EXHIBIT 3.2
CERTIFICATE OF AMENDMENT
STOCK CORPORATION
Office of the Secretary of the State
30 Trinity Street/P.O. Box 150470/Hartford, CT 05115-0470/new/1-97
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NAME OF CORPORATION: Wiltek, Inc.
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THE CERTIFICATE OF INCORPORATION IS AMENDED
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TEXT OF EACH AMENDMENT/RESTATEMENT:
The Certificate of Incorporation of Wiltek, Inc. is amended by adding thereto
the terms of a new series of preferred stock designated as the "Senior
Convertible Series A Preferred Stock." The terms of said series are set forth
in full on Annex I hereto. This amendment was duly adopted by the corporation's
Board of Directors on January 21, 1999. This series of Preferred Stock is being
created out of the previously authorized 1,000,000 shares of Preferred Stock,
which shares were not previously assigned to a series. The total number of
shares of authorized Wiltek, Inc. stock remains unaffected by this Certificate
of Amendment at 10,000,000, of which 9,000,000 shares are Common Stock without
par value and 1,000,000 share are Preferred Stock without par value.
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Annex I
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RESOLVED that, pursuant to the authority vested in the Board
of Directors of Wiltek, Inc., a Connecticut corporation (the "Company") in
accordance with the provisions of the Certificate of Incorporation of the
Company (the "Certificate of Incorporation"), a series of the class of
authorized Senior Convertible Series A Preferred Stock, no par value, of the
Company, is hereby created and that the designation and number of shares thereof
and the voting powers, preferences and relative, participating, optional and
other special rights of the shares of such series, and the qualifications,
limitations and restrictions thereof are as follows:
Section 1. Designation and Number.
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(a) The shares of such series shall be designated as
"Senior Convertible Series A Preferred Stock" (the "Series A Stock"). The number
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of shares initially constituting the Series A Stock shall be 1,000,000, which
number may be decreased (but not increased) by the Board of Directors without a
vote of stockholders; provided, however, that such number may not be decreased
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below the number of then outstanding shares of Series A Stock.
(b) The Series A Stock shall, with respect to dividend
rights and rights upon liquidation, dissolution or winding up, rank prior to all
other classes and series of capital stock of the Company now or hereafter
authorized (except as may be authorized pursuant to Section 3(b)) including,
without limitation, the Common Stock.
(c) Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in Section 9.
Section 2. Dividends and Distributions.
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In the event that the Company shall declare a dividend or make
any other distribution (including, without limitation, in cash, in capital stock
(which shall include, without limitation, any options, warrants or other rights
to acquire capital stock) of the Company or other property or assets) to holders
of Common Stock, then the Board of Directors shall declare, and the holder of
each share of Series A Stock shall be entitled to receive, a dividend or
distribution in an amount equal to the amount of such dividend or distribution
received by a holder of the number of shares of Common Stock for which such
share of Series A Stock is convertible on the record date for such dividend or
distribution. Any such amount shall be paid to the holders of shares of Series A
Stock at the same time such dividend or distribution is made to holders of
Common Stock.
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Section 3. Voting Rights.
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In addition to any voting rights provided by law or in the
Securities Purchase Agreement, the holders of shares of Series A Stock shall
have the following voting rights:
(a) So long as the Series A Stock is outstanding, each
share of Series A Stock shall entitle the holder thereof to vote, in person or
by proxy, at a special or annual meeting of stockholders, on each of the matters
entitled to be voted on by holders of Common Stock, voting together as a single
class with other shares entitled to vote thereon. With respect to any such vote,
each share of Series A Stock shall entitle the holder thereof to cast that
number of votes per share as is equal to the number of votes that such holder
would be entitled to cast had such holder converted its shares of Series A Stock
into Common Stock on the record date for determining the stockholders of the
Company eligible to vote on any such matters.
(b) Unless the consent or approval of a greater number of
shares shall then be required by law, the affirmative vote of the holders of at
least a majority of the outstanding shares of Series A Stock, voting separately
as a single class, in person or by proxy, at a special or annual meeting of
stockholders called for the purpose, shall be necessary to (i) authorize,
increase the authorized number of shares of, or issue (including on conversion
or exchange of any convertible or exchangeable securities or by
reclassification), any shares of any class or classes of Senior Stock or Parity
Stock, (ii) authorize, adopt or approve an amendment to the Certificate of
Incorporation that would increase or decrease the par value of the shares of
Series A Stock, or alter or change the powers, preferences or special rights of
the shares of Series A Stock, other Parity Stock or Senior Stock, (iii) amend,
alter or repeal the Certificate of Incorporation so as to affect the shares of
Series A Stock adversely, including, without limitation, by granting any voting
right to any holder of notes, bonds, debentures or other debt obligations of the
Company, (iv) authorize or issue any security convertible into, exchangeable for
or evidencing the right to purchase or otherwise receive any shares of any class
or classes of Senior Stock or Parity Stock, or (v) effect an Extraordinary
Event.
(c) If on any date (i) the Company shall have failed to
satisfy its obligation to convert shares of Series A Stock pursuant to Section
7, or (ii) a breach of Article 8 of the Securities Purchase Agreement shall have
occurred and be continuing for a period of at least 30 days, then the number of
directors constituting the Board of Directors shall, without further action, be
increased by one and the holders of shares of Series A Stock shall have, in
addition to the other voting rights set forth herein, the exclusive right,
voting separately as a single class, to elect a director of the Company to fill
such newly created directorship, by written consent as provided herein, or at a
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special meeting of such holders called as provided herein. Any such additional
director shall continue as a director (subject to reelection or removal as
provided in Section 3(d)(ii)) and the holders of Series A Stock shall have such
additional voting rights until such time as (A) any conversion obligation
provided in Section 7 that has become due shall have been satisfied or (B) there
shall exist no breach of Article 8 of the Stock Purchase Agreement, as the case
may be, at which time such additional director shall cease to be a director and
such additional voting rights of the holders of Series A Stock shall terminate
subject to revesting in the event of each and every subsequent event of the
character indicated above, provided that the conditions set forth in the proviso
above shall not have occurred. Notwithstanding anything to the contrary
contained herein, in the event the Company shall have breached Section 8.9 of
the Securities Purchase Agreement, all references to the right of the holders of
shares of Series A Stock to elect one director to the Board of Directors of the
Company shall instead refer to the right of such holders to elect that number of
directors that shall constitute a majority of such Board of Directors.
