EXHIBIT 10(h)
AGREEMENT OF MERGER AND PLAN OF REORGANIZATION
This Agreement of Merger and Plan of Reorganization ("Agreement")
dated May 1, 1998 is by and among ClearWorks Technologies, Inc., a Delaware
corporation, (the "Buyer") and Team Renaissance, Inc., a Texas corporation, (the
"Company") and Xxxxxxx X. Xxxxxxxx, the majority stockholder of Company and
other stockholders of Company (collectively referred to as the "Sellers").
WHEREAS, the Sellers collectively own all of the outstanding
stock of the Company;
WHEREAS, the Company is engaged in the business (the "Business")
of providing network wiring and cabling services;
WHEREAS, the Buyer desires to acquire by purchase all of Sellers'
shares in the Company;
WHEREAS, for U.S. federal income tax purposes, it is intended that this
merger shall qualify as a tax-free reorganization under the provisions of
Section 368 of the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing premises and
representations, warranties and agreements contained herein, and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
CLOSING
Section I.1 CLOSING. Subject to the provisions of this Agreement,
the Merger shall be consummated by filing with the Secretary of State of the
States of Texas and Delaware a certificate of merger, in such form as required
by, and signed and attested in accordance with, the relevant provisions of the
Texas Business Corporation Act (the "TCBA") and the Delaware General
Corporations Law the "DGCL") (the time of such filing or such later time and
date as is specified in such filing being the "Effective Time"). The closing of
the purchase and sales provided for herein (the "Closing") is to take place on
May 21, 1998 ("Closing Date") at the
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offices of Xxxxxx & Fleschler, 0000 Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000,
concurrently with the execution and delivery hereof.
Section 1.2 EFFECT OF CLOSING. By virtue of the Merger and
without the necessity of any action by or on behalf of the parties hereto:
(a) At the Effective Time, (i) the separate existence of the Company
shall cease and the Company shall be merged with and into Buyer (the Buyer
and the Company are sometimes referred to herein as the "Constituent
Corporations" and the Buyer is sometimes referred to herein as the
"Surviving Corporation"), (ii) the Certificate of Incorporation of the
Buyer shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter amended and (iii) the By-laws of the Buyer as
in effect immediately prior to the Effective Time shall be the By-laws of
the Surviving Corporation until thereafter amended.
(b) At and after the Effective Time, the Surviving Corporation
shall possess all the rights, privileges, powers and franchises as well as
of a public and of a private nature, and be subject to all the
restrictions, disabilities and duties, of each of the Constituent
Corporations; and all and singular the rights, privileges, powers and
franchises of each of the Constituent Corporations, and all property,
real, personal and mixed, and all debts due to either of the Constituent
Corporations on whatever account, as well as for stock subscriptions as
all other things in action or belonging to each of the Constituent
Corporations shall be vested in the Surviving Corporation; and all
property, rights, privileges, powers and franchises, and all and every
other interest shall be thereafter the property of the Surviving
Corporation as they were of the respective Constituent Corporations, and
the title to any real estate vested by deed or otherwise, in either of the
Constituent Corporations, shall not revert or be in any way impaired; but
all rights of creditors and all liens upon any property of either of the
Constituent Corporations shall be preserved unimpaired; and all debts,
liabilities and duties of the respective Constituent Corporations shall
thenceforth attach to the Surviving Corporation and may be enforced
against it to the same extent as if said debts and liabilities had been
incurred or contracted by it, except as otherwise provided by law or
contract.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
Section II.1 EFFECT ON CAPITAL STOCK. As of the Effective Time, by
virtue of the Merger and without any action on the part of any holder of shares
of the Company or shares of capital stock of the Buyer:
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(a) CAPITAL STOCK. Each issued and outstanding share of the capital
stock of the Buyer shall continue to be an issued and outstanding share of
capital stock of the Surviving Corporation. Each certificate representing
immediately prior to the Effective Time issued shares of capital stock of
the Buyer shall continue to evidence ownership of the same number of
shares of capital stock of the Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK. All shares of Company Common
Stock that are owned by the Company as treasury stock shall be canceled
and retired and shall cease to exist (collectively the "Canceled Shares")
and no stock of the Buyer or other consideration shall be delivered in
exchange therefor.
(c) EXCHANGE RATIO FOR COMPANY COMMON STOCK. Subject to Section 2.2,
each issued and outstanding share of Company Common Stock (other than the
Canceled Shares) shall be converted into the right to receive a number of
shares of Buyer Common Stock exchanged at a ratio of three and two tenths
(3.2) shares of Company Common Stock for one share of Buyer Common Stock.
As of the Effective Time, all shares of Company Common Stock shall no
longer be outstanding and shall automatically be canceled and retired and
shall cease to exist, and each holder of a certificate representing any
such shares shall cease to have any rights with respect thereto.
(d) CANCELLATION OF DEBT. The majority shareholder Xxxxxxx X.
Xxxxxxxx will execute a cancellation of debt owed by the Company in the
form of notes payable to Xxxxxxx X. Xxxxxxxx in the amount of $14,598.04.
Section II.2 EXCHANGE OF CERTIFICATES. (a) On the Closing Date, each
Seller shall surrender to Xxxxxxx XxXxxxx, 000 X. Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxx, 00000, Vice President of the Buyer, all certificates representing the
Company Common Stock. Upon surrender of the Company Common Stock, such Seller
shall be entitled to receive the amount of Buyer Common Stock specified in
Section 2.1. All shares of Buyer Common Stock issued upon the surrender for
exchange of shares of Company Common Stock in accordance with the terms hereof
shall be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Company Common Stock, and there shall be no further
registration of transfers of the shares of Company Common Stock after the
Effective Time.
Section II.3 AUDIT. Within sixty (60) days of Closing, the interest
holders in the Company shall cooperate at no charge to Buyer, in conducting as
audit of the combined financial statements of the Company as of April 30, 1998
(the "Audit Date"), in accordance with generally accepted auditing standards and
generally accepted accounting principles ("GAAP"). The certificate of such
Accounting Firm having no qualifications or limitations.
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Section II.4 EMPLOYMENT AGREEMENT. At the Closing, the majority
shareholder, Xxxxxxx X. Xxxxxxxx shall enter into an employment agreement with
Buyer (the "Employment Agreement") in substantially the form of Exhibit A,
attached hereto and made a part hereof.
Section II.5 SHAREHOLDERS' AGREEMENT. At the Closing, the Sellers
will each enter into a Shareholders' Agreement which contains provisions
concerning the transferability of stock of the Buyer in substantially the form
of Exhibit B, attached hereto and made a part hereof.
