Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
DOMINIX, INC.
JADE ENTERTAINMENT GROUP, INC.
AND
JADE ACQUISITION CORP.
AND
THE PRINCIPAL STOCKHOLDERS OF
JADE ENTERTAINMENT GROUP, INC.
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of November 25, 2003, among Dominix, Inc., a Delaware
corporation with principal offices located at 00 Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxx
Xxxx 00000 ("Parent"), Jade Entertainment Group, Inc., a New York corporation
with principal offices located at 00 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxx
Xxxx 00000("Xxxx"), and Jade Acquisition Corp., a New York corporation and a
wholly-owned subsidiary of Parent with principal offices located at 00 Xxxxxxxxx
Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("Jade Merger Sub") and the Principal
Stockholders of Jade set forth on the signature pages to this Agreement
(collectively the "Principal Stockholders").
RECITALS
A. Upon the terms and subject to the conditions of this Agreement and
in accordance with the New York Business Corporation Law ("New York Law"), and
the terms of that certain letter of intent, as amended dated September 26, 2003
among Parent, Jade, the Principal Stockholders and MarketShare Recovery Inc.
(the "LOI"), Parent and Jade, intend to enter into a business combination
transaction. The LOI also provides for the Parent to require all of the assets
of MarketShare Recovery Inc. in a separate transaction.
B. Parent has previously made a loan in the principal amount of $50,000
to fund working capital needs of Jade, which loan is secured by all assets of
Jade (the "Secured Loan");
C. The Board of Directors of Jade (i) has determined that the Merger
(as defined in Section 1.2 below) is consistent with and in furtherance of the
long-term business strategy of Jade and fair to, and in the best interests of,
Jade and its stockholders, (ii) has approved this Agreement, the Merger and the
other transactions contemplated by this Agreement, (iii) has adopted a
resolution declaring the Merger advisable, (iv) has determined to recommend that
the stockholders of Jade adopt this Agreement and (v) none of the aforesaid
actions by the Board of Directors of Jade has been amended, rescinded or
modified.
D. The Board of Directors of Parent (i) has determined that the Merger
is consistent with and in furtherance of the long-term business strategy of
Parent and fair to, and in the best interests of, Parent and its stockholders,
(ii) has approved this Agreement, the Merger and the other transactions
contemplated by this Agreement, (iii) has adopted a resolution declaring the
Merger advisable and (iv) has determined to recommend that the stockholders of
Parent approve the issuance of shares of Series B preferred stock of the Parent
(as defined below) pursuant to the Merger (the "Share Issuance") and (iv) none
of the aforesaid actions by the Board of Directors of Parent has been amended,
rescinded or modified.
E. The Board of Directors of the Jade Merger Sub (i) has determined
that the Merger is consistent with and in furtherance of the long-term business
strategy of the Jade Merger Sub and fair to and in the best interests of the
Jade Merger Sub and its stockholders, (ii) has approved this Agreement, the
Merger and the other transactions contemplated by this Agreement; and (iii) has
adopted a resolution declaring the Merger advisable.
F. Contemporaneous with the execution of this Agreement, the Parent is
executing that certain Stock Purchase Agreement between the Parent and
MarketShare Recovery Inc., a Delaware corporation (the "MarketShare Parent")
dated as of November 25, 2003 (the "Market Stock Purchase Agreement"), which
provides for the Parent to acquire all of the capital stock of MarketShare
Recovery Inc.'s wholly owned subsidiary, MarketShareRecovery, Inc., a New York
corporation ("Market"). The principal stockholders of the MarketShare Parent are
also the principal stockholders of Jade.
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NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
THE MERGER
1.1 The Jade Merger. At the Effective Time (as defined in Section 1.3
hereof) and subject to and upon the terms and conditions of this Agreement and
the applicable provisions of New York Law, Jade Merger Sub shall be merged with
and into Jade (the "Merger"), the separate corporate existence of Jade Merger
Sub shall cease and Jade shall continue as the surviving corporation and shall
become a wholly-owned subsidiary of Parent. The surviving corporation after the
Merger is sometimes referred to hereinafter as the "Jade Surviving Corporation."
1.2 Effective Time. Unless this Agreement is earlier terminated
pursuant to Article VII hereof, the closing of the Merger and the other
transactions contemplated by this Agreement (the "Closing") will take place at
the offices of counsel for the Parent or such other mutually convenient location
at a time and date to be specified by the parties, but in no event later than
two (2) business days following satisfaction or waiver of the conditions set
forth in Article VI hereof. The date upon which the Closing actually occurs is
herein referred to as the "Closing Date." On the Closing Date, the parties
hereto shall cause the Merger to be consummated by filing a Certificate of
Merger (or like instrument) (the "Certificate of Merger") with the Secretary of
State of the State of New York, in accordance with the relevant provisions of
New York Law (the times at which the Merger has become fully effective (or such
later time as may be agreed in writing by Jade and specified in the Certificate
of Merger) is referred to herein as the "Effective Time").
1.3 Effect of the Merger. (a) At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of New York Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, except as provided herein, (i) all the property, rights,
privileges, powers and franchises of Jade and Jade Merger Sub shall vest in the
Jade Surviving Corporation, and all debts, liabilities and duties of Jade and
Jade Merger Sub shall become the debts, liabilities and duties of the Jade
Surviving Corporation.
(b) Prior to or at the Effective Time, the properties and
assets of Jade will be free and clear of any and all encumbrances, charges,
claims equitable interests, liens, options, pledges, security interests,
mortgages, rights of first refusal or restrictions of any kind and nature
(collectively the "Encumbrances"), except for such liabilities, accounts
payable, debts, adverse claims, duties, responsibilities and obligations of
every kind or nature, whether accrued or unaccrued, known or unknown, direct or
indirect, absolute, contingent, liquidated or unliquidated and whether arising
under, pursuant to or in connection with any contract, tort, strict liability or
otherwise (collectively the "Liabilities") of Jade, that the Jade Surviving
Corporation will assume, which Liabilities Parent and Jade have jointly approved
and which shall be set forth in Schedule 2.5.
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1.4 Certificates of Incorporation; Bylaws. (a) Unless otherwise
determined by Jade prior to the Effective Time, at the Effective Time, (i) the
Certificate of Incorporation of Jade Merger Sub as in effect immediately prior
to the Effective Time shall be the Certificate of Incorporation of the Jade
Surviving Corporation at and after the Effective Time until thereafter amended
in accordance with the New York Law and the terms of such Certificate of
Incorporation; provided, however, that at the Effective Time, Article I of the
Certificate of Incorporation of the Jade Surviving Corporation shall be amended
and restated in its entirety to read as follows: "The name of the corporation is
Jade Entertainment Group, Inc."
(b) Unless otherwise determined by Parent prior to the
Effective Time, (i) the Bylaws of Jade Merger Sub as in effect immediately prior
to the Effective Time shall be the Bylaws of the Jade Surviving Corporation at
and after the Effective Time, until thereafter amended in accordance with New
York Law and the terms of the Certificate of Incorporation of the Jade Surviving
Corporation and such By Laws.
1.5 Jade Directors and Officers. Unless otherwise determined by Parent
prior to the Effective Time, the directors of Jade Merger Sub immediately prior
to the Effective Time shall be the directors of the Jade Surviving Corporation
and at and after the Effective Time, each to hold the office of a director of
the Jade Surviving Corporation in accordance with the provisions of New York Law
and the Certificate of Incorporation and Bylaws of the Jade Surviving
Corporation until their successors are duly elected and qualified.
1.6 Effect on Capital Stock. Subject to the terms and conditions of
this Agreement, at the Effective Time, by virtue of the Merger and without any
action on the part of Parent, Jade, Jade Merger Sub or the holders of any of the
following securities, the following shall occur:
(a) Conversion of Jade Common Stock. All of the shares of Common
Stock, par value $0.01 per share of Jade (the "Jade Common Stock") issued and
outstanding immediately prior to the Effective Time will be automatically
converted (subject to Section 1.6 (f)) into (i) 85,000,000 shares of Common
Stock, par value $0.001 of Parent (the "Parent Common Stock") plus (ii) 82,167
shares of newly issued Series B preferred stock of the Company (the "Series B
Shares"), which Series B Shares shall be convertible into such number of shares
of the Parent Common Stock, to assure that on an as converted basis(without
counting shares issuable upon the conversion of Restricted Stock Awards relating
to 100,000,000 shares), together with the 85,000,000 shares of Parent Common
Stock the shareholders of Jade will own fifty (50%) percent of the issued and
outstanding shares of the Parent Common Stock immediately following the date of
this Agreement (such Parent Common Stock and Series B Shares being referred to
in this Agreement as the "Jade Merger Consideration"). If any shares of Jade
Common Stock outstanding immediately prior to the Effective Time are unvested or
are subject to a repurchase option, risk of forfeiture or other condition under
any applicable restricted stock purchase agreement or other agreement with Jade,
then the Series B Shares issued in exchange for such shares of Jade Common Stock
will also be unvested and subject to the same repurchase option, risk of
forfeiture or other condition, and the certificates representing such Series B
Shares may accordingly be marked with appropriate legends. The Parent Common
Stock and Series B Shares issued to the shareholders of Jade shall be restricted
securities as such term is defined under Rule 144 of the Securities Act of 1933,
as amended (the "Act"). Each certificate for the Parent Common Stock and Series
B Shares as well as the Parent Common Stock issuable upon conversion of the
Series B Shares shall bear a legend as follows:
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"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act") or
applicable state law. The securities may not be offered for sale or
sold in the absence of an effective registration statement under the
Act and applicable state law, or an opinion of counsel reasonably
satisfactory to the Parent, that registration is not required."
A copy of the Certificate of Designation setting forth the terms of the Series B
Shares to be issued to the shareholders of Jade is annexed hereto as Exhibit C.
(b) Calculation of Jade Merger Consideration. For purposes of
determining the percentage of the number of shares of Parent Common Stock
retained by current shareholders of the Parent, at the time of the Closing,
there shall be included in such calculation in addition to the current
shareholders' holdings, the Parent Common Stock to be issued to (i) the Parent's
holders of its Series A Convertible Preferred Stock, and (ii) the holders of the
Parent's convertible debt aggregating approximately $250,000 of the Parent's
current liabilities into shares of its Series A Convertible Preferred Stock.
(c) Cancellation of Jade Stock. Each share of Jade Common Stock
held by Jade or any direct or indirect wholly-owned subsidiary of Jade
immediately prior to the Effective Time shall be canceled and extinguished
without any conversion thereof. Each share of Jade Common Stock held by Parent
or any direct or indirect wholly-owned subsidiary of Parent immediately prior to
the Effective Time shall be canceled and extinguished without any conversion
thereof.
(d) Jade Warrant. At the Effective Time, the sole outstanding
warrant to acquire 50,000 shares of Jade Common Stock (the "Jade Warrant") will
be assumed by the Parent and the Warrant will be exercisable into such amount of
shares of the Parent as if the Warrant had been exercised immediately prior to
the merger. Except as set forth in Section 2.3, Jade does not have any options
or warrants outstanding, except the Jade Warrant.
(e) Capital Stock of Jade Merger Sub. Each share of Common Stock,
$0.001 par value per share, of Jade Merger Sub (the "Jade Merger Sub Common
Stock") issued and outstanding immediately prior to the Effective Time shall be
converted into one validly issued, fully paid and nonassessable share of Common
Stock, $0.001 par value per share, of the Jade Surviving Corporation. Each
certificate evidencing ownership of shares of Jade Merger Sub Common Stock shall
evidence ownership of such shares of capital stock of the Jade Surviving
Corporation.
(f) Adjustments to Jade Merger Consideration. As expeditiously as
possible either before or subsequent to the Effective Time, Parent will declare
and effect a reverse stock split of the Parent Common Stock in the range of
one-for-one hundred fifty (1:150) to one-for-two hundred (1:200) (the "Reverse
Stock Split"). The Principal Stockholders hereby irrevocably consent to and
shall vote all their shares of Parent Common Stock that they are entitled to
vote as a result of their ownership of Parent Common Stock and Series B Shares
in favor of the Reverse Stock Split and hereby grant the Parent an irrevocable
power of attorney to vote all their shares of such Parent Common Stock in favor
of such Reverse Stock Split without any further action of any kind on the part
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of either of the Principal Stockholders. Irrespective of the date upon which the
Reverse Stock Split takes effect, the Jade Merger Consideration as defined below
shall be adjusted to reflect the Reverse Stock Split which shall affect all
shareholders of the Parent equally. In addition, the Jade Merger Consideration
shall be adjusted to reflect appropriately the effect of any forward stock
split, stock dividend (including any dividend or distribution of securities
convertible into or exercisable or exchangeable for Parent Common Stock or Jade
Common Stock), reorganization, recapitalization, reclassification, combination,
exchange of shares or other like change with respect to Parent Common Stock or
Jade Common Stock occurring or having a record date on or after the date hereof
and prior to the Effective Time.
(g) Fractional Shares. The Parent Common Stock and Series B
Shares will be issued, in fractions if necessary, by virtue of the Merger. The
Parent Common Stock and upon conversion of the Series B Shares into Parent
Common Stock, fractional shares will be rounded to the nearest whole share of
Parent Common Stock.
1.7 Surrender of Certificates.
(a) Parent to Provide Series B Shares. Promptly after the
Effective Time, Parent shall make available in accordance with this Article I,
the Parent Common Stock and Series B Shares issuable pursuant to Section 1.6(a)
in exchange for outstanding shares of Jade Common Stock.
(b) Exchange Procedures. Promptly after the Effective Time, Parent
shall mail to each holder of record (as of the Effective Time) of a certificate
or certificates, which immediately prior to the Effective Time represented
outstanding shares of Jade Common Stock (the "Certificates") (i) a letter of
transmittal in customary form (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Parent and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for certificates
representing shares of Parent Common Stock and Series B Shares pursuant to
Section 1.6(a). Upon surrender of Certificates for cancellation to the Parent,
together with such letter of transmittal, duly completed and validly executed in
accordance with the instructions thereto, the holders of such Certificates shall
be entitled to receive in exchange therefore certificates representing the
number of shares of Parent Common Stock and Series B Shares (or fractions
thereof) into which their shares of Jade Common Stock were converted pursuant to
Section 1.6(a) and the Certificates so surrendered shall forthwith be canceled.
Until so surrendered, outstanding Certificates will be deemed, from and after
the Effective Time, to evidence only the ownership of the number of whole shares
of Parent Common Stock and Series B Shares into which such shares of Jade Common
Stock shall have been so converted (including any voting, notice or other rights
associated with the ownership of such shares of Series B Shares under the (i)
Certificate of Designation under which the Series B Shares were issued, (ii)
Certificate of Incorporation or Bylaws of Parent or (iii) under the New York
Business Corporation Law).
