EXECUTION COPY
INFOCROSSING, INC.
0 Xxxxxxxx Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
February 1, 2002
Xxxxxx, Xxxxxxx Strategic Partners Fund, L.P.,
Strategic Associates, L.P.,
Camden Partners Strategic Fund II-A, L.P.,
Camden Partners Strategic Fund II-B, L.P.
Xxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000
RE: Management Rights
Ladies and Gentlemen:
This letter will confirm our agreement that in connection with your
purchase of $10.0 million principal amount Senior Subordinated Debentures due
2005 (the "Debentures"), together with warrants (the "Warrants") to purchase,
initially, up to 2,000,000 shares of common stock (subject to adjustment), par
value $.01 per share (the "Common Stock") of Infocrossing, Inc. (the "Company"),
you shall be entitled to the following contractual management rights, in
addition to any rights to non-public financial information, inspection rights,
and other rights specifically provided to you in the applicable financing
instruments.
1. Each of you (the "Camden Group") shall be entitled to consult with and
advise management of the Company on significant business issues, including
management's proposed annual operating plans, and management will, upon your
reasonable request, meet with each of you at reasonable intervals at the
Company's facilities at mutually agreeable times for such consultation and
advice and to review progress in achieving said plans. Without limitation to the
foregoing, the Company will provide the Camden Group with (i) an annual budget
and operating plan for each fiscal year, within a reasonable time (but in no
event more than 5 business days) after the Company's management has first
presented such budget and operating plan to the Company's Board of Directors
(the "Board"); and (ii) a copy of each report, schedule and other document filed
or received by any of them pursuant to the requirements of Federal or state
securities laws.
Page 2
2. Representatives of the Camden Group may, upon reasonable notice, during
normal business hours, examine the books and records of the Company and inspect
its facilities and may make reasonable requests for information at reasonable
times and intervals concerning the general status of the Company's financial
condition and operations.
3. The Company shall provide to the Camden Group (i) audited fiscal
year-end financial statements, prepared by a national accounting firm; (ii)
monthly financial statements (including revenue and gross profit information,
year-to-date results, comparisons to previous year's results, for such period
and comparisons to budget), together with a brief management executive summary
report, and (iii) before each fiscal year-end, a copy of the Company's monthly
budget for the next fiscal year and projections for the next three years in the
same format as the financial statements.
4. If the Camden Group is represented on the Company's Board pursuant to
the right granted in that certain Amended and Restated Stockholders Agreement,
by and between the Company and the stockholders party thereto, of even date
herewith (the "Stockholders' Agreement"), your representative Director may bring
a visitor who is not a Board member to all meetings of the Board, except that
the visitor may be excluded from access to any material or meeting or portion
thereof if the Company believes, upon advice of counsel (which may be the
Company's general counsel), that such exclusion is reasonably necessary to
preserve the attorney-client privilege. If your representative Director will not
attend a meeting of the Board, upon reasonable notice to the Board, the Camden
Group may designate a substitute to attend that Board meeting as an observer and
address the Board with respect to any business issues facing the Company except
that the observer may be excluded from access to any material or meeting or
portion thereof if the Company believes, upon advice of counsel (which may be
the Company's general counsel). The Company shall provide to the Camden Group
all notices and materials delivered to members of the Board, substantially
concurrently with the delivery to the members of the Board.
5. If the Camden Group is not represented on the Board, the Company shall
give a representative of the Camden Group copies of all notices, minutes,
consents and other material that the Company provides to its directors and allow
a representative of the Camden Group to attend all Board meetings as a visitor
at the Company's reasonable expense, except that the representatives may be
excluded from access to any material or meeting or portion thereof if the
Company believes, upon advice of counsel (which may be the Company's general
counsel), that such exclusion is reasonably necessary to preserve the
attorney-client privilege. Upon reasonable notice and at a scheduled meeting of
the Board, such representatives may address the Board with respect to the Camden
Group's concerns regarding significant business issues facing the Company. The
Company shall provide to the Camden Group all notices and materials delivered to
members of the Board, substantially concurrently with the delivery to the
members of the Board.
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6. For so long as the Camden Group is either (A) represented on the Board
pursuant to the right granted in the Stockholders Agreement; or (B) entitled to
attend all Board meetings as a visitor in accordance with paragraph 5 hereof,
the Company shall (i) maintain directors' and officers' insurance with policy
limits and deductibles at least as favorable to the beneficiaries of such
insurance as are currently maintained and otherwise on terms reasonably
comparable to the coverage maintained by the Company on the date hereof, such
insurance to be maintained with an insurer with an A.M. Best financial strength
rating of "A-minus" or better; and (ii) the Company shall indemnify the
Company's directors and officers to the fullest extent permitted under the
General Corporation Law of the State of Delaware and shall enter into all such
agreements and use its best efforts to obtain any necessary amendments to its
Certificate of Incorporation or by-laws to give effect to this paragraph 6.
7. The Camden Group has agreed, and any representative the Camden Group may
appoint will agree, to hold in confidence and trust and not use or disclose any
confidential information provided to or learned by it in connection with your
rights under this letter. The Camden Group acknowledges that it is aware (and
that the representatives of the Camden Group who are apprised of this matter
have been or will be advised) that the United States securities laws restrict
persons with material non-public information about a company obtained directly
or indirectly from that company from purchasing or selling securities of such
company and from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell such securities.
8. The Company shall, upon reasonable notice, furnish to the Camden Group
all information that the Camden Group may reasonably request to enable the
Camden Group to file any form required by any governmental authority.
9. With respect to the Camden Group, the rights described herein shall
terminate and be of no further force or effect with respect to you upon the
earlier to occur of (i) there ceasing to be any indebtedness outstanding under
the Debentures; and (ii) seven years from the date hereof. For the avoidance of
doubt, the rights conferred to the Camden Group pursuant to this letter are
separate rights and any member of the Camden Group may seek enforcement of said
rights unless the rights terminate with respect to you in accordance with this
paragraph 9. The confidentiality provisions hereof will survive any such
termination.
(Signature page follows)
Very truly yours,
INFOCROSSING, INC.
By:
-----------------------------------------
Name:
Title:
Acknowledged and agreed to
this 1st day of February, 2002
XXXXXX XXXXXXX STRATEGIC CAMDEN PARTNERS STRATEGIC
PARTNERS FUND, L.P. FUND II-A, L.P.
By: Xxxxxx, Xxxxxxx Strategic Partners, By: Camden Partners Strategic II, LLC,
L.P., its General Partner its General Partner
By: By:
------------------------------------- ------------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxx
Title: Managing Member Title: Managing Member
STRATEGIC ASSOCIATES, L.P. CAMDEN PARTNERS STRATEGIC FUND II-B, L.P.
By: Xxxxxx, Xxxxxxx Strategic Partners, By: Camden Partners Strategic II, LLC,
L.P., its General Partner its General Partner
By: By:
------------------------------------- ------------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxx
Title: General Partner Title: General Partner