(d) (i) The right of holders of shares of Series A Stock
to take any action as provided in Section 3(c) may be exercised at any annual
meeting of stockholders or at a special meeting of holders of shares of Series A
Stock held for such purpose as hereinafter provided or at any adjournment
thereof, or by the written consent, delivered to the Secretary of the Company,
of the holders of the minimum number of shares required to take such action,
which shall be a majority of the outstanding shares of Series A Stock unless
otherwise required by law.
So long as such right to vote continues (and unless such right
has been exercised by written consent of the minimum number of shares required
to take such action), the President of the Company may call, and upon the
written request of holders of record of at least 5% of the outstanding shares of
Series A Stock, addressed to the Secretary of the Company at the principal
office of the Company, shall call, a special meeting of the holders of shares
entitled to vote as provided herein. Such meeting shall be held within 30 days
after delivery of such request to the Secretary, at the place and upon the
notice provided by law and in the by-laws of the Company for the holding of
meetings of stockholders.
(ii) At each meeting of stockholders at which the
holders of shares of Series A Stock shall have the right, voting separately as a
single class, to elect one director of the Company as provided in Section 3(c)
(or, in the case of a breach of Section 8.9 of the Securities Purchase
Agreement, the number of directors that shall constitute a majority of the Board
of Directors) or to take any action, the presence in person or by proxy of the
holders of record of one-third of the total number of shares of Series A Stock
then outstanding and entitled to vote on the matter shall be necessary and
sufficient to constitute a quorum. At any such meeting or at any adjournment
thereof:
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(A) the absence of a quorum of the holders of shares
of Series A Stock shall not prevent the election of directors other
than those to be elected by the holders of shares of Series A Stock,
and the absence of a quorum of the holders of shares of any other class
or series of capital stock shall not prevent the election of directors
to be elected by the holders of shares of Series A Stock, or the taking
of any action as provided in this Section 3; and
(B) in the absence of a quorum of the holders of
shares of Series A Stock, a majority of the holders of such shares
present in person or by proxy shall have the power to adjourn the
meeting as to the actions to be taken by the holders of shares of
Series A Stock from time to time and place to place without notice
other than announcement at the meeting until a quorum shall be present.
For taking of any action as provided in Section 3(b) or
Section 3(c) by the holders of shares of Series A Stock, each such holder shall
have one vote for each share of such stock standing in his name on the transfer
books of the Company as of any record date fixed for such purpose or, if no such
date be fixed, at the close of business on the Business Day next preceding the
day on which notice is given, or if notice is waived, at the close of business
on the Business Day next preceding the day on which the meeting is held.
Each director elected by the holders of shares of Series A
Stock as provided in Section 3(c) shall, unless his or her term shall expire
earlier in accordance with the provisions thereof, hold office until the annual
meeting of stockholders next succeeding his election or until his or her
successor, if any, is elected and qualified.
If any director so elected by the holders of Series A Stock
shall cease to serve as a director before his or her term shall expire (except
by reason of the termination of the voting rights accorded to the holders of
Series A Stock in accordance with Section 3(c)), the holders of the Series A
Stock then outstanding and entitled to vote for such director may, by written
consent as provided herein, or at a special meeting of such holders called as
provided herein, elect a successor to hold office for the unexpired term of the
director whose place shall be vacant.
Any director elected by the holders of shares of Series A
Stock voting separately as a single class may be removed from office with or
without cause by the vote or written consent of the holders of at least a
majority of the outstanding shares of Series A Stock, at the time of removal. A
special meeting of the holders of shares of Series A Stock may be called in
accordance with the procedures set forth in Section 3(c)(i).
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Section 4. Certain Restrictions.
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(a) Whenever the Company shall not have converted shares of
Series A Stock at a time required by Section 7, at such time and thereafter
until all conversion obligations provided in Section 7 that have come due shall
have been satisfied, the Company shall not: (A) declare or pay dividends, or
make any other distributions, on any shares of Junior Stock, or (B) declare or
pay dividends, or make any other distributions, on any shares of Parity Stock,
except dividends or distributions paid ratably on the Series A Stock and all
Parity Stock on which dividends are payable or in arrears, in proportion to the
total amounts to which the holders of all shares of the Series A Stock and such
Parity Stock are then entitled.
(b) Whenever the Company shall not have converted shares of
Series A Stock at a time required by Section 7, at such time and thereafter
until all conversion obligations provided in Section 7 that have come due shall
have been satisfied, the Company shall not redeem, purchase or otherwise acquire
for consideration, or require the conversion of, any shares of Junior Stock or
Parity Stock.
(c) The Company shall not permit any Subsidiary of the
Company, or cause any other Person, to purchase or otherwise acquire for
consideration any shares of capital stock of the Company unless the Company
could, pursuant to Section 4(b), purchase such shares at such time and in such
manner.
Section 5. Reacquired Shares.
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Any shares of Series A Stock converted, exchanged, redeemed,
purchased or otherwise acquired by the Company or any of its Subsidiaries or
other Affiliates in any manner whatsoever shall be retired and canceled promptly
after the acquisition thereof. All such shares of Series A Stock shall upon
their cancellation become authorized but unissued shares of Series A Stock, no
par value, of the Company and, upon the filing of an appropriate certificate
with the Secretary of State of the State of Connecticut, may be reissued as part
of another series of preferred stock, no par value per share, of the Company
subject to the conditions or restrictions on issuance set forth herein, but in
any event may not be reissued as shares of Series A Stock or other Parity Stock
unless all of the shares of Series A Stock issued on the Issue Date shall have
already been redeemed, converted or exchanged.
Section 6. Liquidation, Dissolution or Winding Up.
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(a) If the Company shall commence a voluntary case under
the United States bankruptcy laws or any applicable bankruptcy, insolvency or
similar law
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of any other country, or consent to the entry of an order for relief in an
involuntary case under any such law or to the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property, or make an
assignment for the benefit of its creditors, or admit in writing its inability
to pay its debts generally as they become due, or if a decree or order for
relief in respect of the Company shall be entered by a court having jurisdiction
in the premises in an involuntary case under the United States bankruptcy laws
or any applicable bankruptcy, insolvency or similar law of any other country, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and on
account of any such event the Company shall liquidate, dissolve or wind up, or
if the Company shall otherwise liquidate, dissolve or wind up, no distribution
shall be made (i) to the holders of shares of Junior Stock unless, prior
thereto, the holders of shares of Series A Stock, subject to Section 7, shall
have received the Liquidation Preference, plus all accrued and unpaid dividends,
to the date of distribution, with respect to each share, or (ii) to the holders
of shares of Parity Stock, except distributions made ratably on the Series A
Stock and all other Parity Stock in proportion to the total amounts to which the
holders of all shares of the Series A Stock and other Parity Stock are entitled
upon such liquidation, dissolution or winding up.
