TERMINATION AGREEMENT
This Termination Agreement ("Agreement") is made this 1st day of June, 2000,
("Effective Date") by and between FutureOne, Inc., a Nevada corporation,
(formerly known as World's Fare, Inc.) ("FutureOne" or the "Company") and
Blackwater Capital Partners, L.P. and Blackwater Capital Group, L.L.C.
("Blackwater" or the "Investors"), all of which may be referred to herein as a
"Party" or the "Parties"
WHEREAS, FutureOne, located in Phoenix Arizona, is a communications company that
also provides broadband engineering and construction, broadband applications and
is developing NeighborComm(TM); and
WHEREAS, Blackwater is a financial services company located in Chicago,
Illinois; Xxxxxx X. Xxxxx is the Managing Member; and
WHEREAS, effective as of July 25, 1998, the Parties hereto entered into a
certain Stock Purchase Agreement ("SPA"), whereby Blackwater is obligated to
purchase 3,411,000 shares of FutureOne's common stock (including 100,000 shares
each from certain executive officers of FutureOne) for $10,000,000, a Voting
Trust Agreement ("VTA") and a Warrant Agreement ("Warrant"), collectively the
"Investor Agreements"; and
WHEREAS, Blackwater has purchased directly or through third party investors
1,387,605 shares of FutureOne common stock under the SPA as of the Effective
Date hereof; and
WHEREAS, Blackwater has been issued a Warrant to purchase 1,700,000 shares of
FutureOne common stock at $1.00 per share, subject to certain per share vesting
requirements, and approximately 650,000 shares of said Warrant have vested under
the SPA as of the date hereof. The SPA provides that the remaining approximately
1,050,000 will vest if FutureOne refuses further funding from Blackwater; and
WHEREAS, Blackwater has rights under the SPA to fund 75% of the purchase through
a public offering of FutureOne's common stock after it has funded the first 25%
directly or through third party investors; and
WHEREAS, The SPA provided that Blackwater purchase an initial 300,000 shares of
FutureOne common stock at $1.25 per share and purchase all remaining shares at a
minimum price of $2.93169. As of the date hereof, Blackwater has purchased
187,605 shares for its own account at $2.93169 even though they had an
obligation to sell such shares to an underlying investor at $1.25 per share.
Subsequently, FutureOne approved the sale of one million shares of common stock
plus 400,000 of the Blackwater warrants) to Muluha Ltd. at a gross price of
$2.30 per share and a net price of approximately $2.05 per share. In addition
FutureOne approved the sale of 200,000 shares of common stock to Xxxxxx Xxxxxx
at $1.25 per share; and
WHEREAS, As of the Effective Date herein, FutureOne has not raised any capital
funding through convertible notes, warrants or stock purchases directly from
FutureOne investors at per share prices higher than $1.00 for its common stock;
and
WHEREAS, Due to the circumstances described above and because various market and
business circumstances have changed since the Parties originally executed the
Investor Agreements, certain differences have subsequently arisen between the
Company and the Investors concerning the SPA. The Parties therefore believe it
is in their mutual best interest to terminate the existing SPA and VTA and enter
into a new agreement for the performance of various consulting, financial,
advisory and other related services to be provided by Blackwater under the terms
and conditions expressed on Exhibit A attached hereto and made a part hereof.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions herein, the execution of this Agreement and the Consultant Services
Agreement attached hereto as Exhibit A, and the faithful performance of same by
each of the Parties hereto, including the services to be performed by Blackwater
as indicated on Exhibit A, the Company and the Investors hereby agree as
follows:
1. WARRANT AGREEMENT AND WARRANT. The Parties hereby agree the Warrant Agreement
shall remain in full force and effect in accordance with its terms, including
that certain "Warrant for the Purchase of 1,700,000 Shares of Common Stock,
$0.001 par value" issued by the Company to Blackwater on or about July 25, 1998.
The Parties further acknowledge that Blackwater has subsequently transferred
their rights and interest to purchase 600,000 of said shares to other investors,
brokers and affiliates. The Parties further acknowledge that FutureOne, by
hereinafter terminating the SPA, is refusing further funding under the SPA and
accordingly all previously non-vested warrants under the SPA shall immediately
become fully vested according to the terms of the SPA.
2. TERMINATION OF STOCK PURCHASE AGREEMENT. Subject to Section 4 herein and
except as to transactions that have already occurred, modifications thereto that
have been agreed to and ratified by the prior actions of the Parties and those
provisions of the Stock Purchase Agreement which by their terms or nature
survive termination, the Parties hereby mutually agree to terminate the Stock
Purchase Agreement effective June 1, 2000. The Parties also hereby agree that
each party to the SPA has performed satisfactorily under the Agreement and that
neither Party shall have a claim against the other for any breach or default
under the SPA, including any breach of the representations of either party
contained therein.
