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AGREEMENT
AGREEMENT dated as of March 16, 1999 by and between XXXXX X. XXXX,
residing at 00 Xxx Xxxx Xxxx, Xxxxx Xxxxx, Xxx Xxxx 00000 ("Xxxx") and AD-STAR
SERVICES, INC., a New York corporation, having its principal offices at 0000
Xxxxxxx Xxxxxx, Xxxxxx xxx Xxx, Xxxxxxxxxx 00000 ("Ad-Star").
WHEREAS, Publishing Technologies , Inc. ("PTI") by agreement dated as
of February 1, 1994 by and among Ad-Star, PTI, Xxx Xxxxxx ("Xxxxxx") and Xxxxxx
X. Xxxxxxxx ("Xxxxxxxx") (the "License Agreement") heretofore granted an
exclusive license to Ad-Star to service the business conducted by PTI prior to
June 1, 1991 and by Ad-Star since June 1, 1991 (the "Ad-Star Business"); and
WHEREAS, the License Agreement also provided inter alia as follows:
(a) Ad-Star will pay PTI a royalty of five percent of all
Ad-Star Customer License Fees and Customer License Renewal Fees, or $100,000 a
year, whichever is greater;
(b) Ad-Star granted to PTI a non-transferable option to
purchase 15% of its Common Stock for one dollar;
(c) PTI granted to Ad-Star an option to purchase all the
shares of Ad-Star at a purchase price adjustable each year based on the royalty
payments made under (a) above at a price as of February 1, 1994 of $770,000, as
set out more fully in the License Agreement; and
(d) Xxxxxx, Xxxxxxxx and Ad-Star agreed that they would not
compete with the Ad-Star Business in certain respects; and
WHEREAS, Compton Management Associates Limited ("Compton") on or about
May 1, 1994 acquired all the outstanding Common Stock of PTI, which latter
company was thereafter liquidated and its assets distributed to Compton; and
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WHEREAS, Compton, on or about November 6, 1995, liquidated its business
and in connection therewith transferred all its assets, rights and privileges
formerly owned by PTI to Xxxx; and
WHEREAS, the Company has received a letter of intent for an initial
public offering and is negotiating with prospective lenders to provide interim
financing; and
WHEREAS, the acquisition by Ad-Star of all the PTI assets will
facilitate the consummation of this financing.
NOW, THEREFORE, for good and valuable consideration exchanged by the
parties, receipt of which is acknowledged, the parties have agreed as follows:
1. Xxxx represents and warrants (a) that the assets and
business formerly owned and conducted by PTI consisting of all its assets,
tangible and intangible, including all the intellectual property and software
owned by PTI, its rights under the License Agreement, including the rights to
the royalty payments and the rights to enforce the non-competition provisions
all as referred to in the second Whereas Clause above were transferred to him
and that he is the sole and exclusive owner of such assets and rights and (b)
that he has the power, right and authority to transfer the License Agreement and
PTI's rights thereunder to Ad-Star and that upon the transfer of such rights
under this Agreement Ad-Star will be fully vested with the exclusive rights of
ownership to the assets and business relating to the Ad-Star Business.
2. The parties hereto have agreed that as of the date hereof
the option price at which Ad-Star can acquire the PTI business under the License
Agreement is fixed at $751,709.57 and that Ad-Star by this agreement does hereby
exercise its option by delivering to Xxxx its note (the "Note") in the form
annexed hereto in such amount payable to Xxxx.
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3. Such Note with interest at the rate of 10 percent per annum
is payable in equal monthly installments of $8,333.33, such payments to be
applied in the following order: first to the accrued and unpaid interest to the
date of payment and the balance to reduce the principal amount thereof. The
installment payments under the Note shall commence on the first day of the month
following the date of this Agreement and shall continue until the principal
balance is paid in full. Ad-Star will prepay the Note in full upon the
consummation of a initial public offering of Ad-Star's Common Stock resulting in
the receipt by the Company of at least $5,000,000 in gross proceeds.
4. Xxxx by this instrument does hereby assign, sell, transfer,
grant and convey to Ad-Star its successors and assigns all of the assets, rights
and privileges formerly owned or held by PTI which have devolved upon Xxxx
including, without limitation, PTI's rights under the License Agreement,
consisting among other things of, the right to receive royalties from Ad-Star,
and to enforce certain non-competition provisions against Xxxxxx, Xxxxxxxx and
Ad-Star, and all rights in and to intellectual property and software relating to
the Ad-Star Business or otherwise formerly owned or used by PTI.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
day and year first above written.
/s/ Xxxxx X. Xxxx
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XXXXX X. XXXX
AD-STAR SERVICES, INC.
BY: /s/ Xxxxxx Xxxxxxxx
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President
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