(c) Transfers of Ownership. If certificates representing shares of
Parent Common Stock and Series B Shares are to be issued in a name other than
that in which the Certificates surrendered in exchange therefore are registered,
it will be a condition of the issuance thereof that the Certificates so
surrendered will be properly endorsed and otherwise in proper form for transfer
and that the persons requesting such exchange will have (i) paid to Parent or
any agent designated by it any transfer or other taxes required by reason of the
issuance of certificates representing Parent Common Stock and Series B Shares in
any name other than that of the registered holder of the Certificates
surrendered, or (ii) established to the satisfaction of Parent or any agent
designated by it that such tax has been paid or is not payable.
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(d) Required Withholding. Each of the Parent and the Jade
Surviving Corporation shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to any
holder or former holder of Jade Common Stock such amounts as may be required to
be deducted or withheld therefrom under the Code or state, local or foreign tax
law. To the extent such amounts are so deducted or withheld, such amounts shall
be treated for all purposes under this Agreement as having been paid to the
person to whom such amounts would otherwise have been paid.
(e) No Liability. Notwithstanding anything to the contrary
in this Section 1.7, neither
the Parent, the Jade Surviving Corporation nor any party hereto shall be liable
to a holder of Parent Common Stock, Series B Shares or Jade Common Stock for any
amount properly paid to a public official pursuant to any applicable abandoned
property, escheat or similar law.
1.8 No Further Ownership Rights in Jade Common Stock. All Parent Common
Stock and Series B Shares issued in accordance with the terms hereof shall be
deemed to have been issued in full satisfaction of all rights pertaining to such
shares of Jade Common Stock. After the Effective Time, there shall be no further
registration of transfers on the records of Jade Surviving Corporation of shares
of Jade Common Stock which were outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates are presented to Jade Surviving
Corporation for any reason, they shall be canceled and exchanged as provided in
this Article I.
1.9 Lost, Stolen or Destroyed Certificates. In the event that any
Certificates shall have been lost, stolen or destroyed, the Parent shall issue
and pay in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, certificates
representing the Parent Common Stock and Series B Shares into which the shares
of Jade Common Stock represented by such Certificates were converted pursuant to
Section 1.6(a); provided, however, that the Parent may, in its discretion and as
a condition precedent to the issuance of such certificates representing Parent
Common Stock and Series B Shares require the owner of such lost, stolen or
destroyed Certificates to deliver a bond in such sum as it may reasonably direct
as indemnity against any claim that may be made against Parent or the Jade
Surviving Corporation with respect to the Certificates alleged to have been
lost, stolen or destroyed.
1.10 Tax Treatment. It is intended by the parties hereto that the
Merger shall constitute reorganization within the meaning of Section 368(a) of
the Code. Each of the parties hereto adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
United States Treasury Regulations. Both prior to and after the Closing, each
party's books and records shall be maintained, and all federal, state and local
income tax returns and schedules thereto shall be filed in a manner consistent
with the Jade Merger being qualified as a reverse triangular merger under
Section 368(a)(2)(E) of the Code (and comparable provisions of any applicable
state or local laws) and with the Jade Merger being qualified as a
reorganization described in Sections 368(a)(1)(A) and 368(a)(1)(D) of the Code
(and comparable provisions of any applicable state or local laws).
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1.11 Appraisal Rights. Notwithstanding anything in this Agreement to
the contrary, to the extent provided by the New York Business Corporation Law,
Parent will not make any payment of Jade Merger Consideration with respect to
Jade Common Stock held by any person (each a "Dissenting Stockholder" and
collectively, the "Dissenting Stockholders") who elects to demand appraisal of
his or her shares and duly and timely complies with all the provisions of the
New York Business Corporation Law (the "Appraisal Rights") concerning the right
of holders of Jade Common Stock to require appraisal of their shares
("Dissenting Shares"), but such Dissenting Stockholders shall have the right to
receive such consideration from Parent as may be determined to be due such
Dissenting Stockholders pursuant to the laws of the State of New York, subject
to Section 6.2(e) below which provides for the Parent's right to terminate the
proposed Merger in the event that the aggregate of any Appraisal Rights
exercised by Dissenting Stockholders would require the Parent to make a cash
payment in excess of $25,000 to such Dissenting Stockholders in lieu of their
right to receive their pro-rata share of the Jade Merger Consideration. If,
after the Effective Time, a Dissenting Stockholder withdraws his or her demand
for appraisal or fails to perfect or otherwise loses his or her right of
appraisal, in any case pursuant of the New York Business Corporation Law, each
of his or her shares of Jade Common Stock will be deemed to be converted as of
the Effective Time into the right to receive the Jade Merger Consideration
pursuant to Section 1.6(a).
Taking of Necessary Action; Further Action. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Jade Surviving Corporation (and/or
its successor in interest) with full right, title and possession to all assets,
property, rights, privileges, powers and franchises of Jade, Jade Merger Sub and
the officers and directors of Parent, and the Jade Surviving Corporation shall
be fully authorized (in the name of Jade Merger Sub, Jade and otherwise) to take
all such necessary action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF JADE AND
THE PRINCIPAL STOCKHOLDERS
Jade and the Principal Stockholders hereby represent and warrant to
Parent and the Jade Merger Sub that:
2.1 Organization and Standing.(a) Jade has been duly formed as a
corporation and is validly existing and in good standing under the laws of the
State of New York and has the requisite power and authority necessary to own its
properties and to conduct its business as presently conducted. Jade is duly
qualified to transact business as a corporation and is in good standing in every
jurisdiction in which the failure to so qualify would have a material adverse
effect on the operations or financial condition of Jade. (b) Jade has delivered
or made available to Parent a true and correct copy of the Certificate of
Incorporation and Bylaws of Jade, as amended to date, and each such instrument
is in full force and effect. Jade is not in violation of any of the provisions
of its Certificate of Incorporation or Bylaws or equivalent governing
instruments.
2.2 Brokers or Finders. No person has or will have, as a result of the
transactions contemplated by this Agreement any right, interest or valid claim
against or upon Parent and the Jade Merger Sub for any commission, fee or other
compensation as a finder or broker because of any act or omission by either Jade
or any of the Principal Stockholders.
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2.3 Authorization. Jade and the Principal Stockholders have full right
and power to enter into and perform pursuant to this Agreement and this
Agreement constitutes Jade and the Principal Stockholders' valid and legally
binding obligations, enforceable in accordance with their terms, except to the
extent that their enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other laws affecting the enforcement of creditors'
rights generally or by general equitable principles. The Principal Stockholders
are authorized to sell their shares of Jade Common Stock and to enter into this
Agreement. The execution, delivery and performance of this Agreement by Jade and
the Principal Stockholders and the consummation by them of the transactions
contemplated hereby will not violate or conflict with any provision of any law
or contract applicable to Jade or any of the Principal Stockholders.
2.4 Litigation. There are no suits, investigations, arbitrations,
mediations, actions or proceedings pending or threatened against Jade or any of
the Principal Stockholders or with respect to any of their properties or assets
before any court or governmental authority which, in the aggregate, could
reasonably be expected to have a material adverse effect on Jade.
2.5 Absence of Certain Changes or Events. Since September 30, 2003,
the business of Jade has been conducted in the ordinary course and there has not
been any material adverse change in the financial condition, results of
operations, prospects, properties or business of Jade or any mortgage, pledge or
subjection to lien, charge or encumbrance of any kind of any of Jade's assets,
tangible or intangible, except with respect to the incurrence of liability by
Jade in connection with the Secured Loan.
2.6 Employment Agreements. Schedule 2.6 sets forth a true and complete
list of all employment agreements with any employee of Jade and all bonus,
incentive compensation and related compensation agreements. Jade is not a party
to or bound by any collective bargaining agreement.
2.7 Health Benefit Plans. Jade does not have any other health benefit
plans, compensation arrangements and other benefit arrangements covering
employees of Jade, including without limitation, any multi-employer plan with
the meaning of Section 3(37) of ERISA, employee welfare benefit plan (as defined
in Section 3(1) of ERISA); or bonus, deferred compensation, stock purchase,
stock option, severance plan, salary continuation, vacation sick leave, fringe
benefit incentive insurance welfare or similar arrangement.
2.8 Tax Matters. Jade has filed all tax returns required to be filed by
it (subject to permitted extensions) with any state or federal entities and all
such tax returns were true, correct and complete when filed. All taxes of Jade
have been paid in full, including all federal, state, local or foreign income,
gross receipts, property, sales, use, license, excise, franchise, employment,
payroll, premium, withholding, alternative or added minimum, ad valorem,
transfer or excise tax. Between December 31, 2002 and the Closing Date, Jade has
not incurred (or will incur) a tax liability other than a tax liability in the
ordinary course of business and in accordance with past custom and practice.
2.9 Contracts. Schedule 2.9 sets forth a list of all material contracts
in which Jade is a party (each a "Contract" and collectively, the "Contracts").
Jade has provided Parent with true, correct and complete copies of the
Contracts. With respect to each such Contract: (i) the agreement is legal,
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valid, binding, enforceable, and in full force and effect; and (ii) to the
knowledge of Jade and the Principal Stockholders, no party is in default under
such Contract and (iii). Except as set forth in Schedule 2.9, there are no
written agreements, to which Jade is a party or by which it is bound which (i)
involve obligations (contingent or otherwise) of, or payments to, Jade in excess
of $25,000, (ii) are material to the conduct and operations of the Jade's
business or properties (including, without limitation, the license of any
Intellectual Property to or from Jade), (iii) restrict or materially adversely
affect the development, manufacture, sale, marketing or distribution of Jade's
products or services, (iv) relating to the employment or compensation of any
employee or consultant, (v) of duration of six months or more and not cancelable
without penalty by Jade on 30 days or less notice or (vi) relating to the sale,
lease, pledge or other disposition of any material assets of or to Jade.
2.10 Banks. Schedule 2.10 sets forth a complete and correct list
setting forth the name of each bank in which Jade has an account, line of
credit, credit facility or safe deposit box, the names of all persons authorized
to draw thereon or have access thereto and the name of each person holding a
power of attorney from Jade.
2.11 Jade Capital Structure. The authorized capital stock of Jade
consists of 10,000,000 shares of Common Stock, par value $.01 per share, of
which there were 2,134,341 shares issued and outstanding as of November 10,
2003. No shares of preferred stock are authorized in Jade's Certificate of
Incorporation or Bylaws. All outstanding shares of Jade Common Stock are duly
authorized, validly issued, fully paid and non-assessable and are not subject to
preemptive rights created by statute, the Certificate of Incorporation or Bylaws
of Jade, or any agreement or document to which Jade is a party or by which it is
bound.
2.12 Obligations With Respect to Capital Stock. There are no equity
securities, partnership interests or similar ownership interests of any class of
Jade, or any securities exchangeable or convertible into or exercisable for such
equity securities, partnership interests or similar ownership interests issued,
reserved for issuance or outstanding. Except for the Jade Warrant, there are no
options, warrants, equity securities, partnership interests or similar ownership
interests, calls, rights (including preemptive rights), commitments or
agreements of any character to which Jade is a party or by which it is bound
obligating Jade or any to issue, deliver or sell, or cause to be issued,
delivered or sold, or repurchase, redeem or otherwise acquire, or cause the
repurchase, redemption or acquisition, of any shares of capital stock of Jade or
obligating Jade to grant, extend, accelerate the vesting of or enter into any
such option, warrant, equity security, partnership interest or similar ownership
interest, call, right, commitment or agreement. There are no registration rights
and, to the knowledge of Jade there are no voting trusts, proxies or other
agreements or understandings with respect to any equity security of any class of
Jade.
2.13 Jade SEC Filings; Jade Financial Statements. (a) Jade has filed
all forms, reports and documents required to be filed with the SEC since the
initial filing date of the registration statement for Jade's initial public
offering, except that Jade has not filed its report on Form 10-QSB for the
periods ending June 30, 2003 and September 30, 2003. All such required forms,
reports and documents (including the financial statements, exhibits and
schedules thereto and those documents that the Jade may file subsequent to the
date hereof) are collectively referred to herein as the "Jade SEC Reports." As
of their respective dates, the Jade SEC Reports (i) were prepared in accordance
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and the rules and regulations of the SEC thereunder applicable to such Jade
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SEC Reports, and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(b) Attached as Schedule 2.13(b) is (i) Jade's filing on Form 10-KSB
for the period ended December 31, 2002 containing the audited consolidated
balance sheets of Jade as of December 31, 2002 together with the related
consolidated statements of income and cash flows for the fiscal years of Jade
then ended December 31, 2002, all certified by Xxxxx-Xxxxx, Xxxxxxxxxxx, Xxxxxx
LLC, Jade's independent public accountants whose audit reports thereon are
included therewith and (ii) an unaudited consolidated balance sheet of Jade as
of September 30, 2003 (the "Jade Balance Sheet"), together with the related
statements of income and cash flows for the three month period then ended
September 30, 2003 (collectively, the "Jade Financial Statements"). Each of the
Jade Financial Statements (including, in each case, any related notes thereto)
was prepared in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved, and each
fairly presents the consolidated financial position of Jade as of the respective
dates thereof and the consolidated results of its operations and cash flows and
stockholder equity for the periods indicated. Except as disclosed in the Jade
Financial Statements, Jade does not have any liabilities (absolute, accrued,
contingent or otherwise) of a nature required to be disclosed on a balance sheet
or in the related notes to the consolidated financial statements prepared in
accordance with GAAP which are, individually or in the aggregate, material to
the business, results of operations or financial condition of Jade, except
liabilities incurred since the date of the Jade Financial Statements in the
ordinary course of business consistent with past practices and which would not
reasonably be expected to have a Jade Material Adverse Effect.
2.14 Patents and Trademarks. As used in this Agreement, "Intellectual
Property" means (i) all inventions (whether patentable or unpatentable and
whether or not reduced to practice), all improvements thereto, and all patents,
patent applications and patent disclosures, together with all reissuances,
continuations, divisionals, substitutions, continuations-in-part, provisionals,
revisions, extensions and re-examinations thereof, (ii) all trademarks, service
marks, trade names, logos, corporate names and Internet domain names, including
all goodwill associated therewith, and all applications, registrations and
renewals in connection therewith, (iii) all copyrights and all applications,
registrations and renewals in connection therewith, (iv) all trade secrets and
confidential business information (including ideas, research and development,
copyrights, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information and business and
marketing plans and proposals), (v) all computer programs and software
(including data and related documents) including, but not limited to, Jade's
proprietary internet search engine software, (vi) all know-how , research
information, research data and notebooks and (vii) all other proprietary rights.
