Document:

Exhibit 10.62

 

CHANGE IN CONTROL EMPLOYMENT AND SEVERANCE

AGREEMENT

 

This Change in Control Employment and Severance Agreement (the “AGREEMENT”)

is entered into this 14th day of January 2003, between Paul McLean

(“Executive”) and Zamba Corporation, a Delaware corporation

(the “COMPANY”).  This Agreement is intended to provide

Executive with the compensation and benefits described herein upon the

occurrence of specific events following a Change in Control (as hereinafter

defined).

 

Certain capitalized terms used in this Agreement are defined in Article

VII.

 

The Company and Executive hereby agree as follows:

 

ARTICLE I

EMPLOYMENT BY THE COMPANY

 

1.1          Executive is currently employed as the Executive Vice President of

Delivery Services of the Company.

 

1.2          This Agreement shall

become effective upon the occurrence of a Change in Control.

 

1.3          The Company and Executive each agree and acknowledge that Executive is

employed by the Company as an “at will” employee and that either Executive or

the Company has the right at any time to terminate Executive’s employment with

the Company, with or without cause or advance notice, for any reason or for no

reason.  The Company and Executive wish

to set forth the compensation and benefits which Executive shall be entitled to

receive in the event that Executive’s employment with the Company terminates

under the circumstances described in Article II of this Agreement.

 

1.4          The duties and

obligations of the Company to Executive under this Agreement shall be in

consideration for Executive’s continued employment with the Company and

Executive’s execution of the general waiver and release described in Section

4.3.

 

ARTICLE II

TRIGGERING EVENTS

 

2.1          Involuntary

Termination of Employment During Term

 

(a)           If Executive’s

employment is involuntarily terminated by the Company without Cause during the

Term, such termination of employment will be a Triggering Event, and the

Company shall pay or provide Executive the compensation and benefits described

in Article III.

 

(b)           If Executive’s employment

is involuntarily terminated by the Company for Cause during the Term, such

termination of employment will not be a Triggering Event, and Executive

will not

be entitled to receive any compensation or benefits under the provisions of

this Agreement except as otherwise specifically set forth herein.

 

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2.2          Voluntary

Termination of Employment During Term.

 

(a)           Executive may

voluntarily terminate his employment with the Company at any time during the

Term.  If Executive voluntarily

terminates his employment for Good Reason during the Term, such termination of

employment will be a Triggering Event, and the Company shall pay or provide

Executive the compensation and benefits described in Article III.

 

(b)           If Executive

voluntarily terminates his employment for any reason other than Good Reason

during the Term, such termination of employment will not be a Triggering Event,

and Executive will not be entitled to receive any

compensation or benefits under the provisions of this Agreement except as

otherwise specifically set forth herein.

 

2.3          Death

or Disability During Term.  If Executive’s employment with the Company

terminates on account of death or disability during the Term, such termination

of employment will be a Triggering Event, and the Company shall pay or provide

Executive the compensation and benefits described in Article III.

 

2.4          Employment

Through Term.  If Executive’s employment continues through

the end of the Term, such continuation of employment will be a Triggering

Event, and the Company shall pay Executive the compensation and benefits

described in Article III.

 

ARTICLE III

COMPENSATION AND BENEFITS

 

3.1          Right

to Compensation and Benefits.  If a Triggering Event occurs during the

Term, Executive shall be entitled to receive the compensation and benefits

described in this Agreement subject to the restrictions and limitations set

forth in Article IV.  If a

Triggering Event does not occur during the Term, Executive shall not be

entitled to receive any compensation and benefits described in this Agreement,

except as otherwise specifically set forth herein.

 

3.2          Severance

Payment. 

Upon the occurrence of a Triggering Event or, if later, upon the

termination of Executive’s employment with the Company during the Term

following a Triggering Event, Executive shall receive a lump sum severance

payment equal to the amount of Executive’s Base Salary that would have been

paid with respect to the period beginning on the date of the Triggering Event

and ending with the last day of the Term. 

Such lump sum amount shall be paid no later than thirty (30) days

following the date of the Triggering Event or, if later, the date of

termination of Executive’s employment with the Company and shall be subject to

all applicable tax withholding.

 

3.3          Health

Insurance Coverage.  Upon the occurrence of a Triggering Event

or, if later, upon the termination of Executive’s employment with the Company

during the Term following a Triggering Event, to the extent permitted by the

Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) and by the

Company’s group health insurance policy, Executive and his covered dependents

will be eligible to continue their health insurance benefits at their own

expense. If Executive elects COBRA continuation coverage, the Company shall pay

Executive’s and covered dependents’ COBRA continuation premiums for six (6)

months following the date Executive’s coverage as an active employee under the

Company’s group health policy ceases, provided that the Company’s obligation to

make such payments shall terminate immediately if Executive becomes eligible

for other health insurance benefits at the expense of a new employer.  Executive agrees to notify the Company, in

writing, immediately upon acceptance of any employment which provides health

insurance benefits.  This Section 3.3

provides only for the Company’s payment of COBRA continuation premiums for the

period specified above.  This Section

3.3 is not intended to affect, nor does it affect, the rights of

 

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Executive, or Executive’s

covered dependents, under any applicable law with respect to health insurance

continuation coverage.

 

3.4          Stock

Option Acceleration.  Executive’s stock options under the

Company’s stock option plans which are outstanding as of the date of the

Triggering Event (the “Stock Options”) shall become fully vested and

exercisable upon the occurrence of a Triggering Event or upon the termination

of Executive’s employment during the Term which does not otherwise constitute a

Triggering Event, notwithstanding the then existing provisions of the relevant

Stock Option agreements, which provisions are expressly modified by this

Agreement.  The period of time during

which the Stock Options shall remain exercisable, and all other terms and

conditions of the Stock Options, shall be as specified in the relevant Stock

Option agreements.

