-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OJtK/H4/dQ2dI7nelI2foP2aGj8yLsk03R1w0M9KPWr5uKuLBxJhYgVC8UHRwTAO IthyqczNP8EYZqSWA3lxuA== 0000893816-04-000009.txt : 20040401 0000893816-04-000009.hdr.sgml : 20040401 20040401164803 ACCESSION NUMBER: 0000893816-04-000009 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20040401 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040401 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INFOCROSSING INC CENTRAL INDEX KEY: 0000893816 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 133252333 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-20824 FILM NUMBER: 04710142 BUSINESS ADDRESS: STREET 1: 2 CHRISTIE HEIGHTS STREET CITY: LEONIA STATE: NJ ZIP: 07605 BUSINESS PHONE: 2018404700 MAIL ADDRESS: STREET 1: 2 CHRISTIE HEIGHTS STREET CITY: LEONIA STATE: NJ ZIP: 07605 FORMER COMPANY: FORMER CONFORMED NAME: COMPUTER OUTSOURCING SERVICES INC DATE OF NAME CHANGE: 19930328 8-K 1 k8apipe2.txt ANNOUNCING THE CLOSING OF PIPE 2 U. S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): March 26, 2004 -------------- INFOCROSSING, INC. (Exact name of issuer as specified in its charter) Delaware 0-20824 13-3252333 ------------------------------ ----------- ------------------- (State or other jurisdiction of Commission (IRS Employer incorporation or organization) File Number Identification No.) 2 Christie Heights Street Leonia, New Jersey 07605 (Address of principal executive offices) (201) 840-4700 (Issuer's telephone number) N/A (Former name or former address, if changed since last report.) ITEM 5. OTHER EVENTS This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These statements include the projections set forth below and, in some cases, can otherwise be identified by terminology such as "may," "will," "should," "expect," "anticipate," "intend," "plan," "believe," "estimate," "potential," or "continue," the negative of these terms or other comparable terminology. These statements involve a number of risks and uncertainties including, but not limited to: incomplete or preliminary information; changes in government regulations and policies; continued acceptance of the Company's products and services in the marketplace; competitive factors; new products; technological changes; the Company's dependence on third party suppliers; intellectual property rights; difficulties with the integration of SMS; and other risks. For any of these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, as amended. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report and are based on information currently and reasonably known. The Company undertakes no obligation to release any revisions to or update these forward-looking statements to reflect events or circumstances that occur after the date of this Report or to reflect the occurrence or effect of anticipated or unanticipated events. The Company announced today that it completed a previously announced $30.6 million private placement of 2,917,000 shares of its common stock. The Company intends to use the net proceeds of the private placement to finance a portion of the cash component of the purchase price for the publicly announced pending acquisition of ITO Acquisition Corporation, a California corporation doing business as Systems Management Specialists, or "SMS". The private placement was made only to accredited investors in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). The shares of common stock issued in the private placement have not been registered under the Securities Act, or any state securities laws and, unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. This announcement does not constitute an offer to sell, or the solicitation of an offer to buy, any securities, nor shall there be any sale of the securities in any jurisdiction in which such offering would be unlawful. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial statements of business acquired: None (b) Pro forma financial information: None (c) Exhibits 4.1 Securities Purchase Agreement, dated as of March 24, 2004, by and among the Company and certain purchasers of common stock. 4.2 Registration Rights Agreement, dated as of March 24, 2004, by and among the Company and certain purchasers of common stock. 99 Press Release, dated April 1, 2004, regarding the completion of a previously announced private placement of common stock. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. INFOCROSSING, INC. Date: April 1, 2004 /s/ WILLIAM J. McHALE ---------------------------------------- William J. McHale Senior Vice President of Finance EX-4 2 ex4-1pp2.txt EXHIBIT 4.1 - SECURITIES PURCHASE AGREEMENT SECURITIES PURCHASE AGREEMENT This Securities Purchase Agreement (this "AGREEMENT") is dated as of March 24, 2004, among Infocrossing, Inc., a Delaware corporation (the "COMPANY"), and the purchasers identified on the signature pages hereto (each, a "PURCHASER" and collectively, the "PURCHASERS"). WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act (as defined below) and Rule 506 promulgated thereunder, the Company desires to issue and sell to the Purchasers, and the Purchasers, severally and not jointly, desire to purchase from the Company certain securities of the Company, as more fully described in this Agreement. NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Purchasers agree as follows: ARTICLE I. DEFINITIONS 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have the meanings indicated in this Section 1.1: "ACTION" means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or threatened against or affecting the Company in a writing delivered to the Company or such Subsidiary (as the case may be), any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency, regulatory authority (federal, state, county, local or foreign), stock market, stock exchange or trading facility. "AFFILIATE" means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144. "BUSINESS DAY" means any day except Saturday, Sunday and any day which shall be a federal legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close. "CLOSING" means the closing of the purchase and sale of the Shares pursuant to Article II. "CLOSING DATE" means the second Business Day after the satisfaction or waiver of the conditions to Closing set forth in Sections 5.1 and 5.2. "COMMISSION" means the Securities and Exchange Commission. "COMMON STOCK" means the common stock of the Company, $0.01 par value per share, and any securities into which such common stock may hereafter be reclassified. "COMPANY COUNSEL" means Latham & Watkins LLP. "DISCLOSURE MATERIALS" has the meaning set forth in Section 3.1(h). "EFFECTIVE DATE" means the date that the Registration Statement required by Section 2(a) of the Registration Rights Agreement is first declared effective by the Commission. "ESCROW AGENT" means the Escrow Agent under the Escrow Agreement. "ESCROW AGREEMENT" means the Escrow Agreement, dated as of the date of this Agreement, among the Company, Roth Capital Partners, LLC and the Escrow Agent. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "INVESTMENT AMOUNT" means, with respect to each Purchaser, the investment amount indicated below such Purchaser's name on the signature page of this Agreement. "LIEN" means any lien, charge, encumbrance, security interest or right of first refusal. "PER SHARE PURCHASE PRICE" equals $10.50. "PERSON" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. "PROCEEDING" means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. "REGISTRATION STATEMENT" means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the Purchasers of the Shares. "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement, dated as of the date of this Agreement, among the Company and the Purchasers, in the form of Exhibit B. "RULE 144" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "SEC REPORTS" has the meaning set forth in Section 3.1(h). "SECURITIES ACT" means the Securities Act of 1933, as amended. "SHARES" means the shares of Common Stock issued or issuable to the Purchasers at the Closing. "SUBSIDIARY" means any "significant subsidiary" as defined in Rule 1-02(w) of the Regulation S-X promulgated by the Commission under the Exchange Act. "TRADING DAY" means (i) a day on which the Common Stock is traded on a Trading Market, or (ii) if the Common Stock is not listed on a Trading Market, a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board or the National Quotation Bureau Incorporated, or (iii) if the Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day. "TRADING MARKET" means whichever of the New York Stock Exchange, the American Stock Exchange, the NASDAQ National Market or the NASDAQ SmallCap Market, on which the Common Stock is listed or quoted for trading on the date in question. "TRANSACTION DOCUMENTS" means this Agreement, the Registration Rights Agreement, the Escrow Agreement and any other documents or agreements executed in connection with the transactions contemplated hereunder. ARTICLE II. PURCHASE AND SALE 2.1 Purchase of Shares; Closing. Subject to the terms and conditions set forth in this Agreement, at the Closing the Company shall issue and sell to each Purchaser, and each Purchaser shall, severally and not jointly, purchase from the Company, the Shares representing such Purchaser's Investment Amount. The Closing shall take place on the Closing Date at the offices of Bryan Cave LLP, 1290 Avenue of the Americas, New York, NY 10104 or at such other location as the parties may agree. 