3. TERMINATION OF VOTING TRUST AGREEMENT. The parties agree that no warrants
were ever exercised and no shares are currently subject to the VTA. Therefore,
the Parties hereby mutually agree to terminate the Voting Trust Agreement
effective June 1, 2000.
4. FUTURE OBLIGATIONS OF THE PARTIES. Exhibit A attached hereto defines the
Agreement by and between the Company and Blackwater for the performance of
various consulting, financial, advisory and other related services to be
performed by Blackwater following the Effective Date of this Agreement.
5. COMPENSATION FOR SERVICES. As consideration for any and all obligations of
the Company to Blackwater, past present or future, including compensation for
those services to be performed as defined in the Consultant Services Agreement,
attached hereto as Exhibit A, and any compensation due Blackwater as a result of
the termination of the SPA and VTA, FutureOne hereby agrees to immediately issue
to Blackwater 330,000 shares of its restricted common stock. upon execution of
an appropriate Subscription Agreement. THE FOREGOING SHALL BE THE SOLE AND
EXCLUSIVE COMPENSATION DUE TO BLACKWATER FROM FUTUREONE AS A RESULT OF
TERMINATION OF THE SPA AND VTA AND SERVICES TO BE PERFORMED UNDER THE CONSULTANT
SERVICES AGREEMENT.
6. NO LIABILITY FOR TERMINATION. Except for the compensation to be received in
Section 5, Blackwater agrees that it shall have no right to, and hereby
expressly releases and holds FutureOne harmless from any and all liability for
damages, equitable relief or indemnification of any kind including, but not
limited to loss of profits, promotional expenditures, loss of goodwill, or any
other cost, damage, liability, loss or expense incurred by Blackwater, including
any special, indirect or compensatory damages, relating in any manner to the
termination of the SPA and VTA.
7. GENERAL PROVISIONS
a. The failure to insist, in any one or more instances, upon the strict
performance of any provision hereof or to exercise any right hereunder shall not
be deemed to be a waiver or relinquishment of the future performance of any such
provision or the future exercise of such right, but the obligation of Blackwater
and FutureOne with respect to such future performance shall continue in full
force and effect.
b. The nature of the Services to be performed hereunder are unique and personal.
Therefore, neither this Agreement, nor any interest herein, nor any rights
hereunder shall be sold, transferred or assigned (by operation of law or
otherwise) by Blackwater, nor shall any of the duties of Blackwater hereunder be
delegated to any person, firm or corporation. Any attempted assignment,
transfer, sale or delegation shall be void and of no force or effect.
c. Blackwater agrees to furnish FutureOne with oral or written reports and
information regarding the Services and work being performed at such times and as
often as FutureOne may reasonably request, making full disclosure of efforts
made by Blackwater and the results thereof.
d All notices that are authorized, allowed or required under the terms of this
Agreement shall be in writing and shall be by verified delivery through
electronic mail, personal delivery, by registered or certified mail (return
receipt requested, postage prepaid) or by a third party courier service where
receipt is verified by the receiving party's acknowledgement at the addresses
listed for the parties in the SPA or as subsequently notified in writing. With
respect to notices transmitted via electronic mail or personal delivery, notice
shall be deemed to have been received on the date that notice is sent. With
respect to notices transmitted via registered or certified mail or via third
party courier service, notice shall be deemed to have been received five
business days following the date that the notice is sent. Either party may from
time to time change its address for notification purposes by giving the other
party written notice of the new address and the date upon which it will become
effective.
e. In the event any one or more of the provisions of this Agreement is held to
be unenforceable under applicable law such unenforceability shall not affect any
other provision of this Agreement; this Agreement shall be construed as if said
unenforceable provision had not been contained herein; and the parties shall
negotiate in good faith to replace the unenforceable provision by such as has
the effect nearest to that of the provision being replaced.
f. The headings and captions that have been used in this Agreement have been
used for convenience only and are not to be considered in construing or
interpreting the provisions of this Agreement.
g. Any and all proposed press releases or other announcements by FutureOne or
Blackwater referring to the other party must be submitted and approved by the
other party prior to any release.
h. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
8. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding by and between the Parties and no representations, promises,
agreements and/or understandings, written or oral, relating to this Agreement by
either Party not contained herein shall be of any force or effect.
This Agreement and the Exhibit hereto are the exclusive Agreement between the
Parties with respect to its subject matter and supersedes all prior and
contemporaneous agreements, negotiations, representations and proposals, written
or oral, related to its subject matter. The Parties acknowledge that they have
read this Agreement and understand and agree to be bound by its terms and
conditions.