Section II.6 TAXES UPON CONVEYANCE AND TRANSFER. The Sellers shall
pay any and all sales, use, transfer or similar taxes payable in connection with
the sale, transfer and assignment of the Company Common Stock to Buyer.
Section II.7 MAIL RECEIVED AFTER CLOSING. Following the Closing,
Buyer may receive and open all mail addressed to the Sellers and, to the extent
that such mail and the contents thereof relate to the Business of the Company,
deal with the contents thereof in its discretion. Buyer shall notify the Sellers
of and provide the Sellers copies of any mail that on its face obliges the
Sellers to take any action.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
The Sellers, jointly and severally, represent and warrant to Buyer
the following:
Section III.1 CORPORATE STATUS AND GOOD STANDING. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Texas, with full corporate power and authority under its
certificate or articles of incorporation and by-laws to own and lease its
properties and to conduct the Business. The Company is duly qualified to do
business as a foreign corporation in all states in which the nature of its
business requires such qualification and the failure to do so would have an
adverse effect on the Company or the Company Common Stock.
Section III.2 CAPITAL STRUCTURE. As of the Closing Date, the Company
Common Stock are duly authorized, validly issued, fully paid and non-assessable
and are not subject to preemptive rights or rights of any person to acquire
securities of the Company. The Company Common Stock are all of the outstanding
shares of the capital stock of the Company and are owned beneficially and of
record by the shareholders in the amounts listed on Exhibit C, attached hereto
and made a part hereof. The Company has not issued (i) any securities
convertible or exchangeable for shares of common stock of the Company; or (ii)
any options, warrants, calls, rights (including preemptive rights), commitments
or agreements to which the Company is bound.
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As of the Closing Date, there are no stockholder agreements, voting trusts or
other agreements or understandings to which either of the Sellers or the Company
is a party that will limit in any way the transactions described in the
Agreement or the free and clear ownership of the Company Common Stock by Buyer.
Section III.3 AUTHORIZATION. Each of the Sellers has full power and
authority to execute and deliver this Agreement and the exhibits attached
hereto; to consummate the transactions contemplated herein; and to take all
actions required to be taken by each of them pursuant to the provisions hereof;
and each of the Sellers agree that this Agreement and the exhibits attached
hereto constitute the valid and binding obligation of the Sellers and this
Agreement and exhibits attached hereto are enforceable in accordance with their
terms. To the extent any spouse or former spouse of the Seller has any community
property interest in the Company Common Stock, such spouse or former spouse has
executed a counterpart hereof.
Section III.4 NON-CONTRAVENTION. Except as set forth in Exhibit D
attached hereto and made a part hereof, neither the execution and delivery of
this Agreement or any documents executed in connection herewith, nor the
consummation of the transactions contemplated herein or therein, does or will
violate, conflict with, result in breach of or require notice or consent under
any law, the charter or bylaws of the Company or any provision of any agreement
or instrument to which the Company is a party. The Sellers collectively own 100%
of the outstanding securities of the Company. The last regularly prepared annual
income statement for the Company shows revenues of less than $2,000,000, and the
last regularly prepared balance sheet of the Company shows assets of less than
$1,000,000. The Sellers are collectively the ultimate parent entity of the
Company and, assuming the accuracy of the representation in Section 4.3, no
filing under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX
Xxx") is required in connection with the transactions contemplated by this
Agreement.
Section III.5 VALIDITY. There are no pending or threatened judicial
or administration actions, proceedings or investigations which question the
validity of this Agreement or any action taken or contemplated by the Company or
the Sellers in connection with this Agreement.
Section III.6 BROKER INVOLVEMENT. The Sellers have not hired,
retained or dealt with any broker or finder in connection with the transactions
contemplated by this Agreement.
Section III.7 LITIGATION. Except as set forth on Exhibit E attached
hereto and made a part hereof, there is no investigation, claim or proceeding or
litigation of any type pending or threatened involving or that might have an
adverse effect on the Sellers or Buyer as the owner of the Company Common Stock,
and Sellers are unaware of any judgment, order, writ, injunction or decree of
any court, government or governmental agency, or arbitral tribunal against or
involving Sellers or the Company that might have an adverse effect on Sellers or
Buyer as the
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owner of the Company Common Stock.
Section III.8 TITLE. The Sellers are the true and lawful owners of
the Company Common Stock, free and clear of any and all liens, encumbrances,
mortgages, options, security interests, restrictions, liabilities, pledges and
assignments of any kind, and each of the Sellers has the full right to sell and
transfer to Buyer good and marketable title to the Company Common Stock, free
and clear of any and all liens and encumbrances of any nature or description.
The delivery to Buyer of the instruments of transfer of ownership contemplated
by this Agreement will vest good and marketable title to the Company Common
Stock in Buyer, free and clear of all liens and encumbrances of any nature or
description.
Section III.9 CONTINUITY PRIOR TO CLOSING DATE. Except as set forth
on Exhibit F attached hereto and made a part hereof, from the Letter of Intent
Date to and including the Closing Date, the Company has not conducted its
business otherwise than in the usual and customary manner and in the ordinary
course of business, consistent with its historical practice, and there has not
been any:
(a) any sale, lease, distribution, transfer, mortgage, pledge or
subjection to lien of Company's assets, except sales of obsolete or
surplus equipment in the ordinary and usual course of business and the
creation of liens for taxes not yet due and payable, materialmen's,
mechanics', workmen's, repairmen's or other like liens;
(b) any material transaction by the Company not in the ordinary and
usual course of business;
(c) any material damage, destruction or loss to the assets of the
Company or any other assets used in the Business, whether or not covered
by insurance;
(d) a termination, or a threatened termination, or material
modification, in each case not in the ordinary course of business, of any
material contract or the relationship of the Company with any customer or
supplier;
(e) any change by the Company in accounting methods or principles or
the application thereof or any change in the Company's policies or
practices with respect to items affecting working capital;
(f) any delay or reduction in capital expenditures in contemplation
of this Agreement or otherwise, or any failure to continue to make capital
expenditures in the ordinary course of business consistent with past
practice;
(g) any acceleration of shipments, sales or orders or other similar
action in
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contemplation of this Agreement or otherwise not in the ordinary course of
business consistent with past practice;
(h) any bonus payments, salary increases, commission increases or
modifications, the execution of any employment agreement, severance
arrangement, consulting arrangement or similar document or agreement, or
other changes in employee benefits or other compensation;
(i) any waiver by the Company of any rights that, singly or in the
aggregate, are material to the Business, the Company Common Stock, the
assets of the Company or the financial condition or results of operation
of the Company;
(j) any labor strikes, union organizational activities or other
similar occurrence; or
(k) any contract or commitment by the Company to do or cause to be
done any of the foregoing, except in connection with this Agreement and
the transactions contemplated hereby.
