SELLING AGREEMENT
SELLING AGREEMENT made this 2nd day of May" 2001 by and between TACONIC
CAPITAL PARTNERS L.P, ("Taconic"), with offices at 000 Xxxx Xxxxxx, Xxxxx 0000,
Xxx Xxxx, XX 00000; INTERNET SOLUTIONS PARTNERS, INC, ("Internet Solutions"),
with offices at 00 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000; and INSYNC, INC.
("Insync"), with offices at 0000 Xxxxxxxx Xxxxx, Xxxxxx, XX 00000; and
XXXXXXX INVESTMENTS, lNC., 0000 Xxxxxxx XxX, Xxxx 000, Xxxx Xxxxx, XX 00000
("Xxxxxxx Investments")
WHEREAS, Internet Solutions is engaged in the business among other
things of developing direct marketing campaigns on behalf of companies engaged
in E-Commerce; and
WHEREAS, Insync is an Application Service provider which deploys Windows
based software on a subscription basis to business users through any Internet
browser and now geographically dispersed business users can be connected to
each other virtually and have access to their email, files and software that
they use every day from any computer, regardless of its operating system from
anywhere in the world; and
WHEREAS, Insync has engaged the services of Internet Solutions to assist
it in selling and advertising the Software Products; and
WHEREAS, Internet Solutions has proposed an arrangement with Taconic and
Insync for the benefit of Insync thereby facilitating placement of Insync's
products on Internet Sites; and
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged by the parties, the parties
agree as follows;
1. DEDICATED ACCOUNT. Concurrently with the execution and delivery of
this Agreement the parties are establishing a dedicated merchant account (the
"Dedicated Account") with CardService International, Inc. ("CardService") Or
other mutually acceptable credit card issuer with offices located at 0000
Xxxxxx Xxxxx, Xxxxxxxx, XX 00000. The Dedicated Account shall bear the name
"Batman" and shall remain open during the Term of this Agreement as defined
pursuant to Paragraph 9 herein. The signatories to the account shall be Xxxx
Xxxxxxx of Internet Solutions and Xxxxx XxXxxx of Taconic (the "Signatories").
No changes or amendments to the account or its terms shall be made unless with
the prior written authorization of both Signatories to the account. The account
shall be established solely for the Purpose of receiving the proceeds of all
confirmed credit card sales of the Software Products by Insync in connection
with on-line sales. The Dedicated Account documents shall provide that
CardService is to remit the proceeds in accordance with the terms of and at the
times provided in the Dedicated Account documents to a specially designated
account maintained at The Chase Manhattan Bank (the "Chase Account") at
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000, which account is more fully described
in Paragraph 2 herein. Copies of The Dedicated Account and Chase Account
documents shall be furnished at Closing to all of the parties herein.
2. THE CHASE ACCOUNT. Prior to Closing, as that term is defined
pursuant to Paragraph 10 herein, Internet Solutions shall have established the
Chase Account and concurrently with the execution and delivery of this
Agreement, each of the parties hereto shall complete and execute the Automatic
Dollar Transfer Service Agreement (the "Transfer Agreement") required by the
Chase Manhattan Bank (the "Chase") in the form annexed hereto. The Transfer
Agreement shall, among other things, authorize the Chase during the Term of
this Agreement to distribute at the close of business every fourteen (14) days
alt of the proceeds (the "Proceeds') received from CardService to the following
companies in the following percentages as compensation for their respective
services:
Percentage of
Proceeds Each Sale
------------------
First Second
Name Month Month Services
----------------------- ----- ----- ----------------------------
(a) PayTrust, Inc. 25% 12.5% Internet advertising charges
(b) Taconic 12.5% 6.25% Consulting services
(c) Insynq 50% 75%125% Product sales price
(d) Internet Solutions 6.25% 3.125% Advertising services
(e) Xxxxxxx Investments 6.25% 3.125% Advertising services
provided that upon and after the occurrence of a Drawing Event (as defined in
Paragraph 7 below), Chase shall instead make me following "payment
Adjustments": Chase shall pay to Taconic its 12.5 % and 6.25% amount plus the
50% + 75% amount otherwise payable to Insync and the 6.25% + 3.125% amounts to
Internet Solutions and Xxxxxxx Investments until such time as the amount drawn
has been repaid in full to Taconic with interest thereon, as provided herein.
The terms of the Transfer Agreement shall provide that Taconic may notify the
Chase of the occurrence of a Drawing Event and upon receipt of such
notification, the Payment Adjustments shall be made until the amount drawn has
been repaid in full with interest thereon, as provided herein. In order to
facilitate the transfer of funds from the Chase Account each of the parties
hereto shall have established prior to closing an account at the Chase to
receive the distributions from the Chase Account.