9. AMENDMENTS. This Agreement may be amended at any time only by the written
mutual consent of the Parties hereto.
10. TIME OF THE ESSENCE. Time shall be of the essence under this Agreement.
11. CHOICE OF LAW AND DISPUTE RESOLUTION. This Agreement is to be governed by
and construed in accordance with the laws of the state of Arizona, excluding
conflicts of law provisions.
The Parties agree to attempt to settle any dispute or claim arising out of this
Agreement through consultation and negotiation in the spirit of mutual
friendship and cooperation. If there is a dispute about the interpretation of,
or performance under this Agreement, or other claim, serious concern or material
issue between the Parties regarding, arising from or related to this Agreement,
the Parties will first submit the matter to a panel of two senior executives
(one executive chosen by each party) with sufficient authority to resolve the
dispute. The panel shall promptly meet and/or confer in a good faith effort to
resolve such dispute.
If such internal attempts fail, the dispute shall then be submitted to
mediation, arbitration, fact-finding or other form of alternative dispute
resolution (ADR) in accordance with the then current rules of the American
Arbitration Association. All hearings shall be held in Phoenix, Arizona. The
costs of such mediation or other ADR procedure shall be shared equally by the
Parties. Any dispute which cannot be resolved between the Parties within three
months of the date of the initial demand shall be finally determined judicially.
The use of an ADR procedure under this Section shall not be construed (under
such doctrines as laches, waiver or estoppel) to have affected adversely either
party's ability to pursue its legal remedies.
The prevailing party in any action arising out of this Agreement shall be
entitled to recover its reasonable attorneys' fees and costs in addition to any
other relief to which it may be entitled.
IN WITNESS WHEREOF, the Parties hereto have entered into this Agreement as of
the Effective Date set forth herein.
FUTUREONE, INC. BLACKWATER CAPITAL
GROUP, L.L.C.
By: By:
--------------------------------- ---------------------------------
Name: Name:
------------------------------- -------------------------------
Title: Title:
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BLACKWATER CAPITAL
PARTNERS, L.P.
By:
---------------------------------
Name:
-------------------------------
Title:
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Exhibit A
CONSULTANT SERVICES AGREEMENT
In consideration of the mutual covenants and agreements contained in this
Agreement, the Parties hereto further agree to retain Blackwater as a consultant
under the following terms and conditions:
1. SERVICES OF CONSULTANT. FutureOne hereby engages Blackwater to provide and
Blackwater agrees to provide professional consulting, advisory and financial
services on behalf of FutureOne as follows: Contacting and locating capital
funding sources such as broker/dealers, potential investors, registered
representatives, institutions, mutual fund managers, investment banking sources,
securities analysts, independent portfolio managers, and others in the
professional investment community contacts for the purpose of meeting
FutureOne's capital requirements. Blackwater will also coordinate and assist in
the filing and preparation of the documentation necessary for any private
placement, debt financing, preferred stock issuance, secondary common stock
public offering or other like capital raise by working with the attorneys,
auditors, bankers and other professionals/consultants of FutureOne. Blackwater
will also actively assist FutureOne in locating and securing strategic industry
alliances, joint venture partners, merger and acquisition targets, assist in the
analysis of company assets for dispositions or other financial transactions and
generally assist the officers and directors in the financial and strategic
direction of FutureOne.
Blackwater shall pay all of their own expenses, including, but not limited to,
travel, consulting fees and other expenses incurred by Blackwater in the normal
course of business, to provide these services.
This Agreement shall not limit FutureOne's right to perform itself or to select
others to perform the same or similar consulting work for any reason.
2. TERM. This Agreement shall be effective as of the Effective Date herein and
continue for Six (6) months from the effective date hereof. This Agreement may
be extended for additional periods of time by mutual written consent of the
Parties. FutureOne may terminate this Agreement for convenience at any time and
for any reason upon ten days prior written notice to Blackwater. Notwithstanding
the above, FutureOne may terminate or suspend performance under this Agreement
immediately upon any material breach by Blackwater, or if Blackwater becomes
insolvent, admits in writing its inability to pay its debts as they mature,
makes an assignment for the benefit of creditors, or if a petition under the
Bankruptcy Act is filed by or against Blackwater.
Termination shall not relieve either party of obligations previously incurred
pursuant to this Agreement. The parties agree that where the context of any
provision indicates an intent that it shall survive the term of this Agreement,
then it shall so survive.