2.2 Closing Deliveries. (a) At the Closing, the Company shall deliver or cause to be delivered to each Purchaser the following (collectively, the "COMPANY DELIVERABLES"): (i) a certificate evidencing a number of Shares equal to such Purchaser's Investment Amount divided by the Per Share Purchase Price, registered in the name of such Purchaser, or such nominee name as designated by Purchaser; (ii) the legal opinion of Company Counsel, in agreed form, addressed to the Purchasers; and (iii) the Registration Rights Agreement and the Escrow Agreement, each duly executed by the Company. (b) At the Closing, each Purchaser shall deliver or cause to be delivered the following: (i) such Purchaser's Investment Amount, which shall have been deposited in accordance with Section 4.11 and which will be distributed in accordance with the Escrow Agreement; and (ii) the Registration Rights Agreement, duly executed by such Purchaser. ARTICLE III. REPRESENTATIONS AND WARRANTIES 3.1 Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to each Purchaser: (a) Subsidiaries. The Company has no direct or indirect Subsidiaries other than those listed in Schedule 3.1(a). Except as disclosed in Schedule 3.1(a), the Company owns, directly or indirectly, all of the capital stock of each Subsidiary free and clear of any and all Liens, and all the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights. (b) Organization and Qualification. Each of the Company and each Subsidiary is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and each Subsidiary is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not, individually or in the aggregate, have or reasonably be expected to result in (i) an adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material and adverse effect on the results of operations, assets, prospects, business or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse impairment to the Company's ability to perform on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a "MATERIAL ADVERSE EFFECT"). (c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company in connection therewith. Each Transaction Document has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application and as any rights to indemnity or contribution thereunder may be limited by public policy considerations. (d) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated thereby do not and will not (i) conflict with or violate any provision of the Company's or any Subsidiary's certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. (e) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than (i) the filing with the Commission of one or more Registration Statements in accordance with the requirements Registration Rights Agreement or the filing of a Form D with the Commission, (ii) any filings required by state securities laws, (iii) the filings required in accordance with Section 4.5, and (iv) those that have been made or obtained prior to or as of the date of this Agreement. (f) Issuance of the Shares. The Shares have been duly authorized and, when issued and paid for in accordance with this Agreement, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens. (g) Capitalization. The number of shares and type of all authorized, issued and outstanding capital stock of the Company, and all shares of Common Stock reserved for issuance under the Company's various option and incentive plans, is set forth in Schedule 3.1(g). Except as set forth in Schedule 3.1(g), no securities of the Company are entitled to preemptive or similar rights, and no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Shares and except as disclosed in Schedule 3.1(g), there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock. Except as set forth in Schedule 3.1(g), the issue and sale of the Shares will not, immediately or with the passage of time, obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities. (h) SEC Reports; Financial Statements. The Company has filed all reports required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof (the foregoing materials being collectively referred to herein as the "SEC REPORTS" and, together with the Schedules to this Agreement, the "DISCLOSURE MATERIALS") on a timely basis or has timely filed a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved ("GAAP"), except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, in each case in accordance with GAAP, subject, in the case of unaudited statements, to normal, nonrecurring, year-end audit adjustments. (i) Press Releases. The press releases disseminated by the Company during the one (1) year preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. (j) Material Changes. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in the SEC Reports, (i) there has been no event, occurrence or development that has had or that would have or reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company's financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has not adopted material changes in accounting principles or changed its auditors, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information. (k) Litigation. There is no Action which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Shares or (ii) would, if there were an unfavorable decision, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act. (l) Labor Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company which would have or reasonably be expected to result in a Material Adverse Effect. (m) Compliance. Neither the Company nor any Subsidiary (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment, labor matters and gaming matters, except in each case as would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. The Company is in compliance with the applicable requirements of the Sarbanes-Oxley Act of 2002 and the rules and regulations thereunder promulgated by the Commission, except where such noncompliance would not have or reasonably be expected to result in a Material Adverse Effect and except that the Company does not currently have a financial expert on its audit committee. (n) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect ("MATERIAL PERMITS"), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit. (o) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them that is material to their respective businesses and good and marketable title in all personal property owned by them that is material to their respective businesses, in each case free and clear of all Liens, except for Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries or Liens pursuant to the Term Loan Agreement, dated October 21, 2003, among the Company, the Lenders named therein and Infocrossing Agent, Inc., as Agent. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases of which the Company and the Subsidiaries are in compliance, except as would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. (p) Patents and Trademarks. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, licenses and other similar rights that are necessary or material for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect (collectively, the "INTELLECTUAL PROPERTY RIGHTS"). Neither the Company nor any Subsidiary has received a written notice that the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any Person. Except as set forth in the SEC Reports, to the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. (q) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary on market terms. (r) Transactions With Affiliates and Employees. There are no transactions between the Company or any Subsidiary on the one hand and any officer or director of the Company on the other and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), in each case, that are required to be described in the SEC Reports pursuant to Item 404 of Regulation S-K and are not so described in accordance therewith. (s) Internal Accounting Controls. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management's general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (t) Solvency. Based on the financial condition of the Company as of the Closing Date (and assuming that the Closing shall have occurred), (i) the Company's fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Company's existing debts and other liabilities (including known contingent liabilities) as they mature; (ii) the Company's assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof; and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). (u) Certain Fees. Except as described in Schedule 3.1(u), no brokerage or finder's fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement. The Purchasers shall have no obligation with respect to any fees or with respect to any claims (other than such fees or commissions owed by a Purchaser pursuant to written agreements executed by such Purchaser which fees or commissions shall be the sole responsibility of such Purchaser) made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by this Agreement. (v) Certain Registration Matters. Assuming the accuracy of the Purchasers' representations and warranties set forth in Section 3.2(b)-(i), no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Purchasers under the Transaction Documents. The Company is eligible to register the resale of its Common Stock for resale by the Purchasers under Form S-3 promulgated under the Securities Act. Except as described in Schedule 3.1(v), the Company has not granted or agreed to grant to any Person any rights (including "piggy-back" registration rights) to have any securities of the Company registered with the Commission or any other governmental authority that have not been satisfied. (w) Listing and Maintenance Requirements. Except as specified in the SEC Reports or that have been cured, the Company has not, in the two years preceding the date hereof, received notice from any Trading Market to the effect that the Company is not in compliance with the listing or maintenance requirements thereof. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be (other than with respect to minimum price requirements), in compliance with the current listing and maintenance requirements for continued listing of the Common Stock on the NASDAQ Stock Market. The issuance and sale of the Shares under the Transaction Documents does not contravene the rules and regulations of the Trading Market on which the Common Stock is currently listed or quoted, and no approval of the shareholders of the Company thereunder is required for the Company to issue and deliver to the Purchasers the Shares in accordance with the Transaction Documents. (x) Investment Company. The Company is not, and is not an Affiliate of, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (y) No Additional Agreements. The Company does not have any agreement or understanding with any Purchaser with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents. (z) No Ownership in SMS. Neither the Company nor, to the Company's knowledge, any of its officers or directors own any equity interest in ITO Acquisition Corp, a data center outsourcing company doing business as Systems Management Specialists ("SMS") other than pursuant to the Company's acquisition of all of the outstanding stock of SMS. (aa) Disclosure. The Company confirms that neither it nor any Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information that the Company believes constitutes material, non-public information except insofar as the existence and terms of the proposed transactions hereunder may constitute such information. The Company understands and confirms that the Purchasers will rely on the foregoing representations and covenants in effecting transactions in securities of the Company. All disclosure provided to the Purchasers regarding the Company, its business and the transactions contemplated hereby, furnished by or on behalf of the Company (including the Company's representations and warranties set forth in this Agreement) are true and correct and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. (bb) Acquisition of SMS. Upon receipt of a certificate from Roth Capital Partners, LLC in a form satisfactory to the Company certifying that Roth Capital Partners, LLC has obtained at least $27.5 million of gross subscriptions to purchase Common Stock and assuming the receipt of such financing, the Company will have sufficient funds to finance the cash component of the purchase price for the outstanding capital stock of SMS. In addition, as of the date hereof and assuming receipt of such financing as contemplated by such certificate, to the Company's knowledge, there would not be expected to be a failure of any material condition which would prevent the consummation of the acquisition of SMS by the Company. 