Section III.10 CONTRACTS AND COMMITMENTS. Exhibit G, attached hereto
and made a part hereof, lists all agreements, commitments, contracts,
undertakings or understandings to which the Company is a party and which relate
to the Business or the Company, including but not limited to trademark, trade
name or patent license agreements, service agreements, lease, purchase or sale
agreements, supply agreements, distribution or distributor agreements, purchase
orders, customer orders and equipment rental agreements. The Company is not in
breach of or default under any agreement, lease, contract or commitment listed
in Exhibit G (collectively, the "Agreements"). Each Agreement is a valid,
binding and enforceable agreement of the Company and the other parties thereto.
There has not occurred any breach or default under any Agreement on the part of
the other parties thereto, and no event has occurred which with the giving of
notice or the lapse of time, or both, would constitute a default under any
Agreement. There is no dispute between the parties to any Agreement as to the
interpretation thereof or as to whether any party is in breach or default
thereunder, and no party to any Agreement has indicated its intention to, or
suggested it may evaluate whether to, terminate any Agreement.
Section III.11 TRADEMARKS, TRADE NAMES AND INTELLECTUAL PROPERTY.
Exhibit H, attached hereto and made a part hereof, contains an accurate and
complete list of (i) all patents, pending patent applications and invention
memoranda relating to the Company's Business or the Company Common Stock, (ii)
all registered United States and foreign trademarks, trade names, logos and
copyrights owned or used by the Company in connection with its Business or the
Company Common Stock, and all registrations thereof, and (iii) all unregistered
United States and foreign trademarks, trade names, logos and copyrights used by
the Company in connection with
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its Business or the Company Common Stock. The Company has the right to use all
trademarks, trade names, logos, copyrights, patents, pending patent applications
and invention memoranda referred to herein. There is no pending or threatened
action or claim that would impair any such right.
Section III.12 FINANCIAL RECORDS.. The unaudited financial
statements of the Company as of and for the year ended December 31, 1997 and as
of and for each month ending through April 30, 1998 and attached hereto as
Exhibit I and made a part hereof, delivered to Buyer (the "Financial
Statements"), are accurate and complete, were prepared on a consistent basis
(except as set forth therein) and fairly present the financial condition and
results of operations of the Company. The audited financial statements referred
to in Section 2.3 will be completed within sixty (60) days of the Effective
Time, and will be prepared in accordance with GAAP applied on a consistent basis
and will fairly present the financial condition and results of operations of the
Company. Exhibit J, attached hereto and made a part hereof, reflects all
inter-company transactions between the Company and its stockholders or its
affiliates since January 1, 1996 through the date of this Agreement.
Section III.13 EMPLOYEES AND RELATED MATTERS. Exhibit K, attached
hereto and made a part hereof, is a complete list of all employees of the
Company, listing the title or position held, base salary, any commissions or
other compensation paid or payable, all employee benefits received by such
employees and any other terms of any oral or written agreement with the Company.
Section III.14 NO MATERIAL CHANGE. There has been no material
adverse change in the Company Common Stock or their value or in the Business
from the Letter of Intent Date to and including the Closing Date, and no event
has occurred which could be expected to lead to or cause such a material adverse
change.
Section III.15 INVESTMENT INTENTION. Sellers are acquiring the Buyer
Common Stock hereunder for investment, solely for its own account and not with a
view to, or for resale in connection with, the distribution or other disposition
thereof.
Section III.16 COMPLIANCE WITH LAW. The Company is not in violation
of any provision of any applicable law, decree, order, regulation, license,
permit, consent, approval, authorization or qualification or order, including,
without limitation, those relating to health, the environment or Hazardous
Substances, and the Company has received no notice of any alleged violation of
such law, decree, order, regulation, license, permit, consent, approval,
authorization or qualification or order.
Section III.17 GOVERNMENT LICENSES, PERMITS AND RELATED APPROVALS.
Exhibit L, attached hereto and made a part hereof, sets forth a list of all
licenses, permits, consents,
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approvals, authorizations, qualifications and orders of governmental authorities
required for the conduct of the Business by the Company as currently conducted,
all of which are in full force and effect.
Section III.18 SAFETY REPORTS. Exhibit M, attached hereto and made a
part hereof, sets forth a complete listing of all injury reports, worker's
compensation reports and claims, safety citations and reports, OSHA reports and
all documents relating to any of the foregoing.
Section III.19 TRANSACTIONS WITH CERTAIN PERSONS. Except as set
forth on Exhibit N, attached hereto and made a part hereof, during the past
three years the Company has not, directly or indirectly, purchased, leased or
otherwise acquired any property or obtained any services from, or sold, leased
or otherwise disposed of any property or furnished any services to, or otherwise
dealt with (except with respect to remuneration for services rendered as a
director, officer or employee of the Company), in the ordinary course of
business or otherwise, (i) any officer, director or stockholder of the Company
or any subsidiary thereof or (ii) any person, firm or corporation which,
directly or indirectly, alone or together with others, controls, is controlled
by or is under common control with the Company or any stockholder of the
Company. The Company does not owe any amount to, or have any contract with or
commitment to, any of its shareholders, directors, officers, employees or
consultants (other than compensation for current services not yet due and
payable and reimbursement of expenses arising in the ordinary course of business
not in excess of $2,000 in the aggregate), and none of such persons owes any
amount to the Company.
Section III.20 STUDIES, ETC. Exhibit O, attached hereto and made a
part hereof, sets forth a complete list of all studies, reports, plans, analyses
or similar documents (whether prepared by the Company's employees or others) in
the possession or control of the Company or any affiliate thereof relating to
safety, the environment, Hazardous Substances, as defined in Section 6.1,
intellectual property, markets, competitors, strategic planning, product
liability, warranties or otherwise relating in any way to the Business.
Section III.21 DISCLOSURE. All exhibits and schedules to this
Agreement are complete and accurate. No representation or warranty by the
Sellers in this Agreement or in any exhibit to this Agreement, or in any
statement or certificate or other document furnished to Buyer by the Sellers or
any representative of the Sellers, contains or will contain any untrue statement
of a material fact or omits or will omit a material fact necessary to make the
statements therein not misleading.
Section III.22 EMPLOYEE BENEFITS. Exhibit P, attached hereto and
made a part hereof, contains a complete list of "employee welfare plans" (as
that term is defined in Section 3(1) of ERISA) in which active or former
employees of the Company (collectively, the "Affected Employees") participate
(which plans as applied to such Affected Employees are hereinafter referred to
as "Welfare Plans"). Exhibit P also contains a complete list of "employee
pension benefit plans" as that term is defined in Section 3(2) of ERISA in which
Affected Employees participate (which plans as applied to such Affected
Employees are
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hereinafter referred to as "Pension Plans"). No Affected Employees participate
in any "multiemployer plan" (as that term is defined in Section 3(37) of ERISA).