 

3.5          Mitigation.  Except

as otherwise specifically provided herein, Executive shall not be required to

mitigate damages or the amount of any payment provided under this Agreement by

seeking other employment or otherwise, nor shall the amount of any payment

provided for under this Agreement be reduced by any compensation earned by

Executive as a result of employment by another employer or by retirement

benefits after the date of the Triggering Event, or otherwise.

 

ARTICLE IV

LIMITATIONS AND CONDITIONS ON BENEFITS;

AMENDMENT OF AGREEMENT

 

4.1          Other

Severance Benefits; Withholding of Taxes.  The benefits provided under

this Agreement are in lieu of any other benefit provided under any employment

contract or severance plan of the Company in effect at the time of a Triggering

Event.  The Company shall withhold

appropriate federal, state or local income and employment taxes from any

payments hereunder.

 

4.2          Obligations of Executive.  During the Term, Executive

agrees not to personally solicit any of the Company’s employees to become

employed elsewhere or provide the names of such employees to any other company

which Executive has reason to believe will solicit such employees.

 

4.3          Employee Agreement and Release Prior

to Receipt of Certain Benefits.  Prior to the receipt of any benefits under Section 3.2 above, Executive

shall execute an effective employee agreement and release in the form attached

hereto as Exhibit A.  Such employee

agreement and release shall specifically relate to all of Executive’s rights

and claims in existence at the time of its execution.  It is understood that Executive has twenty-one (21) days to

consider whether to execute such employee agreement and release and Executive

may revoke such employee agreement and release within seven (7) days after

execution of such employee agreement and release.  If Executive does not execute such employee agreement and release

within the twenty-one (21) day period, or if Executive revokes such employee

agreement and release within the seven (7) day period, no benefits shall be

payable under Section 3.2 above. 

Nothing in this Agreement shall limit the scope or time of applicability

of such employee agreement and release once it is executed and not timely

revoked.

 

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4.4          Certain

Additional Payments.  If it shall be determined, either by the

Company or by a final determination of the Internal Revenue Service, that any

payment or distribution by the Company to or for the benefit of Executive,

whether paid or payable or distributed or distributable pursuant to the terms

of this Agreement (including, without limitation, the value ascribed to option

acceleration pursuant to Section 3.4 above) or otherwise (the “Payments”),

would cause Executive to become subject to the excise tax imposed by Section

4999 of the Code (the “Excise Tax”), then the Company shall pay to Executive,

within the later of ninety (90) days of the date of the Triggering Event or

ninety (90) days of the date of determination referred to above, an additional

amount (the “Gross-Up Payment”) such that the net amount retained by Executive,

after deduction of any Excise Tax and any federal (and state and local) income

and employment taxes on the Gross-Up Payment, shall be equal to the

Payments.  For purposes of determining

the amount of the Gross-Up Payment, Executive shall be deemed to pay federal,

state and local income taxes at the highest nominal marginal rate of federal,

state and local income taxation in the calendar year in which the Gross-Up

Payment is made, net of the maximum reduction in federal income taxes which

could be obtained from deduction of such state and local taxes.  If the Excise Tax is subsequently

determined, whether by the Company or by a final determination of the Internal

Revenue Service, to be less than the amount taken into account to determine the

amount of the Gross-Up Payment, then Executive shall repay to the Company at

that time the portion of the Gross-Up Payment attributable to such reduction

(plus an amount equal to any tax reduction, whether of the Excise Tax, any

applicable income tax, or any applicable employment tax, which Executive may

enjoy as a result of such initial repayment). 

If the Excise Tax is subsequently determined, whether by the Company or

by a final determination of the Internal Revenue Service, to be more than the

amount taken into account to determine the amount of the Gross-Up Payment, then

the Company shall pay to Executive an additional amount, which shall be

determined using the same methods as were used for calculating the Gross-Up

Payment, with respect to such excess. 

For purposes of this Section 4.4, a determination of the Internal

Revenue Service as to the amount of Excise Tax for which Executive is liable

shall not be treated as final until the time that either (i) the Company agrees

to acquiesce in the determination of the Internal Revenue Service or (ii) the determination

of the Internal Revenue Service has been upheld in a court of competent

jurisdiction and the Company decides not to appeal such judicial decision or

such decision is not appealable.  If the

Company chooses to contest the determination of the Internal Revenue Service,

then all costs, attorneys’ fees, and other expenses shall be paid by the

Company.

 

4.5          Amendment or Termination.  This Agreement may be amended

or terminated only upon the mutual written consent of the Company and

Executive.

 

ARTICLE V

OTHER RIGHTS AND BENEFITS NOT AFFECTED

 

5.1          Nonexclusivity.  Nothing in the Agreement shall prevent or

limit Executive’s continuing or future participation in any benefit, bonus,

incentive or other plans, programs, policies or practices provided by the

Company and for which Executive may otherwise qualify, nor shall anything

herein limit or otherwise affect such rights as Executive may have under any

stock option or other agreements with the Company; provided, however, that in

accordance with Section 4.1 above, any benefits provided hereunder shall be in

lieu of any other severance payments to which Executive may otherwise be

entitled, including, without limitation, under any employment contract or

severance plan, and benefits under this Agreement shall be offset to the extent

necessary to give effect to this proviso. 

Except as otherwise expressly provided herein, amounts which are vested

benefits or which Executive is otherwise entitled to receive under any plan,

policy, practice or program of the Company at or subsequent to the effective

date of a Change in Control shall be payable in accordance with such plan,

policy, practice or program.

 

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5.2          Employment Status.  This Agreement does not

constitute a contract of employment, nor does it impose on Executive any

obligation to remain as an employee or on the Company any obligation

(i) to retain Executive as an employee, (ii) to change the status of

Executive as an at will employee, or (iii) to change the Company’s

policies regarding termination of employment.

