EXHIBIT 10.11
STOCK TRANSFER AGREEMENT
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COMMON STOCK OF DIGITAL FUSION, INC.
This Stock
Transfer Agreement is made and entered into by and among
Digital
Fusion, Inc. ("the Company"), Madison Run, LLC (the "Transferor") and AABBRR,
LLC (the "Transferee") with respect to the
transfer by the Transferor of common
stock, par value $.001 per share (the
"Common Stock") of the
Company pursuant
hereto.
PRELIMINARY STATEMENT
1. The Transferor and the Company have previously entered into an
Additional Subscription Agreement dated as of October 21, 2004 whereby the
Transferor purchased from the Company 1,650,000 shares of Common Stock (the
"Subscription Agreement").
2. Transferor
desires to transfer to Transferee, and Transferee desires to
acquire from Transferor, 100,000 shares of
Common Stock acquired pursuant to the
Subscription Agreement (the "Stock"), on the terms and conditions set forth
herein.
NOW THEREFORE,
in consideration of the Transferee's agreement to accept the
Transferor's transfer of shares of the Common Stock upon the terms and
conditions set forth in this Stock Transfer
Agreement,
the Transferor and
the
Transferee agree and represent as
follows:
A. TRANSFER OF THE STOCK
Upon the terms
and conditions set
forth in this Stock Transfer Agreement,
Transferor shall sell, assign, transfer, convey and deliver to Transferee
and
Transferee shall acquire from Transferor, the Stock and all of Transferor's
respective right, title and interest in the Stock in
exchange for an aggregate
payment of ONE HUNDRED THOUSAND DOLLARS
($100,000) (the "Purchase Price"). The
Stock will be transferred to the Transferee
concurrent
with the payment of
the
Purchase Price and the Purchase Price shall
be paid to the Transferor concurrent
with the execution of this Stock Transfer
Agreement.
B. REPRESENTATIONS AND WARRANTIES OF THE
TRANSFEROR AND THE COMPANY
1. The
Transferor has all requisite corporate power and authority to
enter
into and perform its obligations under this Stock Transfer Agreement. The
execution, delivery and performance by the Transferor of this Stock
Transfer
Agreement has been duly authorized by all
necessary action.
2. The
Transferor has good,
valid and marketable title to the Stock and
such Stock is, to the best of the
Transferor's knowledge, free and clear of any
and all liens and encumbrances.
3. The Company
acknowledges its representations, warranties and obligations
in the Subscription Agreement, and agrees that the Transferee is entitled to
rely thereon in respect to the Stock
acquired by
Transferee
under this Stock
Transfer Agreement.
C. REPRESENTATIONS AND WARRANTIES OF THE
TRANSFEREE
1. The initial
offer and sale of the
Stock was intended to
be exempt from
registration under Section 4(2) of the
Securities Act of 1933, as amended, (the
"Securities Act") and/or Regulation D
promulgated under the Securities Act. As a
result, the Transferor made certain representations and warranties to the
Company in the Subscription Agreement. In furtherance of the transfer of
Stock
as contemplated by this Stock Transfer
Agreement, the
Transferee represents and
warrants to the Transferor and the Company
as follows:
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(a) The Stock is
being purchased
for the account of the Transferee for
investment
purposes only and not
for the account of any other person, and
not with a view
to distribution,
assignment
or resale to others or to
fractionalization in whole or in part.
(b) No other
person has or will have a direct or indirect beneficial
interest
in the Stock and the
Transferee
will not sell,
hypothecate
or
otherwise
transfer the Stock
except in accordance
with the registration
provisions of
the Securities
Act and applicable
state securities laws,
unless an
opinion of counsel
acceptable to the Company and the Transferor
and their
respective
counsel is provided
which states that an exemption
from the
registration
requirements
of the Securities Act and applicable
state securities
laws is available.
(c) In
evaluating
the suitability of an investment in the Stock, the
Transferee
has not relied upon
any representations
or other information
(whether oral or
written) from the Transferor, the Company or any of their
respective
agents other than as set forth in the Company's periodic
reports
filed
pursuant to the
Securities
Exchange Act of 1934,
as amended, (the
"Periodic
Reports"),
in this Stock
Transfer Agreement and in documents
provided
pursuant to Section C.1.(d) of this Stock Transfer Agreement. No
oral or
written representations have been made, or oral or written
information
furnished to, the Transferee or its advisors, if any, in
connection
with
the offering of the Stock which were in any way
inconsistent
with the Periodic Reports.
(d) The Company
and the Transferor
have made available to the Transferee
the opportunity to ask questions of the Company's officers and all
documents and
information that the Transferee has requested relating to the
purchase of the
Stock.