The Welfare Plans and Pension Plans are hereinafter collectively referred to as
"Company's Plans." Each of the Company's Plans is in compliance with the
provisions of all applicable laws, rules and regulations, including, without
limitation, ERISA and the Code. None of the Pension Plans have incurred any
"accumulated funding deficiency" (as defined in Section 412(a) of the Code). The
Company has not incurred any liability to the Pension Benefit Guaranty
Corporation under Sections 4062, 4063 or 4064 of ERISA, or any withdrawal
liability under Title IV of ERISA with respect to any multiemployer plan. The
Company has no employees covered by a collective bargaining agreement.
Section III.23 DISTRIBUTED PRODUCTS. Exhibit Q, attached hereto and
made a part hereof, sets forth a complete listing of all products (i)
distributed by the Company (and the manufacturer thereof and the person, if
different, for whom the Company distributes such product) or (ii) manufactured
or sold by the Company and distributed by others (and the name of such
distributor). Such schedule also sets forth the terms of each such distribution
arrangement. The Company has full right to distribute all products referred to
in clause (i) of the preceding sentence.
Section III.24 CUSTOMERS. Exhibit R, attached hereto and made a part
hereof, sets forth a complete listing of the Company's customers. The transfer
of the Company Common Stock and the transactions contemplated by this Agreement
will not result in the loss of any of the Company's customers.
Section III.25 ACCOUNTS RECEIVABLE. Exhibit S, attached hereto and
made a part hereof, sets forth a complete listing of all accounts receivable or
notes receivable ("Accounts Receivable"). All of the Accounts Receivable are
owned by the Company, free and clear of all liens, and are fully collectible.
Section III.26 ACCOUNTS PAYABLE. Exhibit T, attached hereto and made
a part hereof, sets forth a complete listing of all accounts payable and/or
notes payable. ("Accounts Payable"). The Accounts Payable list is a complete
list of debts validly owed by the Company.
Section III.27 TAXES. The Company has properly filed or caused to be
filed all federal, state, local and foreign income and other tax returns,
reports and declarations that are required by applicable law to be filed by
them, and have paid, or made full and adequate provisions for the payment of,
all federal, state, local and foreign income and other taxes properly due for
the periods covered by such returns, reports and declarations, except such
taxes, if any, as are adequately reserved against in the Company Balance Sheet.
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Section III.28 FACILITIES. The Company is not in breach, violation
or default of any building/office lease with respect to or as a result of which
the other party (whether lessor, lessee, sublessor or sublessee) thereto has the
right to terminate the same, and the Company has not received notice of any
claim or assertion that is or may be in any such breach, violation, or default.
Section III.29 INSURANCE. The Company has insurance policies in full
force and effect which provide for coverages which are usual and customary in
the business of the Company as to amount and scope, and are adequate to protect
the Company against any reasonable foreseeable risk of loss, including business
interruption. The Company has not within the past three (3) years received any
notice of cancellation of any insurance agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Sellers the following:
Section IV.1 CORPORATE STATUS AND GOOD STANDING. The Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, with full corporate power and authority under its
respective certificate or articles of incorporation and by-laws to conduct its
business as the same exists on the date hereof and on the Closing Date.
Section IV.2 AUTHORIZATION. The Buyer has full corporate power and
authority under its respective certificate or articles of incorporation and
by-laws, and its respective board of directors has taken all necessary corporate
action to authorize, execute and deliver this Agreement and the exhibits and
schedules attached hereto, to consummate the transactions contemplated herein
and to take all actions required to be taken by it pursuant to the provisions
hereof or thereof, and each of this Agreement and the exhibits hereto to which
it is a party constitutes the valid and binding obligation of the Buyer or the
Subsidiary, as the case may be, enforceable in accordance with its terms. The
Buyer Common Stock is duly authorized, validly issued, fully paid and
non-assessable.
Section IV.3 NON-CONTRAVENTION. Neither the execution and delivery
of this Agreement and the schedules and exhibits attached hereto, nor the
consummation of the transactions contemplated herein or therein, does or will
violate, conflict with or result in breach of or require notice or consent under
any law, the charter or bylaws of Buyer or any provision of any agreement or
instrument to which it is a party.
Section IV.4 VALIDITY. There are no pending or threatened judicial
or administrative actions, proceedings or investigations which question the
validity of this Agreement or any action taken or contemplated by Buyer in
connection with this Agreement.
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Section IV.5 BROKER INVOLVEMENT. The Buyer has not hired, retained
or dealt with any broker or finder in connection with the transactions
contemplated by this Agreement.
ARTICLE V
COVENANTS
Section V.1 COVENANT AGAINST COMPETITION. As an essential
consideration for the obligations of the Buyer under this Agreement, the Sellers
hereby agree and covenant that, for a period of three years following the
Closing Date, neither of the Sellers nor any affiliate thereof shall engage in
any manner in providing, marketing or brokering services of the same general
type as those provided or marketed by the Company, or associated services, in
the geographic areas in which the Company has operated since inception, unless
employed by the Buyer, an affiliate of Buyer or the Company. If Buyer believes
the Sellers or any affiliate has violated the provisions of this Section 5.1,
Buyer shall have the right to seek relief from any court of competent
jurisdiction. The Sellers acknowledge that money damages alone will not
adequately compensate Buyer in the event of a breach of the covenants of this
Section. Therefore, the Sellers agree that in addition to all remedies available
at law, in equity or under this Agreement, Buyer shall be entitled to injunctive
relief for the enforcement of this covenant. Each of the Sellers agree that the
covenants in this Section are reasonable with respect to their duration, scope
and geographical area. If, at the time of enforcement of this Section, a court
should hold that the restrictions herein are unreasonable under the
circumstances then existing or otherwise, the parties agree that the maximum
duration, scope or geographical area legally permissible under such
circumstances will be substituted for the duration, scope or area stated herein.
Section V.2 FURTHER ASSURANCES. The Sellers and the Buyer shall
execute and deliver, at Closing or thereafter, any other instrument which may be
requested by a party and which is reasonably appropriate to perfect or evidence
any of the sales, assignments, transfers, conveyances or other transactions
contemplated by this Agreement or to transfer any Company Common Stock after
Closing.
Section V.3 CONSENTS. After the Closing, the Sellers will use their
best efforts to obtain any consents required in connection with the transactions
contemplated hereby that are requested by Buyer and that have not been
previously obtained.