(b) Neither the consolidation or merger of the Company with
or into any other Person nor the sale or other distribution to another Person of
all or substantially all the assets, property or business of the Company shall
be deemed to be a liquidation, dissolution or winding up of the Company for
purposes of this Section 6.
Section 7. Conversion.
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(a) Any holder of Series A Stock shall have the right, at
its option, at any time and from time to time, to convert, subject to the terms
and provisions of this Section 7, any or all of such holder's shares of Series A
Stock into such number of fully paid and non-assessable shares of Common Stock
as is equal, subject to Section 7(g), to the product of the number of shares of
Series A Stock being so converted multiplied by the quotient of (i) Liquidation
Preference divided by the (ii) Conversion Price (as defined below) then in
effect. The "Conversion Price" shall be $1.20 per share, subject to adjustment
as set forth in Section 7(d). Such conversion right shall be exercised by the
surrender of the shares of Series A Stock to be converted (the "Shares") to the
Company at any time during usual business hours at its principal place of
business to be maintained by it, accompanied by written notice that the holder
elects to convert such Shares and specifying the name or names (with address) in
which a certificate or certificates for shares of Common Stock are to be issued
and (if so required by the Company) by a written instrument or instruments of
transfer in form reasonably satisfactory to the
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Company duly executed by the holder or its duly authorized legal representative
and transfer tax stamps or funds therefor, if required pursuant to Section 7(k).
All Shares surrendered for conversion shall be delivered to the Company for
cancellation and canceled by it and no Shares shall be issued in lieu thereof.
(b) As promptly as practicable after the surrender, as
herein provided, of any Shares for conversion pursuant to Section 7(a), the
Company shall deliver to or upon the written order of the holder of the Shares
so surrendered a certificate or certificates representing the number of fully
paid and non-assessable shares of Common Stock into which such Shares may be or
have been converted in accordance with the provisions of this Section 7. Subject
to the following provisions of this Section 7, such conversion shall be deemed
to have been made immediately prior to the close of business on the date that
such Shares shall have been surrendered in satisfactory form for conversion, and
the Person or Persons entitled to receive the Common Stock deliverable upon
conversion of such Shares shall be treated for all purposes as having become the
record holder or holders of such Common Stock at such appropriate time, and such
conversion shall be at the Conversion Price in effect at such time; provided,
however, that no surrender shall be effective to constitute the Person or
Persons entitled to receive the Common Stock deliverable upon such conversion as
the record holder or holders of such Common Stock while the share transfer books
of the Company shall be closed (but not for any period in excess of five days),
but such surrender shall be effective to constitute the Person or Persons
entitled to receive such Common Stock as the record holder or holders thereof
for all purposes immediately prior to the close of business on the next
preceding day on which such share transfer books are open, and such conversion
shall be deemed to have been made at, and shall be made at the Conversion Price
in effect at, such time on such next preceding day. If the last day for the
exercise of the conversion right shall not be a Business Day, then such
conversion right may be exercised on the next preceding Business Day.
(c) Upon (i) the third anniversary of the Issue Date, each
outstanding share of Series A Stock, or (ii) if earlier, the transfer of any
shares of Series A Stock by an Initial Holder to any Person other than an
Affiliate of such Initial Holder, such shares of Series A Stock, shall
automatically, with no further action required to be taken by the Company or the
holder thereof, be converted into such number of fully paid and non-assessable
shares of Common Stock as is equal to the product of the number of shares of
Series A Stock being so converted, multiplied by the quotient of (i) the
Liquidation Preference divided by (ii) the Conversion Price then in effect.
Immediately thereafter, each holder of Series A Stock subject to such
conversion, shall be deemed to be the holder of record of the Common Stock
issuable upon conversion of such holder's Series A Stock, notwithstanding that
the share register of the Company shall then be closed or that certificates
representing such Common Stock shall not then be actually delivered to such
Person. Upon notice from the Company, each holder of Series A Stock so converted
shall promptly surrender to the Company, at any place
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where the Company shall maintain a transfer agent for its Series A Stock and
Common Stock, certificates representing the shares so converted, duly endorsed
in blank or accompanied by proper instruments of transfer. On the date of such
automatic conversion, all rights with respect to the shares of Series A Stock so
converted, including the rights, if any, to receive notices and vote, will
terminate, except only the rights of holders thereof to (A) receive certificates
for the number of shares of Common Stock into which such shares of Series A
Stock have been converted, (B) be paid any declared but unpaid dividends thereon
and (C) exercise the rights to which they are entitled as holders of Common
Stock.
(d) The Conversion Price shall be subject to adjustment as
follows:
(i) In case the Company shall at any time or from time
to time (A) pay a dividend or make any other distribution (other than a dividend
or distribution paid or made to holders of shares of Series A Stock in the
manner provided in Section 2) on the outstanding shares of any of its Common
Stock in capital stock (which, for purposes of this Section 7(d) shall include,
without limitation, any dividends or distributions in the form of options,
warrants or other rights to acquire capital stock) of the Company or any
Subsidiary or Affiliate thereof, (B) subdivide the outstanding shares of any of
its Common Stock into a larger number of shares, (C) combine the outstanding
shares of any of its Common Stock into a smaller number of shares, or (D) issue
any shares of its capital stock in a reclassification of any of its Common
Stock, then, and in each such case, the Conversion Price in effect immediately
prior to such event shall be adjusted (and any other appropriate actions shall
be taken by the Company) so that the holder of any share of Series A Stock
thereafter surrendered for conversion shall be entitled to receive the number of
shares of Common Stock or other securities of the Company that such holder would
have owned or would have been entitled to receive upon or by reason of any of
the events described above, had such share of Series A Stock been converted
immediately prior to the occurrence of such event. An adjustment made pursuant
to this Section 7(d)(i) shall become effective retroactively (A) in the case of
any such dividend or distribution, to a date immediately following the close of
business on the record date for the determination of holders of any of its
Common Stock entitled to receive such dividend or distribution or (B) in the
case of any such subdivision, combination or reclassification, to the close of
business on the day upon which such corporate action becomes effective.