Schedule 2.14 contains a complete list of all Intellectual Property registered
in Jade's name and material to Jade's business as conducted as of the date
hereof (collectively, the "Jade Registered Intellectual Property"), which
registrations are valid. Jade's use of Intellectual Property does not constitute
an infringement of any third party's rights that could reasonably be expected to
result in a Jade Material Adverse Effect. Except as set forth on Schedule 2.8,
Jade owns, free and clear of any liens, all right, title and interest to the
Jade Registered Intellectual Property. With respect to Intellectual Property,
other than the Jade Registered Intellectual Property, used or held for use by
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Jade in its business as conducted as of the date hereof (the "Other Intellectual
Property"), Jade owns, controls or has a right to use, to the extent necessary
to conduct its business in a manner generally consistent with its past practice,
such Other Intellectual Property which is material to Jade's business. Except as
set forth on Schedule 2.8, Jade is not a party to any outstanding options,
licenses or agreements of any kind relating to (i) any Other Intellectual
Property owned by any other person or entity or (ii) the Jade Registered
Intellectual Property. Jade has not during the preceding three years received
any communications or claims nor, to Jade's knowledge, is there any threatened
claim, alleging that Jade has infringed upon, or, by conducting its business as
proposed, would infringe upon the intellectual property rights of any other
person which such infringement would have a Jade Material Adverse Effect. Except
as set forth on Schedule 2.8, to the knowledge of Jade, no third party has
interfered with, infringed upon or misappropriated any of Jade's rights to the
Jade Registered Intellectual Property or Other Intellectual Property which such
interference, infringement or misappropriation would constitute a Jade Material
Adverse Effect.
2.15 Board Approval. The Board of Directors of Jade has, as of the date
of this Agreement, (i) determined that the Merger is fair to and in the best
interests of Jade and its stockholders, (ii) determined to recommend that the
stockholders of Jade adopt this Agreement and (iii) duly approved the Merger,
this Agreement and the transactions contemplated hereby.
2.16 Disclosure. No representation or warranty of Jade or the Principal
Stockholders and no statement in the Schedules submitted by Jade omits to state
a material fact necessary to make the statements herein or therein, in light of
the circumstances in which they were made, not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF parent and Jade merger sub
Each of Parent and Jade Merger Sub hereby represents and warrants to
Jade that:
3.1 Organization and Standing.(a) Parent and Jade Merger Sub have each
been duly formed as a corporation and is validly existing and in good standing
under the laws of the State of Delaware and New York, respectively, and each has
the requisite power and authority necessary to own its properties and to conduct
its business as presently conducted. Parent and Jade Merger Sub is each duly
qualified to transact business as a corporation and is in good standing in every
jurisdiction in which the failure to so qualify would have a material adverse
effect on the operations or financial condition of Parent or Jade Merger Sub.
(b) Parent and Jade Merger Sub have delivered or made available to Parent a true
and correct copy of the Certificate of Incorporation and Bylaws of Parent and
Jade Merger Sub, as amended to date, and each such instrument is in full force
and effect. Neither Parent nor Jade Merger Sub is in violation of any of the
provisions of its Certificate of Incorporation or Bylaws or equivalent governing
instruments.
3.2 Brokers or Finders. No person has or will have, as a result of the
transactions contemplated by this Agreement any right, interest or valid claim
against or upon Jade and the Principal Stockholders for any commission, fee or
other compensation as a finder or broker because of any act or omission by
either Parent or Jade Merger Sub.
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3.3 Authorization. Parent and Jade Merger Sub have full right and power
to enter into and perform pursuant to this Agreement and this Agreement
constitutes Parent and Jade Merger Subs' valid and legally binding obligations,
enforceable in accordance with their terms, except to the extent that their
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights
generally or by general equitable principles. The execution, delivery and
performance of this Agreement by Parent and Jade Merger Sub and the consummation
by them of the transactions contemplated hereby will not violate or conflict
with any provision of any law or contract applicable to Parent and Jade Merger
Sub.
3.4 Litigation. There are no suits, investigations, arbitrations,
mediations, actions or proceedings pending or threatened against Parent or the
Jade Merger Sub or with respect to any of their properties or assets before any
court or governmental authority which, in the aggregate, could reasonably be
expected to have a material adverse effect on either Parent or Jade Merger Sub.
3.5 Absence of Certain Changes or Events. Since September 30, 2003,
Parent and Jade Merger Sub have not engaged in any operating business and there
has not been any material adverse change in the financial condition, results of
operations, prospects, properties or business of either Parent or Jade Merger
Sub or any mortgage, pledge or subjection to lien, charge or encumbrance of any
kind of any of either Parent or Jade Merger Sub's assets, tangible or
intangible.
3.6 Employment Agreements. Neither Parent nor Jade Merger Sub has any
employees and neither Parent nor Jade Merger Sub is a party to or bound by any
collective bargaining agreement.
3.7 Health Benefit Plans. Neither Parent nor Jade Merger Sub has any
health benefit plans, compensation arrangements and other benefit arrangements
covering employees of Parent or Jade Merger Sub, including without limitation,
any multi-employer plan with the meaning of Section 3(37) of ERISA, employee
welfare benefit plan (as defined in Section 3(1) of ERISA); or bonus, deferred
compensation, stock purchase, stock option, severance plan, salary continuation,
vacation sick leave, fringe benefit incentive insurance welfare or similar
arrangement.
3.8 Tax Matters. Parent has either filed all tax returns required to be
filed by it (subject to permitted extensions) with any state or federal entities
and all such tax returns were true, correct and complete when filed or will file
any unfiled tax returns in a reasonable period of time and does not believe
there will be any tax amount owed that would have a material adverse affect on
Parent. All taxes of Parent have been paid in full, including all federal,
state, local or foreign income, gross receipts, property, sales, use, license,
excise, franchise, employment, payroll, premium, withholding, alternative or
added minimum, ad valorem, transfer or excise tax. Between December 31, 2002 and
the Closing Date, Parent has not incurred (or will incur) a tax liability other
than a tax liability in the ordinary course of business and in accordance with
past custom and practice.
3.9 Contracts. Schedule 3.9 sets forth a list of all material contracts
in which Parent is a party (each a "Contract" and collectively, the
"Contracts"). Parent has provided Jade with true, correct and complete copies of
the Contracts. With respect to each such Contract: (i) the agreement is legal,
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valid, binding, enforceable, and in full force and effect; and (ii) to the
knowledge of Parent, no party is in default under such Contract and (iii).
Except as set forth in Schedule 3.9, there are no written agreements, to which
Parent is a party or by which it is bound which (i) involve obligations
(contingent or otherwise) of, or payments to, Parent in excess of [$25,000],
(ii) are material to the conduct and operations of Parent's business or
properties (including, without limitation, the license of any Intellectual
Property to or from Parent), (iii) restrict or materially adversely affect the
development, manufacture, sale, marketing or distribution of Parent's products
or services, (iv) relating to the employment or compensation of any employee or
consultant, (v) of duration of six months or more and not cancelable without
penalty by Parent on 30 days or less notice or (vi) relating to the sale, lease,
pledge or other disposition of any material assets of or to Parent.
3.10 Capital Structure. The authorized capital stock of Parent consists
of 200,000,000 shares of Common Stock, par value $.001 per share, of which there
were approximately 112,140,105 shares issued and outstanding as of September 30,
2003; 4,000,000 shares of Series A Convertible Preferred Stock, par value $.001
per share, of which there were 3,439,999 shares issued and outstanding as of
November 25, 2003; 100,000 shares of Series B Convertible Preferred Stock, par
value $.001 per share, of which there were no shares issued and outstanding as
of September 30, 2003 and 900,000 shares of undesignated and unissued Preferred
Stock and 100,000,000 shares of Parent Common Stock granted by the Board of
Directors as Restricted Stock Awards to designated individuals but not yet
issued. The authorized capital stock of Jade Merger Sub consists of 100 shares
of Common Stock, par value $.01 per share, of which there are 100 shares issued
and outstanding as of November 18, 2003. All outstanding shares of Parent and
Jade Merger Sub are duly authorized, validly issued, fully paid and
nonassessable and are not subject to preemptive rights created by statute, the
Certificate of Incorporation or Bylaws of Parent and Jade Merger Sub or any
agreement or document to which Parent and Jade Merger Sub is a party or by which
it is bound.
3.11 Obligations With Respect to Capital Stock. Except as set forth in
Section 3.11, there are no equity securities, partnership interests or similar
ownership interests of any class of Parent or Jade Merger Sub or any securities
exchangeable or convertible into or exercisable for such equity securities,
partnership interests or similar ownership interests issued, reserved for
issuance or outstanding. Except for securities Parent owns, directly or
indirectly through one or more Subsidiaries, there are no equity securities,
partnership interests or similar ownership interests of any class of any
Subsidiary of Parent, or any security exchangeable or convertible into or
exercisable for such equity securities, partnership interests or similar
ownership interests issued, reserved for issuance or outstanding. Except as set
forth in Section 3.11, there are no options, warrants, equity securities,
partnership interests or similar ownership interests, calls, rights (including
preemptive rights), commitments or agreements of any character to which Parent
or any of its Subsidiaries is a party or by which it is bound obligating Parent
or any of its Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, or repurchase, redeem or otherwise acquire, or cause the
repurchase, redemption or acquisition, of any shares of capital stock of Parent
or any of its Subsidiaries or obligating Parent or any of its Subsidiaries to
grant, extend, accelerate the vesting of or enter into any such option, warrant,
equity security, partnership interest or similar ownership interest, call,
right, commitment or agreement.
3.12 Parent SEC Filings; Parent Financial Statements. (a) The Parent
has filed all forms, reports and documents required to be filed with the SEC.
All such required forms, reports and documents (including the financial
statements, exhibits and schedules thereto and those documents that the Parent
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may file subsequent to the date hereof) are collectively referred to herein as
the "Parent SEC Reports." As of their respective dates, the Parent SEC Reports
(i) were prepared in accordance with the requirements of the Securities Act or
the Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Parent SEC Reports, and (ii) did not at the time
they were filed (or if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing) contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
3.13 Patents and Trademarks. Parent does not have any trademark or
copyright registrations and none are required for the conduct of its business.
3.14 Board Approval. The Board of Directors of Parent and Jade Merger
Sub have, as of the date of this Agreement, (i) determined that the Merger is
fair to and in the best interests of Parent and its stockholders and Jade Merger
Sub, (ii) determined to recommend that the stockholders of Parent adopt this
Agreement and (iii) duly approved the Merger, this Agreement and the
transactions contemplated hereby.
3.15 Disclosure. No representation or warranty of Parent and the Jade
Merger Sub and no statement in the Schedules submitted by Parent and Jade Merger
Sub omits to state a material fact necessary to make the statements herein or
therein, in light of the circumstances in which they were made, not misleading.
3.16 Interim Operations of Jade Merger Sub. The Jade Merger Sub was
formed solely for the purpose of engaging in the transactions contemplated
hereby and has engaged in no other business other than incident to its creation
and this Agreement and the transactions contemplated hereby.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1 Conduct of Business by the Parties. During the period from the date
of this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, each of Jade and Parent
and its Subsidiaries shall carry on their respective business in the ordinary
course in substantially the same manner as heretofore conducted and in
substantial compliance with all applicable laws and regulations, pay their
respective debts and taxes when due subject to good faith disputes over such
debts or taxes, pay or perform other material obligations when due subject to
good faith disputes over such obligations, and use their commercially reasonable
efforts consistent with past practices and policies to (i) preserve intact their
present business organization, (ii) keep available the services of each of their
present officers and employees, respectively, and (iii) preserve their
relationships with customers, suppliers, distributors, licensors, licensees and
others with which each party has business dealings material to their respective
business.
4.2 Covenants of Jade. Except as permitted by the terms of this
Agreement, without the prior written consent of Parent, during the period from
the date of this Agreement and continuing until the earlier of the termination
of this Agreement pursuant to its terms or the Effective Time, Jade shall not do
any of the following:
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(a) Except as required by law or pursuant to the terms of the Jade
Option Plans in effect as of the date hereof, waive any stock repurchase
rights, accelerate, amend or change the period of exercisability of options or
restricted stock, or reprise options granted under any employee, consultant,
director or other stock plans or authorize cash payments in exchange for any
options granted under any of such plans;
(b) Except as required by applicable law, grant any severance or
termination pay to any officer or employee except pursuant to written
agreements outstanding, or policies existing, on the date hereof and as
previously disclosed in writing or made available to Parent, or adopt any new
severance plan, or amend or modify or alter in any manner any severance plan,
agreement or arrangement existing on the date hereof;
(c) Other than in the ordinary course of business consistent with past
practices, transfer or license to any person or entity or otherwise extend,
amend or modify any rights to the Jade Registered Intellectual Property, or
enter into grants to transfer or license to any person future patent rights;
provided that in no event shall Jade license on an exclusive basis or sell any
Jade Registered Intellectual Property (other than in connection with the
abandonment of immaterial Jade Registered Intellectual Property after at least
five business days' written notice to Jade);
(d) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in
respect of any capital stock or split, combine or reclassify any capital stock
or issue or authorize the issuance of any other securities in respect of, in
lieu of or in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any
shares of capital stock of Jade, except (i) repurchases of unvested shares at
cost in connection with the termination of the employment relationship with any
employee pursuant to stock option or purchase agreements in effect on the date
hereof (or any such agreements entered into in the ordinary course of business
consistent with past practice by Jade with employees hired after the date
hereof), (ii) for the purpose of funding or providing benefits under any Jade
Benefit Plans, Jade Option Plans, any other stock option and incentive
compensation plans, directors plans, and stock purchase and dividend
reinvestment plans in accordance with past practice;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or
propose any of the foregoing with respect to any shares of capital stock or any
securities convertible into shares of capital stock, or subscriptions, rights,
warrants or options to acquire any shares of capital stock or any securities
convertible into shares of capital stock, or enter into other agreements or
commitments of any character obligating it to issue any such shares or
convertible securities, or any equity-based awards (whether payable in shares,
cash or otherwise) other than the issuance, delivery and/or sale of shares of
Jade Common Stock (as appropriately adjusted for stock splits and the like)
pursuant to the exercise of stock options or warrants outstanding as of the
date of this Agreement.