Section V.4 NAME. The Sellers agree that following consummation of
this Agreement none of them shall make any attempt to make any use of the name
of the Company in conjunction with operations in any respect in competition with
those of the Company as its business was conducted prior to the Closing, or
authorize others to do so, without the consent of the Purchaser.
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ARTICLE VI
INDEMNIFICATION
Section VI.1 SELLERS' INDEMNITY OBLIGATIONS. Each of the Sellers
agree to jointly and severally indemnify and hold the Buyer (including its
officers, directors, employees and agents) harmless from and against any and all
claims, actions, causes of action, arbitration's, proceedings, losses, damages,
liabilities, judgments and expenses (including, without limitation, reasonable
attorneys' fees) ("Indemnified Amounts") incurred by the Buyer as a result of
(a) any error, inaccuracy, breach or misrepresentation in any of the
representations and warranties made by or on behalf of either of the Sellers in
this Agreement, (b) any violation or breach by either of the Sellers of or
default by either of the Sellers under the terms of this Agreement, (c) any act
or omission occurring, or condition or circumstances existing, prior to the
Closing Date, or any condition or circumstances caused by any act or omission
occurring prior to the Closing Date, by either of the Sellers or with respect to
the Company Common Stock or the Business not fully covered by a specific accrual
liability or reserve on the unaudited financial statements, including the items
set forth on Exhibit E, (d) the past or present presence, release, remediation
or clean-up of, or exposure to, Hazardous Substances (as defined below) relating
to or located on, within or under the Assets of the Company, (e) any product
liability or other claims concerning services provided or products sold by the
Company prior to the Closing Date not fully covered by a specific accrual
liability or reserve on the audited financial statements and (f) any debts,
liabilities or obligations of Sellers, direct or indirect, fixed, contingent or
otherwise, that are not expressly assumed by Buyer in this Agreement. The
foregoing is not an exclusive remedy, and Buyer shall be entitled to recover its
reasonable and necessary attorneys' fees and litigation expenses incurred in
connection with successful enforcement of its rights under this Section.
"Hazardous Substances" means any pollutant, toxic substance,
asbestos, hazardous waste, or any constituent of any such substance, waste or
product, whether solid, liquid or gaseous in form, described in or regulated
under RCRA, CERCLA, Superfund or under any other federal, state or local law,
statute, ordinance, rule, regulation, order, judicial decision, arbitration
decision or determination of any governmental authority, and shall include
petroleum, natural gas, natural gas liquids, crude oil and any fraction or
product thereof.
Section VI.2 BUYER'S INDEMNITY OBLIGATIONS. Buyer shall indemnify
and hold Sellers harmless from and against any and all Indemnified Amounts
incurred by the Sellers as a result of (a) any error, inaccuracy, breach or
misrepresentation in any of the representations and warranties made by or on
behalf of the Buyer in this Agreement, (b) any violation or breach by the Buyer
of or default by the Buyer under the terms of this Agreement, or (c) any
liabilities or obligations of Sellers expressly assumed by Buyer in this
Agreement. The failure of the Buyer to
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cure, remediate or otherwise repair any condition or circumstance existing at
the Closing or caused by the Sellers shall not be deemed an "omission" for
purposes hereof. The Sellers shall be entitled to recover its reasonable and
necessary attorneys' fees and litigation expenses incurred in connection with
successful enforcement of its rights under this Section.
Section VI.3 SURVIVAL. The representations, warranties and
indemnities set forth in this Agreement and in any certificate or instrument
delivered in connection herewith shall be continuing and shall survive the
Closing. The covenants and agreements entered into pursuant to this Agreement to
be performed after the Closing shall survive the Closing without limitation.
Section VI.4 INDEMNIFICATION PROCEDURES. All claims for
indemnification under this Agreement shall be asserted and resolved as follows:
(a) A party claiming indemnification under this Agreement (an
"Indemnified Party") shall with reasonable promptness (i) notify in writing the
party from whom indemnification is sought (the "Indemnifying Party") of any
third-party claim or claims asserted against the Indemnified Party ("Third Party
Claim") for which indemnification is sought and (ii) transmit to the
Indemnifying Party a copy of all papers served with respect to such claim (if
any) and a written notice ("Claim Notice") containing a description in
reasonable detail of the nature of the Third Party Claim, an estimate of the
amount of damages attributable to the Third Party Claim to the extent feasible
(which estimate shall not be conclusive of the final amount of such claim) and
the basis of the Indemnified Party's request for indemnification under this
Agreement.
Within 15 days after receipt of any Claim Notice (the "Election
Period"), the Indemnifying Party shall notify the Indemnified Party whether the
Indemnifying Party disputes its potential liability to the Indemnified Party
with respect to such Third Party Claim.
If the Indemnifying Party does not dispute its potential liability
to the Indemnified Party within the Election Period, the Indemnified Party shall
give the Indemnifying Party an opportunity to control negotiations toward
resolution of such claim without the necessity of litigation, and if litigation
ensues, to defend the same with counsel reasonably acceptable to the Indemnified
Party, at the Indemnifying Party's expense, and the Indemnified Party shall
extend reasonable cooperation in connection with such defense. The Indemnified
Party shall be entitled to participate in, but not to control, the defense of
any Third Party Claim resulting in litigation, at its own cost and expense;
provided, however, that if the parties to any suit or proceeding shall include
the Indemnifying Party as well as the Indemnified Party and the Indemnified
Party shall have been advised by counsel that one or more legal defenses may be
available to it that may not be available to the Indemnifying Party, then the
Indemnified Party shall be entitled to participate in the defense of such suit
or proceeding along with the Indemnifying Party, but the Indemnified Party shall
be obligated to bear the fees and expenses of counsel of the Indemnified Party,
which shall be selected by the Indemnified Party in its complete and sole
discretion. If the Indemnifying
-14-
Party does not dispute its potential liability to the Indemnified Party within
the Election Period and the Indemnified Party fails to assume control of the
negotiations prior to litigation or to defend such action within a reasonable
time, the Indemnifying Party shall be entitled, but not obligated, to assume
control of such negotiations or defense of such action, and the Indemnifying
Party shall be liable to the Indemnified Party for its expenses reasonably
incurred or amounts paid in connection therewith. If the Indemnifying Party
disputes its potential liability to the Indemnified Party within the Election
Period, then the Indemnified Party shall be entitled to assume control of such
negotiations or defense of action and the liability for the expense thereof, as
well as any liability with respect to such Third Party Claim, shall be
determined as provided in Section 7.5 below.
Neither the Indemnifying Party nor the Indemnified Party shall
settle, compromise, or make any other disposition of any Third Party Claim which
would or might result in any liability to the Indemnified Party or the
Indemnifying Party under this Article VII without the written consent of such
other party.