 

ARTICLE VI
NON-ALIENATION OF BENEFITS

 

No benefit

hereunder shall be subject to anticipation, alienation, sale, transfer,

assignment, pledge, encumbrance or charge, and any attempt to do so shall be void.

 

ARTICLE VII

DEFINITIONS

 

For purposes

of the Agreement, the following terms shall have the meanings set forth below:

 

7.1          “Agreement” means this Change in Control Severance Agreement.

 

7.2          “Base

Salary” means Executive’s salary (excluding

bonus, any other incentive or other payments and stock option exercises) at the

rate paid by the Company in consideration for Executive’s service on the day

prior to the effective date of a Change in Control or at such higher rate as

may be in effect during the Term and which is includable in the gross income of

Executive for federal income tax purposes or which would have been includable

in gross income except for an election either under Section 125 or 402(e)(3) of

the Code or under the terms of a nonqualified deferred compensation arrangement

sponsored by the Company.

 

7.3          “Cause” means either of the following: (i) an intentional or grossly negligent

act by Executive causing material harm to the Company or (ii) Executive’s

conviction of, or plea of “guilty” or “no contest” to, a felony.

 

7.4          “Change in Control” means the consummation of any one of the following events:  (i) a sale of all or substantially all of

the assets of the Company; (ii) a merger or consolidation in which the Company

is not the surviving corporation (other than a transaction the principal

purpose of which is to change the state of the Company’s incorporation or a

transaction in which the voting securities of the Company are exchanged for

beneficial ownership of at least fifty percent (50%) of the voting securities

of the controlling acquiring corporation); (iii) a merger or consolidation in

which the Company is the surviving corporation and less than fifty percent

(50%) of the voting securities of the Company which are outstanding immediately

after the consummation of such transaction are beneficially owned, directly or

indirectly, by the persons who owned such voting securities immediately prior

to such transaction; (iv) any transaction or series of related transactions

after which any person (as such term is used in Section 13(d)(3) of the

Securities Exchange Act of 1934), other than any employee benefit plan (or

related trust) sponsored or maintained by the Company or any subsidiary of the

Company, becomes the beneficial owner of voting securities of the Company

representing fifty percent (50%) or more of the combined voting power of all of

the voting securities of the Company; or (v) the liquidation or dissolution of

the Company.

 

7.5                               “Code” means the Internal Revenue Code of 1986, as amended.

 

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7.6          “Company” means Zamba Corporation, a Delaware corporation, and any successor

thereto.

 

7.7          “Disability” means a disability which qualifies Executive as disabled for purposes

of receiving benefits under the Company’s long term disability plan applicable

to Executive.

 

7.8          “Good Reason” means that any one of the following actions has been taken by the

Company without Executive’s express written consent and such action has not

been promptly reversed within thirty (30) days following written notice from

Executive to the Company:  (i) a

material reduction in Executive’s job responsibilities given Executive’s prior

position and responsibilities with the Company, it being deemed that a position

with a different title but providing similar activities, given the size of the

combined company, shall not be considered a material reduction in Executive’s

job responsibilities; (ii) any reduction in Executive’s compensation and

aggregate benefits as in effect immediately prior to such reduction; (iii)

relocation of Executive’s workplace to a facility or location more than

twenty-five (25) miles from Executive’s workplace immediately prior to such

relocation; (iv) any purported termination of Executive’s employment which is

not effected by reason of death, disability, or Cause; (v) the failure or

refusal of a successor to the Company to assume the Company’s obligations under

this Agreement, as provided in Section 8.7 below; or (vi) a material breach by

the Company or any successor to the Company of any of the material provisions

of this Agreement

 

7.9          “Term” means the period beginning on the effective date of a Change in

Control and ending thirteen (13) months thereafter.

 

7.10        “Triggering Event” means an event described in Section 2.1(a), 2.2(a), 2.3 or 2.4

above.  No other event shall be a

Triggering Event for purposes of this Agreement.

 

ARTICLE VIII

GENERAL

PROVISIONS

 

8.1          Notices.  Any notices provided hereunder must be in

writing and such notices or any other written communication shall be deemed

effective upon the earlier of personal delivery (including personal delivery by

telex or facsimile) or the third day after mailing by first class mail, to the

Company at its primary office location and to Executive at his address as

listed in the Company’s payroll records. 

Any payments made by the Company to Executive under the terms of this

Agreement shall be delivered to Executive either in person or at his address as

listed in the Company’s payroll records.

 

8.2          Severability.  Whenever possible, each

provision of this Agreement will be interpreted in such manner as to be

effective and valid under applicable law, but if any provision of this

Agreement is held to be invalid, illegal or unenforceable in any respect under

any applicable law or rule in any jurisdiction, such invalidity, illegality or

unenforceability will not affect any other provision or any other jurisdiction,

but this Agreement will be reformed, construed and enforced in such

jurisdiction as if such invalid, illegal or unenforceable provisions had never

been contained herein.

 

8.3          Waiver.  If either party should waive

any breach of any provisions of this Agreement, he or it shall not thereby be

deemed to have waived any preceding or succeeding breach of the same or any

other provision of this Agreement.

 

8.4          Complete Agreement.  This Agreement, including

Exhibit A, constitutes the entire agreement between Executive and the Company

and it is the complete, final, and exclusive embodiment

 

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of their agreement with regard

to this subject matter.  It is entered

into without reliance on any promise or representation other than those

expressly contained herein.

 

8.5          Counterparts.  This Agreement may be executed

in separate counterparts, any one of which need not contain signatures of more

than one party, but all of which taken together will constitute one and the

same Agreement.

 

8.6          Headings.  The headings of the Articles

and Sections hereof are inserted for convenience only and shall neither be

deemed to constitute a part hereof nor to affect the meaning thereof.

 

8.7          Successors and Assigns.  This Agreement is intended to

bind and inure to the benefit of and be enforceable by Executive and the

Company, and their respective successors, assigns, heirs, executors and

administrators, except that Executive may not delegate any of his duties

hereunder and he may not assign any of his rights hereunder without the written

consent of the Company, which consent shall not be withheld unreasonably.