3. APPOINTMENT OF PAYING AGENT. At the Closing, Taconic, Internet
Solutions and Insync shall enter into an agreement (the "PayTrust Agreement")
with PayTrust, Inc. ("PayTrust"). The PayTrust Agreement shall be for the Term
of this Agreement (as defined in Paragraph 9, the ""Term'") and shall provide
that upon receipt of the Proceeds due PayTrust each fourteen (14) days from the
Chase Account as set forth in Paragraph 2 above, PayTrust shall then
immediately pay to those Internet Sites through which sales of the Software
Products have been made during the aforesaid fourteen (14) day period. Prior to
Closing and during the Term of this Agreement Internet Solutions shall have
established and supplied a software application link to PayTrust to enable
PayTrust during the Term of this Agreement to track daily the Internet Sites
entitled to receive payment and the amount representing the advertising costs
that each Internet Site is entitled to receive. Internet Solutions shall be
solely responsible for the payment of all service charges as charged by
PayTrust. PayTrust shall agree that it will not offset such charges against
amounts it is required to pay to the Internet Sites. The PayTrust Agreement
shall also permit Taconic to enforce the terms against PayTrust directly. Each
party to this Agreement shall be furnished with a copy of the PayTrust
Agreement at Closing.
4. MARKETING AND ADVERTISING. During the term of this Agreement
Internet Solutions shall have authority on behalf of Insync to procure Websites
to advertise and offer for sale the Software Products. In addition thereto,
Internet Solutions shall be responsible for structuring all costs per account
acquisition strategies which shall include but not be limited to banners"
interstitules" e-mails or any other form of generally accepted advertising
media. Internet Solutions shall also be responsible for managing all technical
and infrastructure aspects of the E-Commerce activities on behalf of Insync and
shall be responsible for furnishing tracking services to PayTrust. Each of
Internet Solutions and Insync agree, and each of them shall instruct their
employees and others, to describe Taconic's services accurately in any
discussions with Internet Sites and to provide Internet Sites with a copy of
the disclosure statement in the form attached as Exhibit A hereto prior to
entering into agreements with such Sites. Marketing, promotional, offering and
advertising materials shall not use the Taconic name unless approved in advance
in writing by Taconic.
5. ESCROW ACCOUNT. At least five (5) days prior to Closing, Internet
Solutions shall have arranged for the establishment of an Escrow Account at The
Provident Bank, 000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, XX 00000. The maintenance and
implementation of the Escrow Account shall be governed by the terms of the
escrow agreement (the "Escrow Agreement") in the form annexed hereto as Exhibit
B. At Closing, the Escrow Agreement shall be executed by Taconic as the Sole
party to the Escrow Agreement and Provident Bank as Escrow Agent
6. ESCROW FUNDS. At the time of Closing, Taconic shall deposit into the
Escrow Account the sum of One Million Dollars ($1,000,000) (the "Escrow
Funds"'), where such funds shall remain during the Term of this Agreement or
there shall be a Drawing Event, whichever shall first Occur. The Escrow Funds
shall be invested as provided by the terms of the Escrow Agreement Taconic
acknowledges that once the Escrow Agent has acknowledged receipt of the Escrow
Funds, the responsibility for proper deposit and disbursement of the escrow
Funds shall rest solely with Taconic and Provident Bank, who are the sole
parties to the Escrow Agreement.
7. DRAWING. The failure by PayTrust for any reason and at any time
during the Term of this Agreement to pay the Internet Sites entitled to receive
payment for advertising of the Software Products within thirty {30) days after
receipt of the Proceeds from the Chase Account shall constitute a drawing event
("Drawing Event"), in the event that there has been a Drawing Event as provided
by Paragraph 7 herein and Taconic has not been reimbursed pursuant to the terms
of Paragraph 2 herein, then lnsync hereby agrees that it shall promptly
reimburse Taconic in cash for the amount of the drawing, plus interest at a
rate equal to the prime lending rate of Chase Manhattan Bank (or its successor)
plus 2% (as of the date of the Drawing Event) per annum, compounding quarterly.
Insync, Internet Solutions and Xxxxxxx Investments hereby grant a security
interest in favor of Taconic in the Dedicated Account to support their
respective obligations under this Agreement and agree that Taconic may tile
financing statements in respect thereof as may be necessary to evidence such
security interest.