(g) Cause, permit or submit to a vote of Jade's stockholders any
amendments to the Jade Charter Documents;
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(h) Acquire or agree to acquire by merging or consolidating with, or by
purchasing any equity interest in or a portion of the assets of, or by any
other manner, any business or any corporation, partnership, association or
other business organization or division thereof, or otherwise acquire or agree
to enter into any joint ventures, strategic partnerships or strategic
investments; provided, that Jade shall not be prohibited from entering into
business development deals in the ordinary course of business;
(i) Sell, lease, license, encumber or otherwise dispose of any
properties or assets except in the ordinary course of business consistent with
past practice, except for the sale, lease, licensing, encumbering or
disposition (other than through licensing permitted by clause (c) of property
or assets which are not material, individually or in the aggregate, to the
business of Jade;
(j) Incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or options,
warrants, calls or other rights to acquire any debt securities of Jade, enter
into any "keep well" or other agreement to maintain any financial statement
condition or enter into any arrangement having the economic effect of any of
the foregoing other than in connection with the loan;
(k) Except in the ordinary course of business consistent with past
practice, materially, and modify, amend or terminate any Jade Contracts
disclosed in Schedule 2.9 of the Jade Schedule or waive, delay the exercise of,
release or assign any material rights or claims thereunder without providing
prior notice to Parent;
(l) Except as required by GAAP, revalue any of its assets or make any
change in accounting methods, principles or practices;
(m) Make any Tax election or accounting method change (except as
required by GAAP) inconsistent with past practice that, individually or in the
aggregate, is reasonably likely to adversely affect in any material respect the
Tax liability or Tax attributes of Jade, settle or compromise any material Tax
liability or consent to any extension or waiver of any limitation period with
respect to Taxes;
(n) Communicate, solicit, initiate, encourage or participate in any
discussions or negotiations with regard to any proposal to acquire, directly or
indirectly, any Jade Common Stock or to invest any funds in Jade, whether such
proposal, acquisition, investment or other transaction involves a stock sale, a
tender offer, exchange offer, merger or other business combination involving
Jade or for the acquisition of a substantial portion of the assets of Jade.
Jade shall immediately communicate to Parent the identity of the other party
and the initial terms of any proposal it or any of the Principal Stockholders
may receive from any other party in respect of any of the above-referenced
proposals (each an "Acquisition Proposal"). The Board of Directors of Jade and
the Principal Stockholders shall not (i) withdraw or modify or propose to
withdraw or modify, their approval of this Agreement, (ii) approve any letter
of intent, agreement in principle, acquisition agreement or similar agreement
relating to any Acquisition Proposal or (iii) approve or recommend, or propose
to approve or recommend, any Acquisition Proposal, or (iv) enter into an
agreement to do any of the foregoing.
(o) Agree in writing or otherwise to take any of the actions described
in Section 4.1 (a) through (n) above.
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4.3 Covenants of Parent. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, Parent and each of its Subsidiaries
shall not (i) amend the Parent Charter Documents (other than to change its name,
to effect the Reverse-Split and to increase its authorized capital); (ii) split,
combine or reclassify its outstanding shares of capital stock; or (iii) declare,
set aside or pay any dividend payable in cash, stock or property in respect of
any capital stock other than dividends from its wholly-owned Subsidiaries.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Public Disclosure. Parent and Jade will consult with each other,
and to the extent practicable, agree, before issuing any press release or
otherwise making any public statement with respect to the Merger or this
Agreement and will not issue any such press release or make any such public
statement prior to such consultation, except as may be required by law or any
listing agreement with a national securities exchange or Nasdaq, in which case
reasonable efforts to consult with the other party will be made prior to such
release or public statement. The parties will agree to the text of the joint
press release announcing the signing of this Agreement.
5.2 Commercially Reasonable Efforts; Notification. (a) Upon the terms
and subject to the conditions set forth in this Agreement, each of the parties
agrees to use commercially reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with the
other parties in doing, all things necessary, proper or advisable to consummate
and make effective, in the most expeditious manner practicable, the Merger and
the other transactions contemplated by this Agreement, including to accomplish
the following: (i) causing the conditions precedent set forth in Article VI to
be satisfied; (ii) obtaining all necessary actions or nonactions, waivers,
consents, approvals, orders and authorizations from Governmental Entities; (iii)
making all necessary registrations, declarations and filings (including
registrations, declarations and filings with Governmental Entities, if any);
(iv) avoiding any suit, claim, action, investigation or proceeding by any
Governmental Entity challenging the Merger or any other transaction contemplated
by this Agreement; (v) obtaining all consents, approvals or waivers from third
parties required as a result of the transactions contemplated in this Agreement;
(vi) defending any suits, claims, actions, investigations or proceedings,
whether judicial or administrative, challenging this Agreement or the
consummation of the transactions contemplated hereby, including seeking to have
any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed; and (vii) executing or delivering any
additional instruments reasonably necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement.
(b) Jade shall give prompt notice to Parent upon becoming
aware that any representation or warranty made by it contained in this Agreement
has become untrue or inaccurate, or of any failure of Jade to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement, in each case, where the
conditions set forth in Section 6.2(a) or Section 6.2(b) would not be satisfied
as a result thereof; provided, however, that no such notification shall affect
the representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
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(c) Parent shall give prompt notice to Jade upon becoming
aware that any representation or warranty made by it contained in this Agreement
has become untrue or inaccurate, or of any failure of Parent to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement, in each case, where the
conditions set forth in Section 6.3(a) or Section 6.3(b) would not be satisfied
as a result thereof; provided, however, that no such notification shall affect
the representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
5.3 Third Party Consents. On or before the Closing Date, Jade and
Parent will each use its commercially reasonable efforts to obtain any consents,
waivers and approvals under any of its respective agreements, contracts,
licenses or leases required to be obtained in connection with the consummation
of the transactions contemplated hereby.
5.4 Jade Stock Options. (a) At the Effective Time, the Jade Warrant
shall, by virtue of the Merger, be assumed by Parent. The Jade Warrant so
assumed by Parent under this Agreement will continue to have, and be subject to,
the same terms and conditions of such options or warrants immediately prior to
the Effective Time (including, without limitation, any repurchase rights or
vesting provisions and provisions regarding the acceleration of vesting and
exercisability on certain transactions), except that (i) the Jade Warrant will
be exercisable (or will become exercisable in accordance with its terms) for
that number of whole shares of Parent Common Stock equal to the number of shares
of Jade Common Stock that were issuable upon exercise of such Jade Warrant
(assuming full vesting), immediately prior to the Effective Time in the same
ratio as provided for holders of Jade Common Stock receive the Jade Merger
Consideration as set forth in Section 1.6(a) above, (ii) the aggregate exercise
price for the shares of Parent Common Stock issuable upon exercise of such
assumed Jade Warrant will be equal to the exercise price per share of Jade
Common Stock at which such Jade Warrant was exercisable immediately prior to the
Effective Time and (iii) all vesting period with respect thereto shall, to the
extent provided by the terms thereof, accelerate, and be subject to any other
rights which arise under the warrant agreement evidencing awards thereunder as a
result of the transactions contemplated by this Agreement. At the Effective
Time, (x) all references in the related stock warrant agreement to Jade shall be
deemed to refer to Parent and (ii) Parent shall assume all of Jade 's
obligations with respect to the Jade Warrant as so amended. As promptly as
reasonably practicable after the Effective Time, Parent shall issue to the
holder of the outstanding Jade Warrant a document evidencing the foregoing
assumption by Parent.
5.5 Parent Board of Directors. Prior to the Effective Time, the Board
of Directors of Parent, in accordance with applicable law and the Parent Charter
Documents, shall take all necessary action (which action may include the
resignation of existing directors) to cause the Board of Directors of Parent, as
of the Effective Time, to consist of not more than five (5) directors, with two
directors designated by the stockholders of Parent existing immediately prior to
the Effective Time and two directors (the "Jade Directors") designated by the
stockholders of Jade existing immediately following the Effective Time. The
remaining director of Parent shall be designated by MarketShare, assuming the
consummation of the acquisition of the assets of MarketShare pursuant to the
Market Acquisition Agreement. In the event that such acquisition of the assets
of MarketShare is not consummated, the stockholders of Parent shall be entitled
to designate the remaining director of Parent.
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5.6 Parent Management. At the Effective Time, Xxxxxxx Xxxxxx shall
enter into an Executive Employment Agreement with the Parent in the form and
substance attached as Exhibit G-1 as Chief Executive Officer of the Parent, at
the Effective Time, Xxxxxxx Xxxxxxx shall enter into an Executive Employment
Agreement with the Parent in the form and substance attached as Exhibit G-2 as
the President of the Parent and at the Effective Time, Xxxx Xxxxx shall enter
into an Executive Employment Agreement with the Parent in the form and substance
attached as Exhibit G-3 as the Chief Financial Officer of the Parent.
5.7 Non-Disclosure, Invention Release and Non-Competition Agreements.
(a) Jade shall use its commercially reasonable efforts to cause employees of
Jade who will become employees of Parent from and after the Effective Time to
enter into Parent's standard form of Non- Disclosure, Invention Release and
Non-Competition Agreement prior to the Closing.
5.8 Conveyance Taxes. Parent, Jade, and Jade Merger Sub shall cooperate
in the preparation, execution and filing of all returns, questionnaires,
applications, or other documents regarding (i) any real property transfer gains,
sales, use, transfer, value-added, stock transfer and stamp Taxes, (ii) any
recording, registration and other fees, and (iii) any similar Taxes or fees that
become payable in connection with the transactions contemplated hereby. [The
Taxes described in clause (i) shall be paid equally by Jade and Parent].
5.9 MarketShare Asset Acquisition. It shall not constitute any
condition to the consummation of the transactions contemplated by this Agreement
that the Parent consummates the acquisition of all of the capital stock of
MarketShareRecovery, Inc. pursuant to the MarketShare Stock Purchase Agreement
or pursuant to any of the agreement to understanding.
5.10 SEC Reporting. As soon as practicable after the Effective Time,
the Board of Directors of Parent, in accordance with applicable law and the
Articles of Incorporation and Bylaws of Parent, shall take all necessary action
and shall cause its authorized officers to make all the necessary filings with
the SEC, for Parent to maintain its status as a reporting company pursuant to
Section 12(g)(1) of the Securities Exchange Act of 1934.]
5.11 Survival after Closing. All of the covenants and obligations of
the parties to this Agreement, which by their terms are to be performed or will
become effective after the Closing, including without limitation, those
contained in Sections 1.7 and 1.12 and Article V shall survive the Closing.
5.12 Related Party Transactions; Xxxxxxxx-Xxxxx. Parent covenants and
agrees that, after the Effective Time, it shall establish or reaffirm its
corporate policies and procedures to require that (a) all transactions involving
Parent and any of its affiliates or related parties be approved by an
independent committee of the Board of Directors of Parent and (b) Parent shall
comply in all respects with the provisions of the Xxxxxxxx-Xxxxx Act of
2002("Xxxxxxxx-Xxxxx") or any similar law adopted to replace Xxxxxxxx-Xxxxx.
ARTICLE VI
CONDITIONS TO THE MERGER
20
6.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of the
following conditions, any of which may be waived if waived in writing by both
Parent and Jade:
(a) Stockholder Approval. This Agreement shall have been adopted
and the Merger shall have been duly approved (i) by the requisite vote under
applicable law and the Jade Charter Documents by the stockholders of Jade at a
special meeting of stockholders of Jade duly noticed (ii) by the requisite vote
under applicable law and the Parent Charter Documents by the stockholders of
Parent. The Share Issuance shall have been duly approved by the requisite vote
under applicable law and the Articles of Incorporation and Bylaws of Parent by
the stockholders of Parent.
(b) No Order. No Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or permanent)
which is in effect and which has the effect of making the Merger illegal or
otherwise prohibiting consummation of the Merger.
(c) Schedules. Each of the parties hereto shall have delivered to
each other complete and accurate Schedules to this Agreement and such Schedules
shall have been approved by the recipient.
(d) Exhibits. The parties shall mutually agree upon the form and
substance of all the agreement attached as Exhibits to this Agreement, which
agreements shall be executed and delivered to each other at the Closing Date.
6.2 Additional Conditions to Obligations of Parent. The obligation of
Parent to effect the Merger shall be subject to the satisfaction at or prior to
the Closing Date of each of the following conditions, any of which may be
waived, in writing, exclusively by Parent:
(a) Representations and Warranties. The representations and
warranties of Jade and the Principal Stockholders set forth in this Agreement
shall be true and correct as of the date of this Agreement and as of the Closing
Date as if made on and as of the Closing Date (except to the extent any such
representation and warranty expressly speaks as of an earlier date) and Parent
shall have received a certificate signed on behalf of Jade by the Chief
Executive Officer of Jade to such effect; provided, however, that
notwithstanding anything herein to the contrary, this Section 6.2(a) shall be
deemed to have been satisfied even if such representations or warranties are not
so true and correct unless the failure of such representations or warranties to
be so true and correct, individually or in the aggregate, has had, or is
reasonably likely to have, a Jade Material Adverse Effect.
(b) Agreements and Covenants. Jade and Principal Stockholders
shall have performed or complied with, in all material respects, all agreements
and covenants required by this Agreement to be performed or complied with by
them on or prior to the Closing Date, and Parent shall have received a
certificate to such effect signed on behalf of Jade by an authorized officer of
Jade.
(c) No Closing Material Adverse Effect. Since the date hereof,
there has not occurred a Jade Material Adverse Effect. For purposes of the
preceding sentence and Section 6.2(a), the occurrence of any of the following
events or circumstances, in and of themselves and in combination with any of the
others, shall not constitute a Jade Material Adverse Effect:
21
(1) any litigation or threat of litigation filed or made after
the date hereof challenging any of the transactions
contemplated herein or any shareholder litigation or threat of
shareholder litigation filed or made after the date hereof
resulting from this Agreement or the transactions contemplated
herein;
(2) any adverse change, event or effect that is demonstrated
to be caused primarily by conditions generally affecting the
United States economy; and
(3) any adverse change, event or effect that is demonstrated
to be caused primarily by conditions generally affecting the
healthcare, biotechnology, or services industries.
(e) Dissenting Stockholders. Dissenting Stockholders, if any,
shall have exercised Appraisal Rights which would require the Parent to pay such
Dissenting Stockholders an aggregate sum in excess of $25,000 in satisfaction of
such Appraisal Rights in lieu of the right of the Dissenting Stockholders to
receive the Jade Merger Consideration as provided for in Section 1.6(a).
6.3 Additional Conditions to the Obligations of Jade. As of the Closing
Date, Jade shall have submitted a balance sheet setting forth its assets and
liabilities in the form set forth in Schedule 6.3.
(a) Representations and Warranties. The representations and
warranties of Parent and the Jade Merger Sub set forth in this Agreement shall
be true and correct as of the date of this Agreement and as of the Closing Date
as if made on and as of the Closing Date (except to the extent any such
representation and warranty expressly speaks as of an earlier date) and Jade
shall have received a certificate signed on behalf of Parent and the Jade Merger
Sub by the Chief Executive Officer of Parent to such effect; provided, however,
that notwithstanding anything herein to the contrary, this Section 6.3(a) shall
be deemed to have been satisfied even if such representations or warranties are
not so true and correct unless the failure of such representations or warranties
to be so true and correct, individually or in the aggregate, has had, or is
reasonably likely to have, a Parent Material Adverse Effect.