 

8.8          Attorneys’ Fees.  If either party hereto brings

any action to enforce his or its rights hereunder, the prevailing party in any

such action shall be entitled to recover his or its reasonable attorneys’ fees

and costs incurred in connection with such action.

 

8.9          Choice of Law.  All questions concerning the

construction, validity and interpretation of this Agreement will be governed by

the law of the State of Minnesota.

 

8.10        Construction of Plan.  In the event of a conflict

between the text of the Agreement and any summary, description or other

information regarding the Agreement, the text of the Agreement shall control.

 

IN

WITNESS WHEREOF,

the parties have executed this Agreement on the day and year written above.

 

	

  ZAMBA

  CORPORATION,

  a

  Delaware corporation

  	

  PAUL

  MCLEAN

  Executive

  
	

   

  	

   

  
	

   

  	

   

  
	

  By: 

  	

  /s/ Michael H. Carrel

  	

   

  	

  /s/ Paul McLean

  	

   

  
	

   

  	

   

  
	

  Name: Michael H. Carrel

  	

   

  
	

   

  	

   

  
	

  Title: CFO

  	

   

  
	

   

  	

   

  
	

  Exhibit A: Employee Agreement and Release

  	

   

  
					

 

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EXHIBIT A

 

EMPLOYEE AGREEMENT AND RELEASE

 

I

understand and agree completely to the terms set forth in the foregoing

agreement.

 

Except as otherwise set forth in this Agreement, I hereby release,

acquit and forever discharge the Company, its parents and subsidiaries, and

their officers, directors, agents, servants, employees, shareholders,

successors, assigns and affiliates, of and from any and all claims,

liabilities, demands, causes of action, costs, expenses, attorneys fees,

damages, indemnities and obligations of every kind and nature, in law, equity,

or otherwise, known and unknown, suspected and unsuspected, disclosed and

undisclosed (other than any claim for indemnification I may have as a result of

any third party action against me based on my employment with the Company),

arising out of or in any way related to agreements, events, acts or conduct at

any time prior to and including the date I sign this Agreement, including but

not limited to:  all such claims and

demands directly or indirectly arising out of or in any way connected with my

employment with the Company or the termination of that employment, including

but not limited to, claims of intentional and negligent infliction of emotional

distress, any and all tort claims for personal injury, claims or demands related

to salary, bonuses, commissions, stock, stock options, or any other ownership

interests in the Company, vacation pay, fringe benefits, expense

reimbursements, severance pay, or any other form of compensation; claims

pursuant to any federal, state or local law or cause of action including, but

not limited to, the federal Civil Rights Act of 1964, as amended; the federal

Age Discrimination in Employment Act of 1967, as amended (“ADEA”); the federal

Americans with Disabilities Act of 1990; state laws comparable to the foregoing

federal laws; tort law; contract law; wrongful discharge; discrimination;

fraud; defamation; emotional distress; and breach of the implied covenant of

good faith and fair dealing; provided, however, that nothing in this paragraph shall

be construed in any way to release the Company from its obligation to indemnify

me pursuant to the Company’s Indemnification Agreement.

 

I

acknowledge that I am knowingly and voluntarily waiving and releasing any

rights I may have under the ADEA.  I also

acknowledge that the consideration given for the waiver and release in the

preceding paragraph hereof is in addition to anything of value to which I was

already entitled.  I further acknowledge

that I have been advised by this writing, as required by the ADEA, that: (A) my

waiver and release do not apply to any rights or claims that may arise after

the date I sign this Agreement; (B) I have the right to consult with an

attorney prior to executing this Agreement; (C) I have twenty-one (21) days to

consider this Agreement (although I may choose to voluntarily execute this

Agreement earlier); (D) I have seven (7) days following the execution of this

Agreement by the parties to revoke the Agreement; and (E) this Agreement

shall not be effective until the date upon which the revocation period has

expired, which shall be the eighth day after this Agreement is executed by me,

provided that the Company has also executed this Agreement by that date

(“Effective Date”).

 

 

	

   

  	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  Date:

  	

   

  
							

 

9EXHIBIT 10.63

 

SETTLEMENT AGREEMENT AND RELEASE

 

This Settlement Agreement and Release (“Agreement”) is entered into as of January 27, 2003, by ZAMBA

Corporation d/b/a Zamba Solutions (“Zamba”) and Todd Fitzwater (“Fitzwater”).

 

F  A  C  T  S

 

A.            On or about September

18, 1998, Zamba and Fitzwater entered into a Subordinated Convertible

Promissory Note (the “Note”), which was amended by Amendment No. 1 dated

March 26, 2002 (the “Amendment”), which was incorporated into and became

part of the Note.

 

B.            Zamba

and Fitzwater have agreed to terminate the Note, and any amendments or

modifications thereto, on the terms and conditions set forth below.

 

Now, therefore, for good and valuable

consideration, the receipt and sufficiency of which is hereby acknowledged, the

parties hereto agree as follows:

 

1.             Termination

of Note.  By execution of this

Agreement, the parties wish to memorialize their agreement regarding the

termination of the Note.

 

2.             Termination

Payment.  In consideration for

Fitzwater’s agreement to terminate the Note, Zamba shall pay to Fitzwater the

sum of One Hundred Sixty-five Thousand Dollars ($165,000) (the “Termination Cash Payment”).  The Termination Cash Payment shall be

payable within three (3) business days of the latter of the Effective Date and Zamba’s

receipt of the entire Seven Hundred Fifty Thousand Dollar payment owed to it on

December 15, 2002, pursuant to its Loan Agreement dated November 4, 2002, with

Entrx Corporation (the “Entrx Loan”).  

The Termination Cash Payment shall be delivered to Fitzwater in the form

of a wire transfer in accordance with wire transfer instructions provided by

Fitzwater to Zamba on the Effective Date. 