(e) The
Transferee recognizes
that an investment in
the Company
involves
substantial
risks and represents that the Transferee has taken full
cognizance of
and understands
all of the risks
related to the purchase of
the Stock.
The Transferee can bear the economic
risk of losing the entire
investment in
the Stock.
(f) The
Transferee has carefully considered and has, to the extent
he, she
or it believes
such discussion to be necessary, discussed with his, her or
its professional
legal, tax and financial advisers the suitability of an
investment in
the Company, and the Transferee has determined that the Stock
is a suitable
investment for the Transferee.
(g) The
statements
and information set forth in the Entities Investor
Qualification
Questionnaire
(the "Questionnaire") and attached to this
Stock Transfer
Agreement as Exhibit A, are true, accurate and complete. All
information
which the Transferee has provided to the Transferor and the
Company
concerning the
Transferee and the Transferee's financial position
is correct and
complete as of the date set forth below, and if there should
be any change in
such information
prior to the transfer
of the Stock, the
Transferee will
immediately provide such information to the Company and the
Transferor and
will promptly send
confirmation of such
information to the
Company and the
Transferor.
(h) The
Transferee's
overall commitment to investments which are not
readily
marketable is not
disproportionate to
the Transferee's net worth,
and the
Transferee's
investment
in the Stock will not
cause such overall
commitment to
become excessive.
(i) The
Transferee
has adequate
means of providing for
its current needs
and personal
contingencies and has
no need for liquidity in its investment
in the
Stock.
(j) If this
Stock Transfer Agreement is executed and delivered on behalf of
an entity, the person executing and delivering this Stock Transfer
Agreement has
been duly authorized and is duly qualified to (i) execute and
deliver this
Stock Transfer
Agreement and all other instruments executed
and delivered on
behalf of the
Transferee in connection with the transfer
of the Stock,
and (ii) purchase and hold the Stock.
The signature of
the
person
executing and
delivering this Stock
Transfer Agreement is
binding
upon such
entity and such entity has not been formed for the specific
purpose of
acquiring the Stock.
2
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2. The foregoing
representations and warranties are true and accurate as of
the date of this Stock Transfer Agreement,
shall be true and
accurate as of the
date of the acceptance of this Stock
Transfer Agreement by the Company and
the
Transferor and shall survive thereafter.
If such representations or warranties
shall not be true and accurate in any
respect, the
Transferee
will, prior to
such acceptance, give written notice of such fact to the Company and the
Transferor specifying which representations and warranties are not true and
accurate and the reasons therefor.
3. The
Transferee shall
indemnify and hold harmless the Transferor and the
Company and any of its respective officers, employees, registered
representatives, directors or control
persons who were or are a party to, or are
threatened to be made a party to any
threatened,
pending or completed
action,
suit or proceeding, whether civil,
criminal, administrative or investigative, by
reason of, or arising from any actual or alleged misrepresentation
or
misstatement of facts, or omission to represent
or state facts, made by the
Transferee to the Transferor and the Company, concerning the Transferee or
its
financial position, in connection with the offering and sale of the Stock,
against losses, liabilities and expenses
actually and reasonably incurred by the
Transferor, the Company or any of their respective officers, employees,
registered representatives, directors or control persons
(including attorneys'
fees, judgments, fines and amounts paid in
settlement) in connection with such
action, suit or proceeding.
D. TRANSFEREE INFORMATION
The Transferee
and each of its members is an "accredited investor" as that
term is defined in Rule 501(a) of
Regulation D promulgated under the Securities
Act ("Accredited Investor"). In furnishing the information set forth in the
Questionnaire, the Transferee acknowledges that the Transferor
and the Company
will be relying thereon in determining,
among other things,
whether there are
reasonable grounds to believe that the
Transferee and its members qualify as an
Accredited Investor under the Securities
Act.
E. TRANSFEREE UNDERSTANDINGS
1. The
Transferee understands, acknowledges and agrees with the
Transferor
and the Company as follows:
(a) The
Transferee
through each of its members has such knowledge and
experience
in financial and business matters that it is capable of
evaluating
the merits and risks
of investment in the Company and of making
an informed
investment decision.
(b) The Transferee through each of its members has by reason of its
business or
financial experience,
the capacity to protect its own interest
in connection
with this transaction.
(c) Except as set forth herein, the Company is under no obligation to
register the
Stock on behalf of the
Transferee or to assist the Transferee
in complying with any exemption from registration. The certificate
representing the
Stock shall be marked with the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF
1933, AS AMENDED
OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR
OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE RE