(b) In the event any Indemnified Party should have a claim against
any Indemnifying Party hereunder that does not involve a Third Party Claim, the
Indemnified Party shall transmit to the Indemnifying Party within a reasonable
time a written notice (the "Indemnity Notice") describing in reasonable detail
the nature of the claim, an estimate of the amount of damages attributable to
such claim to the extent feasible (which estimate shall not be conclusive of the
final amount of such claim) and the basis of the Indemnified Party's request for
indemnification under this Agreement. If the Indemnifying Party does not notify
the Indemnified Party within 15 days from its receipt of the Indemnity Notice
that the Indemnifying Party disputes such claim, the claim specified by the
Indemnified Party in the Indemnity Notice shall be deemed a liability of the
Indemnifying Party hereunder.
Section VI.5 GENERAL. The indemnification obligations under this
Article VI shall apply regardless of whether any suit or action results solely
or in part from the active, passive or concurrent negligence of the Indemnified
Party. The rights of the parties to indemnification under this Article VI shall
not be limited due to any investigations heretofore or hereafter made by such
parties or their representatives, regardless of negligence in the conduct of any
such investigations. All representations, warranties and covenants and
agreements made by the parties shall not be deemed merged into any instruments
or agreements delivered in connection with the Closing or otherwise in
connection with the transactions contemplated hereby.
-15-
ARTICLE VII
ACTIONS TO BE TAKEN AT CLOSING
Section VII.1 ACTIONS TO BE TAKEN BY THE SELLERS AT THE CLOSING. The
Sellers shall take the following actions at the Closing:
(a) Each of the Sellers shall execute and deliver a Shareholder
Agreement.
(b) The Sellers shall endorse and deliver pursuant to Section 2.2
share certificates Nos. 1 through 3 conveying all the Company
Common Stock to Buyer.
(c) Execution of cancellation of debt owed by the Company in the
form of notes payable to Xxxxxxx X. Xxxxxxxx
Section VII.2 ACTIONS TO BE TAKEN BY BUYER AT THE CLOSING. Buyer
shall take the following actions at the Closing:
(a) Buyer shall deliver to Sellers a copy certified by its Secretary
of resolutions duly adopted by the board of directors of Buyer authorizing
and approving the execution and delivery of this Agreement, including the
exhibits and schedules hereto, the issuance of the Buyer Common Stock and
the consummation of the transactions contemplated herein.
(b) Buyer and Xx. Xxxxxxx X. Xxxxxxxx, respectively, shall execute
and deliver the Employment Agreement.
ARTICLE VIII
GENERAL PROVISIONS
Section VIII.1 CONFIDENTIALITY; PUBLICITY; BOOKS AND RECORDS. (a)
After the Closing, the Sellers will not, directly or indirectly, disclose or
provide to any other person any non-public information of a confidential nature
concerning the Business, the Company Common Stock or the business or operations
of the Company, except as is required in governmental filings or judicial,
administrative or arbitration proceedings. The parties hereto will promptly
advise, and obtain the approval of, the other parties before issuing any press
release with respect to this
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Agreement or the transactions contemplated hereby.
(b) For a period of five years after the Closing Date, Buyer will
preserve and retain the books and records constituting part of the assets of the
Company and make such books and records available at the then current
administrative headquarters of Buyer to Sellers, upon reasonable prior written
notice and at reasonable times, at the requesting party's cost and expense, it
being understood that the requesting party shall be entitled to make copies of
any such books and records as shall be reasonably necessary.
Section VIII.2 EXPENSES. The parties hereto shall pay their own
respective expenses, including the fees and disbursements of their respective
counsel in connection with the negotiation, preparation and execution of this
Agreement and the consummation of the transactions contemplated herein. The
Company shall not bear the expenses of Sellers.
Section VIII.3 ENTIRE AGREEMENT. This Agreement, including all
schedules and exhibits attached hereto, constitutes the entire agreement of the
parties with respect to the subject matter hereof, and may not be modified,
amended or terminated except by a written instrument specifically referring to
this Agreement signed by all the parties hereto.
Section VIII.4 WAIVERS AND CONSENTS. All waivers and consents given
hereunder shall be in writing. No waiver by any party hereto of any breach or
anticipated breach of any provision hereof by any other party shall be deemed a
waiver of any other contemporaneous, preceding or succeeding breach or
anticipated breach, whether or not similar.
Section VIII.5 NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been received only if
and when (i) personally delivered or (ii) on the third day after mailing, by
United States mail, first class, postage prepaid, by certified mail return
receipt requested, addressed in each case as follows (or to such other address
as may be specified by like notice):
(a) If to Buyer or the Subsidiary, to:
CLEARWORKS TECHNOLOGIES, INC.
000 X. Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx XxXxxxx, Vice President
-17-
(b) If to Seller, to:
Team Renaissance, Inc.
0000 Xxxx Xxxxxxx Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Section VIII.6 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors, legal representatives and assigns. No third party shall
have any rights hereunder. No assignment shall release the assigning party.
Section VIII.7 TITLE AND RISK OF LOSS. Title to, liability for and
in connection with, and risk of loss of Company Common Stock shall remain with
the Sellers in every instance until the Closing.
Section VIII.8 LIMITATION ON INTEREST. Regardless of any provision
contained herein or any other document executed in connection with this
Agreement, the parties hereto shall not be obliged to pay, and the parties
hereto shall never be entitled to charge, reserve, receive, collect or apply, as
interest (it being understood that interest shall be calculated as the aggregate
of all charges that are contracted for, charged, reserved, received, collected,
applied or paid that constitute interest under applicable law) payable hereunder
any amount in excess of the maximum nonusurious contract rate of interest
allowed from time to time by applicable law, and in the event any of the parties
hereto ever charges, reserves, receives, collects or applies, as interest, any
such excess, at the option of the payor of such interest, such amount shall be
deemed a partial prepayment of the amount payable hereunder or promptly refunded
to the payor of such interest.
Section VIII.9 CHOICE OF LAW. This Agreement shall be governed by
the laws of the State of Texas (without regard to the choice of law provisions
thereof).
Section VIII.10 SECTION HEADINGS. The section headings and table of
contents contained in this Agreement are for reference purposes only and shall
not affect the meaning or interpretation of this Agreement.
Section VIII.11 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument.
[THIS SPACE INTENTIONALLY LEFT BLANK]
-18-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective on the date first above written.
CLEARWORKS TECHNOLOGIES, INC.
By:/s/XXXXXXX XXXXXXX
Name: Xxxxxxx XxXxxxx
Title: Vice President
TEAM RENAISSANCE, INC.
By:/s/XXXXXXX X. XXXXXXXX
Name: Xxxxxxx X. Xxxxxxxx
Title: President
TEAM RENAISSANCE, INC.