Additionally, as further consideration of Fitzwater’s agreement to terminate

the Note, Zamba shall transfer to either Fitzwater or the Fitzwater Family 1999

Trust (“Family Trust”), in accordance with written instructions to be provided

by Fitzwater prior to the transfer, an aggregate of 16,667 shares of NextNet

Wireless, Inc. (“NextNet”) Series A Preferred Stock owned by Zamba (the

“Termination NextNet Transfer”), pursuant to the provisions described in

Section 3 of this Agreement.

 

3.             NextNet

Transfer Provisions.  Within three

(3) business days of the Effective Date, Zamba shall begin the Termination

NextNet Transfer at a deemed purchase price of $6.00 per share.  Promptly following the Effective Date, Zamba

shall deliver to NextNet a notice pursuant to the Right of First Offer set

forth in Section 1.1 of the Right of First Refusal Agreement dated as of

September 21, 1998 among Zamba, NextNet and the Series B purchasers identified

therein (the “Right of First Refusal Agreement”).

 

If NextNet elects to exercise its right of first refusal pursuant to

the Right of First Refusal Agreement, the amount paid by NextNet shall be paid

to Fitzwater within five business days of Zamba’s receipt of full payment from

NextNet for the shares subject to the Termination NextNet Transfer (the “Shares”),

and Fitzwater shall not receive any of the Shares, provided that Zamba shall

pay to Fitzwater the difference between $6.00 per share and the price per share

paid by NextNet, if any.  If NextNet

declines to exercise its right of first refusal, Zamba shall, within five

business days after Zamba’s receipt of NextNet’s notice to decline its right or

the expiration of the period of time in which NextNet has the right to exercise

first refusal, notify each investor in NextNet eligible under the Right of

First Refusal Agreement of its opportunity to exercise its pro rata right of

first refusal pursuant to the Right of First Refusal Agreement.

 

1

 

If any of the eligible investors in NextNet elects to exercise its pro

rata right of first refusal, Zamba will forward to Fitzwater the payments Zamba

receives from such investor(s) within five business days of Zamba’s receipt of

such payment(s), and the number of Shares that Fitzwater will receive pursuant

to this Agreement shall be reduced on a share-for-share basis , provided that

Zamba shall pay to Fitzwater the difference between $6.00 per share and the

price per share paid by such investor(s), if any.  Promptly after the expiration of the investor pro rata right of

first refusal period, Zamba shall cause NextNet to deliver to Fitzwater a

certificate registered in Fitzwater’s name representing the Shares transferred.

 

4.             Share Legends.  The Shares issued to Fitzwater shall contain

the following legends:

 

THESE SHARES HAVE NOT

BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES

LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF

EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR EXEMPTION FROM

REGISTRATION UNDER THE FOREGOING LAWS. 

ACCORDINGLY, THESE SHARES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED

OF WITHOUT (i) AN OPINION OF COUNSEL SATISFACTORY TO NEXTNET WIRELESS, INC.

THAT SUCH SALE, TRANSFER OR OTHER DISPOSITION MAY LAWFULLY BE MADE WITHOUT

REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES

LAWS OR (ii) SUCH REGISTRATION.

 

THE SHARES

EVIDENCED HEREBY ARE SUBJECT TO A VOTING AGREEMENT BY AND AMONG NEXTNET

WIRELESS, INC. AND CERTAIN STOCKHOLDERS OF THE COMPANY (A COPY OF WHICH MAY BE

OBTAINED FROM THE COMPANY), AND BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON

ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY

ALL THE PROVISIONS OF SAID VOTING AGREEMENT.

 

THE SALE,

PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS

CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN RIGHT OF FIRST

REFUSAL AGREEMENT BY AND BETWEEN THE STOCKHOLDER, NEXTNET WIRELESS, INC. AND

CERTAIN HOLDERS OF PREFERRED STOCK OF THE CORPORATION.  COPIES OF SUCH AGREEMENT MAY BE OBTAINED

UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION.

 

5.             Zamba Release.  Zamba,

for itself and for its affiliated corporations and partnerships, officers,

directors, shareholders, agents, representatives, employees, attorneys,

shareholders, successors in interest, personal representatives, heirs, assigns

and each of them, absolutely, fully and forever releases and discharges

Fitzwater and Fitzwater’s respective partners, agents, representatives,

employees, servants, attorneys, successors in interest, assigns and each of

them, whether past, present or future, of and from any and all claims, demands,

liabilities, obligations, losses, controversies, costs, expenses, attorneys’

fees and damages of every kind, nature, character or description whatsoever,

whether in law or in equity, and whether known or unknown, suspected or

unsuspected, arising out of, connected with, or in any way related to the

Note.  Zamba acknowledges and agrees

that the release set forth above applies to all claims relating to the Note

whether those claims are known or unknown, foreseen or unforeseen. 

 

6.             Fitzwater

Release.  Except for the obligations

of Zamba expressly set forth herein, and subject to the provisions of Section

11 of this Agreement, Fitzwater, for himself and for his partners, family

agents, representatives, employees, attorneys, shareholders, successors in

interest, personal representatives, heirs, assigns and each of them,

absolutely, fully and forever releases and discharges Zamba and its officers,

directors, shareholders, agents, representatives, employees, servants,

attorneys, successors in interest, assigns and each of them, whether past,

present or future, of and from any and all claims, demands, liabilities,

obligations, losses, controversies, costs, expenses, attorneys’ fees and

damages of every kind, nature, character or description whatsoever, whether in

law or in equity, and

 

2

 

whether known or unknown,

suspected or unsuspected, arising out of, connected with, or in any way related

to the Note.  Fitzwater acknowledges and

agrees that the release set forth above applies to all claims relating to the

Note whether those claims are known or unknown, foreseen or unforeseen.