(ii) In case the Company shall at any time or from
time to time distribute to any holder of shares of its Common Stock (including
any such distribution made in connection with a consolidation or merger in which
the Company is the resulting or surviving corporation and the Common Stock is
not changed or exchanged) cash, evidences of indebtedness of the Company or
another issuer, securities of the Company or another issuer or other assets
(excluding (A) dividends or distributions paid or made to holders of shares of
Series A Stock in the manner provided in Section 2
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and (B) dividends payable in shares of Common Stock for which adjustment is made
under Section 7(d)(i)) or rights or warrants to subscribe for or purchase
securities of the Company (excluding those in respect of which adjustments in
the Conversion Price is made pursuant to Section 7(d)(i), then, and in each such
case, the Conversion Price then in effect shall be adjusted by dividing the
Conversion Price in effect immediately prior to the date of such distribution by
a fraction (x) the numerator of which shall be the Current Market Price of the
Common Stock on the record date referred to below and (y) the denominator of
which shall be such Current Market Price of the Common Stock less the then fair
market value (as determined in good faith by the Board of Directors of the
Company, in the case of any such distribution other than a distribution of cash,
based on an opinion of a nationally recognized investment banking firm
unaffiliated with either the Company or the holders of the Series A Stock,
chosen by the Company (which shall bear the expense thereof) and reasonably
acceptable to a majority of the holders of the Series A Stock, a certified
resolution with respect to which shall be mailed to the holders of the Series A
Stock) of the portion of the cash, evidences of indebtedness, securities or
other assets so distributed or of such subscription rights or warrants
applicable to one share of Common Stock (but such denominator not to be less
than one); provided, however, that no adjustment shall be made with respect to
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any distribution of rights to purchase securities of the Company if the holder
of shares of Series A Stock would otherwise be entitled to receive such rights
upon conversion at any time of shares of Series A Stock into Common Stock unless
such rights are subsequently redeemed by the Company, in which case such
redemption shall be treated for purposes of this Section 7(d)(ii) as a dividend
on the Common Stock. Such adjustment shall be made whenever any such
distribution is made and shall become effective retroactively to a date
immediately following the close of business on the record date for the
determination of stockholders entitled to receive such distribution.
(iii) In case the Company at any time or from time to
time shall take any action affecting its Common Stock which could have a
dilutive effect on the number of shares of Common Stock that may be issued upon
conversion of the Series A Stock, other than an action described in any of
Section 7(d)(i), 7(d)(ii) or Section 7(h), or an action which would have the
same dilutive effect on the Series A Stock as on the Common Stock, then, and in
each such case, the Conversion Price shall be adjusted in such manner and at
such time as the Board of Directors of the Company in good faith determines to
be equitable in the circumstances (such determination to be evidenced in a
resolution, a certified copy of which shall be mailed to the holders of the
Series A Stock).
(iv) In the event that any convertible or exchangeable
securities, options, warrants or other rights, the issuance of which shall have
given rise to an adjustment pursuant to this Section 7(d) ("Convertible
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Securities"), shall have expired or terminated without the exercise thereof
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and/or if there shall have been an increase, with the passage of time or
otherwise, in the price payable upon the exercise or
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conversion thereof or a decrease in the number of shares of Common Stock
issuable upon the exercise or conversion thereof, then the Conversion Price
hereunder shall be readjusted (but to no greater extent then originally
adjusted) on the basis of (A) eliminating from the computation of the Conversion
Price as of the time of the issuance of the Convertible Securities any shares of
Common Stock corresponding to such Convertible Securities as shall have expired
or terminated, (B) treating the additional shares of Common Stock, if any,
actually issued or issuable pursuant to the previous exercise of such
Convertible Securities as having been issued for the consideration actually
received and receivable therefor and (C) treating any of such Convertible
Securities which remain outstanding as being subject to exercise or conversion
on the basis of such exercise or conversion price as shall be in effect at such
time.
(e) If the Company shall take a record of the holders of
any of its Common Stock for the purpose of entitling them to receive a dividend
or other distribution, and shall thereafter and before the distribution to
stockholders thereof legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment in the Conversion Price then in
effect shall be required by reason of the taking of such record.
(f) Upon any increase or decrease in the Conversion Price,
then, and in each such case, the Company promptly shall deliver to each
registered holder of Series A Stock at least ten Business Days prior to
effecting any of the foregoing transactions a certificate, signed by the
President or a Vice-President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary of the Company, setting forth in
reasonable detail the event requiring the adjustment and the method by which
such adjustment was calculated and specifying the increased or decreased
Conversion Price then in effect following such adjustment.
(g) No fractional shares or scrip representing fractional
shares shall be issued upon the conversion of any shares of Series A Stock. If
more than one share of Series A Stock shall be surrendered for conversion at one
time by the same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of the
shares of Series A Stock so surrendered. If the conversion of any share or
shares of Series A Stock results in a fraction, an amount equal to such fraction
multiplied by the Current Market Price of the Common Stock on the Business Day
preceding the day of conversion shall be paid to such holder in cash by the
Company.
(h) In case of any capital reorganization or
reclassification or other change of outstanding shares of Common Stock (other
than a change in par value, or from par value to no par value, or from no par
value to par value), or in case of any consolidation or merger of the Company
with or into another Person (other than a consolidation or merger in which the
Company is the resulting or surviving Person and
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which does not result in any reclassification or change of outstanding Common
Stock), or in case of any sale or other disposition to another Person of all or
substantially all of the assets of the Company (any of the foregoing, a
"Transaction"), the Company, or such successor or purchasing Person, as the case
may be, shall execute and deliver to each holder of Series A Stock at least ten
Business Days prior to effecting any of the foregoing Transactions a certificate
that the holder of each share of Series A Stock then outstanding shall have the
right thereafter to convert such share of Series A Stock into the kind and
amount of shares of stock or other securities (of the Company or another issuer)
or property or cash receivable upon such Transaction by a holder of the number
of shares of Common Stock into which such share of Series A Stock could have
been converted immediately prior to such Transaction. Such certificate shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 7. If, in the case
of any such Transaction, the stock, other securities, cash or property
receivable thereupon by a holder of Common Stock includes shares of stock or
other securities of a Person other than the successor or purchasing Person and
other than the Company, which controls or is controlled by the successor or
purchasing Person or which, in connection with such Transaction, issues stock,
securities, other property or cash to holders of Common Stock, then such
certificate also shall be executed by such Person, and such Person shall, in
such certificate, specifically acknowledge the obligations of such successor or
purchasing Person and acknowledge its obligations to issue such stock,
securities, other property or cash to the holders of Series A Stock upon
conversion of the shares of Series A Stock as provided above. The provisions of
this Section 7(h) and any equivalent thereof in any such certificate similarly
shall apply to successive Transactions.
