipt by the Member
Representative of the notice and prior to the closing of the Exchange, the
Member Representative will provide notice to the Company specifying the names in
which the Holders desire the certificates for their respective Exchange Shares
to be issued.
4. Exchange Rate.
(a) Initial Exchange Rate. Each of the FX Shares shall be
exchangeable into that number of fully paid and non-assessable shares of Company
Common Stock as is determined by dividing 31.2375 by the "Exchange Rate" (as
defined below) in effect at the time of the exchange. The exchange rate (the
"Exchange Rate") initially will be 1. The initial Exchange Rate will be subject
to adjustment from time to time in certain instances, as provided in Section
4(b) below.
(b) Adjustment to Exchange Rate. The Exchange Rate will be subject
to adjustment from time to time as provided in this Section 4(b).
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(i) Adjustment for Stock Splits and Stock Dividends. If at any
time or from time to time the outstanding shares of Company Common Stock shall
be subdivided into a greater number of shares, or a dividend in Company Common
Stock or other securities of the Company convertible into or exchangeable for
Company Common Stock (in which latter event the number of shares of Company
Common Stock issuable upon the conversion or exchange of such securities shall
be deemed to have been distributed) shall be paid in respect to the Company
Common Stock, the Exchange Rate in effect immediately prior to the subdivision
or at the record date of the dividend will, simultaneously with the
effectiveness of the subdivision or immediately after the record date of the
dividend, be proportionately reduced, and conversely, if the outstanding shares
of Company Common Stock shall be combined into a smaller number of shares, the
Exchange Rate in effect immediately prior to the combination will,
simultaneously with the effectiveness of the combination, be proportionately
increased. Any adjustment to the Exchange Rate under this Section 4(b)(i) will
become effective at the close of business on the date the subdivision or
combination referred to in this Section 4(b)(i) becomes effective.
(ii) Adjustment for Recapitalizations and Reorganizations. If
at any time or from time to time there shall be a recapitalization of the
Company Common Stock (other than a subdivision or combination provided for in
Section 4(b)(i) above) or a merger, consolidation or reorganization of the
Company, provision shall be made in the transaction so that the Holders will
thereafter be entitled to receive, upon the Exchange, the number of shares of
stock or other securities or property of the Company or otherwise, to which a
holder of that number of shares of Company Common Stock, deliverable upon
exchange of the FX Shares, immediately prior to the transaction, would have been
entitled in connection with the transaction. In any such case, appropriate
adjustment will be made in the application of the provisions of this Section
4(b), with respect to the rights of the Holders after the transaction, to the
end that the provisions of this Section 4(b) (including adjustment of the
Exchange Rate then in effect and the number of shares issuable upon the
Exchange) shall be applicable after that event as nearly equivalent as is
possible, using reasonable efforts.
(c) Notice of Adjustments. In each case of an adjustment or
readjustment of the Exchange Rate or the number of shares of Company Common
Stock or other securities issuable upon the Exchange, if the adjustment or
readjustment results in a change of more than 1% from the previous rate or
number of shares, the Company, or independent public accountants selected by the
Company, shall compute the adjustment or readjustment in accordance with this
Agreement and prepare a certificate showing the adjustment or readjustment, and
the Company will deliver the certificate to each Holder. The certificate will
set forth the adjustment or readjustment, showing in detail the facts upon which
the adjustment or readjustment is based, including a statement of (i) the
capital stock of the Company then outstanding, (ii) the Exchange Rate then in
effect and (ii) the number of shares of Company Common Stock and the type and
amount, if any, of other property which at the time would be received upon
exchange of the FX Shares.
(d) Disputes as to Calculation of Exchange Rate. In the event of a
disagreement between the parties regarding the Exchange Rate. (i) each of the
Member Representative and the Company will retain independent public accountants
to determine the rate, and within 30 days thereafter, will deliver to the other
the written report of its accountants calculating the rate; (ii) if the higher
rate is less than 10% above the lower rate, the average will be the Exchange
Rate; (iii) if the rates exceed this 10% difference, the Member Representative
and the Company will instruct their
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accountants to forthwith select a third reputable accounting firm to determine
the Exchange Rate, and (x) if the third accounting firm's rate is between the
rates of the other accountants. the third accounting firm's rate will be the
Exchange Rate, or (y) if the third accounting firm's rate is outside the range
of the other accountants' rates, the other accountants will continue to select
new third accounting firms, until a third accounting firm so selected provides a
rate which is between the first two rates, and this rate will be the Exchange
Rate. In connection with these valuations, the Company will, on a confidential
basis, deliver or provide access to each accounting firm of all information
reasonably requested by the accounting firm in order to determine the Exchange
Rate. The entire cost of all valuations performed under this Section 4(d) shall
be borne by the Company.