 

7.             Representations

and Warranties of Fitzwater.  As a

material inducement for Zamba’s issuance and transfer of the Shares, Fitzwater

represents, warrants, covenants and acknowledges to Zamba that:

 

(a)           Fitzwater understands that the Shares

and their transfer to Fitzwater have not been registered under the Securities

Act of 1933, as amended (the “Securities Act”), or applicable state

securities laws.  Instead, Zamba is

transferring the Shares pursuant to exemptions from such laws and in doing so

is relying on, among other things, Fitzwater’s representations, warranties, covenants

and acknowledgements contained herein.

 

(b)           Fitzwater is an “accredited investor”

as such term is defined in Rule 501(a) of Regulation D under the Securities

Act, and as further represented in Section 8 of this Agreement.

 

(c)           Fitzwater has sufficient knowledge

and experience in financial and business matters that Fitzwater is capable of

evaluating the merits and risks of investing in the Shares.

 

(d)           Fitzwater has been provided with or

given access to such information concerning NextNet, including, but not limited

to, its business, financial condition and prospects (collectively, “NextNet’s

Business”), as Fitzwater has requested and/or deems necessary and has

utilized such information to Fitzwater’s satisfaction for the purpose of making

an investment in the Shares pursuant to the terms hereof and determining the

value of the Shares.  Fitzwater hereby

acknowledges that he has made his own independent investigation of NextNet’s

Business to his satisfaction and that it is not relying on any information

which may been provided by Zamba, including, but not limited to, Zamba’s

officers, directors, employees, agents and other representatives (each of whom,

a “Company Representative”), in connection with his acquisition of the

Shares or the determination of their value. 

Fitzwater hereby agrees to indemnify and hold harmless each Company

Representative in connection with any loss, claim or demand which Fitzwater now

has or in the future may have in connection with or related to his acquisition

of the Shares pursuant to the terms hereof except for claims by Fitzwater for

any breach by Zamba of its representations or warranties under Section 9 of

this Agreement.

 

(e)           Fitzwater understands that the

acquisition of the Shares is a highly speculative investment and involves a

high degree of risk.  Fitzwater

acknowledges that he may not ever be able to resell the Shares acquired

pursuant to the terms hereof, whether at the deemed price or otherwise.  Fitzwater believes that the investment in

the Shares is suitable based upon Fitzwater’s investment objectives and

financial needs and Fitzwater has adequate means of providing for current

financial needs and personal contingencies, has no need for liquidity of

investment with respect to the Shares and can afford a complete loss of such

investment.

 

(f)            Fitzwater is acquiring the Shares

for his own account, for investment purposes only, and without the intention of

reselling or redistributing the same.

 

(g)           Fitzwater is aware that, in the view

of the Securities and Exchange Commission, a acquisition of the Shares with an

intent to resell by reason of any foreseeable specific contingency or

anticipated change in market values, or any change in NextNet’s condition, or

in connection with a contemplated liquidation or settlement of any loan

obtained for the acquisition of the Shares and for which such shares were

pledged, would constitute an intent inconsistent with the foregoing

representation.

 

(h)           If, contrary to Fitzwater’s foregoing

intentions, he should later desire to dispose of or transfer any of the Shares

in any manner, he shall not do so without (i) first obtaining an opinion of

counsel satisfactory to NextNet that such proposed disposition or transfer may

lawfully be made without registration pursuant to the Securities Act and

applicable state securities laws or (ii) registering the resale

 

3

 

of such shares under the

Securities Act and applicable state securities laws.

 

(i)            Neither Zamba nor NextNet has any

obligation to register the Shares for resale under the Securities Act or any

applicable state securities laws, or to take any other action which would

facilitate the availability of federal or state registration exemptions in

connection with any resale of such shares. 

Accordingly, Fitzwater may be prohibited by law from selling or

otherwise transferring or disposing of the Shares and likely will have to bear

the economic risk of his investment in NextNet for an indefinite period.

 

(j)            Except as provided in this

Agreement, to the knowledge of Fitzwater, no other individual or entity needs

to consent to this Agreement or the transactions contemplated hereunder, and

Fitzwater has obtained all necessary authorizations to enter into this

Agreement and the transactions contemplated hereunder,

 

(k)           This Agreement is a legal, valid, and

binding obligation of Fitzwater enforceable in accordance with its terms.

 

(l)            There

is no investment banker, broker, finder or other intermediary which has been

retained by or is authorized to act on behalf of Fitzwater who might be

entitled to any fee or commission from Zamba or NextNet upon consummation of

the transactions contemplated by this Agreement.

 

(m)          Fitzwater agrees to be bound by the

transfer restrictions described in Section 3.6 of the Series A Preferred Stock

Purchase Agreement dated as of September 21, 1998 between Zamba and NextNet

(the “Zamba Acquisition Agreement”).

 

(n)           Fitzwater acknowledges that the

provisions of the Right of First Refusal Agreement shall continue to apply to

the Shares.

 

(o)           Fitzwater acknowledges that he has

already received a copy of the Amended and Restated Investors’ Rights Agreement

dated as of July 10, 2000 among the Company, NextNet and the investors and

founders identified therein (the “Investors’ Rights Agreement”).  Fitzwater understands that, pursuant to the

terms of the Investors’ Rights Agreement, the registration rights described in

Section 1 and the right of first offer described in Section 2.6 thereof have

not been assigned to Fitzwater by Zamba. 

Accordingly, Fitzwater is not entitled to any registration rights or

rights of first offer with respect to Fitzwater’s ownership of the Shares

acquired pursuant to the terms hereof.

 

(p)           Fitzwater acknowledges that the

Shares shall continue to be subject to the terms and conditions of the Zamba

Acquisition Agreement, the Investors’ Rights Agreement, and the Voting

Agreement dated September 21, 1998, among NextNet, the Company and certain

other investors (the “Voting Agreement”), except for the provisions of

those agreements that, by their nature, are not transferable or assignable to

Fitzwater.

