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Agreement dated July 19, 1996
by and among
KTI, Inc.
Thomas A. Bosanko
and
Patrick B. Higbie
This Agreement dated this 19th day of July, 1996 witnesseth that:
Whereas, CIBER, Inc. ("CIBER") has made an offer to purchase substantially all
of the assets (the "Assets") of the Business Systems Division of DataFocus
Incorporated, a Delaware corporation ("DataFocus"), as evidenced by a letter
agreement dated July 16, 1996 attached hereto as Exhibit I; and
Whereas, the Board of Directors of KTI, Inc., a New Jersey corporation ("KTI"),
the parent and sole stockholder of DataFocus, is willing to approve the sale of
the Assets on terms similar to those proposed by CIBER; and
Whereas, Messrs. Bosanko and Higbie have an option to purchase 20% of the common
stock of DataFocus for $380,000.00; and
Whereas, the Board of Directors of DataFocus and Messrs. Bosanko and Higbie
consented to, and adopted, a Stockholder Appreciation Rights Plan (the "SAR
Plan") for the purpose of granting stockholder appreciation rights ("SARs") to
certain employees of DataFocus, a copy of which is attached hereto as Exhibit
IIa, and amended by the First Amendment thereto, attached hereto as Exhibit IIb;
and
Whereas, SARs have been granted to certain employees of DataFocus
("Participants") as shown on Exhibit III attached hereto; and
Whereas, Messrs. Bosanko and Higbie each have options to purchase 16,666 shares
of KTI common stock, no par value ("KTI Common Stock"), at $6.00 per share,
which options were issued under the KTI Stock Option Plan and are fully vested;
and
Whereas, Thomas A. Bosanko has additional options to purchase 66,665 shares of
KTI Common Stock at various prices per share, which options were issued under a
stock option plan of a corporation previously merged into KTI and are fully
vested; and
Whereas, Patrick B. Higbie has additional options to purchase 33,331 shares of
KTI Common Stock at various prices per share, which options were issued under a
stock option plan of a corporation previously merged into KTI and are fully
vested; and
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Whereas, Messrs. Bosanko and Higbie each has an employment contract with KTI,
dated as of November 21, 1994, attached hereto as Exhibits IVa and IVb,
respectively;
Now therefore, KTI, for itself and on behalf of DataFocus, and Messrs. Bosanko
and Higbie for themselves as individuals, hereby agree as follows:
1. If the Board of Directors of KTI shall approve the sale of the Assets to
CIBER under terms and conditions satisfactory to such Board, the approval of
which shall be evidenced by the signature of one or more Proper Officers of KTI
(A "Proper Officer" being the Chairman of the Board of Directors, the President,
or a Senior Vice President) on an agreement for the sale of the Assets between
KTI and CIBER, then:
A. Each of Messrs. Bosanko and Higbie may sign consulting agreements
with CIBER in form and substance reasonably satisfactory to Messrs. Bosanko and
Higbie, respectively, and CIBER. KTI shall have the right to act as the
intermediary between CIBER and Messrs. Bosanko and Higbie in the negotiation of
such consulting agreements;
B. Each of Messrs. Bosanko and Higbie shall sign a covenant not to
compete with CIBER, enforceable under the laws of Virginia and in form and
substance reasonably satisfactory to CIBER and, after consultation with Messrs.
Bosanko and Higbie, to KTI for a term of not more than eighteen months from the
date of the closing of the sale of the Assets (the "Closing"). Said covenant
shall cover client locations within a 50 mile radius of each of Washington, D.C.
and Metro Park in Edison, New Jersey. Activities covered by each covenant not to
compete will include current Business Systems Division activities and contract
computer application software programming, management consulting of information
services, PeopleSoft software consulting, millennium date change consulting,
network integration consulting and computer systems outsourcing. Each covenant
not to compete shall explicitly permit the pursuit of the sale of NuTCRACKER
software product ("NuTCRACKER"), including consulting services to port software
using NuTCRACKER, by Messrs. Bosanko and Higbie.