(e) Notice of Events Pertinent to Exchange Rights. If: (i) the
Company shall set a record date for the purpose of entitling the holders of
Company Common Stock to receive a dividend in Company Common Stock, or any other
distribution of property or securities of the Company; or (ii) the Company shall
set a record date for the purpose of entitling the holders of Company Common
Stock, as a class, to subscribe for or purchase any shares of any class or
securities convertible into or exchangeable for shares of any class, or any
option, right or warrant. to subscribe for any of the foregoing; or (iii) there
is a merger or consolidation of the Company with or into another corporation or
corporations; or (iv) there is a reorganization of the Company (including any
exchange reorganization or sale-of-assets reorganization) or a recapitalization
or reclassification of the capital stock of the Company; or (v) there is a
voluntary or involuntary dissolution, liquidation, or winding up of the Company;
then, and in any such case, the Company will cause to be mailed to the Holders,
at least 30 days prior to the date specified below, a notice stating the date
(x) that has been set as the record date for the purpose of a dividend,
distribution, or rights subscription as described in clauses (i) and (ii) of
this subsection 4(e), or (y) on which the merger or consolidation,
reorganization, liquidation, dissolution or winding up described in clauses
(iii) through (v) of this subsection 4(e) is to take place.
5. Closing of Exchange. The closing of the Exchange will take place at the
time and place as the Member Representative and the Company shall mutually agree
upon; provided, that the date of closing will be within 10 days following the
effective date of the Exchange as determined pursuant to Section 2 of this
Agreement. At the closing, each of the Holders will deliver to the Company
documents of transfer in form and substance reasonably acceptable to the Company
and its counsel, necessary to vest in the Company good and marketable title to
the FX Shares so exchanged by the Holder, free and clear of any and all liens
and rights of third parties, other than those imposed under or pursuant to this
Agreement, the Contribution Agreement, against delivery by the Company to the
Holders of certificates representing the Exchange Shares in the names and
denominations specified by the Holders prior to the closing.
6. Preemptive Rights.
(a) Grant of Rights. Until a Qualified Public Offering, and except
as provided in this Section 6, the Holders shall have the right to purchase,
during the period or periods, at the prices and on the other terms and
conditions fixed by the Board of Directors of the Company, any shares of Company
Common Stock. and any options or warrants or other instruments or securities
exchangeable for or convertible into shares of Company Common Stock or
evidencing any right to
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subscribe for, purchase or otherwise acquire shares of Company Common Stock.
which may be issued from time to time by the Company.
(b) Pro-Rata Purchase. Each of the Holders shall have the right to
purchase his or its pro rata portion of the securities subject to this Section
6. After giving notice of any proposed issuance of securities subject to this
Section 6 and affording each Holder the opportunity to purchase his or its pro
rata share of the securities during a period of not less than 15 days after the
date notice is first given to the Holder, the Company may thereafter sell any of
the pro rata share of the securities that are not purchased by the Holders
without further offering them to the Holders. Failure by a Holder to purchase
his or its pro rata share of securities by exercise of a preemptive right on one
occasion shall not constitute a waiver of such right with respect to future
offerings by the Company.
(c) Limitations on Preemptive Rights. Notwithstanding the foregoing,
the Company may issue shares of Company Common Stock, or any options or warrants
or other instruments or securities exchangeable for or convertible into shares
of Company Common Stock or evidencing any right to subscribe for, purchase or
otherwise acquire shares of Company Common Stock, without first offering the
same to the Holders in the following circumstances: (i) in exchange for capital
stock of the Company; (ii) to fulfill or comply with any obligation of the
Company to issue shares of Company Common Stock pursuant to any present or
future stock option plan, stock purchase, bonus, savings investment, or other
stock incentive programs for the benefit of the directors, officers, employees
of or consultants to the Company; provided, that the maximum number of shares
that may be issued pursuant to any of the foregoing in any five year period does
not exceed 15% of the total shares of Company Common Stock outstanding
immediately following the closing of the Contribution Agreement (subject to
adjustment to prevent dilution); and provided, further, that the per share
exercise or purchase price under any of the foregoing was determined by the
Company's Board of Directors to be at least 85% of the fair market value of a
share of Company Common Stock at the time of grant of the stock purchase right,
stock option or other stock incentive; (iii) in connection with a Qualified
Public Offering; (iv) in connection with a merger, consolidation or
reorganization of the Company with a Person or Persons who are not Affiliates of
the Company; (v) in connection with any acquisition of the assets of or an
equity interest in any business entity which is, or is owned by, a Person not an
Affiliate of the Company, the Investors or the Existing Stockholder; or (vi) in
connection with any other transaction approved in writing by the Member
Representative.