 

(q)           Until such time as Zamba beneficially

holds fewer than 100,000 shares of NextNet Series A Preferred Stock, Fitzwater

agrees to vote or act with respect to any of its shares of NextNet Series A

Preferred Stock so as to elect the nominee of Zamba to be the representative of

the Series A shareholders on the NextNet Board of Directors.

 

(r)            All representations made and

obligations undertaken by Fitzwater in this Agreement regarding NextNet shares

shall also be binding upon Family Trust as if such representations were made

and obligations undertaken by Family Trust. 

Fitzwater has the full right and authority to validly enter into such

obligations on behalf of Family Trust.

 

8.             Representation

Regarding Accredited Investor Status.

 

(a)           Fitzwater is an

“accredited investor” as defined in Rule 501(a) of Regulation D of the

Securities Act, because Fitzwater meets at least one of the following criteria

(please check one):

 

4

 

o            Fitzwater

is a natural person whose individual net worth, or joint net worth with his or

her spouse, exceeds $1,000,000 at the time of Fitzwater’s acquisition; or

 

o            Fitzwater

is a natural person who had an individual income in excess of $200,000 in each

of the two most recent years or joint income with Fitzwater’s spouse in excess

of $300,000 in each of those years and who reasonably expects to reach the same

income level in the current year; or

 

o            Fitzwater

is either (i) a bank as defined in Section 3(a)(2) of the Securities Act, or

any savings and loan association or other institution as defined in Section

3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary

capacity, any broker or dealer registered pursuant to Section 15 of the

Securities Exchange Act of 1934, (ii) an insurance company as defined in

Section 2(13) of the Securities Act, (iii) an investment company registered

under the Investment Company Act of 1940 or a business development company as

defined in Section 2(a)(48) of such Act, (iv) a Small Business Investment

Company licensed by the U.S. Small Business Administration under Section 301(c)

or (d) of the Small Business Investment Act of 1958, or (v) an employee benefit

plan within the meaning of Title I of the Employee Retirement Income Security

Act of 1974, if the investment decision is made by a plan fiduciary, as defined

in Section 3(21) of such Act, which plan fiduciary is either a bank, savings

and loan association, insurance company or registered investment adviser, or if

the employee benefit plan has total assets in excess of $5,000,000 or, if a

self directed plan, with investment decisions made solely by persons who are

accredited investors; or

 

o            Fitzwater

is a private business development company as defined in Section 202(a)(22) of

the Investment Advisers Act of 1940; or

 

o            Fitzwater

is an organization described in Section 501(c)(3) of the Internal Revenue Code,

a corporation, Massachusetts or similar business trust, or partnership, not

formed for the specific purpose of acquiring the Shares, with total assets in

excess of $5,000,000; or

 

o            Fitzwater

is a director or executive officer of NextNet; or

 

o            Fitzwater

is a trust, with total assets in excess of $5,000,000, not formed for the

specific purpose of acquiring the Shares, whose acquisition is directed by a

sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D of the

Securities Act; or

 

o            Fitzwater

is any entity in which all of the equity owners are accredited investors.

 

(b)           Family Trust is an

“accredited investor” as defined in Rule 501(a) of Regulation D of the

Securities Act, because Family Trust meets at least one of the following

criteria (please check one):

 

ý            Family

Trust is a natural person whose individual net worth, or joint net worth with

his or her spouse, exceeds $1,000,000 at the time of Family Trust’s

acquisition; or

 

o            Family

Trust is a natural person who had an individual income in excess of $200,000 in

each of the two most recent years or joint income with Family Trust’s spouse in

excess of $300,000 in each of those years and who reasonably expects to reach

the same income level in the current year; or

 

o            Family

Trust is either (i) a bank as defined in Section 3(a)(2) of the Securities Act,

or any savings and loan association or other institution as defined in Section

3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary

capacity, any broker or dealer registered pursuant to Section 15 of the

Securities Exchange Act of 1934, (ii) an insurance company as defined in

Section 2(13) of the Securities Act, (iii) an investment company registered

under the Investment

 

5

 

Company Act of 1940 or a business development company as defined in

Section 2(a)(48) of such Act, (iv) a Small Business Investment Company licensed

by the U.S. Small Business Administration under Section 301(c) or (d) of the

Small Business Investment Act of 1958, or (v) an employee benefit plan within

the meaning of Title I of the Employee Retirement Income Security Act of 1974,

if the investment decision is made by a plan fiduciary, as defined in Section

3(21) of such Act, which plan fiduciary is either a bank, savings and loan

association, insurance company or registered investment adviser, or if the

employee benefit plan has total assets in excess of $5,000,000 or, if a self

directed plan, with investment decisions made solely by persons who are

accredited investors; or

 

o            Family

Trust is a private business development company as defined in Section

202(a)(22) of the Investment Advisers Act of 1940; or

 

o            Family

Trust is an organization described in Section 501(c)(3) of the Internal Revenue

Code, a corporation, Massachusetts or similar business trust, or partnership,

not formed for the specific purpose of acquiring the Shares, with total assets

in excess of $5,000,000; or

 

o            Family

Trust is a director or executive officer of NextNet; or

 

o            Family

Trust is a trust, with total assets in excess of $5,000,000, not formed for the

specific purpose of acquiring the Shares, whose acquisition is directed by a

sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D of the

Securities Act; or

 

o            Family

Trust is any entity in which all of the equity owners are accredited investors.

 

9.             Representations and Warranties

of Zamba.  As a material inducement

for Fitzwater’s and Family Trust’s acquisition of the Shares to be acquired

pursuant to the terms hereof, Zamba represents, warrants, covenants and

acknowledges to Fitzwater and Family Trust that:

 

(a)           Zamba is a corporation duly

organized, validly existing and in good standing under the laws of the State of

Delaware and has the requisite corporate power and authority to own its

properties and to carry on its business as now being conducted and presently

proposed to be conducted and is duly authorized to enter into this Agreement

and consummate the transactions contemplated herein.