C. Each of the parties hereto shall execute and deliver any and all
other documents reasonably requested by CIBER or any other party hereto to
implement this Agreement and to permit the sale of the Assets.
Failure by either of Messrs. Bosanko or Higbie to execute and deliver the
covenant not to compete, or any other document reasonably requested by KTI or
CIBER as set forth in Paragraphs B. and C. above shall cause substantial
economic damage to KTI.
2. Each of Messrs. Bosanko and Higbie hereby represents and warrants that the
representations and warranties of DataFocus set forth in the letter agreement
attached hereto as Exhibit I are true and correct as of the date hereof.
3. Messrs. Bosanko and Higbie on one side, and KTI and DataFocus on the other
side have agreed that it would be in the best interests of both sides that the
arrangement between Messrs. Bosanko and Higbie be made more definite and
predictable. Accordingly, KTI and DataFocus
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and Messrs. Bosanko and Higbie have agreed that, effective at the Closing: (a)
Messrs. Bosanko's and Higbie's stock options to purchase shares of KTI Common
Stock be canceled; (b) Messrs. Bosanko's and Higbie's option to purchase 20% of
the common stock of DataFocus for $380,000 be canceled; and (c) Messrs.
Bosanko's and Higbie's existing employment agreements with KTI be canceled, all
in exchange for deferred compensation agreements between Messrs. Bosanko and
Higbie and DataFocus for the sum of money indicated opposite their name below:
Thomas A. Bosanko $310,000.00
Patrick B. Higbie $310,000.00
and, as additional compensation, Messrs. Bosanko and Higbie shall receive
bonuses from DataFocus in the amount set forth opposite their names below:
Thomas A. Bosanko $292,530.00 (1)(2)
Patrick B. Higbie $209,776.00 (1)(2)
(1) These numbers are estimates and may be modified, using the formula used to
develop these numbers and attached hereto as Exhibit V.
(2) FICA and federal and state income taxes shall be withheld from such bonuses
as required by law. The deferred compensation agreements must be executed and
delivered by Messrs. Bosanko and Higbie on one side and DataFocus on the other
side on or before the date of Closing.
Upon cancellation of the employment agreements between Messrs. Bosanko and
Higbie, on one side, and KTI, on the other side, at the date of Closing, all
obligations due to Messrs. Higbie and Bosanko from KTI thereunder shall cease on
said date. Any benefits due to Messrs. Bosanko or Higbie under any DataFocus
medical and employee benefit plans, and for accrued but not yet taken vacation
days shall be the obligations of DataFocus alone. Thereafter, Messrs. Bosanko
and Higbie shall be employees of DataFocus at will, with only such rights as may
be conferred upon them by their deferred compensation agreements with DataFocus.
The options of Messrs. Bosanko and Higbie, referred to in 3. (a) and (b) above,
shall be terminated at the Closing.
The net amount to be paid to Messrs. Bosanko and Higbie pursuant to this Section
3 shall be paid to Messrs. Bosanko and Higbie, promptly following the Closing of
the sale of the Assets.
4. Messrs. Bosanko and Higbie shall request the Board of Directors of DataFocus
to revalue its assets so as to increase its surplus, if appropriate, and in an
amount necessary, consistent with such Board's fiduciary duties, to permit the
payment of the dividend, described below.