7. Put Option.
(a) Option. If a Qualified Public Offering has not occurred prior to
the fifth anniversary of the date of this Agreement (the "Option Trigger Date"),
the Member Representative shall have the right and option (the "Put Option") at
any time following the Exchange, to require the Company to purchase for the "Put
Option Price" (as defined below) up to an aggregate number of Exchange Shares
owned by the Holders (the shares subject to the Put Option are referred to in
this Agreement as the "Option Shares") equal to (i) $900,000 divided by (ii) the
per share value (the "Per Share Value") determined pursuant to Section 7(c)
below, by delivering written notice of election to exercise the Put Option to
the Company. The effective date of the Put Option shall be the date the exercise
notice is given by the Member Representative to the Company. The portion of
the Option
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Shares to be purchased from each Holder shall be based on the relative
percentages of Exchange Shares then held by all of the Holders on the effective
date of the Put Option.
(b) Put Option Price. The "Put Option Price" for the Option Shares
shall mean an amount equal to the sum of (i) $900,000 plus (ii) an additional
amount necessary for the Holders to realize, on an after-tax (state and Federal)
basis (calculated at the then-highest marginal tax rates, but assuming a Federal
deduction for state taxes paid), and including any and all taxes (at the same
marginal rates) payable on the additional amounts paid pursuant to this
subsection (ii), an amount equal to the after-tax amount (similarly calculated)
which the Holders would have realized had the payment of the $900,000 amount
been treated, for all tax purposes, as a long-term (and if there is then more
than one long-term rate, the rate applicable to assets held for at least seven
years at the time of sale) capital gain.
(c) Per Share Value.
(i) Calculation of Per Share Value. The Per Share Value for
purposes of calculating the number of Option Shares under the Put Option shall
be an amount equal to the "Fair Market Value" (as defined below) of the Company
on the effective date of the Put Option, divided by the number of shares of
Company Common Stock issued and outstanding on the effective date of the Put
Option (and if there is more than one class of common stock of the Company then
outstanding, the denominator shall be adjusted to include on an equitable basis
all then outstanding shares of all classes of common stock). For purposes of
Section 7(b), "Fair Market Value" means the value determined on the basis of the
businesses, properties, historical financial performance and financial
condition, projections and prospects for the further growth of the Company,
including its Subsidiaries and other consolidated or owned operations,
considered as a single entity. The parties will use reasonable efforts to reach
agreement on the Fair Market Value. In the event of a disagreement between the
parties regarding the Fair Market Value, (i) each of the Member Representative
and the Company will retain a reputable investment bank to determine the value,
and within 30 days thereafter, will deliver to the other the written report of
its investment bank as to the value; (ii) if the higher valuation is less than
10% above the lower valuation, the average will be the Fair Market Value; (iii)
if the valuations exceed this 10% difference, the Member Representative and the
Company will instruct their investment banks to forthwith select a third
reputable investment bank, and (x) if the third investment bank's valuation is
between the valuations of the other banks, the third investment bank's valuation
will be the Fair Market Value, or (y) if the third investment bank's valuation
is outside the range of the other banks, the average of the two investment
banks' valuations that are closest together will be the Fair Market Value unless
the middle valuation is equally different from the high and low valuations, in
which case the middle valuation will be the Fair Market Value. In connection
with these valuations, the Company will, on a confidential basis, deliver or
provide access to each investment bank of all information reasonably requested
by the investment bank in order to determine the Fair Market Value. The entire
cost of all appraisals performed under this Section 7(c)(i) shall be borne by
the Company.