By:/s/ XXXXX X. XXXXXXXXXXX
Name: Xxxxx X. XxXxxXxxxxx, Individually
By:/s/XXXXXXX X. XXXXXXXX
Name: Xxxxxxx X. Xxxxxxxx, Individually
-19-
EXHIBITS AND SCHEDULES
EXHIBIT A - Employment Agreement
EXHIBIT B - Shareholders Agreement
EXHIBIT C - Capital Structure
EXHIBIT D - Contravention of Agreements
EXHIBIT E - Litigation
EXHIBIT F - Changes in Continuity
EXHIBIT G - Agreements
EXHIBIT H - Intellectual Property
EXHIBIT I - Financial Statements
EXHIBIT J - Intercompany Transactions
EXHIBIT K - Employees
EXHIBIT L - Government Licenses
EXHIBIT M - Safety Reports
EXHIBIT N - Transactions With Certain Persons
EXHIBIT O - Studies
EXHIBIT P - ERISA
EXHIBIT Q - Company Products
EXHIBIT R - Customer List
EXHIBIT S - Accounts Receivable
EXHIBIT T - Accounts Payable
-20-
EXHIBIT A - EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
BY AND BETWEEN
CLEARWORKS TECHNOLOGIES, INC.
AND
XXXXXXX X. XXXXXXXX
This Agreement (this "Agreement") is entered into by and between
CLEARWORKS TECHNOLOGIES, INC., hereinafter called "Employer" or "Company," and
Xxxxxxx X. Xxxxxxxx of Houston, Texas, hereinafter called "Employee."
A. EMPLOYMENT
Employer hereby employs Employee as its Director - Mergers & Acquisitions.
This Employment Agreement is effective May 1, 1998 (the "Effective Date"), and
continuing for a term of three (3) years, subject to the termination provisions
set forth below.
B. DUTIES
Employee shall perform such duties as like executives of other companies
in the same industry. It is contemplated that Employee shall be responsible for
identifying and acquiring like companies in the information technology
marketplace. Employee will be responsible for completing acquisitions of
profitable companies in compliance with the Company's Strategic Business Plan.
Employee will utilize his best efforts to acquire companies that will enhance
the Company's profitability and will be responsible for building a team to
acquire companies on a national basis. Employee shall devote Employee's full
productive time and best efforts to the performance of Employee's duties.
-21-
C. COMPENSATION
As compensation, Employee shall receive a base salary totaling $70,000.00
per year, payable in accordance with Employer's usual payroll practices, plus a
raise of not less than 10% per year on the first anniversary of the Effective
Date, plus an additional raise of not less than 10% of Employee's then current
salary on the second anniversary of the Effective Date. Employee shall also be
eligible to receive an annual bonus. Employee shall also receive such other
additional compensation, if any, as may be determined in the discretion of
Employer's Board of Directors.
In addition to the above compensation, Employee shall be entitled to
receive commissions equal to one percent (1%) for the first year and one-half of
one percent (.05%) for the second year of the purchase price of any acquisition
brought to Employer's attention while Employee is employed by Employer. The
percentage of Employee's commission will be determine as of the date Employee
obtains an executed nonbinding nondisclosure agreement along with a company
profile on the company to be acquired. The percentage of Employee's commission
will be determine as of the date Employee obtains an executed nonbinding
nondisclosure agreement along with a company profile on the company to be
acquired. The commission will be paid at the time of closing in the form of
options to acquire stock of Employer at three dollars ($3) for the first year,
and a 20% discount from the trading price of that day for the second and third
year, but otherwise in accordance with Employer's Stock Option Plan.
As additional compensation for his employment and any other agreements
contained herein, Employee shall also receive benefits commensurate with the
benefits received by the Senior Executives of the Company.
D. STOCK OPTIONS AND EQUITY OWNERSHIP
The Employee will acknowledge that the Company Common Stock issued to
Employee will not be registered with the SEC for resale. As such, these shares
of Common Stock will be subject to SEC Rule 144 limitations on their sale.
Employee agrees not to transfer shares of Company Common Stock received in the
transaction for the period during which such sale is prohibited.
1. Employer's Right of First Refusal
-22-
During the term of this agreement, in the event that the Employee elects
to sell any portion of his stock in Employer, Employer shall have the
right of first refusal for thirty days after receiving written
notification by Employee that Employee wishes to sell any portion of his
stock in Employer. Employer shall be deemed to have received notice of
such intention not later than three days after Employee mails notice of
the same to Employer. The sales price of any such shares of stock shall be
the price quoted for such stock in the WALL STREET JOURNAL as of market
opening on the date written notification is mailed or delivered (whichever
is sooner) to Employer. If, after thirty calendar days from the date of
delivery or mailing (whichever is earlier), the Employer does not elect to
purchase any portion of the stock Employee wishes to sell, or fails to pay
the purchase price as provided for below, Employee is free to sell the
stock subject to any and all SEC requirements or restrictions.
2. Payment of Purchase Price
The purchase price for the shares of stock in Employer owned by Employee
may be paid by Employer as follows: The purchase price for the shares of
capital stock in the Corporation will be satisfied by a cash payment to
the Employee at the time of the closing for the full amount of the
purchase price. Employer agrees to take such acts as are necessary,
including but not limited to adoption or amendment of appropriate articles
of incorporation or by-laws, to effectuate the following:
(a) In the event Employer or its Affiliates proposes to register an
offering of its securities under the federal securities laws, other than for an
employee benefit plan or pursuant to a plan of merger or acquisition, Employer
shall use its best efforts to cause Employee's securities to be included in the
registration so as to permit the public sale of those securities.
E. TERMINATION
Employee may terminate this Agreement at any time by giving one month's
advanced written notice to Employer. Employer may terminate this Agreement on or
before three (3) years immediately following the Effective Date only in the
event of "cause," as that term in hereinafter defined. Employer may terminate
this Agreement for cause
-23-
immediately by giving notice identifying the cause. "Cause" is defined as any
act by Employee committed with the subjective intent to injure Employer's
business or reputation, a felony conviction of a crime involving moral
turpitude, dependence on illegal controlled substances, or failure to accomplish
objectives set forth by the company's Management By Objectives (MBO's). In the
event of a lawful termination by Employer for cause, Employee shall be entitled
to the rights provided for in this Agreement earned through the end of the
business day of the date of such termination. In the event of any other
termination of this Agreement, Employee shall be entitled to all compensation
and other rights provided to Employee herein for the entirety of the three-year
term provided in paragraph A above.