Messrs. Bosanko and Higbie, on one side and KTI and DataFocus, on the other
side, hereby irrevocably agree that DataFocus shall declare and pay a partial
liquidating dividend to KTI on the date of Closing, consisting of cash and
accounts receivable, for:
(A) cash in an amount, equal to:
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Cash received from CIBER pursuant to the sale of the Assets, as
adjusted for prorations, less
Accounts Payable of the Business Systems Division, retained by
DataFocus plus
Cash on hand of DataFocus, plus
Cash equivalents owned by DataFocus, plus
That portion of the security deposits attributable to leased premises
subleased, or otherwise assigned or transferred by DataFocus to CIBER
(such portion shall be determined when CIBER executes and delivers the
appropriate documents to DataFocus, KTI or the landlord), less
Transaction costs, including without limitation, investment banking and
legal fees, in connection with the sale of the Business Systems
Division actually paid after the date of determination of cash on hand,
less
Bonuses due to Messrs. Bosanko and Higbie pursuant to Section 3. above,
less Sales or use taxes, if any, imposed on the transfer of Assets from
DataFocus to CIBER, less
Costs of buildouts, etc., for demising walls to separate CIBER premises
from DataFocus premises, less
State income taxes, including without limitation, capital gains taxes
attributable to the sale of the Assets, for the period from January 1,
1996 to the date of Closing, less
Any distributions paid under the DataFocus Stockholder Appreciation
Rights Plan, less
Any severance paid to terminated employees of the Business Systems
Division of DataFocus, subject to an aggregate limit of $100,000.00,
and
(B) The assignment of all accounts receivable of the Business Systems
Division ("Accounts Receivable") (Said assignment shall be satisfactory
to KTI's special counsel in form and substance).
Any amounts due from KTI to DataFocus, other than those arising out of this
Agreement, shall be forgiven at Closing. Any amounts due from DataFocus to KTI,
other than those arising out of this Agreement, shall be forgiven at Closing.
Cash on hand and the retained Accounts payable shall be calculated after such
forgiveness.
Each of Messrs. Bosanko and Higbie hereby warrants and represents to KTI that,
to the best of their knowledge, after careful investigation, DataFocus will have
sufficient assets on hand after the payment of the dividend to meet all of
DataFocus's current obligations when due.
5. DataFocus shall deposit cash proceeds of Accounts Receivable directly into an
account in KTI's name, with such endorsements as may be necessary, pursuant to a
receivable agreement (the "Receivable Agreement"). DataFocus shall collect the
Accounts Receivable at DataFocus's sole cost. If DataFocus believes that it
would be appropriate to incur legal costs and expenses to collect such Accounts
Receivable, DataFocus shall request and receive written approval from KTI prior
to incurring such expenses. Such legal fees and expenses shall be the sole
expense of KTI when so approved. The Receivable Agreement shall further provide
that Accounts Receivable may not be compromised or settled without KTI's prior
written consent. For accounting
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purposes, DataFocus shall credit cash received from a single customer in date
order of the invoices issued, unless otherwise designated by the customer
Messrs. Bosanko and Higbie acknowledge that the bonuses computed in accordance
with Exhibit V assume that the Accounts Receivable will be collected in the
amount indicated. To the extent that aggregate collections received during the
six month period following the date of Closing vary, plus or minus, Messrs.
Bosanko and Higbie shall receive 10% of such variance from KTI, or reimburse KTI
for such variance.
If sales or use taxes used in determining Messrs. Bosanko and Higbie's bonuses
are underestimated, KTI shall reimburse DataFocus for 80% of any such deficit.
Messrs. Bosanko and Higbie shall reimburse DataFocus for the remaining 20% of
said deficit. If sale or use taxes used in determining Messrs. Bosanko and
Higbie's bonuses are overestimated, DataFocus shall pay 80% of the excess to KTI
and 10% each to Messrs. Bosanko and Higbie.
6. KTI shall deposit $150,000.00 in an interest bearing account in its name with
a Bank of its selection. The funds in such account shall be used to pay any
lease and buildout expenses for that portion of the premises in the Metro Park,
New Jersey premises which are not occupied by either CIBER or DataFocus. Funds
may be withdrawn by KTI solely for such expenses. To the extent that funds
remain in such account upon final disposition of such portion of the premises,
the surplus shall be distributed 80% to KTI, 10% to Thomas A. Bosanko and 10% to
Patrick B. Higbie. If the funds in such account are insufficient, the
aforementioned parties shall contribute funds promptly, upon receipt of a
written request from KTI, in the same proportions. Upon the termination of all
obligations for such premises, KTI shall deliver an accounting for the
disbursement of funds from such account. Any interest earned on said account
shall be taxable to each party, in accordance with their interests.
