David
Polonitza
5935
Alcase Street
VIA
FEDERAL EXPRESS AND FACSIMILE
Board of
Directors of ITEX Corporation
3326
160th Avenue SE
Suite
100
Attention:
Corporate Secretary
Re: PROPOSAL
OF NOMINATION OF CANDIDATES FOR ELECTION AS DIRECTORS AT THE 2009 ANNUAL MEETING
OF STOCKHOLDER OF ITEX CORPORATION (the "CORPORATION")
Ladies
and Gentlemen:
David
Polonitza (“Polonitza”) hereby submits this notice (this "Notice") on the date
hereof pursuant to the requirements (the
"Bylaw Requirements") set forth in Article II, Section 2.6 of the
Amended and Restated Bylaws of the Corporation (as attached as
Exhibit 3.2 to the Form 8-K filed by the Corporation with the U.S. Securities
and Exchange Commission (the "SEC") on December 19, 2008)
(the "Bylaws") of his proposal to nominate the Slate (as defined
below) for
election as directors of the Corporation at
the 2009 annual meeting of
stockholders of the Corporation (the "Annual Meeting"), or a special
meeting of stockholders of the Corporation called for a similar
purpose.
As of the
close of business on September 17, 2009, David Polonitza is the direct
beneficial owner of 631,100 Shares (including the 1000 Shares of which David
Polonitza is the stockholder of record)
Polonitza
hereby proposes to nominate for election
as directors of the Corporation the
following persons (each, a "Nominee" and
collectively, the "Nominees" or the "Slate"):
Mr.
Alnesh Mohan
Mr. David
Polonitza
Mr. Rahul
Pagidipati
Polonitza
believes that the terms of three (3) directors currently serving on the ITEX
Board expire at the Annual Meeting. To the extent there are in excess
of three (3) vacancies on the ITEX Board to be filled by election at the Annual
Meeting or ITEX increases the size of the ITEX Board above its existing size,
Polonitza reserves the right to nominate additional nominees to be elected to
the ITEX Board at the Annual Meeting.
The
information concerning Polonitza and the Nominees required by Article II,
Section 2.6 of the Bylaws is set forth below:
(i) NAME
AND ADDRESS OF THE STOCKHOLDER WHO INTENDS TO MAKE THE NOMINATION, AS THEY
APPEAR ON THE CORPORATION'S STOCK LEDGER, :
David
Polonitza
5935
Alcase Street
(ii)
NAME, AGE, BUSINESS ADDRESS AND, IF KNOWN, RESIDENCE ADDRESS OF THE
NOMINEES:
David
Polonitza, 29
5935
Alcase Street, Fort Knox, KY 40121 (Business Address)
Rahul
Pagidipati, 31
2955 SE
3rd Court, Ocala FL 34471 (Business Address)
Alnesh
Mohan, 38
Box 36,
#1620 - 1140 West Pender Street, Vancouver, BC V6E-4G1 (Business
Address)
#702 –
583 Beach Crescent, Vancouver, BC V6Z-3E6 (Residence Address)
(iii)
PRINCIPAL OCCUPATION OR EMPLOYMENT OF THE NOMINEES:
DAVID
POLONITZA has served as an officer in the United States Army since 2002. Mr.
Polonitza currently holds the position of Brigade Staff Officer since 2009.
Prior positions include Troop Commander (2007-2009), Executive Officer
(2003-2005; 2006-2007) and Battalion Intelligence Officer (2005-2006). Mr.
Polonitza has a Bachelor of Science degree in economics from the United States
Military Academy and is an MBA candidate at the University of Louisville with a
focus in Entrepreneurship.
RAHUL
PAGIDIPATI founded and has served as the CEO of Anion Technologies Ltd., a
software outsourcing firm, since 1999. Mr. Pagidipati has a Bachelor of
Arts degree in Economics from the University of Florida, a Master of Business
Administration degree from the Kellogg School of Management at Northwestern
University, and a Juris Doctor degree from Northwestern University School of
Law. Mr. Pagidipati served on the Board of Directors of Suncoast Labs,
before its acquisition by Laboratory Corporation of America (NYSE: LH), and
co-founded and served on the Board of Directors of Freedom Health, one of the
largest privately held Medicare Advantage HMOs in the United
States.
ALNESH
MOHAN has served as Partner at Quantum Advisory Partners LLP, a business
advisory firm, since 2005, and as Vice-Chairman and CEO of Corner Market Capital
Corporation, an investment fund, since 2006. Mr. Mohan has a Bachelor
of Business Administration degree from Simon Fraser University, and a Masters of
Science in Taxation from Golden Gate University. Mr. Mohan has been a
registered Chartered Accountant in British Columbia since 1997, and a registered
Certified Public Accountant in Illinois since 2000. Prior to his
current positions at Quantum and Corner Market Capital, Mr. Mohan was a Tax
Manager at KPMG from 2001-2005 consulting on corporate & personal tax
compliance in Canada and the United States.