3.2 Representations and Warranties of the Purchasers. Each Purchaser hereby, for itself and for no other Purchaser, represents and warrants to the Company as follows: (a) Organization; Authority. Such Purchaser is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents to which it is a party and otherwise to carry out its obligations thereunder. The execution, delivery and performance by such Purchaser of the transactions contemplated by this Agreement has been duly authorized by all necessary corporate or, if such Purchaser is not a corporation, such partnership, limited liability company or other applicable like action, on the part of such Purchaser. Each of this Agreement and the Registration Rights Agreement has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application and as any rights to indemnity or contribution thereunder may be limited by public policy considerations. Such Purchaser is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with its execution, delivery and performance of the Transaction Documents other than those that have been made or obtained prior to the date of the Agreement. (b) Investment Intent. Such Purchaser understands that the Shares are "restricted securities" (as defined in Rule 144 under the Securities Act) and have not been registered under the Securities Act or any applicable state securities law and such Purchaser is acquiring the Shares as principal for its own account for investment purposes only and not for the account of any other Person or with a view to any resale or distribution thereof or any part thereof, without prejudice, however, to such Purchaser's right at all times to sell or otherwise dispose of all or any part of such Shares in compliance with applicable federal and state securities laws. Subject to the immediately preceding sentence, nothing contained herein shall be deemed a representation or warranty by such Purchaser to hold the Shares for any period of time. Such Purchaser is acquiring the Shares hereunder in the ordinary course of its business. Such Purchaser does not have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Shares. (c) Purchaser Status. Such Purchaser is an "accredited investor" as defined in Rule 501(a) under the Securities Act. Such Purchaser is not a registered broker-dealer under Section 15 of the Exchange Act. (d) General Solicitation. Such Purchaser is not purchasing the Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement. (e) Access to Information. Such Purchaser acknowledges that it has reviewed the Disclosure Materials and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and the Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf of such Purchaser or its representatives or counsel shall modify, amend or affect such Purchaser's right to rely on the truth, accuracy and completeness of the Disclosure Materials and the Company's representations and warranties contained in the Transaction Documents. (f) International Actions. Such Purchaser acknowledges, represents and agrees that no action has been or will be taken in any jurisdiction outside the United States by the Company that would permit an offering of the Shares, or possession or distribution of offering materials in connection with the issue of the Shares, in any jurisdiction outside the United States. If such Purchaser is located outside the United States, it has or will take all actions necessary for the sale of the Shares to comply with all applicable laws and regulations in each foreign jurisdiction in which it purchases, offers, sells or delivers Shares or has in its possession or distributes any offering material, in all cases at its own expense. (g) Experience of such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. Such Purchaser has carefully considered the potential risks relating to the Company and a purchase of the Shares, and fully understands that the Shares are speculative investments which involve a high degree of risk of loss of such Purchaser's entire investment. Such Purchaser is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment. (h) Limited Ownership. The purchase by such Purchaser of the Shares issuable to it at the Closing will not result in such Purchaser (individually or together with other Persons with whom such Purchaser has identified, or will have identified, itself as part of a "group" in a public filing made with the Commission involving the Company's securities), acquiring, or obtaining the right to acquire, in excess of 14.999% of the Common Stock or the voting power of the Company on a post transaction basis that assumes that the Closing shall have occurred. Such Purchaser will not, alone or together with others, make a public filing with the Commission to disclose that it has (or that it together with such other Persons have) acquired, or obtained the right to acquire, as a result of the Closing (when added to any other securities of the Company that it or they then own or have the right to acquire), in excess of 14.999% of the Common Stock or the voting power of the Company on a post transaction basis that assumes that the Closing shall have occurred. Such Purchaser acknowledges and agrees that the Company has not approved the investment by such Purchaser, nor the Purchaser as an "interested stockholder", in either case for purposes of Section 203 of the Delaware General Corporate Law, with the result that the restrictions on "business combinations" set forth therein are applicable to such Purchaser. (i) Information. Such Purchaser represents that the information contained in this Section 3.2 is accurate and may be relied upon by the Company, and such Purchaser will notify the Company immediately of any material change in any of such information prior to the Closing. (j) Not an Officer or Director of the Company. Such Purchaser represents that it is not an officer or director of the Company or any of its Subsidiaries. (k) No Agreements to Purchase Shares. Such Purchaser has not entered into, on or prior to the date hereof, any contract, agreement, arrangement or understanding with the Company to purchase, directly or indirectly, any Shares. The Company acknowledges and agrees that each Purchaser does not make or has not made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Section 3.2. ARTICLE IV. OTHER AGREEMENTS OF THE PARTIES 4.1 (a) Shares may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of the Shares other than pursuant to an effective registration statement, to the Company or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably satisfactory to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Shares under the Securities Act. (b) Certificates evidencing the Shares will contain the following legend, so long as is required by this Section 4.1(b) or Section 4.1(c): THESE SHARES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR SECURITIES REGULATORS OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE, NOR MAY ANY INTEREST THEREIN BE, OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY, SUBJECT TO CERTAIN EXCEPTIONS, A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, IN FORM AND SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SHARES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SHARES IN ACCORDANCE WITH APPLICABLE LAWS. The Company acknowledges and agrees that a Purchaser may from time to time make a bona fide pledge, and/or grant of a security interest in some or all of the Shares pursuant to a bona fide margin agreement in connection with a bona fide margin account and, if required under the terms of such agreement or account, such Purchaser may deliver pledged or secured Shares to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval or consent of the Company and no legal opinion of legal counsel to the pledgee, secured party or pledgor shall be required in connection with the pledge, but such legal opinion may be required in connection with a subsequent transfer following default by the Purchaser transferee of the pledge. No notice shall be required of such pledge. At the appropriate Purchaser's expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Shares may reasonably request in connection with a pledge or transfer of the Shares including the preparation and filing of any required amended registration statement or prospectus supplement under Rule 424(b)(3) of the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders thereunder. (c) Certificates evidencing the Shares shall not contain any legend (including the legend set forth in Section 4.1(b)): (i) following any sale of such Shares pursuant to an effective registration statement under the Securities Act, or (ii) following any sale of such Shares pursuant to and in compliance with Rule 144 and upon receipt by the Company of customary representation letters from selling Purchasers and their brokers, or (iii) following receipt by the Company of customary representation letters from the selling Purchasers evidencing such Purchaser's eligibility to make resales under Rule 144(k). The Company shall promptly cause its counsel to issue any legal opinion or instruction required by the Company's transfer agent to effect the de-legending contemplated in this section. The Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section except as it may reasonably determine are necessary or appropriate to comply or to ensure compliance with those applicable laws that are enacted or modified after the Closing such as to require such notation or instructions. 4.2 Furnishing of Information. As long as any Purchaser owns the Shares, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. Upon the request of any such Person, the Company shall deliver to such Person a written certification of a duly authorized officer as to whether it has complied with the preceding sentence. As long as any Purchaser owns Shares, if the Company is not required to file reports pursuant to such laws, it will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information as is required for the Purchasers to sell the Shares under Rule 144. The Company further covenants that it will take such further action as any holder of Shares may reasonably request, all to the extent required from time to time to enable such Person to sell such Shares without registration under the Securities Act within the limitation of the exemptions provided by Rule 144. 4.3 Integration. The Company shall not, and shall use its best efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Shares in a manner that would require the registration under the Securities Act of the sale of the Shares to the Purchasers, or that would be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any Trading Market, and the Company represents that it has not engaged in such sales, offers or solicitations during the six months immediately preceding the date hereof. 4.4 Subsequent Registrations. Other than pursuant to the Registration Statement, prior to the Effective Date, the Company may not file any registration statement (other than on Form S-8) with the Commission with respect to any securities of the Company. 