7. KTI shall use its best efforts to cause any gain on the sale of Assets to
CIBER to be included in KTI's consolidated Federal income tax return. DataFocus
and Messrs. Bosanko and Higbie shall use their best efforts to cooperate with
KTI to achieve this goal, and shall make any election or other action reasonably
requested to achieve such goal.
8. Messrs. Bosanko and Higbie shall have the option to purchase all of the
common stock of DataFocus, after the payment of the dividend described in
Section 2 above, commencing on the next business day after the date of Closing
and terminating five business days thereafter. Said option may be exercised by
the payment by Messrs. Bosanko and Higbie to KTI of:
Cash in the amount of $5,000.00, plus
The execution and delivery of a royalty agreement between DataFocus and
KTI, in form and substance reasonably satisfactory to KTI's special
counsel, providing for a payment by DataFocus to KTI of a base royalty
of $5,000.00 per month, plus
Additional royalty of 5% of net NuTCRACKER product revenue (actual cash
sales proceeds, less cash actually paid for returns and less cash paid
for royalties) in excess of $4,000,000.00 per year. (Payments for any
period, less than a complete year for years later than 1996, will be
annualized to determine the appropriate percentage royalty, e.g., a one
month period with $500,000 in net NuTCRACKER product revenue would
result in
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annualized net NuTCRACKER product revenue of $6,000,000 and require a
royalty payment of $13,333.33 for such month, which number includes the
base royalty.) The additional royalty for 1996 will be calculated on,
and paid on, total net NuTCRACKER product revenue in excess of
$4,000,000 for calendar 1996.
If said option is exercised, KTI will loan up to $500,000.00 to Messrs. Bosanko
and Higbie individually, on the condition that they will, in turn, make such
funds available to DataFocus.. The initial loan or loans shall be not less than
$300,000.00, without DataFocus's approval. Messrs. Bosanko and Higbie may
request and receive additional loans within six months of the date of the
exercise of Messrs. Bosanko's and Higbie's option to purchase DataFocus if KTI
has received not less than $200,000.00 in cash from the proceeds of collection
of the Accounts Receivable. Such additional loans, together with the initial
loan may not exceed $500,000.00 in the aggregate, calculated on the highest
level of disbursement on each loan. The Notes will provide for amortization over
4 years from the date of issuance of the first loan, with level quarterly
payments on principal, and monthly payments of interest. The interest rate shall
be eight percent per annum, calculated on actual days and a 365 or 366 day year
as appropriate. The Notes will have no prepayment penalties. The Notes, royalty
agreement and all payment obligations of DataFocus to KTI, pursuant to Sections
5 and 6 will be secured by 73,724 shares of KTI Common Stock . The Collateral
Value of KTI Common Stock shall change quarterly, commencing on the first
business day of each quarter, based on the closing sale, or bid price, as
appropriate, on the last business day of the preceding quarter. A portion of the
Collateral may be returned if such Collateral exceeds 150% of the sum of the
then principal amount of the Notes, any accrued and unpaid royalties and any
accrued and unpaid payment obligations. Additional Collateral shall be deposited
(subject to a maximum number of shares of KTI Common Stock of 73,724), or
Collateral released as appropriate upon written request of the party desiring
action to be taken. All documentation for the Note shall be reasonably
satisfactory to KTI's counsel
A default in the payment of royalties or in the payment of any payment
obligations pursuant to Sections 5 and 6 by DataFocus to KTI shall be a default
on the Note or Notes.
Royalties payable will terminate 3 years after the date of the final payment on
the Note, unless terminated earlier, pursuant to the immediately following
sentence. After the date of Closing, DataFocus shall have the option to
terminate the royalties payable hereunder for a single payment, in cash, in an
amount equal to: (i) $400,000 during the first year after the date of Closing;
(ii) 3 times the prior year's royalties during the second year after the date of
Closing; (iii) 2 times the prior year's royalties during the third year after
the date of Closing; and (iv) the prior year's royalties during the fourth and
subsequent years after the date of Closing. Additional royalty payments shall be
made each calendar quarter, by the tenth business day of the following quarter,
based on good faith estimates of the additional royalty payments for the entire
year.