(ii) Payment of Put Option Price. The Put Option Price for the
Option Shares under the Put Option shall be paid, at the election of the Member
Representative, by either (x) bank cashiers' checks in immediately available
funds payable to the order of the selling holders, or (y) wire transfer of
immediately available funds to an account or accounts designated by the
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Member Representative. Notwithstanding the foregoing, if the funds of the
Company legally available to be paid for redemption of the Option Shares under
applicable corporate law are insufficient to redeem all of the Option Shares,
those funds which are legally available will be used to redeem the maximum
possible number of Option Shares ratably among the Holders based upon the number
of Option Shares held by each Holder, and the remaining Option Shares will be
redeemed from the Holders by payment of a secured promissory note to each Holder
with a principal amount equal to the balance of the purchase price for the
Holder's Option Shares (each a "Note" and collectively, the "Notes"). Each Note
(a) will bear interest at an annual rate equal to the lesser of (x) the highest
interest rate permissible by law and (y) the rate announced from time to time by
Bank America NT&SA as its reference rate plus 2%, adjusting quarterly, (b) shall
provide for interest only to be payable quarterly and principal to be payable as
provided below, (c) shall be secured by the number of Option Shares paid for
using the Note, and (d) shall have a term of 2 years.
On the last day of each calendar quarter following the closing
of the purchase and sale of the Option Shares (each, a "Payment Date"), the
Company will determine the cash amount legally available to the Company on the
Payment Date that may be used to redeem shares of the Company's capital stock,
and the Company will apply that amount toward repayment of the Notes, which
payment will be applied ratably among the Holders based upon the number of
Option Shares underlying the Notes held by the Holders on the Payment Date.
(d) Put Option Closing. The closing of the purchase and sale of the
Option Shares pursuant to this Section 7 will take place at the time and place
as the Member Representative and the Company shall mutually agree upon;
provided, that the date of closing will be within 30 days following the date of
final determination of the Fair Market Value. At the closing, each of the
Holders of the Option Shares will deliver to the Company documents of transfer
in form and substance reasonably acceptable to the Company and its counsel,
necessary to vest in the Company good and marketable title to the Option Shares
so sold by the Holder, free and clear of any and all liens and rights of third
parties, other than those imposed under or pursuant to this Agreement, the
Contribution Agreement or any other agreement delivered in connection with this
Agreement or the Contribution Agreement, against delivery by the Company to the
Holders of the Option Shares of the Put Option Price for the Option Shares,
payable in the manner set forth in Section 7(c)(ii) above.
(e) Right of Set Off. In addition to, and without limiting any other
rights the Company may have under that certain Non-Recourse Secured Promissory
Note, dated as of the date of this Agreement, in the principal amount of up to
$600,000 delivered by Xxxxx to the Company (the "Promissory Note"), Xxxxx hereby
grants to the Company a right to set off and apply any payments of the Put
Option Price required to be made by the Company to Xxxxx under this Section 7
against any amounts due (and not paid when due) by Xxxxx to the Company under
the Promissory Note, without presentment, demand, protest or other notice of any
kind, all of which Xxxxx hereby expressly waives.
8. FX Stock. Until the Exchange, other than (i) as contemplated by this
Agreement or the Contribution Agreement, or (ii) as consented to in writing by
the Member Representative, the Company will not, and the Existing Stockholder
will not permit or cause the Company to. (x) sell, transfer or otherwise dispose
of any shares of capital stock of FX owned by the Company on the date of this
Agreement, or cause or permit FX to issue, sell or otherwise dispose of, or
purchase, redeem
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or otherwise acquire any shares of capital stock of FX, or (y) grant, or cause
or permit FX to grant, any right (or the preemptive right) or any option to
subscribe for or purchase, or enter into, or cause or permit FX to enter into,
any agreement for the issuance (contingent or otherwise) of, or create, or cause
or permit FX to create, any call, commitment, stock appreciation right, claim or
other right of any character relating to, any shares of capital stock of FX.
9. Hold-Back Agreement
(a) By Xxxxx. Except as otherwise provided in Section 9(c) below,
and in addition to all other obligations of Xxxxx regarding the transfer of
shares of Company Common Stock, Xxxxx agrees that, without the prior written
consent of the Existing Stockholder, he will not, during the period commencing
on the date of this Agreement and ending on the fifth anniversary of the date of
this Agreement, transfer (i) any of a number of Exchange Shares equal to 30% of
the Exchange Shares received by Xxxxx at the closing of the Exchange, (ii) any
securities issued by the Company with respect to those Exchange Shares by way of
dividend or stock split or similar transaction, and (iii) any securities issued
by the Company or a successor to the Company with respect to those Exchange
Shares in connection with any recapitalization, merger, consolidation or other
reorganization.