(b) Agreements and Covenants. Parent and Jade Merger Sub shall
have performed or complied with, in all material respects, all agreements and
covenants required by this Agreement to be performed or complied with by it at
or prior to the Closing Date, and Jade shall have received a certificate to such
effect signed on behalf of Parent by an authorized officer of Parent.
(c) No Closing Material Adverse Effect. Since the date hereof,
there has not occurred a Parent Material Adverse Effect. For purposes of the
preceding sentence and Section 6.3(a), the occurrence of any of the following
events or circumstances, in and of themselves and in combination with any of the
others, shall not constitute a Parent Material Adverse Effect:
22
(1) any litigation or threat of litigation filed or made
after the date hereof challenging any of the transactions
contemplated herein or any shareholder litigation or threat of
shareholder litigation filed or made after the date hereof
resulting from this Agreement or the transactions contemplated
herein;
(2) any adverse change, event or effect that is demonstrated
to be caused primarily by conditions generally affecting the
United States economy; and
(3) any adverse change, event or effect that is demonstrated
to be caused primarily by conditions generally affecting the
healthcare, biotechnology, or services industries.
(d) Working Capital. Parent shall have available working
capital, including any moneys previously provided pursuant to
the Loan, of at least $500,000 as of the Closing.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after the requisite approval of the
stockholders of Jade and Jade:
(a) by mutual written consent duly authorized by the Boards of
Directors of Parent and Jade;
(b) by either Parent or Jade if the Merger shall not have been
consummated by December 31, 2003, which date shall be automatically extended for
an additional period of up to thirty (30) days, as it may be necessary to obtain
the requisite stockholder approval by the stockholders of Parent and Jade (such
date, or such other date that may be agreed by mutual written consent, being the
"Outside Date") for any reason; provided, however, that the right to terminate
this Agreement under this Section 7.1(b) shall not be available to any party
whose action or failure to act has been a principal cause of or resulted in the
failure of the Merger to occur on or before such date if such action or failure
to act constitutes a breach of this Agreement;
(c) by either Parent or Jade if a Governmental Entity shall have
issued an order, decree or ruling or taken any other action, in any case having
the effect of permanently restraining, enjoining or otherwise prohibiting the
Merger, which order, decree, ruling or other action shall have become final and
nonappealable or any law, order, rule or regulation is in effect or is adopted
or issued, which has the effect of prohibiting the Merger;
7.2 Fees and Expenses. (a) Except as set forth in this Section 7.2, all
Expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such Expenses whether
or not the Merger are consummated: As used in this Agreement, "Expenses" shall
include all reasonable out-of-pocket expenses (including, without limitation,
all fees and expenses of counsel, accountants, experts and consultants to a
party hereto and its affiliates) incurred by a party or on its behalf in
connection with or related to the authorization, preparation, negotiation,
execution and performance of this Agreement and all other matters relating to
the closing of the Merger and the other transactions contemplated hereby.
23
7.3 Amendment. This Agreement may be amended by the parties hereto by
action taken by or on behalf of their respective Boards of Directors at any time
prior to the Effective Time; provided, however, that, after the approval and
adoption of this Agreement by the stockholders of Parent and Jade, there shall
not be any amendment that by law requires further approval by the stockholders
of Parent or Jade without the further approval of such stockholders. This
Agreement may not be amended by the parties hereto except by execution of an
instrument in writing signed on behalf of each of Jade, Parent, and Jade Merger
Sub.
7.4 Extension; Waiver. At any time prior to the Effective Time, any
party hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
8.1 Survival of Terms and Indemnification.
(A) Survival; Knowledge. All of the terms and conditions of this
Agreement, together with the representations, warranties and covenants contained
herein or in any instrument or document delivered or to be delivered pursuant to
this Agreement shall survive the execution of this Agreement and the Closing
notwithstanding any investigation heretofore or hereafter made by or on behalf
of any party hereto; provided, however, that (i) the agreements and covenants
set forth in this Agreement shall survive and continue until all obligations set
forth therein shall have been performed and satisfied; and (ii) all
representations and warranties shall survive and continue until twelve (12)
months from the Closing (the "Anniversary Date"), except for representations and
warranties for which a claim for indemnification hereunder (an "Indemnification
Claim") shall be pending as of the Anniversary Date, in which event such
representations and warranties shall survive with respect to such
Indemnification Claim until the final disposition thereof.
(B) Indemnification by Jade. Jade and the Principal Stockholders shall
indemnify, defend and hold harmless Parent, Jade Merger Sub and each of their
officers, directors, employees, shareholders, members, attorneys, accountants,
partners, representatives, agents, successors and assigns (each an "Indemnified
Party" and collectively, the "Indemnified Parties"), at all times after the date
of this Agreement, from and against any liabilities, damages, losses, claims,
liens, costs, or expenses (including reasonable attorney's fees) of any nature
(any or all of the foregoing are hereinafter referred to as a "Loss") insofar as
a Loss or any action in respect thereof, whether now existing or accruing prior
to or subsequent to the Closing, which arises out of or is based solely on any
express misrepresentation (or alleged express misrepresentation), breach (or
alleged breach) of any of the express warranties, express representations or
covenants made by Jade in this Agreement and any instrument or document
delivered or to be delivered pursuant to this Agreement including any
certificate, schedule, document attached hereto or delivered pursuant to this
Agreement.
24
(C) Indemnification by Parent. Parent shall indemnify, defend and hold
harmless Jade, its officers, directors, employees, shareholders, attorneys,
accountants, partners, representatives, agents, successors and assigns of Jade
(each a "Jade Indemnified Party" and collectively, the "Jade Indemnified
Parties"), at all times after the date of this Agreement, from and against any
liabilities, damages, losses, claims, liens, costs, or expenses (including
reasonable attorney's fees) of any nature (any or all of the foregoing are
hereinafter referred to as a "Loss") insofar as a Loss or any action in respect
thereof, whether now existing or accruing prior to or subsequent to the Closing,
which arises out of or is based on any misrepresentation (or alleged
misrepresentation), breach (or alleged breach) of any of the warranties,
representations or covenants made by Parent in this Agreement, and instrument or
document delivered or to be delivered pursuant to their Agreement including any
certificate, schedule, document attached hereto or delivered pursuant to this
Agreement.
(D) Third Party Claims. Except as otherwise provided in this Agreement,
the following procedures shall be applicable with respect to indemnification for
any third party claim, including, but not limited to, any action or proceeding
by a third party against any party hereto based upon any contract or tort based
claim relating to or arising out of any acts or omissions by any party hereto (a
"Claim"):
(i) Promptly after receipt by any party hereto of any
Claim, such party will, if a Claim with respect
thereto is to be made against any party obligated to
provide indemnification hereunder (the "Indemnifying
Party"), give such Indemnifying Party written notice
of such Claim, but any failure to timely notify the
Indemnifying Party shall not relieve the Indemnifying
Party of its obligations hereunder except to the
extent it was prejudiced thereby. Such Indemnifying
Party shall have the right, at its option, to settle,
compromise or defend, at its own expense and with its
own counsel, any such Claim involving the asserted
liability of the party seeking such indemnification
(the "Indemnified Party"), provided that the
Indemnifying Party shall not settle, compromise or
consent to the entry of any judgment in any pending
or threatened Claim, except with the consent of the
Indemnified Party (which consent shall not be
unreasonably withheld). If the Indemnifying Party
fails to assume the defense of such Claim within 30
days of receipt of notice of such Claim, or if at any
time the Indemnifying Party shall fail to defend in
good faith any such Claim, the Indemnified Party may
assume the defense thereof and may employ counsel
with respect thereto and all fees and expenses of
such counsel shall be paid by the Indemnifying Party
and the Indemnified Party may conduct and defend such
claim in such manner as it may deem appropriate,
subject to the last sentence of this Section. If any
Indemnifying Party undertakes to compromise, settle
or defend any such asserted liability, it shall
promptly notify the Indemnified Party of its
intention to do so, and the Indemnified Party agrees
to cooperate fully with the Indemnifying Party and
its counsel in the compromise of, or defense against
any such asserted liability. The Indemnified Party
may appoint, at its own expense, associate counsel to
participate in the joint defense of any such matter
with respect to which the Indemnifying Party has
undertaken the defense, and the Indemnifying Party
may appoint, at its own expense, associate counsel to
participate in the joint defense of any such matter
which the Indemnified Party is defending. No
Indemnified Party shall settle, compromise or consent
to the entry of any judgment in any pending or
threatened Claim, except with the consent of the
Indemnifying Party (which consent shall not be
unreasonably withheld).
25
(ii) The sole and exclusive monetary remedy of the parties
hereto for any and all Loss, including any Claim,
with respect to the transactions contemplated in this
Agreement, shall be the indemnity set forth in this
Article VIII, as limited by the provisions set forth
in this Article VIII. Any claim or request for
indemnification not submitted in writing prior to the
expiration of the applicable survival period of the
warranty or representation provided in this Article
VIII on which such Loss or Claim is based shall be
deemed to have been waived and no party shall have
any further liability with respect thereto.
ARTICLE IX
GENERAL PROVISIONS
9.1 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given on the day of delivery if delivered personally
or sent via telecopy (receipt confirmed) or on the second business day after
being sent if delivered by commercial delivery service, to the parties at the
following addresses or telecopy numbers (or at such other address or telecopy
numbers for a party as shall be specified by like notice):
(a) if to Parent or Jade Merger Sub:
Dominix, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telecopy No.:
with a copy to:
Xxxxxxx Xxxxxx, Esq.
Xxxxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxx 00000
Telecopy No.: 000-000-0000
(b) if to Jade and the Principal Stockholder:
Jade Entertainment Group, Inc.
00 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopy No.:
26
with a copy to:
Xxxx Xxxxxx, Esq.
000 Xxxx Xxxxxx Xxxxx 0000
Xxxxx Xxxxx, Xxxxxxx 00000
f. 305.913.7732
9.2 Interpretation. (a) When a reference is made in this Agreement to
Exhibits, such reference shall be to an Exhibit to this Agreement unless
otherwise indicated. When a reference is made in this Agreement to a Section,
such reference shall be to a Section of this Agreement. Unless otherwise
indicated the words "include," "includes" and "including" when used herein shall
be deemed in each case to be followed by the words "without limitation. "The
table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. When reference is made herein to "the business of" an entity,
such reference shall be deemed to include the business of all direct and
indirect subsidiaries of such entity. Reference to the subsidiaries of an entity
shall be deemed to include all direct and indirect subsidiaries of such entity.
(b) For purposes of this Agreement, the term "knowledge" means
with respect to a party hereto, with respect to any matter in question, that any
of the officers of such party has actual knowledge of such matter.
(c) For purposes of this Agreement, the term "person" shall
mean any individual, corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, company (including any limited liability company or joint stock
company), firm or other enterprise, association, organization, entity or
Governmental Entity.
(d) For purposes of this Agreement, an "agreement,"
"arrangement," "contract," "commitment" or "plan" shall mean a legally binding,
written agreement, arrangement, contract, commitment or plan, as the case may
be.
9.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
9.4 Entire Agreement; Third Party Beneficiaries. This Agreement and the
documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including the Exhibit and Schedules
annexed hereto, constitute the entire agreement among the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof.
27
9.5 Severability. In the event that any provision of this Agreement, or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
9.6 Other Remedies; Specific Performance. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in the courts as described in Section 9.7 below, this being in addition
to any other remedy to which they are entitled at law or in equity. [In any
action at law or suit in equity to enforce this Agreement or the rights of any
of the parties hereunder, the prevailing party in such action or suit shall be
entitled to receive a reasonable sum for its attorneys' fees and all other
reasonable costs and expenses incurred in such action or suit.]
9.7 Governing Law and Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of law thereof. Any action, suit or proceeding assign under or related to their
agreement shall be brought exclusively in the State or Federal courts of New
York in New York County and each of the Parties hereto hereby waives any claim
of personal jurisdiction, forum non conversions or otherwise to such exclusive
jurisdiction.
9.8 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
9.9 Assignment. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
9.10 Waiver of Jury Trial. EACH OF JADE, THE PRINCIPAL STOCKHOLDERS,
PARENT, AND JADE MERGER SUB HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF JADE,
THE PRINCIPAL STOCKHOLDERS, PARENT, JADE, OR JADE MERGER SUB IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
28
[SIGNATURE PAGE TO MERGER AGREEMENT AMONG DOMINIX, INC., JADE ACQUISITION CORP.,
JADE ENTERTAINMENT GROUP, INC., AND THE PRINCIPAL STOCKHOLDERS OF JADE
ENTERTAINMENT GROUP, INC.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the date first
written above.
DOMINIX, INC.
By: ________________________________
Name: Xxxxxx X. Xxxxxxxx
Title: President
JADE ACQUISITION CORP.
By: ________________________________
Name: Xxxxxx X. Xxxxxxxx
Title: President
JADE ENTERTAINMENT GROUP, INC.
By: ________________________________
Name: ______________________________
Title: _____________________________
PRINCIPAL STOCKHOLDERS OF JADE
ENTERTAINMENT GROUP, INC.
XXXXXXX XXXXXX
-----------------------------------
XXXXXXX XXXXXXX
-----------------------------------
29
XXXXXX PROFIT
------------------------------------
XXXXXX XXXX XXXXXXXXX
------------------------------------
XXXXX ASSOCIATES
By:__________________________________
Name:
Title:
XXXXXX XXXXX XXXXX
------------------------------------
XXXXXXX XXXXXX
------------------------------------
XXXXXX XXXXXX
------------------------------------
XXXXX XXXXXXXX
------------------------------------
XXXX XXXXXXXX
------------------------------------
ISYS GROUP
By:__________________________________
Name:
Title:
30
XXXX X. XXXXXX
------------------------------------
XXXXXXXXXXX XXXXXXX
-----------------------------------
TRIBE COMMUNICATIONS
By:________________________________
Name:
Title:
31
EXHIBITS AND SCHEDULES TO
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
DOMINIX, INC.
JADE ENTERTAINMENT GROUP, INC.
AND
JADE ACQUISITION CORP.
AND
THE PRINCIPAL STOCKHOLDERS OF
JADE ENTERTAINMENT GROUP, INC.