9. DataFocus shall have its financial statements audited by an auditor of
national reputation, or an auditing firm which is a member of the SEC section of
the AICPA and which is reasonably acceptable to KTI.
10. DataFocus shall cooperate with CIBER in connection with the division of the
current office space in the Fairfax premises and the Metro Park premises. If
CIBER and DataFocus are unable
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to agree, DataFocus must accede to CIBER's requirements for the partition of
such office space into separate offices.
DataFocus may not lease any office space in the State of New Jersey so long as
KTI shall have any obligation for any portion of the Metro Park premises.
DataFocus shall indemnify KTI for any damages suffered by KTI because of a
breach of leases by DataFocus in connection with the premises in Fairfax,
Virginia and Metro Park, New Jersey occupied by DataFocus, and not subleased to
CIBER. Certain employees of DataFocus will occupy a portion of the Metro Park
leased space for a short period of time. When such portion has been vacated and
is available for rental to a third party, then DataFocus's obligations for such
portion of the Metro Park leased premises will cease.
11. For purposes of computing payments due pursuant to the sale of Assets under
the SAR Plan, the net proceeds of the sale of the Assets (the "Net Proceeds")
shall be as follows (all amounts to be determined as of the date of Closing,
unless otherwise indicated in this Section):
Cash received from CIBER pursuant to the sale of the Assets, as
adjusted for prorations, less
Retained liabilities of DataFocus, including vacation pay, less
Any funds due to KTI from DataFocus per KTI's books (currently
consisting of routine administrative charges accruing in the normal
course of business), plus
Any funds due from KTI to DataFocus, per KTI's books (currently
consisting of a loan of approximately $200,000.00), less
Cash placed into escrow, plus
Cash on hand and cash equivalents, held by DataFocus and delivered to
KTI, plus Accounts Receivable, less
Cash paid to Messrs. Bosanko and Higbie pursuant to Section 3(a), less
The net present value, using a discount rate of 8%, of lease
obligations for that portion of the DataFocus premises in Fairfax,
Virginia not assumed by CIBER (the "Fairfax premises"), less
The net present value, using a discount rate of 8%, of lease
obligations for that portion of the Metro Park, New Jersey premises not
assumed by CIBER (the "Metro Park premises"),less
Any buildout expenses incurred in connection with the division of
office space in the Fairfax premises or in the Metro Park premises,
less
State income taxes, including without limitation, capital gains taxes
attributable to the sale of the Assets, for the period from January 1,
1996 to the date of Closing, less
Any severance costs for Business Systems Division employees not hired
by CIBER, plus
Any recoveries realized by DataFocus from the subleasing or other
resolution of the leases for the Fairfax premises and the Metro Park
premises, when received, plus
Funds when released to DataFocus from the escrow referred to above,
less
Any sales or use taxes, if any, imposed on the sale of the Assets,
but not any income or capital gains taxes imposed thereon, less
All transaction costs paid or accrued in connection with the sale of
DataFocus, including, without limitation, accountants, investment
banking fees and legal fees and expenses.
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12. (a) Subject to the limitations set forth in subsection (c) below,
Messrs. Bosanko and Higbie hereby agree to indemnify and hold harmless each of
KTI and DataFocus and its affiliates, directors, officers and agents from and
against 20% of any and all costs, losses, liabilities damages, claims or
expenses, including, without limitation, litigation costs, penalties and
interest and reasonable attorneys' fees, experts' fees and court costs, actually
incurred, sustained, accrued or paid by any such indemnitee and arising out of
or resulting from any misrepresentation or breach of any warranty made by
DataFocus or KTI (except for warranties relating solely to KTI) in the agreement
for the purchase of the Assets by CIBER (the "Asset Agreement"), or the
schedules annexed thereto or the transactions contemplated thereby.