8. FORECLOSURE. Upon written notice by Internet Solutions to the Escrow
Agent of a Drawing Event (the "Notice") amounts may be drawn from the escrow
account in accordance with the terms of the Escrow Agreement in order to
facilitate payment to the Internet Sites. Upon the occurrence of a Termination
Event (defIned below), Taconic may immediately terminate this Agreement and the
Escrow Agreement by delivering written notice thereof to each of the parties
hereto as provided by Paragraph 19 herein. The term "Termination Event" means
any of the following:
(1) breach of this Agreement by Insync or Internet Solutions;
Internet Solutions;
(2) breach of any representation or warranty in Paragraph 11 or 12
hereof made by Insync or
(3) breach by PayTrust of its obligations to pay Internet Sites as
provided by the PayTrust Agreement (the "PayTrust Default");
(4) a change of majority ownership of either internet Solutions or
Insync;
(5) failure of Internet Solutions to pay amounts due and owing to
PayTrust under the PayTrust Agreement, which failure has not
been cured within 5 days; or
(6) termination of the CardService Agreement, PayTrust Agreement or
the Transfer Agreement.
From and after termination of this Agreement, all amounts held or thereafter
deposited in the Dedicated Account shall continue to be disbursed in accordance
with the terms hereof and Insync and Internet Solutions shall continue to
Comply with the terms hereof to wind-down the program.
9. TERM OF AGREEMENT. The term (the "Term') of this Agreement shall be
for a period of One year unless earlier terminated by any party to this
Agreement by providing thirty (30) days prior written notice to the other
parties hereto or unless terminated by operation of Paragraph 8 herein.
10. OTHER COMPENSATIONS. lnsync agrees to issue 435,000 shares of common
stock to the parties for entering into this agreement. In addition, if total
sales during the campaign reaches $750,000, the company agrees to issue an
additional 435,000 shares. If total sales during the term of this agreement
reaches $1.25 million, Insync agrees to issue an additional 290,000 shares. If
$2 million in sales is achieved during this agreement, then an additional
335,000 shares will be issued achieving a total number of shares of 1.5
million. The company agrees to file an S-8 registration statement within one
month of signing of this contract and will do its best efforts to make sure it
is effective. Registration statement will include the shares held in escrow
under the performance contract and the shares will be released upon achieving
the various performance criteria. The shares will be divided as per a
subsequent communication between the parties.
11. CLOSING. The closing (the ""Closing") under this Agreement shall
take place at the offices of XxXxxxxxxx & Stem" LLP, counsel to Internet
Solutions at 10:00 am. local time on the date hereof.
12. REPRESENTATIONS AND WARRANTIES.
(a) Each of the parties hereto represents that it has the corporate
power and authority to execute and deliver this Agreement and to execute and
deliver all other agreements and instruments to be executed and delivered in
connection with this Agreement and to consummate the transactions contemplated
hereby. This Agreement and the other agreements to be executed and delivered in
connection with this Agreement and the transactions contemplated hereby
constitute legal, valid and binding obligations of the parties hereto.
(b) Insync hereby represents and warrants to Taconic that (i) true
and Correct copies of the CardService Agreement and the Transfer Agreement have
been delivered to Taconic prior to the date hereof and (ii) Insync is not
subject to any litigation or similar proceedings, nor is any such litigation or
proceeding threatened by any person against Insync (to its knowledge).
(c) Internet Solutions hereby represents and Warrants to Taconic
that (i) the software application link provided to PayTrust will accurately
track the Internet Sites and the amounts representing advertising costs and
(ii) except as described to Taconic. Internet Solutions is not subject to any
litigation, or similar proceeding, nor is any such litigation or proceeding
threatened by any person (to its knowledge).
13. NO VIOLATION. Neither the execution, delivery, or performance by the
parties hereto of this Agreement or other documents or agreements to be
executed in Connection with this Agreement (a) violates any provision of the
Parties' respective certificates of incorporation or by-laws or (b) violates
conflicts or constitutes a default under any term or provision of any contract,
commitment, understanding, arrangement or agreement to which any of the Parties
is a party thereto.
14. COVENANTS. Insync and Internet Solutions Covenant and agree with
Taconic as follows:
(a) Internet Solutions and Insync shall limit their marketing and
promotional efforts to Internet Sites that are "Tier 1 Internet Sites meaning
Internet Sites that are not engaged in the distribution of pornography or
engaged in the business of offering gambling or casino services and
additionally are in good standing with the Internet Ad Bureau.
(b) Each advertising agreement with an Internet Site shall be
substantially in the same form as the sample agreement attached as Exhibit C
hereto and shall provide that the Internet Sites be paid no more than 40% of
the amounts actually deposited in the Dedicated Account. Those advertising
agreements meeting these requirements shall constitute "Approved Agreements."