(b) By the Existing Stockholder. Except as otherwise provided in
Section 9(c) below, and in addition to all other obligations of the Existing
Stockholder regarding the transfer of shares of Company Common Stock, the
Existing Stockholder agrees that, without the prior written consent of Xxxxx, he
will not, during the period commencing on the date of this Agreement and ending
on the fifth anniversary of the date of this Agreement, transfer (i) any of
866,250 shares of Company Common Stock, (ii) any securities issued by the
Company with respect to those shares of Company Common Stock by way of dividend
or stock split or similar transaction, and (iii) any securities issued by the
Company or a successor to the Company with respect to those shares of Company
Common Stock in connection with any recapitalization, merger, consolidation or
other reorganization.
(c) Transfers to Family Members or Trusts. Nothing in Sections 9(a)
and (b) shall require Xxxxx or the Existing Stockholder to obtain the other's
consent to a transfer of all or a portion of his respective shares of Company
Common Stock subject to the restrictions on transfer set forth in Section 9(a)
or Section 9(b), by death or inter vivos, (i) to any of his Family Members, or
(ii) to any trust established solely for his benefit or for the benefit of one
or more of his Family Members, or to any legal entity in which he or any of
these Persons are the sole beneficial owners. Any shares transferred to the
executor of an estate, in the case of death, to any Family Member, or to any
trust or other legal entity described above in subsection (ii) of this Section
9(c), shall be subject to the provisions of this Section 9. No transfer of
shares may be made to any of the foregoing Persons pursuant to this Section 9(c)
unless and until the Person delivers to Xxxxx or the Existing Stockholder, as
the case may be, a signed counterpart of this Agreement or a written
acknowledgment that the shares to be received in the proposed transfer are
subject to Section 9 of this Agreement and that the Person and his successors in
interest are bound by this Section 9 and agree to comply with its terms. Any
attempted transfer of shares under this Section 9(c) to any of the foregoing
Persons other than in accordance with this Section 9(c) shall be null and void
and the Company will refuse to recognize the transfer and not reflect in its
records any change in record
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ownership of shares pursuant to the transfer, and the Company will refuse to
treat as owner of the shares or to accord the right to vote as the owner or to
pay dividends to any transferee to whom the shares shall have been transferred.
10. Miscellaneous
(a) Notices. All notices, demands or other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered in
person, or by United States mail, certified or registered, return receipt
requested or otherwise actually delivered:
(i) if to any of the Investors or Holders or to the Existing
Stockholder, at the address set forth for each of these Persons on the
Company's books; and
(ii) if to the Company, at the address of the Company as set forth
in the Contribution Agreement, marked for attention as therein indicated;
or such other address as may have been furnished by such Person in writing to
the other parties. Any such notice, demand or other communication shall be
deemed to have been given on the date actually delivered or as of the date
mailed, as the case may be.
(b) Severability and Governing Law. Should any Section or any part
of a Section within this Agreement be rendered void, invalid or unenforceable by
any court of law for any reason, the invalidity or unenforceability shall not
void or render invalid or unenforceable any other Section or part of a Section
in this Agreement. This Agreement shall be governed and construed in accordance
with the laws of the State of California applicable to contracts made and to be
performed entirely within the State of California, without regard to principles
of conflicts of law.
(c) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(d) No Adverse Construction. The rule that a contract is to be
construed against the party drafting the contract is hereby waived, and shall
have no applicability in construing this Agreement or the terms of this
Agreement.
(e) Captions and Section Headings. Section titles or captions
contained in this Agreement are inserted as a matter of convenience and for
reference purposes only, and in no way define, limit, extend or describe the
scope of this Agreement or the intent of any provision hereof
(f) Amendments and Waivers. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by all the parties to this
Agreement or, in the case of a waiver, by the party or parties, as the case may
be, waiving compliance. No delay on the part of any party in exercising any
right power or privilege under this Agreement shall operate as a waiver thereof,
nor shall any waiver on the part of any party of any right, power or privilege
under this Agreement, nor any single or partial exercise of any right, power or
privilege under this Agreement, preclude any
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other or further exercise thereof or the exercise of any other right, power or
privilege under this Agreement.
(g) Costs and Attorneys' Fees. In the event that any action, suit or
other proceeding is instituted concerning or arising out of this Agreement, the
prevailing party shall be entitled to recover all of the prevailing party's
costs and reasonable attorneys' fees incurred in each and every such action,
suit, or other proceedings, including any and all appeals or petitions
therefrom.
(h) Successors and Assigns. Except as otherwise provided in this
Agreement, all rights, covenants and agreements of the parties contained in this
Agreement shall be binding upon and inure to the benefit of their respective
successors and permitted assigns.