(b) If any claim is made, or litigation is commenced in respect of
which indemnity may be sought hereunder, the party seeking indemnification (the
"Aggrieved Party") shall, upon being legally served with, or otherwise notified
of, such claim or litigation, promptly notify the party from whom indemnity is
sought (the "Indemnifying Party") thereof in writing, and the Indemnifying Party
shall, at its expense, thereupon fulfill his obligation to defend the Aggrieved
Party against any such claim or litigation; provided, however, that the failure
to so notify the Indemnifying Party shall not relieve the Indemnifying Party
from (i) any liability under this Section 4, except to the extent that it has
been prejudiced in any material respect by such failure, or (ii) any liability
it may have otherwise. The Aggrieved Party's counsel may participate in the
defense of any such claim or litigation, provided that the Indemnifying Party
shall direct and control the defense of any such claim or litigation. Any such
participation of the Aggrieved Party shall be at the Aggrieved Party's expense
of any such claim or litigation, provided that the Indemnifying Party shall
direct and control the defense of any such litigation.
(c) No indemnity claim may be made hereunder with respect to the Asset
Agreement unless such claim is made before eighteen months after the date of
Closing; provided, however, that any indemnity claim will be deemed to have been
made upon the date the notice described below is received if there shall have
occurred any misrepresentation or breach of any warranty made by DataFocus in
the Asset Agreement or the schedules annexed thereto or the transactions
contemplated thereby and the Aggrieved Party shall have given written notice
thereof to the Indemnifying Party setting out the basis for such indemnity claim
before eighteen months after the date of Closing.
(d) Any amount for indemnification payable by the Indemnifying Party to
the Aggrieved Party pursuant to the terms hereof shall be payable in cash.
13. KTI shall indemnify Messrs. Bosanko and Higbie and DataFocus against any
claim asserted against DataFocus, after the exercise by Messrs. Bosanko and
Higbie of their option to purchase DataFocus, for any and all income taxes,
interest and penalties due to the inclusion of DataFocus in KTI's consolidated
Federal income tax for calendar 1995 and prior tax years. KTI shall indemnify
Messrs. Bosanko and Higbie and DataFocus against any claim asserted against
DataFocus, after the exercise of their option to purchase DataFocus, for any and
all income taxes, interest and penalties due on DataFocus's State income tax
returns for calendar 1995 and prior tax years. KTI shall indemnify DataFocus for
any Federal capital gains taxes, or Federal income taxes, interest and penalties
for that portion of the 1996 tax year ending on the day immediately prior to the
date on which Messrs. Bosanko and Higbie exercise their option to purchase
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DataFocus, so long as such date is at least one business day after the Closing.
KTI will pay, or reimburse DataFocus for, State income taxes: (A) with respect
to Virginia, an amount equal to the amount of State income taxes that would be
owed, if 1996 State income taxes would have been calculated for that portion of
1996 ending on the date immediately preceding the date on which Messrs. Bosanko
and Higbie exercised their option to purchase DataFocus, assuming that DataFocus
had no additional income or expenses for the balance of the year; and (B) with
respect to New Jersey; the lesser of: (1) an amount equal to the amount of State
income taxes that would be owed, if 1996 State income taxes would have been
calculated for that portion of 1996 ending on the date immediately preceding the
date on which Messrs. Bosanko and Higbie exercised their option to purchase
DataFocus, assuming that DataFocus had no additional income or expenses for the
balance of the year; and (2) the proportionate share of income tax payable,
prorating the actual amount of State taxes due for 1996, based on (3)
DataFocus's taxable income for in that portion of the year immediately prior to
the date on which Messrs. Bosanko and Higbie exercise their option, and (4)
DataFocus's taxable income for the balance of 1996, reduced for both States by
the reserve for State income taxes held by DataFocus under Section 2. above. In
no event shall KTI be required to pay more than the State Taxes actually paid by
DataFocus. If the reserve held for State income taxes referred to in Section 2.
above exceeds such State income tax, 80% of the surplus shall be distributed to
KTI and 10% each to Messrs. Bosanko and Higbie.