(iv)
CLASS AND NUMBER OF SHARES OF STOCK OF ITEX WHICH ARE BENEFICIALLY OWNED BY THE
NOMINEES AND BY THE NOMINATING STOCKHOLDER:
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NAME
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BENEFICIAL
OWNERSHIP
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David
Polonitza
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631,100
shares of Common Stock, $0.01 par
value.
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Mr.
Polonitza, by virtue of a written agreement, has the power to vote and dispose
of the Common Stock jointly owned by him and his wife, Rebecca
Polonitza. Accordingly, Mr. Polonitza may be deemed to be the
beneficial owner of such shares of Common Stock. Additionally, David
Polonitza has a Disclosable Interest, as defined by Article II, Section
2.6(a)(v) of the Bylaws, in 439,360 shares of Common Stock, $0.01 par value,
owned by members of the “Polonitza Group” as disclosed in the Schedule 13D filed
by Polonitza on December 27, 2007, as such filing was amended on March, 3
2009.
Rahul
Pagidipati 605,580 shares of Common Stock, $0.01
par value.
Mr.
Pagidipati by virtue of a written agreement, has the power to vote and dispose
of the Common Stock owned by him and the Common Stock held within the
Pagidipati Family Limited Partnership. Accordingly, Mr. Pagidipati may be
deemed to be the beneficial owner of such shares of Common Stock.
Additionally, Rahul Pagidipati has a Disclosable Interest, as defined by Article
II, Section 2.6(a)(v) of the Bylaws, in 30,000 shares of Common Stock, $0.01 par
value, owned by jointly by Dr. Devaiah and Dr. Rudrama Pagidipati, who are
partners of the Pagidipati Family, LP.
Alnesh
Mohan 420,000 shares of Common Stock, $0.01 par value.
Mr.
Mohan, by virtue of a written agreement, has the power to vote and dispose of
the Common Stock held within Corner Market Capital Corporation, MPIC Fund I, LP
and MPIC Canadian LP. Accordingly, Mr. Mohan may be deemed to be the beneficial
owner of such shares of Common Stock. Additionally, Alnesh Mohan has a
Disclosable Interest, as defined by Article II, Section 2.6(a)(v) of the Bylaws,
in 40,000 shares of Common Stock, $0.01 par value, owned by Mr. Andrew Cooke,
who is a director of the MPIC Fund I, LP.
(v) ANY
OTHER INFORMATION RELATING THE PROPOSED NOMINEES THAT IS REQUIRED TO BE
DISCLOSED IN A PROXY STATEMENT OR OTHER FILINGS REQUIRED TO BE MADE IN
CONNECTION WITH THE SOLICITATION OF PROXIES FOR ELECTION OF DIRECTORS IN A
CONTESTED ELECTION PURSUANT TO REGULATION 14A UNDER THE SECURITIES EXCHANGE ACT
OF 1934:
There are
no arrangements or understandings among the Nominees, other than the consents by
the Nominees to serve as directors of ITEX if elected as such at the Annual
Meeting, the decision to file this Notice and the arrangement to split the cost
of the legal fees incurred by the Nominees in connection with this
Notice.
(vi) THE
EXECUTED CONSENT OF THE NOMINEES TO SERVE AS A DIRECTOR OF ITEX, IF
ELECTED:
Each of
the Nominees hereby consents to be named as a nominee in this Notice, to be
named as a nominee in any proxy statement filed by the Corporation or Polonitza
and to serve as a director of the Corporation, if so elected.
Information
is set forth herein as of the close of business on September 17, 2009. Neither
the delivery of this Notice nor any delivery by any Nominee of additional
information to the Corporation from and after the date hereof shall be deemed to
constitute an admission by any Nominee that such delivery is required or that
each and every item or any item of information is required or as to the legality
or enforceability of any notice requirement or any other matter, or a waiver by
any Nominee of their right to contest or challenge, in any way, the validity or
enforceability of any notice requirement or any other matter (including actions
taken by the Board of Directors of the Corporation in anticipation of or
following receipt of this Notice). Furthermore, if the Board of Directors of the
Corporation increases the number of directors to be nominated and elected at the
Annual Meeting, Polonitza reserves the right to add additional director nominees
in respect of each such additional directorship. In the event any statement or
other information in this Notice is not true, or to the extent any applicable
information has been omitted from this Notice, the Nominees reserve the right to
correct and/or supplement any such statement or other information set forth in
this Notice.
Please
address any correspondence to David Polonitza at his home address or contact him
by phone at 502-460-3141.
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Very
truly yours,
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/s/
David Polonitza
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David
Polonitza
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/s/
Rahul Pagidipati
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Rahul
Pagidipati
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/s/
Alnesh Mohan
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Alnesh
Mohan
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