4.5 Securities Laws Disclosure; Publicity. On the date that this Agreement is executed by the parties, the Company will issue a press release and file a Current Report on Form 8-K to disclose the execution of this Agreement and the material terms of the transactions contemplated hereby. On the Closing Date, the Company will issue a press and file a Current Report on Form 8-K (which will include the Transaction Documents as exhibits) to disclose the Closing. In addition, the Company will make such other filings and notices in the manner and time required by the Commission and the Trading Market on which the Common Stock is listed. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any press release or any filing with the Commission (other than the Registration Statement and any exhibits to filings made in respect of this transaction in accordance with periodic filing requirements under the Exchange Act and Form D filings with the Commission) or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure. 4.6 Limitation on Issuance of Future Priced Securities. During the six months following the Closing Date, the Company shall not issue any "Future Priced Securities" as such term is described by NASD IM-4350-1, other than issuances of warrants to acquire Common Stock that contain customary anti-dilution protection (which the parties agree shall not include adjustments tied to other issuances of Company securities). 4.7 Indemnification of Purchasers. In addition to the indemnity provided in the Registration Rights Agreement, the Company will indemnify and hold the Purchasers and their directors, trustees, officers, shareholders, partners, members, employees and agents (each, a "PURCHASER PARTY") harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys' fees and costs of investigation (collectively, "LOSSES") that any such Purchaser Party may suffer or incur as a result of or relating to (a) any misrepresentation, breach or inaccuracy of any representation, warranty, covenant or agreement made by the Company in any Transaction Document or (b) Section 16(b) of the Exchange Act solely as a result of being deemed to be part of a group or having acquired beneficial ownership of Shares beneficially owned by one or more of the other Purchasers, in either case in respect of this clause (b), solely as a consequence of entering into this Agreement as determined in a final nonappealable judgment of a court of competent jurisdiction. 4.8 Non-Public Information. The Company covenants and agrees that neither it nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and confirms that each Purchaser shall be relying on the foregoing representations in effecting transactions in securities of the Company. 4.9 Use of Proceeds. The Company intends to use the net proceeds from the sale of the Shares hereunder to finance a portion of its acquisition of all of the outstanding stock of SMS and in the event such acquisition does not close, the Company intends to use the net proceeds of this offering for other acquisitions and general working capital purposes. 4.10 Listing of Common Stock. From the date hereof through the Effectiveness Period (as such term is defined in the Registration Rights Agreement) the Company agrees, (i) if the Company applies to have the Common Stock traded on any other Trading Market, it will include in such application the Shares, and will take such other action as is necessary or desirable in the reasonable opinion of the Purchasers to cause the Shares to be listed on such other Trading Market as promptly as possible and (ii) it will take all action reasonably necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply in all material respects with the Company's reporting, filing and other obligations under the bylaws or rules of the Trading Market. 4.11 Delivery of Investment Amount. Promptly following its execution of this Agreement, each Purchaser shall deliver to the escrow account specified on Annex 1 to this Agreement, for deposit and distribution in accordance with the terms of the Escrow Agreement, such Purchaser's Investment Amount, in United States dollars and in immediately available funds. ARTICLE V. CONDITIONS PRECEDENT TO CLOSING 5.1 Conditions Precedent to Obligations of the Purchasers. Each Purchaser's obligation to purchase the Shares at the Closing is subject to the satisfaction or waiver by such Purchaser of the following conditions: (a) Representations and Warranties. The representations and warranties of the Company set forth in this Agreement shall be true and correct in all material respects (except for those qualified as to materiality, which shall be true and correct) as of the date of this Agreement and as of the Closing Date (except to the extent that such representation or warranty speaks of an earlier date, in which case such representation or warranty shall be true and correct in all material respects (or if qualified by materiality, which shall be true and correct) as of such date) as though made on and as of the Closing Date. (b) Performance of Obligations. The Company shall have performed in all material respects all agreements and covenants required to be performed by it under this Agreement prior to the Closing Date. (c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction or by the NASDAQ National Market which prohibits the consummation of any of the transactions contemplated by the Transaction Documents. (d) No Material Adverse Effect. Between the execution of this Agreement and the Closing, no event or series of events (other than stock price fluctuations) shall have occurred which reasonably would be expected to have or result in a Material Adverse Effect. (e) Company Deliverables. The Company shall have delivered all of the Company Deliverables for distribution at Closing. (f) Minimum Subscriptions. The aggregate of all Purchasers' Investment Amounts delivered to the Escrow Agent or the Company in accordance with Section 4.11 and the Escrow Agreement shall not be less than $27.5 million. (g) Nasdaq Listing. The Nasdaq Stock Market shall have approved the Company's application for the listing of the Shares and shall not have objected to the transactions contemplated by this Agreement. (h) Closing Date. The Closing shall have occurred by April 5, 2004. 5.2 Conditions Precedent to Obligations of the Company. The Company's obligation to issue and sell the Shares to each Purchaser at the Closing is subject to the satisfaction, or waiver by the Company, of the following conditions: (a) Representations and Warranties. The representations and warranties of such Purchaser set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date (except to the extent that such representation or warranty speaks of an earlier date, in which case such representation or warranty shall be true and correct in all material respects as of such date) as though made on the Closing Date. (b) Performance of Obligations. Such Purchaser shall have performed in all material respects all agreements and covenants required to be performed by it under this Agreement prior to the Closing Date. (c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction or by the NASDAQ National Market which prohibits the consummation of any of the transactions contemplated by the Transaction Documents. (d) Minimum Subscriptions. The aggregate of all Purchasers' Investment Amounts delivered to the Escrow Agent or the Company in accordance with Section 4.11 and the Escrow Agreement shall not be less than $27.5 million. (e) Nasdaq Listing. The Nasdaq Stock Market shall have approved the Company's application for the listing of the Shares and shall not have objected to the transactions contemplated by this Agreement. (f) Closing Date. The Closing shall have occurred by April 5, 2004. ARTICLE VI. MISCELLANEOUS 6.1 Fees and Expenses. At the Closing, the Company shall pay to Bryan Cave LLP, upon presentation of an invoice, $25,000 in connection with the preparation of the Transaction Documents, it being understood that Bryan Cave LLP has only rendered legal advice to Roth Capital Partners LLC, and not to the Company or any Purchaser in connection with the transactions contemplated hereby, and that each of the Company and each Purchaser has relied for such matters on the advice of its own respective counsel. Except as specified in the immediately preceding sentence and as specified in the Registration Rights Agreement, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of the Transaction Documents. The Company shall pay all stamp and other taxes and duties levied in connection with the sale of the Shares. 6.2 Entire Agreement. The Transaction Documents, together with the Exhibits, Annexes and Schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. 6.3 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as follows: If to the Company: Infocrossing, Inc. 2 Christie Heights Street Leonia, NJ 07605 Attn: Chief Executive Officer Facsimile No.: (201) 840-7126 With a copy to: Latham & Watkins LLP 885 Third Avenue, Suite 1000 New York, NY 10022-4802 Attn: Robert A. Zuccaro, Esq. Facsimile No.: (212) 751-4864 If to a Purchaser: To the address set forth under such Purchaser's name on the signature pages hereof; or such other address as may be designated in writing hereafter, in the same manner, by such Person. 6.4 Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment, by the Company and the holders of two-thirds of the Shares then outstanding or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right. 6.5 Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement or any of the Transaction Documents. 6.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchasers. Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Shares in other than a registered resale or a resale pursuant to Rule 144, provided such transfer is in compliance with Section 4.1 and the transferee undertakes in writing to the Company to be bound, with respect to the transferred Shares, by the provisions hereof that apply to the Purchasers. 6.7 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.7. 6.8 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan (the "NEW YORK COURTS"). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of the any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of a Transaction Document, then the prevailing party in such Proceeding shall be reimbursed by the other party for its attorney's fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding. 6.9 Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Shares for a period of two years from the Closing. The agreements and covenants contained herein shall survive the Closing in accordance with their respective terms. 6.10 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof. 6.11 Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement. 6.12 Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights. 6.13 Replacement of Shares. If any certificate or instrument evidencing any Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Shares. If a replacement certificate or instrument evidencing any Shares is requested due to a mutilation thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement. 