(c) Taconic shall pay all costs of the Escrow Agent; Internet
Solutions shall pay all operating costs associated with the PayTrust Agreement;
and Insync shall pay all setup costs for the Chase Account and the Dedicated
Account.
(d) Insync shall nor amend or modify any terms of the CardService
Agreement or the Transfer Agreement.
(e) Internet Solutions shall provide the services set forth in
Paragraphs 3 and 4.
(f) Internet Solutions and Insync each agree that they shall not
encumber, pledge or otherwise permit liens to arise against their interests in
the Dedicated Account Or any of the related agreements.
(g) Insync and Internet Solutions shall promptly notify Taconic of
any litigation Or other proceeding which is material to either of them which
has been instituted or threatened in writing, Internet Solutions will promptly
notify Taconic of any defaults in payments by PayTrust.
15. INDEMNIFICATION. Insync and Internet Solutions hereby each agree to
indemnify and hold harmless each of Taconic and its officers, investors,
Partners, managers, employees and their affiliates and successors from and
against:
(i) any breach by such party of its obligations or representations
or warranties hereunder or under the Transfer Agreement, the Card Service
Agreement Or the PayTrust Agreement;
(ii) any claim by any person against Taconic for any liability,
damages, etc, related to or arising out of the business, assets, operations or
liabilities of such indemnifying party or its affiliates or any marketing,
promotional or advertising materials; and/or
(iii) any defect, claim for Customer refund, warranty , or other
liability related to the software products or services provided by Insync or
Internet Solutions (as the case may be);
(iv) any failure by lnsync or Internet Solutions to comply with any
applicable Laws.
16. MODIFICATION. No provision hereof shall be modified, altered or
limited unless set forth in writing and duly executed by all of the parties
hereto.
17. NO ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereby and their Successors and
permitted assigns. This Agreement may not be assigned by any of the parties
hereto without the prior written Consent of the other parties.
18. NO JOINT VENTURE. Internet Solutions and Taconic are independent
contractors and accordingly no partnership, joint venture or association is
created hereby.
19. SECTION AND OTHER HEADINGS. This section and the other headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. Words used
in this Agreement in the singular number shall be held to include the plural
and vice versa, unless the Content otherwise requires.
20. NOTICES. All notices and other communications shall be in writing to
the other Parties and shall be deemed to have been duly given (a) on the date
delivered personally; (b) on the next Business Day following the date of
deposit (i) in United States first class express mail, postage prepaid or (ii)
with an overnight courier guaranteeing next Business Day delivery; or ( c ) On
the dare of telecopy transmission, if transmitted prior to5:00 p.m. local time
of the recipient on a business day (provided that confirmation of receipt of
such telecopy transmission is confirmed by the recipient on such date);
otherwise on the next Business Day; in any case addressed or telecopied as
follows:
If to Internet Solutions: Internet Solutions Partners, Inc.
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxx Xxxxxxx
With a copy to: XxXxxxxxxx & Stem, LLP
Attn.: Xxxxxxx Xxxxxxxx, Esq.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
If to Insync: Insync, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxx, X A 98402
Attn.: Xxxx Xxxxx
If to Taconic: Taconic Capital Partners LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attn.: Xxxxxxxxxxx XxXxxx
If to Xxxxxxx Investments: Xxxxxxx Investments, Inc.
c/o Xxxxxx Xxxxxxx
0000 Xxxxxxx X0 X, Xxxx 000
Xxxx Xxxxx, XX 00000
Or such other address as the person to whom notice is to be given may have
previously furnished to the other parties in writing in the manner set forth
above.
21. GOVERNING LAW. This Agreement shall be governed by, and be construed
in accordance with the laws of the State of New York to the fullest extent
permitted by law without regard to its conflict of law rules which might result
in the application of the laws of any other jurisdiction.
22. JURISDICTION SERVICE OF PROCESS. Any action or proceeding seeking to
enforce any provision of or based On any right arising out of this Agreement
may be brought against any of the parties in New York Supreme Court, County of
New York and each of the parties consents to the jurisdiction of such laws in
any such other action or proceeding and waives any objection to venue laid
therein. Process may be served on any Party anywhere in the United States.
23. COUNTERPARTS. This Agreement may be executed in three or more
counterparts, including by facsimile signatures, and each counterpart shall be
deemed an original but all of which taken together constitute one and the same
instrument.
IN WITNESS WHEREOF, each of the parties hereto bas caused this Agreement
to be executed by its respective officers duly authorized as of the date first
above written.
TACONIC CAPITAL PARTNERS, L.P.
By: __________________________
INTERNET SOLUTIONS PARTNERS, INC.
By: __________________________
INSYNC, INC
By: __________________________
XXXXXXX INVESTMENTS, INC.
By: __________________________
