EXHIBIT 10.77
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APPLIED DATA COMMUNICATIONS, INC.
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September 28, 2001
Applied Data Communications, Inc.
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Gentlemen:
The undersigned hereby agrees to purchase from Applied Data Communications,
Inc., a Delaware corporation ("ADC"), an aggregate of seventeen thousand five
hundred (17,500) shares of Series B Preferred Stock ("Preferred Stock"), each
convertible into one hundred (100) shares of Common Stock, on the following
terms and conditions:
1. The purchase price for the Preferred Stock in terms of face amount of
indebtedness shall be $25.00 per share, each such share being convertible into
one hundred 100 shares of Common Stock. The purchase price shall be payable by
cancellation of $436,800 in face amount of indebtedness at the rate of $25.00
for each share of Series B Preferred Stock issued. Such indebtedness may
comprise an obligation to the undersigned or to another and assigned to the
undersigned for submission and cancellation by ADC and the undersigned. The
purchase price indebtedness was compromised and agreed upon by a Settlement
Agreement dated September 20, 2001 between ADC and the undersigned, ratified and
confirmed hereby.
2. Within a reasonable time following the date hereof, ADC shall deliver
to the undersigned purchaser a certificate or certificates for the number of
fully paid and nonassessable shares of Preferred Stock purchased hereunder.
3. The undersigned understands that the shares purchased hereunder
constitute "restricted securities" under the federal securities laws inasmuch as
they are, or will be, acquired from ADC in transactions not involving a public
offering and accordingly may not, under such laws and applicable regulations, be
resold or transferred without registration under the Securities Act of 1933, as
amended (the "1933 Act") or an applicable exemption from such registration. The
undersigned purchaser represents that he is acquiring the shares of Preferred
Stock under this agreement for investment and not for the purpose of resale or
distribution thereof.
4. If at any time during the period commencing on the date hereof and
ending on June 30, 2011, ADC shall determine to register for its own account or
the account of others under the 1933 Act any of its equity securities, other
than on Form S-4 or Form S-8 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, ADC shall send to the holder of shares written
notice of such determination and, if within twenty (20) days after receipt of
such notice, such holder shall so request in writing ("Selling Holder"), ADC
shall include in such Registration Statement all or any part of the shares
issuable or
issued upon conversion of the Preferred Stock issued hereunder ("Registrable
Securities") such Selling Holder requests to be registered. The obligations of
ADC may be waived by holders holding a majority in interest of the Registrable
Securities. In the event that the managing underwriter for said offering advises
ADC in writing that the inclusion of such securities in the offering would be
materially detrimental to the offering, such securities shall nevertheless be
included in the Registration Statement, provided that the holder of the shares
that desires to have shares included in the Registration Statement agrees in
writing, for a period of ninety (90) days following such offering, not to sell
or otherwise dispose of such shares pursuant to such Registration Statement,
which Registration Statement ADC shall keep effective for a period of at least
nine (9) months following the expiration of such 90-day period.
5. All expenses, other than underwriting discounts and commissions and
other fees and expenses of investment bankers and other than brokerage
commissions, incurred in connection with registrations, filings or
qualifications, including, without limitation, all registration, listing and
qualification fees, printers and accounting fees and the fees and disbursements
of counsel for ADC and the Selling Holder, shall be borne by ADC; provided,
however, that ADC shall only be required to bear the fees and out-of-pocket
expenses of one legal counsel selected by the Selling Holder in connection with
such registration.
6. The rights to have ADC register Registrable Securities pursuant to this
agreement shall be automatically assigned by the holder to transferees or
assignees of all or any portion of such securities only if (i) the holder agrees
in writing with the transferee or assignee to assign such rights, (ii) ADC is,
within a reasonable time after such transfer or assignment, furnished with
written notice of the name and address of such transferee or assignee, (iii)
such assignment is in accordance with and permitted by law and all other
agreements between the transferor or assignor and ADC, including without
limitation, shareholder's agreements, warrants and subscription agreements, and
the transferor or assignor otherwise is not in material default of any
obligation to ADC under any such other agreement, and (iv) at or before the time
ADC received the written notice contemplated by clause (ii) of this sentence,
the transferee or assignee agrees in writing with ADC to be bound by all of the
provisions contained herein.
7. This agreement and the documents referred to herein constitute the
entire agreement and understanding of the parties hereto with respect to the
subject matter hereof, and supersede all prior and contemporaneous agreements
and understandings, whether oral or written, between the parties hereto with
respect to the subject matter hereof.
8. ADC represents and warrants that (a) the shares of Preferred Stock
purchased hereunder shall be validly issued, fully paid and nonassessable shares
of Series B Preferred Stock, each of which is convertible into one hundred (100)
shares of Common Stock, and (b) ADC is a corporation in good standing under the
laws of the State of Delaware and is fully entitled and empowered to enter into
and perform this agreement. This agreement is binding and enforceable against
ADC in accordance with its terms.
Please acknowledge your agreement by executing the enclosed copy of this
letter and returning it to the undersigned.
Dated as of September 28, 2001.
Very truly yours,
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇ ▇. ("▇▇▇") ▇▇▇▇
APPLIED DATA COMMUNICATIONS, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Chief Financial Officer
and Secretary