3. INDEPENDENT CONTRACTOR.
a. Blackwater shall perform services hereunder only as an independent
contractor. FutureOne is to have no control over the methods and means of
accomplishing the desired result. Under no circumstances shall Blackwater or its
employees or agents be construed to be an employee or agent of FutureOne.
b. FutureOne shall not be liable to withhold taxes, provide any insurance or
otherwise be obligated as an employer of Blackwater or its employees or agents.
Nothing in this Agreement shall be interpreted as granting either party the
right or authority to make commitments of any kind for the other, implied or
otherwise, without prior approval and consent in writing. This Agreement shall
not constitute, create, or in any way be interpreted as a joint venture,
partnership or formal business organization of any kind.
4. NO BROKER-DEALER. Blackwater is not a broker/dealer registered with the NASD
or any other regulatory agency. In performing services under this Agreement, the
Parties do not intend that Blackwater will be acting in any broker/dealer or
underwriting capacity, or receiving any compensation from FutureOne as such.
Blackwater is acting in the capacity as a financial advisor or finder and will
not be responsible for the negotiation of the financial terms between the
parties involved in any capital raise, nor will Blackwater be responsible for
the handling of any of the funds.
5. NON-EXCLUSIVE AGREEMENT. It is understood and agreed that this Agreement is a
nonexclusive Agreement between FutureOne and Blackwater, and that nothing in
this Agreement shall prevent Blackwater from providing services to other clients
or FutureOne from retaining other consultants and advisors. Blackwater agrees,
however, to devote sufficient time and effort in performing Services for
FutureOne as are reasonable and necessary to meet FutureOne's requirements.
6. PROPRIETARY INFORMATION. Blackwater shall treat as information proprietary to
FutureOne any and all data and/or information discovered and/or disclosed and
shall utilize Proprietary Information solely for the purpose of performing the
Services hereunder. Blackwater shall not (directly or indirectly) use any such
information and/or data for its own benefit or disclose or fail to use its best
efforts to prevent the disclosure of the same to any other person or entity
during the term of this Agreement or at any time thereafter. Proprietary
information includes but is not limited to unique concepts, products, services,
company/corporate strategy and business development, including plans relating to
acquisitions, expansion, marketing, financials, FutureOne lists and other
business information, operating information, policies, practices and processes,
database and networking systems, information relating to employees, customers,
prospective customers and suppliers, whether such information is documented,
contained electronically and/or contained on any other medium.
7. CONFIDENTIALITY. Blackwater shall keep any and all Proprietary Information
obtained during the term of this Agreement or any time thereafter in the
strictest of confidence and secrecy. Blackwater agrees it will not in any way or
by any means, disclose, disseminate and/or distribute any Proprietary
Information to any third party without the prior express written consent of the
FutureOne.
8. DELAY. A party hereto shall not be liable for a delay in its performance
hereunder if such delay is caused by any circumstances beyond its reasonable
control and without its fault or negligence. The party whose performance is
delayed shall immediately notify the other party verbally and in writing of the
delay and the cause thereof, shall take reasonable steps to avoid or remove the
circumstances of delay, and shall resume performance whenever such circumstances
have been removed or alleviated. Neither party shall be liable to the other for
any costs associated with such delay.
If such period of delay however exceeds sixty (60) days, the parties shall meet
and confer to discuss the implications of any further delay and possible
remedies, including but not limited to termination of this Agreement.
This provision shall in no way impair FutureOne's right to terminate this
Agreement as stated in Section 2.
9. COMPLIANCE WITH LAWS AND PROCEDURES. Blackwater will comply with this
Agreement and all applicable laws, and rules, regulations where Blackwater's
services are to be performed. As part of this obligation and without limitation,
Blackwater agrees that it will not take any action in connection with the
performance of the Services herein that would be illegal or in violation of
applicable laws, rules and regulations, and in this regard, Blackwater agrees to
indemnify, defend and save FutureOne harmless from any and all liability as may
be suffered by FutureOne as a consequence of Blackwater's failure to comply with
these undertakings. Blackwater is responsible for all obligations, taxes and
reports relating to or required by the laws pertaining to social security,
unemployment compensation, worker's compensation, environmental regulation,
occupational safety and health, income tax and other reports, and shall be
responsible for making any and all appropriate payments required by state and/or
federal law or by applicable foreign law.
IN WITNESS WHEREOF, the Parties have entered into this Agreement as of this 19th
day of May, 2000.
FUTUREONE, INC. BLACKWATER CAPITAL
GROUP, L.L.C.
By: By:
--------------------------------- ---------------------------------
Name: Name:
------------------------------- -------------------------------
Title: Title:
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BLACKWATER CAPITAL
PARTNERS, L.P.
By:
---------------------------------
Name:
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Title:
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