6.14 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate. 6.15 Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred. 6.16 Independent Nature of Purchasers' Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under any Transaction Document. The decision of each Purchaser to purchase Shares pursuant to the Transaction Documents has been made by such Purchaser independently of any other Purchaser. Nothing contained herein or in any Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Document. Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment in the Shares or enforcing its rights under the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. 6.17 Limitation of Liability. Notwithstanding anything herein to the contrary, the Company acknowledges and agrees that the liability of any Purchaser arising directly or indirectly, under any Transaction Document, of any and every nature whatsoever, shall be satisfied solely out of the assets of such Purchaser, and that no trustee, officer, other investment vehicle affiliated with such Purchaser or any investor, shareholder or holder of shares of beneficial interest of such a Purchaser shall be personally liable for any liabilities of such Purchaser. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGES FOLLOW] IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. INFOCROSSING, INC. /S/ ZACH LONSTEIN -------------------------------------- Name: Zach Lonstein Title: Chairnam and Chief Executive Officer [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGES FOR PURCHASERS FOLLOW] IN WITNESS WHEREOF, the parties have executed this Securities Purchase Agreement as of the date first written above. Trustman in c/o STI Classic Small Cap Growth Fund By:/S/ Mark D. Garfinkel ---------------------------------------- Name: Mark D. Garfinkel Title: Vice President & Fund Manager Investment Amount: $1,281,000 Address for Notice: Trusco Capital Management 50 Hurt Plaza Suite 1400 Atlanta, GA 30303 Facsimile No.: Attn: Trustman in c/o Arthur Vining Davis Foundation By:/S/ Mark D. Garfinkel ---------------------------------------- Name: Mark D. Garfinkel Title: Vice President & Fund Manager Investment Amount: $24,150 Address for Notice: Trusco Capital Management 50 Hurt Plaza Suite 1400 Atlanta, GA 30303 Facsimile No.: Attn: Trustman in c/i TUA Troyal Brooks By:/S/ Mark D. Garfinkel ---------------------------------------- Name: Mark D. Garfinkel Title: Vice President & Fund Manager Investment Amount: $5,250 Address for Notice: Trusco Capital Management 50 Hurt Plaza Suite 1400 Atlanta, GA 30303 Facsimile No.: Attn: Trustman in c/o TUA Sandra Brooks By:/S/ Mark D. Garfinkel ---------------------------------------- Name: Mark D. Garfinkel Title: Vice President & Fund Manager Investment Amount: $2,100 Address for Notice: Trusco Capital Management 50 Hurt Plaza Suite 1400 Atlanta, GA 30303 Facsimile No.: Attn: SF Capital Partners Ltd. By:/S/ Brian Stark ---------------------------------------- Name: Brian Stark Title: Authorized Signatory Investment Amount: $1,018,500 Address for Notice: 3600 3 Lake Drive St. Francis, WI 53235 Facsimile No.: 414-294-7700 Attn: Brian H. Davidson JLF Partners I, L.P. By:/S/ Eric Lieberman ---------------------------------------- Name: Eric Lieberman Title: CFO Investment Amount: $2,677,500 Address for Notice: 2775 Via de la Valle Del Mar, CA 92014 Facsimile No.: 858-259-3449 Attn: Jeff Feinberg JLF Partners II, L.P. By:/S/ Eric Lieberman ---------------------------------------- Name: Eric Lieberman Title: CFO Investment Amount: $210,000 Address for Notice: 2775 Via de la Valle Del Mar, CA 92014 Facsimile No.: 858-259-3449 Attn: Jeff Feinberg JLF Offshore Fund, Ltd By:/S/ Eric Lieberman ---------------------------------------- Name: Eric Lieberman Title: CFO Investment Amount: $4,620,000 Address for Notice: 2775 Via de la Valle Del Mar, CA 92014 Facsimile No.: 858-259-3449 Attn: Jeff Feinberg LBI Group By:/S/ Fred Steinberg ---------------------------------------- Name: Fred Steinberg Title: Vice President Investment Amount: $4,935,000 Address for Notice: c/o Lehman Brothers, Inc 399 Park Ave. 9th Flr New York, NY 10022 Facsimile No.: 646-758-1630 Attn: William Yelsits Janus Investment Fund, On behalf of its series Janus Venture Fund By:/S/ William Bales ---------------------------------------- Name: William Bales Title: Portfolio Manager Investment Amount: $4,200,000 Address for Notice: 151 Detroit Street Denver CO 80206 Facsimile No.: 303-394-7714 Attn: Heidi Walter V.P. and Assistant General Counsel Leaf Investment Partners LP By:/S/ Seymour Goldblatt ---------------------------------------- Name: Seymour Goldblatt Title: Managing Principal of S Squared Capital LLC which is the General Partner of Leaf Investment Partners LP Investment Amount: $2,770,950 Address for Notice: S Squared Technology Corp. Suite 4200 515 Madison Ave. New York, NY 10022-5474 Facsimile No.: 212-838-3873 Attn: Mr. Seymour L Goldblatt Leaf Offshore Investment Fund Ltd By:/S/ Seymour Goldblatt ---------------------------------------- Name: Seymour Goldblatt Title: Managing Principal of S Squared Capital LLC which is the General Partner of Leaf Offshore Investment Fund Ltd Investment Amount: $746,550 Address for Notice: S Squared Technology Corp. Suite 4200 515 Madison Ave. New York, NY 10022-5474 Facsimile No.: 212-838-3873 Attn: Mr. Seymour L Goldblatt Bear Stearns Sec. Corp, Cust J Steven Emeraon IRA ROII By:/S/ J Steven Emerson ---------------------------------------- Name: J Steven Emerson Title: Self Ben self directed IRA Investment Amount: $1,732,500 Address for Notice: Bear Stearns Sec. Corp Cust J Steven Emerson IRA ROII 1999 Avenue of the States #2530 Los Angeles CA 90067 Facsimile No.: 310-201-3910 Attn: Rita Swann Bear Stearns Sec. Corp, Cust J Steven Emeraon ROTH IRA By:/S/ J Steven Emerson ---------------------------------------- Name: J Steven Emerson Title: Self Ben self directed IRA Investment Amount: $1,312,500 Address for Notice: Bear Stearns Sec. Corp Cust J Steven Emerson IRA ROII 1999 Avenue of the States #2530 Los Angeles CA 90067 Facsimile No.: 310-201-3910 Attn: Rita Swann Baron Small Cap Fund, A series of Baron Asset Fund Investment Amount: $2,530,500 and Baron iOpportunity Fund, A series of Baron Asset Fund Investment Amount: $514,500 By:/S/ Linda S. Martinson ---------------------------------------- Name: Linda S. Martinson Title: V.P. and General Counsel Address for Notice: 767 Fifth Avenue 49th Floor New York, NY 10153 Facsimile No.: 212-821-9001 Attn: Linda S. Martinson, Esq. Crestview Capital Master, LLC By:/S/ Robert Hoyt ---------------------------------------- Name: Robert Hoyt Title: Managing Director Investment Amount: $682,500 Address for Notice: 95 Revere Drive Ste A Northbrook, IL 60062 Facsimile No.: 847-559-5807 Attn: Robert Hoyt Topaz Partners By:/S/ Jeremy Garber ---------------------------------------- Name: Jeremy Garber Title: Chief Operating Officer Investment Amount: $525,000 Address for Notice: c/o Jemmco Capital Corp 900 Third Ave New York, NY 10022 Facsimile No.: 212-644-1175 Attn: Jeremy Garber Corsair Capital Partners, LP By:/S/ Jay Petschek ---------------------------------------- Name: Jay Petschek Title: Managing Member Investment Amount: $315,000 Address for Notice: 350 Madison Avenue 9th Floor New York, NY 10017 Facsimile No.: 212-389-8259 Attn: Tommy Hess Corsair Capital Investors, Ltd. By:/S/ Jay Petschek ---------------------------------------- Name: Jay Petschek Title: Managing Member Investment Amount: $157,500 Address for Notice: 350 Madison Avenue 9th Floor New York, NY 10017 Facsimile No.: 212-389-8259 Attn: Tommy Hess Corsair Capital Partners 700, LP By:/S/ Jay Petschek ---------------------------------------- Name: Jay Petschek Title: Managing Member Investment Amount: $52,500 Address for Notice: 350 Madison Avenue 9th Floor New York, NY 10017 Facsimile No.: 212-389-8259 Attn: Tommy Hess FlyLine Holdings, Ltd. By:/S/ William F. Tempel ---------------------------------------- Name: William F. Tempel Title: Member Investment Amount: $210,000 Address for Notice: 115 West 2nd Street Suite 103 Fort Worth, TX 76102 Facsimile No.: 817-509-8702 Attn: Sara Nicholson SRG Capital, LLC By:/S/ Andrew J. Turchin ---------------------------------------- Name: Andrew J. Turchin Title: Chief Financial Officer Investment Amount: $105,000 Address for Notice: 120 Broadway 40th Floor New York, NY 10271 Facsimile No.: 212-571-1279 Attn: Yoav Roth EX-4 3 ex4-2pp2.txt EXHIBIT 4.2 - REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (this "AGREEMENT") is made and entered into as of March 24, 2004, by and among Infocrossing, Inc., a Delaware corporation (the "COMPANY"), and the investors signatory hereto (each a "PURCHASER" and collectively, the "PURCHASERS"). This Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date hereof among the Company and the Purchasers (the "PURCHASE AGREEMENT"). The Company and the Purchasers hereby agree as follows: 1. Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the respective meanings set forth in this Section 1: "EFFECTIVE DATE" means the date that the Registration Statement filed pursuant to Section 2(a) is first declared effective by the Commission. "EFFECTIVENESS DATE" means the earlier of (a) the 90th calendar day following the Closing Date; provided, that, if the Commission reviews and has written comments to the filed Registration Statement that would require the filing of a pre-effective amendment thereto with the Commission, then the Effectiveness Date under this clause (a) shall be the 120th calendar day following the Closing Date, and (b) the fifth Trading Day following the date on which the Company is notified by the Commission that the Registration Statement will not be reviewed or is no longer subject to further review and comments. "EFFECTIVENESS DATE" shall also have the meaning specified in Section 2(b). "EFFECTIVENESS PERIOD" shall have the meaning set forth in Section 2(a). "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "FILING DATE" means the 30th calendar day following the Closing Date. "FILING DATE" shall also have the meaning specified in Section 2(b). "HOLDER" or "HOLDERS" means the holder or holders, as the case may be, from time to time of Registrable Securities. "INDEMNIFIED PARTY" shall have the meaning set forth in Section 5(c). "INDEMNIFYING PARTY" shall have the meaning set forth in Section 5(c). "LOSSES" shall have the meaning set forth in Section 5(a). "PROCEEDING" means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. "PROSPECTUS" means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. "REGISTRABLE SECURITIES" means the Shares. "REGISTRATION STATEMENT" means the initial registration statement required to be filed in accordance with Section 2(a) and any additional registration statement(s) required to be filed under Section 2(b), including (in each case) the Prospectus, amendments and supplements to such registration statements or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statements. "RULE 144" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "RULE 415" means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "RULE 424" means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "SECURITIES