 

(b)           The Shares being transferred to

Fitzwater or Family Trust pursuant to the terms hereof will be transferred to

Fitzwater or Family Trust free and clear of any liens, encumbrances or other

restrictions, other than restrictions on transfer that are contained in the

Zamba Acquisition Agreement, the Right of First Refusal Agreement, the

Investors Rights Agreement, the Voting Agreement, all of which as they may be

amended from time to time, or are otherwise set forth herein or imposed by

applicable securities laws, provided that Zamba will comply with all of such

restrictions so that the Shares will be validly transferred to Fitzwater or

Family Trust.

 

10.           Merger, Consolidation or Other Change

in Control of Zamba or NextNet.

 

(a)           If prior to the delivery of the

Shares Zamba shall at any time consolidate with or merge into to another

corporation (where Zamba is not the continuing corporation after such merger,

consolidation, sale of all or substantially all of its assets or other

change-in-control), or Zamba shall sell, transfer or lease all or substantially

all of its assets, then, in any such case, Fitzwater or Family Trust thereupon

(and thereafter) shall continue to be entitled to require Zamba to be bound by

the terms of this Agreement and shall be entitled to receive the number of

Shares determined in accordance with Section 3 above.

 

(b)           If prior to the

delivery of the Shares NextNet shall at any time consolidate with or merge into

another corporation (where NextNet is not the continuing corporation after such

merger, consolidation or other change-in-control), or NextNet shall sell,

transfer or lease all or substantially all of its assets,

 

6

 

then, in any such case,

Fitzwater or Family Trust thereupon (and thereafter) shall be entitled to

receive the number of Shares (or the proceeds resulting from the sale of such

shares in connection with such merger, consolidation, or other

change-in-control) determined in accordance with Section 3 above.

 

11.           Effective

Date.  This Agreement shall be

effective upon execution by all parties (the “Effective Date”).  Notwithstanding the foregoing, if within 91

days of the execution of this Agreement, Zamba becomes a debtor under the

Bankruptcy Code or makes any assignment for the benefit of its creditors and

Fitzwater  is required to return the

Termination Cash Payment to Zamba or its successor or assignee, then the

release set forth in Section 6 of this Agreement shall become void and the Note

shall not have been terminated but will remain in full force and effect as if

this Agreement had not been entered into by the parties.  The purpose of the foregoing is to allow

Fitzwater to seek all potential remedies and damages from Zamba in the event

Zamba becomes a debtor in a bankruptcy case (either voluntarily or

involuntarily) or makes an assignment for the benefit of its creditors and the

consideration for this Agreement fails because the Termination Cash Payment is

required to be returned by Fitzwater. 

In the absence of either such event within the 91-day period or the

return of the Termination Cash Payment, however, the release set forth in

Section 6 of this Agreement shall remain in full force and effect and the Note

shall remain terminated.

 

12.           Voluntary

Agreement.  Both Zamba and Fitzwater

enter into this Agreement voluntarily, after having had the opportunity to

review it and consult with advisors, including legal counsel, of their

choice.  This Agreement sets forth the

entire agreement between the parties regarding the subject matter herein,

superseding all other agreements, understandings, memoranda, or proposals, either

written or oral, regarding the same subject matter.  This Agreement may only be

modified or amended by a writing signed by all parties.

 

13.           Governing

Law.  This Agreement shall be

governed in all respects, including validity, interpretation and effect, by the

laws of the State of Minnesota, except for its choice of laws principles.  Any action regarding or relating to this

Agreement shall be venued in a state or federal court located in Hennepin in

the State of Minnesota.

 

14.           No Assignment of Claims. The

parties hereto represent and warrant that they have not transferred or

otherwise assigned, either by contract or operation of law, any of the claims

released under this Agreement.

 

15.           No

Reliance on Representations.  Each

party to this Agreement represents and acknowledges that in executing this

Agreement that party does not rely and has not relied upon any representation

or statement made by the other party or by any of such other party’s agents,

attorneys, or representatives with regard to the subject matter, basis or

effect of this Agreement or otherwise, other than those representations and

statements specifically stated in this written Agreement.

 

16.           Counterparts

and Facsimiles. This Agreement may be

executed in one or more counterparts, which shall be deemed effective upon full

execution of this Agreement by all parties. 

Each counterpart shall be deemed an original, but all of which together

shall constitute one and the same instrument and agreement.  In addition, a copy of this Agreement

executed by a party hereto and telecopied to the other party shall be deemed to

constitute delivery of an originally executed copy of this Agreement to the

other party.  A facsimile signature

shall be enforceable to the same extent as an original signature.

 

7

 

17.           Authority.  The parties executing this

Agreement represent that they each have authority to enter into this Agreement,

and that this Agreement is binding on such party and enforceable in accordance

with its terms.  The persons executing

this Agreement on behalf of the parties to this Agreement represent and warrant

that they individually have authority to enter into this Agreement on behalf of

such parties.

 

IN WITNESS WHEREOF, the parties hereby execute this Agreement.

 

	

  FITZWATER

  	

   

  	

  ZAMBA

  
	

   

  	

   

  	

   

  
	

  Todd Fitzwater

  	

   

  	

  ZAMBA Corporation

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/ Todd Fitzwater

  	

   

  	

  By:

  	

  /s/ Michael H. Carrel

  
	

   

  	

   

  	

   

  
	

  Name:

  	

  Todd Fitzwater

  	

   

  	

  Name:

  	

  Michael H. Carrel

  
	

   

  	

   

  	

   

  
	

  Title:

  	

   

  	

   

  	

  Title:

  	

  CFO

  
	

   

  	

   

  	

   

  
	

  Date:

  	

  1/23/03

  	

   

  	

  Date:

  	

  1/27/03

  
										

 

8

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