(i) Specific Performance. The parties hereto agree that the
securities of FX and the Company cannot be purchased or sold in the open market
and that, for these reasons, among others, the parties will be irreparably
damaged in the event that this Agreement is not specifically enforceable.
Accordingly, in the event of any controversy concerning the securities which are
the subject of this Agreement, or any right or obligation to with respect to
such securities, such right or obligation shall be enforceable in a court of
equity by specific performance. The rights granted in this Section 8(i) shall be
cumulative and not exclusive, and shall be in addition to any and all other
rights which the parties to this Agreement may have under this Agreement, at law
or in equity.
(j) Entire Agreement. This Agreement, the Contribution Agreement,
and the other agreements delivered in connection with this Agreement and the
Contribution Agreement, collectively contain the entire understanding of the
parties, and there are no further or other agreements or understandings, written
or oral, in effect between the parties relating to the subject matter of this
Agreement unless expressly referred to in this Agreement.
(k) Agreement to Perform Required Acts. Each party to this Agreement
agrees to perform any further acts and to execute and deliver any further
documents that may be reasonably necessary to carry out the provisions of this
Agreement, that may be required to secure performance of any party's duties
under this Agreement or that may be required to assure the legal and binding
effect of the provisions of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
DYNACS ENGINEERING COMPANY, INC.,
a Florida Corporation
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Xx. Xxxxxxxx X. Xxxxx
Its: President
/s/ X. X. Xxxxx
----------------------------------------
Xx. Xxxxxxxx X. Xxxxx
INVESTORS:
----------------------------------------
Xxxxxxx Xxxxx
----------------------------------------
Xxxxxxx Dallas
----------------------------------------
Xxx Xxxxxxxxxx
OFFENSE GROUP ASSOCIATES, LP
By: Kaim NT, LP
Its: General Partner
By:________________________________
Its:_______________________________
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
DYNACS ENGINEERING COMPANY, INC.,
a Florida Corporation
By:
-------------------------------------
Xx. Xxxxxxxx X. Xxxxx
Its: President
----------------------------------------
Xx. Xxxxxxxx X. Xxxxx
INVESTORS:
/s/ Xxxxxxx Xxxxx
----------------------------------------
Xxxxxxx Xxxxx
----------------------------------------
Xxxxxxx Dallas
----------------------------------------
Xxx Xxxxxxxxxx
OFFENSE GROUP ASSOCIATES, LP
By: Kaim NT, LP
Its: General Partner
By:________________________________
Its:_______________________________
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
DYNACS ENGINEERING COMPANY, INC.,
a Florida Corporation
By:
-------------------------------------
Xx. Xxxxxxxx X. Xxxxx
Its: President
----------------------------------------
Xx. Xxxxxxxx X. Xxxxx
INVESTORS:
----------------------------------------
Xxxxxxx Xxxxx
/s/ Xxxxxxx Dallas
----------------------------------------
Xxxxxxx Dallas
----------------------------------------
Xxx Xxxxxxxxxx
OFFENSE GROUP ASSOCIATES, LP
By: Kaim NT, LP
Its: General Partner
By:________________________________
Its:_______________________________
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
DYNACS ENGINEERING COMPANY, INC.,
a Florida Corporation
By:
-------------------------------------
Xx. Xxxxxxxx X. Xxxxx
Its: President
----------------------------------------
Xx. Xxxxxxxx X. Xxxxx
INVESTORS:
----------------------------------------
Xxxxxxx Xxxxx
----------------------------------------
Xxxxxxx Dallas
/s/ Xxx Xxxxxxxxxx
----------------------------------------
Xxx Xxxxxxxxxx
OFFENSE GROUP ASSOCIATES, LP
By: Kaim NT, LP
Its: General Partner
By:________________________________
Its:_______________________________
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
DYNACS ENGINEERING COMPANY, INC.,
a Florida Corporation
By:
-------------------------------------
Xx. Xxxxxxxx X. Xxxxx
Its: President
----------------------------------------
Xx. Xxxxxxxx X. Xxxxx
INVESTORS:
----------------------------------------
Xxxxxxx Xxxxx
----------------------------------------
Xxxxxxx Dallas
----------------------------------------
Xxx Xxxxxxxxxx
OFFENSE GROUP ASSOCIATES, LP
By: Kaim NT, LP
Its: General Partner
By: /s/
--------------------------------
Its:_______________________________
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