F. INTELLECTUAL PROPERTIES
Employee agrees that he will promptly and completely inform and disclose
in writing to Employer all writings, inventions, designs, improvements, and
discoveries that Employee may produce during the term of this Agreement that
pertain or relate to the business of Employer or to any experimental work
carried on by Employer whether conceived by Employee alone or jointly with
others and whether or not conceived during regular working hours. Employee shall
describe the features of concepts considered new or different. All such
writings, inventions, designs, improvements, and discoveries shall be the
exclusive property of Employer. Employee shall assist Employer in obtaining
patents and/or copyrights on all such writings, inventions, designs,
improvements, and discoveries deemed appropriate by Employer. Employee will
execute all assignments and other documentation necessary to assign the entire
right, title, and interest in such writings, inventions, designs, improvements,
and discoveries to Employer, its successors and assigns, and to cooperate with
Employer in protecting and perfecting Employer's legal interest in such items.
Employee represents that there are currently no such writings, inventions,
designs, improvements, or discoveries not included in a copyright, copyright
application, patent or patent application which Employee wishes to exclude from
the provisions of this Agreement.
H. CONFIDENTIALITY
-24-
During the term of employment under this Agreement, Employee will have
access to and become familiar with various trade secrets of Employer. The term
"trade secrets" means devices, inventions, processes, and compilations of
information, records, and specifications that are owned by Employer and that are
regularly used in the operation of the business of Employer. All files, records,
documents, drawings, specifications, equipment, and other similar items relating
to the business of Employer, whether or not prepared by Employee, shall remain
exclusive property of Employer and shall not be removed under any circumstances
from the premises where the work of Employee is being carried on, unless prior
written consent of Employer has been obtained. Employee agrees to safeguard and
maintain the confidentiality and proprietary nature of information obtained in
the course of this engagement relating to research, development, and business
activities of Employer, and shall not use such information without Employer's
written consent for a period of one year following the termination and as are
reasonably requested by Employer of this Agreement. Such information and all
copies thereof shall be returned to Employer upon termination of employment.
Employee will sign further confidentiality agreements as are reasonably
requested by Employer.
I. RIGHTS IN DATA
In the course of performing duties under this Agreement, Employee will
handle financial, accounting, statistical, and personnel information concerning
clients, employees, acquisitions and subsidiaries of Employer. All such
information is confidential and shall not be disclosed, directly or indirectly,
to any person other than agents of Employer, either during the term of this
Agreement or at any time after such term. All work product shall be the property
of Employer. Employee hereby assigns to Employer the ownership of such work
product and agrees to cooperate with Employer in protecting and perfecting
Employer's legal interests in such work product.
J. OWNERSHIP OF ACCOUNTS
Employee understands that Employer's relationships with its customers and
their key personnel are Employer's exclusive property and that all information
concerning Employer's projects including the client's data, processing
requirements, contract expiration dates, and rights are the exclusive province
of Employer.
-25-
K. NON-COMPETETION
For the term of this agreement, employee agrees to not compete with the
Company in any of the trade practices and/or services offered by the company.
Employee shall not engage in any manner in providing, marketing or brokering
services of the same general type as those provided or marketed by the Company,
or associated services unless employed by the Company, or an affiliate of the
Company. The geographic area of non-competition shall be limited to the State of
Texas.
L. MISCELLANEOUS
1. The descriptive headings of the several sections of this Agreement
are inserted for convenience of the parties only and do not
constitute part of this Agreement.
2. The rights and obligations of Employer under this Agreement shall
inure to the benefit of and shall be binding upon the successors and
assigns of Employer.
3. This Agreement, and all rights and obligations of the parties
hereunder, shall be construed and interpreted under and pursuant to
the laws of the State of Texas. Venue for any disputes arising under
this Contract shall rest exclusively in Xxxxxx County, Texas.
4. Any disputes including termination disputes arising under this
Agreement first shall be submitted to confidential non-binding
mediation with the mediator to be selected in good faith by both
Employer and Employee. The cost of the mediation will be borne
equally by both parties. If Employer and Employee fail in good faith
to agree upon the selection of a mediator within fifteen (15) days
after written notice of the need for mediation, mediation shall no
longer be required.
-26-
In Witness Whereof, the parties hereto have executed this Agreement in
multiple counterparts on this 15th day of May, 1998.
CLEARWORKS
TECHNOLOGIES, INC.
/s/XXXXXXX XXXXXXX
Xxxxxxx XxXxxxx, Vice President
/s/XXXXXXX X. XXXXXXXX
Xxxxxxx X. Xxxxxxxx
-27-
EXHIBIT B - SHAREHOLDERS AGREEMENT
The Shareholder will acknowledge that the Buyer Common Stock issued to
Shareholder will not be registered with the SEC for resale. As such, these
shares of Common Stock will be subject to SEC Rule 144 limitations on their
sale. Shareholder agrees not to transfer shares of Buyer Common Stock received
in the transaction for the period during which such sale is prohibited.
1. Buyer's Right of First Refusal
In the event that the Shareholder elects to sell any portion of his stock
in Buyer, Buyer shall have the right of first refusal for thirty days
after receiving written notification by Shareholder that Shareholder
wishes to sell any portion of his stock in Buyer. Buyer shall be deemed to
have received notice of such intention no later than three days after
Shareholder mails notice of the same to Buyer. The sales price of any such
shares of stock shall be the price quoted for such stock in the WALL
STREET JOURNAL as of market opening on the date written notification is
mailed or delivered (whichever is sooner) to Buyer. If, after thirty
calendar days from the date of delivery or mailing (whichever is earlier),
the Buyer does not elect to purchase any portion of the stock Shareholder
wishes to sell, or fails to pay the purchase price as provided for below,
Shareholder is free to sell the stock subject to any and all SEC
requirements or restrictions.
2. Payment of Purchase Price
The purchase price for the shares of stock in Buyer owned by Shareholder
may be paid by Buyer as follows: The purchase price for the shares of
capital stock in the Corporation will be satisfied by a cash payment to
the Shareholder at the time of the closing for the full amount of the
purchase price. Buyer agrees to take such acts as are necessary, including
but not limited to adoption or amendment of appropriate articles of
incorporation or by-laws, to effectuate the following:
(a) In the event Buyer or its Affiliates proposes to register an offering
of its securities under the federal securities laws, other than for an
employee benefit plan or pursuant to a plan of merger or acquisition,
Buyer shall use their best efforts to cause Shareholder's securities to be
included in the registration so as to permit the public sale of those
securities.
By:/s/XXXXXXX X. XXXXXXXX
Name: Xxxxxxx X. Xxxxxxxx, Individually
By:/s/XXXX XXXXXXXXXXX
Name: Xxxx XxXxxXxxxxx, Individually
-28-
Many pages of copy followed, no file.