(i) In case at any time or from time to time:
(A) the Company shall declare a dividend (or any other
distribution) on its Common Stock;
(B) the Company shall authorize the granting to the
holders of its Common Stock of rights or warrants to subscribe for or purchase
any shares of stock of any class or of any other rights or warrants;
(C) there shall be any reclassification of the Common
Stock; or
(D) there shall be an Extraordinary Event;
then the Company shall mail to each holder of shares of Series A Stock at such
holder's address as it appears on the transfer books of the Company, as promptly
as possible but in any event at least ten days prior to the applicable date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution or rights or warrants or,
if a record is not to be taken, the date as of which
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the holders of Common Stock of record to be entitled to such dividend,
distribution or rights are to be determined, or (y) the date on which such
reclassification or Extraordinary Event is expected to become effective;
provided that in the case of any event to which Section 7(h) applies, the
Company shall give at least ten days' prior written notice as aforesaid. Such
notice also shall specify the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their Common Stock for
shares of stock or other securities or property or cash deliverable upon such
reclassification or Extraordinary Event.
(j) The Company shall at all times reserve and keep
available for issuance upon the conversion of the Series A Stock, such number of
its authorized but unissued shares of Common Stock as will from time to time be
sufficient to permit the conversion of all outstanding shares of Series A Stock,
and shall take all action required to increase the authorized number of shares
of Common Stock if at any time there shall be insufficient authorized but
unissued shares of Common Stock to permit such reservation or to permit the
conversion of all outstanding shares of Series A Stock.
(k) The issuance or delivery of certificates for Common
Stock upon the conversion of shares of Series A Stock shall be made without
charge to the converting holder of shares of Series A Stock for such
certificates or for any tax in respect of the issuance or delivery of such
certificates or the securities represented thereby, and such certificates shall
be issued or delivered in the respective names of, or in such names as may be
directed by, the holders of the shares of Series A Stock converted; provided,
however, that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
such certificate in a name other than that of the holder of the shares of Series
A Stock converted, and the Company shall not be required to issue or deliver
such certificate unless or until the Person or Persons requesting the issuance
or delivery thereof shall have paid to the Company the amount of such tax or
shall have established to the reasonable satisfaction of the Company that such
tax has been paid.
Section 8. Certain Remedies.
----------------
Any registered holder of Series A Stock shall be entitled to
an injunction or injunctions to prevent breaches of the provisions of this
Certificate of Amendment and to enforce specifically the terms and provisions of
this Certificate of Amendment in any court of the United States or any state
thereof having jurisdiction, this being in addition to any other remedy to which
such holder may be entitled at law or equity.
Section 9. Definitions.
-----------
13
For the purposes of this Certificate of Designations, Rights
and Preferences, the following terms shall have the meanings indicated:
"Affiliate" shall have the meaning ascribed to such term in
---------
Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
"Business Day" shall mean any day other than a Saturday,
------------
Sunday or other day on which commercial banks in the City of New York are
authorized or required by law or executive order to close.
"Common Stock" of the Company shall mean the Common Stock, no
------------
par value, and any other common stock of the Company issued from time to time.
"Conversion Price" shall have the meaning given it in Section
----------------
7 hereof.
"Current Market Price" per share shall mean, on any date
--------------------
specified herein for the determination thereof, (a) the average daily Market
Price of the Common Stock for those days during the period of 30 days, ending on
such date, on which the national securities exchanges were open for trading, and
(b) if the Common Stock is not then listed or admitted to trading on any
national securities exchange or quoted in the over-counter market, the Market
Price on such date.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
------------
as amended, and the rules and regulations of the Securities and Exchange
Commission thereunder.
"Extraordinary Event" means (i) the voluntary or involuntary
-------------------
liquidation, dissolution or winding up of the Company, (ii) the voluntary sale,
conveyance, exchange or transfer to another Person of all or substantially all
of the assets of the Company and its Subsidiaries or (iii) the merger or
consolidation of the Company with one or more other Persons.
"Fair Market Value" shall mean the amount which a willing
-----------------
buyer, under no compulsion to buy, would pay a willing seller, under no
compulsion to sell, in an arm's-length transaction.
"Initial Holder" shall mean Commercial Electronics Capital
--------------
Partnership, L.P. and Commercial Electronics, L.L.C. or any other Person to whom
shares of Series A Stock are issued pursuant to and in accordance with the terms
of the Securities Purchase Agreement.
"Issue Date" shall mean the first date on which shares of
----------
Series A Stock are issued.
14
"Junior Stock" shall mean any capital stock of the Company
------------
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Stock.
"Liquidation Preference" with respect to a share of Series A
----------------------
Stock shall mean $3.00.
"Market Price" shall mean, per share of Common Stock, on any
------------
date specified herein: (a) the closing price per share of the Common Stock on
such date published in The Wall Street Journal or, if no such closing price on
-----------------------
such date is published in The Wall Street Journal, the average of the closing
-----------------------
bid and asked prices on such date, as officially reported on the principal
national securities exchange on which the Common Stock is then listed or
admitted to trading; or (b) if the Common Stock is not then listed or admitted
to trading on any national securities exchange but is designated as a national
market system security by the NASD, the last trading price of the Common Stock
on such date; or (c) if there shall have been no trading on such date or if the
Common Stock is not so designated, the average of the reported closing bid and
asked prices of the Common Stock, on such date as shown by NASDAQ and reported
by any member firm of the New York Stock Exchange selected by the Company; or
(d) if none of (a), (b) or (c) is applicable, the Fair Market Value per share
determined in good faith by the Board of Directors of the Company based on an
opinion of a nationally recognized investment banking firm unaffiliated with
either the Company or the holders of the Series A Stock, chosen by the Company
(who shall bear the expense thereof) and acceptable to the holders of at least a
majority in interest of the Series A Stock.
"NASD" shall mean the National Association of Securities
----
Dealers, Inc.
"NASDAQ" shall mean the National Market System of the National
------
Association of Securities Dealers, Inc. Automated Quotations System.
"Parity Stock" shall mean any capital stock of the Company,
------------
including the Series A Stock, ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Stock.
"Person" shall mean any individual, firm, corporation,
------
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, government (or an agency or political subdivision thereof)
or other entity of any kind, and shall include any successor (by merger or
otherwise) of such entity.