KTI represents and warrants to Messrs. Bosanko and Higbie that all Employee
Benefit Plans of KTI (the "Plans"), prior to the date on which Messrs. Bosanko
and Higbie exercise their option to purchase DataFocus: (1) have not engaged in
any "prohibited transactions"; (2) are in material compliance with the
applicable provisions of the Employee Retirement Income Security Act of 1974 and
the regulations thereto ("ERISA"); and (3) have not been completely or partially
terminated nor has there been any "reportable events". None of the Plans has an
accumulated funding deficiency
KTI represents and warrants that it and its subsidiaries and its PERC affiliate
are in material compliance with all applicable Environmental Laws, including
without limitation, the Clean Air Act, the Clean Water Act, the Resource
Conservation and Recovery Act, and other similar Federal and State laws. Neither
KTI or any of its subsidiaries or affiliates has received any written
communication that alleges, or is aware of any pending allegation of, any
current violation of applicable Environmental Laws.
KTI shall indemnify and hold each of Messrs. Bosanko and Higbie and DataFocus
and their affiliates, directors, officers from and against any and all costs,
losses, liabilities, damages, claims or expenses, including, without limitation,
litigation costs, penalties and interest and reasonable attorneys' fees,
experts' fees and court costs, actually incurred, sustained, accrued or paid by
Messrs. Bosanko and Higbie or DataFocus due to a breach of the above
representations or warranties, except that such indemnification shall be limited
to 80% of such amounts for any damages relating to DataFocus.
After exercise by Messrs. Bosanko and Higbie of their option to purchase all of
the stock of DataFocus, DataFocus shall be entitled to indemnification from KTI
to the same intent and effect as Messrs. Bosanko and Higbie.
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14. Messrs. Bosanko and Higbie shall resign all of their positions with every
subsidiary of KTI, other than DataFocus, at the Closing, if so requested by KTI.
15. Messrs. Bosanko and Higbie, DataFocus on one side, and KTI on the other
side, shall exchange mutual releases of any and all claims between such parties
to be effective at the exercise of the Bosanko and Higbie option to purchase the
common stock of DataFocus. At that time, this Agreement (including, without
limitation, the documents and instruments referred to herein) shall constitute
the entire agreement between the parties and shall supersede and replace any and
all agreements and obligations, whether written or oral, between Messrs. Bosanko
and Higbie and DataFocus, on one side, and KTI on the other side. The parties
hereto agree that, from and after the Closing, no suit may be brought by any
party hereto for any reason other than to enforce this Agreement and the
documents to be entered into pursuant to this Agreement. Notwithstanding this
Section, this Agreement shall not impair any obligation which KTI may have to
Thomas A. Bosanko solely in his capacity as a director of KTI.
16. If the sale of the Assets to CIBER is not completed, all Sections of this
Agreement, other than the second to last paragraph of Section 1, shall have no
force or effect. The last paragraph of Section 1. shall continue in full force
and effect, notwithstanding any failure to complete the Closing.
17. This Agreement may be amended by the parties hereto, by an action taken and
properly authorized at any time; provided that this Agreement may not be amended
except by an instrument in writing signed by the parties hereto.
18. Whether or not the transactions contemplated hereby are consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such costs
and expenses.
19. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW JERSEY, WITHOUT REGARD TO ANY APPLICABLE CONFLICTS OF
LAWS PRINCIPLES THEREOF.
20. This Agreement may be executed in two or more counterparts, all of which
shall constitute one and the same agreement, and shall be effective when two or
more counterparts have been signed by each of the parties hereto and delivered
to the other parties, it being understood that all parties need not sign the
same counterpart.
In witness whereof, the undersigned have executed and delivered this Agreement
on the date first above written.
KTI, Inc.
By:
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Thomas A. Bosanko Patrick B. Higbie Senior Vice President
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