EXHIBIT A: Form of Series B Preferred Stock
EXHIBIT B: Certificate of Formation of Newco
EXHIBIT C: Form of Amended Articles of Incorporation of Parent
EXHIBIT D-1: Certificates of Incorporation of the Jade Surviving Corporation
EXHIBIT D-2: Certificates of Incorporation of the Jade Surviving Corporation
EXHIBIT F: Jade Financial Statements
EXHIBIT G-1: Form of Executive Employment Agreement for Xxxxxxx Xxxxxx
EXHIBIT G-2: Form of Executive Employment Agreement for Xxxxxxx Xxxxxxx
EXHIBIT G-3: Form of Executive Employment Agreement for Xxxx Xxxxx
Schedule 2.6: Jade Employment Agreements
Schedule 2.9: Jade Material Contracts
Schedule 2.10: Jade Bank Accounts
Schedule 3.9: Parent Contracts
Schedule 3.10: Parent Bank Accounts
Schedule 6.3: Jade Balance Sheet
32
EXHIBIT A
DOMINIX, INC.
CERTIFICATE OF DESIGNATIONS, RIGHTS AND PREFERENCES
OF A SERIES OF PREFERRED STOCK BY RESOLUTION
OF THE BOARD OF DIRECTORS DESIGNATING
100,000 SHARES OF SERIES B PREFERRED
STOCK, $.001 PAR VALUE,
AS THE "SERIES B CONVERTIBLE PREFERRED STOCK"
I, Xxxxxx X. Xxxxxxxx, President, of DOMINIX, INC., a Delaware
corporation (hereinafter called the "Corporation"), pursuant to the provisions
of Section 151 of the General Corporation Law of the State of Delaware ("DGCL"),
do hereby make this Certificate of Designation under the corporate seal of the
Corporation and do hereby state and certify that pursuant to the authority
expressly vested in the Board of Directors of the Corporation by the Certificate
of Incorporation, the Board of Directors duly adopted the following resolutions:
NOW, THEREFORE, BE IT RESOLVED:
1. Designations and Number of Shares. The series of Preferred Stock,
par value $.001 per share designated by this resolution shall be the Series B
Convertible Preferred Stock (the "Series B Preferred Stock"). The number of
shares of Series B Preferred Stock designated hereby shall be 100,000 shares and
no more except as provided herein.
2. Rank. The Series B Preferred Stock shall, with respect to dividend
rights and rights on liquidation, winding up and dissolution, rank (a)
subordinate to the outstanding Series A Preferred Stock, (b) senior to any other
series of Preferred Stock except as established by the Board of Directors, the
terms of which shall specifically provide that such series shall rank prior to
the Series B Preferred Stock (any such other securities are referred to herein
collectively as the "Senior Securities"), (c) on a parity with any other series
of Preferred Stock established by the Board of Directors, the terms of which
shall specifically provide that such series shall rank on a parity with the
Series B Preferred Stock (the Series B Preferred Stock and any such other
securities are referred to herein collectively as the "Parity Securities"), and
(d) prior to any other equity securities of the Corporation, including the
Corporation's common stock, $.001 par value per share (the "Common Stock") (the
Common Stock and all of such equity securities of the Corporation to which the
Series B Preferred Stock ranks prior are referred to herein collectively as the
"Junior Securities").
3. Liquidation Preference
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, the holders of
shares of the Series B Preferred Stock then outstanding shall be entitled to be
paid out of the assets of the Corporation available for distribution to its
stockholders an amount in cash equal to $0.075 for each share outstanding
("Stated Value"), plus an amount in cash equal to all accrued but unpaid
dividends thereon to the date fixed for liquidation, dissolution or winding up,
before any payment shall be made or any assets distributed to the holders of any
of the Junior Securities, provided, however, that the holders of outstanding
33
shares of the Series B Preferred Stock shall not be entitled to receive such
liquidation payment until the liquidation payments on all outstanding shares of
Senior Securities, if any, shall have been paid in full. If the assets of the
Corporation are not sufficient to pay in full the liquidation payments payable
to the holders of the outstanding shares of the Series B Preferred Stock or any
other Parity Securities, then the holders of all such shares shall share ratably
in such distribution of assets in accordance with the amount which would be
payable on such distribution if the amounts to which the holders of the
outstanding shares of Series B Preferred Stock and the holders of outstanding
shares of such other Parity Securities are entitled were paid in full.
(b) The liquidation payment with respect to each fractional share of
the Series B Preferred Stock outstanding or accrued but unpaid shall be equal to
a ratably proportionate amount of the liquidation payment with respect to each
outstanding share of Series B Preferred Stock.
(c) For the purposes of this Section 3, neither the voluntary sale,
conveyance, lease, exchange or transfer (for cash, shares of stock, securities
or their consideration) of all or substantially all the property or assets of
the Corporation or the consolidation or merger of the Corporation with one or
more other corporations shall be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, unless such voluntary sale, conveyance,
lease, exchange, or transfer shall be in connection with a dissolution or
winding up of the business of the Corporation.
4. Conversion
(a) All the Series B Preferred Stock will be automatically converted
into the Corporation's Common Stock upon the filing of an amendment to the
Corporation's Certificate of Incorporation with the Secretary of State of
Delaware of a reverse split of the Corporation's Common Stock and to increase
the number of authorized shares of the Corporation's Common Stock. Until the
aforementioned Certificate of Amendment is filed, the Series B Preferred Stock
may not be converted.
Number of shares issued upon conversion = Number of Shares of Preferred Stock to
be converted x [ ].
(b) (i) In order to complete the conversion, the holders of
each share of Series B Preferred Stock to be
converted shall surrender the certificate
representing such share at the office of the transfer
agent for the Series B Preferred Stock, appointed for
such purpose by the Corporation, with the Notice of
Election to Convert on the back of said certificate
completed and signed. Unless the shares of Common
Stock issuable on conversion are to be issued in the
same name in which such share of Series B Preferred
Stock is registered, each share surrendered for
conversion shall be accompanied by instruments of
transfer, in form satisfactory to the Corporation,
duly executed by the holder or such holder's duly
authorized attorney and an amount sufficient to pay
any transfer or similar tax.
34
(ii) Within three business days after the surrender of the
certificates for shares of Series B Preferred Stock
as aforesaid, the Corporation shall issue and shall
deliver at such office to such holder, or on his
written order, a certificate or certificates for the
number of full shares of Common Stock issuable upon
the conversion of such shares in accordance with the
provisions of this Section 4, and any fractional
interest in respect of a share of Common Stock
arising upon such conversion shall be settled as
provided in subsection (c) of this Section 4.
(iii) The conversion shall be deemed to have been effected
immediately prior to the close of business on the
date on which the certificates for shares of Series B
Preferred Stock shall have been surrendered and such
notice received by the Corporation as aforesaid, and
the person or persons in whose name or names any
certificate or certificates for shares of Common
Stock shall be issuable upon such conversion shall be
deemed to have become the holder or holders of record
of the shares represented thereby at such time on
such date, unless the stock transfer books of the
Corporation shall be closed on that date, in which
event such person or persons shall be deemed to have
become such holder or holders of record at the close
of business on the next succeeding day on which such
stock transfer books are open, and such notice
received by the Corporation. All shares of Common
Stock delivered upon conversion of the Series B
Preferred Stock will upon delivery by duly and
validly issued and fully paid and non-assessable,
free of all liens and charges and not subject to any
preemptive rights.
(c) No fraction of a share of Series B Shares will be issued by virtue
of the Merger. In lieu thereof any fractional share will be rounded to the
nearest whole share of Series B Shares (with .5 being rounded up).
5. Adjustment in Conversion Ratio.
The Conversion Ratio shall be adjusted from time to time as follows:
(a) In case the Corporation shall (i) pay a dividend or make a
distribution in shares of Common Stock, (ii) subdivide its outstanding shares of
Common Stock into a greater number of shares of Common Stock, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock, (iv) make a distribution on its Common Stock in shares of its capital
stock other than Common Stock, or (v) issue by reclassification of its Common
Stock other securities of the Corporation, the Conversion Ratio then in effect
immediately prior thereto shall be adjusted so that the holder shall be entitled
to receive the kind and number of shares of Common Stock and other securities of
the Corporation which it would have owned or would have been entitled to receive
after the happening of any of the events described above, had such share of
Series B Preferred Stock been converted immediately prior to the happening of
such event or any record date with respect thereto. Any adjustment made pursuant
to this paragraph (a) shall become effective immediately after the effective
date of such event retroactive to the record date, if any, for such event.
(b) When the number of shares of Common Stock or the Conversion Ratio
is adjusted as herein provided, the Corporation shall cause to be promptly
mailed to the Holder by first class mail, postage prepaid, notice of such
adjustment or adjustments and a certificate of a firm of independent public
accountants selected by the Board of Directors of the Corporation (who may be
the regular accountants employed by the Corporation) setting forth the number of
shares of Common Stock and the Conversion Ratio after such adjustment, a brief
statement of the facts requiring such adjustment and the computation by which
such adjustment was made.
35
(c) For the purpose of this Section 5, the following shall apply:
(i) The term "Common Stock" shall mean (A) the class of
stock designated as the Common Stock of the
Corporation at the date of this Designation or (B)
any other class of stock resulting from successive
changes or reclassification of such Common Stock
consisting solely of changes in par value, or from
par value to no par value, or from no par value to
par value. In the event that at any time, as a result
of an adjustment made pursuant to this Section 5, the
Holder shall become entitled to receive any
securities upon conversion of the Corporation other
than shares of Common Stock thereafter the number of
such other securities and the Conversion Ratio of
such securities shall be subject to adjustment from
time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with
respect to the Common Stock contained in this Section
5.
(d) In the case of any consolidation of the Corporation with
or merger of the Corporation into another corporation or in the case of
any sale or conveyance to another corporation of all or substantially
all of the property, assets or business of the Corporation, the
Corporation or such successor or purchasing Corporation, as the case
may be, shall provide that the Holder shall have the right thereafter
to the kind and amount of shares and other securities and property
which the Holder would have owned or have been entitled to receive
after the happening of such consolidation, merger, sale or conveyance
had the Holder's Series B Preferred Stock been converted immediately
prior to such action. Further, any such agreement shall provide for
adjustment which shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section 5. The provisions of this
paragraph (d) shall similarly apply to successive consolidations,
mergers, sales or conveyances.
(e) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued shares of Common Stock or its
issued shares of Common Stock held in its treasury, or both, for the
purposes of effecting conversions of the Series B Preferred Stock, the
full number of shares of Common Stock deliverable upon the conversion
of an outstanding shares of Series B Preferred Stock not theretofore
converted. For purposes of this subsection (e), the number of shares of
Common Stock which shall be deliverable upon the conversion of all
outstanding shares of Series B Preferred Stock shall be computed as if
at the time of computation all such outstanding shares were held by a
single holder.
6. Voting Rights. In addition to any voting rights provided by
law, the holders of shares of Series B Preferred Stock shall have the
following voting rights:
(a) Subject to Section 213 of the Delaware General Corporation
Law, each holder of Series B Preferred Stock shall be entitled to cast,
at any annual, special or regular meeting or take such action by
consent as many votes as such holder would have been able to cast if
the holder had converted all of its shares of Series B Preferred Stock
into shares of Common Stock, in accordance with Sections 4 and 5
hereof, on the record date set for such action, and the outstanding
shares of Common Stock and the Series B Preferred Stock, shall, for
purposes of such action, vote as a single class.
36
(b) The affirmative vote of the holders of at least a majority
of the outstanding shares of Series B Preferred Stock, voting
separately as a single series, in person or by proxy, at a special or
annual meeting of shareholders called for the purpose, shall be
necessary to a1ter, amend of repeal any of the provisions of this
Designation or take any other corporate action, which in any manner
would alter, change or otherwise adversely affect in any way the
powers, preferences or rights of the Series B Preferred Stock.
(c) (i) The rights of holders of shares of Series B Preferred
Stock to take any actions as provided in this Section
6 may be exercised, subject to the DGCL at any annual
meeting of shareholders or at a special meeting of
shareholders held for such purpose as hereinafter
provided or at any adjournment or postponement
thereof, or by the written consent, delivered to the
Secretary of the Corporation, of the holders of the
minimum number of shares required to take such
action.
So long as such right to vote continues (and unless
such right has been exercised by written consent of
the minimum number of shares required to take such
action), the Chairman of the Board of the Corporation
may call, and upon the written request of holders of
record of 50% of the outstanding shares of Series B
Preferred Stock, addressed to the Secretary of the
Corporation at the principal office of the
Corporation, shall call, a special meeting of the
holders of shares entitled to vote as provided
herein.
The Corporation shall use its best efforts to hold
such meeting within twenty, but in any event not
later than sixty, days after delivery of such request
to the Secretary of the Corporation, at the place and
upon the notice provided by law and in the By-laws of
the Corporation for the holding of meetings of
shareholders.
(ii) At each meeting of shareholders at which the holders
of shares of Series B Preferred Stock shall have the
right, voting separately as a single series, to vote
as provided in this Section 6 or to take any action,
the presence in person or by proxy of the holders of
record of one half of the total number of shares of
Series B Preferred Stock then outstanding and
entitled to vote on the matter shall be necessary and
sufficient to constitute a quorum. At any such
meeting or at any adjournment or postponement
thereof:
(A) the absence of a quorum of the holders of
shares of Series B Preferred Stock shall not
prevent the election of directors and the
absence of a quorum of the holders of shares
of any other class or series of capital
stock shall not prevent the taking of any
action as provided in this Section 6; and
37
(B) in the absence of a quorum of the holders of
shares of Series B Preferred Stock, holders
of a majority of such shares present in
person or by proxy shall have the power to
adjourn the meeting as to the actions to be
taken by the holders of shares of Series B
Preferred Stock from time to time and place
to place without notice other than
announcement at the meeting until a quorum
shall be present.
For the taking of any action as provided in this
Section 6 by the holders of shares of Series B
Preferred Stock each such holder shall have one vote
for each share of Series B Preferred Stock standing
in his name on the transfer books of the Corporation
as of any record date fixed for such purpose or, if
no such date be fixed, at the close of business on
the business day next proceeding the day on which
notice is given, or if notice is waived, at the close
of business on the Business Day next preceding the
day on which the meeting is held.
(d) In exercising the voting rights set forth in this Section 6, each
share of Series B Preferred Stock shall have one vote per share.
7. Amendment of Resolution. The Board of Directors of the Corporation
reserves the right by subsequent amendment of this resolution from time to time
to decrease the number of shares which constitute the Series B Preferred Stock
(but not below the number of shares thereof then outstanding) and in other
respects to amend this resolution within the limitations provided by law, this
resolution and the Certificate of Incorporation of the Corporation, as amended.
IN WITNESS WHEREOF, DOMINIX, INC. has caused this certificate to be
signed by its President this ____ day of November, 2003.