"Securities Purchase Agreement" shall mean the Securities
-----------------------------
Purchase Agreement, dated as of January , 1999, by and between the Company,
Commercial
15
Electronics Capital Partnership, L.P. and Commercial Electronics, L.L.C., as the
same may be amended from time to time.
"Senior Stock" shall mean any capital stock of the Company
------------
ranking senior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Stock.
"Subsidiary" of any Person shall mean any corporation or other
----------
entity of which a majority of the voting power of the voting equity securities
or equity interest, or rights to profits, is owned, directly or indirectly, by
such Person.
EXHIBIT B
ESCROW AGREEMENT
----------------
ESCROW AGREEMENT, dated as of January 28, 1999, by and among
WILTEK, INC., a Connecticut corporation (the "Company"), JAY FITZPATRICK, BORIS
-------
FRENKIEL and F. SPENCER POOLEY (collectively, the "Selling Stockholders") and
--------------------
NICHOLS & LEVINE ASSET MANAGEMENT, INC. (the "Escrow Agent").
------------
WHEREAS, the Company has entered into a Securities Purchase
Agreement (the "Securities Purchase Agreement"), dated as of January 28, 1999,
-----------------------------
by and among the Company, Commercial Electronics Capital Partnership, L.P., a
Delaware limited partnership, and Commercial Electronics, L.L.C., a Delaware
corporation, (collectively, the "Purchasers"), pursuant to which the Purchasers
----------
have agreed to purchase certain securities of the Company from the Company;
WHEREAS, the Selling Stockholders have entered into a Stock
Purchase Agreement (the "Stock Purchase Agreement"), dated as of January 28,
------------------------
1999, by and among the Selling Stockholders and the Purchasers, pursuant to
which the Purchasers have agreed to purchase certain securities of the Company
from the Selling Stockholders;
WHEREAS, in connection with the Securities Purchase Agreement,
the Company has agreed to establish a fund to fulfill a portion of its
obligations under a Medical Benefit Letter, dated as of January 28, 1999 (the
"Medical Benefit Letter") pursuant to which the Company has agreed to provide
----------------------
medical insurance benefits for the Selling Stockholders and their respective
spouses as of the date hereof (each such Selling Stockholder and his spouse, a
"Beneficiary" and, collectively, the "Beneficiaries") substantially on the terms
-----------
and subject to the conditions of the Company's medical insurance plan as in
effect on the date hereof, and subject to the terms and conditions contained in
the Medical Benefit Letter and this Agreement (the "Benefits"); and
--------
WHEREAS, this Agreement sets forth the terms and conditions
upon which funds deposited by the Company in connection therewith will be held,
invested and disbursed by the Escrow Agent.
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
2
ARTICLE I.
ESCROW AGENT AND THE ESCROW FUND
--------------------------------
Section A. Escrow Agent. The Company hereby appoints NICHOLS &
------------
LEVINE ASSET MANAGEMENT, INC., as Escrow Agent hereunder for purposes of
receiving, investing (where appropriate) and disbursing the Escrow Fund (as
hereinafter defined).
Section B. Establishment of Escrow Fund and Deposit of Funds.
-------------------------------------------------
Simultaneously with the execution and delivery of this Agreement by the parties
hereto, the Company is depositing with the Escrow Agent the sum of $250,000 by
wire transfer of immediately available funds (the "Deposited Amount"). The
----------------
Deposited Amount as from time to time invested and reinvested as herein
provided, less any distributions pursuant to Article II, is herein referred to
as the "Escrow Fund."
-----------
Section C. Receipt of Deposited Amount. The Escrow Agent hereby
---------------------------
acknowledges receipt from the Company of the Deposited Amount and agrees to hold
the Deposited Amount and the Escrow Fund in accordance with the terms and
conditions set forth herein.
Section D. Investment of Escrow Fund.
-------------------------
(a) The Escrow Agent shall invest any or all of the Escrow Fund, and
any undistributed accretions thereto or income with respect thereto, in its
reasonable discretion in any of the following:
(i) obligations issued or guaranteed by the United States of America
or any agency or instrumentality thereof;
(ii) certificates of deposit or accounts with national banks or
corporations endowed with trust powers having capital and surplus in excess of
$100,000,000;
(iii) commercial paper at the time of investment rated A-1 by
Standard & Poor's Corporation or Prime-1 by Moody's Investor's Service, Inc.;
and
(iv) obligations issued by any state or municipality of the United
States.
(b) The Company shall be deemed an "income beneficiary" of the
Escrow Fund and, except as provided in the immediately following sentence and
3
Section 2.1, shall have the exclusive right to any income earned thereon. Any
income earned and any losses incurred on the Escrow Fund shall be applied to the
Fund Shares (defined in Section 1.5) in the proportions set forth on Schedule I
hereto under the caption "Percentage Allocation of Fund" (as such Fund Shares
may be adjusted from time to time to reflect distributions pursuant to Article
II). The Escrow Agent shall have no responsibility for any loss resulting from
any such investment, unless such loss is attributable to its bad faith, willful
misconduct or gross negligence.
Section E. Fund Shares. Solely for purposes of fulfilling the
-----------
Company's obligation to provide the Benefits, and until such time as an event
set forth in clause (x) or (y) of Section 2.2(a) occurs with respect to a
Beneficiary, such Beneficiary shall be entitled to the benefit of, in accordance
with the terms hereof, a portion of the Escrow Amount (each a "Fund Share" and,
collectively, the "Fund Shares"). A Fund Share shall initially be equal to the
portion of the Deposited Amount set forth opposite the name of each Beneficiary
on Schedule I hereto under the caption "Percentage Allocation of Fund" and shall
thereafter be increased by the proportional share of any income earned and
decreased by any payments made to or on behalf of such Beneficiary from such
Fund Share and by any losses incurred from time to time and all applied in
accordance with Section 1.4. Any funds released under Article II in respect of
Benefits provided to a Beneficiary shall be made solely from the Fund Share
attributable to such Beneficiary. Except as provided in Section 2.1(c), a
Beneficiary shall be entitled only to the benefit of his Fund Share, but not to
direct receipt of the monies in the Fund Share.
ARTICLE II.
RELEASE OF AMOUNTS FROM ESCROW FUND
-----------------------------------
Section A. Release of Funds in Connection With Payment of Medical
Insurance Premiums and Medical Claims.