ACT" means the Securities Act of 1933, as amended. "SHARES" means the shares of Common Stock issued or issuable to the Purchasers pursuant to the Purchase Agreement. "SPECIAL COUNSEL" means Bryan Cave LLP. 2. Registration. (a) On or prior to the Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415. The Registration Statement shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form for such purpose) and shall contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such Registration Statement) the "Plan of Distribution" attached hereto as Annex A. The Company shall use its reasonable best efforts to cause the Registration Statement to be declared effective under the Securities Act as soon as possible but, in any event, no later than the Effectiveness Date, and shall use its reasonable best efforts to keep the Registration Statement continuously effective under the Securities Act (subject to Section 6(d) hereof) until the earlier of (i) the date that all Registrable Securities covered by such Registration Statement have been publicly sold, or (ii) the date on which all Registrable Securities covered by the Registration Statement may be sold without volume restrictions pursuant to Rule 144(k) and, if requested by an affected Holder or the Company's transfer agent, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company's transfer agent and such affected Holders (the "EFFECTIVENESS PERIOD"). (b) If for any reason the Commission does not permit all of the Shares to be included in the Registration Statement filed pursuant to Section 2(a), or for any other reason any Registrable Securities are not permitted by the Commission to be included in a Registration Statement filed under this Agreement, then the Company shall use its reasonable best efforts to prepare and file as soon as possible after the date on which the Commission shall indicate as being the first date or time that such filing may be made, but in any event by the 30th calendar day following such date (such date for such Registration is referred to as such Registration Statement's "Filing Date"), an additional Registration Statement covering the resale of all Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415, on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form for such purpose). Each such Registration Statement shall contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such Registration Statement) the "Plan of Distribution" attached hereto as Annex A. The Company shall use its reasonable best efforts to cause each such Registration Statement to be declared effective under the Securities Act as soon as possible but, in any event, no later than the 90th calendar day following the date on which the Company becomes aware that such Registration Statement is required under this Agreement (each such 90th calendar day, the "Effectiveness Date" for such Registration Statement), and shall use its reasonable best efforts to keep such Registration Statement continuously effective under the Securities Act during the entire Effectiveness Period, subject to Section 6(d) hereof. (c) Notwithstanding anything contained herein to the contrary, including Sections 3(c) and 6(d) (and without regard to the efforts of the Company to avoid such occurrence), if: (i) a Registration Statement is not filed on or prior to its Filing Date (if the Company files a Registration Statement without affording the Holders the opportunity to review and comment on the same as required by Section 3(a) hereof, the Company shall not be deemed to have satisfied this clause (i)), or (ii) a Registration Statement is not declared effective by the Commission on or prior to the required Effectiveness Date, or (iii) after the Effective Date, such Registration Statement ceases to be effective and available to the Holders as to all Registrable Securities to which it is required to cover (1) for an aggregate of 20 Trading Days (which need not be consecutive Trading Days) during the two years following the Effective Date, and (2) for 20 Trading Days in each year thereafter through the expiration of the Effectiveness Period (it being understood that any unused allocation during any one year may not be carried forward to subsequent years) (any such failure or breach being referred to as an "EVENT," and for purposes of clauses (i) or (ii) the date on which such Event occurs, or for purposes of clause (iii) the date which an applicable 20 Trading Day-period(s) is exceeded, being referred to as "EVENT DATE"), then, in addition to any other rights available to the Holders: (x) on each such Event Date the Company shall pay to each Holder an amount in cash, as liquidated damages and not as a penalty, equal to .000333333% of the product of (1) the number of Shares then held by such Holder (2) the closing sales price of the common Stock on the Event Date (except that, Shares that maybe resold by the Holder pursuant to Rule 144(k), as evidenced by a legal opinion provided by Company counsel and paid for by the Company that is acceptable to the transfer agent for the Company to reissue all of such Holder's Shares without any restrictive or other legends, shall be excluded for these purposes) for each day until the applicable Event is cured upon the occurrence of such filing in the case of clause (i) and upon the effectiveness of the Registration Statement in the case of clause (ii) and (iii); provided, however, that the Company shall not in any event be required to pay such liquidated damages for more than one Event or Event Date at any given time and the aggregate amount of such liquidated damages shall not exceed 1.0% of the aggregate unsold portion of the Investment Amount with respect to any calendar month, which shall be deemed to have 30 days for purposes of this Section 2(c). If the Company fails to pay any liquidated damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a rate of 9% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. 3. Registration Procedures In connection with the Company's registration obligations hereunder, the Company shall: (a) Not less than three Trading Days prior to the filing of a Registration Statement or in the case of any related Prospectus or any amendment or supplement thereto such shorter notice, but in no event less than two Trading Days prior to the applicable filing, as may be reasonable under the circumstances, the Company shall furnish to the Holders and the Special Counsel copies of all such documents (other than those incorporated by reference) proposed to be filed which documents will be subject to the review of such Holders and the Special Counsel. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities or the Special Counsel shall reasonably object in good faith. (b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously effective as to the applicable Registrable Securities for its Effectiveness Period; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to each Registration Statement or any amendment thereto and, as promptly as reasonably possible provide the Holders true and complete copies of all correspondence from and to the Commission relating to such Registration Statement that would not result in the disclosure to the Holders of material and non-public information concerning the Company; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the Registration Statements and the disposition of all Registrable Securities covered by each Registration Statement. (c) Notify the Holders and the Special Counsel as promptly as reasonably possible (and, in the case of (i)(A) below, not less than three Trading Days prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a "review" of such Registration Statement and whenever the Commission comments in writing on such Registration Statement (the Company shall provide true and complete copies thereof and all written responses thereto to each of the Holders and the Special Counsel that pertain to the Holders as a Selling Stockholder or to the Plan of Distribution, but not information which the Company believes would constitute material and non-public information); and (C) with respect to each Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and (vi) when the continued effectiveness of a Registration Statement would require the Company to disclose a material financing, acquisition or other corporate transaction, which disclosure the Company shall have determined in good faith is not in the best interests of the Company and its stockholders at that time. (d) Use its reasonable best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment. (e) Furnish to each Holder, without charge, at least one conformed copy of each Registration Statement and each amendment thereto and all exhibits to the extent requested by such Person (including those previously furnished) promptly after the filing of such documents with the Commission. (f) Promptly deliver to each Holder, without charge, as many copies of each Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request. Subject to Section 6(d), the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto. (g) Prior to any public offering of Registrable Securities, use its reasonable best efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as the selling Holders may reasonably request, to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the Registration Statements; provided, that the Company shall not be required to qualify generally to do business or become subject to general service of process in any jurisdiction where it is not then so qualified or subject, or to subject the Company to any taxation in any such jurisdiction where it is not then so subject. (h) Cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to the Registration Statements, which certificates shall be free, to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may request. (i) Upon the occurrence of any event contemplated by Section 3(c)(v), as promptly as reasonably possible, prepare a supplement or amendment, including a post-effective amendment, to the affected Registration Statements or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, no Registration Statement nor any Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (j) Each selling Holder agrees to furnish to the Company a selling security holder questionnaire in the form attached hereto as Annex B (a "SELLING HOLDER QUESTIONNAIRE"). (k) The Company shall not be required to include the Registrable Securities of any Holder in the Registration Statement and shall not be required to pay any liquidated or other damages under Section 2(c) hereof to any Holder who fails to furnish to the Company (i) a fully completed Selling Holder Questionnaire at least three (3) Trading Days prior to the Filing Date or (ii) any other information that the Commission's staff may require as a condition to allowing such Registration Statement to be declared effective under the Securities Act (as evidenced by written comments made by the Commission in it is review of such Registration Statement). 