DOMINIX, INC.
By:
-------------------------------
Xxxxxx X. Xxxxxxxx, President
38
EXHIBIT G-1
DOMINIX, INC.
00 XXXXXXXXX XXXXX
XXXXXXXXX, XXX XXXX 00000
November ___, 2003
Xxxxxxx Xxxxxx
0 Xxxxxx Xxxx
Xx. Xxxxx, Xxx Xxxx 00000
Dear Ray:
This letter sets forth the agreement regarding your employment (the "Agreement")
with Dominix, Inc. (the "Company"), a Delaware corporation that comprises the
businesses of its two recently acquired wholly- owned subsidiaries Jade
Entertainment Group, Inc., a New York corporation ("Jade") and MarketShare
Recovery, Inc., a New York corporation ("MSR")(the "Business"), upon the terms
and conditions set forth herein.
Start Date: November ___, 2003
Employment Term: The term will be for a period of three (3) years through
November [__], 2006 ("Initial Term") provided that the Initial Term may be
automatically extended for up to two (2) additional twelve month periods unless
either party gives written notice to the other to not proceed with such renewal
at least sixty (60) days prior to the expiration of the then existing term (the
"Renewal Term").
Either the Company or you may terminate your employment during the
Initial Term or any Renewal Term for any reason, with or without Cause, provided
however, you agree to deliver to the Company written notice of such termination
at least one hundred twenty (120) days prior to your last date of employment.
Title and Duties: You will be employed in the position of Chief
Executive Officer of the Company working from the
headquarters of Jade presently located at 00
Xxxxxxxxxxx Xxxx - Xxxxx 000, Xxxxxxxx, Xxx Xxxx
00000, or at such other New York City or Long Island
address as the Company shall designate. Your duties
and responsibilities shall be on a full-time basis
and shall be subject, at all times, to the direction
and supervision of the Company's Board of Directors
("Board"). Your responsibilities shall include, but
not limited to, using your best efforts to (i)
oversee, together with executives and consultants of
the Company, its parent, or its affiliates and
subsidiaries in the structuring and negotiation of
licensing, sales or related commercial transactions
for Jade and MSR Products; (ii) develop, supervise
and execute the overall business strategy to develop
the Jade and MSR Businesses; (iv) participate in the
preparation of financial budgets and operating plans
for the Company, its parent, and its affiliates and
subsidiaries along with the Company's SEC filings;
(v) participate in the analysis of potential
acquisition, joint venture, merger and similar type
of transactions for the Company, its parent, and
affiliates and subsidiaries; (vi) participate in the
raising of capital for the Company, its parent,
affiliates and subsidiaries operations; (v) supervise
the Company, its parent, and affiliates and
subsidiaries' personnel in the performance of their
duties, and (vi) to carry out such other matters of a
similar nature as directed by a member of the
Company's Board.
39
Base Salary: During each twelve (12) month period of the Initial Term and any
Renewal Term, you will be paid a base salary of $100,000 ("Base Salary"),
payable in accordance with the Company's normal payroll practice, which is
presently bi-weekly.
Quarterly Bonus: In addition to your Base Salary, during the initial twelve (12)
month period of the Initial Term, you will be entitled to receive a performance
based bonus ("Quarterly Bonus") calculated and payable on a quarterly basis in
arrears, which will be equal to 2% of the Company's consolidated gross revenue
derived from the operations of Jade and MSR for the prior calendar quarter, up
to a maximum of $20,000 per quarter.
Quarterly Bonus's earned shall be payable thirty (30) days following
the end of the last calendar month of the prior quarter.
Compensation Reviews: Base Salary reviews shall be performed annually on each
anniversary of your Start Date. Any increases in Base Salary or cash bonuses, or
any continuation of the Quarterly Bonus beyond the initial twelve (12) month
period, shall be made in the Company's discretion on the appropriate anniversary
date by the independent members of the Company's Board of Directors (or
Compensation Committee if so formed), or by the non-interested members of the
Company's Board of Directors if no independent members are elected, pursuant to
both the Company's guidelines as they exist from time to time, and the Company's
overall financial, as well as your individual, performance.
Severance: In the event that your employment is terminated without Cause by the
Company, or you terminate your employment for Cause, you shall be entitled to
severance at the rate provided by your Base Salary on the following basis:
Months employed months of severance payment
--------------- ---------------------------
0-12 4
12-24 9
after 24 12
Benefits: You will be eligible to participate in
any management bonus plan and entitled to
such benefits, health insurance and
vacation which are, or will be, provided
to other senior executives of the
Company.
40
Expenses: You will be reimbursed upon submission of appropriate
documentation for all reasonable expenses including
travel (local and out of town) incurred by you in the
performance of your employment hereunder, provided
however, that you shall not incur any such expenses
in excess of $3,000 without the prior written consent
of an independent member of the Board or an
authorized financial officer of the Company.
Termination: (a) Your employment shall terminate upon the first to
occur of the following:
(1) The expiration of the Initial Term or any
Renewal Term specified above.
(2) Upon your (i) death or (ii) permanent
disability or incapacity.
(3) For Cause. The Company shall have the right
to terminate your employment upon
twenty-four (24) hours' written notice to
you For Cause. The grounds for such
termination For Cause shall be:
(i) a material, uncured breach of your
agreement of employment hereunder,
including, but not limited to a
violation of any non-competition,
non-solicitation or confidentiality
provisions hereinafter set forth,
(ii) Your arrest for fraud,
embezzlement, bribery, act of moral
turpitude or any felonious offense
(other than strictly a motor vehicle
matter, provided that a conviction for
a motor vehicle matter other than a
minor traffic violation, constitutes
grounds for termination For Cause); or
(iii) Your commission of any act of
fraud, dishonesty or negligence in
connection with the performance of
your duties as an employee of the
Company; or
(iv) Your willful and repeated failure
or refusal (unremedied after five (5)
business days written notice from the
Company of such failure or refusal) to
perform your duties and
responsibilities as are established by
the Company's Board of Directors (or
Audit Committee), from time to time.
(4) Upon written notice from either the
Company, or you, which notice if
delivered by you shall be received by the
Company no less than one hundred twenty
(120) days prior to the date of
termination and if delivered by the
Company, shall be received by you no less
than thirty (30) days prior to the date
of termination.
41
(b) Except as otherwise stated in
"Severance" above, if you are terminated for
Cause, the Company shall have no further
financial or other obligations to you
following the last date of employment.
Agreement Not To Compete: In consideration of the above, you agree
that during the Initial Term or any Renewal
Term, and for twelve (12) months following
the expiration of such term or earlier
termination of your employment, you shall
not either for yourself or on behalf of any
other person, partnership, corporation or
entity, directly or indirectly or by action
in concert with others:
(a) interfere with any of the Company's or
its parent, affiliates' or its subsidiaries'
relationships with, or endeavor to employ or
entice away from the Company or its parent,
affiliates or its subsidiaries, any person
who, at any time on or after the date
hereof, is or shall be an employee of the
Company or its parent, affiliates or its
subsidiaries or under some other contractual
relationship with the Company, interfere
with or seek to adversely alter the
Company's or its parent, affiliates or its
subsidiaries' relationship with, solicit or
divert any supplier, licensee or distributor
of the Company or its parent, affiliates or
its subsidiaries; or
(b) seek or obtain employment with, or
provide services to, any party that has in
the past twelve (12) months had an
agreement, or engaged in any business
transaction of a material nature with the
Company.
Property Rights: With respect to information, inventions and
discoveries or any interest in any copyright
and/or property right developed, made or
conceived of by you, either alone or with
others, at any time during your employment
by the Company and whether or not within
working hours (and written six months
thereafter) arising out of such employment
or pertinent to any field of business or
research in which, during such employment,
the Company is engaged or (if such is known
to or ascertainable by you) is considering
engaging, you agree:
(a) that all such information, inventions
and discoveries or any interest in any
copyright and/or other property right,
whether or not patented or patentable, shall
be and remain the exclusive property of the
Company, whether or not it is protected or
protectible under applicable patent,
trademark, service xxxx, copyright or trade
secret laws which shall be deemed work made
for hire as defined in Section 101 of the
Copyright Act, 15 U.S.C. Section 101. If it
is determined that any such works are not
works made for hire, you hereby assign to
the Company all of your right, title and
interest, including all rights of copyright,
patent, and other intellectual property
rights, to or in such work product;
42
(b) to disclose promptly to an authorized
representative of the Company all such
information, inventions and discoveries or
any copyright and/or other property right
and all information in your possession as to
possible applications and uses thereof;
(c) not to file any patent application
relating to any such invention or discovery
except with the prior written consent of an
authorized officer of the Company (other
than yourself);
(d) that you hereby waive and release any
and all rights you may have in and to such
information, inventions and discoveries and
hereby assign to the Company and/or its
nominees all of your right, title and
interest in them and all your right, title
and interest in any patent, patent
application, copyright or other property
right based thereon. You hereby irrevocably
designate and appoint the Company and each
of its duly authorized officers and agents
as your agent and attorney-in-fact to act
for you and in your behalf and stead to
execute and file any document and to do all
other lawfully permitted acts to further the
prosecution, issuance and enforcement of any
such patent, patent application, copyright
or other property right with the same force
and effects as if executed and delivered by
you; and
(e) at the request of the Company, and
without expense to you, to execute such
documents and perform such other acts as the
Company deems necessary or appropriate, for
the Company to obtain patents on such
inventions in a jurisdictions designated by
the Company, and to assign to the Company or
its designees such inventions and any and
all patent applications and patents relating
thereto.
Confidentiality: With respect to the information, inventions
and discoveries referred to above and also
with respect to all other information,
whatever its nature and form and whether
obtained orally, by observation, from
Materials (as defined below) or otherwise
(except such as is generally available
through publication), obtained by you and
relating to any invention, improvement,
enhancement, product, know-how, formula,
software, process, apparatus, design,
drawings, codes, data printouts, magnetic
tapes and disks, recordings, marketing and
sales programs, financial projections,
concept or other creation, or to any use of
any of them, or to materials, tolerances,
specifications, costs (including, without
limitation, manufacturing costs), pricing
formulae, or to any plans of the Company, or
to any other trade secret or proprietary
43
information of the Company, related to the
Business and operations of the Company or
the Company's customers, strategic
alliances, licensors, parent, subsidiaries
and affiliates, you agree:
(a) to hold all such information, inventions
and discoveries which have not otherwise
become public knowledge in strict confidence
and not to publish or otherwise disclose any
thereof to any person or entity other than
the Company except with the prior written
consent of an authorized officer of the
Company or as may be required by law;
(b) to take all reasonable precautions to
assure that all such information, inventions
and discoveries are properly protected from
access by unauthorized persons;
(c) to make no use of nor exploit in any way
any such information, invention or discovery
except as required in the performance of
your employment duties of the Company; and
(d) upon termination of your employment by
the Company, or at any time upon request of
the Company, to deliver to it all Materials
(as defined below) and all substances,
models, software, prototypes and the like
containing or relating to any such
information, invention or discovery, all of
which Materials (as defined below) and other
things shall be and remain the exclusive
property of the Company.
For purposes of this Agreement, the term
"Materials" includes, without limitation,
letters, memoranda, reports, notes,
notebooks, books of accounts, drawings,
prints, marketing materials, product
designs, specifications, formulae, software,
data printouts, microfilms, e-mails,
magnetic tapes and disks and other documents
and recordings, together with all copies,
excerpts and summaries, thereof.
Indemnity: You shall be indemnified for all claims,
liabilities, damages, losses, costs and
expenses of any nature, including but not
limited to, reasonable attorneys' fees,
judgments, settlement, fines and penalties
that are incurred by you in connection with
the performance of your duties under this
Agreement unless the claim or alleged claim
is based in whole or in part upon acts or
omissions by you constituting willful
misconduct, gross negligence or fraud.
44
Miscellaneous: We agree that it is our intention and
covenant that your employment and
performance thereunder be governed by and
construed under the laws of the State of New
York concerning contracts to be made and
performed wholly within such state, without
regard to any conflict of law principles and
that any dispute between the parties of any
kind shall be adjudicated exclusively in the
courts of the State of New York.
(a) This letter sets forth the entire
agreement regarding your employment and may
not be modified or changed except by mutual
written agreement. Your obligations
hereunder may not be assigned by you. Your
employment agreement is assignable by the
Company to a wholly-owned subsidiary or in
the event of any sale, merger, or similar
transaction by the Company with a third
party or a related party.
(b) You represent and warrant that the
execution, delivery and performance by you
of this Agreement and the matters
contemplated thereunder does not, and will
not, violate, result in a breach of, or
constitute a default under any agreement or
arrangement to which you are a party. You
also represent and warrant that you have had
the opportunity to consult with the counsel
of your choice in the negotiation and
execution of this Agreement and that you are
satisfied that you have been adequately and
independently represented.
(c) The invalidity of all or any part of any
paragraph or subparagraph of this Agreement
shall not render invalid the remainder of
the Agreement and obligations contemplated
hereunder.
(d) This Agreement may be executed in two or
more counterparts, each of which shall be
deemed an original, but all of which when
together, shall constitute one and the same
agreement.
(e) Any notice given hereunder shall be in
writing and either delivered in person, by
nationally recognized overnight courier, or
be registered or certified first class mail,
(postage prepaid, addressed) if to the
Company at Dominix, Inc., 00 Xxxxxxxxx
Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000, attn:
Chairman of the Board and (b) if to the
Employee at the address noted above. Notices
delivered personally shall be deemed given
as of actual receipt; notices sent via
facsimile transmission shall be deemed given
as of one business day following sender's
receipt from sender's facsimile machine of
written confirmation of transmission
thereof; notices sent by overnight courier
shall be deemed as given as of one business
day following sending; and notices mailed
shall be deemed given as of five business
days after proper mailing. Any party may
change its address in notice given to the
other party in accordance with this Section
(e).
45
(f) Each party shall fully indemnify the
other for all claims, liabilities, damages,
losses, costs and expenses of any nature,
including but not limited to, reasonable
attorneys' fees, judgments, settlement,
fines and penalties that are incurred by the
counter-party arising out of or in
connection with the performance of each
party's obligations under this Agreement
unless the claim or alleged claim resulted
from the willful misconduct, gross
negligence or fraud of the party claiming
indemnification
If the above meets with your understanding, please countersign this Agreement at
the lower left to acknowledge your agreement and acceptance with the terms and
conditions outlined above and return a signed copy to me at your earliest
convenience. We look forward to a long and mutually rewarding relationship.
Sincerely,
Dominix, Inc.
By:
---------------------------------------------
Xxxxxx X. Xxxxxxxx, Sole Officer and Director
ACCEPTED AND AGREED TO
THIS ___ day of _________ 2003:
----------------------------------
Xxxxxxx Xxxxxx
46
EXHIBIT G-2
DOMINIX, INC.