(a) The parties acknowledge that the Company is currently
providing Benefits for the Beneficiaries through a third party health insurance
provider ("Third Party Coverage"). So long as the Company continues to maintain
--------------------
Third Party Coverage for one or more Beneficiaries, the Company shall submit to
the Escrow Agent (i) on a quarterly basis, a statement setting forth the payment
of premiums paid by the Company for such health insurance in connection with the
Benefits provided to the Beneficiaries pursuant to its obligations under the
Medical Benefit Letter (including amounts described in Section 2(i)(B) of the
Medical Benefits Letter) and (ii) from time to time, but in no event more often
than quarterly, a statement setting forth the payment of Benefits, if any,
provided by the Company to the Beneficiaries pursuant to its obligations under
the Medical Benefit Letter but not otherwise covered by such health
4
insurance. Each invoice or statement so submitted by the Company in accordance
with this Section 2.1(a) shall set forth the amounts paid by the Company in
connection with Benefits for each Beneficiary (including amounts described in
Section 2(i)(B) of the Medical Benefits Letter) (the "Beneficiary's
-------------
Premium"). Not later than five business days following receipt of such invoice
- -------
or statement, the Escrow Agent shall pay to the Company from the Fund Share of
that Beneficiary an amount equal to the Beneficiary's Premium for that
Beneficiary.
(b) In the event that, for any reason other than as set forth in
clauses (x) and (y) of Section 2.2(a) with respect to a Beneficiary, the Company
is no longer providing Benefits through Third Party Coverage, and there remain
funds in such Beneficiary's Fund Share, (i) the Company shall promptly notify
the Escrow Agent that it is no longer providing Benefits through Third Party
Coverage and (ii) the Company shall submit to the Escrow Agent from time to
time, but in no event more than quarterly, a statement setting forth the payment
of amounts paid by the Company in connection with the Benefits provided by the
Company to such Beneficiary pursuant to its obligations under the Medical
Benefit Letter. Each statement so submitted by the Company in accordance with
this Section 2.1(b) shall set forth the amounts paid by the Company in
connection with Benefits for each Beneficiary (the "Beneficiary's Coverage").
Not later than five business days following receipt of such statement, the
Escrow Agent shall pay to the Company from the Fund Share of that Beneficiary an
amount equal to the Beneficiary's Coverage for that Beneficiary.
(c) In the event that (i) the Company has been dissolved or
otherwise ceases to exist for any reason (and no successor entity has assumed
the Company's obligations under the Medical Benefit Letter) or (ii) the entry of
a final judgment by an arbitrator or a court that the Company has defaulted in
its payment obligations under the Medical Benefit Letter, and there remain funds
in a Beneficiary's Fund Share, such Beneficiary may submit directly to the
Escrow Agent any invoices for Benefits that, but for the dissolution or other
cessation of existence of the Company, or the default by the Company of its
obligations, would have been provided by the Company pursuant to the Medical
Benefit Letter (the amount of such invoice being referred to herein as a
"Benefit Claim"), and the Beneficiary shall be entitled, subject to the
-------------
provisions of this Agreement, to receive in cash, from the Fund Share
attributable to such Beneficiary then held by the Escrow Agent, an amount equal
to the lesser of (i) the full amount of the Benefit Claim or (ii) the remaining
balance of the Fund Share to which the Beneficiary submitting the Benefit Claim
is entitled.
(d) In no event shall the Escrow Agent make payments, or shall any
Beneficiary be entitled to receive payments, in excess of the amount remaining
at any time in such Beneficiary's Fund Share.
5
Section B. Release of Remaining Funds to the Company.
-----------------------------------------
(a) With respect to each Beneficiary's Fund Share, upon the
earlier to occur of the date on which (x) both individuals who are a Beneficiary
of such Fund Share reach the age of 65 or (y) both individuals who are a
Beneficiary of such Fund Share die, the Company may direct the Escrow Agent to
withdraw and pay to the Company all monies then held by the Escrow Agent in such
Fund Share. Upon receipt of instructions from the Company pursuant to this
Section 2.2(a) regarding the release of funds to the Company, any funds due to
be paid to the Company from the Escrow Fund shall be paid promptly by the Escrow
Agent to the Company.
(b) In the event that (i) any of the events set forth in
clause (x) or (y) of Section 2.2(a) occurs with respect to all Beneficiaries and
(ii) the Company is no longer in existence (and no successor entity has assumed
the Company's obligations under the Medical Benefit Letter), all monies
remaining in the Fund Shares shall be disbursed in accordance with applicable
law.
ARTICLE III.
THE ESCROW AGENT
----------------
Section A. Concerning the Escrow Agent.
---------------------------
(a) The duties of the Escrow Agent are only such as are
herein specifically provided, and the Escrow Agent shall not be liable for
anything it may do or refrain from doing in connection with its duties hereunder
except as a result of its gross negligence, willful misconduct or bad faith.
(b) The Escrow Agent shall be reimbursed by the Company for
its fees (more specifically set forth on Exhibit A hereto) and any out-of-pocket
expenses (including counsel fees) reasonably incurred by it in connection with
the performance of its duties and obligations under this Agreement.
(c) Each of the Company and the Beneficiaries hereby agree
to indemnify the Escrow Agent for, and to hold it harmless against, any loss,
liability or expense incurred without gross negligence, willful misconduct or
bad faith on its part, arising out of or in connection with the performance of
any of its powers or duties hereunder, including, without limitation, the costs
and expenses of defending itself against any claim or liability in connection
therewith.
6
(d) The Escrow Agent shall be entitled to rely upon and to act and
refrain from acting in reliance upon any written notice, request, consent,
certificate, order, affidavit, letter, telegram or other document furnished to
it hereunder and believed by it to be genuine and to have been signed or sent by
the proper party. The Escrow Agent may consult with counsel and shall not be
liable for anything it may do or refrain from doing in accordance with the
written opinion and instructions of counsel. Copies of all such opinions shall
be made available to the other parties hereto upon request. (e)ab Any amounts to
be paid by the Escrow Agent to the Beneficiary or the Company hereunder shall be
paid in cash, by wire transfer or by cashier's or certified check or by any
check drawn by the Escrow Agent.
(e) Any amounts to be paid by the Escrow Agent to the Beneficiary
or the Company hereunder shall be paid in cash, by wire transfer or by cashier's
or certified check or by any check drawn by the Escrow Agent.