4. Registration Expenses. All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, and (B) in compliance with applicable state securities or Blue Sky laws), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is reasonably requested by the holders of a majority of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company and up to $5,000 of the fees and disbursements of Special Counsel for each Registration Statement upon presentation of an invoice, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. 5. Indemnification. (a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, partners, agents, investment advisors, members and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, partners, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and reasonable attorneys' fees) and expenses (collectively, "LOSSES"), as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that (1) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use therein (it being understood that the Holder has expressly and in writing approved Annex A hereto for this purpose) or (2) in the case of an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of a Prospectus after the Company has notified such Holder in writing or promptly confirmed in writing that in writing that a Suspension Event has occurred and prior to the receipt by such Holder of an Advice or an amended or supplemented Prospectus, but only if and to the extent that following the receipt of the Advice or the amended or supplemented Prospectus the misstatement or omission giving rise to such Loss would have been corrected. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement. (b) Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees of each of them, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising solely out of or based solely upon: (x) such Holder's failure to comply with the prospectus delivery requirements of the Securities Act or (y) any untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto, or arising solely out of or based solely upon any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading to the extent, but only to the extent that, (1) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement (it being understood that the Holder has expressly and in writing approved Annex A hereto for this purpose), such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (2) in the case of an occurrence of a Suspension Event, the use by such Holder of a Prospectus after the Company has notified such Holder in writing that a Suspension Event has occurred and prior to the receipt by such Holder of an Advice or an amended or supplemented Prospectus, but only if and to the extent that following the receipt of the Advice or the amended or supplemented Prospectus the misstatement or omission giving rise to such Loss would have been corrected. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation. (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an "INDEMNIFIED PARTY"), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the "INDEMNIFYING PARTY") in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party. An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has expressly agreed in writing in advance to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense of the Indemnified Party and such counsel shall be at the expense of the Indemnifying Party); provided that under no circumstances shall the Indemnifying Party be responsible for the fees and expenses of more than three separate counsel for all Indemnified Parties with respect to a Proceeding arising out of the same claim. The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. All fees and expenses of the Indemnified Party consistent with this Section (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days following written notice thereof and submission of reasonably satisfactory documentation to the Indemnifying Party (provided, that the Indemnified Party must expressly undertake in advance in writing to the Indemnifying Party to reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder). (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party (by reason of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys' or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties. 6. Miscellaneous (a) Remedies. In the event of a breach by the Company or by a Holder, of any of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. (b) No Piggyback on Registrations. Except as and to the extent specified in Schedule 3.1(v) to the Purchase Agreement, neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in the Registration Statement other than the Registrable Securities, and the Company shall not after the date hereof enter into any agreement providing any such right to any of its security holders. Except as and to the extent specified in Schedule 6(b) hereto, the Company has not previously entered into any agreement granting any registration rights with respect to any of its securities to any Person which have not been fully satisfied. (c) Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to the Registration Statement. As a condition to the inclusion of its Registrable Securities in a Registration Statement, a Holder shall (i) at least one Trading Day prior to the Filing Date or, if earlier (but subject to Section 3(a)) prior to the date of filing of such Registration Statement, furnish to the Company a completed Selling Holder Questionnaire and (ii) any other information that the Commission's staff may require as a condition to allowing such Registration Statement to be declared effective under the Securities Act (as evidenced by written comments made by the Commission in it is review of such Registration Statement); provided, that if any Holder who shall have failed to provide such information or Selling Holder Questionnaire prior to the filing of a Registration Statement shall thereafter and prior to such Registration Statement's Effective Date provide such information or such Selling Holder Questionnaire, then the Company shall promptly make such amendments to such Registration Statement as are reasonably necessary to include such Holder's Registrable Securities therein; provided, that if the Registration Statement has not been declared effective by the Commission at such time, any period of delay in becoming effective resulting therefrom shall be deemed to extend the Effectiveness Date by such period. (d) Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(c), such Holder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until such Holder's receipt of the copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the "ADVICE") by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement (the period from the date which such Holder receives a Suspension Notice to the date on which such Holder receives copies of the supplemental or amended Prospectus being herein called the "SUSPENSION PERIOD"). (e) Piggy-Back Registrations. If at any time during the Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, then the Company shall send to each Holder written notice of such determination and, if within fifteen days after receipt of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such holder requests to be registered, subject to customary underwriter cutbacks applicable to all holders of registration rights. (f) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of at least two-thirds of the then outstanding Registrable Securities. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of certain Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities to which such waiver or consent relates, provided, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. (g) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (ii) the Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Agreement later than 6:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as follows: If to the Company: Infocrossing, Inc. 2 Christie Heights Street Leonia, NJ 07605 Attn: Chief Executive Officer Facsimile No.: (201) 840-7126 With a copy to: Latham & Watkins LLP 885 Third Avenue, Suite 1000 New York, NY 10022-4802 Attn: Robert A. Zuccaro, Esq. Facsimile No.: (212) 751-4864 If to a Purchaser: To the address set forth under such Purchaser's name on the signature pages hereto. If to Special Counsel: Bryan Cave LLP 1290 Avenue of the Americas New York, NY 10101 Attn.: Eric L. Cohen, Esq. Fax No.: (212) 541-1432 If to any other Person who is then the registered Holder: To the address of such Holder as it appears in the stock transfer books of the Company or such other address as may be designated in writing hereafter, in the same manner, by such Person. (h) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign its rights or obligations hereunder without the prior written consent of each Holder. Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement. (i) Execution and Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof. (j) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan (the "NEW YORK COURTS"). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any Proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of this Agreement, then the prevailing party in such Proceeding shall be reimbursed by the other party for its attorney's fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding. (k) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. (l) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. (m) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (n) Independent Nature of Purchasers' Obligations and Rights. The obligations of each Purchaser hereunder are several and not joint with the obligations of any other Purchaser hereunder, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser hereunder. The decision of each Purchaser to purchase Securities pursuant to the Transaction Documents has been made independently of any other Purchaser. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement. Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment in the Securities or enforcing its rights under the Transaction Documents. Each Purchaser shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGES TO FOLLOW] -18- IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above. INFOCROSSING, INC. /S/ ZACH LONSTEIN -------------------------------------- Name: Zach Lonstein Title: Chairnam and Chief Executive Officer [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGES FOR PURCHASERS FOLLOW] IN WITNESS WHEREOF, the parties have executed this Securities Purchase Agreement as of the date first written above. Trustman in c/o STI Classic Small Cap Growth Fund By:/S/ Mark D. Garfinkel ---------------------------------------- Name: Mark D. Garfinkel Title: Vice President & Fund Manager Address for Notice: Trusco Capital Management 50 Hurt Plaza Suite 1400 Atlanta, GA 30303 Facsimile No.: Attn: Trustman in c/o Arthur Vining Davis Foundation By:/S/ Mark D. Garfinkel ---------------------------------------- Name: Mark D. Garfinkel Title: Vice President & Fund Manager Address for Notice: Trusco Capital Management 50 Hurt Plaza Suite 1400 Atlanta, GA 30303 Facsimile No.: Attn: Trustman in c/i TUA Troyal Brooks By:/S/ Mark D. Garfinkel ---------------------------------------- Name: Mark D. Garfinkel Title: Vice President & Fund Manager Address for Notice: Trusco Capital Management 50 Hurt Plaza Suite 1400 Atlanta, GA 30303 Facsimile No.: Attn: Trustman in c/o TUA Sandra Brooks By:/S/ Mark D. Garfinkel ---------------------------------------- Name: Mark D. Garfinkel Title: Vice President & Fund Manager Address for Notice: Trusco Capital Management 50 Hurt Plaza Suite 1400 Atlanta, GA 30303 Facsimile No.: Attn: SF Capital Partners Ltd. By:/S/ Brian Stark ---------------------------------------- Name: Brian Stark Title: Authorized Signatory Address for Notice: 3600 3 Lake Drive St. Francis, WI 53235 Facsimile No.: 414-294-7700 Attn: Brian H. Davidson JLF Partners I, L.P. By:/S/ Eric Lieberman ---------------------------------------- Name: Eric Lieberman Title: CFO Address for Notice: 2775 Via de la Valle Del Mar, CA 92014 Facsimile No.: 858-259-3449 Attn: Jeff Feinberg JLF Partners II, L.P. By:/S/ Eric Lieberman ---------------------------------------- Name: Eric Lieberman Title: CFO Address for Notice: 2775 Via de la Valle Del Mar, CA 92014 Facsimile No.: 858-259-3449 Attn: Jeff Feinberg JLF Offshore Fund, Ltd By:/S/ Eric Lieberman ---------------------------------------- Name: Eric Lieberman Title: CFO Address for Notice: 2775 Via de la Valle Del Mar, CA 92014 Facsimile No.: 858-259-3449 Attn: Jeff Feinberg LBI Group By:/S/ Fred Steinberg ---------------------------------------- Name: Fred Steinberg Title: Vice President Address for Notice: c/o Lehman Brothers, Inc 399 Park Ave. 9th Flr New York, NY 10022 Facsimile No.: 646-758-1630 Attn: William Yelsits Janus Investment Fund, On behalf of its series Janus Venture Fund By:/S/ William Bales ---------------------------------------- Name: William Bales Title: Portfolio Manager Address for Notice: 151 Detroit Street Denver CO 80206 Facsimile No.: 303-394-7714 Attn: Heidi Walter V.P. and Assistant General Counsel Leaf Investment Partners LP By:/S/ Seymour Goldblatt ---------------------------------------- Name: Seymour Goldblatt Title: Managing Principal of S Squared Capital LLC which is the General Partner of Leaf Investment Partners LP Address for Notice: S Squared Technology Corp. Suite 4200 515 Madison Ave. New York, NY 10022-5474 Facsimile No.: 212-838-3873 Attn: Mr. Seymour L Goldblatt Leaf Offshore Investment Fund Ltd By:/S/ Seymour Goldblatt ---------------------------------------- Name: Seymour Goldblatt Title: Managing Principal of S Squared Capital LLC which is the General Partner of Leaf Offshore Investment Fund Ltd Address for Notice: S Squared Technology Corp. Suite 4200 515 Madison Ave. New York, NY 10022-5474 Facsimile No.: 212-838-3873 Attn: Mr. Seymour L Goldblatt Bear Stearns Sec. Corp, Cust J Steven Emeraon IRA ROII By:/S/ J Steven Emerson ---------------------------------------- Name: J Steven Emerson Title: Self Ben self directed IRA Address for Notice: Bear Stearns Sec. Corp Cust J Steven Emerson IRA ROII 1999 Avenue of the States #2530 Los Angeles CA 90067 Facsimile No.: 310-201-3910 Attn: Rita Swann Bear Stearns Sec. Corp, Cust J Steven Emeraon ROTH IRA By:/S/ J Steven Emerson ---------------------------------------- Name: J Steven Emerson Title: Self Ben self directed IRA Address for Notice: Bear Stearns Sec. Corp Cust J Steven Emerson IRA ROII 1999 Avenue of the States #2530 Los Angeles CA 90067 Facsimile No.: 310-201-3910 Attn: Rita Swann Baron Small Cap Fund, A series of Baron Asset Fund and Baron iOpportunity Fund, A series of Baron Asset Fund By:/S/ Linda S. Martinson ---------------------------------------- Name: Linda S. Martinson Title: V.P. and General Counsel Address for Notice: 767 Fifth Avenue 49th Floor New York, NY 10153 Facsimile No.: 212-821-9001 Attn: Linda S. Martinson, Esq. Crestview Capital Master, LLC By:/S/ Robert Hoyt ---------------------------------------- Name: Robert Hoyt Title: Managing Director Address for Notice: 95 Revere Drive Ste A Northbrook, IL 60062 Facsimile No.: 847-559-5807 Attn: Robert Hoyt Topaz Partners By:/S/ Jeremy Garber ---------------------------------------- Name: Jeremy Garber Title: Chief Operating Officer Address for Notice: c/o Jemmco Capital Corp 900 Third Ave New York, NY 10022 Facsimile No.: 212-644-1175 Attn: Jeremy Garber Corsair Capital Partners, LP By:/S/ Jay Petschek ---------------------------------------- Name: Jay Petschek Title: Managing Member Address for Notice: 350 Madison Avenue 9th Floor New York, NY 10017 Facsimile No.: 212-389-8259 Attn: Tommy Hess Corsair Capital Investors, Ltd. By:/S/ Jay Petschek ---------------------------------------- Name: Jay Petschek Title: Managing Member Address for Notice: 350 Madison Avenue 9th Floor New York, NY 10017 Facsimile No.: 212-389-8259 Attn: Tommy Hess Corsair Capital Partners 700, LP By:/S/ Jay Petschek ---------------------------------------- Name: Jay Petschek Title: Managing Member Address for Notice: 350 Madison Avenue 9th Floor New York, NY 10017 Facsimile No.: 212-389-8259 Attn: Tommy Hess FlyLine Holdings, Ltd. By:/S/ William F. Tempel ---------------------------------------- Name: William F. Tempel Title: Member Address for Notice: 115 West 2nd Street Suite 103 Fort Worth, TX 76102 Facsimile No.: 817-509-8702 Attn: Sara Nicholson SRG Capital, LLC By:/S/ Andrew J. Turchin ---------------------------------------- Name: Andrew J. Turchin Title: Chief Financial Officer Address for Notice: 120 Broadway 40th Floor New York, NY 10271 Facsimile No.: 212-571-1279 Attn: Yoav Roth Plan of Distribution The Selling Stockholders and any of their pledgees, donees, transferees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of Common Stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. The Selling Stockholders may use any one or more of the following methods when selling shares: o ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; o block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; o purchases by a broker-dealer as principal and resale by the broker-dealer for its account; o an exchange distribution in accordance with the rules of the applicable exchange; o privately negotiated transactions; o to cover short sales made after the date that this Registration Statement is declared effective by the Commission; o broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share; o a combination of any such methods of sale; and o any other method permitted pursuant to applicable law. The Selling Stockholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus. Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The Selling Stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved. The Selling Stockholders may from time to time pledge or grant a security interest in some or all of the Shares owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell shares of Common Stock from time to time under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933 amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. Upon the Company being notified in writing by a Selling Stockholder that any material arrangement has been entered into with a broker-dealer for the sale of Common Stock through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such Selling Stockholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such the shares of Common Stock were sold, (iv)the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction. In addition, upon the Company being notified in writing by a Selling Stockholder that a donee or pledge intends to sell more than 500 shares of Common Stock, a supplement to this prospectus will be filed if then required in accordance with applicable securities law. The Selling Stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus. The Selling Stockholders and any broker-dealers or agents that are involved in selling the shares may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. The Selling Stockholders will be responsible to comply with the applicable provisions of the Securities Act and Exchange Act, and the rules and regulations thereunder promulgated, including, without limitation, Regulation M, as applicable to such Selling Stockholders in connection with resales of their respective shares under this Registration Statement. Each Selling Stockholders has represented and warranted to the Company that it does not have any agreement or understanding, directly or indirectly, with any person to distribute the Common Stock. The Company is required to pay all fees and expenses incident to the registration of the shares. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act. s EX-99 4 ex99pip2.txt EXHIBIT 99 - PRESS RELEASE Media Contacts: Investor Relations: Michael Wilczak William McHale Infocrossing, Inc. Infocrossing, Inc. 201-840-4941 201-840-4732 mwilczak@infocrossing.com wmchale@infocrossing.com INFOCROSSING COMPLETES PREVIOUSLY ANNOUNCED $30.6 MILLION PRIVATE PLACEMENT OF COMMON STOCK LEONIA, NJ, APRIL 1, 2004 - Infocrossing, Inc. (Nasdaq: IFOX), a provider of strategic information technology and business process outsourcing solutions to large and mid-sized companies, announced today that it completed a previously announced $30.6 million private placement of 2,917,000 shares of its common stock. The Company intends to use the net proceeds of the private placement to finance a portion of the cash component of the purchase price for the publicly announced pending acquisition of ITO Acquisition Corporation, a California corporation doing business as Systems Management Specialists, or "SMS". The private placement was made only to accredited investors in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). The shares of common stock issued in the private placement have not been registered under the Securities Act, or any state securities laws and, unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities, nor shall there be any sale of the securities in any jurisdiction in which such offering would be unlawful. ABOUT INFOCROSSING (HTTP://WWW.INFOCROSSING.COM) Infocrossing, Inc. (IFOX) is a provider of strategic outsourcing services, delivering the computing platforms and proprietary systems that enable companies to process data and share information within their business, and between their customers, suppliers and distribution channels. Leading companies leverage Infocrossing's robust computing infrastructure, skilled technical team, and process-driven operations to reduce costs and improve service delivery by outsourcing the management of mainframes, mid-range, open system servers, networks and business processes to Infocrossing. This release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. As such, final results could differ from estimates or expectations due to risks and uncertainties, including but not limited to: incomplete or preliminary information; changes in government regulations and policies; continued acceptance of the Company's products and services in the marketplace; competitive factors; technological changes; the Company's dependence upon third-party suppliers; intellectual property rights; difficulties with the integration of SMS; and other risks. For any of these factors, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, as amended. -----END PRIVACY-ENHANCED MESSAGE-----