00 XXXXXXXXX XXXXX
XXXXXXXXX, XXX XXXX 00000
November ___, 2003
Xxxxxxx Xxxxxxx
00 X Xxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Dear Xxx:
This letter sets forth the agreement regarding your employment (the "Agreement")
with Dominix, Inc. (the "Company"), a Delaware corporation that comprises the
businesses of its two recently acquired wholly- owned subsidiaries Jade
Entertainment Group, Inc., a New York corporation ("Jade") and MarketShare
Recovery, Inc., a New York corporation ("MSR")(the "Business"), upon the terms
and conditions set forth herein.
Start Date: November ___, 2003
Employment Term: The term will be for a period of three (3) years through
November [__], 2006 ("Initial Term") provided that the Initial Term may be
automatically extended for up to two (2) additional twelve month periods unless
either party gives written notice to the other to not proceed with such renewal
at least sixty (60) days prior to the expiration of the then existing term (the
"Renewal Term").
Either the Company or you may terminate your employment during the
Initial Term or any Renewal Term for any reason, with or without Cause, provided
however, you agree to deliver to the Company written notice of such termination
at least one hundred twenty (120) days prior to your last date of employment.
Title and Duties: You will be employed in the position of
President of the Company working from the
headquarters of Jade presently located at 00
Xxxxxxxxxxx Xxxx - Xxxxx 000, Xxxxxxxx, Xxx
Xxxx 00000, or at such other New York City
or Long Island address as the Company shall
designate. Your duties and responsibilities
shall be on a full-time basis and shall be
subject, at all times, to the direction and
supervision of the Company's Chief Executive
Officer and its Board of Directors
("Board"). Your responsibilities shall
include, but not limited to, using your best
efforts to (i) participate, together with
executives and consultants of the Company,
its parent, or its affiliates and
subsidiaries in the structuring and
negotiation of licensing, sales or related
commercial transactions for Jade and MSR
Products; (ii) execute the overall business
strategy to develop the Jade and MSR
Businesses; (iv) participate in the
preparation of financial budgets and
47
operating plans for the Company, its parent,
and its affiliates and subsidiaries along
with the Company's SEC filings; (v)
participate in the analysis of potential
acquisition, joint venture, merger and
similar type of transactions for the
Company, its parent, and affiliates and
subsidiaries; (vi) participate in the
raising of capital for the Company, its
parent, affiliates and subsidiaries
operations; (v) manage the Company, its
parent, and affiliates and subsidiaries'
personnel in the performance of their
duties, and (vi) to carry out such other
matters of a similar nature as directed by a
member of the Company's Chief Executive
Officer or a member of the Board.
Base Salary: During each twelve (12) month period of the Initial Term and any
Renewal Term, you will be paid a base salary of $100,000 ("Base Salary"),
payable in accordance with the Company's normal payroll practice, which is
presently bi-weekly.
Quarterly Bonus: In addition to your Base Salary, during the initial twelve (12)
month period of the Initial Term, you will be entitled to receive a performance
based bonus ("Quarterly Bonus") calculated and payable on a quarterly basis in
arrears, which will be equal to 2% of the Company's consolidated gross revenue
derived from the operations of Jade and MSR for the prior calendar quarter, up
to a maximum of $20,000 per quarter.
Quarterly Bonus's earned shall be payable thirty (30) days following
the end of the last calendar month of the prior quarter.
Compensation Reviews: Base Salary reviews shall be performed annually on each
anniversary of your Start Date. Any increases in Base Salary or cash bonuses, or
any continuation of the Quarterly Bonus beyond the initial twelve (12) month
period, shall be made in the Company's discretion on the appropriate anniversary
date by the independent members of the Company's Board of Directors (or
Compensation Committee if so formed), or by the non-interested members of the
Company's Board of Directors if no independent members are elected, pursuant to
both the Company's guidelines as they exist from time to time, and the Company's
overall financial, as well as your individual, performance.
Severance: In the event that your employment is terminated without Cause by the
Company, or you terminate your employment for Cause, you shall be entitled to
severance at the rate provided by your Base Salary on the following basis:
Months employed months of severance payment
0-13 4
12-25 9
after 24 12
Benefits: You will be eligible to participate in any
management bonus plan and entitled to such
benefits, health insurance and vacation
which are, or will be, provided to other
senior executives of the Company.
48
Expenses: You will be reimbursed upon submission of
appropriate documentation for all reasonable
expenses including travel (local and out of
town) incurred by you in the performance of
your employment hereunder, provided however,
that you shall not incur any such expenses
in excess of $1,000 without the prior
written consent of the Chief Executive
Officer or an authorized financial officer
of the Company.
Termination: (a) Your employment shall terminate upon the
first to occur of the following:
(3) The expiration of the Initial Term or
any Renewal Term specified above.
(4) Upon your (i) death or (ii) permanent
disability or incapacity.
(3) For Cause. The Company shall have the
right to terminate your employment upon
twenty-four (24) hours' written notice to
you For Cause. The grounds for such
termination For Cause shall be:
(i) a material, uncured breach of your
agreement of employment hereunder,
including, but not limited to a
violation of any non-competition,
non-solicitation or confidentiality
provisions hereinafter set forth,
(ii) Your arrest for fraud,
embezzlement, bribery, act of moral
turpitude or any felonious offense
(other than strictly a motor vehicle
matter, provided that a conviction for
a motor vehicle matter other than a
minor traffic violation, constitutes
grounds for termination For Cause); or
(iii) Your commission of any act of
fraud, dishonesty or negligence in
connection with the performance of
your duties as an employee of the
Company; or
(iv) Your willful and repeated failure
or refusal (unremedied after five (5)
business days written notice from the
Company of such failure or refusal) to
perform your duties and
responsibilities as are established by
the Company's Board of Directors (or
Audit Committee), from time to time.
(4) Upon written notice from either the
Company, or you, which notice if
delivered by you shall be received by the
Company no less than one hundred twenty
(120) days prior to the date of
termination and if delivered by the
Company, shall be received by you no less
than thirty (30) days prior to the date
of termination.
49
(c) Except as otherwise stated in
"Severance" above, if you are terminated for
Cause, the Company shall have no further
financial or other obligations to you
following the last date of employment.
Agreement Not To Compete: In consideration of the above, you agree
that during the Initial Term or any Renewal
Term, and for twelve (12) months following
the expiration of such term or earlier
termination of your employment, you shall
not either for yourself or on behalf of any
other person, partnership, corporation or
entity, directly or indirectly or by action
in concert with others:
(a) interfere with any of the Company's or
its parent, affiliates' or its subsidiaries'
relationships with, or endeavor to employ or
entice away from the Company or its parent,
affiliates or its subsidiaries, any person
who, at any time on or after the date
hereof, is or shall be an employee of the
Company or its parent, affiliates or its
subsidiaries or under some other contractual
relationship with the Company, interfere
with or seek to adversely alter the
Company's or its parent, affiliates or its
subsidiaries' relationship with, solicit or
divert any supplier, licensee or distributor
of the Company or its parent, affiliates or
its subsidiaries; or
(b) seek or obtain employment with, or
provide services to, any party that has in
the past twelve (12) months had an
agreement, or engaged in any business
transaction of a material nature with the
Company.
Property Rights: With respect to information, inventions and
discoveries or any interest in any copyright
and/or property right developed, made or
conceived of by you, either alone or with
others, at any time during your employment
by the Company and whether or not within
working hours (and written six months
thereafter) arising out of such employment
or pertinent to any field of business or
research in which, during such employment,
the Company is engaged or (if such is known
to or ascertainable by you) is considering
engaging, you agree:
(a) that all such information, inventions
and discoveries or any interest in any
copyright and/or other property right,
whether or not patented or patentable, shall
be and remain the exclusive property of the
Company, whether or not it is protected or
protectible under applicable patent,
trademark, service xxxx, copyright or trade
secret laws which shall be deemed work made
for hire as defined in Section 101 of the
Copyright Act, 15 U.S.C. Section 101. If it
is determined that any such works are not
works made for hire, you hereby assign to
the Company all of your right, title and
interest, including all rights of copyright,
patent, and other intellectual property
rights, to or in such work product;
50
(b) to disclose promptly to an authorized
representative of the Company all such
information, inventions and discoveries or
any copyright and/or other property right
and all information in your possession as to
possible applications and uses thereof;
(c) not to file any patent application
relating to any such invention or discovery
except with the prior written consent of an
authorized officer of the Company (other
than yourself);
(d) that you hereby waive and release any
and all rights you may have in and to such
information, inventions and discoveries and
hereby assign to the Company and/or its
nominees all of your right, title and
interest in them and all your right, title
and interest in any patent, patent
application, copyright or other property
right based thereon. You hereby irrevocably
designate and appoint the Company and each
of its duly authorized officers and agents
as your agent and attorney-in-fact to act
for you and in your behalf and stead to
execute and file any document and to do all
other lawfully permitted acts to further the
prosecution, issuance and enforcement of any
such patent, patent application, copyright
or other property right with the same force
and effects as if executed and delivered by
you; and
(e) at the request of the Company, and
without expense to you, to execute such
documents and perform such other acts as the
Company deems necessary or appropriate, for
the Company to obtain patents on such
inventions in a jurisdictions designated by
the Company, and to assign to the Company or
its designees such inventions and any and
all patent applications and patents relating
thereto.
Confidentiality: With respect to the information, inventions
and discoveries referred to above and also
with respect to all other information,
whatever its nature and form and whether
obtained orally, by observation, from
Materials (as defined below) or otherwise
(except such as is generally available
through publication), obtained by you and
relating to any invention, improvement,
enhancement, product, know-how, formula,
software, process, apparatus, design,
drawings, codes, data printouts, magnetic
tapes and disks, recordings, marketing and
sales programs, financial projections,
concept or other creation, or to any use of
51
any of them, or to materials, tolerances,
specifications, costs (including, without
limitation, manufacturing costs), pricing
formulae, or to any plans of the Company, or
to any other trade secret or proprietary
information of the Company, related to the
Business and operations of the Company or
the Company's customers, strategic
alliances, licensors, parent, subsidiaries
and affiliates, you agree:
(a) to hold all such information, inventions
and discoveries which have not otherwise
become public knowledge in strict confidence
and not to publish or otherwise disclose any
thereof to any person or entity other than
the Company except with the prior written
consent of an authorized officer of the
Company or as may be required by law;
(b) to take all reasonable precautions to
assure that all such information, inventions
and discoveries are properly protected from
access by unauthorized persons;
(c) to make no use of nor exploit in any way
any such information, invention or discovery
except as required in the performance of
your employment duties of the Company; and
(d) upon termination of your employment by
the Company, or at any time upon request of
the Company, to deliver to it all Materials
(as defined below) and all substances,
models, software, prototypes and the like
containing or relating to any such
information, invention or discovery, all of
which Materials (as defined below) and other
things shall be and remain the exclusive
property of the Company.
For purposes of this Agreement, the term
"Materials" includes, without limitation,
letters, memoranda, reports, notes,
notebooks, books of accounts, drawings,
prints, marketing materials, product
designs, specifications, formulae, software,
data printouts, microfilms, e-mails,
magnetic tapes and disks and other documents
and recordings, together with all copies,
excerpts and summaries, thereof.
Indemnity: You shall be indemnified for all claims,
liabilities, damages, losses, costs and
expenses of any nature, including but not
limited to, reasonable attorneys' fees,
judgments, settlement, fines and penalties
that are incurred by you in connection with
the performance of your duties under this
Agreement unless the claim or alleged claim
is based in whole or in part upon acts or
omissions by you constituting willful
misconduct, gross negligence or fraud.
52
Miscellaneous: We agree that it is our intention and
covenant that your employment and
performance thereunder be governed by and
construed under the laws of the State of New
York concerning contracts to be made and
performed wholly within such state, without
regard to any conflict of law principles and
that any dispute between the parties of any
kind shall be adjudicated exclusively in the
courts of the State of New York.
(g) This letter sets forth the entire
agreement regarding your employment and may
not be modified or changed except by mutual
written agreement. Your obligations
hereunder may not be assigned by you. Your
employment agreement is assignable by the
Company to a wholly-owned subsidiary or in
the event of any sale, merger, or similar
transaction by the Company with a third
party or a related party.
(h) You represent and warrant that the
execution, delivery and performance by you
of this Agreement and the matters
contemplated thereunder does not, and will
not, violate, result in a breach of, or
constitute a default under any agreement or
arrangement to which you are a party. You
also represent and warrant that you have had
the opportunity to consult with the counsel
of your choice in the negotiation and
execution of this Agreement and that you are
satisfied that you have been adequately and
independently represented.
(i) The invalidity of all or any part of any
paragraph or subparagraph of this Agreement
shall not render invalid the remainder of
the Agreement and obligations contemplated
hereunder.
(j) This Agreement may be executed in two or
more counterparts, each of which shall be
deemed an original, but all of which when
together, shall constitute one and the same
agreement.
(k) Any notice given hereunder shall be in
writing and either delivered in person, by
nationally recognized overnight courier, or
be registered or certified first class mail,
(postage prepaid, addressed) if to the
Company at Dominix, Inc., 00 Xxxxxxxxx
Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000, attn:
Chairman of the Board and (b) if to the
Employee at the address noted above. Notices
delivered personally shall be deemed given
as of actual receipt; notices sent via
facsimile transmission shall be deemed given
as of one business day following sender's
receipt from sender's facsimile machine of
written confirmation of transmission
thereof; notices sent by overnight courier
shall be deemed as given as of one business
day following sending; and notices mailed
shall be deemed given as of five business
days after proper mailing. Any party may
change its address in notice given to the
other party in accordance with this Section
(e).
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(l) Each party shall fully indemnify the
other for all claims, liabilities, damages,
losses, costs and expenses of any nature,
including but not limited to, reasonable
attorneys' fees, judgments, settlement,
fines and penalties that are incurred by the
counter-party arising out of or in
connection with the performance of each
party's obligations under this Agreement
unless the claim or alleged claim resulted
from the willful misconduct, gross
negligence or fraud of the party claiming
indemnification
If the above meets with your understanding, please countersign this Agreement at
the lower left to acknowledge your agreement and acceptance with the terms and
conditions outlined above and return a signed copy to me at your earliest
convenience. We look forward to a long and mutually rewarding relationship.
Sincerely,
Dominix, Inc.
By:
-----------------------------------------
Xxxxxx X. Xxxxxxxx, Sole Officer and Director
ACCEPTED AND AGREED TO
THIS ___ day of _________ 2003:
----------------------------
Xxxxxxx Xxxxxxx
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