(f) The Escrow Agent shall make payment to or for, or deliver
documents to, any party only if in its judgment such payment or delivery may be
made under the terms of this Agreement without its incurring any liability. If
conflicting demands not expressly provided for in this Agreement are made or
notices served upon the Escrow Agent with respect to its action or omission
under this Agreement, the parties hereto agree that the Escrow Agent shall have
the right to elect to do either or both of the following: (i) withhold and stop
all future actions or omissions on its part under this Agreement; or (ii) file a
suit in interpleader or for instructions or for a declaratory judgment for other
relief and obtain an order from the proper court requiring the parties to
litigate in such court their conflicting claims and demands. In the event any
such action is taken, the Escrow Agent shall be fully released and discharged
from all obligations to perform any duties or obligations imposed upon it by
this Agreement unless and until otherwise ordered by such court.
(g) In the event the Escrow Agent becomes involved in any litigation
or dispute by reason hereof, it is hereby authorized to deposit with the clerk
of a court of competent jurisdiction any and all funds or other property held by
it pursuant hereto and, thereupon, shall stand fully relieved and discharged of
any further duties hereunder. Also, by reason hereof, the Escrow Agent is hereby
authorized to interplead all interested parties in any court of competent
jurisdiction and to deposit with the clerk of such court any and all funds,
securities or other property held by it pursuant hereto and, thereupon, shall
stand fully relieved and discharged of any further duties hereunder.
Section B. Resignation; Removal. If at any time the Escrow Agent
--------------------
shall become incapable of acting or shall be adjudged a bankrupt or insolvent or
a receiver of the Escrow Agent or of its property shall be appointed or any
public officer shall take charge or control of the Escrow Agent or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Company and the Beneficiaries
7
shall appoint a successor Escrow Agent. The Escrow Agent may resign at any time
upon 45 days' written notice to the Company and the Beneficiaries. The
Beneficiaries and the Company may terminate the Escrow Agent as escrow agent
hereunder in their sole discretion, acting jointly, upon 45 days' written notice
from the Beneficiaries and the Company to the Escrow Agent prior to the
effective date of the termination. All amounts in the Escrow Fund held by a
resigning or terminated Escrow Agent hereunder shall be delivered to the
successor Escrow Agent on or prior to the effective date of such resignation or
termination, as the case may be, or if such successor has not yet been
appointed, to a court of competent jurisdiction pending appointment of a
successor
ARTICLE IV.
MISCELLANEOUS
-------------
Section A. Counterparts. This Agreement may be executed in any
------------
number of counterparts by the parties hereto in separate counterparts, each of
which shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.
Section B. Invalidity of Provisions. In case any one or more of the
------------------------
provisions contained in this Agreement should be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected, prejudiced or
disturbed thereby.
Section C. Captions. The captions in this Agreement are for
--------
conveyance only and do not define or limit the scope or intent of any provisions
or Sections of this Agreement.
Section D. Termination. Unless terminated earlier with the consent
-----------
of the parties hereto, this Agreement shall remain in full force and effect
until all monies in the Escrow Fund shall have been released in accordance with
the terms hereof; provided, however, that this Agreement may be terminated on
such earlier date, or may be extended until such later date, as may be
established by any non-appealable final order of a court of competent
jurisdiction directing the termination or extension of this Agreement.
Section E. Notices. Each notice, claim, certificate, request,
-------
demand and other communication hereunder shall be in writing and addressed as
follows:
If to the Company, to it at:
8
Wiltek, Inc.
542 Westport Avenue
Norwalk, Connecticut 06851
Attention: President
with a copy to the other parties hereto;
If to a Beneficiary, to him at the address set forth opposite
such Beneficiary's name on Schedule I hereto,
with a copy to the other parties hereto, and to:
The Jacobson Law Firm, LLC
96 Myrtle Avenue
P.O. Box 272
Westport, Connecticut 06881-0272;
If to the Escrow Agent, to it at:
Nichols & Levine Asset Management, Inc.
38 Post Road West
Westport, Connecticut 06880
with a copy to the other parties hereto;
or to such other addresses as the person to whom notice is to be sent may have
previously furnished to the other parties in writing in the manner set forth
above. Any such notice, claim or other communication shall be deemed
conclusively to have been given and received (i) on the first business day
following the day duly sent by telecopier, or timely received by a nationally
recognized overnight courier or United States Express Mail, with the cost of
transmission or delivery prepaid; (ii) on the fifth business day following the
day duly sent by certified or registered United States mail, postage prepaid and
return receipt requested; or (iii) when otherwise personally delivered to the
addressee.
Section F. Binding Agreement. All covenants and agreements
-----------------
contained in this Agreement by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the respective successors, assigns, heirs,
executors, administrators and legal representatives of the parties hereto
whether so expressed or not.
9
Section G. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Connecticut without regard
to choice of law or conflict of law provisions or rules.
Section H. Fiscal Year and Tax ID Number. For purposes of
-----------------------------
administration of the Fund, the fiscal year shall be the fiscal year of the
Company, which at the date hereof is October 31, and the tax ID number shall be
the tax ID number of the Company.
Section I. Miscellaneous. This Agreement and the Securities
-------------
Purchase Agreement contain the entire understanding of the parties with respect
to the subject matter hereof. No agreement shall be effective to change or
modify, supplement, amend or discharge in whole or in part this Agreement unless
such agreement is in writing, signed by the parties to this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement as of the day and year first above written.
WILTEK, INC.
By_____________________________
Title:
________________________________
Jay Fitzpatrick
________________________________
Boris Frenkiel
________________________________
F. Spencer Pooley
10
NICHOLS & LEVINE ASSET MANAGEMENT, INC.
By_____________________________
Title:
11
SCHEDULE I
- ------------------------------------------------------ ----------------------------------------------------
Beneficiaries Percentage Allocation of Fund
- ------------- -----------------------------
- ------------------------------------------------------ ----------------------------------------------------
Mr. & Mrs. Jay Fitzpatrick 50%
9 Mead Lane
Hilton Head, SC 29926
- ------------------------------------------------------ ----------------------------------------------------
Mr. & Mrs. Boris Frenkiel 24%
241 Catalpa Drive
Wilton, CT 06897
- ------------------------------------------------------ ----------------------------------------------------
Mr. & Mrs. F. Spencer Pooley 26%
60 Canterbury Court, #646
Orange Park, FL 32065
- ------------------------------------------------------ ----------------------------------------------------
12
EXHIBIT A
Nichols & Levine Asset Management, Inc., located at 38 Post
Road West, Westport, CT 06880, will provide services as escrow agent for a fee
of .5% of the escrowed funds, payable quarterly, to be deducted from the funds
on deposit as the escrowed account, together with other reasonable expenses
actually incurred and normal transaction charges.